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Knight Reports First Quarter 2015 Results

MONTREAL, CANADA - (May 13, 2015) - Knight Therapeutics Inc. (TSX:GUD) (“Knight” or the “Company”), a leading Canadian specialty pharmaceutical company, today reported its first quarter ended March 31, 2015 financial results. 

First Quarter 2015 Highlights

•On January 1, 2015, Knight acquired NeurAxon Inc. (“NeurAxon”) for $1.75 million and amalgamated the company into Knight that same day. 

 

•On January 14, 2015, a syndicate of underwriters acquired 1,932,420 common shares of Knight at a price of $6.75 per share for gross proceeds of $13,043,835 pursuant to their exercise in full of the over-allotment option granted per Knight's last equity offering.  

 

•On January 22, 2015, Knight entered into a senior secured debt financing agreement with Synergy Strips Corp., whereby it issued a secured loan of 

$7.4 million [US$6.0 million] that will bear interest at 15% per annum and matures on January 20, 2017. 

 

•On March 25, 2015, Knight received early repayment of $10.0 million 

[US$7.9 million] of its secured loan of $34.0 million [US$30 million] from CRH Medical Corporation (“CRH”). During the three months ended March 31, 2015, Knight sold all of its 3 million common shares of CRH, which were received as part of this secured loan with CRH, for gross proceeds of $9.9 million.

 

•On March 31, 2015, Knight purchased $1.25 million of secured debentures offered by Pediapharm Inc., as part of a $5.50 million offering, which bear interest at a rate of 12% per annum paid quarterly and which mature on March 30, 2019. 

 

Subsequent to the quarter ended March 31, 2015:

•On April 3, 2015, Knight entered into an agreement with HarbourVest Partners LLC, whereby Knight committed to invest $10.0 million into HarbourVest Canada Growth Fund L.P. This brings Knight’s commitment to life sciences venture capital fund investments to approximately $120 million out of the $130 million Knight intends to commit to its long-term licensing strategy.

 

•On April 30, 2015, Knight entered into several agreements with Profound Medical Inc. (“Profound”) which are subject to a number of conditions including, but not limited to, TSX Venture Exchange acceptance: i) Knight entered into a secured loan of $4.0 million to Profound which would bear interest at 15.0% per annum for an initial term of 4 years, ii) Knight purchased $2.0 million as part of a $24.0 million offering of subscription receipts at a price of $1.50 per subscription receipt, and iii) Knight entered into a distribution, license and supply agreement with Profound pursuant to which Knight will act as the exclusive distributor of the Company's TULSA-PRO system, an investigational phase device used in a minimally invasive treatment for localized prostate cancer currently being assessed in clinical trials, in Canada for an initial ten year term.

 

First Quarter 2015 Financial Results Reported in Canadian Dollars 

The Company’s financial statements for the period ended March 31, 2015 have been prepared in accordance with IAS 34, Interim Financial Reporting.

For the quarter ended March 31, 2015, the Company reported revenues of $247,356 and net income of $13,816,190. As at March 31, 2015, the Company had $452.2 million in cash and marketable securities and 92,539,843 common shares outstanding.

“This quarter was marked by a one-time $10 million realized gain generated from the execution of our secured lending strategy. After selling our priority review voucher for US$125M, this now makes us a two hit wonder,” said Jonathan Ross Goodman, President and CEO of Knight Therapeutics Inc. “Every day, the Knight team is aggressively, yet patiently pursuing opportunities to build our pipeline of innovative specialty pharmaceutical products. I assure you that GUD things come to those who wait.”

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 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, June 10, 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 46121470. 

Notice of Second Quarter 2015 Results 

Knight expects to release its second quarter 2015 financial results on the morning of Wednesday, August 12, 2015. Knight expects to hold a conference call at 8:30 am ET on the morning of the release. All interested parties are cordially invited to attend. Investors and other interested parties may call 877-223-4471 (Operator Assisted Toll-Free) or 647-788-4922 (local or international).

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. 

For further information please contact

Knight Therapeutics Inc.
Jeffrey Kadanoff, P.Eng., MBA
Chief Financial Officer
Tel: 514-484-GUD1 (4831)
Fax: 514-481-4116 
This email address is being protected from spambots. You need JavaScript enabled to view it.  
www.gud-knight.com

 

INTERIM CONSOLIDATED BALANCE SHEETS

 

As at

[in Canadian dollars]

[unaudited]

 

 

 

March 31,2015

December 31, 2014

 

$

$

ASSETS

 

 

Current

 

 

Cash and cash equivalents

301,293,007

283,445,451

Marketable securities

150,893,400

133,411,500

Accounts receivable

748,696

740,545

Investment tax credits receivable

200,000

Inventory

1,255,303

601,780

Other current financial assets

3,510,236

10,089,462

Other current assets

425,721

283,867

Total current assets

458,326,363

428,572,605

Property and equipment

40,187

47,728

Intangible assets

3,039,416

845,761

Other financial assets

64,017,965

57,147,077

Total assets

525,423,931

486,613,171

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

Current

 

 

Accounts payable and accrued liabilities

1,600,280

2,089,911

Income taxes payable

3,795,791

4,492,701

Deferred revenue

577,072

1,039,825

Total current liabilities

5,973,143

7,622,437

 

 

 

Shareholders’ equity

 

 

Share capital

354,515,466

341,065,000

Contributed surplus

3,118,518

2,100,025

Accumulated other comprehensive income

22,141,742

9,966,837

Retained earnings

139,675,062

125,858,872

Total shareholders’ equity

519,450,788

478,990,734

Total liabilities and shareholders’ equity

525,423,931

486,613,171

 

 


 INTERIM CONSOLIDATED STATEMENTS OF INCOME

 

[in Canadian dollars]

[unaudited]

 

 

                                                                           Three month period ended

 

March 31,

2015

March 31,

 2014

 

$

$

 

 

 

Revenue

247,356

1,441

Cost of goods sold

86,239

Gross margin

161,117

1,441

 

 

 

Expenses

 

 

General and administrative

2,676,651

77,272

Research and development

334,590

15,037

 

(2,850,124)

(90,868)

Depreciation of property and equipment

7,542

493

Amortization of intangible assets

21,121

6,324

Interest expense

19,040

Interest income

(3,966,030)

(40,983)

Other income

(441,177)

Net gain on financial assets

(7,528,588)

Purchase gain on acquisition

(550,000)

Foreign exchange gain

(4,410,545)

Income (loss) before income taxes

14,017,553

(75,742)

Deferred income tax expense

201,363

Net income (loss)  for the period

13,816,190

(75,742)

Basic and diluted earnings (loss) per share

0.15

(0.01)

 

 

 

Weighted average number of common shares outstanding

 

 

Basic

92,539,843

8,079,889

Diluted

92,820,153

8,079,889

                                                                                                                                                                                         

 INTERIM CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME

 

[in Canadian dollars]

[unaudited]

 

                                                                                                                     Three month period ended

 

March 31, 2015

March 31,2014

 

$

$

 

 

 

Net income (loss) for the period

13,816,190

(75,742)

 

 

 

Realized gain reclassified to statement of income

(net of tax of $ $440,585)

(2,844,143)

 

 

 

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 $332,130)

2,101,857

Unrealized gain on translating financial statements

of foreign operations

12,917,191

Other comprehensive income for the period

12,174,905

Comprehensive income (loss) for the period

25,991,095

(75,742)

 

 

[in Canadian dollars]

[unaudited]

 

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN SHAREHOLDERS’ EQUITY

 

 

 

Share
capital

Warrants

Contributed surplus

Accumulated other comprehensive income

Retained earnings (Deficit)

Total shareholders’ equity

 

$

$

$

$

$

$

Balance on Incorporation and as at January 1, 2014

1

1

Net income (loss) for the period

(75,742)

(75,742)

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

71,617,703

491,877

72,109,580

Warrant purchase loans

(450,000)

(450,000)

Balance as at March  31, 2014

11,909,001

71,167,703

491,877

(75,742)

83,492,839

 

 

Share
capital

Warrants

Contributed surplus

Accumulated other comprehensive income

Retained earnings

Total shareholders’ equity

 

$

$

$

$

$

$

Balance  as at January 1, 2015

341,065,000

2,100,025

9,966,837

125,858,872

478, 990,734

Net income for the period

13,816,190

13,816,190

Realized gain reclassified to statement of income, net of tax of $ $440,585

(2,844,143)

(2,844,143)

Change in fair value of available-for-sale financial instruments, net of tax of $332,130

2,101,857

2,101,857

Unrealized gain on translating financial statements of foreign operations

12,917,191

12,917,191

Share-based compensation expense

1,313,620

1,313,620

Issuance of shares upon financing, net of costs and deferred tax of $92,908

12,510,318

12,510,318

Exercise of compensation warrants

930,227

(295, 127)

635,100

Issuance of shares under share purchase plan

9,921

9,921

Balance as at March 31, 2015

354,515,466

3,118,518

22,141,742

139,675,062

519,450,788

 

INTERIM CONSOLIDATED

STATEMENT OF CASH FLOWS

 

[in Canadian dollars]

[unaudited]

 

Three month period ended  

 

March 31,2015

March 31, 2014

 

$

$

OPERATING ACTIVITIES

 

 

Net income (loss)

13,816,190

(75,742)

Adjustments reconciling net income to operating cash flows:

 

 

Deferred tax

201,363

Share-based compensation

1,313,620

Depreciation of property and equipment

7,542

493

Amortization of intangible assets

21,121

6,324

Accretion of interest

(1,318,296)

Gain on sale of other current financial assets

(7,551,244)

Purchase gain on business combination

(550,000)

Unrealized loss on derivative

22,656

Unrealized foreign exchange gain

(4,398,899)

Changes in non-cash working capital related to operations

(1,990,070)

43,157

Deferred revenue

(462,752)

Cash outflow from operating activities

(888,769)

(25,768)

INVESTING ACTIVITIES

 

 

Purchase of marketable securities

(273,932,700)

Proceeds from disposal of marketable securities

267,504,500

Purchase of other current financial assets

(355,937)

Proceeds from disposal of other current financial assets

12,226,511

Investment in funds

(311,885)

Issuance of loans and debentures receivable

(8,524,922)

Proceeds from repayments on loans receivable

9,971,017

Purchase of property and equipment

(35,982)

Consideration paid on business combination

(1,750,000)

Cash inflow from investing activities

4,826,584

(35,982)

FINANCING ACTIVITIES

 

 

Net impact of Business Separation Agreement

1,000,000

Net proceeds from warrants issuance

72,461,125

Proceeds from exercise of Over-Allotment Option

12,424,253

Proceeds from exercise of compensation warrants

635,100

Costs related to prior period share financing

(206,828)

Share purchase plan

9,921

Share purchase loans

(450,000)

Loan from related party

2,500,000

Cash inflow from financing activities

12,862,446

75,511,125

Increase in cash during the period

16,800,261

75,449,375

Cash, beginning of year

283,445,451

1

Net foreign exchange difference

1,047,295

Cash, end of year

301,293,007

75,449,376

 

 

The following amount is classified within operating activities:

Interest received

2,587,201

 

 

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