MONTREAL, QUEBEC–(Marketwired – Mar 19, 2015) – Knight Therapeutics Inc. (TSX:GUD) (“Knight” or the “Company”), a leading Canadian specialty pharmaceutical company, today reported financial results for its fourth quarter and year ended December 31, 2014.

Highlights

  • Knight committed to invest over $110 million into five life sciences funds. These funds (managed by Sectoral Asset Management Inc., Forbion Capital Partners, Teralys Capital, Domain Associates, L.L.C., and Sanderling Ventures, L.L.C.) all have the ability to leverage their broad life sciences industry experience and existing relationships with key life science companies to help secure Canadian and select international product rights for the Company.
  • Knight provided over $40 million of secured loans in three separate transactions: Origin Biomed Inc., Apicore Inc. and CRH Medical Corporation. These secured loans were made with the objective of deploying capital in low risk, fair return opportunities while helping to secure Canadian and select international product rights.
  • Knight acquired multiple product rights through an asset purchase agreement with Orphan Canada Inc. in September 2014.
  • Knight obtained FDA approval for Impavido(R) in the United States for leishmaniasis, a neglected tropical disease, and was issued a priority review voucher in March 2014 which was subsequently sold to Gilead Sciences, Inc. by one of Knight’s wholly owned subsidiaries for gross proceeds of $142 million [US$125 million] in November 2014.
  • Knight closed three separate equity raises at increasing valuations totalling approximately $355 million in gross proceeds.

Financial Results Reported in Canadian Dollars

For the quarter ended December 31, 2014, the Company reported revenues of $109,608 and net income of $124,981,439. For the year ended December 31, 2014, the Company reported revenues of $365,323 and net income of $125,858,872. As at December 31, 2014, the Company had $416,8 million in cash and marketable securities and 90,818,595 common shares outstanding.

“I said from the beginning that Knight won’t rest until it is at least as successful as Paladin, and after one year of operations, I can confidently say that we are off to a GUD start,” said Jonathan Ross Goodman, President and CEO of Knight Therapeutics Inc. “In the year ahead, we look forward to expanding our team to focus on strategy execution and continuing to build our pipeline of innovative specialty products.”

Conference Call Notice

Knight will host a conference call to discuss its fourth quarter and year end 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 Sunday, April 19, 2015 at 11:59 p.m ET. To access the replay, please call 1-800-585-8367 or 416-621-4642 and use access code 32217419.

Knight expects to release its first quarter 2015 financial results on the morning of Wednesday, May 13, 2015.

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 world markets. Knight’s shares began trading on TSX-V on March 3, 2014 and graduated to TSX on April 29, 2014 under the symbol GUD. For more information about Knight Therapeutics Inc., please visit the company’s website at http://www.gud-knight.com or at www.sedar.com.

Forward-Looking Statement

This press release may contain forward-looking statements and predictions. 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. The Company considers the assumptions on which these forward-looking statements are based to be reasonable at the time they were prepared, but cautions that these assumptions regarding the future events, many of which are beyond the control of the Company 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 the Company’s Listing Application dated February 21, 2014 and its short form prospectus dated December 16, 2014. The Company 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.

CONSOLIDATED BALANCE SHEETS

[In Canadian dollars]

As at December 31

2014 2013
$ $
ASSETS
Current
Cash 283,445,451 1
Marketable securities 133,411,500
Accounts receivable 740,545
Inventory 601,780
Other current financial assets 10,089,462
Other current assets 283,867
Total current assets 428,572,605 1
Property and equipment 47,728
Intangible assets 845,761
Other financial assets 57,147,077
Total assets 486,613,171 1
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current
Accounts payable and accrued liabilities 2,089,911
Income taxes payable 4,492,701
Deferred revenue 1,039,825
Total current liabilities 7,622,437
Shareholders’ equity
Share capital 341,065,000 1
Contributed surplus 2,100,025
Accumulated other comprehensive income 9,966,837
Retained earnings 125,858,872
Total shareholders’ equity 478,990,734 1
486,613,171 1

CONSOLIDATED STATEMENTS OF INCOME

[In Canadian dollars]

Year ended
December 31,
2014
Period from
Incorporation on
November 1, 2013
to December 31,
2013
$ $
REVENUE 365,323
EXPENSES
General and administrative 4,283,437
Research and development 1,028,516
(4,946,630 )
Depreciation of property and equipment 21,955
Amortization of intangible assets 63,234
Interest expense 23,538
Interest income (3,899,865 )
Gain on sale of intangible asset (129,370,762 )
Other income (435,388 )
Net gain on financial assets (15,706 )
Foreign exchange gain (2,387,268 )
Income before income taxes 131,053,632
Income tax expense 4,422,640
Deferred income tax expense 772,120
Net income for the year 125,858,872
Basic and diluted earnings per share $2.20
Weighted average number of common shares outstanding
Basic 57,248,473 1
Diluted 57,295,716 1

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

[In Canadian dollars]

Year ended
December 31,
2014
Period from
Incorporation on
November 1, 2013
to December 31,
2013
$ $
Net income for the year 125,858,872
Other comprehensive income to be reclassified to income or loss in subsequent periods:
Unrealized gain on available-for-sale financial instruments (net of tax of $1,101,032) 6,767,687
Unrealized gain on translating financial statements of foreign operations 3,199,150
Other comprehensive income for the year 9,966,837
Comprehensive income for the year 135,825,709

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

[In Canadian dollars]

Share
capital
Warrants Contributed surplus Accumulated other comprehensive income Retained earnings Total shareholders’ equity
$ $ $ $ $ $
Balance on Incorporation and as at January 1, 2014 1 1
Net income for the year 125,858,872 125,858,872
Unrealized gain on available-for-sale financial instruments 6,767,687 6,767,687
Unrealized gain on translating financial statements of foreign operations 3,199,150 3,199,150
Share-based compensation expense 1,804,898 1,804,898
Issuance of common shares as part of Business Separation Agreement 11,909,000 11,909,000
Issuance of warrants, net of costs and deferred tax 245,734,723 491,877 246,226,600
Deemed exercise of Special Warrants into common shares 245,734,723 (245,734,723 )
Issuance of shares upon financing, net of costs and deferred tax 83,071,591 83,071,591
Exercise of compensation warrants 620,148 (196,750 ) 423,398
Issuance of shares for acquisition of product rights 294,084 294,084
Issuance of shares under share purchase plan 30,453 30,453
Share purchase loans (595,000 ) (595,000 )
Balance as at December 31, 2014 341,065,000 2,100,025 9,966,837 125,858,872 478,990,734

CONSOLIDATED STATEMENT OF CASH FLOWS

[In Canadian dollars]

Year ended
December 31,
2014
Period from
Incorporation on
November 1, 2013 to
December 31, 2013
$ $
OPERATING ACTIVITIES
Net income 125,858,872
Adjustments reconciling net income to operating cash flows:
Deferred tax 772,120
Share-based compensation 1,804,898
Acquisition of product rights 294,084
Depreciation of property and equipment 21,955
Amortization of intangible assets 63,234
Accretion of interest (348,876 )
Other income (424,583 )
Gain on sale of other current financial assets (31,546 )
Gain on sale of intangible asset (129,370,762 )
Unrealized loss on derivative 15,840
Unrealized foreign exchange gain (2,410,213 )
Changes in non-cash working capital related to operations 4,510,390
Deferred revenue 47,930
Cash inflow from operating activities 803,343
INVESTING ACTIVITIES
Purchase of marketable securities (133,411,500 )
Purchase of other current financial assets (2,238,721 )
Proceeds from disposal of other current financial assets 169,880
Investment in funds (14,157,772 )
Issuance of loans receivable (38,941,363 )
Purchase of property and equipment (69,683 )
Proceeds from sale of intangible asset, net 139,563,959
Cash outflow from investing activities (49,085,200 )
FINANCING ACTIVITIES
Net impact of Business Separation Agreement 1,000,000
Net proceeds from warrants issuance 244,826,712
Net proceeds from share issuance 83,035,790 1
Proceeds from exercise of compensation warrants 423,398
Share purchase loans (595,000 )
Share purchase plan 30,453
Loan from related party 2,500,000
Repayment of loan from related party (2,500,000 )
Cash inflow from financing activities 328,721,353 1
Increase in cash during the year 280,439,496 1
Cash, beginning of year 1
Net foreign exchange difference 3,005,954
Cash, end of year 283,445,451 1

The following amounts are classified within operating activities:

Interest received 2,920,285
Interest paid 22,534

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