UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

	For the quarterly period ended September 30, 2006

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

For the transition period from to

Commission File Number 000-21326

Anika Therapeutics, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Massachusetts		04-3145961
(State or Other Jurisdiction of		(I.R.S. Employer Identification No.)
Incorporation or Organization)
160 New Boston Street, Woburn, Massachusetts		01801
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (781) 932-6616

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definitions of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Securities Exchange Act. (Check One):

o Large accelerated filer x Accelerated filer o Non-accelerated filer

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date. At October 25, 2006 there were 10,729,580 outstanding shares of Common Stock, par value $.01 per share.

PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

Anika Therapeutics, Inc. and Subsidiary
Consolidated Balance Sheets
(unaudited)

	September 30,			December 31,
	2006			2005
ASSETS
Current assets:
Cash and cash equivalents	$	47,420,450		$	44,746,656
Accounts receivable, net of reserves of $49,724 at September 30, 2006 and $22,558 at December 31, 2005	2,747,921			2,066,240
Inventories	5,603,740			3,270,678
Current portion deferred income taxes	1,301,085			1,301,085
Prepaid expenses and other receivable	188,046			1,025,481
Total current assets	57,261,242			52,410,140
Property and equipment, at cost	13,112,484			11,949,439
Less: accumulated depreciation	(10,146,937		)	(9,853,177		)
	2,965,547			2,096,262
Long-term deposits	143,060			143,060
Deferred income taxes	8,141,653			7,968,481
Total Assets	$	68,511,502		$	62,617,943

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	785,176		$	1,277,782
Accrued expenses	1,751,065			1,718,916
Deferred revenue	2,896,527			2,830,046
Income taxes payable	1,323,262			—
Total current liabilities	6,756,030			5,826,744
Other long-term liabilities	63,410			—
Long-term deferred revenue	17,749,722			18,900,000
Commitments and contingencies (note 7)
Stockholders’ equity
Preferred stock, $.01 par value; 1,250,000 shares authorized, no shares issued and outstanding at September 30, 2006 and December 31, 2005	—			—
Common stock, $.01 par value; 30,000,000 shares authorized, 10,729,580 shares issued and outstanding at September 30, 2006, 10,500,393 shares issued and outstanding at December 31, 2005	107,296			105,004
Additional paid-in-capital	36,764,276			34,272,881
Retained earnings	7,070,768			3,513,314
Total stockholders’ equity	43,942,340			37,891,199
Total Liabilities and Stockholders’ Equity	$	68,511,502		$	62,617,943

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Anika Therapeutics, Inc. and Subsidiary
Consolidated Statements of Operations
(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2006		2005		2006		2005
Product revenue	$	5,494,407	$	5,998,995	$	18,875,724	$	15,760,065
Licensing, milestone and contract revenue	706,250		4,058,879		2,075,934		8,608,522
Total revenue	6,200,657		10,057,874		20,951,658		24,368,587

Operating expenses:
Cost of product revenue	2,125,028		3,766,762		8,063,750		8,877,934
Research & development	905,289		978,520		3,111,958		3,637,900
Selling, general & administrative	1,453,393		1,393,335		5,218,992		4,160,574
Total operating expenses	4,483,710		6,138,617		16,394,700		16,676,408
Income from operations	1,716,947		3,919,257		4,556,958		7,692,179
Interest income, net	569,229		332,457		1,520,075		818,750
Income before income taxes	2,286,176		4,251,714		6,077,033		8,510,929
Provision for income taxes	961,536		1,720,207		2,519,579		3,440,693
Net income	$	1,324,640	$	2,531,507	$	3,557,454	$	5,070,236
Basic net income per share:
Net income	$	0.12	$	0.24	$	0.34	$	0.49
Basic weighted average common shares outstanding	10,676,943		10,482,850		10,602,659		10,382,096
Diluted net income per share:
Net income	$	0.12	$	0.22	$	0.32	$	0.44