Sep 24, 2020
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Seeing Serious Upside In Anika, Making Money On Europe’s Pain

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How a couple of small cap biotech offering growth at an affordable price? This seemingly tall order is correctly a reality with Bedford Massachusetts based Anika Therapeutics. The company develops and manufactures therapeutic products for tissue protection utilizing hyaluronic acid a naturally occurring polymer in humans. Anika s key products address osteoarthritis advanced wound care and surgical issues


We believe Anika is at the cusp of a huge addressable market globally: aging boomers many that were more physically active and thus more inclined to be afflicted by knee joint and elbow injuries. Anika s Monovisc and Orthovisc leaders in this rapidly growing market are products designed to help protect heal and regenerate tissue


Anika s proprietary technologies for modifying the HA molecule allow product properties to be tailored specifically to therapeutic use. And their patented technology chemically modifies HA to allow for longer residence time inside the body. These technologies are protected by an intensive portfolio of owned and licensed patents. With a view to accommodate this and improve margins in this expected rapid growth phase the company is transitioning to a direct sales model from an outsourced one


Additionally Anika is investing $25 million from its frothy current cash balances to bring its manufacturing home to Bedford from an outsourced manufacturer in Italy. This is expected to improve the efficiency in their manufacturing process and to enhance research and development capabilities. Anika s future pipeline also holds promise. In June last year they entered into an agreement with the Institute for Applied Life Sciences at the University of Massachusetts Amherst to collaborate on research to develop a therapy for rheumatoid arthritis which could start to move towards commercialization as early as 2017


Recent results were impressive. Anika reported a strong Q2 with revenues of $26. 6 million above our expectation of $24. 7 million. EPS of $0. 57 was above our estimate of $0. 49 which was the best at the Street. Total orthobiologics growth was 21% while international orthobiologics was up 36%. Anika raised product revenue guidance for 2016 with growth inside the mid to high teen percent range


The company continues its stock buyback program. Anika is growing market share with a strong orthobiologic product platform & pipeline providing confidence in continuing market share gains for the following couple of years. My 12-month price target is $60. Make Money On Europe s Challenges The ProShares UltraShort FTSE Europe (EPV) is actually a protracted that acts like a short


The investment seeks daily investment results before fees and expenses that correspond to two times the inverse (-2x) of the daily performance of the FTSE Developed Europe Index. The post Brexit liquidity induced relief rally is on its last leg as Euro citizens take off typically the complete month of august creating a liquidity vacuum where sellers can dominate


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It has had flat to negative median income growth since 2008 has an aging southern population seeking to retire and has increasing immigration and headline risk. I feel others members wil soon the Brits as the wave of populism sweeps the old continent. A mere 10% dump should make this a winning call and an excellent late summer hedge

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