Anika Therapeutics, Inc. (ANIK) Business

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:

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.

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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:

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.”

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

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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.

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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

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 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.

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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:

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.

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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:

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 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.

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

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.

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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:

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.

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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:

Talent Acquisition and Management

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.

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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.

Diversity, Equity and Inclusion

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.

Employee Development

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.

Competitive Pay and Benefits

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.

Health and Safety

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 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.