MONTREAL, CANADA–(Marketwired – Nov 11, 2015) – Knight Therapeutics Inc. (TSX:GUD) (“Knight” or the “Company”), a leading Canadian specialty pharmaceutical company, today reported its third quarter ended September 30, 2015 financial results.
Third Quarter 2015 Highlights
Product Development
- Entered into an exclusive Canadian distribution agreement with Alimera Sciences, Inc. for ILUVIEN®, a sustained release intravitreal implant for the treatment of diabetic macular edema.
- Entered into an exclusive Canadian distribution agreement with Akorn, Inc. for AzaSite®, an eye drop solution for topical treatment of bacterial conjunctivitis, commonly known as pink eye.
- Entered into an exclusive distribution agreement with Ember Therapeutics Inc. (“Ember”) for its Bone Morphogenetic Protein-7 pipeline in Canada and select international markets.
- Received notice that New Drug Submission (NDS) for ATryn® (Antithrombin (Recombinant), indicated for the prevention of peri-operative and peri-partum thromboembolic events in hereditary antithrombin deficient patients, was accepted for review by Health Canada.
- Entered into an exclusive licensing agreement with Advaxis, Inc. to commercialize in Canada its product portfolio including its lead drug candidates for HPV-associated cancers, prostate cancer and HER2 expressing solid tumors.
- Entered into an exclusive out-licencing agreement with Profounda Inc. to commercialize Impavido® (miltefosine) in the United States.
Corporate Development
- Acquired a 28.3% equity interest in Medison Biotech (1995) Ltd. (“Medison”) in exchange for approximately a 10% equity interest in Knight (10.33 million common shares) as part of a strategic collaboration.
Other Developments
- Invested $0.5M in the Bloom Burton Healthcare Lending Trust.
- Issued a secured loan of $1.3 million [US$1.0 million] to Ember.
- Received a distribution of $2.0 million [US$1.5 million] related to its investment in Sectoral Asset Management Inc.’s New Emerging Medical Opportunities Fund II, Ltd.
Subsequent to the Quarter Ended September 30, 2015 Highlights
- Announced that a dividend to Knight in the amount of $1.9 million [ILS 5.66 million] was approved by the Board of Directors of Medison which related to the Company’s 28.3% equity interest in Medison.
Third Quarter 2015 Financial Results Reported in Canadian Dollars
The Company’s financial statements for the period ended September 30, 2015 have been prepared in accordance with IAS 34, Interim Financial Reporting.
For the quarter ended September 30, 2015, the Company reported revenues of $114 thousand and net income of $6.3 million. As at September 30, 2015, the Company had $445.9 million in cash and marketable securities and 103,450,125 common shares outstanding.
“This quarter was marked by our strategic and financial partnership with Medison, often referred to as the Paladin of Israel,” said Jonathan Ross Goodman, President and CEO of Knight. “Looking ahead, our team will remain disciplined, yet aggressive in our pursuit of opportunities to expand our promising pipeline of innovative pharmaceuticals.”
Conference Call Notice
Knight will host a conference call to discuss its third quarter results today at 8:30 am ET. Investors and other interested parties may call 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 Wednesday, December 9, 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 9981901.
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’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.gud-knight.com or www.sedar.com.
Forward-Looking Statement
This document contains forward-looking statements for the Company 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. The Company 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 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 Annual Report and in the Company’s Annual Information Form for the year ended December 31, 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.
Knight Therapeutics Inc.
INTERIM CONSOLIDATED BALANCE SHEETS
As at
[In thousands of Canadian dollars]
[Unaudited]
| September 30, 2015 | December 31, 2014 | |
| $ | $ | |
| ASSETS | ||
| Current | ||
| Cash and cash equivalents | 246,606 | 283,445 |
| Marketable securities | 199,283 | 133,412 |
| Accounts receivable | 1,641 | 740 |
| Investment tax credits receivable | 200 | – |
| Inventory | 1,588 | 602 |
| Other current financial assets | 9,333 | 10,090 |
| Other current assets | 433 | 284 |
| Total current assets | 459,084 | 428,573 |
| Property and equipment | 25 | 48 |
| Intangible assets | 3,316 | 846 |
| Other financial assets | 80,756 | 57,147 |
| Investment in associate | 82,096 | – |
| Deferred income tax assets | 2,544 | – |
| Total assets | 627,821 | 486,614 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
| Current | ||
| Accounts payable and accrued liabilities | 801 | 2,090 |
| Income taxes payable | 1,041 | 4,493 |
| Deferred revenue | 530 | 1,040 |
| Total current liabilities | 2,372 | 7,623 |
| Shareholders’ equity | ||
| Share capital | 438,960 | 341,065 |
| Warrants | 161 | – |
| Contributed surplus | 6,159 | 2,100 |
| Accumulated other comprehensive income | 25,697 | 9,967 |
| Retained earnings | 154,472 | 125,859 |
| Total shareholders’ equity | 625,449 | 478,991 |
| Total liabilities and shareholders’ equity | 627,821 | 486,614 |
Knight Therapeutics Inc.
INTERIM CONSOLIDATED STATEMENTS OF INCOME
[In thousands of Canadian dollars, except for share and per share amounts]
[Unaudited]
| Three-month period ended | Nine-month period ended | |||||||
| September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||
| $ | $ | $ | $ | |||||
| Revenue | 114 | 7 | 694 | 255 | ||||
| Cost of goods sold | 18 | – | 376 | – | ||||
| Gross margin | 96 | 7 | 318 | 255 | ||||
| Expenses | ||||||||
| General and administrative | 2,123 | 1,227 | 7,247 | 1,998 | ||||
| Research and development | 1,819 | 687 | 2,453 | 814 | ||||
| (3,846 | ) | (1,907 | ) | (9,382 | ) | (2,557 | ) | |
| Depreciation of property and equipment | 7 | 7 | 22 | 14 | ||||
| Amortization of intangible assets | 22 | 19 | 64 | 44 | ||||
| Interest expense | – | – | – | 23 | ||||
| Interest income | (4,297 | ) | (1,135 | ) | (11,858 | ) | (2,054 | ) |
| Other income | (376 | ) | (329 | ) | (1,343 | ) | (434 | ) |
| Net gain on financial assets | (1,965 | ) | – | (15,989 | ) | – | ||
| Purchase gain on business combination | – | – | (550 | ) | – | |||
| Gain on settlement of loan receivable | – | – | (358 | ) | – | |||
| Share of net income of associate | (95 | ) | – | (95 | ) | – | ||
| Foreign exchange gain | (3,658 | ) | (976 | ) | (7,476 | ) | (977 | ) |
| Income before income taxes | 6,516 | 507 | 28,201 | 827 | ||||
| Income tax expense (recovery) | 143 | (1 | ) | (911 | ) | 4 | ||
| Deferred income tax expense (recovery) | 96 | (54 | ) | 499 | (54 | ) | ||
| Net income for the period | 6,277 | 562 | 28,613 | 877 | ||||
| Basic earnings per share | 0.07 | 0.007 | 0.31 | 0.018 | ||||
| Diluted earnings per share | 0.07 | 0.007 | 0.30 | 0.018 | ||||
| Weighted average number of common shares outstanding | ||||||||
| Basic | 95,570,089 | 77,781,587 | 93,744,281 | 49,898,141 | ||||
| Diluted | 95,737,299 | 77,869,627 | 93,961,953 | 49,963,080 | ||||
Knight Therapeutics Inc.
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
[In thousands of Canadian dollars]
[Unaudited]
| Three-month period ended | Nine-month period ended | ||||||
| September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | ||||
| $ | $ | $ | $ | ||||
| Net income for the period | 6,277 | 562 | 28,613 | 877 | |||
| Realized gain reclassified to statement of income (net of tax of $109 and $1,368 for the three and nine-month periods ended September 30, 2015) | (755 | ) | – |
(8,805 |
) | – | |
| 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 $70 and $482 for the three and nine-month periods ended September 30, 2015, respectively and $27 and $293 for the three and nine-month periods ended September 30, 2014) | 125 | 175 | 3,125 | 1,886 | |||
| Unrealized gain on translating financial statements of foreign operations | 10,557 | – | 21,410 | – | |||
| Other comprehensive income for the period | 9,927 | 175 | 15,730 | 1,886 | |||
| Comprehensive income for the period | 16,204 | 737 | 44,343 | 2,763 | |||
Knight Therapeutics Inc.
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
[In thousands of Canadian dollars]
[Unaudited]
| Share capital |
Warrants | Contributed surplus |
Accumulated other comprehensive income |
Retained earnings |
Total shareholders’ equity |
|||||
| $ | $ | $ | $ | $ | $ | |||||
| Balance on Incorporation and as at January 1, 2014 | – | – | – | – | – | – | ||||
| Net income and comprehensive income for the period | – | – | – | 1,886 | 877 | 2,763 | ||||
| Stock based compensation expense | – | – | 1,010 | – | – | 1,010 | ||||
| Issuance of common shares as part of Business Separation Agreement | 11,909 | – | – | – | – | 11,909 | ||||
| Issuance of warrants, net of costs and including deferred tax | – | 244,559 | 492 | – | – | 245,051 | ||||
| Deemed exercise of Special Warrants into common shares | 244,559 | (244,559 | ) | – | – | – | – | |||
| Share purchase loans | (450 | ) | – | – | – | – | (450 | ) | ||
| Issuance of shares for acquisition of product rights | 294 | – | – | – | – | 294 | ||||
| Balance as at September 30, 2014 | 256,312 | – | 1,502 | 1,886 | 877 | 260,577 |
| Share capital |
Warrants | Contributed surplus |
Accumulated other comprehensive income |
Retained earnings |
Total shareholders’ equity |
|||||
| $ | $ | $ | $ | $ | $ | |||||
| Balance as at January 1, 2015 | 341,065 | – | 2,100 | 9,967 | 125,859 | 478,991 | ||||
| Net income for the period | – | – | – | – | 28,613 | 28,613 | ||||
| Realized gain reclassified to statement of income, net of tax of $1,368 | – | – | – | (8,805 | ) | – | (8,805 | ) | ||
| Change in fair value of available-for-sale financial instruments, net of tax of $482 | – | – | – | 3,125 | – | 3,125 | ||||
| Unrealized gain on translating financial statements of foreign operations | – | – | – | 21,410 | – | 21,410 | ||||
| Share-based compensation expense | – | – | 3,808 | – | – | 3,808 | ||||
| Issuance of shares upon financing, net of costs and includes deferred tax of $2,200 | 14,573 | – | – | – | – | 14,573 | ||||
| Issuance of shares and options upon investment of associate | 80,684 | – | 1,100 | – | – | 81,784 | ||||
| Issuance of shares due to share-based payment | 165 | – | – | – | – | 165 | ||||
| Issuance of shares upon exercise of stock options | 1,487 | – | (554 | ) | – | – | 933 | |||
| Issuance of warrants | – | 161 | – | – | – | 161 | ||||
| Exercise of compensation warrants | 930 | – | (295 | ) | – | – | 635 | |||
| Issuance of shares under share purchase plan | 56 | – | – | – | – | 56 | ||||
| Balance as at September 30, 2015 | 438,960 | 161 | 6,159 | 25,697 | 154,472 | 625,449 |
Knight Therapeutics Inc.
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
[In thousands of Canadian dollars]
[Unaudited]
| Nine-month period ended | ||||
| September 30, 2015 | September 30, 2014 | |||
| $ | $ | |||
| OPERATING ACTIVITIES | ||||
| Net income | 28,613 | 877 | ||
| Adjustments reconciling net income to operating cash flows: | ||||
| Deferred income tax (recovery) | 499 | (54 | ) | |
| Share-based compensation | 3,808 | 1,010 | ||
| Acquisition of product rights | – | 294 | ||
| Depreciation of property and equipment | 22 | 14 | ||
| Amortization of intangible assets | 64 | 44 | ||
| Other income | – | (290 | ) | |
| Accretion of interest | (3,373 | ) | – | |
| Gain on disposal of other financial assets | (15,376 | ) | – | |
| Gain on settlement of loan receivable | (358 | ) | – | |
| Purchase gain on business combination | (550 | ) | – | |
| Share of net income of associate | (95 | ) | ||
| Unrealized gain on derivative | (615 | ) | – | |
| Unrealized foreign exchange gain | (7,426 | ) | (988 | ) |
| Changes in non-cash working capital related to operations | (7,400 | ) | (316 | ) |
| Deferred revenue | (510 | ) | – | |
| Cash inflow (outflow) from operating activities | (2,697 | ) | 591 | |
| INVESTING ACTIVITIES | ||||
| Purchase of marketable securities | (460,369 | ) | – | |
| Proceeds from disposal of marketable securities | 411,944 | – | ||
| Purchase of other current financial assets | (2,356 | ) | – | |
| Proceeds from disposal of other financial assets | 31,265 | – | ||
| Investment in funds | (9,032 | ) | (11,202 | ) |
| Issuance of loans and debentures receivable | (31,929 | ) | (7,791 | ) |
| Proceeds from repayments on loans receivable | 11,111 | – | ||
| Purchase of property and equipment | – | (70 | ) | |
| Consideration paid on business combination | (1,750 | ) | – | |
| Investment in associate | (212 | ) | – | |
| Cash outflow from investing activities | (51,328 | ) | (19,063 | ) |
| FINANCING ACTIVITIES | ||||
| Net impact of Business Separation Agreement | – | 1,000 | ||
| Net proceeds from warrants issuance | – | 245,145 | ||
| Proceeds from exercise of Over-Allotment Option | 12,424 | – | ||
| Proceeds from exercise of compensation warrants | 635 | – | ||
| Costs related to prior period share financing | (207 | ) | – | |
| Share option plan | 934 | – | ||
| Share purchase plan | 55 | – | ||
| Share purchase loans | – | (450 | ) | |
| Loan from related party | – | 2,500 | ||
| Repayment of loan from related party | – | (2,500 | ) | |
| Cash inflow from financing activities | 13,841 | 245,695 | ||
| Increase (decrease) cash during the period | (40,184 | ) | 227,223 | |
| Cash, beginning of period | 283,445 | – | ||
| Net foreign exchange difference | 3,345 | – | ||
| Cash, end of period | 246,606 | 227,223 | ||
