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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
                                   FORM 10-K
 
/X/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
 
                    FOR FISCAL YEAR ENDED DECEMBER 31, 1998
 
/ /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1943
 
      FOR THE TRANSITION PERIOD FROM ________________ TO ________________
 
                        COMMISSION FILE NUMBER 000-21326
                            ------------------------
 
                            ANIKA THERAPEUTICS, INC.
 
             (Exact Name of Registrant as Specified in Its Charter)
 
<TABLE>
<S>                                            <C>
                MASSACHUSETTS                                   04-3145961
       (State or Other Jurisdiction of                       (I.R.S. Employer
       Incorporation or Organization)                       Identification No.)
</TABLE>
 
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<S>                                                           <C>
       236 WEST CUMMINGS PARK, WOBURN, MASSACHUSETTS                      01801
          (Address of Principal Executive Offices)                      (Zip Code)
</TABLE>
 
                            ------------------------
 
       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (781) 932-6616
 
      SECURITIES REGISTERED UNDER SECTION 12 (b) OF THE EXCHANGE ACT: NONE
 
        SECURITIES REGISTERED UNDER SECTION 12 (g) OF THE EXCHANGE ACT:
                     Common Stock, par value $.01 per share
 
    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 and 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 last 90 days.  Yes /X/    No / /
 
    Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S-K is not contained herein, and no disclosure will be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K  / /.
 
    The aggregate market value of voting stock held by non-affiliates of the
Registrant as of March 19, 1999 was $31,456,577 based on the last sale price of
Common Stock of $4.625 as reported by the NASDAQ National Market. At March 19,
1999 there were issued and outstanding 9,314,243 shares of Common Stock, par
value $.01 per share.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
    Certain information required in response to Items 10, 11, 12 and 13 of Part
III are hereby incorporated by reference from the Company's Proxy Statement for
the Annual Meeting to be held on June 3, 1999. Such Proxy Statement shall not be
deemed to be "filed" as part of this Report on Form 10-K except for the parts
therein which have been specifically incorporated by reference herein.
 
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<PAGE>
                                   FORM 10-K
                            ANIKA THERAPEUTICS, INC.
                    FOR FISCAL YEAR ENDED DECEMBER 31, 1998
 
    THIS 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. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM
THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS. CERTAIN FACTORS THAT MIGHT
CAUSE SUCH A DIFFERENCE ARE DISCUSSED THROUGHOUT THIS FORM 10-K AND ARE
DISCUSSED IN THE SECTION ENTITLED "RISK FACTORS AND CERTAIN FACTORS AFFECTING
FUTURE OPERATING RESULTS" ON PAGE 18 OF THIS FORM 10-K.
 
------------------------
 
(1) AMVISC is a registered trademark of Bausch & Lomb Surgical
 
PART I
 
ITEM 1. BUSINESS
 
    Anika Therapeutics, Inc. ("Anika" or the "Company") develops, manufactures
and commercializes therapeutic products and devices intended to promote the
repair, protection and healing of bone, cartilage and soft tissue. These
products are based on hyaluronic acid ("HA"), a naturally-occurring,
biocompatible polymer found throughout the body. Due to its unique biophysical
and biochemical properties, HA plays an important role in a number of
physiological functions such as the protection and lubrication of soft tissues
and joints, the maintenance of the structural integrity of tissues, and the
transport of molecules to and within cells. The Company's currently marketed
products consist of ORTHOVISC-Registered Trademark-, which is an HA product used
in the treatment of some forms of osteoarthritis ("OA") in humans and
HYVISC-Registered Trademark-, which is an HA product used in the treatment of
equine osteoarthritis. ORTHOVISC is currently approved for sale and marketed in
Canada, Europe, Turkey, Israel and Iceland. In the U.S. ORTHOVISC is currently
limited to investigational use only. An Investigational Device Exemption ("IDE")
was approved by the U.S. Food and Drug Administration (FDA) in March 1999
authorizing the Company to commence a human clinical trial in the U.S. The
Company manufactures AMVISC-Registered Trademark- and AMVISC
-Registered Trademark-Plus, which are HA products used as viscoelastic
supplements in ophthalmic surgery, for Bausch & Lomb Surgical, a subsidiary of
Bausch & Lomb. The Company is currently developing INCERT-Registered Trademark-,
which is an HA based product designed for use in the prevention of post-surgical
adhesions. In collaboration with Orquest, Inc., Anika also has exclusive rights
to produce Ossigel(tm); an injectable formulation of basic fibroblast growth
factor combined with HA designed to accelerate the healing of bone fractures.
 
AMVISC PRODUCTS
 
    AMVISC and AMVISC Plus are high molecular weight HA products used as
viscoelastic agents in ophthalmic surgical procedures such as cataract
extraction and intraocular lens implantation. These products coat, lubricate and
protect sensitive tissues such as the endothelium and maintain the space between
them, thereby facilitating ophthalmic surgical procedures.
 
    Anika manufactures the AMVISC product line for Bausch & Lomb Surgical under
a supply agreement that has fixed selling prices and stated minimum annual
purchase obligations through December 31, 2001.
 
ORTHOVISC
 
    ORTHOVISC is a high molecular weight, highly purified HA product designed to
relieve pain and improve joint mobility in patients suffering from
osteoarthritis of the knee. ORTHOVISC is delivered by intra-articular injection
to supplement and restore the body's natural HA found in the synovial fluid of
joints.
 
    Osteoarthritis occurs when the cartilage in a joint gradually deteriorates
due to the effects of mechanical stress, which can be caused by a variety of
factors including the normal aging process. In an
 
                                       1
<PAGE>
osteoarthritic joint, particular regions of articulating surfaces are exposed to
irregular forces, which result in the remodeling of tissue surfaces that disrupt
the normal equilibrium or mechanical function. As osteoarthritis advances, the
joint gradually loses its ability to regenerate cartilage tissue and the
cartilage layer attached to the bone deteriorates to the point where eventually
the bone becomes exposed. Advanced osteoarthritis often requires surgery such as
the implantation of artificial joints.
 
    Osteoarthritis is a debilitating disease causing pain, inflammation and
restricted movement in joints. The current treatment options for osteoarthritis
before joint replacement surgery include analgesics, non-steroidal
anti-inflammatory drugs and steroid injections.
 
    ORTHOVISC is approved for sale and marketed in Canada, Turkey, Israel,
Iceland and Europe under the Communautee European ("CE mark"). The CE mark, a
certification required under European Community ("EC") medical device
regulation, allows ORTHOVISC to be marketed without further approvals in most of
the EC nations as well as other countries that recognize EC device regulation.
 
    In the U.S., ORTHOVISC is limited to investigational use only. In October
1998 the Company was notified by the FDA that its Pre-Market Approval
Application ("PMA") was not approvable and that additional clinical data would
be required to demonstrate the effectiveness of ORTHOVISC. The PMA was submitted
to the FDA in December 1997 and contained clinical data collected from a 226
patient, randomized double blind clinical study completed in June 1997. In late
March 1999, the Company received an Investigational Device Exemption ("IDE")
approval to initiate a second Phase III clinical study.
 
    The Company has licensed ORTHOVISC marketing and distribution rights to
Zimmer, Inc., a subsidiary of Bristol-Myers Squibb Company for the territories
of United States, Canada, Latin America, most of Europe and Asia. ORTHOVISC is
also marketed by Grupo Ferrer, Inc. in Spain and Portugal, by Biomeks
Pharmaceuticals in Turkey and by Rafa Laboratories in Israel. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Overview."
 
HYVISC
 
    HYVISC is a high molecular weight injectable HA product for the treatment of
joint dysfunction in horses due to non-infectious synovitis associated with
equine osteoarthritis. HYVISC has viscoelastic properties that lubricate and
protect the tissues in horse joints. HYVISC is distributed by Boehringer
Ingelheim Animal Health, Inc. in the United States under an agreement
terminating in 2002. The Company and Boehringer Ingelheim have also entered into
an agreement to distribute HYVISC internationally.
 
    Products Under Development
 
    INCERT
 
    INCERT is a chemically modified, cross-linked form of HA designed to prevent
surgical adhesions. Surgical adhesions occur when fibrous bands of tissues form
between adjacent tissue layers during the wound healing process. Although
surgeons attempt to minimize the formation of adhesions, nevertheless they occur
quite frequently after surgery. Adhesions in the abdominal and thoracic cavity
can cause particularly serious problems such as intestinal blockage following
abdominal surgery and infertility following pelvic surgery.
 
    INCERT adheres to a wound site and serves as a barrier between adjacent
tissues. Anika co-owns an issued United States patent covering the use of INCERT
for adhesion prevention. The Company has received notification from the U.S.
Patent and Trademark Office ("PTO") that a third party is attempting to provoke
interference with respect to the Company's patent covering INCERT. The Company
has tested INCERT in pre-clinical animal studies. Anika currently plans to
commence human testing of INCERT in a pilot study by the end of 1999.
 
                                       2
<PAGE>
    OSSIGEL
 
    In June of 1997, the Company executed a multi-year collaboration agreement
with Orquest to develop and manufacture OSSIGEL, a formulation of basic
fibroblast growth factor and HA designed to accelerate the healing of bone
fractures. Orquest is a privately held orthobiologics company headquartered in
Mountain View, California, and was founded in 1994 to develop products for bone
and cartilage regeneration. OSSIGEL has been shown in pre-clinical animal models
to accelerate the healing of bone fractures. Orquest commenced human clinical
testing of OSSIGEL in Europe during 1998. Orquest has filed a patent application
with the U.S. Patent and Trademark Office for the use of OSSIGEL in accelerating
fracture healing.
 
    HA FOR NERVE REGENERATION
 
    The Company is conducting collaborative research with Lahey Clinic to study
the effect of HA on nerve regeneration. A pre-clinical animal model demonstrated
that the Company's highly purified HA formulation enhanced peripheral nerve
regeneration. The Company is also collaborating with Lahey Clinic to study the
use of HA in a spinal cord regeneration pre-clinical model.
 
    HA OLIGOSACCHARIDES
 
    HA oligosaccharides are discrete pieces of the HA polysaccharide chain.
Because many different types of normal cells and cells in disease processes
contain HA receptors on the cell surface that interact with HA oligosaccharides,
the material may have the ability to influence cell behavior.
 
    One of the critical events in the metastasis of cancer is the interaction
between tumor cells and the host tissue stroma. This interaction is mediated by
certain cell surface receptors. Preclinical studies have indicated that the
interaction between one of the cell surface receptors, the hyaluronan receptor
CD44 and HA contained in the host tissue stroma enhances the growth of certain
tumors. Preclinical studies conducted by the Company, working in collaboration
with Tufts University and Massachusetts General Hospital, have indicated that HA
oligosaccharides, by binding to the CD44 receptor and blocking the interaction
with HA in the host tissue stroma, have inhibited the metastasis of cancer cells
inserted in mice. In addition, studies in an in vitro model have indicated that
HA oligosaccharides inhibited the metastasis of cancer cells.
 
    The Company has obtained an exclusive worldwide license to this technology
from Tufts University.
 
MANUFACTURING OF HYALURONIC ACID
 
    The Company has been manufacturing HA since 1983 in its manufacturing
facility located in Woburn, Massachusetts. This facility is approved by the FDA
for the manufacture of medical devices and drugs. In 1996, the Company received
an International Standards Organization ("ISO") 9001 certification of its
manufacturing facility and HA manufacturing process. An ISO 9001 designation is
an internationally recognized certification for quality standards governed by
the International Organization for Standards based in Geneva, Switzerland. The
Company has developed a proprietary HA manufacturing process for the extraction
and purification of HA from rooster combs that yields high molecular weight,
highly purified HA.
 
    A substantial supply of rooster combs is available and the Company believes
that all the other materials required for the manufacture of its HA products are
also readily available from a number of sources. The Company obtains syringes
used to deliver its HA products from a single supplier, however, it generally
keeps sufficient syringes in its inventory to meet anticipated demand for at
least six months. The Company employs strict quality control procedures to
ensure the quality of its products, inventory and raw materials. The Company
believes that its facility in Woburn, Massachusetts has the manufacturing
capacity to accommodate anticipated demand through at least 2003.
 
                                       3
<PAGE>
PATENT AND PROPRIETARY RIGHTS
 
    The Company has a policy of seeking patent protection for patentable aspects
of its proprietary technology. The Company co-owns certain United States patents
and a patent application which claim certain adhesion prevention uses and
certain drug delivery uses of HA, and the Company solely owns patents covering
certain manufacturing processes. The Company also holds an exclusive license
from Tufts University to use technologies claimed in a United States patent
application which has been granted a notice of allowance by the U.S. Patent
Office which relates to the anti-metastasis applications of HA oligosaccharides.
The Company's issued patents expire between 2007 and 2015 and the license
expires upon expiration of all related patents. The Company intends to seek
patent protection with respect to products and processes developed in the course
of its activities when it believes such protection is in its best interest and
when the cost of seeking such protection is not inordinate. However, no
assurance can be given that any patent application will be filed, that any filed
applications will result in issued patents or that any issued patents will
provide the Company with a competitive advantage or will not be successfully
challenged by third parties. The protections afforded by patents will depend
upon their scope and validity, and others may be able to design around the
Company's patents. The Company's issued patents and any patents which arise from
the Company's licensed application would provide competitive protection, if at
all, only in the United States. To date, the Company has not pursued foreign
patents equivalent to those issued or applied for in the United States.
 
    Other entities have filed patent applications for or have been issued
patents concerning various aspects of HA-related products or processes. There
can be no assurance that the products or processes developed by the Company will
not infringe the patent rights of others in the future. Any such infringement
may have a material adverse effect on the Company's business, financial
condition and results of operations. In particular, the Company has received
notice from the PTO that a third party is attempting to provoke a patent
interference with respect to one of the Company's co-owned patents covering the
use of INCERT for post-surgical adhesion prevention. Although the Company
believes that an interference may be declared by the PTO, it is too early to
determine the merits of the interference or the effect, if any, the interference
will have on the Company's marketing of INCERT for this use. The existence of
the interference proceeding may have a negative impact on the marketing of the
INCERT product, and no assurance can be given that the Company would be
successful in any such interference proceeding. If the third party interference
were to be decided adversely to the Company, involved claims of the Company's
patent would be cancelled, the Company's marketing of the INCERT product may be
materially and adversely affected and the third party may enforce patent rights
against the Company which could prohibit the sale and use of the INCERT
products, which could have a material adverse effect on the Company's future
operating results.
 
    The Company also relies upon trade secrets and proprietary know-how for
certain unpatented aspects of its technology. To protect such information, the
Company requires all employees, consultants and licensees to enter into
confidentiality agreements limiting the disclosure and use of such information.
There can be no assurance that these agreements provide meaningful protection or
that they will not be breached, that the Company would have adequate remedies
for any such breach, or that the Company's trade secrets, proprietary know-how,
and technological advances will not otherwise become known to others. In
addition, there can be no assurance that, despite precautions taken by the
Company, others have not and will not obtain access to the Company's proprietary
technology. Further, there can be no assurance that third parties will not
independently develop substantially equivalent or better technology.
 
    The Company has granted Bausch & Lomb Surgical a royalty-free, worldwide,
exclusive license to the Company's manufacturing and product inventions which
relate to the AMVISC products, effective on December 31, 2001, the termination
date of the AMVISC supply contract. Upon expiration of the AMVISC supply
contract, there can be no assurance that Bausch & Lomb Surgical will continue to
use the Company to manufacture AMVISC and AMVISC Plus. If Bausch & Lomb Surgical
discontinues the use of the Company as a manufacturer after such time, the
Company's business, financial condition and results of operations could be
materially and adversely affected.
 
                                       4
<PAGE>
GOVERNMENT REGULATION
 
    Anika's research, development, manufacturing activities and the future
marketing of products by Anika are subject to regulation by numerous
governmental authorities in the United States and other countries. In the United
States, devices and drugs are subject to rigorous FDA regulation. The Federal
Food, Drug and Cosmetic Act governs the testing, manufacture, labeling, storage,
record keeping, approval, advertising and promotion of Anika's products.
 
    Product development and approval within the FDA regulatory framework takes a
number of years and involves the expenditure of substantial resources to
demonstrate safety and effectiveness. There can be no assurance that this
regulatory framework will not change or that additional regulation will not
arise at any stage of Anika's product development process which may affect
approval of or delay an application or require additional expenditures by Anika.
 
    Medical products regulated by the FDA are generally classified as drugs,
biologics, and/or medical devices. AMVISC is approved as a Class III device in
the United States for ophthalmic surgical procedures in intraocular use in
humans. HYVISC is approved as an animal drug for intra-articular injection in
horse joints to treat degenerative joint disease associated with synovitis.
ORTHOVISC is currently considered a Class III medical device by the FDA. In the
past, most HA products have been regulated as medical devices. Anika believes
that its ORTHOVISC for osteoarthritis and INCERT products will be regulated as
Class III devices. In the U.S., however, no assurance can be given that INCERT
will not be classified as a drug or biologic or as both a device and a drug or a
biologic. Although it is not known whether HA oligosaccharides for use in the
treatment of certain proliferative diseases and in HA drug delivery will be
regulated as drugs, these produts is the Company's belief that it will be
regulated as drugs or a biologics.
 
DEVICES
 
    The steps required to qualify a medical device for marketing in the United
States are complex. Medical devices are classified as Class I, II, or III
devices. In general, Class I devices require compliance with labeling and record
keeping regulations and are subject to other general controls. Class II devices
may be subject to special controls, such as market surveillance and are subject
to general controls. Class II devices also may be subject to clinical testing
for purposes of premarket notification to the FDA. Class III devices require
clinical testing to assure safety and effectiveness prior to marketing and
distribution.
 
    At least 90 days prior to marketing, devices must be subject to a premarket
notification to the FDA to determine the product's classification and regulatory
status. If a product is found to be "substantially equivalent" to a Class I or
Class II device, or a Class III device not subject to a PMA requirement, it may
be marketed without further FDA review. The FDA may require the submission of
clinical data as a basis for determining whether a device is "substantially
equivalent." If a device is found to be "not substantially equivalent," the
device manufacturer must file a PMA application with the FDA based on testing
intended to demonstrate that the product is both safe and effective. HA-based
products will likely require the issuance of a PMA from the FDA prior to
commercial sale.
 
    The PMA process requires the performance of human clinical studies under an
IDE. Upon completion of required clinical studies, results are presented to the
FDA in a PMA application. In addition to the results of clinical investigations,
the PMA applicant must submit other information relevant to the safety and
effectiveness of the device, including the results of non-clinical tests; a full
description of the device and its components; a full description of the methods,
facilities and controls used for manufacturing; and proposed labeling. The FDA
staff then determines whether to accept the application for filing. If accepted
for filing, the application is further reviewed by the FDA and then often
reviewed by a FDA scientific advisory panel of physicians and others with
expertise in the relevant field. The FDA will also conduct an inspection to
determine whether an applicant conforms with the FDA's current Quality Systems
Regulations. If the FDA's evaluation is favorable, the FDA will subsequently
publish an order granting the PMA for the device. Although the initial PMA
review process is required to be completed within 180 days from the date of the
PMA application is accepted for filing, the FDA routinely raises additional
issues which must be addressed prior to the approval of a PMA, which may
significantly extend the review process.
 
                                       5
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DRUGS
 
    Medical devices may meet both the definition of a medical device and a drug.
In these instances, the FDA may regulate these products as drugs or biologics or
as both medical devices and drugs or biologics. The steps required before a drug
or biologic may be marketed in the United States include (i) preclinical
laboratory and animal tests, (ii) submission to the FDA of an Investigational
New Drug application ("IND"), which must become effective before human clinical
trials may commence, (iii) adequate and well-controlled human clinical trials to
establish the safety and efficacy of the drug, (iv) submission of a New Drug
Application ("NDA") or Product License Application ("PLA") to the FDA and (v)
FDA approval of the NDA or PLA prior to any commercial sales or shipment of the
drug. A clinical study program designed to demonstrate the safety and
effectiveness of a drug usually proceeds in three phases:
 
    - Phase I involves testing the drug for safety and tolerance in a small
      group of healthy volunteers.
 
    - Phase II involves testing for efficacy and identifying possible side
      effects in a target patient group.
 
    - Phase III involves additional testing for efficacy, optimal dosage and
      safety with an expanded patient group, preferably using a comparative
      control agent.
 
    The results of the clinical testing, together with manufacturing
information, are then submitted to the FDA in the form of an NDA or PLA. In the
event Anika's products are classified as drugs or biologics, it may take five to
ten years to from discovery to approval, which typically would be substantially
longer than the development process for devices and would be substantially more
expensive.
 
    Furthermore, Anika or the FDA may suspend clinical trials at any time upon a
determination that the subjects or patients are being exposed to an unacceptable
adverse health risk ascribable to Anika's products. If clinical studies are
suspended, Anika may be unable to continue the development of the
investigational products affected.
 
    In addition to the FDA approval processes for products, manufacturing
facilities are subject to approval by the FDA. Among the conditions for such
approval is the requirement that quality control and manufacturing procedures
conform to the FDA's Good Manufacturing Practices regulations, which must be
followed at all times. In complying with standards set forth in these
regulations, manufacturers must continue to expend time, monies and effort in
the area of production and quality control to ensure full technical compliance.
Manufacturing establishments also are subject to inspections by or under the
authority of the FDA and by other federal, state or local agencies.
 
    In addition to regulations enforced by the FDA, Anika is subject to
regulation under the Occupational Safety and Health Act, the Environmental
Protection Act, the Toxic Substances Control Act, the Resource Conservation and
Recovery Act and other existing and potential future federal, state and local
regulations of foreign governments. Federal, state and foreign regulations
regarding the manufacture and sale of medical products are subject to change.
Anika cannot predict what impact, if any, such changes might have on its
business.
 
    For marketing outside the United States, Anika will be subject to FDA
regulations regarding the export of products within its jurisdiction and to
foreign regulatory requirements governing human clinical trials and marketing
approval for medical products and devices. The requirements relating to the
conduct of clinical trials, product licensing, pricing and reimbursement vary
widely from country to country. The process of obtaining approvals from the FDA
and other regulatory authorities can be costly, time consuming, and subject to
unanticipated delays. There can be no assurance that approvals of Anika's
products, processes or facilities will be granted or that Anika will obtain the
financing needed to develop certain of such products. Any failure to obtain, or
delay in obtaining, such approvals could adversely affect the ability of Anika
to market its products.
 
                                       6
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COMPETITION
 
    The Company competes with many companies, including large pharmaceutical
companies and specialized medical products companies. Many of these companies
have substantially greater financial and other resources, larger research and
development staffs, more extensive marketing and manufacturing organizations and
more experience in the regulatory process than the Company. The Company also
competes with academic institutions, governmental agencies and other research
organizations which may be involved in research, development and
commercialization of products. Because a number of companies are developing HA
products for similar applications, the successful commercialization of a
particular product will depend in part upon the ability of the Company to
complete clinical studies and obtain FDA marketing and foreign regulatory
approvals prior to its competitors. There can be no assurance that the Company
will be able to compete against current or future competitors or that
competition will not have a material adverse effect on the Company's business,
financial condition and results of operations.
 
    The Company is aware of several companies, including Genzyme, Biomatrix,
Inc., Hyal Pharmaceutical Corp., Fidia S.P.A., LifeCore Biomedical, Inc. and
Seikagaku, that are developing and/or marketing products utilizing HA for a
variety of human applications. In some cases, competitors have obtained product
approvals, submitted for approval or have commenced human clinical studies,
either in the United States or in certain foreign countries. Major competing
products for the use of HA in ophthalmic surgery include Healon (manufactured by
Pharmacia) and Provisc and Viscoat (distributed by Alcon). In the U.S. two HA
products for the treatment of osteoarthritis in the knee, Hyalgan and Synvisc,
have received FDA approval and have been marketed in the U.S. since the fourth
quarter of 1997. Hyalgan is manufactured by Fidia S.P.A. and is distributed in
the United States by Sanofi Pharmaceuticals and OrthoLogic Corp. In addition,
Fidia S.P.A. is selling Hyalgan throughout Europe. Synvisc is manufactured by
Biomatrix Inc. and is distributed in the United States by Wyeth-Ayerst
Laboratories, a division of American Home Products Corp. Synvisc is also
marketed in Canada, Europe, Latin America and Australia. Artz is manufactured by
Seikagaku Corporation and is distributed in Japan, Spain and Sweden. Genzyme has
received marketing approvals in Europe and the U.S. for a chemically modified HA
for the prevention of post-surgical adhesions under the brandname Seprafilm.
LifeCore Biomedical has completed a Phase III human clinical trial testing HA to
prevent surgical adhesions and has filed a PMA with the FDA.
 
RESEARCH AND DEVELOPMENT
 
    The Company intends to continue development of its existing product
candidates, to expand the therapeutic applications of its existing products and
to develop new therapeutic applications for its HA technology.
 
    The Company's research and development efforts consist primarily of the
development of new medical applications for its HA based technology and the
management of clinical trials for product candidates and the preparation and
processing of applications for regulatory approvals at all relevant stages of
development. The Company's development of new products is accomplished primarily
through in-house research and development personnel and resources as well as
with collaboration with other companies and scientific researchers. For the
years ended December 31, 1998 and 1997, the four-month transitional period ended
December 31, 1996 and the fiscal year ended August 31, 1996, research and
development expenses were $2.0 million, $2.0 million, $1.3 million and $1.6
million, respectively. The Company anticipates that it will continue to commit
substantial resources to research and development in the future. As of December
31, 1998 the Company had seven employees engaged primarily in research and
development.
 
EMPLOYEES
 
    As of December 31, 1998, the Company had approximately 61 full-time
employees. The Company considers its relations with its employees to be good. No
employees are represented by labor unions.
 
                                       7
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ENVIRONMENTAL LAWS
 
    The Company believes that it is in compliance with all federal, state and
local environmental regulations with respect to its manufacturing facilities and
that the cost of ongoing compliance with such regulations does not have a
material effect on the Company's operations. The Company's leased manufacturing
facility is located within the Wells G&H Superfund site in Woburn, MA. The
Company has not been named and is not a party to any such legal proceedings
regarding the Wells G&H Superfund site.
 
PRODUCT LIABILITY
 
    The testing, marketing and sale of human health care products entail an
inherent risk of allegations of product liability, and there can be no assurance
that substantial product liability claims will not be asserted against the
Company. Although the Company has not received any material product liability
claims to date and has coverage under its insurance policy of $1,000,000 per
occurrence and $5,000,000 in aggregate, there can be no assurance if material
claims arise in the future, that the Company's 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 the
Company's business, financial condition and results of operation.
 
ITEM 2. PROPERTIES
 
    The Company leases 25,000 square feet of space at 236 West Cummings Park,
Woburn, Massachusetts for its corporate headquarters and manufacturing facility.
This facility has received all FDA and state regulatory approvals to operate as
a sterile device and drug manufacturer. The lease for this facility terminates
in February 2004. The Company also leases (i) approximately 11,000 square feet
of administrative and research and development space in Woburn, Massachusetts
under a lease terminating in October 2001 and (ii) approximately 9,000 square
feet of warehouse space in Woburn, Massachusetts under a lease terminating in
January 2004. For the year ended December 31, 1998 the Company had aggregate
lease costs of approximately $377,000. Anika believes that its existing
facilities are adequate to meet its requirements through 2003.
 
ITEM 3. LEGAL PROCEEDINGS
 
    The Company has no material pending litigation.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
    No matter was submitted to a vote of the security holders during the fourth
quarter of the fiscal year covered by this report.
 
                                       8
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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
 
COMMON STOCK INFORMATION
 
    The Company's common stock par value $0.01 per share (the "Common Stock")
has traded on the Nasdaq National Market since November 25, 1997 under the
symbol "ANIK". Prior to that the Company's stock was traded under the Nasdaq
Small-Cap Market. The following table sets forth, for the periods indicated, the
high and low sale prices of the Common Stock on the Nasdaq Small-Cap and the
Nasdaq National Market. These prices represent prices between dealers and do not
include retail mark-ups, markdowns or commissions and may not represent actual
transactions.
 
<TABLE>
<CAPTION>
                                                                                                PRICE
                                                                                                RANGE
FISCAL YEAR ENDED AUG. 31, 1996                                                                 HIGH        LOW
---------------------------------------------------------------------------------------------- -------    -------
<S>                                                                                            <C>        <C>
First Quarter................................................................................. $ 3 1/8    $ 2 5/8
Second Quarter................................................................................   4 5/8      2 7/8
Third Quarter.................................................................................   7 7/8      3 1/2
Fourth Quarter................................................................................   6 5/8      3 3/8
Transitional period Ended Dec. 31, 1996.......................................................   6 1/4      3 3/8
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                                PRICE
                                                                                                RANGE
FISCAL YEAR ENDED DEC. 31, 1997                                                                 HIGH        LOW
---------------------------------------------------------------------------------------------- -------    -------
<S>                                                                                            <C>        <C>
First Quarter................................................................................. $ 6 1/4    $ 3 1/2
Second Quarter................................................................................   7          5
Third Quarter.................................................................................   9 1/4      6 3/8
Fourth Quarter................................................................................  10 5/8      6 7/8
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                                PRICE
                                                                                                RANGE
FISCAL YEAR ENDED DEC. 31, 1998                                                                 HIGH        LOW
---------------------------------------------------------------------------------------------- -------    -------
<S>                                                                                            <C>        <C>
First Quarter................................................................................. $10 1/8    $ 7 1/4
Second Quarter................................................................................  15          9 9/16
Third Quarter.................................................................................  18 3/16    13
Fourth Quarter................................................................................  12 3/8      3 15/16
</TABLE>
 
    At December 31, 1998, there were 320 holders of record of Common Stock.
 
    The Company has never declared or paid any cash dividends on its Common
Stock. The Company currently intends to retain earnings, if any, for use in its
business and does not anticipate paying cash dividends on its Common Stock in
the foreseeable future. Payment of future dividends, if any, on the Common Stock
will be at the discretion of the Company's Board of Directors after taking into
account various factors, including the Company's financial condition, operating
results, anticipated cash needs and plans for expansion.
 
                                       9
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
 
                         STATEMENTS OF OPERATIONS DATA:
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                                      FOUR-MONTH
                                                   YEARS ENDED       TRANSITIONAL
                                                   DECEMBER 31,      PERIOD ENDED      YEARS ENDED AUGUST 31,
                                               --------------------  DECEMBER 31,  -------------------------------
                                                 1998       1997         1996        1996       1995       1994
                                               ---------  ---------  ------------  ---------  ---------  ---------
<S>                                            <C>        <C>        <C>           <C>        <C>        <C>
Total revenue................................  $  13,870  $  11,955   $    1,212   $   4,613  $   3,356  $   4,663
Cost of sales................................      6,014      4,744        1,309       4,472      3,118      3,934
Gross profit (loss)..........................      7,856      7,211          (97)        141        238        728
Total operating expenses.....................      4,687      4,050        2,619       3,104      2,222      2,230
Income (loss) from operations................      4,349      3,344       (2,658)     (2,849)    (1,955)    (1,440)
Diluted earnings (loss) per share............  $     .40  $     .44   $    (0.56)  $   (0.76) $   (0.63) $   (0.45)
Diluted shares outstanding...................     11,006      7,587        4,905       4,053      3,225      3,177
</TABLE>
 
                              BALANCE SHEET DATA:
 
<TABLE>
<CAPTION>
                                                      AS OF             AS OF
                                                   DECEMBER 31,      DECEMBER 31,         AS OF AUGUST 31,
                                               --------------------  ------------  -------------------------------
<S>                                            <C>        <C>        <C>           <C>        <C>        <C>
                                                 1998       1997         1996        1996       1995       1994
                                               ---------  ---------  ------------  ---------  ---------  ---------
Cash and cash equivalents....................  $  10,713  $  22,680   $    2,705   $   3,651  $   2,825  $   2,584
Short-term investments.......................     12,007         --           --          --         --         --
Working capital..............................     27,076     25,329        4,226       5,858      4,972      5,520
Total assets.................................     32,393     28,749        6,920       8,580      8,046      7,698
Redeemable convertible preferred stock.......         --         --        2,603       2,523      2,326         --
Accumulated deficit..........................     (1,680)    (6,029)      (9,374)     (6,716)    (3,867)    (1,913)
Treasury stock...............................     (1,890)        --           --          --         --         --
Stockholder's equity.........................  $  29,895  $  26,224   $    2,369   $   4,415  $   3,544  $   5,378
</TABLE>
 
                                       10
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
 
OVERVIEW
 
    The Company develops, manufactures and commercializes therapeutic products
and devices intended to promote the repair, protection and healing of bone,
cartilage and soft tissue. These products are based on hyaluronic acid ("HA"), a
naturally-occurring, biocompatible polymer found throughout the body. Due to its
unique biophysical and biochemical properties, HA plays an important role in a
number of physiological functions such as the protection and lubrication of soft
tissues and joints, the maintenance of the structural integrity of tissues, and
the transport of molecules to and within cells. The Company's currently marketed
products consist of ORTHOVISC-Registered Trademark-, which is an HA product used
in the treatment of some forms of osteoarthritis ("OA") in humans and
HYVISC-Registered Trademark-, which is an HA product used in the treatment of
equine osteoarthritis. ORTHOVISC is currently approved for sale and marketed in
Canada, Europe, Turkey, Israel and Iceland. In the U.S. ORTHOVISC is currently
limited to investigational use only. An Investigational Device Exemption ("IDE")
was approved by the FDA in March 1999 authorizing the Company to commence a
human clinical trial in the U.S. The Company manufactures
AMVISC-Registered Trademark- and AMVISC-Registered Trademark-Plus, which are HA
products used as viscoelastic supplements in ophthalmic surgery, for Bausch &
Lomb Surgical, a subsidiary of Bausch & Lomb. The Company is currently
developing INCERT-Registered Trademark-, which is an HA based product designed
for use in the prevention of post-surgical adhesions. In collaboration with
Orquest, Inc., Anika also has exclusive rights to produce OSSIGEL(TM;) an
injectable formulation of basic fibroblast growth factor combined with HA
designed to accelerate the healing of bone fractures.
 
    The Company receives a substantial portion of its revenue from the sale of
AMVISC and AMVISC Plus to Bausch & Lomb Surgical. For the years ended December
31, 1998 and 1997, AMVISC sales accounted for 65% and 84% of product revenue,
respectively.
 
    The Company manufactures AMVISC for Bausch & Lomb Surgical under a five-year
supply contract (the "AMVISC Supply Contract") that became effective on January
1, 1997 and expires on December 31, 2001. Bausch & Lomb Surgical assumed the
AMVISC Supply Contract when it purchased Chiron Vision in January 1998. The
current AMVISC Supply Contract has stated minimums with substantially higher
unit selling prices than a previous six-year supply contract with Chiron Vision
which expired on December 31, 1996. Under the previous supply contract, the
Company was obligated to supply AMVISC at unit selling prices that approximated
the Company's unit manufacturing cost.
 
    In November 1997, the Company entered into a long-term distribution
agreement with Zimmer, Inc., a subsidiary of Bristol-Myers Squibb Company, that
was subsequently amended in June 1998, (the "Zimmer Distribution Contract"). The
Zimmer Distribution Contract provides Zimmer with exclusive marketing and
distribution rights to ORTHOVISC in the United States, Canada, Latin America,
Asia and most of Europe. To date the Company has received up-front
non-refundable licensing payments totaling $4.0 million. In addition, under the
Zimmer Distribution Contract, the Company has the potential to receive
additional payments aggregating up to $20.5 million upon the achievement of
certain regulatory approvals and enumerated sales milestones. As an alternative
to a $2.5 million milestone payment, Zimmer has the right to elect to acquire
shares of the Company's Common Stock equal to the greater of $2.5 million or
9.9% of the then outstanding Common Stock (but not to exceed 19.9% of the then
outstanding Common Stock) at a 25% premium to the then current market price.
There can be no assurance that any of such milestones will be met on a timely
basis or at all. For the year ended December 31, 1998, ORTHOVISC sales to Zimmer
accounted for 15.0% of product revenue.
 
                                       11
<PAGE>
RESULTS OF OPERATIONS
 
YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997
 
                         STATEMENT OF OPERATIONS DETAIL
 
<TABLE>
<CAPTION>
                                                                                              YEAR ENDED
                                                                                     ----------------------------
                                                                                     DEC 31, 1998   DEC 31, 1997
                                                                                     -------------  -------------
<S>                                                                                  <C>            <C>
Product revenue....................................................................  $  12,369,712  $   9,255,338
Licensing fees.....................................................................      1,500,000      2,700,000
                                                                                     -------------  -------------
  Total revenue....................................................................     13,869,712     11,955,338
Cost of product revenue............................................................      6,014,181      4,744,123
                                                                                     -------------  -------------
  Gross profit.....................................................................      7,855,531      7,211,215
Operating expenses:
  Research and development.........................................................      1,955,940      1,957,796
  Selling, general and administrative..............................................      2,731,142      2,092,467
                                                                                     -------------  -------------
  Total operating expenses.........................................................      4,687,082      4,050,263
                                                                                     -------------  -------------
  Income from operations...........................................................      3,168,449      3,160,952
  Interest income, net.............................................................      1,307,825        262,162
                                                                                     -------------  -------------
  Income before income taxes.......................................................      4,476,274      3,423,114
  Income taxes.....................................................................        127,557         78,677
                                                                                     -------------  -------------
    Net income.....................................................................  $   4,348,717  $   3,344,437
                                                                                     -------------  -------------
                                                                                     -------------  -------------
</TABLE>
 
    PRODUCT REVENUE.  Product revenue for the year ended December 31, 1998 was
$12,370,000 an increase of $3,115,000, or 33.6%, over the $9,255,000 recorded in
the prior year. The increase was primarily attributable to an increase of
$2,955,000 or 220% in sales of ORTHOVISC. Sales of AMVISC products also
increased by $333,000 or 4%.
 
    LICENSING FEES.  Licensing fees of $1,500,000 and $2,700,000 were received
for the years ended December 31, 1998 and 1997, respectively. During 1998, the
Company received a non-refundable $1.5 million licensing payment from Zimmer for
the expansion of territories under the Zimmer Distribution Agreement. During
1997, the Company received a non-refundable $2.5 million licensing payment from
Zimmer for ORTHOVISC distribution rights and $200,000 from Orquest for the
development of OSSIGEL.
 
    GROSS PROFIT.  Gross profit for the year ended December 31, 1998 was
$7,856,000 an increase of $644,000 or 8.2% over the 7,211,000 recorded in the
prior year. The increase was primarily due to the increase in product revenue
and the gross profit percentage on product revenue partially offset by a
decrease in licensing fee. Gross profit from product revenues increased as a
percentage of product revenue to 51.4% for the year ended December 31, 1998 as
compared to 48.7% in the prior year. The increase in the gross profit percentage
on product revenues was due to increased sales volume of ORTHOVISC, which has a
higher gross margin per unit than AMVISC products.
 
    RESEARCH AND DEVELOPMENT.  Research and development expenses for the year
ended December 31, 1998 decreased by $2,000 to $1,956,000 from $1,958,000
recorded in the prior year. An increase in research and development staffing
during 1998 was offset by a reduction in ORTHOVISC regulatory and clinical
costs. The Company expects that research and development expenses will increase
substantially during 1999 due to ORTHOVISC clinical trial costs.
 
    SELLING, GENERAL AND ADMINISTRATIVE.  Selling, general and administrative
expenses for the year ended December 31, 1998, increased by $639,000, or 30.5%,
to $2,731,000 from $2,092,000 in the prior year. The
 
                                       12
<PAGE>
increase was primarily attributable to increases in consulting, recruiting,
selling and marketing costs and the amortization of unearned stock compensation.
 
    NET INTEREST INCOME.  The Company's net interest income increased by
$1,046,000 to $1,308,000 for the year ended December 31, 1998 from $262,000 in
the prior year. The increase is attributable to an increase in average cash
available for investment during the 1998 as compared to 1997, as a result the
Company's December 1997 stock offering.
 
    INCOME TAXES.  The Company recorded an effective tax rate of 2.9% for 1998
versus 2.3% for the prior year. The Company recorded tax expense for the year
ended December 31, 1998 of $128,000 which consisted of current tax expense of
approximately $1,803,000 (tax rate of 40.2%) offset by a tax benefit of
approximately $1,675,000 from net operating loss carryforwards.
 
YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996
 
                         STATEMENT OF OPERATIONS DETAIL
<TABLE>
<CAPTION>
                                                                                               YEAR ENDED
                                                                                      ----------------------------
<S>                                                                                   <C>            <C>
                                                                                      DEC 31, 1997   DEC 31, 1996
                                                                                      -------------  -------------
 
<CAPTION>
                                                                                                      (UNAUDITED)
<S>                                                                                   <C>            <C>
Product revenue.....................................................................  $   9,255,338  $   4,633,743
Licensing fees......................................................................      2,700,000             --
                                                                                      -------------  -------------
  Net revenue.......................................................................     11,955,338      4,633,743
  Cost of product revenue...........................................................      4,744,123      4,517,591
                                                                                      -------------  -------------
Gross profit........................................................................      7,211,215        116,152
                                                                                      -------------  -------------
Operating expenses:
  Research and development..........................................................      1,957,796      2,488,657
  Selling, general and administrative...............................................      2,092,467      2,393,623
                                                                                      -------------  -------------
  Total operating expenses..........................................................      4,050,263      4,882,280
                                                                                      -------------  -------------
  Income (loss) from operations.....................................................      3,160,952     (4,766,128)
  Interest income, net..............................................................       (262,162)      (166,908)
                                                                                      -------------  -------------
  Income (loss) before income taxes.................................................      3,423,114     (4,599,220)
  Income taxes......................................................................         78,677             --
                                                                                      -------------  -------------
    Net income (loss)...............................................................  $   3,344,437  $  (4,599,220)
                                                                                      -------------  -------------
                                                                                      -------------  -------------
</TABLE>
 
    PRODUCT REVENUE.  Product revenue for the year ended December 31, 1997 was
$9,255,000 an increase of $4,621,000 or 100% over the $4,634,000 in the prior
year. The increase was primarily attributable to increased AMVISC sales. Sales
of AMVISC as measured in units increased by 6.5% while the average selling price
of AMVISC increased by 70% under the new AMVISC supply contract. Future
increased selling prices under the AMVISC supply contract will be limited to
annual adjustment based on the producer price index.
 
    LICENSING FEES.  Licensing fees of $2,700,000 were received for the year
ended December 31, 1997. The Company received a $2.5 million licensing payment
from Zimmer for ORTHOVISC distribution rights and $200,000 from Orquest for the
development of OSSIGEL.
 
    GROSS PROFIT.  The Company's gross profit for the year ended December 31,
1997 was $7,211,000 an increase of $7,095,000 over the $116,000 recorded in the
prior year. The increase was primarily due to the 70% increase in the average
unit selling price of AMVISC under the new AMVISC Supply Contract, increased
sales volume of ORTHOVISC and the $2,700,000 licensing fee received in 1997.
Gross profit from product revenues increased as a percentage of product revenues
to 48.7% for the year ended
 
                                       13
<PAGE>
December 31, 1997 as compared to 2.5% in the prior year due primarily to the
increase in average unit selling price of AMVISC and the increased sales of
ORTHOVISC which has a higher gross margin than AMVISC.
 
    RESEARCH AND DEVELOPMENT.  Research and development expenses for the year
ended December 31, 1997 decreased by $531,000, or 21.3% to $1,958,000 from
$2,489,000 recorded in the prior year. The decrease was primarily due to a
reduction in expenses associated with the ORTHOVISC clinical trial which was
completed in June 1997.
 
    SELLING, GENERAL AND ADMINISTRATIVE.  Selling, general and administrative
expenses for the year ended December 31, 1997, decreased by $302,000, or 12.6%,
to $2,092,000 from $2,394,000 in the prior year. Staffing levels were
substantially the same for each of these years. The decrease is primarily
attributable to severance payments to the Company's former president incurred in
1996 and a $544,000 write-off of leasehold improvements and lease expenses
resulting from the closing of one of the Company's facilities in 1996 which was
partially offset by an increase in general expense levels in 1997.
 
    NET INTEREST INCOME.  The Company's net interest income increased to
$262,000, or 56.9%, in the year ended December 31, 1997 from $167,000 in the
prior year. The increase is attributable to an increase in average cash
available for investment in the year ended December 31, 1997 as compared to
1996.
 
    TAX EXPENSE.  The Company recorded tax expense for the year ended December
31, 1997 of approximately $79,000 which consisted of current tax expense of
$1,375,000 (tax rate of 40.2%) offset by a tax benefit of $1,296,000 from net
operating loss carryforwards. At December 31, 1997 the company has a remaining
tax benefit of $3,256,000 from net operating loss carryforwards to offset future
tax expense.
 
FOUR MONTHS ENDED DECEMBER 31, 1996 COMPARED TO FOUR MONTHS ENDED DECEMBER 31,
  1995
 
                         STATEMENT OF OPERATIONS DETAIL
<TABLE>
<CAPTION>
                                                                                            FOUR MONTHS ENDED
                                                                                       ---------------------------
<S>                                                                                    <C>            <C>
                                                                                       DEC 31, 1996   DEC 31, 1995
                                                                                       -------------  ------------
 
<CAPTION>
                                                                                                      (UNAUDITED)
<S>                                                                                    <C>            <C>
Net sales............................................................................  $   1,212,041  $  1,191,215
Cost of sales........................................................................      1,308,625     1,263,249
                                                                                       -------------  ------------
  Gross loss.........................................................................        (96,584)      (72,034)
Operating expenses:
  Research and development...........................................................      1,310,330       456,315
  Selling, general and administrative................................................      1,308,583       384,215
                                                                                       -------------  ------------
    Total operating expenses.........................................................      2,618,913       840,530
                                                                                       -------------  ------------
  Loss from operations...............................................................     (2,715,497)     (912,564)
    Interest income..................................................................        (57,898)       (5,303)
                                                                                       -------------  ------------
  Loss before income taxes...........................................................     (2,657,599)     (907,261)
  Income taxes.......................................................................
                                                                                       -------------  ------------
Net loss.............................................................................  $  (2,657,599) $   (907,261)
                                                                                       -------------  ------------
                                                                                       -------------  ------------
</TABLE>
 
    NET SALES.  Net sales of HA products for the four-month transitional period
ended December 31, 1996 totaled $1.2 million, which was substantially unchanged
from the net sales recorded for the comparable four month period of the prior
year.
 
    GROSS LOSS.  The Company's gross loss as a percentage of net sales was 8.0%
for the four month transitional period ended December 31, 1996, an increase of
two percentage points from the 6.0% gross
 
                                       14
<PAGE>
loss for the same period in 1995. The increase was primarily attributable to
increased sales of HA products with lower margins.
 
    RESEARCH AND DEVELOPMENT.  Research and development expenses for the
four-month transitional period ended December 31, 1996 increased by $854,000, or
187.3%, to $1.3 million from $456,000 for the same period in 1995. The increase
was primarily attributable to $600,000 in expenses related to the clinical trial
for ORTHOVISC and the amortization of $375,000 of unearned stock option
compensation related to the amendment of the employment agreement of the
Company's chief scientific officer.
 
    SELLING, GENERAL AND ADMINISTRATIVE.  Selling, general and administrative
expenses for the four-month transitional period ended December 31, 1996
increased by $925,000, or 240.9%, to $1.3 million from $384,000 for the same
period in 1995. The increase was primarily attributable to the hiring of
additional marketing and administrative staff, a $544,000 write-off of leasehold
improvements and lease expenses resulting from closing one of the Company's
facilities, and $200,000 in severance costs associated with the departure of the
Company's former president.
 
YEAR ENDED AUGUST 31, 1996 COMPARED TO YEAR ENDED AUGUST 31, 1995
 
    NET SALES.  Net sales of HA products totaled $4.6 million in the fiscal year
ended August 31, 1996, representing an increase of $1.3 million, or 38.2%, from
the $3.4 million for fiscal 1995. The increase was primarily attributable to an
increase in the unit volume of AMVISC sales.
 
    GROSS PROFIT.  The Company's gross profit as a percentage of net sales
declined to 3% in the fiscal year ended August 31, 1996, from 7% in fiscal 1995.
During the year ended August 31, 1996 the balance in the AMVISC manufacturing
reserve of $521,000 was written off to cost of goods sold since the previous
AMVISC supply contract was marginally profitable and it expired on December 31,
1996. The Company determined that the reserve was no longer required because the
previous AMVISC supply contract was expected to remain marginally profitable
through the end of the contract period. The decrease in gross profit as a
percentage of net sales is attributable to higher manufacturing costs per unit
in the fiscal year ended August 31, 1996 versus fiscal 1995 and an unfavorable
mix of product sales in the fiscal year ended August 31, 1996 versus fiscal
1995.
 
    RESEARCH AND DEVELOPMENT.  Research and development expenses increased by
$317,000, or 24.0%, to $1.6 million in the fiscal year ended August 31, 1996
from $1.3 million in fiscal 1995. The increase was attributable primarily to the
commencement of the ORTHOVISC clinical trial in the United States.
 
    SELLING, GENERAL AND ADMINISTRATIVE.  Selling, general and administrative
expenses for the fiscal year ended August 31, 1996 increased by $565,000, or
62.5%, to $1.5 million from $904,000 in fiscal 1995. The increase was
attributable primarily to additions to administration staffing for the fiscal
year ended August 31, 1996, increased selling and marketing costs associated
with the international commercialization of ORTHOVISC and severance payments to
the Company's former president.
 
    NET INTEREST INCOME.  The Company's net interest income increased to
$114,000, or 293.0%, in the fiscal year ended August 31, 1996 from $29,000 in
fiscal 1995. The increase is attributable to the Company having higher cash
balances on average in the fiscal year ended August 31, 1996 as compared to
fiscal 1995.
 
    INCOME TAX BENEFIT.  The Company has not recorded income tax benefits for
the fiscal years ended August 31, 1996 and 1995. The Company will not be able to
record income tax benefits from the operating losses incurred after May 1, 1993
until the Company has operating profits, since the realization of these benefits
cannot be reasonably assured.
 
                                       15
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
 
    At December 31, 1998, the Company had cash, cash equivalents and short-term
investments of $22.7 million and working capital of $27.1 million versus cash
and cash equivalents of $22.7 million and working capital of $25.3 million at
December 31, 1997. During 1998, the Company generated approximately $3,353,000
of cash from operating activities, which consisted primarily of net income
offset by changes in working capital items.
 
    During 1998, the Company utilized $2,238,000 for capital expenditures,
primarily for the expansion of its manufacturing facility. The Company expects
to utilize approximately $2,000,000 during 1999 to complete the expansion of its
manufacturing facility. The Company expects that after this expansion it will
have adequate capacity to meet demand through at least the end of the year 2003
based upon its current expectations.
 
    In October 1998, the Board of Directors approved a stock repurchase plan
under which the Company is authorized to repurchase up to $4 million of Anika
Common Stock with the total number of shares purchased under the plan not to
exceed 9.9% of the total issued and outstanding shares. Through December 31,
1998 the Company repurchased 359,500 shares for $1,923,000 and through March 25,
1999 the Company had repurchased 685,600 shares at an average cost per share of
$5.11 for a total cash purchase price of $3,503,000. During the years ended
December 31, 1998 the Company generated $964,000 via the exercise of stock
options and warrants.
 
    In December 1997, the Company completed a secondary public offering of
2,725,000 shares of Common Stock that resulted in net proceeds to the Company of
approximately $17 million.
 
    In March 1996, the Company completed a financing involving the private
placement of 1,455,000 shares of newly issued Common Stock to institutional and
accredited investors. Total gross proceeds were approximately $4.0 million and
net proceeds to the Company after fees and expenses were approximately $3.5
million. In connection with the private placement, the Company issued to the
private placement agent warrants to purchase 57,036 shares of Common Stock at
$4.00 per share and warrants to purchase 146,664 shares of Common Stock at $3.00
per share. The proceeds from the private placement were used to repay $1.0
million of indebtedness and for working capital.
 
    The Company believes that its cash on hand will be sufficient to meet its
operating requirements for at least the next 24 months. Expenditures required to
fund the ORTHOVISC clinical trial will adversely impact the Company's financial
results in 1999. However, the Company believes that the combination of revenues
from its international ORTHOVISC business and the AMVISC product line should be
sufficient to fund its operations during 1999 including expenses related to the
clinical trial. In the future, the Company may require additional financing to
fund its operations and for the construction of a new manufacturing facility.
 
    The Company's future capital requirements and the adequacy of available
funds will depend, however, on numerous factors, including market acceptance of
its existing and future products, the successful commercialization of products
in development, progress in its product development efforts, the magnitude and
scope of such efforts, progress with preclinical studies, clinical trials and
product clearances by the FDA and other agencies, the cost and timing of its
efforts to expand its manufacturing capabilities, the cost of filing,
prosecuting, defending and enforcing patent claims and other intellectual
property rights, competing technological and market developments, and the
development of strategic alliances for the marketing of certain of its products.
Although the Company achieved profitability for the years ended December 31,
1998 and 1997 there can be no assurance that the Company will continue to record
profits in future periods. For 1998 and 1997, the Company's unit sales of AMVISC
substantially exceeded the minimum obligations under the AMVISC Supply
Agreement. For 1999, the Company can provide no assurance that unit sales of
AMVISC for 1999 will exceed minimum annual purchase obligations.
 
                                       16
<PAGE>
    The terms of any future equity financings may be dilutive to the Company's
stockholders and the terms of any debt financings may contain restrictive
covenants which limit the Company's ability to pursue certain courses of action.
The ability of the Company to obtain financing is dependent on the status of the
Company's future business prospects as well as conditions prevailing in the
relevant capital markets. No assurance can be given that any additional
financing will be made available to the Company or will be available on
acceptable terms should such a need arise. The Company's estimate of the time
period for which cash and cash equivalents, will be adequate to fund operations
is a forward looking statement within the meaning of the Private Securities
Litigation Reform Act of 1995 and is subject to risks and uncertainties. Actual
results may differ materially from those contemplated in such forward-looking
statements. In addition to those described above, factors which may cause such a
difference are set forth under the caption "Risk Factors and Certain Factors
Affecting Future Operating Results" as well as in this 10-K generally.
 
YEAR 2000 READINESS DISCLOSURE
 
    The statements in the following section include "Year 2000 readiness
disclosure" within the meaning of the Year 2000 Information and Readiness
Disclosure Act.
 
    The Company has begun assessing its information systems to verify Year 2000
readiness. The Company relies upon microprocessor-based personal computers,
mainframes and commercially available applications software. The Company has
recently put into service the microprocessor-based personal computers with
applications software which according to literature supplied with the software
is Year 2000 compliant. The Company intends to test the applications software to
verify compliance. The Company is also in the process of upgrading its mainframe
computer hardware and software. The Company's present mainframe computer system
runs only financial applications. Installation of the upgraded hardware and
software is expected to occur in 1999 and all of the software packages under
review by the Company are reported to be Year 2000 compliant. Management will
verify Year 2000 compliance of the mainframe computer as soon as installation
and testing have been completed.
 
    The Company has begun to discuss Year 2000 readiness with its material
supply and service vendors. To date, those vendors and suppliers that have been
contacted have indicated that their hardware and software will be Year 2000
compliant in time frames that meet the Company's requirements. However, the
Company intends to continue to assess its exposure to Year 2000 noncompliance on
the part of any of its material vendors and suppliers.
 
    The Company believes that the current personal computer software
applications and modifications to its mainframe system will allow it to be Year
2000 compliance in a timely manner. The Company does not anticipate that it will
incur material expenses to make the internal computer system Year 2000 compliant
and believes that the Year 2000 issue will not pose significant operational
problems for the Company's system. There can be no assurance, however, that the
Company's internal systems or those of third parties will be compliant in a
timely manner. The failure of internal systems or third parties to be Year 2000
compliant in a timely manner could have a material adverse effect on the
Company's business, financial conditions, and results of operations. The Company
currently does not have any contingency plan in the event Year 2000 compliance
cannot be achieved in a timely manner.
 
    The preceding "Year 2000 Readiness Disclosure" contains various
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934 and the Section 27A Securities Act of 1933. These
forward-looking statements represent the Company's beliefs or expectations
regarding future events. When used in the "Year 2000 Readiness Disclosure", the
words "believes," "expects," "estimates" and similar expressions are intended to
identify forward looking statements. Forward looking statements include, without
limitation, the Company's expectations as to when it will complete the
installation and testing of its internal systems; its estimated cost of
achieving Year 2000 readiness; and the Company's belief that its internal
systems will be Year 2000 compliant in a timely manner. All forward-looking
 
                                       17
<PAGE>
statements involve a number of risks and uncertainties that could cause the
actual results to differ materially from the projected results.
 
    Factors that may cause these differences include, but are not limited to,
the availability of qualified personnel and other information technology
resources; the ability to identify and remediate all date sensitive lines of
computer code or to replace embedded computer chips in affected systems or
equipment; and the actions of third parties with respect to Year 2000 problems.
 
RISK FACTORS AND CERTAIN FACTORS AFFECTING FUTURE OPERATING RESULTS
 
    THIS 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. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM
THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS. CERTAIN FACTORS THAT MIGHT
CAUSE SUCH A DIFFERENCE INCLUDE, AMONG OTHER FACTORS NOTED HEREIN, THE
FOLLOWING:
 
    COMPREHENSIVE GOVERNMENT REGULATION; NO ASSURANCE OF FDA APPROVAL.  The
Company's products, product development activities, manufacturing processes, and
current and future sales and marketing are subject to extensive and rigorous
regulation by the FDA and comparable agencies in foreign countries. In the
United States, the FDA regulates the marketing, advertising, promotion, and
distribution of medical devices, drugs, and biologics, as well as testing,
manufacturing, labeling, recordkeeping, and reporting activities for such
products.
 
    Medical products regulated by the FDA are generally classified as devices
and/or drugs and/or biologics. Product development and approval within the FDA
framework takes a number of years and involves the expenditure of substantial
resources. There can be no assurance that the FDA will grant approval for the
Company's new products on a timely basis if at all, or that FDA review will not
involve delays that will adversely affect the Company's ability to commercialize
additional products or expand permitted uses of existing products, or that the
regulatory framework will not change, or that additional regulation will not
arise at any stage of the Company's product development process which may
adversely affect approval of or delay an application or require additional
expenditures by the Company. In the event the Company's future products are
regulated as human drugs or biologics, the FDA's review process typically would
be substantially longer and more expensive than the review process for devices.
 
    The Company's ORTHOVISC product is currently regulated as a Class III device
by the FDA. Class III devices are those that generally must receive pre-market
approval by the FDA to ensure their safety and effectiveness (e.g.
life-sustaining, life-supporting and implantable or new devices which have not
been found to be substantially equivalent to legally marketed devices) and
require clinical testing to ensure safety and effectiveness and FDA approval
prior to marketing and distribution. In order for the Company to commercially
distribute ORTHOVISC in the U.S., it must obtain FDA approval of a PMA. The PMA
approval process can be expensive, uncertain and lengthy. A number of devices
for which pre-market approval has been sought have never been approved for
marketing. The review of an application often occurs over a protracted time
period and may take two years or more from the filing date to complete. The
Company submitted a PMA for ORTHOVISC in December 1997. In October 1998, the
Company was notified by the FDA that the Company's PMA application for ORTHOVISC
was not approvable and that additional clinical data would be required to
demonstrate the effectiveness of ORTHOVISC. The Company submitted an IDE to the
FDA in February 1999 and received approval in late March 1999 to commence a
second Phase III clinical study. There can be no assurance that the FDA will
approve a PMA application for ORTHOVISC on a timely basis, if at all, or that
the FDA review will not involve delays that will affect the Company's ability to
commercialize additional products or expand permitted uses of existing products.
Furthermore, even if granted, the approval may include significant limitations
on the indications for use for which the product may be marketed.
 
                                       18
<PAGE>
    The Company's developmental HA products, including INCERT and HA
oligosaccharides, have not obtained regulatory approval in the U.S. for
investigational use and/or commercial marketing and sale. The Company believes
that INCERT will be regulated or biologic as a Class III medical device and HA
oligosaccharides will be regulated as a drug or a biologic, although there can
be no assurance that such products will not be otherwise classified. Before
undertaking clinical trials in the U.S. to support a PMA, the Company must apply
for and obtain FDA and/or institutional review board ("IRB") approval of an IDE.
There can be no assurance that the Company will be permitted to undertake
clinical trials of these or other future products in the U.S. or that clinical
trials will demonstrate that the products are safe and effective or otherwise
satisfy the FDA's pre-market approval requirements. Orquest has not received
regulatory approval in the U.S. for the commercial marketing and sale of
OSSIGEL. OSSIGEL will be regulated as a Class III medical device with the FDA's
Center of Biologics Research and Review as the lead review center. There can be
no assurance that Orquest will be permitted to undertake clinical trials of
OSSIGEL or, if clinical trials are permitted, that such clinical trials will
demonstrate that OSSIGEL is safe and effective or otherwise satisfy FDA
requirements.
 
    Once obtained, marketing clearance can be withdrawn by the FDA due to
failure to comply with regulatory standards or the occurrence of unforeseen
problems following initial clearance. The Company may be required to make
further filings with the FDA under certain circumstances. The FDA's regulations
require agency approval of a PMA supplement for certain changes if they affect
the safety and effectiveness of an approved device, including, but not limited
to, new indications for use, labeling changes, the use of a different facility
to manufacture, process or package the device, changes in manufacturing methods
or quality control systems and changes in performance or design specifications.
Failure by the Company to receive approval of a PMA supplement regarding the use
of a different manufacturing facility or any other change affecting the safety
or effectiveness of an approved device on a timely basis, or at all, would have
a material adverse effect on the Company's business, financial condition and
results of operations. The FDA could also limit or prevent the manufacture or
distribution of the Company's products and has the power to require the recall
of such products. Significant delay or cost in obtaining, or failure to obtain
FDA clearance to market products, any FDA limitations on the use of the
Company's products, or any withdrawal or suspension of clearance by the FDA
could have a material adverse effect on the Company's business, financial
condition and results of operations.
 
    In addition, all FDA-approved products manufactured by the Company must be
manufactured in compliance with FDA's Good Manufacturing Practices ("GMP")
regulations or, for medical devices, FDA's Quality System Regulations ("QSR").
Ongoing compliance with GMP, QSR and other applicable regulatory requirements is
monitored through periodic inspection by state and federal agencies, including
the FDA. The FDA may inspect the Company and its facilities from time to time to
determine whether the Company is in compliance with regulations relating to
medical device and manufacturing companies, including regulations concerning
manufacturing, testing, quality control and product labeling practices. There
can be no assurance that the Company will be able to comply with current or
future FDA requirements applicable to the manufacture of products.
 
    FDA regulations depend heavily on administrative interpretation and there
can be no assurance that the future interpretations made by the FDA or other
regulatory bodies, with possible retroactive effect, will not adversely affect
the Company. In addition, changes in the existing regulations or adoption of new
governmental regulations or policies could prevent or delay regulatory approval
of the Company's products.
 
    Failure to comply with applicable regulatory requirements could result in,
among other things, warning letters, fines, injunctions, civil penalties, recall
or seizure of products, total or partial suspension of production, refusal of
the FDA to grant pre-market clearance or pre-market approval for devices,
withdrawal of approvals and criminal prosecution.
 
                                       19
<PAGE>
    In addition to regulations enforced by the FDA, the Company is subject to
other existing and potential future federal, state, local and foreign
regulations. International regulatory bodies often establish regulations
governing product standards, packing requirements, labeling requirements, import
restrictions, tariff regulations, duties and tax requirements. To enable the
Company to market its products in Europe, the Company was required to receive a
"CE" marking certification, an international symbol of quality and compliance
with the applicable European medical device directive. In October 1996, the
Company received an EC Design Examination and an EC Quality System Certificate
from a European Notified Body, which entitles the Company to affix a CE marking
on ORTHOVISC for the treatment of osteoarthritis in synovial joints. There can
be no assurance that the Company will be able to achieve and/or maintain
compliance required for CE marking or other foreign regulatory approvals for any
or all of its products or that it will be able to produce its products in a
timely and profitable manner while complying with applicable requirements.
Federal, state, local and foreign regulations regarding the manufacture and sale
of medical products are subject to change. The Company cannot predict what
impact, if any, such changes might have on its business. The requirements
relating to the conduct of clinical trials, product licensing, pricing and
reimbursement also vary widely from country to country.
 
    The process of obtaining approvals from the FDA and other regulatory
authorities can be costly, time consuming, and subject to unanticipated delays.
There can be no assurance that approvals of the Company's products will be
granted or that the Company will have the necessary funds to develop certain of
such products. Any failure to obtain, or delay in obtaining, such approvals
could adversely affect the ability of the Company to market its products.
 
    HISTORY OF LOSSES; UNCERTAINTY OF FUTURE PROFITABILITY.  From its inception
up until December 31, 1996, the Company had incurred annual operating losses. As
of December 31, 1998, the Company had an accumulated deficit of approximately
$1.6 million. The continued development of the Company's products will require
the commitment of substantial resources to conduct research and preclinical and
clinical development programs, and to establish sales and marketing
capabilities. The Company incurred substantial and increasing operating losses
through December 31, 1996 and, although the Company had net income of $4,349,000
and $3,344,000 for the years ended December 31, 1998 and 1997, respectively, the
ability of the Company to reach sustained profitability is highly uncertain. To
achieve sustained profitability the Company must, among other things,
successfully complete development of certain of its products, obtain regulatory
approvals and establish sales and marketing capabilities for certain of its
products. There can be no assurance that the Company will be able to achieve
sustained profitability.
 
    COMPETITION.  The Company competes with many companies, including large
pharmaceutical companies and specialized medical products companies. Many of
these companies have substantially greater financial and other resources, larger
research and development staffs, more extensive marketing and manufacturing
organizations and more experience in the regulatory process than the Company.
The Company also competes with academic institutions, governmental agencies and
other research organizations which may be involved in research, development and
commercialization of products. Because a number of companies are developing HA
products for similar applications, the successful commercialization of a
particular product will depend in part upon the ability of the Company to
complete clinical studies and obtain FDA marketing and foreign regulatory
approvals prior to its competitors. There can be no assurance that the Company
will be able to compete against current or future competitors or that
competition will not have a material adverse effect on the Company's business,
financial condition and results of operations.
 
    UNCERTAINTY REGARDING SUCCESS OF CLINICAL TRIALS.  Several of the Company's
products, including ORTHOVISC, INCERT and HA oligosaccharides, as well as the
products of the Company's collaborative partners, including OSSIGEL, will
require clinical trials to determine their safety and efficacy in humans for
various conditions. There can be no assurance that the Company or its
collaborative partners will not encounter problems that will cause it to delay
or suspend clinical trials of any of these products. In
 
                                       20
<PAGE>
addition, there can be no assurance that such clinical trials, if completed,
will ultimately demonstrate these products to be safe and efficacious.
 
    DEPENDENCE UPON MARKETING PARTNERS.  The Company does not plan to directly
market and sell its current products to customers. Therefore, the Company's
success will be dependent upon the efforts of its marketing partners and the
terms and conditions of the Company's relationships with such marketing
partners. The Company currently manufactures AMVISC and AMVISC Plus for Bausch &
Lomb Surgical under a non-exclusive fixed price, five-year supply agreement
which contains stated minimum annual purchase obligations and terminates on
December 31, 2001. Since January 1, 1997, Bausch & Lomb Surgical has purchased
AMVISC and AMVISC Plus in amounts substantially in excess of the minimum
purchase obligations set forth in the AMVISC supply contract. There can be no
assurance that Bausch & Lomb, Inc. will continue to purchase AMVISC and AMVISC
Plus at levels beyond the stated minimum annual purchase obligations. Any such
decrease in orders under the AMVISC supply contract could have a material
adverse effect on the Company's business, financial condition and results of
operations. For the years ended December 31, 1998 and 1997, sales of AMVISC
products to Bausch & Lomb Surgical accounted for 65% and 84% of product
revenues.
 
    In November 1997, the Company entered into a long-term distribution
agreement with Zimmer, Inc., a subsidiary of Bristol-Myers Squibb Company, that
was subsequently amended in June 1998, (the "Zimmer Distribution Contract"). The
Zimmer Distribution Contract provides Zimmer with exclusive marketing and
distribution rights to ORTHOVISC in the United States, Canada, Latin America,
Asia and most of Europe. To date the Company has received up-front
non-refundable licensing payments totaling $4.0 million. In addition, under the
Zimmer Distribution Contract the Company has the potential to receive payments
aggregating up to an additional $20.5 million upon the achievement of certain
regulatory approvals and enumerated sales milestones. As an alternative to a
$2.5 million milestone payment, Zimmer has the right to elect to acquire shares
of the Company's Common Stock equal to the greater of $2.5 million or 9.9% of
the then outstanding Common Stock (but not to exceed 19.9% of the then
outstanding Common Stock) at a 25% premium to the then current market price.
There can be no assurance that any of such milestones will be met on a timely
basis or at all. In addition, Zimmer has the right to terminate the agreement if
ORTHOVISC is not approved by the FDA by January 1, 2001 and if Zimmer sales of
ORTHOVISC fail to meet the minimums specified in the contract for two
consecutive years beginning in 1998. There can be no assurance that any of these
events will not occur, or, if any such event does not occur, that Zimmer will
not elect to terminate the agreement. Any such termination is likely to have a
material adverse effect on the Company's ability to market ORTHOVISC, which may
have a material adverse effect on the Company's future operation results. For
the year ended December 31, 1998, ORTHOVISC sales to Zimmer accounted for 15% of
product revenue.
 
    The Company will need to obtain the assistance of additional marketing
partners for new products which are brought to market and existing products
brought to new markets. There can be no assurance that such additional partners
will be available or that such partners will agree to market the Company's
products on acceptable terms. The failure to establish strategic partnerships
for the marketing and distribution of the Company's products on acceptable terms
would have a material adverse effect on the Company's business, financial
condition and results of operations.
 
    UNCERTAINTY OF MARKET ACCEPTANCE OF NEW PRODUCTS.  The Company's success
will depend in part upon the acceptance of the Company's new products by the
medical community, hospitals and physicians and other health care providers, and
third-party payors. Such acceptance may depend upon the extent to which the
medical community perceives the Company's products as safer, more effective or
cost-competitive than other similar products. Ultimately, for the Company's new
products to gain general market acceptance, it will also be necessary for the
Company to develop marketing partners for the distribution of its products.
There can be no assurance that the Company's new products will achieve
significant market acceptance on a timely basis, or at all. Failure of some or
all of the Company's new products to achieve significant market
 
                                       21
<PAGE>
acceptance could have a material adverse effect on the Company's business,
financial condition and results of operations.
 
    DEPENDENCE ON PATENTS AND PROPRIETARY TECHNOLOGY.  The Company's success
will depend, in part, on its ability to obtain and enforce patents, protect
trade secrets, obtain licenses to technology owned by third parties when
necessary, and conduct its business without infringing the proprietary rights of
others. The patent positions of pharmaceutical, medical products and
biotechnology firms, including the Company, can be uncertain and involve complex
legal and factual questions. There can be no assurance that any patent
applications will result in the issuance of patents or, if any patents are
issued, whether they will provide significant proprietary protection or
commercial advantage, or will not be circumvented by others. In the event a
third party has also filed one or more patent applications for any of its
inventions, the Company may have to participate in interference proceedings
declared by the U.S. Patent and Trademark Office ("PTO") to determine priority
of invention (see below), which could result in failure to obtain or the loss of
patent protection for the inventions and the loss of any right to use the
inventions. Even if the eventual outcome is favorable to the Company, such
interference proceedings could result in substantial cost to the Company. Filing
and prosecution of patent applications, litigation to establish the validity and
scope of patents, assertion of patent infringement claims against others and the
defense of patent infringement claims by others can be expensive and time
consuming. There can be no assurance that in the event that any claims with
respect to any of the Company's patents, if issued, are challenged by one or
more third parties, that any court or patent authority ruling on such challenge
will determine that such patent claims are valid and enforceable. An adverse
outcome in such litigation could cause the Company to lose exclusivity covered
by the disputed rights. If a third party is found to have rights covering
products or processes used by the Company, the Company could be forced to cease
using the technologies or marketing the products covered by such rights, could
be subject to significant liabilities to such third party, and could be required
to license technologies from such third party. Furthermore, even if the
Company's patents are determined to be valid, enforceable, and broad in scope,
there can be no assurance that competitors will not be able to design around
such patents and compete with the Company using the resulting alternative
technology.
 
    The Company has a policy of seeking patent protection for patentable aspects
of its proprietary technology. The Company co-owns certain United States patents
and a patent application which claim certain adhesion prevention uses and
certain drug delivery uses of HA, and solely owns patents directed to certain
manufacturing processes. The Company also holds an exclusive license from Tufts
University to use technologies claimed in a United States patent application
which has been granted a Notice of Allowance from the U.S. Patent Office for the
anti-metastasis applications of HA oligosaccharides. The Company's issued
patents expire between 2007 and 2015 and the license expires upon expiration of
all related patents. The Company intends to seek patent protection with respect
to products and processes developed in the course of its activities when it
believes such protection is in its best interest and when the cost of seeking
such protection is not inordinate. However, no assurance can be given that any
patent application will be filed, that any filed applications will result in
issued patents or that any issued patents will provide the Company with a
competitive advantage or will not be successfully challenged by third parties.
The protections afforded by patents will depend upon their scope and validity,
and others may be able to design around the Company's patents. The Company's
issued patents and any patents which arise from the Company's licensed
application would provide competitive protection, if at all, only in the United
States. The Company has not, to date, pursued foreign patents equivalent to
those issued or applied for in the United States.
 
    Other entities have filed patent applications for or have been issued
patents concerning various aspects of HA-related products or processes. There
can be no assurance that the products or processes developed by the Company will
not infringe the patent rights of others in the future. Any such infringement
may have a material adverse effect on the Company's business, financial
condition and results of operations. In particular, the Company has received
notice from the PTO that a third party is attempting
 
                                       22
<PAGE>
to provoke a patent interference with respect to one of the Company's co-owned
patents covering the use of INCERT for post-surgical adhesion prevention.
Although the Company believes that an interference may be declared by the PTO,
it is too early to determine the merits of the interference or the effect, if
any, the interference will have on the Company's marketing of INCERT for this
use. The existence of the interference proceeding may have a negative impact on
the marketing of the INCERT product, and no assurance can be given that the
Company would be successful in any such interference proceeding. If the
third-party interference were to be decided adversely to the Company, involved
claims of the Company's patent would be cancelled, the Company's marketing of
the INCERT product may be materially and adversely affected and the third party
may enforce patent rights against the Company which could prohibit the sale and
use of the INCERT products, which could have a material adverse effect on the
Company's future operating results.
 
    The Company also relies upon trade secrets and proprietary know-how for
certain unpatented aspects of its technology. To protect such information, the
Company requires all employees, consultants and licensees to enter into
confidentiality agreements limiting the disclosure and use of such information.
There can be no assurance that these agreements provide meaningful protection or
that they will not be breached, that the Company would have adequate remedies
for any such breach, or that the Company's trade secrets, proprietary know-how,
and technological advances will not otherwise become known to others. In
addition, there can be no assurance that, despite precautions taken by the
Company, others have not and will not obtain access to the Company's proprietary
technology. Further, there can be no assurance that third parties will not
independently develop substantially equivalent or better technology.
 
    Pursuant to the AMVISC supply contract the Company has agreed to grant
Bausch & Lomb Surgical a royalty-free, worldwide, exclusive license to the
Company's manufacturing and product inventions which relate to AMVISC products,
effective on December 31, 2001, the termination date of the AMVISC supply
contract which became effective on January 1, 1997. Upon expiration of the
AMVISC supply contract, there can be no assurance that Bausch & Lomb Surgical
will continue to use the Company to manufacture AMVISC and AMVISC Plus. If
Bausch & Lomb Surgical discontinues the use of the Company as a manufacturer
after such time, the Company's business, financial condition and results of
operations would be materially and adversely affected.
 
    RISKS ASSOCIATED WITH MANUFACTURING.  The Company's results of operations
are dependent upon the continued operation of its manufacturing facility in
Woburn, Massachusetts. The operation of biomedical manufacturing plants involves
many risks, including the breakdown, failure or substandard performance of
equipment, natural and other disasters, and the need to comply with the
requirements of directives of government agencies, including the FDA. In
addition, the Company relies on a single supplier for syringes and a small
number of suppliers for a number of other materials required for the
manufacturing and delivery of its HA products. Furthermore, manufacturing
processes and research and development efforts of the Company involve animals
and products derived from animals. The utilization of animals in research and
development and product commercialization is subject to increasing focus by
animal rights activists. The activities of animal rights groups and other
organizations that have protested animal based research and development programs
or boycotted the products resulting from such programs could cause an
interruption in the Company's manufacturing processes and research and
development efforts. The occurrence of material operational problems, including
but not limited to the events described above, could have a material adverse
effect on the Company's business, financial condition and results of operations
during the period of such operational difficulties.
 
    NO ASSURANCE OF GROWTH OR ABILITY TO MANAGE GROWTH.  The Company's future
success depends on substantial growth in product sales. There can be no
assurance that such growth can be achieved or, if achieved, can be sustained.
There can be no assurance that even if substantial growth in product sales and
the demand for the Company's products is achieved, the Company will be able to
(i) develop the necessary manufacturing capabilities, (ii) obtain the assistance
of additional marketing partners, (iii) attract, retain and integrate the
required key personnel, or (iv) implement the financial, accounting and
management
 
                                       23
<PAGE>
systems needed to manage growing demand for its products, should it occur.
Failure of the Company to successfully manage future growth could have a
material adverse effect on the Company's business, financial condition and
results of operations.
 
    THIRD PARTY REIMBURSEMENT AND HEALTH CARE COST CONTAINMENT INITIATIVES.  In
the U.S. and other markets, health care providers, such as hospitals and
physicians, that purchase health care products, such as the Company's products,
generally rely on third party payors, including Medicare, Medicaid and other
health insurance and managed care plans, to reimburse all or part of the cost of
the health care product. Reimbursement by a third party payor may depend on a
number of factors, including the payor's determination that the use of the
Company's products are clinically useful and cost-effective, medically necessary
and not experimental or investigational. Since reimbursement approval is
required from each payor individually, seeking such approvals can be a time
consuming and costly process which, in the future, could require the Company or
its marketing partners to provide supporting scientific, clinical and
cost-effectiveness data for the use of the Company's products to each payor
separately. Significant uncertainty exists as to the reimbursement status of
newly approved health care products, and third party payors are increasingly
attempting to contain the costs of health care products and services by limiting
both coverage and the level of reimbursement for new therapeutic products and by
refusing in some cases to provide coverage for uses of approved products for
disease indications for which the FDA has not granted marketing approval. In
addition, Congress and certain state legislatures have considered reforms that
may affect current reimbursement practices, including controls on health care
spending through limitations on the growth of Medicare and Medicaid spending.
There can be no assurance that third party reimbursement coverage will be
available or adequate for any products or services developed by the Company.
Outside the U.S., the success of the Company's products is also dependent in
part upon the availability of reimbursement and health care payment systems.
Lack of adequate coverage and reimbursement provided by governments and other
third party payors for the Company' products and services could have a material
adverse effect on the Company's business, financial condition and results of
operations.
 
    NEED FOR ADDITIONAL FUNDS; LIQUIDITY.  The Company had cash, cash
equivalents and short-term investments of $22.7 million as of December 31, 1998.
The Company's future capital requirements and the adequacy of available funds
will depend, however, on numerous factors, including market acceptance of its
existing and future products, the successful commercialization of products in
development, progress in its product development efforts, the magnitude and
scope of such efforts, progress with preclinical studies, clinical trials and
product clearances by the FDA and other agencies, the cost and timing of its
efforts to expand its manufacturing capabilities, the cost of filing,
prosecuting, defending and enforcing patent claims and other intellectual
property rights, competing technological and market developments, and the
development of strategic alliances for the marketing of certain of its products.
To the extent that funds generated from the Company's operations, together with
the Company's existing capital resources and are insufficient to meet future
requirements, the Company will be required to obtain additional funds through
equity or debt financings, strategic alliances with corporate partners and
others, or through other sources. The terms of any future equity financings may
be dilutive to the Company's stockholders and the terms of any debt financings
may contain restrictive covenants which limit the Company's ability to pursue
certain courses of action. The ability of the Company to obtain financing is
dependent on the status of the Company's future business prospects as well as
conditions prevailing in the relevant capital markets. No assurance can be given
that any additional financing will be made available to the Company or will be
available on acceptable terms should such a need arise.
 
    EXPOSURE TO PRODUCT LIABILITY CLAIMS.  The testing, marketing and sale of
human health care products entail an inherent risk of allegations of product
liability, and there can be no assurance that substantial product liability
claims will not be asserted against the Company. Although the Company has not
received any material product liability claims to date and has a $5 million
insurance policy to cover such claims should they arise, there can be no
assurance that material claims will not arise in the future or that the
Company's insurance will be adequate to cover all situations. Moreover, there
can be no assurance that
 
                                       24
<PAGE>
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
the Company's business, financial condition and results of operations.
 
    DEPENDENCE UPON KEY PERSONNEL.  The Company is highly dependent on the
members of its management and scientific staff, the loss of one or more of whom
could have a material adverse effect on the Company. In addition, the Company
believes that its future success will depend in large part upon its ability to
attract and retain highly skilled, scientific, managerial and manufacturing
personnel. The Company faces significant competition for such personnel from
other companies, research and academic institutions, government entities and
other organizations. There can be no assurance that the Company will be
successful in hiring or retaining the personnel it requires. The failure to hire
and retain such personnel could have a material adverse effect on the Company's
business, financial condition and results of operations.
 
    ENVIRONMENTAL REGULATION.  The Company is subject to a variety of local,
state and federal government regulations relating to the storage, discharge,
handling, emission, generation, manufacture and disposal of toxic, or other
hazardous substances used in the manufacture of the Company's products. Any
failure by the Company to control the use, disposal, removal or storage of
hazardous chemicals or toxic substances could subject the Company to significant
liabilities, which could have a material adverse effect on the Company's
business, financial condition and results of operations.
 
    RISKS RELATING TO INTERNATIONAL OPERATIONS.  Approximately 35% of the
Company's product sales during 1998 were generated in international markets
through marketing partners. The Company's representatives, agents and
distributors which sell products in international markets are subject to the
laws and regulations of the foreign jurisdictions in which they operate and in
which the Company's products are sold. A number of risks are inherent in
international sales and operations. For example, the volume of international
sales may be limited by the imposition of government controls, export license
requirements, political instability, trade restrictions, changes in tariffs,
difficulties in managing international operations, import restrictions and
fluctuations in foreign currency exchange rates. Such changes in the volume of
sales may have an adverse effect on the Company's business, financial condition
and results of operations.
 
    POTENTIAL VOLATILITY OF STOCK PRICE; NO CONTROL OVER MARKET MAKING.  The
market price of shares of the Company's Common Stock may be highly volatile.
Factors such as announcements of new commercial products or technological
innovations by the Company or its competitors, disclosure of results of clinical
testing or regulatory proceedings, governmental regulation and approvals,
developments in patent or other proprietary rights, public concern as to the
safety of products developed by the Company and general market conditions may
have a significant effect on the market price of the Company's Common Stock. In
particular, the Company's stock price declined significantly in October 1998
following the Company's announcement that the FDA had notified the Company that
its PMA for ORTHOVISC was not approvable and that additional clinical data would
be required to demonstrate the effectiveness of ORTHOVISC. To the extent the
Company experiences any other adverse developments in the process of seeking FDA
approval for ORTHOVISC, the price of the Common Stock will likely be subject to
further, and perhaps substantial, declines. The trading price of the Company's
Common Stock could be subject to wide fluctuations in response to
quarter-to-quarter variations in the Company's operating results, material
announcements by the Company or its competitors, governmental regulatory action,
conditions in the health care industry generally or in the medical products
industry specifically, or other events or factors, many of which are beyond the
Company's control. In addition, the stock market has experienced extreme price
and volume fluctuations which have particularly affected the market prices of
many medical products companies and which often have been unrelated to the
operating performance of such companies. The Company's operating results in
future quarters may be below the expectations of equity research analysts and
investors. In such event, the price of the Common Stock would likely decline,
perhaps substantially.
 
                                       25
<PAGE>
    No person is under any obligation to make a market in the Common Stock or
publish research reports on the Company, and any person making a market in the
Common Stock or publishing research reports on the Company may discontinue
market making or publishing such reports at any time without notice. There can
be no assurance that an active public market in the Common Stock will develop
or, if developed, will be sustained.
 
    POSSIBLE ADVERSE EFFECT OF CERTAIN ANTI-TAKEOVER PROVISIONS.  Certain
provisions of the Company's Restated Articles of Organization and Amended and
Restated By-laws could have the effect of discouraging a third party from
pursuing a non-negotiated takeover of the Company and preventing certain changes
in control. These provisions include a classified Board of Directors, advance
notice to the Board of Directors of stockholder proposals, limitations on the
ability of stockholders to remove directors and to call stockholder meetings,
the provision that vacancies on the Board of Directors be filled by a majority
of the remaining directors, the ability of the Board of Directors to issue,
without further stockholder approval, a Shareholder Rights Plan. The Company
also is subject to Chapter 110F of the Massachusetts General Laws which, subject
to certain exceptions, prohibits a Massachusetts corporation from engaging in
any of a broad range of business combinations with any "interested stockholder"
for a period of three years following the date that such stockholder became an
interested stockholder. These provisions could discourage a third party from
pursuing a takeover of the Company at a price considered attractive by many
stockholders, since such provisions could have the effect of preventing or
delaying a potential acquiror from acquiring control of the Company and its
Board of Directors.
 
ITEM 7A. QUANTITIVE AND QUALITIVE DISCLOSURES ABOUT MARKET RISK.
 
    None.
 
                                       26
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                                 BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                                                             DECEMBER 31,
                                                                                     ----------------------------
<S>                                                                                  <C>            <C>
                                                                                         1998           1997
                                                                                     -------------  -------------
ASSETS
Current assets:
  Cash and cash equivalents........................................................  $  10,712,520  $  22,679,820
  Short-term investments...........................................................     12,007,503       --
  Accounts receivable, net.........................................................      3,032,737      1,918,293
  Inventories......................................................................      3,522,019      2,541,552
  Prepaid expenses.................................................................        250,023        610,364
                                                                                     -------------  -------------
      Total current assets.........................................................     29,524,802     27,750,029
                                                                                     -------------  -------------
Property and equipment.............................................................      6,376,405      4,138,365
Less: accumulated depreciation.....................................................     (3,809,723)    (3,325,321)
                                                                                     -------------  -------------
    Net property and equipment.....................................................      2,566,682        813,044
                                                                                     -------------  -------------
Notes receivable from officers.....................................................        193,000         75,000
Long-term deposits.................................................................        108,500        111,265
                                                                                     -------------  -------------
      Total assets.................................................................  $  32,392,984  $  28,749,338
                                                                                     -------------  -------------
                                                                                     -------------  -------------
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable.................................................................  $     891,493  $     967,986
  Accrued expenses.................................................................      1,356,586      1,253,154
  Deferred revenue.................................................................        200,000        200,000
                                                                                     -------------  -------------
      Total current liabilities....................................................      2,448,079      2,421,140
                                                                                     -------------  -------------
Advance rent payment...............................................................         50,215        103,912
                                                                                     -------------  -------------
Stockholders' equity:
  Redeemable convertible preferred stock; $.01 par value: authorized 750,000
    shares; no shares issued and outstanding.......................................       --             --
  Undesignated preferred stock; $.01 par value: authorized 1,250,000 shares; no
    shares issued and outstanding..................................................       --             --
  Common stock; $.01 par value: authorized 30,000,000 shares; issued 9,991,943
    shares in 1998 and 9,691,091 shares in 1997....................................         99,919         96,911
  Additional paid-in capital.......................................................     34,439,676     32,156,504
  Deferred compensation............................................................     (1,074,699)            --
  Treasury stock (344,500 shares in 1998, at cost).................................     (1,889,794)            --
  Accumulated deficit..............................................................     (1,680,412)    (6,029,129)
                                                                                     -------------  -------------
      Total stockholders' equity...................................................     29,894,690     26,224,286
                                                                                     -------------  -------------
      Total liabilities and stockholders' equity...................................  $  32,392,984  $  28,749,338
                                                                                     -------------  -------------
                                                                                     -------------  -------------
</TABLE>
 
                See accompanying notes to financial statements.
 
                                       27
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                            STATEMENTS OF OPERATIONS
 
<TABLE>
<CAPTION>
                                                                                       FOUR
                                                                                       MONTH            YEAR
                                                YEAR ENDED                         TRANSITIONAL         ENDED
                                               DECEMBER 31,      YEAR ENDED         YEAR ENDED       AUGUST 31,
                                                   1998       DECEMBER 31, 1997  DECEMBER 31, 1996      1996
                                               -------------  -----------------  -----------------  -------------
<S>                                            <C>            <C>                <C>                <C>
Product revenue..............................  $  12,369,712    $   9,255,338      $   1,212,041    $   4,612,918
Licensing fees...............................      1,500,000        2,700,000                 --               --
                                               -------------  -----------------  -----------------  -------------
Total revenue................................     13,869,712       11,955,338          1,212,041        4,612,918
  Cost of product revenue....................      6,014,181        4,744,123          1,308,625        4,472,214
                                               -------------  -----------------  -----------------  -------------
  Gross profit (loss)........................      7,855,531        7,211,215            (96,584)         140,704
Operating expenses:
  Research and development...................      1,955,940        1,957,796          1,310,330        1,634,640
  Selling, general and administrative........      2,731,142        2,092,467          1,308,583        1,469,257
                                               -------------  -----------------  -----------------  -------------
Total operating expenses.....................      4,687,082        4,050,263          2,618,913        3,103,897
                                               -------------  -----------------  -----------------  -------------
Income (loss) from operations................      3,168,449        3,160,952         (2,715,497)      (2,963,193)
  Interest income, net.......................      1,307,825          262,162             57,898          114,314
                                               -------------  -----------------  -----------------  -------------
Income (loss) before provision for income
  taxes......................................      4,476,274        3,423,114         (2,657,599)      (2,848,879)
  Provision for income taxes.................        127,557           78,677                 --               --
                                               -------------  -----------------  -----------------  -------------
Net income (loss)............................  $   4,348,717    $   3,344,437      $  (2,657,599)   $  (2,848,879)
                                               -------------  -----------------  -----------------  -------------
                                               -------------  -----------------  -----------------  -------------
Basic earnings (loss) per share..............  $        0.44    $        0.60      $       (0.56)   $       (0.76)
                                               -------------  -----------------  -----------------  -------------
Shares used for computing basic earnings
  (loss) per share...........................      9,885,724        5,436,474          4,905,381        4,052,660
                                               -------------  -----------------  -----------------  -------------
Diluted earnings (loss) per share............  $        0.40    $        0.44      $       (0.56)   $       (0.76)
                                               -------------  -----------------  -----------------  -------------
Shares used for computing diluted earnings
  (loss) per share...........................     11,006,276        7,587,393          4,905,381        4,052,660
                                               -------------  -----------------  -----------------  -------------
</TABLE>
 
                See accompanying notes to financial statements.
 
                                       28
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                       STATEMENTS OF STOCKHOLDERS' EQUITY
 
<TABLE>
<CAPTION>
                                                             ADDITIONAL                                              TOTAL
                                      COMMON                   PAID-IN      DEFERRED     TREASURY   ACCUMULATED   STOCKHOLDERS'
                                      STOCK       AMOUNT       CAPITAL    COMPENSATION     STOCK      DEFICIT        EQUITY
                                    ----------  -----------  -----------  -------------  ---------  ------------  ------------
<S>                                 <C>         <C>          <C>          <C>            <C>        <C>           <C>
Balance, September 1, 1995........   3,291,475   $  32,915    $7,378,514   $        --   $      --   $(3,867,088)  $3,544,341
Exercise of common stock
  options.........................      74,804         748      158,752             --          --           --       159,500
Issuance of common stock to 401(k)
  plan............................      19,447         194       79,176             --          --                     79,370
Dividend on redeemable convertible
  preferred stock.................          --          --     (224,605)            --          --           --      (224,605)
Issuance of common stock, net.....   1,455,000      14,550    3,527,035             --          --                  3,541,585
Unearned stock option
  compensation....................          --          --      632,813       (468,750)         --                    164,063
Net loss..........................          --          --                                      --   (2,848,879)   (2,848,879)
                                    ----------  -----------                              ---------  ------------  ------------
Balance, August 31, 1996..........   4,840,726      48,407   11,551,685       (468,750)         --   (6,715,967)    4,415,375
                                    ----------  -----------  -----------  -------------  ---------  ------------  ------------
Exercise of common stock
  options.........................      83,733         837      193,049             --          --           --       193,886
Issuance of common stock to 401(k)
  plan............................       6,260          63       27,381             --          --           --        27,444
Dividend on redeemable convertible
  preferred stock.................          --          --      (79,045)            --          --           --       (79,045)
Unearned stock option
  compensation....................          --          --           --        468,750          --           --       468,750
Net loss..........................          --          --           --             --          --   (2,657,599)   (2,657,599)
                                    ----------  -----------  -----------  -------------  ---------  ------------  ------------
Balance, December 31, 1996........   4,930,719      49,307   11,693,070             --          --   (9,373,566)    2,368,811
                                    ----------  -----------  -----------  -------------  ---------  ------------  ------------
Exercise of common stock
  options.........................     228,047       2,281      583,394             --          --           --       585,675
Sale of common stock, net of
  issuance costs of $2,043,519....   2,725,000      27,250   17,004,231             --          --           --    17,031,481
Issuance of common stock to 401(k)
  plan............................      25,795         258      133,147             --          --           --       133,405
Issuance of common stock to Board
  of Directors....................       8,000          80       43,670             --          --           --        43,750
Conversion of redeemable
  convertible preferred stock.....   1,773,530      17,735    2,802,027             --          --           --     2,819,762
Dividend on redeemable convertible
  preferred stock.................          --          --     (103,035)            --          --           --      (103,035)
Net income........................          --          --           --             --          --    3,344,437     3,344,437
                                    ----------  -----------  -----------  -------------  ---------  ------------  ------------
Balance, December 31, 1997........   9,691,091      96,911   32,156,504             --          --   (6,029,129)   26,224,286
                                    ----------  -----------  -----------  -------------  ---------  ------------  ------------
Exercise of common stock
  options.........................     112,153         971      368,099                     34,024                    403,094
Exercise of common stock
  warrants........................     203,700       2,037      666,099             --          --           --       668,136
Expenses from sale of common
  stock, net......................                             (107,293)            --          --           --      (107,293)
Unearned stock compensation.......          --          --    1,356,267     (1,074,699)         --                    281,568
Purchase of 359,500 shares of
  common stock....................                                                       (1,923,818)          --   (1,923,818)
Net income........................          --          --           --             --                4,348,717     4,348,717
                                    ----------  -----------  -----------  -------------  ---------  ------------  ------------
Balance, December 31, 1998........   9,991,943   $  99,919   3$4,439,676   $(1,074,699)  $(1,889,794)  $(1,680,412)  $29,894,690
                                    ----------  -----------  -----------  -------------  ---------  ------------  ------------
                                    ----------  -----------  -----------  -------------  ---------  ------------  ------------
</TABLE>
 
                See accompanying notes to financial statements.
 
                                       29
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                            STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                                              FOUR-MONTH
                                                                                             TRANSITIONAL
                                                                      YEAR         YEAR         PERIOD        YEAR
                                                                     ENDED,       ENDED,        ENDED,       ENDED,
                                                                     DEC. 31      DEC. 31      DEC. 31,    AUGUST. 31
                                                                      1998         1997          1996         1996
                                                                   -----------  -----------  ------------  ----------
<S>                                                                <C>          <C>          <C>           <C>
Cash flows from operating activities:
  Net income (loss)..............................................  $ 4,348,717  $ 3,344,437   $(2,657,599) $(2,848,879)
  Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:
      Depreciation and amortization..............................     484,402,      279,035      129,827      352,209
      Impairment of leasehold improvements.......................           --           --      375,924      200,000
      Amortization of unearned stock compensation................      281,568           --      468,750      164,063
      Provision for doubtful accounts............................       57,000           --           --           --
      Common stock issued to 401(k) plan and Board of
        Directors................................................           --      177,155       27,444       79,370
      Other long-term liabilities................................      (53,697)     (38,863)     (57,225)    (520,757)
      Changes in operating assets and liabilities:
        Accounts receivable......................................   (1,171,444)  (1,379,289)      92,912     (440.940)
        Inventories..............................................     (980,467)     (59,906)      32,634      778,136
        Prepaid expenses.........................................      360,341     (303,827)     195,672     (183,247)
        Accounts payable and accrued expenses....................       26,939      615,592      364,230      786,365
                                                                   -----------  -----------  ------------  ----------
          Net cash provided by (used in) operating activities....    3,353,359    2,634,334   (1,027,431)  (1,633,680)
                                                                   -----------  -----------  ------------  ----------
Cash flows from investing activities:
  Long-term deposits.............................................        2,765      (42,500)     (68,765)          --
  Increase in short-term investments, net........................  (12,007,503)          --           --           --
  Purchase of property and equipment.............................   (2,238,040)    (273,035)     (44,048)    (413,752)
  Notes receivable from officers.................................     (118,000)     (75,000)          --           --
                                                                   -----------  -----------  ------------  ----------
  Net cash used in investing activities..........................  (14,360,778)    (390,535)    (112,813)    (413,752)
                                                                   -----------  -----------  ------------  ----------
Cash flows from financing activities:
  Proceeds from sale of common stock, net                                   --   17,031,481           --    3,541,585
  Expenses from issuance of stock................................     (107,293)          --           --      (27,293)
  Payments of long-term debt.....................................           --           --           --     (800,000)
  Proceeds from exercise of preferred stock warrants.............           --      114,200           --           --
  Purchase of 359,500 shares of common stock.....................   (1,923,818)          --           --
  Proceeds from exercise of stock options and warrants...........    1,071,230      585,675      193,886      159,500
                                                                   -----------  -----------  ------------  ----------
          Net cash (used in) provided by financing activities....     (959,881)  17,731,356      193,886    2,873,792
                                                                   -----------  -----------  ------------  ----------
          Increase (decrease) in cash and cash equivalents.......  (11,967,300)  19,975,155     (946,358)     826,360
Cash and cash equivalents at beginning of period.................   22,679,820    2,704,665    3,651,023    2,824,663
                                                                   -----------  -----------  ------------  ----------
Cash and cash equivalents at end of period.......................  $10,712,520  $22,679,820   $2,704,665   $3,651,023
                                                                   -----------  -----------  ------------  ----------
                                                                   -----------  -----------  ------------  ----------
Supplemental disclosure of cash flow information:
  Cash paid for interest.........................................  $        --  $     2,771   $            $   42,222
Supplemental disclosure of non cash items:
  Repayment of debt through future deferred sublease payments....  $        --  $        --   $       --   $  200,000
  Conversion of redeemable convertible preferred stock...........  $        --  $ 2,819,762           --   $       --
  Dividend on redeemable convertible preferred stock.............  $        --  $   103,035   $   79,045   $  224,605
</TABLE>
 
                See accompanying notes to financial statements.
 
                                       30
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
1. NATURE OF BUSINESS (CONTINUED)
 
    Anika Therapeutics, Inc. ("Anika" or the "Company") develops, manufactures
and commercializes therapeutic products and devices intended to promote the
protection and healing of bone, cartilage and soft tissue. These products are
based on hyaluronic acid ("HA"), a naturally-occurring, biocompatible polymer
found throughout the body. Due to its unique biophysical and biochemical
properties, HA plays an important role in a number of physiological functions
such as the protection and lubrication of soft tissues and joints, the
maintenance of the structural integrity of tissues, and the transport of
molecules to and within cells. The Company's currently marketed products consist
of ORTHOVISC-Registered Trademark-, which is an HA product used in the treatment
of some forms of osteoarthritis ("OA") in humans and
HYVISC-Registered Trademark-, which is an HA product used in the treatment of
equine osteoarthritis. ORTHOVISC is currently approved for sale and marketed in
Canada, Europe, Turkey, Israel and Iceland; in the U.S. ORTHOVISC is currently
limited to investigational use only. The Company manufactures
AMVISC-Registered Trademark- and AMVISC-Registered Trademark- Plus, which are HA
products used as viscoelastic supplements in ophthalmic surgery, for Bausch &
Lomb Surgical, a subsidiary of Bausch & Lomb. The Company is currently
developing INCERT-Registered Trademark-, which is an HA based product designed
for use in the prevention of post-surgical adhesions. In collaboration with
Orquest, Inc., Anika also has exclusive rights to produce Ossigel(TM); an
injectable formulation of basic fibroblast growth factor combined with HA
designed to accelerate the healing of bone fractures.
 
    Commencing on December 31, 1996, the Company changed its fiscal year end
from August 31 to December 31.
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
USE OF ESTIMATES
 
    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
CASH AND CASH EQUIVALENTS
 
    Cash and cash equivalents consists of cash and investments with original
maturities of three months or less.
 
SHORT-TERM INVESTMENTS
 
    The Company follows the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 115, ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND
EQUITY SECURITIES.
 
    Short-term investments consist of debt securities with original maturities
between three and twelve months. The Company classifies these short-term
investments as held to maturity, and accordingly they are
 
                                       31
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
carried at amortized costs. Aggregate fair value, amortized cost and average
maturity for marketable securities held at December 31, 1998 is as follows:
 
<TABLE>
<CAPTION>
                                                                      GROSS
                                                    AMORTIZED      UNREALIZED
                                                      COST        HOLDING LOSS     FAIR VALUE
                                                  -------------  ---------------  -------------
<S>                                               <C>            <C>              <C>
Commercial Paper (average maturity of 2.57        $  12,007,503
 months)........................................                       (6,593)    $  12,000,910
                                                  -------------        ------     -------------
                                                  -------------        ------     -------------
</TABLE>
 
    During 1998, the Company sold securities classified as held for maturity
with an amortized cost aggregating $28,250,000. Total proceeds from these sales
were $28,250,000 with total interest and realized gain of $425,429.
 
FINANCIAL INSTRUMENTS
 
    Statement of Financial Accounting Standards (SFAS) No. 107, DISCLOSURES
ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, requires disclosure about fair value
of financial instruments. Financial instruments consist of cash equivalents,
short-term investments, accounts receivable, notes receivable from officers and
accounts payable. The estimated fair value of these financial instruments
approximates their carrying value, and in the case of cash equivalents and
short-term investments, is based on market quotes. The Company's cash
equivalents and short-term investments are generally obligations of the federal
government or investment-grade corporate issuers. The Company, by policy, limits
the amount of credit exposure to any one financial institution.
 
INVENTORIES
 
    Inventories are stated at the lower of cost or market, with cost being
determined using the first-in, first-out (FIFO) method.
 
REVENUE RECOGNITION
 
    Product revenue is recognized upon shipment of commercial product and
represents sales of AMVISC products, HYVISC and ORTHOVISC. ORTHOVISC is sold
under a supply contract with Zimmer Corporation (Zimmer) for Zimmer's
distribution in Canada and Europe. ORTHOVISC product revenue recognized upon
shipment to Zimmer is based upon an estimate of the per unit sales price
obtained by Zimmer and is subject to adjustment based on Zimmer's actual selling
price.
 
    License fee revenue is recognized when the related milestone has been
achieved and payment has been received as long as the license fee is
non-refundable. Revenue related to license fees that are subject to refund are
recognized as the refund provisions lapse.
 
    Advanced payments received for products are recorded as deferred revenue and
are recognized when the product is shipped.
 
                                       32
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT
 
    Property and equipment is stated at cost and depreciated using the
straight-line method over the estimated useful lives of the respective assets,
as follows:
 
<TABLE>
<S>                                                                <C>
                                                                   5-10
Machinery and equipment..........................................  years
Furniture and fixtures...........................................  3-5 years
                                                                   4-10
Leasehold improvements...........................................  years
</TABLE>
 
    Amortization on leasehold improvements is calculated using the straight-line
method over the shorter of the lease term or estimated life of the asset.
 
IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF
 
    The Company follows the provisions of SFAS No. 121, ACCOUNTING FOR THE
IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF
(SFAS 121). This statement requires that long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or changes
in circumstances indicate the carrying amount of an asset may not be
recoverable.
 
    During the years ended December 31, 1998 and 1997, the Company did not
record losses on impairment. During the four-month transitional period ended
December 31, 1996, the Company recorded losses on impairment for certain
leasehold improvements of approximately $376,000. The losses resulted from
relocating the corporate offices and the Company's unsuccessful attempts to
obtain sublease income sufficient to recover the amortization of the
improvements.
 
RESEARCH AND DEVELOPMENT
 
    Research and Development costs are expensed as incurred.
 
EARNINGS (LOSS) PER SHARE
 
    The Company has adopted SFAS No. 128, EARNINGS PER SHARE, which establishes
standards for computing and presenting earnings (loss) per share, simplifying
previous standards and making them comparable to international earnings per
share standards.
 
    Basic earnings per share is computed by dividing net income (loss) by the
weighted average number of common shares outstanding during the period. Diluted
earnings per share is computed by dividing net income (loss) by the weighted
average number of common shares and dilutive potential common shares outstanding
during the period. Under the treasury stock method, the unexercised options are
assumed to be exercised at the beginning of the period or at issuance, if later.
The assumed proceeds are then used to purchase common shares at the average
market price during the period.
 
    Potential common shares for which inclusion would have the effect of
increasing diluted earnings per share (i.e. antidilutive) are excluded from the
computation. Anti-dilutive potential common shares outstanding at December 31,
1998, 1997 and 1996 and August 31, 1996 were approximately 1,120,552, 2,150,869,
2,203,871 and 2,086,467 respectively.
 
    For the four-month transitional period ended December 31, 1996 and the
fiscal year ended August 31, 1996 the number of shares used to compute both
basic and diluted earning per share were the same due to the fact that the
Company incurred a net loss in both periods.
 
                                       33
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    The following illustrates a reconciliation of the number of shares used in
the calculation of basic and diluted earnings (loss) per share for the years
ended December 31, 1998 and 1997 the four-month transitional period ended Dec.
31, 1996 and the fiscal year ended Aug. 31, 1996:
 
<TABLE>
<CAPTION>
                                              YEARS ENDED DECEMBER 31,
                                             --------------------------
<S>                                          <C>           <C>           <C>                 <C>
                                                                             FOUR-MONTH
                                                                            TRANSITIONAL
                                                                               PERIOD          YEAR ENDED
                                                                           ENDED DEC. 31,      AUGUST 31,
                                                 1998          1997             1996              1996
                                             ------------  ------------  ------------------  --------------
Net income (loss)..........................  $  4,348,717  $  3,344,437    $   (2,657,599)    $ (2,848,879)
Less: Redeemable convertible preferred
  stock dividend...........................            --      (103,035)          (79,045)        (224,605)
                                             ------------  ------------  ------------------  --------------
Net income (loss) available to common
  shareholders.............................  $  4,348,717  $  3,241,402    $   (2,736,644)    $ (3,073,484)
                                             ------------  ------------  ------------------  --------------
                                             ------------  ------------  ------------------  --------------
Basic weighted average common shares
  outstanding..............................     9,885,724     5,436,474         4,905,381        4,052,660
Dilutive effect of assumed exercise of
  stock options and warrants...............     1,120,552       952,432                --               --
Dilutive effect of assumed conversion of
  preferred stock..........................            --     1,198,437                --               --
                                             ------------  ------------  ------------------  --------------
Weighted average common shares outstanding
  assuming conversion......................    11,006,276     7,587,393         4,905,381        4,052,660
                                             ------------  ------------  ------------------  --------------
                                             ------------  ------------  ------------------  --------------
Basic net income (loss) per share..........         $0.44         $0.60            $(0.56  )        $(0.76 )
                                             ------------  ------------
                                             ------------  ------------
Diluted net income (loss) per share........         $0.40         $0.44            $(0.56  )        $(0.76 )
                                             ------------  ------------
                                             ------------  ------------
</TABLE>
 
INCOME TAXES
 
    The Company provides for income taxes in accordance with SFAS No. 109,
ACCOUNTING FOR INCOME TAXES. SFAS No. 109 requires the recognition of deferred
tax assets and liabilities for the expected future tax consequences of temporary
differences between the financial reporting and tax bases of assets and
liabilities.
 
STOCK-BASED COMPENSATION
 
    The Company has adopted SFAS No. 123, ACCOUNTING FOR STOCK-BASED
COMPENSATION, which permits entities to recognize as expense over the vesting
period the fair value of all stock-based awards on the date of grant.
Alternatively, SFAS 123 also allows entities to continue to apply the provisions
of APB Opinion No. 25 and provide pro forma net earnings (loss) disclosures for
employee stock option grants as if the fair-value-based method defined in SFAS
123 had been applied. The Company has elected to continue to apply the
provisions of APB Opinion No. 25 for employee grants and provide the pro forma
disclosure of SFAS 123 (see Note 9).
 
CONCENTRATION OF CREDIT RISK
 
    SFAS No. 105, DISCLOSURE OF INFORMATION ABOUT FINANCIAL INSTRUMENTS WITH
OFF-BALANCE-SHEET-RISK AND FINANCIAL INSTRUMENTS WITH CONCENTRATIONS OF CREDIT
RISK, requires disclosure of any significant off-balance-
 
                                       34
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
sheet and credit risk concentrations. The Company has no significant
off-balance-sheet concentration of credit risk such as foreign exchange
contracts, option contracts or other foreign hedging arrangements.
 
    Sales of AMVISC Products to Bausch & Lomb Surgical accounted for 65%, 84%,
94% and 89% of product revenue for the years ended December 31, 1998 and 1997,
the four-month transitional period ended December 31, 1996 and the year ended
August 31, 1996, respectively. ORTHOVISC sales to another customer accounted for
18% and 15% of product revenue for the years ended December 31, 1998 and 1997,
respectively. Additionally, as of December 31, 1998, two customers represented
86% of the Company's accounts receivable balance with one international customer
representing 14% of the Company's accounts receivable balance.
 
REPORTING COMPREHENSIVE INCOME
 
    The Company adopted SFAS No. 130, REPORTING COMPREHENSIVE INCOME, effective
January 1, 1998. SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components in the financial statements.
Comprehensive income is the total of net income and all other nonowner changes
in equity including such items as unrealized holding gains/losses on securities,
foreign currency translation adjustments and minimum pension liability
adjustments. The Company had no such items for the years ended December 31, 1998
and 1997.
 
SEGMENT AND ENTERPRISE-WIDE REPORTING
 
    In 1997, the FASB issued SFAS 131, DISCLOSURES ABOUT SEGMENTS OF AN
ENTERPRISE AND RELATED INFORMATION. SFAS No. 131 requires certain financial and
supplementary information to be disclosed on an annual and interim basis for
each reportable operating segment of an enterprise, as defined. Based on the
criteria set forth in SFAS No. 131, the Company currently operates in one
operating segment, therapeutic products and devices.
 
    SFAS No. 131 also requires that certain enterprise-wide disclosures be made
related to products and services, geographic areas and major customers. The
Company derives substantially all of its operating revenue from the sale and
support of one group of similar products and services. Primarily all of the
Company's assets are located within the United States. During the year ended
December 31,1998 and 1997, the four-month transitional period ended December 31,
1996, and the fiscal year ended August 31, 1996, the Company derived its revenue
from the following geographic locations (as a percentage of total revenue):
 
<TABLE>
<CAPTION>
                                                               FOUR MONTH
                                                              TRANSITIONAL       YEAR ENDED
                                 YEAR ENDED    YEAR ENDED     PERIOD ENDED       AUGUST 31,
COUNTRY:                        DEC 31, 1998  DEC 31, 1997  DECEMBER 31, 1996       1996
------------------------------  ------------  ------------  -----------------  --------------
<S>                             <C>           <C>           <C>                <C>
United States.................        82.3%         88.7%           99.5%             96.9%
Eastern Europe................        16.2%         11.2%             --%               --%
Other.........................         1.5%           .1%             .5%              3.1%
                                ------------  ------------        -------           -------
    Total.....................       100.0%        100.0%          100.0%            100.0%
                                ------------  ------------        -------           -------
                                ------------  ------------        -------           -------
</TABLE>
 
                                       35
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NEW ACCOUNTING PRONOUNCEMENT
 
    In June 1998, the Financial Accounting Standards Board (the FASB) issued
SFAS No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. This
statement requires companies to record derivatives on the balance sheet as
assets or liabilities, measured at fair value. Gains or losses resulting from
changes in the values of those derivatives would be accounted for depending on
the use of the derivative and whether it qualifies for hedge accounting. SFAS
No. 133 will be effective for the Company's fiscal year ending December 31,
1999. Management believes that this statement will not have a significant impact
on the Company.
 
3. ALLOWANCE FOR DOUBTFUL ACCOUNTS (CONTINUED)
 
    A summary of the allowance for doubtful account activity is as follows:
 
<TABLE>
<CAPTION>
                                                                                  DECEMBER 31,
                                                                                      1998
                                                                                  ------------
<S>                                                                               <C>
Balance, beginning of the year..................................................   $       --
Amounts provided................................................................       57,000
Amounts written off.............................................................           --
                                                                                  ------------
Balance at the end of the year..................................................   $   57,000
                                                                                  ------------
                                                                                  ------------
</TABLE>
 
The company did not have an allowance for doubtful accounts in 1997 or 1996.
 
4. INVENTORIES (CONTINUED)
 
    Inventories consist of the following:
 
<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                                    --------------------------
<S>                                                                 <C>           <C>
                                                                        1998          1997
                                                                    ------------  ------------
Raw materials.....................................................  $    432,255  $    442,364
Work in-process...................................................     3,013,930     2,098,736
Finished goods....................................................        75,834           452
                                                                    ------------  ------------
    Total.........................................................  $  3,522,019  $  2,541,552
                                                                    ------------  ------------
                                                                    ------------  ------------
</TABLE>
 
5. PROPERTY & EQUIPMENT (CONTINUED)
 
    Property and equipment is stated at cost and consists of the following:
 
<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                                    --------------------------
<S>                                                                 <C>           <C>
                                                                        1998          1997
                                                                    ------------  ------------
Machinery and equipment...........................................  $  4,145,013  $  2,353,761
Leasehold improvements............................................     1,666,771     1,495,923
Furniture and fixtures............................................       564,621       288,681
                                                                    ------------  ------------
    Total.........................................................  $  6,376,405  $  4,138,365
                                                                    ------------  ------------
                                                                    ------------  ------------
</TABLE>
 
                                       36
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
6. NOTES RECEIVABLE FROM OFFICERS (CONTINUED)
 
    Notes receivable from officers consists of loans made to two officers. The
loan amounts are due at the earlier of the end of five years from the date of
the note or at the termination of the officers' employment. Interest accrues at
annual rates between 4.42% to 6.0% and is payable monthly over the term of the
loans.
 
7. ACCRUED EXPENSES (CONTINUED)
 
    Accrued expenses consists of the following:
 
<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                                    --------------------------
<S>                                                                 <C>           <C>
                                                                        1998          1997
                                                                    ------------  ------------
Accrued compensation..............................................  $    560,270  $    612,176
Federal taxes.....................................................       130,324        78,679
Other accrued expenses............................................       665,992       562,299
                                                                    ------------  ------------
    Total.........................................................     1,356,586  $  1,253,154
                                                                    ------------  ------------
                                                                    ------------  ------------
</TABLE>
 
8. LEASE OBLIGATIONS (CONTINUED)
 
    The Company leases three facilities with one lease expiring in October 2001,
another in January 2004 and the third lease in February 2004. As of December 31,
1998, one facility is being partially sublet. These leases are accounted for as
operating leases in the accompanying statements of operations. Net rental
payments in connection with the leases, totaled $376,900 and $352,922 for the
years ended December 31, 1998 and 1997, respectively, $115,074 for the
four-month transitional period ended December 31, 1996, and $369,928 for the
fiscal year ended August 31, 1996. Future minimum lease payments under the
operating leases, net of sublease income for the years ending December 31 are as
follows:
 
<TABLE>
<CAPTION>
                                                                                      NET
                                                                                    PAYMENTS
                                                                                  ------------
<S>                                                                               <C>
1999............................................................................  $    451,674
2000............................................................................       475,058
2001............................................................................       494,590
2002............................................................................       470,460
2003............................................................................       492,064
                                                                                  ------------
    Total.......................................................................  $  2,383,846
                                                                                  ------------
                                                                                  ------------
</TABLE>
 
9. STOCK OPTION PLAN (CONTINUED)
 
    The Company has reserved 3,000,000 shares of Common Stock for the grant of
stock options to employees, directors, consultants and advisors under the Anika
Therapeutics, Inc. Stock Option Plan (the "Plan"). In addition, the Company also
established the Directors Stock Option Plan (the "Director's Plan") and reserved
40,000 shares of the Company's common stock for issuance to the Board of
Directors. On October 28, 1997, the Company amended the Plan to reserve an
additional 1,000,000 shares of common stock. Additionally, on October 28, 1997
the Board of Directors granted to certain executive officers and employees of
the Company options to acquire 269,000 shares of common stock at an exercise
price of $7.625 per share, vesting over a four-year period. Such grants received
stockholder approval upon the amendment to the Plan on June 3,1998. When the
amendment was approved by the shareholders, the
 
                                       37
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
9. STOCK OPTION PLAN (CONTINUED)
Company was required to record compensation expense with respect to the 269,000
options granted equal in an amount to the difference between the exercise price
and the fair market value of the common stock at the time of such approval. The
Company recorded deferred compensation of $1,490,061 and during 1998, $415,362
was amortized to expense during 1998. The unamortized deferred compensation of
$1,074,699 at December 31, 1998 will be amortized on a straight-line basis over
the options' remaining period.
 
Combined stock option activity for both Plans is summarized as follows:
 
<TABLE>
<CAPTION>
                                                                          WEIGHTED AVG EXERCISE
                                                               SHARES        PRICE PER SHARE
                                                             ----------  -----------------------
<S>                                                          <C>         <C>
Outstanding at September 1, 1995...........................   1,346,072         $    2.55
  Granted..................................................     302,750         $    1.69
  Canceled.................................................    (146,391)        $    2.83
  Exercised................................................     (74,804)        $    2.13
                                                             ----------             -----
Outstanding at August 31, 1996.............................   1,427,627         $    2.36
  Granted..................................................     435,500         $    4.91
  Canceled.................................................          --                --
  Exercised................................................     (83,732)        $    2.35
                                                             ----------             -----
Outstanding at December 31, 1996...........................   1,779,395         $    2.99
                                                             ----------             -----
  Granted..................................................     309,500         $    7.40
  Canceled.................................................     (14,333)        $    2.42
  Exercised................................................    (228,047)        $    2.54
                                                             ----------             -----
Outstanding at December 31, 1997...........................   1,846,515         $    3.77
                                                             ----------             -----
  Granted..................................................     508,500         $    5.82
  Canceled.................................................     (68,958)        $    8.49
  Exercised................................................    (112,153)        $    3.62
                                                             ----------             -----
Outstanding at December 31, 1998...........................   2,173,904         $    4.02
                                                             ----------             -----
                                                             ----------             -----
  Exercisable at December 31, 1998.........................   1,339,236         $    3.04
</TABLE>
 
    Generally, options vest in varying installments up to four years after the
date of grant and have an expiration date no later than ten years after the date
of grant. The price range of options exercisable as of December 31, 1998,
December 31, 1997 and December 31, 1996 was from $0.50 to $8.125, $1.383 to
$5.25 and $1.067 to $2.625.
 
                                       38
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
9. STOCK OPTION PLAN (CONTINUED)
 
    The following table summarizes significant ranges of outstanding options
under both Plans at December 31, 1998:
 
<TABLE>
<CAPTION>
                               WEIGHTED
                                AVERAGE       WEIGHTED                  WEIGHTED
  RANGES OF                    REMAINING       AVERAGE                   AVERAGE
  EXERCISE       NUMBER       CONTRACTUAL     EXERCISE      NUMBER      EXERCISE
    PRICE      OUTSTANDING       LIFE           PRICE     EXERCISABLE     PRICE
-------------  -----------  ---------------  -----------  -----------  -----------
 
<S>            <C>          <C>              <C>          <C>          <C>
                   OPTIONS OUTSTANDING                      OPTIONS EXERCISABLE
               ----------------------------               ------------------------
$0.50-$1.39...    173,678           6.92      $    0.52      173,678    $     .52
$1.40-$2.86...    712,642           4.91      $    2.50      712,642    $    2.50
$2.87-$4.25...    211,100           6.95      $    3.58      171,933    $    3.49
$4.26-$6.00...    828,609           8.58      $    5.08      209,108    $    5.03
$  6.01-$8.13     247,875           8.84      $    7.63       71,875    $    7.63
</TABLE>
 
    During 1996, options for 302,750 shares of its $.01 par value common stock
were granted by the Company. The Company recorded deferred compensation of
$632,813 on options for 168,750 shares to account for the difference between the
market value of the stock at the time of grant and exercise price of the
options.
 
    In October 1995, the FASB issued SFAS No. 123, ACCOUNTING FOR STOCK BASED
COMPENSATION, which requires measurement of the fair value of stock-based
compensation to be included in the statement of operations or disclosed in the
notes to the financial statements. The Company has determined that it will
continue to account for stock-based compensation for employees under Accounting
Principles Board ("APB") Opinion No. 25 and elect the disclosure-only
alternative under SFAS No. 123 for stock-based compensation awarded in 1997 and
1998 using the Black-Scholes option pricing model prescribed by SFAS No. 123.
The underlying assumptions used are as follows:
 
<TABLE>
<CAPTION>
                                                                                                 FOUR-MONTH
                                                                                                TRANSITIONAL
                                                                                                PERIOD ENDED     YEAR ENDED
                                                                             DECEMBER 31,       DECEMBER 31,     AUGUST 31,
                                                                         --------------------  ---------------  -------------
                                                                           1998       1997          1996            1996
                                                                         ---------  ---------  ---------------  -------------
<S>                                                                      <C>        <C>        <C>              <C>
Risk-free interest rate................................................       5.45%       6.0%          6.0%            6.0%
Expected dividend yield................................................         --         --            --              --
Expected lives.........................................................          6          6             6               6
Expected volatility....................................................       50.0       54.8%         57.8%           57.9%
Weighted average value of grants.......................................      4.071       7.40          4.91            1.69
</TABLE>
 
                                       39
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
9. STOCK OPTION PLAN (CONTINUED)
    SFAS No. 123, pro forma net income (loss) and net income (loss) per share
would have been as follows:
 
<TABLE>
<CAPTION>
                                                                                       FOUR-MONTH
                                                                                      TRANSITIONAL
                                                                 YEARS ENDED          PERIOD ENDED    YEAR ENDED
                                                                 DECEMBER 31,         DECEMBER 31,    AUGUST 31,
                                                          --------------------------  -------------  -------------
                                                              1998          1997          1996           1996
                                                          ------------  ------------  -------------  -------------
<S>                                                       <C>           <C>           <C>            <C>
Net income--
  As reported...........................................  $  4,348,717  $  3,344,437  $  (2,657,599) $  (2,848,879)
  Pro forma.............................................     3,701,831  $  2,644,895  $  (2,765,290) $  (3,162,717)
Net income (loss) per share, as reported--
  Basic.................................................  $       0.44  $       0.60  $       (0.56) $       (0.76)
  Diluted...............................................  $       0.40  $       0.44  $       (0.56) $       (0.76)
Net income (loss) per share, pro forma--
  Basic.................................................  $        .37  $       0.48  $       (0.58) $       (0.84)
  Diluted...............................................  $        .34  $       0.35  $       (0.58) $       (0.84)
</TABLE>
 
    Because the method prescribed by SFAS No. 123 has not been applied to
options granted prior to September 1, 1995, the resulting pro forma compensation
cost may not be representative of that expected in future years.
 
10. REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONTINUED)
 
    On May 17, 1995, the Company issued 120,970 shares of Series A Redeemable
Convertible Preferred Stock ("Series A stock") at a selling price of $20.00 per
share for a total consideration of $2,235,642, net of offering costs. On
December 1, 1997, the Company completed a secondary offering of 2,725,000 shares
of common stock. In connection with the completion of the offering, the Company
converted the entire amount of Series A stock, including accrued dividends
(130,576 shares) to 1,305,760 shares of common stock. In addition, the Company
also converted all warrants (46,777) issued in connection with the Series A
stock to 467,770 shares of common stock.
 
    Each share of the Series A stock was entitled to receive an annual dividend
on May 1 of each year, at a rate of $1.80 per share, payable in additional
shares of Series A stock, with the number of dividend shares determined by the
price of the Company's underlying common stock. The Company had the right to
elect to pay the dividend in cash if certain financial covenants were met.
During each consecutive ninety-day period in which the average quarterly price
of the Company's common stock remained above $6.00 per share, no dividend
accrued. As of June 5, 1997, the Company ceased accruing dividends. For the
period May 1, 1996 to April 30, 1997 the Company issued 3,952 additional shares
of Series A stock to preferred shareholders as a dividend payment. For the
period May 17, 1995 through April 30, 1996, the Company issued 5,289 additional
shares of Series A stock to the preferred shareholders as dividend payments. The
total recorded values of the dividend payments were $227,266 and $208,227,
respectively. For the year ended December 31, 1997, the four-month transitional
period ended December 31, 1996 and the fiscal year ended August 31, 1996,
accrued dividends payable were $0, $158,737 and $79,693, respectively.
 
                                       40
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
11. COMMON STOCK (CONTINUED)
 
    In March 1996 the Company completed a financing involving the private
placement of 1,455,000 shares of newly issued common stock to institutional and
accredited investors. Total gross proceeds were $3,986,700 and net proceeds to
the Company after fees and expenses were $3,541,585. In addition, the Company
granted certain registration rights and filed a registration statement with the
Securities and Exchange Commission that was declared effective by the Securities
and Exchange Commission on May 23, 1996. The proceeds from the private placement
were used to repay a $1,000,000 debt obligation and for general working capital
purposes.
 
    On December 1, 1997 the Company completed a secondary offering of common
stock. In connection with the offering the Company issued 2,725,000 shares of
common stock and received total gross proceeds of $19,075,000, and net proceeds
of $17,031,481. The Company intends to use the net proceeds of this offering for
expansion of its manufacturing facilities, to fund the Company's product
research and development efforts, including clinical trials, and for working
capital and other general corporate purposes. The Company may also use a portion
of the net proceeds of this offering to acquire or invest in new products or
technologies or to acquire other businesses.
 
12. WARRANTS (CONTINUED)
 
    In connection with the private placement of newly issued common stock in
March, 1996, the Company issued warrants to Leerink, Swann, Garrity, Sollami,
Yaffe and Wynn, Inc. ("Leerink Swann & Company"), for 146,664 shares of common
stock exercisable at $3.00 per share and warrants for 57,036 shares of common
stock exercisable at $4.00 per share. On January 8, 1998, the notice for
mandatory exercise of the warrants by the Company was sent in accordance with
the warrant provisions and all warrants were converted into common stock
resulting in net proceeds to the Company of $668,136.
 
13. STOCK REPURCHASE PLAN (CONTINUED)
 
    In October 1998, the Board of Directors approved a stock repurchase plan
under which the Company is authorized to purchase up to $4,000,000 of the
Company's common stock, with the total number of shares purchased not to exceed
9.9% of the total number of shares issued and outstanding. Under the plan,
shares may be repurchased from time to time and in such amounts as market
conditions warrant and subject to regulatory considerations. As of December 31,
1998, the Company had repurchased a total of 359,500 shares at a net cost of
$1,923,543. Through March 25, 1999, the Company had purchased an additional
326,100 shares at an additional cost of approximately $1,579,000.
 
14. EMPLOYEE BENEFIT PLAN (CONTINUED)
 
    Full-time employees are eligible to participate in the Company's 401(k)
savings plan. Employees may elect to contribute a percentage of their
compensation to the plan, and the Company will make matching contributions up to
a limit of 5% of an employee's compensation. In addition, the Company can make
annual discretionary contributions. For the year ended December 31, 1998 the
Company's matching contribution was in the form of cash and the total expense
was $130,644. For the years ended December 31, 1997, the four-month transitional
period ended December 31, 1996 and the fiscal year ended August 31, 1996, the
Company's matching contributions and any discretionary contributions to the plan
were in the form of the Company's common stock. The Company's total 401(k)
savings plan expense for each respective period listed above was $133,405,
$27,444, and $79,370, respectively.
 
                                       41
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
15. LICENSING AND DISTRIBUTION AGREEMENT (CONTINUED)
 
    In November 1997, the Company entered into a long-term distribution
agreement with Zimmer, Inc., a subsidiary of Bristol-Myers Squibb Company, that
was subsequently amended in June 1998, (the "Zimmer Distribution Contract"). The
Zimmer Distribution Contract provides Zimmer with exclusive marketing and
distribution rights to ORTHOVISC in the United States, Canada, Asia and most of
Europe. To date, the Company has received up-front non-refundable licensing
payments from Zimmer totaling $4.0 million. In addition, under the Zimmer
Distribution Contract the Company has the potential to receive payments
aggregating up to $20.5 million upon the achievement of certain regulatory
approvals and enumerated sales milestones. As an alternative to a $2.5 million
milestone payment, Zimmer has the right to elect to acquire shares of the
Company's Common Stock equal to the greater of $2.5 million or 9.9% of the then
outstanding Common Stock (but not to exceed 19.9% of the then outstanding common
stock) at a premium to the then current market price. There can be no assurance
that any of such milestones will be met on a timely basis or at all. The Zimmer
Distribution Contract provides that the amount Zimmer will pay to the Company
for ORTHOVISC will be based on a fixed percentage of Zimmer's actual selling
price, subject to a floor. Additionally, the Zimmer Distribution Contract
contains certain annual minimum purchase requirements that Zimmer must order.
 
16. INCOME TAXES (CONTINUED)
 
    The Company records a deferred tax asset or liability based on the
difference between the financial statement and tax bases of assets and
liabilities, as measured by the enacted tax rates assumed to be in effect when
these differences reverse.
 
    As of December 31, 1998, the Company has available net operating loss
carryforwards for federal tax purposes of approximately $1,450,000 and research
and development credit carryforwards of approximately $276,000 to reduce future
income taxes, if any. In addition, the Company has net operating loss
carryforwards for state tax purposes of approximately $1,055,000. These
carryforwards expire at various dates through 2008, and are subject to review
and possible adjustment by the Internal Revenue Service.
 
    The Internal Revenue Code (IRC) contains provisions that may limit the
amount of net operating loss and credit carryforwards that the Company may
utilize in any one year in the event of certain cumulative changes in ownership
over a three-year period. In the event that the Company has had a change of
ownership, as defined in IRC Section 382, utilization of the carryforwards may
be restricted.
 
                                       42
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
16. INCOME TAXES (CONTINUED)
    The approximate income tax effect of each type of temporary difference and
carryforward is as follows:
 
<TABLE>
<CAPTION>
                                                                               YEAR
                                                                              ENDED
                                                                           DECEMBER 31,
                                                                    --------------------------
<S>                                                                 <C>           <C>
                                                                        1998          1997
                                                                    ------------  ------------
Deferred tax assets (liabilities):
  Depreciation....................................................  $    312,754  $    358,566
  Accrued expenses and other......................................       (17,585)       87,755
  Inventory loss reserve..........................................        60,429            --
  Nonqualified stock option amortization..........................       113,387       217,081
  Uniform capitalization..........................................            --        59,743
  Net operating loss carryforwards................................       583,915     2,001,952
  Credit carryforward.............................................       275,901       219,194
                                                                    ------------  ------------
Gross deferred tax assets.........................................     1,328,801     2,944,291
  Less: valuation allowance.......................................    (1,328,801)   (2,944,291)
                                                                    ------------  ------------
Net deferred tax asset............................................  $         --  $         --
                                                                    ------------  ------------
                                                                    ------------  ------------
</TABLE>
 
    The valuation allowance for deferred tax assets was $1,328,801 at December
31, 1998, a decrease of $1,615,490 over the balance of $2,944,291 at December
31, 1997. The valuation allowance for deferred tax assets was $2,944,291 at
December 31, 1997, a decrease of $1,530,325 over the balance of $4,474,616 at
December 31, 1996. The valuation allowance for deferred tax assets was
$4,474,616 at December 31, 1996, an increase of $1,301,957 over the balance of
$3,172,659 at August 31, 1996.
 
    Due to the uncertainty surrounding the timing of realization of the benefits
of its favorable tax attributes in future tax returns, the Company has placed a
full valuation allowance against its net deferred tax asset. However,
approximately $113,000 of the valuation allowance relates to the excess tax
benefit of disqualifying dispositions and the exercise of non-qualified stock
options. If the valuation allowance is reduced in the future periods, this
benefit will be recorded in additional paid in capital at that time.
 
    Income tax expense was $127,557 and $78,677 for the years ended December 31,
1998 and 1997, respectively, and $0 for both the four-month transitional period
ended December 31, 1996 and the fiscal year ended August 31, 1996. The provision
for income taxes differs from the amounts computed by
 
                                       43
<PAGE>
                            ANIKA THERAPEUTICS, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
 
16. INCOME TAXES (CONTINUED)
applying the U.S. Federal income tax rate of thirty-four percent to pretax
income as a result of the following:
 
<TABLE>
<CAPTION>
                                                                                    FOUR-MONTH
                                                                                   TRANSITIONAL        FISCAL
                                                    YEAR ENDED     YEAR ENDED       YEAR ENDED       YEAR ENDED
                                                   DECEMBER 31,   DECEMBER 31,     DECEMBER 31,      AUGUST 31,
                                                       1998           1997             1996             1996
                                                   -------------  -------------  -----------------  -------------
<S>                                                <C>            <C>            <C>                <C>
Computed expected tax (benefit) expense..........  $   1,521,967  $   1,163,859    $    (903,584)   $    (968,619)
State tax (benefit) expense (net of federal
  benefit).......................................        280,669        215,329         (166,631)        (178,323)
Nondeductible expenses...........................         28,308          3,804              517            1,638
Increase in credit carryforward..................             --             --         (219,361)          (9,200)
Unrealized gain on short-term investments........        (80,702)            --               --               --
Other............................................         (7,195)        (7,660)           5,335              149
Change in valuation allowance related to income
  tax benefit....................................     (1,615,490)    (1,296,655)       1,283,724        1,154,355
                                                   -------------  -------------  -----------------  -------------
Tax expense......................................  $     127,557  $      78,677    $          --    $          --
                                                   -------------  -------------  -----------------  -------------
                                                   -------------  -------------  -----------------  -------------
</TABLE>
 
                                       44
<PAGE>
                          INDEPENDENT AUDITORS' REPORT
 
The Board of Directors and Shareholders
Anika Therapeutics, Inc.:
 
    We have audited the accompanying balance sheet of Anika Therapeutics, Inc.
(the "Company") as of December 31, 1998, and the related statements of
operations, stockholders' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
    We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
 
    In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Anika Therapeutics, Inc. as
of December 31, 1998, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
 
                                          ARTHUR ANDERSEN LLP
 
Boston, Massachusetts
February 16, 1999
 
                                       45
<PAGE>
                          INDEPENDENT AUDITORS' REPORT
 
    The Board of Directors and Shareholders
 
    Anika Therapeutics, Inc.:
 
    We have audited the accompanying balance sheet of Anika Therapeutics, Inc.
(the "Company") as of December 31, 1997, and the related statements of
operations, stockholders' equity and cash flows for the year ended December 31,
1997, the four-month transitional period ended December 31, 1996 and the fiscal
year ended August 31, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
 
    We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
    In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Anika Therapeutics, Inc. as
of December 31, 1997, and the results of its operations and its cash flows for
the year ended December 31, 1997, the four-month transitional period ended
December 31, 1996 and the fiscal year ended August 31, 1996, in conformity with
generally accepted accounting principles.
 
                                          KPMG PEAT MARWICK LLP
 
Boston, Massachusetts
February 18, 1998
 
                                       46
<PAGE>
PART II
 
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE
 
    None.
 
PART III
 
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
    The information required by item 10 is hereby incorporated by reference to
the Registrant's Proxy Statement (the "Proxy Statement") for the Annual Meeting
of Stockholders to be held on June 3, 1999 under the headings "Election of
Directors".
 
ITEM 11.  EXECUTIVE COMPENSATION
 
    The information required by Item 11 is hereby incorporated by reference to
the Proxy Statement under the heading "Election of Directors Executive
Compensation."
 
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
    The information required by Item 12 is hereby incorporated by reference to
the Proxy Statement under the heading "Beneficial Ownership of Voting Stock."
 
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
    The information required by Item 13 is hereby incorporated by reference to
the Proxy Statement under the headings "Employment Arrangements with Senior
Executives" and "Certain Relationships."
 
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
    (a)  Documents filed as part of Form 10-K.
 
        (1)  Financial Statements
 
    The financial statements of the Company have been included in Item 8 of this
report.
 
    Balance Sheets December 31, 1998 and 1997
 
    Statements of Operations Year ended December 31, 1998 and 1997, the
    four-month transitional period ended December 31, 1996, and the fiscal year
    ended August 31, 1996
 
    Statements of Stockholders' Equity Year ended December 31, 1998 and 1997,
    the four-month transitional period ended Dec. 31, 1996, and the fiscal year
    ended August 31, 1996
 
    Statements of Cash Flows Years ended December 31, 1998 and 1997, the
    four-month transitional period ended Dec. 31, 1996, and the fiscal year
    ended August 31, 1996
 
Notes to Financial Statements
 
        (2)  Schedules
 
    Schedules other than those listed above have been omitted since they are
    either not required or the information required is included in the financial
    statements or the notes thereto.
 
    Arthur Andersen LLP's Reports with respect to the above listed financial
    statements and financial statements schedules are included herein on Item 8
    and Exhibit 23.1
 
        (3)  Exhibits required to be filed by Item 601 of Regulation S-K and by
    Item 13 (c)
 
    The list of Exhibits filed as a part of this Annual Report on Form 10-K are
    set forth on the Exhibit Index immediately preceding such Exhibits, and is
    incorporated herein by reference.
 
    (b)  Reports on Form 8-K
 
    None.
 
                                       47
<PAGE>
                                   SIGNATURES
 
    In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
<TABLE>
<S>                             <C>  <C>
                                ANIKA THERAPEUTICS, INC.
 
                                By:  /s/ SEAN F. MORAN
                                     -----------------------------------------
                                     Sean F. Moran
                                     PRINCIPAL FINANCIAL & ACCOUNTING OFFICER
                                     March 31, 1999
</TABLE>
 
                                   SIGNATURES
 
    In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated, on March 31, 1999.
 
<TABLE>
<CAPTION>
          SIGNATURE                       TITLE
------------------------------  --------------------------
 
<C>                             <S>
 
    /s/ J. MELVILLE ENGLE
------------------------------  Chairman, President &
      J. Melville Engle           Chief Executive Officer
 
     /s/ JOSEPH L. BOWER
------------------------------  Director
       Joseph L. Bower
 
    /s/ EUGENE A. DAVIDSON
------------------------------  Director
      Eugene A. Davidson
 
  /s/ JONATHAN D. DONALDSON
------------------------------  Director
    Jonathan D. Donaldson
 
     /s/ SAMUEL F. MCKAY
------------------------------  Director
       Samuel F. McKay
 
     /s/ HARVEY S. SADOW
------------------------------  Director
       Harvey S. Sadow
 
    /s/ STEVEN E. WHEELER
------------------------------  Director
      Steven E. Wheeler
 
      /s/ SEAN F. MORAN
------------------------------  Chief Financial Officer
        Sean F. Moran
</TABLE>
 
                                       48