Christopher Ranjitkar - Investor Relations and Corporate Communications Manager Charles Sherwood - President and Chief Executive Officer Sylvia Cheung - Chief Financial Officer.

Mark Landy - Northland Capital Jim Gentrup - Val Vista Capital Tim McCandless - Asymmetry Global Health.

Good morning, ladies and gentlemen and welcome to the Second Quarter 2015 Anika Therapeutics’ Investor Conference Call. My name is Sheinelle and I will be your coordinator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session toward the end of this conference call.

I will now turn the call over to Mr. Christopher Ranjitkar, Investor Relations and Corporate Communications Manager. Sir, please proceed..

Good morning, everyone and thank you for joining our second quarter call. Joining me on the call today is Anika’s President and Chief Executive Officer, Dr. Charles Sherwood and our Chief Financial Officer, Sylvia Cheung. During today’s call, we will review our second quarter 2015 financial results and key business highlights.

Both of which were summarized in our earnings release issued after market close and which is available in the Investor Relations of our website at anikatherapeutics.com. In addition, a slide presentation is posted on our website in the Investor Relations section under the Events, Webcasts and Presentations tab.

We invite you to take a moment to open the file and follow the presentation along with us. Following prepared remarks by Dr. Charles Sherwood and Sylvia Cheung, we will open the floor to questions. Please turn to Slide 2.

Before we begin, please remember that the statements made during this conference call constitute forward-looking statements as defined in the Securities and Exchange Act of 1934. These statements are based on our current beliefs and expectations and are subject to certain risks and uncertainties.

The company’s actual results could differ materially from any anticipated future results, performance or achievements. Please see our SEC filings for more information about factors that could affect our results. I will now pass the call over to our President and CEO, Charles Sherwood..

Thank you. Good morning, everyone. Please turn to Slide #3. The second quarter of 2015 was strong across the board for Anika and solid progress is made on all key fronts. We achieved continued robust end user demand, growing financial strength, and steady pipeline projects.

On top of that, we benefited from a payment from one of our distribution partners, which adds to the strength of the quarter and Sylvia will discuss this later on the call. Our results underscore our progress in our mission to deliver innovative therapies that address the full continuum of patient care with the focus in the area of orthopedics.

For today’s call, we will focus primarily on our orthopedics business and how the combination of our current products and new opportunities will drive future growth and market share.

While our surgical, dermal, ophthalmic and veterinary franchises are important components of Anika’s portfolio, we believe that a focused discussion of our orthopedics business will be most meaningful for you all today. Please now turn to Slide #4.

Presently, our orthopedics business is comprised primarily of two commercially available products, Orthovisc and Monovisc, which are viscosupplements used to treat pain caused by osteoarthritis. Both are based on our proprietary non-animal based hyaluronic acid, or HA in the highest concentration commercially available today.

It’s important to note that we believe that high concentration levels are our primary driver of effectiveness of these two therapies, which is an important competitive differentiator. Orthovisc, our multi-injection product in flagship Orthobiologic delivered solid growth in end user sales in the quarter. We continue to see U.S.

market leadership in the multi-injection segment with Orthovisc even as we make headway with our single injection product, Monovisc. Since its launch in the U.S. over a year ago, Monovisc has shown continued demand growth and steady adoption. During the quarter, Monovisc achieved a 59% sequential increase in end user sales.

While it may have taken us some time to get Monovisc to market, there is a clear demand for this product, which we are excited to report now, holds the number two position in the U.S. single injection viscosupplementation market. Outside the U.S., we are pleased to report that Monovisc is continuing to gain traction.

We recently signed distribution agreements with partners in Australia and India and we are focused on bringing Monovisc to other key markets, including China and Japan. Building on the commercial momentum in current markets and indications, our growth strategy for Monovisc, includes expanding the market via a broader indication for use.

One such indication is for treatment of pain associated with osteoarthritis of the hip, which affects approximately 27 million Americans in which we believe represents a significant opportunity in the U.S., where there was clearly an established medical need.

To that end, during the quarter, we submitted and recently received approval for an investigational device exemption, or IDE, to evaluate Monovisc’s utility in treating OA hip pain in the U.S. This study sponsored by our commercial partner, Mitek, will begin patient enrollment in the U.S. later this year. Please now turn to Slide #5.

Looking beyond our widely commercialized products, there is a significant amount of activity underway in the development of new therapies. Our pipeline is headlined by two novel product opportunities today, Cingal and Hyalofast.

Back in April, we reported strong Phase 3 results for Cingal, our third generation viscosupplementation product demonstrating its safety and effectiveness in treating pain caused by OA of the knee.

Then in July, we announced a follow-on study that demonstrated the safety of a repeat injection of Cingal, which reinforces the impeccable safety profile of Anika therapies established by Orthovisc and Monovisc.

Cingal was poised to be the first viscosupplement to combine the proven benefits of our proprietary HA formulation with a well-established steroid and represents an important opportunity for Anika as we look to advance it to commercialization. Cingal has currently gone through the regulatory process in the U.S., Europe, and Canada.

From ongoing informal communications with the FDA, we have received feedback that provides a better understanding of the agency’s position on the Cingal U.S. regulatory pathway.

Our next step is to conduct a formal meeting with the FDA’s Office of Compliance products to present our data and provide clinical input from physicians familiar with our product in steroid injections. The most likely outcome will be that we will file a request for a formal designation shortly after the meeting.

We believe our position is sound, has a strong scientific foundation and is supported by the regulations describing combination products. Consequently, we remain fully committed to pursuing a device designation with target approval in Q4 of 2016. However, like any other regulatory review, it’s hard to predict the exact outcome in time.

In the event that the agency issues an imposing view, we expect that an alternative pathway could likely add a year to our approval timeline. We expect to hear a definitive answer from the FDA on this matter in Q4. Outside the U.S., in Europe, Cingal is currently under review for CE Mark and in Canada we submitted Cingal to help Canada in May.

We are expecting approvals in both jurisdictions by the end of the year or early 2016 with revenue to fall. In both geographies, the product was designated as a viscosupplementation device.

With Orthovisc and Monovisc steadily capturing share and Cingal poised as the next generation in viscosupplementation, we remain confident we are on track to be the leader in the approximately $1 billion viscosupplementation market by 2017.

Outside viscosupplementation, Hyalofast, a biodegradable 3D scaffold that enables and promotes cartilage regeneration, is the next emerging product opportunity in our pipeline. We believe Hyalofast represents significant potential to move Anika into the rapidly evolving and exciting field of regenerative medicine in the orthopedic space.

The primary indications for Hyalofast include the repair of chondral and osteochondral lesions in the knee and ankle. These lesions are very common and are associated with both the wear and tear of aging as well as sports injuries and other trauma.

We have demonstrated that Hyalofast can be implanted in a single step arthroscopic procedure which is less invasive and will be less costly in currently available treatments and many competitive treatments under-development. Today, the number of procedures performed to treat these lesions is approximately 2 million annually in the U.S. In the U.S.

we have recently received the FDA’s approval of our Hyalofast IDE and we expect to begin patient enrollment in the fourth quarter. I want to note that Hyalofast is not a new product, it is already available commercially in 18 countries with more than 6,000 people having been successfully treated to-date internationally.

Before, I turn the call over to Sylvia, I want to highlight a highly interesting therapeutic program that is not yet in the clinic, but is notable as it addresses an important clinical area and potential for our future.

In June, we announced the research collaboration with the University of Massachusetts Amherst to develop a novel treatment for rheumatoid arthritis which is estimated to effect 67 million individuals in the U.S. by 2013.

This partnership combines Anika’s proprietary HA technology with UMass Amherst preclinical research and scientific expertise with the goal of developing the first and only localized therapy for RA that is cost effective and has the potential to have a systemic impact.

As the loss thought, I want to reiterate the strength of our business illustrated by our second quarter results. You will hear Sylvia describe the resolving inventory adjustment of our main commercialization partner, as well as the payment that resulted from our strong ASPs.

This and focusing on Anika’s core business in the quarter and near-term prospects for new revenue streams reveals a lot to feel good about. We had strong end user demand for our therapies which maintain market dominant positions.

We have a number of products in the pipeline that we believe will contribute meaningfully in the years to come and we are exploring the therapies of tomorrow to address important unmet medical needs and fuel our future growth. And with that, I will hand it off to Sylvia..

Thank you and good morning. If you could turn to Slide #6 as Chuck mentioned we have a solid second quarter of product revenue increasing 8% over last year, largely driven by the continued success of our Orthobiologics franchise. I want to briefly discuss two items associated with the product revenue.

As Chuck alluded to earlier, Q2 product revenue increase included a non-recurring payment, it was up approximately $1.8 million from our U.S. partner on Mitek. We have received this payment because the end user selling prices for Monovisc were considerably higher than initially anticipated.

The amount was related to products sold to Mitek prior to Q4 of 2014 that was agreed and paid in the second quarter of 2016. We believe this payment further demonstrates Monovisc’s strength in the market and its ability to provide meaningful revenue for Anika going forward.

The second item is Mitek inventory adjustment we had discussed in earlier quarters, which as anticipated continue to impact us in Q2. As we have said before, we are confident that inventory reset will be complete and will be on schedule to complete in the third quarter.

Summarizing our top line, we are very encouraged that in spite of the ongoing inventory reset and excluding the one-time Mitek payment, we were able to maintain stable product revenue growth year-to-date, in line with our stated expectations.

This demonstrates the solidness of our business and was made evident by continued growth and increasing demand of our flagship products Orthovisc and Monovisc.

To put this growth into perspective, Q2 marked the 38 quarter of continued year-over-year growth for Orthovisc end user sales as well as the fourth consecutive quarter of sequential growth for Monovisc since its launch in last April. Both of these data points supported the formidable positions of these products in the U.S.

physical supplementation market. Transitioning to the bottom line, Q2 net income was $7.8 million or $0.51 per diluted share, compared with $9.3 million or $0.60 per diluted share last year. As a reminder last year numbers included $5 million in milestone revenue as a result of the first commercial sale of Monovisc in the U.S.

Excluding the impact of this milestone revenue, net income and diluted EPS increased $1.6 million or $0.11 per share, respectively. Now moving on briefly to our balance sheet, on June 30, total cash and investments was approximately $122 million.

This marks an approximately $60 million increase from year end, driven primarily by solid operating income performance and cash proceeds from exercises of stock options during period. Turning to guidance, our outlook has improved and we now expect total 2015 product revenue growth in the low to mid double-digit range.

This excludes any milestone and contract related revenue. On a quarterly basis we expect third quarter revenue to be – product revenue to be around mid single-digits as Mitek’s inventory reset concludes in this period. Based on the year-to-date uptick in U.S. Monovisc end user sales and our current forecast, we expect that the U.S.

Monovisc end user revenue by Mitek to exceed $50 million during the fourth quarter of this year. And this would trigger the next milestone payment of $5 million under our existing Monovisc contract with Mitek.

In closing, from a financial perspective, Anika’s top line and profitability continues to be driven by strong end user demand, which we believe bodes well for our future. And with that we will now open up the floor for questions..

Thank you. [Operator Instructions] And our first question comes from Mark Landy of Northland Capital. Sir, your line is now open..

Good morning folks. Thanks for taking my questions..

Good morning Mark..

Good morning Mark..

Good morning.

So, Chuck, just in reference to single and under the – or let’s just make the assumption now, my assumption and for discussion purposes that perhaps you do have to go down an NDA route, how much of the existing data do you feel you will be able to use and how much new data will you have to generate, clinical data?.

It’s really hard to say Mark until we have that conversation. One thing that we have to keep in mind is that we have a definitive and highly successful Phase 3 trial with absolutely no questions about the safety of the product or the effectiveness of the product.

So, giving that as this stake in the ground, giving the fact that we have also run a retreatment trial, given the fact that we have two approved devices with a long – well one with the long history that’s steroid but Monovisc this will be the – I think the third trial that we have on Monovisc.

So I am thinking not too much, but we have some of the classic preclinical work that they would – that we would expect – the FDA would expect for a drug application. So, I am not thinking that we need to do a lot, but I am thinking that we probably will have to do some things whether it’s preclinical or maybe some additional clinical.

But maybe some of that additional clinical can be done post-approval. So, at this – until we talk to them, we will really not know. The second point I really would like to make is that with our informal communications I guess have come to an end.

Now, we have to go formal with meeting and I request for designation, but before we have a fairly good sized number of consultants, ex-FDAers, other people in the industry and if we listen to them which we do, they strongly believe that our case for device designation is solid.

So, as I said though, you can never tell and the FDA is the FDA, but I hope that I can’t fully answer your question, because until we talk, if we have to go down the drug, which we hope you don’t, we really won’t know until we thought, but we are estimating that it’s going to be a year delay if we do just to put the information together..

Okay, fair enough. And then just moving on to the study in the hip, comment was that it was going to be sponsored by Mitek. So, my question there is, is Mitek actually conducting the study or they just providing the funding for the study, because we did have an earlier study in the shoulder done at Mitek, I believe was in charge of [indiscernible].

And there were some issues with the way that study was conducted to the point that the data wasn’t usable for an application for approval.

So, how is that study going to be done? How is the thoughts, the process and the logistics?.

Yes, fundamentally they are paying. Secondarily, we have put a much more solid guidance group together, a steering committee, which is us and them, but I am not sure which portion of J&J, because there has been some reorganizations in J&J of late.

So, J&J, one entity of J&J will run the clinical trial, whether it’s in DePuy Synthes or where it is, but it won’t be Mitek people, because that’s just not the way it’s run anymore. So, yes, J&J is going to do the recruitment.

Yes, they will use their statisticians and they may or may not contract out the site monitoring, we will have to do a CRO like we would do. We will have to see. But we are a lot more involved this time than we were before.

That’s the initial trial, shoulder trial was several years ago and it was quite a bit more hands off from our perspective than this one will be. And so far I would have to tell you that we went back and forth on the protocol. We had input – they had input.

It was all well received I think together a great protocol witness have hardly any questions from the FDA before approval. So, I think we will do a lot better job this time, but to answer your question straightforward, they are paying and it’s their people that are going to primarily run the trial..

Thanks, guys. I will get back in the line..

And our next question comes from [indiscernible] from Singular Research. Sir, your line is now open..

Thanks.

Sylvia, given everything you are working on and what was mentioned last quarter didn’t really see much higher R&D in Q2, I am assuming we will in Q3 and Q4, is that correct?.

That is correct. For the year, we are expecting R&D to increase. The timing of it is heavier toward the second half or toward the end of the year because of the initiation and ramp up of the Hyalofast study, which Chuck discussed earlier..

Okay, makes sense. And couple of more questions.

Can you give us little bit more color on what drove the gross margin higher, certainly much higher than will be expected, product gross margins?.

Sure. The product gross margin is higher for the first half of this year primarily because of the revenue mix. And by revenue mix, I mean the mix of revenue from product shipment versus royalty in this particular quarter as I discussed earlier, we also had a $1.8 million of one-time payment from Mitek as a result of higher ASPs.

So, those particular items, I shouldn’t say those particular items, the royalty and the one-time payment from Mitek drove the margin higher than the annual expected range, which is the low 70% target..

Okay..

I would add a little color to that and that is that long, several, several maybe couple of years ago, we said it was going to be our strategy hopefully to try with to have any new product that we made, have higher margin or be more profitable than anything that we had in the past. And so there is a good news/bad news story here.

And the bad news is our ophthalmic business has declined considerably after the departure of Bausch & Lomb. The good news is that was our lowest margin product that we actually manufactured. So, that’s part of our strategy.

We still need to be a little cautious, because since we don’t sell these things directly, it’s tough to get really, really, really high in gross margin with some of our products, but so far we are pretty happy with what we have been able to do..

Certainly, the results show that.

And then last question I have actually Chuck, can you give us an idea about the market size for the hip OA pain treatment?.

And I should know that, I apologize that I don’t exactly know that, but I do know that the hip indication is number two active in knee. I also know that the popularity of hip – there is off-label now, because of course, there are no products approved to hip.

Second, in some cases or in a good portion of the cases, it’s difficult to get into the joint, so you need to use some kind of guidance ultrasound radiofrequency whatever. And so that stops people from doing some of these things.

So, I think that hip away though is a pretty significant problem, but I don’t think the market will develop because of those two issues that I just talked about, I think has a big need..

It looks that way. Well, thanks guys. I appreciate it..

You are welcome..

Thank you, Ali..

[Operator Instructions] And our next question comes from Jim Gentrup from Val Vista Capital. Sir, your line is now open..

Hi, good morning, guys.

How are you?.

Good.

How are you, Jim?.

Good, good. Just quick – couple of quick questions.

The $1.8 million payout that was categorized as product revenue and not milestone, is that correct?.

That is correct. It was related to products previously sold and higher than originally expected ASPs. Milestones are typically events that have to happen. And as a result of achieving certain events or self thresholds that we would get lump-sum payments so that differentiated between the product line versus the milestone contract line..

Think of this as the second payment, the royalty payment, where we didn’t – we just got the true-up..

Okay.

And that didn’t – did that carry any gross margin? Does that carry any cost of goods would have been NOL?.

Not in this quarter, the cost of goods went through when the products were shipped to them previously..

Okay, alright, good. Okay, thank you. And then….

Which was the reason for the margin uptick, but go ahead..

Okay, alright. That makes sense. Okay.

And then the inventory reset program, I kind of lost track of the rationale for that if you could just backtrack a little bit, I mean, I think it’s taken three or four quarters to work through this and what kind of indications do we have that it will be more of a steady state type of situation now?.

Right. The inventory reset should complete by the end of this quarter. And we do have visibility into end user sales, end user revenue trends as well as forecast as part of this relationship with Mitek. So, we are pretty confident in terms of the timing of the completion and starting in the fourth quarter we will be back to normal.

The drivers for the reset, there are really two, one is in the first half of last year the market didn’t grow at the level that was expected as a matter of fact, Q1 was flat and our competitors actually saw a decline in share. We saw small increases, but those markets didn’t grow in Q1. Q2 picked up a little bit and Q3 and Q4 were back to normal.

This was 2014. So Mitek resulted in slightly higher inventory coming out of the first half of 2014, at the end of 2014 because of the policy change, company reorganization and so forth they issued a policy that reduces the number of weeks on hand for Orthovisc, Monovisc and other products of theirs by roughly about 50%.

And this was what we are currently experiencing which will come to an end by the end of the quarter. So based on the forecast that we see, the orders that we currently have on hand and the uptick that we are seeing, all signs are leading us to conclude and be confident that we will back to normal state in the fourth quarter..

Okay, alright. Thank you for that clarity.

And then last question I have is just SG&A expenses declined year-over-year and maybe I missed it, but it was pretty big drop was there were stock based comp adjustments or what caused that drop year-over-year?.

Right. I think percentage wise it’s big from a dollar standpoint not too much. The main driver was we have some intangible assets which as you know are being amortized over a certain time period to match the estimated life of the asset and certain of those assets were fully amortized at the end of last year.

And so we don’t have recurring amortization expense. We expect SG&A to pick up in the second half of this year as we continue to look at international expansion and marketing efforts as well as preparing for commercial activities and end market research activities for Cingal. So the second half of the year, we expect increases in SG&A expenses..

Okay. And then I guess I just have one more if you don’t mind..

Sure, go ahead..

With regard to Cingal, last time you went through this process with the FDA, we had a lot of – with the Monovisc, it was just one delay after another, what confidence do we have this time as we go through this process that Cingal will have a different type of or a less resistance or more I mean what has been done differently I guess and so just we would love to hear your comments on that, that’s all?.

Well, I have three comments. The first one is the FDA is the FDA. Two, I don’t mean to make light of this I am not doing that, Jim. The second one is yes, we had a lot of delays with Monovisc and we worked it, we worked it, worked it, but we prevailed at the end. We came out, got the product approved, that’s my second comment.

The third comment is we are just going to have to – we had anticipated maybe that this was so obvious that we could just go right to the CDRH guys, device guys and they would take the PMA and they would review.

And we have been in dialog with them and very informally with some of the people in OCP and its now becoming clear that we are going to have to file a formal designation. We didn’t think that was going to be the case.

So we will have the meeting to settle, adopt, we have a bunch of data, we have a bunch of clinicians who have used the product, who are very supportive. There is a lot of information that we can bring to that meeting that probably we could get impact into a very tidy request for designation.

Then we will have to follow that most likely with our request, official request for designation. I think it’s possible, but highly unlikely that it was a good meeting. Okay. We will – this is okay, send it to the device people, so that’s probably not going to happen.

We still believe we have a good case for the device designation, but if that doesn’t happen, we have got a ton of data, so I think that we would – will suffer a year delay I am thinking by the time we talk with drug people, make them happy, do all that.

I don’t think that’s going to happen, but I don’t think this is going to carry on for years, that’s not going to happen. So we have to remember too and I keep bringing this, but people keep forgetting this. We had a very, very successful highly conclusive statistically relevant Phase 3 trial. So we have that on our side.

This was very powerful and worked very, very well in the trial. So that’s got to carry a lot of weight. The Monovisc was we had – there were some issues with that trial and we ended up getting it approved as non-inferiority to worth of it’s not as the superiority because of the strength of the placebo.

In this trial, placebo was also strong, but Cingal was off the charts in terms of effectiveness. So we have got that going forward, so I don’t think this is going to carry on for a long, long time.

Any questions?.

And our next question comes from Tim McCandless of Asymmetry Global Health. Sir your line is now open..

Yes. Hi. Thank you for taking the question.

I just want to follow-up to that Cingal commentary from the last question and so just to understand how you are thinking about the potential 1 year delay comments, is the 1 year delay commentary related to the need for the formal meeting and then likely filing an RFD, but is it not inclusive if we did assume if you had to run an additional clinical trial given that typical two trial requirement, which is like not include the follow-on safety study at CEDAR?.

The 1 year delay that we stated earlier incorporates additional clinical information, so it’s really the – an additional year of getting approval. I think it was stated pretty clear in terms of our status position on Cingal..

One thing and I know now somebody’s questions get fueled from our competitors who are studying products – other products steroid. These first of all one of our competitors has a [indiscernible] steroid that is clearly a drug and it’s a new technology. One of our other competitors in the clinic now has a very unique AJ formulation with the steroid.

Since neither of those things are approved that’s clearly a drug too. We are different. We have two already approved, acting independently combination product with the drug in a device. So we can go over this time and time again, but we are different..

And just to be clear on the additional clinical data included in that 1 year is that inclusive of having to run a new trial, I was just unclear on that piece? Thank you..

I think we have made it pretty clear in Chuck’s earlier remarks that the exact information obviously we have to wait till we speak with the FDA and to find that. But we also have experts internally and externally that are familiar with these regulations. So we put the best estimates based on expert advice together and that’s the timeline.

In terms of the status of Cingal, let us get through the formal conversation with the FDA and then from there on it’s likely as we said that we will file an RFD and from there on there will be a definitive answer. And from that point we will have a clear pathway as to which way it’s going to go and what the requirements are.

So I think we have commented adequately with regards to the Cingal regulatory situation..

And our next question comes from – a follow-up from Mark Landy of Northland Capital. Sir your line is now open..

Thanks for taking my follow-up questions.

Sylvia I just want to dig a little bit into the milestone payments from J&J, in terms of accounting treatment, is this considered thoughts of the agreement with respect to the sales revenues, so that if we would have seen normalized inventory stocking this wouldn’t have as dramatic effect on the gross margin and you are getting the payment along with the typical in process transfer of product to them or is this something that’s going to be treated definitely from an accounting perspective.

We need to think of how we break that out to get to what is an apples-to-apples gross margin assumption?.

Alright, just – you are referring to the $5 million as a result of achieving end user revenue at $50 million level, is that the milestone that you are referring to?.

No, the $1.8 million..

Sorry which – the $1.8 million is already included in Q2 and it’s a – as we said a non-recurring. So there is no additional amortization over a certain period of time, it happened in the quarter, we got – we have reached an agreement on what the amount was and we received payment in the quarter. So it’s a standalone quarter..

Okay. That’s what happens when you are trying to do two things at once, I apologize. So then what would the gross margin had been if we neck that out, is it a simple reduction of $1.8 million in revenues or can you just help us understand what the normalized gross margin would have been, had we removed that payment/.

Right, it is a simple reduction of taking the $1.8 million out from product and due to calculation based on the cost of goods sold..

Okay.

And then just moving further to the inventory reduction at Mitek, are they contractual minimums on an annual basis that they have to meet and to the assumption that they had drawn down very little inventory or bought very little inventory, that is the top-up that has to come through the fourth quarter, how do we think about those contractual minimums if they are there and how would that impact the inventory management on a go forward basis?.

Sylvia can correct me or add some more color if I don’t get it right, but fundamentally there are – this I know there are no contractual minimums in the contract. Okay. Second, the inventory slowed up to a fairly high level and they decided to cut it in half. So we are probably going to be running at I think eight weeks inventory from now on.

And so as long as their planning is good, that’s just fine. If there is a fault in demand, end user demand, we always keep the inventory here. So that’s basically what happened. And the emphasis changed the people who are looking at the inventory levels within – across all of J&J changed. And so it was an event that we had to deal with.

But we are looking forward to Q4 when we can work off the forecast. It’s easy to explain if we grow it because the end user demand continues to grow. And it’s a very simple way of looking at progress. So I am sorry that it was so convoluted the over past year, but it was to a large degree something not of our doing..

Just last two questions, there was a $3 million sequential increase in accounts receivable, can you just detail that for us a little bit Sylvia and then also you guys now have $122 million of cash in the book, what’s more to come, so what’s the thoughts on deploying that level of cash, it’s a pretty big hold right now?.

Alright. The increase in accounts receivable is primarily related to timing of revenue and revenue increase. So nothing makes me – nothing out of the ordinary driving that. The uses of cash I think we have been pretty clear about we don’t intend to do anything on the dividend or buyback side. I think we have made it very clear.

We are however intending to use cash for internal capital investments, which we talked about before from – as it relates to moving the remaining Italian manufacturing from existing contact manufacturer to our manufacturing facility here in Bedford, Massachusetts. Other activities include strategic licensing or M&A activities.

We believe and I think you know that we have a pretty strong internal IP platform and product pipeline. We think that there can be potentials for augments. We are certainly keeping the M&A activities in mind, but it takes time as you know.

We are keeping our eye open while focusing on continuing the Monovisc launch as well as getting Cingal through the regulatory pace. So we got a pretty full set of cash on our hand. So it’s an area that we are looking at this point, nothing definitive to announce for the investment community..

Thank you very much..

You’re welcome..

And I am showing no further questions at this time. I will now turn the call over to Mr. Charles Sherwood for the closing remarks..

Thank you, Sheinelle. As you all heard today, Anika has made great strides in the first half of 2015 which we believe will be a transformational year for the company.

Orthovisc and Monovisc continue to capture markets share, both Cingal and Hyalofast are advancing towards commercialization and we are moving ahead with the next generation of novel ideas in treating commonly diagnosed orthopedic conditions.

So we expect to continue our commercial momentum throughout the remainder of 2015 and look forward to delivering the value of two commercial launches over the coming months and years. And we thank you for joining us on the call today and your interest in Anika..

Ladies and gentlemen, thank you for participating in today’s conference. This concludes today’s program, you may all disconnect. Everyone have a great day..