MONTREAL, QUEBEC–(Marketwired – May 11, 2017) – Knight Therapeutics Inc. (TSX:GUD) (“Knight” or the “Company”), a leading Canadian specialty pharmaceutical company, today reported financial results for its first quarter ended March 31, 2017. All dollar amounts are in thousands except for per share amounts. All currencies are Canadian unless otherwise specified.

“This quarter marked a major milestone for Knight as we began commercializing our first innovative pharmaceutical product in Canada with the relaunch of Movantik®,” said Jonathan Ross Goodman, CEO of Knight Therapeutics Inc. “Looking ahead, we are focused on advancing our product pipeline and capitalizing on opportunities to add new products to our portfolio that will improve the health of Canadians.”

Financial Results

For the quarter ended March 31, 2017, Knight reported revenues of $1,750, an increase of $682 over the same period last year, and net income of $6,047, an increase of $5,570 over the same period last year. 

As at March 31, 2017, the Company had $763,778 in cash, cash equivalents and marketable securities and 142,759,326 common shares outstanding.

First Quarter Highlights

  • Announced the commercial relaunch of Movantik® in Canada
  • Submitted Iluvien® for regulatory approval by Health Canada
  • Received full repayment of the balance of secured loans to Apicore Inc. and Pro Bono Bio PLC

Conference Call Notice 

Knight will host a conference call to discuss its first quarter results today at 8:30 am ET. Investors and other interested parties may call 1-877-223-4471 (Operator Assisted Toll-Free) or 647-788-4922 (local or international).

A taped replay of the conference call will be available from today at 11:30 a.m. ET until June 11, 2017 at 11:59 p.m. ET. To access the replay, please call 1-800-585-8367 or 416-621-4642 and use access code 13628658.

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

[Unaudited] [In thousands of Canadian dollars]

As at March 31, 2017 December 31, 2016
ASSETS    
Current    
Cash and cash equivalents 519,522 514,942
Marketable securities 244,256 221,108
Trade and other receivables 7,977 6,440
Inventories 689 790
Other current financial assets 41,635 51,789
Income taxes receivable 4,786 4,683
Total current assets 818,865 799,752
Property and equipment 37 32
Intangible assets 13,787 14,153
Other financial assets 78,076 90,643
Investment in associate 77,907 80,113
Deferred income tax assets 5,621 6,077
Total assets 994,293 990,770
     
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Current    
Accounts payable and accrued liabilities 2,933 3,207
Income taxes payable 6,007 5,659
Other balances payable 532 537
Deferred other income 263 355
Total current liabilities 9,735 9,758
Deferred other income 363 417
Other balances payable 900 877
Total liabilities 10,998 11,052
     
Shareholders’ equity    
Share capital 761,003 760,447
Warrants 785 785
Contributed surplus 10,120 9,469
Accumulated other comprehensive income 26,754 30,431
Retained earnings 184,633 178,586
Total shareholders’ equity 983,295 979,718
Total liabilities and shareholders’ equity 994,293 990,770

INTERIM CONSOLIDATED STATEMENTS OF INCOME

[Unaudited] [In thousands of Canadian dollars, except for share and per share amounts]

  Three months ended March 31,  
  2017   2016  
         
Revenues 1,750   1,068  
Cost of goods sold 288   246  
Gross margin 1,462   822  
         
Expenses        
Selling and marketing 363    
General and administrative 2,468   2,193  
Research and development 416   283  
  (1,785 ) (1,654 )
         
Depreciation of property and equipment   8  
Amortization of intangible assets 326   41  
Interest income (5,860 ) (4,816 )
Other income (308 ) (1,099 )
Net gain on financial assets (3,375 ) (1,729 )
Share of net income of associate (319 ) (854 )
Foreign exchange loss 243   3,770  
Income before income taxes 7,508   3,025  
         
Income tax expense        
Current 480   2,541  
Deferred 981   7  
Net income for the period 6,047   477  
         
Attributable to shareholders of the Company        
Basic earnings per share 0.04   0.005  
Diluted earnings per share 0.04   0.005  
Weighted average number of common shares outstanding        
Basic 142,720,536   103,475,043  
Diluted 143,626,773   103,688,167  
         
         

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

[Unaudited] [In thousands of Canadian dollars]

Three months ended March 31,  
  2017   2016  
Net income for the period 6,047   477  
         
Realized gain reclassified to statement of income net of tax of $64 (2016: net of tax of $64) (973 ) (410 )
Other comprehensive income (loss) to be reclassified to statement of income in subsequent periods:        
Unrealized (loss) gain on available-for-sale financial instruments net of tax of $434 (2016: net of tax of $72) (1,046 ) 421  
Unrealized loss on translation of foreign operations (1,658 ) (10,978 )
Other comprehensive (loss) for the period (3,677 ) (10,967 )
Total comprehensive income (loss) for the period 2,370   (10,490 )
         
         

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

[Unaudited] [In thousands of Canadian dollars]

  Share capital Warrants Contributed surplus   Accumulated other comprehensive income   Retained earnings Total shareholders’ equity  
Balance as at January 1, 2016 439,148 161 6,772   35,955   160,026 642,062  
Net income for the three-month period     477 477  
Realized gain reclassified to statement of income   (410 ) (410 )
Unrealized gain on available for sale financial instruments   421   421  
Unrealized loss on translation of foreign operations   (10,978 ) (10,978 )
Comprehensive (loss) income   (10,967 ) 477 (10,490 )
Share-based compensation expense 1,073     1,073  
Issuance under share purchase plan 28     28  
Balance as at March 31, 2016 439,176 161 7,845   24,988   160,503 632,673  
                   
Balance as at January 1, 2017 760,447 785 9,469   30,431   178,586 979,718  
Net income for the three-month period     6,047 6,047  
Realized gain reclassified to statement of income   (973 ) (973 )
Unrealized loss on available for sale financial instruments   (1,046 ) (1,046 )
Unrealized loss on translation of foreign operations   (1,658 ) (1,658 )
Comprehensive (loss) income   (3,677 ) 6,047 2,370  
Share-based compensation expense 846     846  
Issuance under share option plan 513 (195 )   318  
Issuance under share purchase plan 43     43  
Balance as at March 31, 2017 761,003 785 10,120   26,754   184,633 983,295  

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

[Unaudited] [In thousands of Canadian dollars]

  Three months ended March 31,  
  2017   2016  
OPERATING ACTIVITIES        
Net income for the period 6,047   477  
Adjustments reconciling net income to operating cash flows:        
  Deferred tax 981   7  
  Share-based compensation expense 846   1,073  
  Depreciation and amortization 326   49  
  Accretion of interest (1,078 ) (1,105 )
  Realized gain on financial assets (976 ) (656 )
  Unrealized gain on financial assets (2,399 ) (1,073 )
  Foreign exchange loss 204   3,760  
  Share of net income from associate (319 ) (854 )
  Dividends from associate   2,423  
  Other adjustments (301 ) (142 )
  3,331   3,959  
Changes in non-cash working capital related to operations 905   576  
Cash inflow from operating activities 4,236   4,535  
         
INVESTING ACTIVITIES        
Purchase of marketable securities (44,291 ) (147,399 )
Purchase of intangibles   (2,924 )
Issuance of loans receivable   (34,851 )
Purchase of equities (2,819 ) (3,461 )
Investment in funds (4,141 ) (5,833 )
Proceeds from marketable securities 20,486   152,226  
Proceeds from repayments of loans receivable 28,058   1,018  
Proceeds from disposal of equities 709   5,619  
Proceeds from distribution of funds 2,154    
Cash inflow (outflow) from investing activities 156   (35,605 )
         
FINANCING ACTIVITIES        
Share option plan 345    
Share purchase plan 43   28  
Cash inflow from financing activities 388   28  
Increase (decrease) in cash during the period 4,780   (31,042 )
Cash and cash equivalents, beginning of the period 514,942   237,481  
Net foreign exchange difference (200 ) (1,654 )
Cash and cash equivalents, end of the period 519,522   204,785  
         
Supplemental cash flow information:        
Interest received 4,018   3,773  
Income taxes paid 286   2,334  
         
Cash and cash equivalents 519,522   204,785  
Marketable securities 244,256   221,450  
  763,778   426,235  
         

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