Anika Therapeutics : 2025 Annual Report

Published: 2026-04-30 15:50:15 ET ANIK

Published on 04/30/2026 at 03:50 pm EDT

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Exact Name of Registrant as Specified in Its Charter)

(State or Other Jurisdiction of Incorporation or Organization)

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(Address of Principal Executive Offices) (Zip Code)

(Registrant's Telephone Number, Including Area Code)

Title of Each Class Trading Symbol Name of Each Exchange on Which Registered

Common Stock, par value $0.01 per share ANIK NASDAQ Global Select Market Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange

Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of voting common stock held by non-affiliates of the registrant as of June 30, 2025, the last day of the registrant's most recently completed second fiscal quarter, was $147,343,841 computed by reference to the closing price of common stock on such date. The registrant does not have any non-voting stock outstanding.

At February 20, 2026, there were 13,400,751 shares of the registrant's common stock outstanding.

Portions of the registrant's proxy statement for its 2026 annual meeting of stockholders are incorporated by reference in Part III of this Annual Report on Form 10-K.

ANIKA THERAPEUTICS, INC. TABLE OF CONTENTS

Page

Cautionary Note Regarding Forward-Looking Statements 4

Part I

Item 1.

Business .................................................................................................................................................

Item 1A.

Risk Factors............................................................................................................................................

Item 1B.

Unresolved Staff Comments ..................................................................................................................

Item 1C.

Cybersecurity .........................................................................................................................................

Item 2.

Properties ...............................................................................................................................................

Item 3.

Legal Proceedings ..................................................................................................................................

Item 4.

Mine Safety Disclosures ........................................................................................................................

Part II

Item 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities .................................................................................................................................

Item 6.

[Reserved] ..............................................................................................................................................

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations .................

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk ...............................................................

Item 8.

Financial Statements and Supplementary Data ......................................................................................

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures ...............

Item 9A.

Controls and Procedures ........................................................................................................................

Item 9B.

Other Information .................................................................................................................................

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ...................................................

Part III

Item 10.

Directors, Executive Officers and Corporate Governance .....................................................................

Item 11.

Executive Compensation........................................................................................................................

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters ................................................................................................................................................

Item 13.

Certain Relationships and Related Transactions, and Director Independence .......................................

Item 14.

Principal Accountant Fees and Services ................................................................................................

Part IV

Item 15. Exhibits and Financial Statement Schedules 91

Item 16. Form 10-K Summary 94

Signatures 95

References in this Annual Report on Form 10-K to "we," "us," "our," "our company," and other similar references refer to Anika Therapeutics, Inc. and its subsidiaries unless the context otherwise indicates.

ANIKA, ANIKA THERAPEUTICS, ANIKAVISC, CINGAL, HYAFF, HYALOBARRIER, HYALOFAST, HYVISC,

INTEGRITY, MONOVISC, NUVISC, ORTHOVISC, and TACTOSET are our trademarks that appear in this Annual Report on Form 10-K. For convenience, these trademarks may appear in this Annual Report on Form 10-K without ® and ™ symbols, but that practice does not mean that we will not assert, to the fullest extent under applicable law, our rights to the trademarks. This Annual Report on Form 10-K also contains trademarks and trade names that are the property of other companies and licensed to us.

FORM 10-K

ANIKA THERAPEUTICS, INC.

For Fiscal Year Ended December 31, 2025

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 concerning our business, consolidated financial condition, and results of operations. The Securities and Exchange Commission ("SEC") encourages companies to disclose forward-looking statements so that investors can better understand a company's future prospects and make informed investment decisions. Forward-looking statements are subject to risks and uncertainties, many of which are outside our control, which could cause actual results to differ materially from these statements. Therefore, you should not rely on any of these forward-looking statements. Forward-looking statements can be identified by such words as "will," "likely," "may," "believe," "expect," "anticipate," "intend," "seek," "designed," "develop," "would," "future," "can," "could," and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters. All statements other than statements of historical facts included in this Annual Report regarding our strategies, prospects, financial condition, operations, costs, plans, and objectives are forward-looking statements. Examples of forward-looking statements include, among others, statements regarding expected future operating results, expectations regarding the timing and receipt of regulatory results, anticipated levels of capital expenditures, and expectations of the effect on our financial condition of claims, litigation, and governmental and regulatory proceedings.

Please refer to "Item 1A. Risk Factors" for important factors that we believe could cause actual results to differ materially from those in our forward-looking statements. Any forward-looking statement made by us in this Annual Report on Form 10-K is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise.

RISK FACTOR SUMMARY

The risk factors detailed in Item 1A entitled "Risk Factors" in this Annual Report on Form 10-K are the risks that we believe are material to our investors and a reader should carefully consider them. Those risks are not all of the risks we face and other factors not presently known to us or that we currently believe are immaterial may also affect our business if they occur. The following is a summary of the risk factors detailed in Item 1A:

Our financial performance depends on sales growth and increasing demand for our portfolios, and we may not be able to successfully manage the recent, and future, expansion of our operations.

Substantial competition could materially affect our financial performance.

Our business may be adversely affected if consolidation in the healthcare industry leads to demand for price concessions or if we are excluded from being a supplier by a group purchasing organization or similar entity.

A significant portion of our Osteoarthritis ("OA") Pain Management revenues are derived from a small number of customers, the loss of which could materially adversely affect our business, financial condition and results of operations.

We experience quarterly sales volume variation, which makes our future results difficult to predict and makes period-to-period comparisons potentially not meaningful.

We rely on a small number of suppliers for certain key raw materials and a small number of suppliers for a number of other materials required for the manufacturing and delivery of our products, and disruption could materially adversely affect our business, financial condition, and results of operations.

Our manufacturing processes involve inherent risks, and disruption could materially adversely affect our business, financial condition, and results of operations.

Failure to comply with current or future national, international, federal or state laws and regulations, regulatory guidance and industry standards relating to data protection, privacy and information security, including restrictive European regulations, could lead to government enforcement actions (which could include civil or criminal penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business.

We are increasingly dependent on sophisticated information technology and if we fail to effectively maintain or protect our information systems or data, including from data breaches, our business could be adversely affected.

We may require additional capital in the future. We cannot give any assurance that such capital will be available at all or on terms acceptable to us, and if it is available, additional capital raised by us could dilute your ownership interest or the value of your shares.

Our license agreements with Johnson & Johnson MedTech ("J&J MedTech") provide substantial control of Monovisc and Orthovisc in the United States to J&J MedTech, and J&J MedTech's actions could have a material impact on our business, financial condition and results of operations.

We may not succeed in our integration and buildout of our direct sales channel in the United States, and our failure to do so could negatively impact our business and financial results.

We are dependent upon marketing and distribution partners and the failure to maintain strategic alliances on acceptable terms will have a material adverse effect on our business, financial condition, and results of operations.

Sales of our products are largely dependent upon third-party health insurance coverage and reimbursement, and our performance may be harmed by health care cost containment initiatives or decisions of individual third-party payers.

We are facing a longer than expected pathway to commercialization of our Cingal product in the United States, and we may face other unforeseen difficulties in achieving regulatory approval for Cingal or other new products, which could affect our business and financial results.

Significant political, trade, regulatory developments, and other circumstances beyond our control, could have a material adverse effect on our financial condition or results of operations.

Failure to obtain, or any delay in obtaining, U.S. Food and Drug Administration ("FDA") or other U.S. and foreign governmental clearances or approvals for our products may have a material adverse effect on our business, financial condition and results of operations.

Once obtained, we cannot guarantee that the FDA or international product clearances or approvals will not be withdrawn or that relevant agencies will not require other corrective action, and any withdrawal or corrective action could materially affect our business and financial results.

Our operations and products are subject to extensive regulation, compliance with which is costly and time-consuming, and our failure to comply may result in substantial penalties, including recalls of our products.

Any changes in the FDA or international regulations related to product approval or approval renewal, including those currently under consideration by the FDA or those that apply retroactively, could adversely affect our competitive position and materially affect our business and financial results.

Notices of inspectional observations or deficiencies from the FDA or other regulatory bodies require us to undertake corrective and preventive actions or other actions to address the FDA's or other regulatory bodies' concerns. These actions could be expensive and time-consuming to complete and could impose an additional burden on us.

We may rely on third parties to support certain aspects of our clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory clearance or approval or commercialize our products, and our business could be substantially harmed.

We may have difficulty managing our growth.

We may explore inorganic growth as a part of our future growth strategy, which would expose us to a variety of risks that could adversely affect our business operations.

As our international sales and operations grow, we could become increasingly subject to additional economic, political, and other risks that could harm our business.

We may be unable to adequately protect our intellectual property rights, which could have a material impact on our business and future financial results.

Our stock price may be highly volatile, and we cannot assure you that market making in our common stock will continue.

Our charter documents contain anti-takeover provisions that may prevent or delay an acquisition of our company.

We have been, and may continue to be, subject to the actions of activist stockholders, which could cause us to incur substantial costs, divert management's and the board's attention and resources, and have an adverse effect on our business and stock price.

This section contains forward-looking statements. You should refer to the explanation of the qualifications and limitations on forward-looking statements beginning on page 4.

PART I

ITEM 1. BUSINESS

Purpose and Mission

Founded in 1992, Anika Therapeutics, Inc. ("Anika" or "Company") is a global leader in the OA Pain Management and regenerative solutions space, focusing on early intervention orthopedics. The Company leverages proprietary hyaluronic acid ("HA") technology to develop highly differentiated products. Driven by strong partnerships with physicians, Anika is dedicated to pioneering HA-based innovations that redefine orthopedic care. Our mission is to restore active living, empower surgeon choice, and enhance patient outcomes worldwide.

Anika's Mission:

"Together, we restore active living and redefine what's possible with hyaluronic acid."

Anika's Core Values:

Trust and Respect: We build trust and show respect in every interaction.

Quality: We are committed to quality as we work to improve people's lives.

Empowerment & Teamwork: We are empowered as a team to make decisions that drive impact.

Focus: We focus on what matters most and are driven to be better every day.

Strategy

In October 2024, we announced a strategic shift to concentrate on our OA Pain Management and Regenerative Solutions portfolios. This strategic decision involved the sale of Arthrosurface Incorporated on October 31, 2024 and the sale of Parcus Medical, LLC on March 7, 2025, both of which were acquired in early 2020 under a previous management strategy.

As we look ahead, our focused strategy, driven by HA-based products, positions us to offer truly innovative treatments in areas of unmet need and substantial, growing markets. We will place particular emphasis on the commercial execution and adoption of the newest product in our Regenerative Solutions portfolio, the Integrity Implant System ("Integrity"), a HA-based scaffold designed for rotator cuff and other tendon repairs. The Integrity system has shown strong performance, with continuing growth in surgeries and significant adoption by new customers.

We will continue to invest in our Regenerative Solutions R&D pipeline as we prepare for the potential U.S. approval and launch of both Hyalofast and Cingal, each representing an incremental U.S. addressable market of at least $1 billion. We submitted our premarket approval ("PMA") application with the FDA for Hyalofast on October 31, 2025. We received a letter from the FDA in January 2026 in which the FDA identified a number of deficiencies in which we are preparing our response. Additionally, we will build on the international commercial momentum of our entire OA Pain Management portfolio, led by Monovisc and Cingal. Cingal has shown significant clinical success and we have been actively engaging with the FDA on next steps for regulatory approval in the U.S.

On October 31, 2024 (the "Arthrosurface Closing Date"), we completed the sale of all outstanding equity interests (the "Arthrosurface Transaction") of Arthrosurface Incorporated, a Delaware corporation and former wholly-owned subsidiary of the Company ("Arthrosurface"), which held our Arthrosurface asset group, to Phoenix Brio, Incorporated, a Delaware corporation ("Phoenix Brio"), pursuant to the terms and conditions of a Share Purchase Agreement, dated as of the Arthrosurface Closing Date (the "Arthrosurface Purchase Agreement"), by and amongst us, Arthrosurface, and Phoenix Brio.

As consideration for the Arthrosurface Transaction, at the closing, Phoenix Brio delivered to us a ten-year non-interest bearing promissory note in the principal amount of $7.0 million. Under the terms of the Purchase Agreement, we are also eligible to receive: (i) for each calendar quarter, an amount equal to a percentage of the net sales (the "Revenue Payments") for the sale of certain commercial and pipeline products during the period commencing on the Closing Date and ending on the earlier of the fifth (5th) anniversary of the Closing Date or the date on which the Buy-Out Payment (as defined below) is paid to us; and (ii) a percentage of the gross proceeds with respect to the sale of certain commercial and pipeline products in a bona fide arm's length transaction with a third party that is not an affiliate of Phoenix Brio or us occurring within the first twenty-four (24) months following the Closing Date. Phoenix Brio can also elect to make a payment in an amount equal to the greater of (A) $14.0 million or (B) ten (10) times the Revenue Payments ((A) and (B) together, the "Buy-

Out Payment") paid to us during the last full calendar year prior to the consummation of a change of control transaction or Phoenix Brio's written notice to us that it is electing to make the Buy-Out Payment. Pursuant to the Arthrosurface Purchase Agreement, the aggregate consideration is subject to customary post-closing adjustments.

On March 7, 2025 (the "Parcus Closing Date"), we completed the sale of all of the outstanding equity interests of Parcus Medical, LLC, a Wisconsin limited liability company and former wholly-owned subsidiary of the Company ("Parcus"), to Medacta Americas Manufacturing, Inc., a Delaware corporation ("Medacta"), pursuant to the terms and conditions of a Membership Interest Purchase Agreement, dated as of the Closing Date (the "Parcus Purchase Agreement"), by and among the Company, Parcus and Buyer (the "Transaction"). As consideration for the Transaction, at closing, Medacta made a payment of $4.5 million in cash. Pursuant to the Parcus Purchase Agreement, the aggregate consideration is subject to customary post-closing adjustments.

Products and Services

We provide a broad array of products and services, including:

Osteoarthritis ("OA") Pain Management: Orthovisc, Monovisc, and Cingal.

Monovisc and Orthovisc are our single- and multi-injection, HA viscosupplement products indicated for pain relief from OA conditions. Labeling in the United States limits their use to the knee exclusively, while labeling outside the U.S. is broader, providing expanded therapeutic options beyond the knee to include anatomies such as the shoulder, hip, and ankle. Our OA Pain Management products are generally administered to patients in an office setting. In the United States, Monovisc and Orthovisc are marketed exclusively by Johnson & Johnson MedTech ("J&J MedTech").

In December 2011, we entered into a fifteen-year licensing agreement with J&J MedTech to exclusively market Monovisc in the United States through December 2026. On October 16, 2025, J&J MedTech extended the agreement to exclusively market Monovisc in the United States through December 2031. In December 2003, we entered into a ten-year licensing agreement to exclusively market Orthovisc in the United States. J&J MedTech has subsequently extended this agreement, and most recently from August 2022 through December 2028. These licensing agreements of Monovisc and Orthovisc can be extended at the option of J&J MedTech.

Monovisc and Orthovisc have been market leaders, based on combined overall revenue in the viscosupplement market, since 2018. Despite recent competitive pricing pressures and reduced market access, Monovisc and Orthovisc remain market leaders in the United States OA Pain Management market. Internationally, we market our OA Pain Management products directly through a worldwide network of commercial distributors, and our international sales team has successfully expanded into new countries, driving double-digit growth in recent years.

Cingal is our novel, next-generation, non-opioid, single-injection OA Pain Management product, consisting of our proprietary cross-linked HA material combined with a fast-acting steroid, designed to provide both short- and long-term pain relief. Cingal is CE marked and has been sold outside the United States for several years, directly in over 50 countries through our network of distributors. Cingal is not currently approved for commercial use in the United States. We have been actively engaging with the FDA on next steps for U.S. regulatory approval.

We have made significant progress in addressing the FDA's requirements for Cingal's approval. In April 2023, we held a Type-C meeting with the FDA, which led to an advice letter received from the FDA in April 2024. The letter included positive feedback and new challenges that we are actively addressing. We also received confirmation that the clinical data for Cingal is a review issue and not a filing issue. Additionally, in September 2024, we acquired the Aristospan New Drug Application ("NDA"), which allowed us to address a recent FDA requirement and will enable us to source the reference drug for a bioequivalence study. In April 2025, we subsequently sold the Aristospan NDA to a third party manufacturer who will supply the reference drug for the bioequivalence study. We had another Type-C meeting with the FDA in February 2025 to discuss finalizing NDA submission requirements, including bioequivalence study requirements. The preclinical and bioequivalence studies have been initiated.. We are committed to bringing this revolutionary pain management therapy to the approximate $1 billion U.S. addressable market. For additional information, please see the section captioned "Item 1. Business-Research and Development."

Regenerative Solutions: Integrity, Hyalofast, and Tactoset.

Integrity is an HA-based scaffold with bone and tendon fixation components and arthroscopic delivery instruments. It is designed to protect injured tendons and promote healing in rotator cuff repair and other tendon procedures. Integrity received FDA clearance for commercial use in the United States in August 2023 and we initiated a limited market release in November 2023. Since its launch, Integrity has shown strong performance, with continuing growth in surgeries and significant adoption by new customers. The system competes in a U.S. tendon augmentation market estimated to be more than $220 million annually.

Hyalofast is a 100% HA resorbable scaffold used for single stage cartilage regeneration. While Tactoset and Integrity are commercialized principally in the United States, Hyalofast is currently available outside the United States in over 30 countries within Europe, South America, Asia, and certain other international markets. In the United States, Hyalofast is a pipeline product under a pivotal Investigational Device Exemption ("IDE") clinical trial and is not available for commercial sale. We submitted a PMA on October 31, 2025 with the FDA, and we are targeting a U.S. launch by 2027, pending approval from the FDA. For additional information, please see the section captioned "Item 1. Business-Research and Development."

Tactoset Injectable Bone Substitute is an HA-enhanced injectable bone repair therapy designed to treat insufficiency fractures and augment hardware fixation, such as suture anchors.

Listed below are the key product drivers to our business

Non-Orthopedic Products: Hyvisc, Hyalobarrier, Anikavisc, Nuvisc

Our Non-Orthopedic product family consists of legacy HA-based products that are marketed principally for non-orthopedic applications. These products include: Hyvisc, our high molecular weight injectable HA veterinary product for the treatment of joint dysfunction in horses due to non-infectious synovitis associated with equine OA; Hyalobarrier, an anti-adhesion barrier indicated for use after abdominal-pelvic surgeries; and ophthalmic products, including injectable, high molecular weight HA products such as Anikavisc and Nuvisc, used as viscoelastic agents in ophthalmic surgical procedures such as cataract extraction and intraocular lens implantation. These Non-Orthopedic products are sold through commercial sales and marketing partners around the world.

Sales Channels

A majority of our products are used by clinicians and surgeons in one of three environments: office-based procedures, hospital operating rooms, and ambulatory surgery centers ("ASCs"). Office-based procedures usually focus on injections, while ASCs are clinics outside of a normal hospital setting, often at least partially physician-owned. These medical care delivery environments typically require different commercial approaches and have distinct call points, necessitating diversity in our sales strategy. For instance, our OA Pain Management product family and certain products in our Non-Orthopedic category are almost entirely utilized in an office-based setting, while our Regenerative Solutions and certain other products in our Non-Orthopedic category are almost exclusively used in hospital operating rooms or ASCs.

As a result of these distinctions, we employ multiple sales models in the United States to ensure that we meet the needs of our customers and other healthcare system stakeholders. For many years, we have maintained a mutually beneficial commercial partnership with J&J MedTech. Pursuant to our contracts with J&J MedTech, we are the exclusive supplier responsible for the manufacture and sale Monovisc and Orthovisc to J&J MedTech in the United States, while J&J MedTech is responsible for the marketing, sales and distribution to end user customers in the United States. We have U.S. commercial partnerships for other products in our Non-Orthopedic product families. Under these partnerships, we sell our products directly to our partners, who perform downstream sales and marketing activities to customers and end-users. In addition to a transfer price, we may also structure our arrangements to receive a royalty on end-user sales.

In the U.S., we sell our Regenerative Solutions portfolio directly to clinicians, including hospitals and ASCs, through a hybrid approach involving our Anika sales team and a large network of independent third-party distributors. We employ selling models that seek to maximize benefits for our company and customers, including contracts with group purchasing organizations and certain fixed-price delivery models. This approach has proven effective, as evidenced by the strong performance of products like the Integrity Implant System, which has seen significant adoption and growth.

Outside of the United States, we market and sell our products using a worldwide network of commercial distributors, providing a solid foundation for future revenue growth and territorial expansion. Our relationships with these partners are generally structured such that we sell our products to them directly, while they, with global support from our team, perform in-country sales and marketing activities to drive local growth and adoption of our products. We expect to generally maintain this model for the foreseeable future, while also selectively evaluating other options and being opportunistic about adopting other sales models, including direct sales, in certain jurisdictions.

We believe that our overall sales approach provides our business with a strong base to drive revenue growth as we continue to grow and scale our commercial infrastructure. We will continue to focus on expanding our commercial capabilities, including market access, innovative sales and delivery models, and improved logistics management. This strategy is expected to enhance our ability to deliver value to our shareholders and meet the needs of our diverse customer base.

Manufacturing

We manufacture all of our HA-based products, including our OA Pain Management and Regenerative Solutions products, as well as certain additional products, at our facility in Bedford, Massachusetts. Here, we have developed significant manufacturing expertise in procedures such as homogenized mixing and filling of highly viscous liquids and creation and manipulation of solid HA into scaffolds or other fiber-based presentations.

To support higher expected output of OA Pain Management and Regenerative Solutions products, we are investing in our Bedford manufacturing facility. This investment is part of our broader strategy to enhance our manufacturing capabilities and ensure we can meet the growing demand for our innovative products.

The raw materials necessary to manufacture our products are generally available from multiple sources. However, we rely on a small number of suppliers for certain key raw materials and other components, parts, and disposables required for the manufacturing and delivery of these products. Any prolonged interruption of operations or significant reduction in the capacity or performance capability of any of our manufacturing facilities, or with any of our key suppliers, could have a material adverse effect on our operations.

Research and Development

Our research and development efforts focus on developing new medical applications that address unmet needs by leveraging our technology platforms. This includes new implant designs, developing intellectual property related to our technology platforms and new products, managing clinical trials for certain product candidates, preparing and processing applications for regulatory clearances and approvals, and conducting process development and scale-up manufacturing activities for our existing and new product development initiatives. For 2025, 2024, and 2023, research and development expenses were $25.8 million, $25.5 million, and $21.8 million, respectively. The increase in 2025 was primarily due to costs associated with increased spending on Cingal U.S. regulatory submission activities and our Integrity clinical study, as well as ensuring compliance with growing global regulatory requirements, such as the European Union ("EU") Medical Device Regulation ("MDR") and new product development initiatives. We anticipate continuing to commit resources to research and development activities, primarily for new product development, regulatory compliance, scale-up manufacturing activities, and preclinical and clinical studies.

Our new product development efforts focus on HA-based products in unmet, large, and growing orthopedic markets to drive long-term value, specifically in OA Pain Management and Regenerative Solutions. To better inform and target our research and development investments, we routinely interact with key external stakeholders, including clinicians, to incorporate customer and patient insights into our development process. This approach helps ensure we bring needed solutions to the market. As we move forward, we plan to continue investing in novel and meaningful new products for our target markets based on our core capabilities, including further expanding our regenerative HA technology platform.

Our development focus for OA Pain Management will continue to be on targeting to bring Cingal, our next-generation, non-opioid, single-injection OA pain product combined with a fast-acting steroid, to the U.S. market. In 2022, we completed a third Phase III clinical trial for Cingal, which achieved its primary endpoint. We have been actively engaging with the FDA on next steps for U.S. regulatory approval. We have made significant progress in addressing the FDA's requirements for Cingal's approval. This includes having numerous meetings with the FDA to discuss finalizing NDA submission requirements and starting a bioequivalence study in 2025. In parallel, we are exploring the potential to advance Cingal through commercial partnerships in the U.S. and select Asian markets.

Development for our Regenerative Solutions product family is focused on several key areas. We are developing novel solutions and line extensions across our regenerative solutions segments, with a key focus on the shoulder, knee, and foot and ankle. These include enhancements to existing regenerative solutions such as our Tactoset Injectable Bone Substitute for hardware augmentation, our Integrity Implant System, a regenerative HA-based patch product targeted at rotator cuff repair that received 510(k) clearance in August 2023 and is now in full market release. Integrity has shown strong performance, with strong growth in surgeries and significant adoption by new customers.

In addition, we have made significant progress on a full regenerative pipeline, leveraging the commercial success of Integrity, as well as progress on our clinical trial to support approval in the United States for Hyalofast, our single-stage, off-the-shelf cartilage repair therapy, currently sold only outside the United States. In early 2023, we completed enrollment of 200 patients in our U.S. pivotal FastTRACK Phase III clinical trial evaluating Hyalofast, a single-stage, hyaluronic acid-based scaffold for cartilage repair. This clinical trial had a two-year follow-up protocol. We used a modular PMA filing process for our regulatory submission to the FDA for approval of Hyalofast in the U.S. In July 2025, we received topline results from the study and Hyalofast did not achieve significance on its pre-specified co-primary endpoints for pain and function. Although the study did not meet its co-primary endpoints, Hyalofast demonstrated consistent improvements over microfracture across all measures of pain and function, Sports and Recreation Function and Quality of Life and other measures including Total Knee Injury and Osteoarthritis and Outcomes Score. The statistical analysis was impacted by both a disproportionately higher subject dropout rate in the microfracture arm and missed visits due to COVID. Based on the strength and consistency of the overall data and the positive real-world clinical experience including data from multiple independent studies outside the U.S. over the past 15 years, we submitted the final PMA module to the FDA on October 31, 2025.

As expected, we received in January 2026 a deficiency letter from the FDA informing us that the Hyalofast PMA lacks information needed to complete its review. Among other things, the letter addressed matters related to chemistry, manufacturing and controls (CMC) and the statistical analysis plan for both primary and secondary endpoints and whether any of these endpoints achieved statistical significance. We plan to continue to engage with the FDA to explore potential approaches to address the FDA's concerns so that it might complete its review. Although there can be no assurance that we will be able to fully address the FDA's concerns, we continue to believe the totality of evidence presented in this study and the data from outside the United Sates demonstrates the clinical value of Hyalofast.

Intellectual Property

We pursue patent and trademark protection for our key technologies, products, and product enhancements in the United States and select international markets. When appropriate, we enforce and plan to defend our patent and trademark rights. While our patent and trademark portfolio provides competitive advantages for our current and future product lines, it is not our only form of protection. We also depend on trade secrets and ongoing technological innovations and regulatory approvals to sustain our competitive edge.

Our intellectual property strategy is integral to our overall corporate strategy, particularly as we focus on our core HA technology and Regenerative Solutions products. This approach ensures that we can continue to innovate and bring new, differentiated products to market, such as Integrity and Hyalofast, while protecting our proprietary technologies and maintaining our competitive position in the industry.

Competition

Many of these larger companies have significantly greater financial resources, larger research and development teams, more extensive marketing and manufacturing capabilities, and more experience with regulatory processes than we do. We also face competition from academic institutions, government agencies, and other research organizations involved in product research, development, and commercialization. Additionally, many of our competitors compete with us for collaborations in research and development, clinical trial, and commercialization programs.

We primarily compete with other market participants on the efficacy and safety of our products, as well as the breadth of our overall product portfolio. Other competitive factors include the timing and scope of regulatory approvals, availability of manufacturing supplies and raw materials, marketing and sales capabilities, reimbursement coverage, product pricing, and patent protection. Key factors that may affect our competitive position include:

The quality and breadth of our product portfolio development;

Our ability to complete successful clinical studies and obtain FDA and foreign regulatory approvals;

Our ability to source raw materials and components at competitive prices and deliver them on schedule;

Our ability to strengthen our commercial infrastructure, integrate sales channels, and execute sales strategies;

The execution of commercial strategies by our key partners and our management of these relationships;

Our ability to recruit and retain skilled employees; and

The availability of capital resources to fund strategic activities, including acquisitions.

We are aware of several companies developing and marketing competitive products. Some competitors have already obtained product approvals, submitted applications for approval, or commenced clinical studies in the U.S. or abroad. All our products face substantial competition, and there is a risk that we may not compete effectively against current or future competitors. Additionally, healthcare legislation and regulation aimed at reducing costs have led to industry consolidation, creating larger companies with greater market power. This has intensified competition in the provision of products and services. Market makers, such as group purchasing organizations and integrated delivery networks, have increased their negotiating leverage. If these market makers demand significant price concessions or exclude us as a supplier, our product revenue could be adversely impacted.

Despite these challenges, many of our products, such as Monovisc, Orthovisc, and Cingal, have maintained strong market positions due to their clinical efficacy and safety profiles. Our regenerative solutions, including Integrity and Hyalofast, are also gaining traction, supported by robust clinical data and innovative technology. We continue to focus on expanding our market presence and enhancing our competitive edge through strategic investments in research and development, regulatory compliance, and commercial infrastructure.

Governmental Regulation

The clinical development, manufacturing, and marketing of our products are subject to governmental regulation in the United States, the EU, and other territories worldwide, including under the Federal Food, Drug, and Cosmetic Act ("FDCA") in the United States. Medical products regulated by the FDA and other authorities are generally classified as drugs, biologics, or medical devices. The classification standards for our products may change over time due to new regulations or updated interpretations of existing regulations.

Regulation of Medical Devices

Medical devices intended for human use are classified into three categories (Class I, II, or III) based on the controls deemed necessary by the FDA to ensure their safety and effectiveness. Class I and II devices are subject to the 510(k) premarket notification process unless exempt. Class III devices must obtain FDA approval of their PMAs to be commercially distributed.

Some of our current products require premarket notification and clearance under section 510(k) of the FDCA. To obtain 510(k) clearance, a company must submit a premarket notification demonstrating that the proposed device is "substantially equivalent" to a legally marketed device, known as a "predicate device." A device is substantially equivalent if it has the same intended use and either the same technological characteristics or different technological characteristics that do not raise new questions of safety and effectiveness.

The FDA aims to review and issue a determination on a 510(k) submission within 90 calendar days, though it often takes longer. The FDA may require additional information, including clinical data, to make a determination regarding substantial equivalence.

If the FDA agrees that the device is substantially equivalent, it will grant 510(k) clearance to market the device. If the FDA determines that the device is "not substantially equivalent" to a predicate device, it is designated as a Class III device, requiring more rigorous PMA requirements or a risk-based classification determination through the "de novo" process for novel medical devices that are low to moderate risk.

After receiving 510(k) clearance, any modification that could significantly affect the device's safety or effectiveness, or constitute a major change in its intended use, requires a new 510(k) clearance or PMA approval. The determination of whether a modification could significantly affect the device's safety or effectiveness is initially left to the manufacturer using available FDA guidance. Many minor modifications are documented by a "letter to file," but the FDA may review these letters and require the manufacturer to cease marketing and recall the modified device until 510(k) clearance or PMA approval is obtained.

Some of our devices are Class III devices requiring PMA approval before marketing. In a PMA, the manufacturer must demonstrate that the device is reasonably safe and effective, supported by extensive data from preclinical studies and clinical trials. The PMA must also include a full description of the device, its components, manufacturing methods, facilities, controls, and proposed labeling. The FDA has 180 days to review a PMA, though it often takes longer. An advisory committee of external experts may review the application and provide recommendations to the FDA. The FDA generally conducts a pre-approval inspection of the manufacturing facilities to ensure compliance with the FDA's quality management system regulation ("QMSR").

The FDA will approve the device for commercial distribution if the data and information in the PMA constitute valid scientific evidence and provide reasonable assurance of the device's safety and effectiveness. Certain changes to an approved device that affect its safety or effectiveness require submission of a PMA supplement or a new PMA.

Regulation of a Drug

New drugs require FDA approval of an NDA to be marketed. The approval process typically takes several years and varies based on the product's type, complexity, and novelty. None of our products are currently approved under an NDA.

The steps for obtaining FDA approval of an NDA include:

Completion of preclinical laboratory tests, animal studies, and formulation studies under the FDA's Good Laboratory Practices regulations;

Submission of an Investigational New Drug Application ("IND") for human clinical testing, which must become effective before trials begin and require Institutional Review Board ("IRB") approval at each clinical site;

Performance of adequate and well-controlled clinical trials in accordance with Good Clinical Practices to establish the product's safety and efficacy;

Submission of a user fee (unless waived) and an NDA, containing detailed information about the product's Chemistry, Manufacturing, and Control ("CMC"), preclinical and clinical trial outcomes, and proposed labeling and packaging;

Satisfactory review of the NDA by the FDA, including resolution of any questions raised during the review;

Completion of an FDA advisory committee review, if applicable;

Completion of an FDA inspection of the manufacturing facilities to assess compliance with current Good Manufacturing Practices ("cGMP") regulations; and

FDA approval of the NDA, including agreement on post-marketing commitments, if applicable.

After the NDA submission is accepted, the FDA reviews it to determine whether the proposed product is safe and effective for its intended use and has an acceptable purity profile. A drug-drug combination product must meet the FDA's fixed combination rule, demonstrating the contribution of each component to the therapeutic effect.

If the FDA finds the application, manufacturing process, or facilities unacceptable, it will either not approve the NDA or issue a complete response letter outlining the deficiencies. The applicant may resubmit the NDA, withdraw the application, or request a hearing. Despite additional information, the FDA may ultimately decide the NDA does not meet regulatory criteria for approval.

The FDA aims to review standard NDAs in 10 months and priority NDAs in six months, though it does not always meet these goals, which are subject to change.

Clinical Trials

Clinical trials are typically required to support a PMA, NDA, and sometimes a 510(k) submission. All trials must be approved by and conducted under the oversight of an IRB for each site. Clinical investigators must obtain informed consent from all study subjects. Trials can be suspended or terminated by us, the FDA, or the IRB for various reasons, including risks outweighing benefits. Information about certain clinical studies must be submitted to the National Institutes of Health for public dissemination at https://www.clinicaltrials.gov. All clinical investigations of devices must comply with the FDA's investigational device exemption (IDE) regulations, which govern labeling, prohibit promotion, and specify recordkeeping, reporting, and monitoring responsibilities. Significant risk devices require an IDE application approved by the FDA before trials begin. Non-significant risk devices only require IRB approval.

For new drugs, an IND application must be submitted before clinical studies begin, containing information on animal studies, manufacturing, and clinical protocols. The IND must become effective before trials start, automatically becoming effective 30 days after receipt unless the FDA raises concerns. If concerns arise, they must be resolved before trials proceed.

Human clinical trials for NDA approval are typically conducted in three phases:

Phase 1: Initial testing in healthy subjects to assess safety, sometimes conducted in patients for severe diseases.

Phase 2: Trials in a limited patient population to identify adverse effects, evaluate efficacy, and determine dosage.

Phase 3: Large-scale trials to provide statistically significant evidence of efficacy, evaluate dosage, potency, and safety, and establish the benefit-risk relationship for approval.

For chronic diseases, safety and efficacy data must be gathered over extended periods, ranging from six months to three years or more.

During all phases, the FDA requires extensive monitoring and auditing of clinical activities, data, and investigators.

Annual progress reports and serious adverse event reports must be submitted to the FDA.

Post-Approval Requirements

Products manufactured or distributed pursuant to FDA clearances or approvals are subject to ongoing regulation by the FDA. This includes requirements for monitoring, record-keeping, advertising and promotion, reporting adverse experiences, and limitations on industry-sponsored scientific and educational activities.

FDA regulations mandate that PMA and NDA approved products be manufactured in specific facilities, and all devices and drugs must comply with the QMSR and cGMP regulations, respectively.

Manufacturers and other entities involved in the manufacture and distribution of cleared or approved devices or drugs must register their establishments and list their products with the FDA and certain state agencies. These manufacturers are subject to periodic announced and unannounced inspections by the FDA and state agencies to ensure compliance with regulatory requirements. Discovery of violative conditions, including failure to conform to QMSR and cGMP regulations, could result in enforcement actions.

Products may only be promoted for the cleared or approved indications and in accordance with the label provisions. While the FDA does not regulate physicians' treatment choices, it restricts communications about off-label use of products. The FDA and other agencies actively enforce laws prohibiting off-label marketing and promotion. Companies found to have improperly marketed or promoted off-label uses may face significant liability, including criminal and civil penalties under the FDCA and False Claims Act, exclusion from federal healthcare programs, and mandatory compliance programs.

The FDA may also require post-marketing testing and surveillance to monitor a marketed product's effects. Discovery of previously unknown problems or non-compliance with FDA requirements can lead to adverse publicity, product restrictions, and judicial or administrative enforcement. The FDA has broad regulatory compliance and enforcement powers, including issuing Form FDA 483 notices, warning letters, civil money penalties, suspending or delaying clearances or approvals, product recalls, production shutdowns, withdrawal of approvals, product seizures, consent decrees, injunctive relief, or criminal prosecution. The FDA can also require manufacturers to repair, replace, or refund the cost of devices. Outside the United States, regulatory agencies may exert similar powers.

EU Regulation

In the EU, medical devices must be CE marked to be marketed. CE marking involves working with a notified body (or self-certifying for certain low-risk, Class I devices) to demonstrate that the device meets all applicable general safety and performance requirements of EU medical devices legislation, including compliance with the manufacturer's Quality Management System. The EU's Medical Devices Directive ("MDD") has been replaced by the EU Medical Devices Regulation ("EU MDR"), effective May 26, 2021. Devices certified under the MDD may continue to be marketed during a transitional period. On March 15, 2023, the transition period was extended from May 26, 2024, to either May 26, 2026, December 31, 2027, or December 31, 2028, depending on device classification, provided certain conditions are met. These conditions include compliance with EU MDR requirements for post-market surveillance, vigilance, and registration, having a contract with an EU MDR notified body before September 26, 2024, and filing an agreement for conformity assessment by May 26, 2024. The EU MDR generally requires increased levels of clinical data compared to MDD requirements, and all product technical data must comply with the latest standards regardless of when the product was initially developed.

Drug approval in the EU follows one of several processes: (i) a centralized procedure, involving a scientific opinion from the European Medicines Agency's Committee for Medicinal Products for Human Use ("CHMP"), with the marketing authorization granted by the European Commission; (ii) a mutual recognition procedure, where an individual country's regulatory agency approves the product, followed by mutual recognition by other countries' regulatory agencies; (iii) a decentralized procedure, where approval is sought simultaneously through multiple countries' regulatory agencies; or (iv) a national procedure, where approval is sought through a single country's regulatory agency.

UK Regulation

As of January 1, 2021, the Medicines and Healthcare products Regulatory Agency ("MHRA") is the UK's standalone medicines and medical devices regulator. On January 1, 2025, a new arrangement called the "Windsor Framework" came into effect and reintegrated Northern Ireland under the regulatory authority of the MHRA with respect to medicinal products. The Windsor Framework removes EU licensing processes and EU labeling and serialization requirements in relation to Northern Ireland and introduces a UK-wide licensing process for medicines. In order to obtain a UK marketing authorization to commercialize products in the UK, an applicant must follow one of the UK national authorization procedures or one of the remaining post-Brexit international cooperation procedures. The MHRA has introduced changes to national licensing procedures, including procedures to prioritize access to new medicines that will benefit patients, a 150-day assessment (subject to clock-stops) and a rolling review procedure. In addition, since January 1, 2024, the MHRA introduced the International Recognition Procedure ("IRP"), which enables the MHRA when reviewing certain types of marketing authorization applications to take into account the expertise and decision-making of trusted regulatory partners, including the EMA.

Regarding medical devices, since the end of the Brexit transitional period on January 1, 2021, new regulations require medical devices to be registered with the MHRA before being placed on the Great Britain market. The MHRA will only register devices where the manufacturer or their United Kingdom Responsible Person has a registered place of business in the UK. CE marks issued by EU notified bodies to place medical devices on the EU market will remain valid in the UK until June 30, 2028 (for CE marks issued under the EU MDD) or June 30, 2030 (for CE marks issued under the EU MDR). After these dates, a UK Conformity Assessed ("UKCA") mark will be required to place a device on the Great Britain market. Manufacturers may choose to use the UKCA mark voluntarily before these dates. However, the UKCA mark is not recognized in the EU. The EU regulatory framework for medical devices continues to apply in Northern Ireland under the Northern Ireland Protocol. Medical devices placed on the Northern Ireland market generally require CE marking under EU rules; where a UK Approved Body is used for mandatory third-party conformity assessment for the Northern Ireland market, the device must bear CE UKNI, although devices bearing the CE UKNI marking will not be accepted on the EU market.

Other Health Care Laws

The delivery of our products is regulated by the U.S. Department of Health and Human Services and other state and non-U.S. government agencies responsible for healthcare reimbursement and regulation. U.S. laws and regulations are primarily imposed in connection with government-funded healthcare programs, such as Medicare and Medicaid, and the government's interest in regulating healthcare quality and cost. Other governments also impose regulations on their healthcare reimbursement programs and the delivery of healthcare items and services.

We are subject to various U.S. federal and state laws pertaining to healthcare fraud and abuse, including anti-kickback, false claims, self-referrals, and other healthcare fraud. Additionally, we are subject to U.S. federal and state transparency laws, such as the U.S. Physician Payments Sunshine Act, which requires us to annually disclose certain payments and other transfers of value made to U.S.-licensed healthcare practitioners (e.g., physicians, nurse practitioners, advanced practice registered nurses) and teaching hospitals. Similar laws and regulations regarding sales, marketing, and advertising practices exist in other regions where we operate.

Coverage and Reimbursement

Sales of medical products depend partly on coverage by third-party payers, such as government healthcare programs, commercial insurance, and managed healthcare organizations, and the level of reimbursement provided. Coverage and reimbursement decisions are made on a plan-by-plan basis, and third-party payers are increasingly reducing reimbursements for medical products and procedures.

Factors considered by payers in determining reimbursement include:

Whether the product or procedure is a covered benefit under the health plan;

Safety, effectiveness, and medical necessity;

Appropriateness for the specific patient;

Cost-effectiveness; and

Whether the product or procedure is experimental or investigational.

No uniform policy for coverage and reimbursement exists among third-party payers in the United States, leading to significant differences in coverage and reimbursement for products and procedures. The coverage determination process is often time-consuming and costly, requiring scientific and clinical support for each payer separately, with no assurance of consistent or initial coverage and adequate reimbursement. Rules and regulations regarding reimbursement change frequently, often on short notice.

In the United States, our products are administered by healthcare providers and reimbursed under a "buy-and-bill" model, pursuant to which providers purchase the product and seek reimbursement from third-party payers. Under this model, providers bear inventory, billing, and reimbursement risk, and may be sensitive to reimbursement levels, payment timing, claims denials, and administrative requirements imposed by payers. Even where coverage is available, third-party payers may impose prior authorization, step therapy, site-of-care restrictions, or other utilization management requirements, or may delay, deny, or reduce payment based on administrative, technical, or documentation-related reasons. These practices may discourage provider adoption or reduce utilization of our products.

The U.S. government, state legislatures, and foreign governments continue to implement cost-containment programs, including price controls, coverage and reimbursement restrictions, and generic substitution requirements. Adoption of such measures could limit product sales. Decreases in third-party reimbursement or decisions not to cover a product or procedure could reduce physician usage and patient demand, adversely affecting sales.

Health Care Reform

The Affordable Care Act of 2010 ("ACA") substantially changed healthcare financing by both governmental and private insurers, significantly impacting the pharmaceutical and medical device industries. The ACA included provisions governing enrollment in federal healthcare programs, reimbursement adjustments, changes to fraud and abuse laws, and Medicare provisions aimed at reducing costs. It also introduced comparative effectiveness research, an independent payment advisory board, and pilot programs to evaluate alternative payment methodologies. Since its enactment, there have been ongoing judicial and Congressional efforts to modify or repeal certain aspects of the ACA. For example, the Further Consolidated Appropriations Act, 2020, repealed the Cadillac tax, the health insurance provider tax, and the medical device excise tax. It is impossible to determine how future healthcare reform measures, including changes affecting Medicare reimbursement, utilization management, site-of-care policies, or drug pricing and payment methodologies, will impact our business.

Data Privacy and Security Laws

We are also subject to various laws and regulations concerning data privacy in the United States, Europe, and elsewhere, including Section 5(a) of the Federal Trade Commission Act, U.S. state consumer privacy laws, state breach notification laws, rules restricting the transfer of sensitive personal data, and comprehensive privacy and data protection laws, in the EU and the United Kingdom, including the General Data Protection Regulation ("GDPR"). These laws and regulations impose stringent requirements on the processing, administration, security, and confidentiality of personal data and empower enforcement agencies to impose large penalties for noncompliance. In addition, various jurisdictions around the world continue to propose new laws that regulate the privacy and/or security of certain types of personal data. Complying with these laws and regulations, requires us to devote significant resources. Any failure or perceived failure to comply with them may subject us to fines, penalties, litigation, reputational harm, and may also require us to change our data processing strategies.

Environmental Laws

We believe that we are in compliance with all foreign, federal, state, and local environmental regulations with respect to our manufacturing facilities. The cost of ongoing compliance with such environmental regulations does not have a material effect on our operations.

Seasonality

Our OA Pain Management and Non-Orthopedic product families are generally less seasonal in nature due to the nature of our product mix and sales channels and order strategies of our customers. With our Regenerative Solutions product portfolio, procedure volumes are normally higher in the fourth quarter due to several factors including the satisfaction by patients of insurance deductible limits and the time of year patients prefer to have elective procedures. Our Regenerative Solutions business can be impacted by periodic restrictions on the performance of elective surgical procedures throughout the United States and global markets, the unavailability of physicians and/or changes to their treatment prioritizations, reductions in the levels of healthcare facility staffing and, in certain instances, and the willingness or ability of patients to seek treatment.

Environmental, Social and Governance

In 2021, we began building a foundational Environmental, Social and Governance ("ESG") framework guided by our corporate values. We completed a Sustainability Accounting Standards Board ("SASB")-based materiality assessment that incorporated input from advisors and key stakeholders. This process identified the ESG topics most significant to our business and led to the selection of six initial focus areas aligned with SASB standards for the medical device industry. We plan to review and update our ESG efforts as needed over time.

Human Capital Management

We believe that creating a diverse, talented, and inclusive workplace is central to our culture, employee recruitment, retention, engagement, innovation, operational excellence, and overall performance. This culture and drive for performance are crucial in attracting and retaining key talent. Our culture is centered around our fundamental values of:

Trust and Respect: We build trust and show respect in every interaction.

Quality: We are committed to quality as we work to improve people's lives.

Empowerment & Teamwork: We are empowered as a team to make decisions that drive impact.

Focus: We focus on what matters most and are driven to be better every day.

Our industry requires complex processes for product development and commercialization, necessitating deep expertise and experience across various disciplines. Medical device companies compete for a limited number of qualified applicants to fill specialized positions, requiring competitive compensation and benefits packages and an attractive culture to attract and retain skilled employees.

As of December 31, 2025, we employed 235 full-time employees in the United States and Europe.

We believe that our employees' understanding of how their work contributes to our overall strategy and performance is key to our success. To communicate these important topics engagingly, we utilize various channels, including all-employee town hall meetings led by senior management through regular email and intranet updates from our CEO and other key executives. We also monitor voluntary turnover as compared to national and industry benchmarks and evaluate improvement opportunities through exit and stay interviews.

We are committed to a diverse, equitable, and inclusive workplace where all employees, regardless of gender, race, ethnicity, national origin, age, sexual orientation or identity, education, or disability, are valued, respected, and supported. We will continue to enhance workforce diversity through focused talent acquisition goals and development plans.

The ongoing development of our employees is a catalyst for our growth and success. Many of our employees have advanced degrees in their professions. We support further development with individualized development plans, mentoring, coaching, group training, and conference attendance. We also provide financial support, including tuition reimbursement for qualified programs, and access to a broad-based learning management platform for self-directed learning and improvement.

To attract and retain qualified employees and key talent, we offer total rewards packages consisting of base salary, cash bonuses, and comprehensive benefits. We also provide equity compensation for certain employees based on various criteria, including their level within the company. All employees globally are eligible to participate in the annual incentive cash bonus plan or a sales incentive plan aligned with corporate and individual performance. Bonus opportunities and equity compensation increase as a percentage of total compensation based on responsibility level. Our employee stock purchase plan, introduced in 2021, allows eligible employees to purchase shares in Anika at a discounted rate.

We remain focused on promoting the total wellness of our employees, including resources, programs, and services to support their physical, mental, and financial wellness. We have established safety policies and protocols and regularly update employees on any changes. To further protect on-site employees, we invest resources for environmental, health and safety, conduct regular safety training for our employees and provide personal protective equipment and cleaning supplies.

Product Liability

The testing, marketing, and sale of human health care products entail an inherent risk of allegations of product liability, and we cannot assure that substantial product liability claims will not be asserted against us. Although we have not received any material product liability claims to date, we cannot be sure that if material claims arise in the future, our insurance will be adequate to cover all situations. Moreover, we cannot be sure that such insurance, or additional insurance, if required, will be available in the future or, if available, will be available on commercially reasonable terms. Any product liability claim, if successful, could have a material adverse effect on our business, financial condition, and results of operations.

Available Information

We are required to file annual, quarterly, and current reports, proxy statements, and other information with the SEC. The SEC maintains a website at https://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Investors and others should note that we announce material information to our investors using our investor relations website (https://ir.anika.com/), SEC filings, press releases, public conference calls and webcasts. We use these channels as well as social media, including LinkedIn and Twitter (@AnikaThera), to communicate with the public about our company, our business, our product candidates and other matters. It is possible that the information we post on social media could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels listed on our investor relations website. Information that is contained in and can be accessed through our website or our social media posts are not incorporated into, and does not form a part of, this Annual Report on Form 10-K.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and other information, including amendments and exhibits to such reports, filed or furnished pursuant to the Securities Exchange Act of 1934, are available free of charge in the "SEC Filings" section of our website at http://www.anika.com, as soon as reasonably practicable after the reports are electronically filed with or furnished to the SEC. The information on our website is not part of this Annual Report on Form 10-K.

ITEM 1A. RISK FACTORS

Our operating results and financial condition have varied in the past and could vary significantly in the future depending on a number of factors. You should consider carefully the risks and uncertainties described below, in addition to the other information contained in this Annual Report on Form 10-K, before deciding whether to purchase our common stock. If any of the following risks actually occur, our business, financial condition, results of operations, and future prospects could be materially and adversely affected. In that event, the trading price of our common stock could decline, and stockholders could lose part or all of their investment.

Risks Related to Our Business and Industry

Our future success depends on growth in sales of our products. There can be no assurance that such growth can be achieved or, if achieved, sustained. There can be no assurance that, even if substantial growth in product sales and the demand for our products is achieved, we will be able to:

Gain acceptance of our expanding portfolio of existing products, as well as future products, by the medical community, hospitals, physicians, other health care providers, third-party payers, and end-users, which acceptance may depend upon the extent to which the medical community and end-users perceive our products as safer, more effective or more cost-competitive than other similar products.

Maintain, manage, and develop the necessary manufacturing capabilities and inventory management practices;

Develop, implement, and integrate the mix of appropriate sales channels needed to generate increased sales across our product platform and to develop marketing partners and viable commercial strategies for the distribution of our growing mix of products;

Attract and retain required key personnel; and

Maintain the financial, accounting, and management systems needed to manage our growing business and the associated demand for our products.

There can be no assurance that our current and future products will achieve significant market acceptance on a timely basis, or at all. The failure of some or all of our products to achieve significant market acceptance, or our failure to successfully manage future growth, could have a material adverse effect on our business, financial condition, and results of operations.

We compete with numerous companies, including large pharmaceutical firms and specialized medical device companies, across our product lines. For our OA Pain Management products, our main competitors include Sanofi Genzyme, Zimmer Biomet, Inc., Bioventus Inc., Avanos Medical, Inc., Pacira BioSciences, Conmed Corporation and Ferring Pharmaceuticals, among others. With respect to our Regenerative Solutions products, our key competitors are Arthrex, Inc., Smith & Nephew PLC, Stryker Corporation, and Zimmer Biomet, Inc., as well as smaller organizations like Atreon Orthopedics and Bone Support AB. Many of these companies have substantially greater financial resources, larger research and development staffs, more extensive marketing and manufacturing organizations, and more experience in the regulatory process than us. We also compete with academic institutions, government agencies, and other research organizations that are involved in the research and development and commercialization of products similar to our own. Many of our competitors also compete against us in securing relationships with collaborators for their research and development and commercialization programs.

Because a number of companies are developing or have developed products for similar applications as our products and have received FDA clearance or approval, the successful commercialization of a particular product will depend in part upon our ability to complete clinical studies and/or obtain the FDA marketing and foreign regulatory clearance or approvals prior to our competitors, or, if regulatory clearance or approval is not obtained prior to our competitors, to identify markets for our products that may be sufficient to permit meaningful sales of our products. Additionally, legislation and regulation aimed at curbing rising healthcare costs has resulted in a consolidation trend in the healthcare industry to create larger companies, including hospitals, with greater market power. In turn, this has led to greater and more intense competition in the provision of products and services to market participants. Important market makers, like group purchasing organizations and integrated delivery networks, have increased their negotiating leverage, and if these market makers demand significant price concessions or if we are excluded as a supplier by these market makers, our product revenue could be adversely impacted. There can be no assurance that we will be able to compete against current or future competitors or that competition will not have a material adverse effect on our business, financial condition, and results of operations.

Because healthcare costs have risen significantly over the past decade, numerous initiatives and reforms have been launched by legislators, regulators, and third-party payers to curb these costs. As a result, there has been a consolidation trend in the healthcare industry to create larger companies, including hospitals, with greater market power. As the healthcare industry consolidates, competition to provide products and services to industry participants has become and may continue to become more intense. This may result in greater pricing pressures and the exclusion of certain suppliers from important markets such as group purchasing organizations, independent delivery networks, and large single accounts continuing to use their market power to consolidate purchasing decisions. If a group purchasing organization excludes us from being one of their suppliers, our net sales could be adversely impacted. We expect that market demand, government regulation, third-party reimbursement policies, and societal pressure will continue to change the worldwide healthcare industry, which may exert further downward pressure on the prices of our products and limit our access to sell our products and services to customers.

We have historically derived most of our revenue from a small number of customers who resell our products to end-users. Many of these customers are significantly larger companies than us. In 2025, J&J MedTech accounted for 50% of our revenue. While we have started to diversify our sales channels, including through the implementation of a direct commercial model in the United States for our Regenerative Solutions products, we expect to continue to be dependent on a small number of large customers for a substantial portion of our business. The failure of key customers to purchase our products in the amounts they historically have or in amounts that we expect would seriously harm our business.

In addition, if present and future customers terminate their purchasing arrangements with us, significantly reduce or delay their orders, or seek to renegotiate their agreements on terms less favorable to us, our business, financial condition, and results of operations will be adversely affected. If we accept terms less favorable than the terms of the current agreements, such renegotiations may have a material adverse effect on our business, financial condition, and/or results of operations. Furthermore, in any future negotiations we may be subject to the perceived or actual leverage that these customers may have given their relative size and importance to us. Any termination, change, reduction, or delay in orders could seriously harm our business, financial condition, and results of operations. The loss of any one of our major customers, the delay of significant orders from such customers or our inability to timely supply product to these customers (including due to production and shipping delays attributable to supply or staffing shortages), even if only temporary, could reduce or delay our recognition of revenues, harm our reputation in the industry, and reduce our ability to accurately predict cash flow, and, as a consequence, could seriously harm our business, financial condition, and results of operations.

We experience quarterly fluctuations in our product sales as a result of multiple factors, many of which are outside of our control including our arrangements with J&J MedTech which performs most of the downstream sales and marketing activities to customers and end-users for Monovisc and Orthovisc in the United States. Therefore, we are subject to fluctuations in our customers' sales patterns and corresponding ordering patterns, including J&J MedTech. These quarterly fluctuations create uncertainty as to the volume of sales that we may achieve in a given period. As a result, comparing our operating results on a period-to-period basis might not be meaningful. You should not rely on our past results as an indication of our future performance. Our operating results could be disproportionately affected by a reduction in revenue because a proportionately smaller amount of our expenses varies with our revenue. As a result, our quarterly operating results are difficult to predict, even in the near term.

Although we believe that alternative sources for many of the components and raw materials that we use in our manufacturing processes are available, we cannot be certain that the supply of key raw materials will continue to be available at current levels or will be sufficient to meet our future needs. We continue to see impacts on our supply chain as the companies that produce our products, product components or otherwise support our manufacturing processes, the distribution centers where we manage our inventory, or the operations of our logistics and other service providers, including third parties that sterilize and store our products, were disrupted, temporarily closed or experienced worker shortages for a sustained period of time during and following the global pandemic or due to other supply chain disruptions. We also have to enter into longer-term purchase commitments with these key suppliers that could lead impacts on cost and volatility of supply. Any supply interruption could harm our ability to manufacture our products until a new source of supply is identified and qualified. We may not be able to find sufficient alternative suppliers in a reasonable time period, or on commercially reasonable terms, if at all, and our ability to produce and supply our products could be impaired.

We manufacture our global commercial supply from a single site located in Bedford, Massachusetts. The operation of biomedical manufacturing plants involves many risks, including the risks of breakdown, failure, substandard performance of equipment, the inability of production runs to pass internal quality standards, the need to comply with the requirements of directives of government agencies, including the FDA, and the occurrence of natural and other disasters. Such occurrences could have a material adverse effect on our business, financial condition, and results of operations during the period of such operational difficulties and beyond.

In addition, governmental agencies of the United States or other countries may impose new requirements regarding registration, labeling or prohibited materials that may require us to modify or re-register our devices once they are already on the market or otherwise impact our ability to market the devices in the United States or other countries. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing authorization that we may have obtained, which could have a material adverse effect on our business, prospects, results of operations, financial condition and our ability to achieve or sustain profitability. The process of complying with these government regulations can be costly and time-consuming, and could delay or prevent the production, manufacturing or sale of our products.

The testing, marketing, and sale of human health care products include an inherent risk of allegations of product liability, and there can be no assurance that substantial product liability claims will not be asserted against us. Although we have not received any material product liability claims to date and we believe that we have adequate insurance coverage to cover such product liability claims should they arise, there can be no assurance that material claims will not arise in the future or that our insurance will be adequate to cover all situations. Moreover, there can be no assurance that such insurance, or additional insurance, if required, will be available in the future or, if available, will be available on commercially reasonable terms. Any product liability claim, if successful, could have a material adverse effect on our business, financial condition, and results of operations.

We and our third-party providers are subject to national, international, federal or state laws and regulations, regulatory guidance and industry standards relating to data protection, privacy and information security. This includes the EU, GDPR, and the United Kingdom ("UK") equivalent of the same (the "UK GDPR" together with the EU GDPR, the "GDPR"), as well as other national data protection legislation in force in relevant European Economic Area ("EEA") Member States and the UK (including the UK Data Protection Act 2018), which governs the collection, use, storage, disclosure, transfer, or other processing of personal data (including health data processed in the context of clinical trials): (i) regarding individuals in the EEA and UK; and/or (ii) carried out in the context of the activities of our establishment in any EEA Member State or the UK.

The GDPR is wide-ranging in scope and imposes numerous additional requirements on companies that process personal data, including imposing special requirements in respect of the processing of special categories of personal data (such as health and data), relying on a legal basis or condition for processing personal data, where required, requiring that consent of individuals to whom the personal data relates, requiring information disclosures to individuals regarding data processing activities, requiring that safeguards are implemented to protect the security and confidentiality of personal data, creating mandatory data breach notification requirements in certain circumstances, requiring data protection impact assessments for high risk processing and requiring that certain measures (including contractual requirements) are put in place when engaging third-party processors. The GDPR also provides individuals with various rights in respect of their personal data. The definition of personal data under GDPR is defined broadly and includes pseudonymized or coded data; GDPR will, therefore, apply in the context of data collected and processed about clinical trial participants and investigators in the EU and UK. We are required to apply GDPR standards to any clinical trials that our EEA and UK established businesses carry out anywhere in the world.

Significantly, the GDPR imposes strict rules on the transfer of personal data out of the EEA or the UK to the United States or other regions that have not been deemed to offer "adequate" privacy protections. Currently, we rely mainly on Standard Contractual Clauses approved by the European Commission ("SCCs") to legitimize transfers of personal data out of the EEA. On June 4, 2021, the European Commission issued new forms of SCCs for data transfers from controllers or processors in the EEA (or otherwise subject to the EU GDPR) to controllers or processors established outside the EEA (and not subject to the EU GDPR). The UK is not subject to the EC's new SCCs but has published its own standard clauses, the International Data Transfer Agreement, which enables transfers from the UK. We will be required to implement these new safeguards in the event these safeguards are used as our basis for conducting restricted data transfers under the EU GDPR and UK GDPR and doing so may require significant effort and cost. If relying on the SCCs or UK IDTA for data transfers, we may also be required to carry out transfer impact assessments to assess whether the recipient is subject to local laws which allow public authority access to personal data. There continue to be concerns about whether the SCCs and other international transfer mechanisms will face additional legal challenges. Any inability to transfer personal data from the EEA to the U.S. in compliance with data protection laws may impede our ability to conduct trials and may adversely affect our business and financial position.

The GDPR increases our responsibilities and may increase our liability in relation to personal data that we process where such processing is subject to the GDPR. While we have taken steps to comply with the GDPR, and implementing legislation in applicable EEA member states and the UK, including by seeking to establish appropriate lawful bases for the various processing activities we carry out, reviewing our security procedures and those of our service providers, and entering into data processing agreements with relevant service providers we cannot be certain that our efforts to achieve and remain in compliance have been, and/or will continue to be, fully successful. Given the breadth and depth of changes in data protection obligations, complying with the GDPR and similar laws' requirements are rigorous and time intensive and require significant resources and a review of our technologies, systems and practices, as well as those of any third-party service providers, contractors or consultants that process or transfer personal data.

The UK's data protection regime is independent from but aligned to the EU's data protection regime. Although the UK is regarded as a third country under the EU's GDPR, the European Commission has now issued an adequacy decision recognizing the UK as providing adequate protection under the EU GDPR and, therefore, transfers of personal data originating in the EEA to the UK remain unrestricted. In December 2025, the European Commission adopted a decision to extend the validity of the UK adequacy decision for six years until December 2031, determining that the UK continues to offer a level of data protection that is "essentially equivalent" to the EU standards. This follows the UK's adoption of the Data (Use and Access) Act 2025 on 19 June 2025. Like the EU GDPR, the UK GDPR restricts personal data transfers outside the UK to countries not regarded by the UK as providing adequate protection. The UK Government has confirmed that personal data

transfers from the UK to the EEA remain free flowing. In addition, EEA Member States have adopted implementing national laws to implement the GDPR which may partially deviate from the GDPR and the competent authorities in the EEA Member States may interpret GDPR obligations slightly differently from country to country, so that we do not expect to operate in a uniform legal landscape in the EEA and UK with respect to data protection regulations. The potential of the respective provisions and enforcement of the EU GDPR and UK GDPR further diverging in the future creates additional regulatory challenges and uncertainties for us. The lack of clarity on future UK laws and regulations and their interaction with EU laws and regulations could add legal risk, uncertainty, complexity and compliance cost to the handling of European personal data and our privacy and data security compliance and could require us to amend our processes and procedures to implement different compliance measures for the UK and the EEA.

Failure to comply with the requirements of the GDPR and the related national data protection laws of the EEA Member States and the UK may result in fines up to €20 million (£17.5 million for the UK GDPR) or 4% of a company's global annual revenues for the preceding financial year, whichever is higher. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.

In the United States, numerous federal and state laws and regulations, including health information privacy laws, state data breach notification laws, and federal and state consumer protection laws that govern the collection, use, disclosure and protection of health-related and other personal information could apply to our operations or the operations of our collaborators and third-party service providers. For example, the California Consumer Privacy Act ("CCPA"), grants California consumers (as defined in the law) individual privacy rights, including the rights to access, correct and delete their personal information, opt out of certain personal information sharing and receive detailed notice about how their personal information is used or shared.

In addition, the California Privacy Rights Act ("CPRA") significantly modified the CCPA, including by expanding consumers' rights with respect to certain sensitive personal information and created a state agency vested with authority to enforce the CCPA. The CCPA also provides for a private right of action for certain data breaches. The effects of the CCPA are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply.

The CCPA marked the beginning of a trend toward more stringent privacy legislation at the state level. As of January 2026, 19 other U.S. states have also enacted or are considering similar omnibus privacy legislation similar to the CCPA. The existence of comprehensive privacy laws in different states in the country, which vary in their requirements and enforcement, may make our compliance obligations more complex and costly and may increase the likelihood that we become subject to litigation, enforcement actions or otherwise incur liability actual or perceived for noncompliance.

In addition to these comprehensive state privacy laws, other states, including Washington, Connecticut and Nevada, have passed laws that apply more stringent standards to consumer health information. Most notably, Washington's My Health My Data Act regulates the collection and sharing of consumer health information and has a private right of action, further increasing relevant compliance risk. In addition, a smaller number of states have passed laws that regulate biometric data specifically. The increasingly complex landscape of privacy and security laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products. State laws are changing rapidly and industry organizations regularly adopt and advocate for new standards in these areas.

Regulators and legislators in the U.S. are increasingly scrutinizing and restricting certain personal data transfers and transactions involving foreign countries. For example, the Department of Justice's January 8, 2025, Rule on Preventing Access to U.S. Sensitive Personal Data and Government-Related Data by Countries of Concern or Covered Persons, prohibits transfers of data, including health data, genetic data, and biospecimens, to countries of concern, including China. The regulations also restrict certain investment agreements, employment agreements and vendor agreements involving such data and countries of concern, absent specified cybersecurity controls. Actual or alleged violations of these regulations may be punishable by criminal and/or civil sanctions and may result in exclusion from participation in federal and state programs and could restrict our ability to use certain vendors, sites, investigators, or service providers in clinical trials.

The shifting compliance environment and the need to build and maintain robust and expandable systems to comply with privacy and security laws in multiple jurisdictions increases our compliance risk. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management's attention from the operation of our business, and lead to reputational damage and loss of current and future business, any of which may have a material adverse effect on our business.

Compliance with data protection laws and regulations could require us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions. It could also require us to change our business practices and put in place additional compliance mechanisms, which may interrupt or delay our development, regulatory and commercialization activities and increase our cost of doing business. Failure by us or our third-party providers to comply with data protection laws and regulations could result in government enforcement actions (which could include civil or criminal penalties and orders preventing us from processing personal data), private litigation and result in significant fines and penalties against us. Claims that we have violated individuals' privacy rights, failed to comply with data protection laws or breached our contractual obligations, even if we are not found liable, could be expensive and time-consuming to defend, could result in adverse publicity and could have a material adverse effect on our business, financial condition, results of operations and prospects.

We may use and integrate artificial intelligence ("AI") into our business processes, and this innovation presents risks and challenges that could affect its adoption, and therefore our business. The use of AI presents risks and challenges that could adversely affect our business and reputation, including cybersecurity, data privacy, IT, confidentiality, regulatory, legal, operational, competitive, reputational, intellectual property and other risks. Specifically, risks related to accuracy, bias, AI hallucinations, discrimination, harmful content, misinformation, fraud, scams, targeted attacks (including model poisoning or data poisoning), surveillance, data leakage, bias and inequality, environmental and other harms may flow from our development or use of AI technologies. For example, use of certain AI tools may increase the risk of unauthorized disclosure of confidential information, compromise of proprietary intellectual property, or inadvertent inclusion of third-party intellectual property or other protected material, which could result in disputes or claims of infringement.

Additionally, government and supranational regulation related to AI is evolving as new laws and regulations are implemented globally and could increase the operational cost of compliance, including through requirements related to transparency, accountability, risk management, human oversight, and data governance. We expect to see increasing regulation related to AI governance, use and ethics, which may also significantly increase the burden and cost of research, development and compliance in this area. For example, the EU's Artificial Intelligence Act ("AI Act") - the world's first comprehensive AI law -entered into force on August 1, 2024, with most important provisions scheduled to become effective on August 1, 2026. As currently enacted, the AI Act imposes significant obligations on providers and deployers of high-risk AI systems and general purpose AI models, and encourages providers and deployers of AI systems to account for EU ethical principles when developing and using AI technology. The scope of requirements depends on legal and risk determinations that rely on novel legal provisions that have not yet been fully interpreted by courts or regulators, and non-compliance can lead to significant fines.

In the U.S., the regulatory environment is complex and uncertain. Over the past year, states have advanced, and in some cases passed, dozens of laws focusing on AI governance and regulation, including deployment of AI in healthcare settings. At the Federal level, the current executive administration has endorsed a federal moratorium on the enforcement of state AI laws, including through a December 11, 2025, executive order on "Ensuring a National Policy Framework for Artificial Intelligence." So far, these efforts have not been successful at curtailing state action on AI regulation, contributing to a complicated legislative patchwork, which may be litigated in state and federal courts. In addition, there is continued uncertainty regarding the application of existing federal and state legal frameworks to uses and development of AI, and legal norms and market standards regarding AI continue to evolve. For example, various federal and state regulators have issued guidance and focused enforcement efforts on the use of AI in regulated sectors. The FDA, for example, issued guidance on the use of artificial intelligence in medical devices, requiring detailed risk management and review processes to obtain approvals. The FDA has further issued, for example, draft guidance on the use of AI in regulatory decision-making for drug and biological products that centers on the context of use while establishing a credibility assessment framework for establishing and evaluating AI model outputs intended to support regulatory decision-making. If we develop or use AI systems that are governed by these laws or regulations, including as informed by regulatory guidance, we will need to meet higher standards of data quality, transparency, and human oversight, and we would need to adhere to specific, potentially burdensome and costly ethical, accountability, and administrative requirements. We may also be subject to significant enforcement or litigation in the event of any perceived non-compliance.

The rapid evolution of AI will require the application of significant resources to design, develop, test and maintain our products and services to help ensure that AI is implemented in accordance with applicable law and regulation and in a socially responsible manner and to minimize any real or perceived unintended harmful impacts. Our vendors may in turn incorporate AI tools into their offerings, and the providers of these AI tools may not meet existing or rapidly evolving regulatory or industry standards, including with respect to privacy and data security. Further, bad actors around the world use increasingly sophisticated methods, including the use of AI, to engage in illegal activities involving theft and misuse of personal information, confidential information and intellectual property. In addition, the use of generative AI models in our internal or third-party systems may create new attack surfaces or methods for adversaries, which could impact us and our vendors. Any of these effects could damage our reputation, result in the loss of valuable property and information, cause us to breach applicable laws and regulations, and adversely impact our business, financial condition and results of operation.

We are increasingly dependent on sophisticated information technology for our products and infrastructure. As a result of technological initiatives, recently enacted regulations, changes in our system platforms and integration of new business acquisitions, we have been consolidating and integrating the number of systems we operate and have upgraded and expanded our information systems capabilities. We also have outsourced elements of our operations to third parties, and, as a result, we manage a few third-party suppliers who may or could have access to our confidential intellectual property or business information.

Our information systems, and those of third-party suppliers with whom we contract, require an ongoing commitment of significant resources to maintain, protect and enhance existing systems and develop new systems to keep pace with continuing changes in information technology, evolving systems and regulatory standards and the increasing need to protect patient and customer information. In addition, given their size and complexity, these systems could be vulnerable to service interruptions or to data security incidents, breaches, other interruptions from inadvertent or intentional actions by our employees, third-party suppliers and/or business partners, or from cyber-attacks by malicious third parties attempting to gain unauthorized access to our products, systems or Confidential Information.

The risk of a data security incident, breach or other disruption, particularly through cyberattacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Cyberattacks could include wrongful conduct by hostile foreign governments, industrial espionage, wire fraud and other forms of cyber fraud, the deployment of harmful malware, ransomware, denial-of-service, social engineering fraud (including phishing attacks) or other means to threaten data security, confidentiality, integrity and availability. If such an event were to occur, it could result in the theft or destruction of intellectual property, data or other misappropriation of assets, or otherwise compromise our confidential or proprietary information and result in a material disruption of our development programs and our business operations.

Although we devote resources to protect our information systems, we realize that cyberattacks, cyber intrusions and other disruptions are a threat, and there can be no assurance that our efforts will prevent information security incidents or breaches that would result in business, legal, financial or reputational harm to us, or would have a material adverse effect on our business, financial condition, results of operations and prospects. We may not be able to anticipate all types of security threats, nor may we be able to implement preventive measures to be effective against all such security threats. The techniques used by cyber criminals change frequently, may not be recognized until launched and can originate from a wide variety of sources, including insider threats and outside groups such as external service providers, organized crime affiliates, terrorist organizations or hostile foreign governments or agencies, or generated using artificial intelligence.

Likewise, we rely on third parties for various operations, including the manufacture of our products and to conduct clinical trials, and similar events relating to their computer systems could also have a material adverse effect on our business. We rely on our third-party providers to implement effective security measures and identify and correct for any such failures, deficiencies or data security incidents or breaches. Any data security incident or breach in our or our third-party providers' information technology systems could lead to unauthorized access, disclosure and use of non-public information, including protected health information and other personally identifiable information which is protected by HIPAA, and other laws. Any such access, disclosure, or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, damage to our reputation and the further development and commercialization of our products could be delayed.

While we have not directly experienced any material system failure, accident or data security incident or breach to date, we have, from time to time experienced and may in the future continue to experience, threats and cybersecurity incidents relating to our and our third-party vendors' information systems. If we or our third-party providers fail to maintain or protect our information technology systems and data integrity effectively or fail to anticipate, plan for or manage significant disruptions to our information technology systems, we or our third-party providers could have difficulty preventing, detecting and controlling such data security incidents, breaches or other cyberattacks and any such attacks could result in losses described above as well as disputes with physicians, participants and our partners, regulatory sanctions or penalties, increases in operating expenses, expenses or lost revenues or other adverse consequences, any of which could have a material adverse effect on our business, results of operations, financial condition, prospects and cash flows. If we are unable to prevent or mitigate the impact of such data security incidents or data privacy breaches, we could be exposed to litigation and governmental investigations, which could lead to a potential disruption to our business. While we maintain insurance at levels that we believe are appropriate for our business, this coverage may not be sufficient in type or amount to cover us against all claims related to data security incidents, breaches or other interruptions.

Any compromise to our information security or that of our third-party service providers or contractors could result in an interruption in our operations, the unauthorized publication of our confidential business or proprietary information, the unauthorized release, use, disclosure and/or dissemination of customer, vendor, or employee data, the violation of privacy and/or data protection laws, including under the GDPR, in the EU or the UK, or other laws and exposure to litigation, any of which could harm our business and operating results. Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our privacy and data security obligations. Further, applicable privacy and data security obligations may require us to notify relevant stakeholders of a data security incident, breach, or other interruptions. Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences. In addition, cyberattacks, cyber intrusions, or other interruptions may cause stakeholders (including investors and potential customers) to stop supporting our business, deter new customers from using our products, and negatively impact our ability to grow and operate our business.

If the fair value of any of our long-lived assets decreases as a result of an economic slowdown, a downturn in the markets where we sell products and services, a downturn in our stock price, financial performance or future outlook, or other reasons, we may be required to record an impairment charge on such assets. We are required to test intangible assets with indefinite life periods for potential impairment annually and on an interim basis if there are indicators of a potential impairment. We also are required to evaluate amortizable intangible assets and fixed assets for impairment if there are indicators of a possible impairment. Impairment charges could have a negative impact on our results of operations and financial position, as well as on the market price of our common stock.

We are highly dependent on the members of our management, operations and technical staff, the loss of one or more of whom could have a material adverse effect on us. We have experienced a number of management changes in recent years, and there can be no assurances that any future management changes will not adversely affect our business. Effective February 1, 2026, we had a transition in our President and Chief Executive Officer ("CEO") role, in which Cheryl Blanchard became Executive Chair of our Board of Directors and she was replaced as President and CEO by Stephen Griffin, who had been Executive Vice President, Chief Financial Officer and Chief Operating Officer. This transition in our CEO role may disrupt our operations, create uncertainty among employees and investors, and result in changes to our strategic direction. We believe that our future success will depend in large part upon our ability to attract and retain technical and highly skilled executive, managerial, professional, and technical personnel. We continue to engage with our employees on a regular basis to limit voluntary employee turnover. We face significant competition for such personnel from competitive companies, research and academic institutions, government entities, and other organizations. There can be no assurance that we will be successful in hiring or retaining the personnel we require. The failure to hire and retain such personnel could have a material adverse effect on our business, financial condition, and results of operations.

We may need to raise capital in the future depending on numerous factors, including:

Market acceptance of our existing and future products;

The success and sales of our products under various distributor agreements and other appropriate commercial strategies, including the ability of our partners to achieve third party reimbursement for our products;

The successful commercialization of products in development through appropriate commercial models and marketing channels;

Progress in our product development efforts;

The magnitude and scope of such product development efforts;

Any potential acquisitions of products, technologies, or businesses;

Progress with preclinical studies, clinical trials, and product approvals and clearances by the FDA and other agencies;

Requirement to conduct additional preclinical studies and clinical trials for future products;

The cost and timing of our efforts to manage our manufacturing capabilities and related costs;

Expanding our manufacturing capacity to support growing demand for our products and add redundancies to our manufacturing process;

The cost of filing, prosecuting, defending, and enforcing patent claims and other intellectual property rights and the cost of defending any other legal proceeding;

Competing technological and market developments;

The development of strategic alliances for the marketing of certain of our products;

The terms of such strategic alliances, including provisions (and our ability to satisfy such provisions) that provide upfront and/or milestone payments to us;

The cost of maintaining adequate inventory levels to meet current and future product demand; and

Further expanding our business in international markets.

To the extent funds generated from our operations, together with our existing capital resources, are insufficient to meet future requirements, we will be required to obtain additional funds through equity or debt financing, through strategic alliances with corporate partners and others, or through other sources. The terms of any future equity financing may be dilutive to our investors, and the terms of any debt financing may contain restrictive covenants, which limit our ability to pursue certain courses of action. Our ability to obtain financing is dependent on the status of our future business prospects as well as conditions prevailing in the relevant capital markets at the time, we seek financing. No assurance can be given that any additional financing will be made available to us or will be available on acceptable terms should such a need arise.

If we succeed in raising additional funds through the issuance of equity or convertible securities, then the issuance could result in substantial dilution to existing stockholders. Furthermore, the holders of these new securities or debt may have rights, preferences and privileges senior to those of the holders of common stock. In addition, any preferred equity issuance or debt financing that we may obtain in the future could have restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

The rules dealing with U.S. federal, state, and local and non-U.S. taxation are constantly under review by persons involved in the legislative process, the Internal Revenue Service, the U.S. Treasury Department and other taxing authorities. Changes to tax laws or tax rulings, or changes in interpretations of existing laws (which changes may have retroactive application), could adversely affect us or the holders of our common stock. These changes could subject us to additional income-based taxes and non-income taxes (such as payroll, sales, use, value-added, net worth, property, and goods and services taxes), which in turn could materially affect our financial position and results of operations. Additionally, new, changed, modified, or newly interpreted or applied tax laws could increase our customers' and our compliance, operating and other costs, as well as the costs of our products. In recent years, many such changes have been made, and changes are likely to continue to occur in the future. As we expand the scale of our business activities, any changes in the United States and non-U.S. taxation of such activities may impact our effective tax rate, result in higher tax payments and harm our business, financial condition, cash flows and results of operations.

On July 4, 2025, tax reform legislation included in the One Big Beautiful Bill Act (the "OBBBA") was enacted in the United States. Key corporate tax provisions include the restoration of 100% bonus depreciation, allowing for the potential for immediate expensing of domestic research and experimental expenditures, changes to Section 163(j) interest limitations, updates to Global Intangible and Low-Taxed Income ("GILTI") and Foreign Derived Intangible Income ("FDII") rules, amendments to energy credits, and expanded Section 162(m) aggregation requirements. We have evaluated the elective provisions allowed under the new U.S. tax legislation and accounted for tax deductions for bonus depreciation and research and development expenses allowed under the new legislation. Other changes enacted did not have a material impact to our financial statements.

Actual events involving limited liquidity, defaults, non-performance, or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. If any of our customers, suppliers or other parties with whom we conduct business are unable to access funds pursuant to lending arrangements with financial institutions, such parties' ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected.

Although we assess our banking and customer relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial institutions with which we have credit agreements or arrangements directly, or the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry. These factors could involve financial institutions or financial services industry companies with which the Company has financial or business relationships but could also include factors involving financial markets or the financial services industry generally.

The results of events or concerns that involve one or more of these factors could include a variety of material and adverse impacts on our current and projected business operations and our financial condition and results of operations. These could include, but may not be limited to, the following:

Delayed access to deposits or other financial assets or the uninsured loss of deposits or other financial assets;

Delayed or lost access to, or reductions in borrowings available under revolving existing credit facilities or other working capital sources and/or delays, inability or reductions in the company's ability to refund, roll over or extend the maturity of, or enter into new credit facilities or other working capital resources;

Potential or actual breach of contractual obligations that require the Company to maintain letters of credit or other credit support arrangements;

Potential or actual breach of financial covenants in our credit agreements or credit arrangements;

Potential or actual cross-defaults in other credit agreements, credit arrangements or operating or financing agreements; or

Termination of cash management arrangements and/or delays in accessing or actual loss of funds subject to cash management arrangements.

The short and long-term implications of the ongoing conflict between Russia and Ukraine and the conflict in the Middle East are difficult to predict at this time. We continue to monitor any adverse impact that the outbreak of war in Ukraine, the subsequent institution of sanctions against Russia by the United States and several European and Asian countries, and the conflict in the Middle East may have on the global economy in general, on our business and operations and on the businesses and operations of our suppliers and other third parties with which we conduct business. For example, a prolonged conflict in Ukraine or the Middle East may result in increased inflation, escalating energy prices and constrained availability, and thus increasing costs, of raw materials. We also have suppliers and customers in and around those areas that we periodically do business with that could be disrupted by these events. We will continue to monitor this fluid situation and develop contingency plans as necessary to address any disruptions to our business operations as they develop. To the extent these conflicts may adversely affect our business as discussed above, it may also have the effect of heightening many of the other risks described herein. Such risks include, but are not limited to, adverse effects on macroeconomic conditions, including inflation; disruptions to our global technology infrastructure, including through cyberattack, ransom attack, or cyber-intrusion; adverse changes in international trade policies and relations; disruptions in global supply chains; and constraints, volatility, or disruption in the capital markets, any of which could negatively affect our business and financial condition.

Significant political, trade, or regulatory developments, such as those stemming from changes in the U.S. federal administration, are difficult to predict and may have a material adverse effect on us, as we both import materials and equipment necessary to manufacture our products in the U.S., and export materials and products from the U.S. Similarly, changes in U.S. federal policy that affect the geopolitical landscape could give rise to circumstances outside our control that could have negative impacts on our business operations. Changes to U.S. policy implemented by the U.S. Congress, the current administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. For example, certain governments (including the United States and other countries) have imposed or may impose tariffs on a wide range of products, raw materials, and intermediate goods, including on products that we purchase from certain key suppliers. Additional tariffs, or retaliatory measures by other countries in response, may be implemented at any time. Historically, tariffs have led to increased trade and political tensions. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods. Political tensions as a result of trade policies could reduce trade volume, investment, technological exchange, and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets. Any changes in political, trade, regulatory, and economic conditions, including U.S. trade policies, could have a material adverse effect on our financial condition or results of operations. Until we know what policy changes are made, whether those policy changes are challenged and subsequently upheld by the court system, the duration that those policy changes remain in effect, and how those changes impact our business and the business of our competitors over the long term, we will not know if, overall, we will benefit from them or be negatively affected by them.

Risks Related to Our Commercialization Activities

Our license and distribution agreements with J&J MedTech related to Monovisc and Orthovisc provide J&J MedTech with, among other things, the exclusive right to market and sell Monovisc and Orthovisc in the United States, unilateral decision-making authority over the sale, price, and promotion of Monovisc and Orthovisc in the United States, substantial control over the future development of Monovisc and Orthovisc related to the treatment of pain associated with osteoarthritis, a license to manufacture and have manufactured such products in the event that we are unable to supply J&J MedTech with Monovisc or Orthovisc in accordance with the terms of the relevant agreement, and certain rights of first refusal with respect to future products we develop for the treatment of pain associated with osteoarthritis. In exchange, J&J MedTech pays us a transfer price calculated with reference to historical end-user prices in the market and a fixed royalty rate per product on their net product sales. As J&J MedTech accounts for a large percentage of our revenue and has unilateral decision-making authority over in-market activities, including end-user pricing and discounts, reimbursement strategy, and overall promotion strategy, actions taken by J&J MedTech impact our ability to predict and generate revenue and have a material impact on our business, financial condition, and results of operations.

In October 2025, J&J MedTech announced that it planned to divest its orthopedics implants and related surgical products business which would include Monovisc and Orthovisc products that we manufacture. This action by J&J MedTech could impact our ability to predict and generate revenue and have a material impact on our business, financial condition, and results of operations.

Beginning in 2019, we started selling and marketing many of our products directly to customers, including hospitals and ASCs, through our direct Anika sales team and a network of independent third-party distributors. This approach was a departure from our historical distribution model in the United States, and we cannot be certain that we will be successful in implementing and executing on this commercial approach or that, even if we are able to implement it, the approach will be successful at scale. We may not be able to attract or retain the sophisticated personnel required for our approach, to identify or negotiate favorable or acceptable terms with distribution agents and ensure that they dedicate time and focus to our products, to achieve in-market pricing at the levels we have targeted, to develop and tailor our product portfolio to be specifically desired by clinicians who practice in ASCs, or to timely execute on our strategies for market penetration generally. Our failure to successfully implement and execute this commercial approach could have a material adverse effect on our business, financial condition, and results of operations.

Our success is dependent, in part, upon the efforts of our marketing, distribution, and logistics partners, including our sales agent partners in the United States, and the terms and conditions of our relationships with such partners. We cannot assure you that our commercial partners, including J&J MedTech, will not seek to renegotiate their current agreements on terms less favorable to us or terminate such agreements. A failure to maintain relationships with our commercial partners on terms satisfactory to us, or at all, could result in a material adverse effect on our operating results.

We continue to seek to establish long-term partnerships in regions and countries not covered by existing agreements, and we may need to obtain the assistance of additional marketing partners to bring new and existing products to market and to replace certain marketing partners. There can be no assurance that we will be able to identify or engage appropriate distribution or collaboration partners or effectively transition to any such new partnerships. The failure to establish strategic partnerships for the marketing and distribution of our products on acceptable terms and within our planned timeframes could have a material adverse effect on our business, financial condition, and results of operations.

In the United States and other foreign markets, health care providers, such as hospitals and physicians, that purchase health care products, such as our products, generally rely on third-party payers, including Medicare, Medicaid, and other health insurance and managed care plans, to provide coverage and to reimburse for all or part of the cost of the health care product or procedures that use such products. Coverage and reimbursement by third-party payers, both in the United States and internationally, may depend on several factors, including the individual payer's determination that our products or procedures that use our products are clinically useful and cost-effective, medically necessary, and not experimental or investigational. Since insurance coverage determinations and reimbursement decisions are made by each payer individually, seeking positive coverage and reimbursement decisions can be a time consuming and costly process, which could require us or our marketing partners to provide supporting scientific, clinical, and cost-effectiveness data for the use of our products to each payer separately. Significant uncertainty exists as to the insurance coverage and reimbursement status of newly approved health care products or procedures that use such products, and any failure or delay in obtaining reimbursement approvals can negatively impact sales of our new products. In addition, we cannot be certain that payers who currently provide reimbursement for our products or procedures that use our products will continue to provide such reimbursement in the future, and such payer decisions could negatively impact the sales of our current or future products.

Even when our products or procedures that use our products are covered by third-party payers, reimbursement may be subject to significant administrative requirements, including prior authorization, claims documentation, and utilization management processes. Payers may delay, deny, or reduce payment for administrative or technical reasons, or may require providers to pursue appeals or resubmissions, which can be costly and time-consuming. Such delays or denials may discourage providers from purchasing or administering our products and could negatively impact sales, cash flows, and operating results.

Disclaimer

Anika Therapeutics Inc. published this content on April 30, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 30, 2026 at 19:49 UTC.