MONTREAL, CANADA–(Marketwired – Mar 25, 2015) – Knight Therapeutics Inc. (TSX:GUD) (“Knight” or the “Company”), a leading Canadian specialty pharmaceutical company, announced today that it successfully helped finance CRH Medical Corporation’s (TSX:CRH) (OTCQX:CRMMF) (“CRH”) U.S. expansion as best evidenced by CRH’s recent equity offering: CRH raised $27.37 million of equity at $3.40 per share, more than triple the share price from when Knight extended the secured loan less than four months ago, in the public markets and is using such proceeds to retire USD$7.9 million of its secured debt to Knight. CRH is a North American medical company focused on providing physicians with innovative products and services for the treatment of gastrointestinal diseases.
The retiring of debt relates to Knight’s secured loan of USD$30 million, announced on December 2, 2014, to help CRH fund the acquisition of Gastroenterology Anesthesia Associates, LLC and GAA Management, LCC. Under the terms of the agreement, the secured loan bears interest at a rate of 10% per annum plus other additional consideration. The balance of the loan matures on December 1, 2016 and will be extended for one year should CRH meet profitability milestones.
In addition, as part of the secured loan agreement, Knight was issued 3,000,000 common shares in the capital of CRH. Those shares were subsequently sold for gross proceeds of CAD$9.9 million.
“Our partnership with CRH to support their reliably profitable U.S. anesthesia services acquisition has been a win for all parties involved; the true sign of a well-crafted sustainable relationship,” said Jonathan Ross Goodman, President and CEO of Knight.
Knight CFO Jeffrey Kadanoff added, “With CAD$9.9 million already earned from the sale of CRH shares and today’s early repayment of principal, we project that Knight will comfortably earn a 36% annual return on our USD$30 million two-year secured loan. This is strong evidence that our strategy of deploying capital in low risk opportunities by providing secured loans to solid life science companies is highly effective.”
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’ 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 web site at http://www.gud-knight.com or at http://www.sedar.com.
Knight Therapeutics 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 annual information form dated March 19, 2015. 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.