As at September 30, 2017, Knight had over $760,000 in cash, cash equivalents and marketable securities and 142,772,805 common shares outstanding.
| MONTREAL, QUEBEC -- (Marketwired) -- Nov 09, 2017 -- Knight Therapeutics ( Q3 2017 Highlights -- Revenues were $1,860, a decrease of $32 or 2% versus the same period in prior year -- Cash flows from operations were $10,736, an increase of $6,348 or 145% over the same period in prior year -- Issued additional loans of US$12,504 to Synergy CHC Corp (“Synergy”) and 60 degrees Pharmaceuticals LLC (“60P”) -- Amended loan with Crescita Therapeutics Inc. (“Crescita”) resulting in an early repayment of $2,488 -- Received dividends of $2,459 from Medison Biotech (1995) Ltd. (“Medison”) -- Received distributions of $1,063 from a strategic fund investment and realized a gain of $276 -- Recorded an unrealized gain of $3,049 on investment in Forbion Capital Partners (“Forbion”) following the announcement of Merck’s acquisition of Rigontec -- Realized gain of $1,457 on disposal of common shares of Merus Labs International Inc. upon the close of its acquisition by Norgine B.V. Subsequent Events -- Received 566,471 common shares of Crescita pursuant to a share transfer agreement increasing ownership to approximately 14.9% -- Accepted the resignation of Jeffrey Kadanoff and appointed Samira Sakhia as Chief Financial Officer -- Received a distribution of EUR2,144 from Forbion upon close of the acquisition of Rigontec “This past quarter our team was focused on advancing our product pipeline and evaluating opportunities to build our portfolio of innovative pharmaceuticals,” said Jonathan Ross Goodman, CEO of Knight. “In the quarters ahead, we will look to capitalize on GUD opportunities for growth.” As at September 30, 2017, Knight had over $760,000 in cash, cash equivalents and marketable securities and 142,772,805 common shares outstanding. From this strong cash position, Knight will continue to pursue business and corporate development opportunities. Financial Results Change Change Q3-17 Q3-16 $ % YTD-17 YTD-16 $ % ---------------------------------------------------------------------------- Revenues 1,860 1,892 (32) (2%) 6,090 4,095 1,995 49% Operating expenses 3,567 2,888 679 24% 11,060 8,097 2,963 37% Interest income 6,959 7,375 (416) (6%) 18,517 18,315 202 1% Share of net income of associate 98 1,096 (998) (91%) 513 2,755 (2,242) (81%) Net income 3,593 5,698 (2,105) (37%) 10,099 10,621 (522) (5%) Earnings per share 0.03 0.04 (0.01) (25%) 0.07 0.09 (0.02) (22%) Revenue: Revenue in Q3 2017 was in line with the same period last year, while the increase for the nine-month period is due to the addition of Movantik® and an increase of Impavido® sales. Operating expenses: Increase in Q3 2017 is explained by commercial activities including sales force promotion of Movantik®, and an increase in the number of employees as Knight expands commercialization and prepares to launch new products in Canada. Interest income: Decrease in Q3 2017 is driven by a lower average loan balance outstanding, offset by higher interest income earned on cash, cash equivalents and marketable securities. Share of net income of associate: Decrease in Q3 2017 is due to Medison’s lower net income mainly attributable to increases in marketing and selling expenses linked to new product launches as well as to an increase in the amortization of fair value adjustments recorded by Knight. Product Update According to IMS data, Movantik® sales in Canada were $255 and $634 for the three and nine-month periods ended September 30, 2017. In December 2016, Knight entered into an agreement with AstraZeneca for the rights to Movantik® in Canada and Israel under which Knight is responsible for all commercial, regulatory and certain supply chain activities. Movantik® is the first once-daily oral peripherally-acting mu-opioid receptor antagonist for the treatment of opioid-induced constipation in adult patients with non-cancer pain who have had an inadequate response to laxative(s). Strategic Lending Updates On August 9, 2017, Knight issued an additional three-year secured loan of US$10,000 with an annual interest rate of 10.5% to Synergy. The loan will be used for acquisitions and general working capital purposes. Additionally, Knight agreed to provide an ongoing credit facility for an aggregate of up to US$20,000 to be granted at Knight’s sole discretion. As part of the transaction, the Knight will receive a success fee payable at maturity of the loan. On August 14, 2017, Knight amended its loan with Crescita. The amendment resulted in an early repayment of $2,488 reducing the principal balance to $4,100. Additionally, Knight agreed to amend the collateral on the loan with the release of a letter of credit in exchange for a general security interest over Crescita’s assets. The interest rate of 9% per annum and maturity date of January 22, 2022 remain unchanged. In addition, Knight surrendered its 293,163 warrants of Crescita exercisable at $2.44 per share and was issued 216,000 warrants exercisable at a price of $0.75 per share and 180,000 warrants exercisable at a price of $1.00 per share, in each case for a term of six years. During Q3 2017, Knight issued an additional loan of US$2,504 to 60P. Knight has issued a total of US$6,700 to 60P at an interest rate of 15% per annum and a maturity date of December 31, 2020. In addition, pursuant to its loan agreements with Medimetriks Pharmaceuticals Inc. (“Medimetriks”), Knight received 286,955 common shares of Medimetriks increasing its ownership of to 10% on a fully diluted basis. Conference Call Notice Knight will host a conference call and audio webcast to discuss its third quarter results today at 8:30 am ET. Knight cordially invites all interested parties to participate in this call. Date: Thursday, November 9, 2017 Time: 8:30 a.m. EST Telephone: 1-877-223-4471 or 647-788-4922 Webcast: http://www.gudknight.com/ or http://bit.ly/2iG5Zgk This is a listen-only audio webcast. Media Player is required to listen to the broadcast. Replay: An archived replay will be available for 30 days at http://www.gudknight.com/ About Knight Therapeutics Inc. Knight Therapeutics Inc., headquartered in Montreal, Canada, is a specialty pharmaceutical company focused on acquiring or in-licensing innovative pharmaceutical products for the Canadian and select international markets. Knight Therapeutics Inc.'s shares trade on TSX under the symbol GUD. For more information about Knight Therapeutics Inc., please visit the company’s web site at www.gudknight.com or www.sedar.com. Forward-Looking Statement This document contains forward-looking statements for Knight Therapeutics Inc. and its subsidiaries. These forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. Knight Therapeutics Inc. considers the assumptions on which these forward-looking statements are based to be reasonable at the time they were prepared, but cautions the reader that these assumptions regarding future events, many of which are beyond the control of Knight Therapeutics Inc. and its subsidiaries, may ultimately prove to be incorrect. Factors and risks, which could cause actual results to differ materially from current expectations are discussed in Knight Therapeutics Inc.'s Annual Report and in Knight Therapeutics Inc.'s Annual Information Form for the year ended December 31, 2016. Knight Therapeutics Inc. disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information or future events, except as required by law. INTERIM CONSOLIDATED BALANCE SHEETS (In thousands of Canadian dollars) (Unaudited) As at September 30, 2017 December 31, 2016 ---------------------------------------------------------------------------- ASSETS Current Cash and cash equivalents 506,839 514,942 Marketable securities 218,248 221,108 Trade and other receivables 8,123 6,440 Inventories 653 790 Other current financial assets 30,960 51,789 Income taxes receivable 2,448 4,683 ---------------------------------------------------------------------------- Total current assets 767,271 799,752 Marketable securities 36,000 - Property and equipment 60 32 Intangible assets 12,713 14,153 Other financial assets 95,725 90,643 Investment in associate 75,642 80,113 Deferred income tax assets 6,056 6,077 ---------------------------------------------------------------------------- Total assets 993,467 990,770 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS’ EQUITY Current Accounts payable and accrued liabilities 4,146 3,207 Income taxes payable 7,008 5,659 Other balances payable 587 537 Deferred other income 250 355 ---------------------------------------------------------------------------- Total current liabilities 11,991 9,758 Deferred other income 229 417 Other balances payable 799 877 ---------------------------------------------------------------------------- Total liabilities 13,019 11,052 ---------------------------------------------------------------------------- Shareholders’ equity Share capital 761,127 760,447 Warrants 785 785 Contributed surplus 11,900 9,469 Accumulated other comprehensive income 17,951 30,431 Retained earnings 188,685 178,586 ---------------------------------------------------------------------------- Total shareholders’ equity 980,448 979,718 ---------------------------------------------------------------------------- Total liabilities and shareholders’ equity 993,467 990,770 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- INTERIM CONSOLIDATED STATEMENTS OF INCOME (In thousands of Canadian dollars, except for share and per share amounts) (Unaudited) Three months ended Nine months ended September 30 September 30 2017 2016 2017 2016 ---------------------------------------------------------------------------- Revenues 1,860 1,892 6,090 4,095 Cost of goods sold 337 296 1,097 1,077 ---------------------------------------------------------------------------- Gross margin 1,523 1,596 4,993 3,018 ---------------------------------------------------------------------------- Expenses Selling and marketing 834 94 2,247 262 General and administrative 2,147 2,358 6,944 6,592 Research and development 586 436 1,869 1,243 ---------------------------------------------------------------------------- (2,044) (1,292) (6,067) (5,079) ---------------------------------------------------------------------------- Depreciation of property and equipment - - - 18 Amortization of intangible assets 539 100 1,185 263 Interest income (6,959) (7,375) (18,517) (18,315) Other income (871) (2,081) (1,513) (3,534) Net (gain) loss on financial assets (1,317) 2,914 (3,636) 402 Share of net income of associate (98) (1,096) (513) (2,755) Foreign exchange loss (gain) 2,695 (1,132) 4,244 2,995 ---------------------------------------------------------------------------- Income before income taxes 3,967 7,378 12,683 15,847 ---------------------------------------------------------------------------- Income tax expense (recovery) Current 490 1,288 1,598 4,407 Deferred (116) 392 986 819 ---------------------------------------------------------------------------- Net income for the period 3,593 5,698 10,099 10,621 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Attributable to shareholders of the Company Basic earnings per share 0.03 0.04 0.07 0.09 Diluted earnings per share 0.03 0.04 0.07 0.09 INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands of Canadian dollars) (Unaudited) Three months ended Nine months ended September 30 September 30 2017 2016 2017 2016 ---------------------------------------------------------------------------- OPERATING ACTIVITIES Net income for the period 3,593 5,698 10,099 10,621 Adjustments reconciling net income to operating cash flows: Deferred tax (116) 392 986 819 Share-based compensation expense 762 765 2,626 2,648 Depreciation and amortization 539 100 1,185 281 Accretion of interest (1,197) (2,129) (3,381) (4,975) Realized gain on financial assets (1,761) (367) (3,402) (509) Unrealized loss (gain) on financial assets 444 3,281 (234) 911 Foreign exchange loss (gain) 2,695 (1,132) 4,244 2,995 Share of net income from associate (98) (1,096) (513) (2,755) Other income (871) (1,271) (872) (1,271) Deferred other income (63) 848 (293) 555 ---------------------------------------------------------------------------- 3,927 5,089 10,445 9,320 ---------------------------------------------------------------------------- Changes in non-cash working capital related to operations 4,350 (3,115) 2,914 (2,152) ---------------------------------------------------------------------------- Dividends from associate 2,459 2,414 4,984 4,837 ---------------------------------------------------------------------------- Cash inflow from operating activities 10,736 4,388 18,343 12,005 ---------------------------------------------------------------------------- INVESTING ACTIVITIES Purchase of marketable securities (103,273) (161,913) (245,746) (445,038) Purchase of intangibles - (367) - (3,291) Issuance of loans receivables (15,164) (1,027) (16,971) (38,476) Purchase of equities - (5,073) (2,939) (10,496) Investment in funds (4,987) (4,917) (15,318) (14,142) Proceeds from sale of marketable securities 77,170 182,896 203,729 417,000 Proceeds from repayments of loans receivable 5,985 5,916 36,309 7,939 Proceeds from disposal of equities 9,357 3,337 12,872 7,363 Proceeds from distribution of funds 510 1,974 3,886 1,974 ---------------------------------------------------------------------------- Cash (outflow) inflow from investing activities (30,402) 20,826 (24,178) (77,167) ---------------------------------------------------------------------------- FINANCING ACTIVITIES Proceeds from share issuance, net of costs - (16) - 218,536 Proceeds from exercise of stock options - - 345 - Proceeds from contributions to share purchase plan 61 24 154 74 Issuance of share purchase loans - - - (200) ---------------------------------------------------------------------------- Cash inflow from financing activities 61 8 499 218,410 ---------------------------------------------------------------------------- (Decrease) increase in cash during the period (19,605) 25,222 (5,336) 153,248 Cash and cash equivalents, beginning of the period 527,879 363,713 514,942 237,481 Net foreign exchange difference (1,435) 467 (2,767) (1,327) ---------------------------------------------------------------------------- Cash and cash equivalents, end of the period 506,839 389,402 506,839 389,402 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Marketable securities, end of the period 254,248 255,652 254,248 255,652 Cash, cash equivalents and marketable securities, end of the period 761,087 645,054 761,087 645,054 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
Contacts: Knight Therapeutics Inc. Samira Sakhia President and Chief Financial Officer 514-678-8930 514-481-4116 (FAX) info@gudknight.com www.gudknight.com
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