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                                                                   EXHIBIT 10.27

                             DEMAND PROMISSORY NOTE

$59,000                                                     May 26, 2000

      FOR VALUE RECEIVED, the undersigned, CHARLES H. SHERWOOD (the "Borrower")
HEREBY PROMISES TO PAY ON DEMAND to the order of ANIKA THERAPEUTICS, INC. (the
"Company") the principal sum of Fifty-Nine Thousand DOLLARS ($59,000), together
with interest (compounded on the basis of actual number of days elapsed over a
360-day year) on he unpaid principal balance outstanding from time to time at
the rate per annum equal to 6.22% percent (the "Interest Rate") [THE APPLICABLE
FEDERAL RATE (AFR) AT THE TIME OF ISSUANCE FOR DEBT INSTRUMENTS WITH A DURATION
OF GREATER THAN 3 YEARS AND LESS THAN 9 YEARS] on or prior to the first to occur
of (i) the fifth (5th) anniversary of the date of issuance or (ii) the date the
Borrower is no longer employed by the Company (the first to occur of the
foregoing, the "Maturity Date"). After the Maturity Date, Borrower promises to
pay interest on the unpaid principal from time to time outstanding at the rate
per annum equal to the Interest Rate plus three percent (3%). In no event,
however, shall this Note bear interest in excess of the maximum rate of interest
permitted by applicable law. The principal sum evidenced hereby shall be paid in
full no later than Maturity Date, upon which date all accrued and unpaid
interest and any other amounts then due shall also be paid in full. Prior to the
Maturity Date, payments of accrued interest shall be made monthly in arrears on
the last day of each calendar month, commencing on the last day of the month in
which this Note is issued.

      Principal, interest and all other amounts due under this Note shall be
payable, in immediately available funds, at the office of the Company, 236 W.
Cummings Park, Woburn, Massachusetts, or at such other address as the holder of
this Note may from time to time designate in writing to the Borrower.

      The Borrower shall have the right, at any time, to prepay all or any part
of the outstanding principal amount without premium or penalty.

      The Borrower acknowledges that the Company shall have the right to set-off
any amounts from time to time due to the Company hereunder against any amounts
from time to time owed to the Borrower by the Company, including, without
limitations, salary, bonus, severance or otherwise. Without limiting the
foregoing, the Borrower further acknowledges that, and authorizes the Company to
make monthly payroll deductions from the Borrower to make the required interest
payments hereunder.

      The Borrower hereby waives presentment, demand, notice, protest and other
demands and notices in connection with the delivery, acceptance or unenforcement
of this Note.

      No delay or omission on the part of the holder of this note in exercising
any right hereunder shall operate as a waiver of such right or of any other
right under this Note, and a
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waiver, delay or omission on any one occasion shall not be construed as a bar to
or waiver of any such right on any future occasion.

      The Borrower hereby agrees to pay on demand all costs and expenses,
including, without limitation, reasonable attorneys' fees and legal expenses,
incurred or paid by the holder of this Note in enforcing this Note on default.

      This Note shall be deemed to be under seal, and all rights and obligations
hereunder shall be governed by the laws of The Commonwealth of Massachusetts.

COMPANY:                                  BORROWER:

/s/ J. MELVILLE ENGLE                     Name:/s/ CHARLES H. SHERWOOD
---------------------                          -----------------------
J. Melville Engle                               Charles H. Sherwood
Chairman & CEO
Anika Therapeutics, Inc.


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