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Knight Reports Fourth Quarter and Year-Ended December 31, 2015 Results

MONTREAL, CANADA--(Marketwired - March 24, 2016) - 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, 2015.

2015 Highlights

  • Knight secured the rights to over 20 innovative pharmaceutical products, consumer health products and medical devices, in various stages of development, for Canada and select international markets.
  • Knight provided over $40 million of secured loans in 9 separate transactions with the objective of deploying capital in low risk, fair return opportunities while helping to secure Canadian and select international product rights.
  • Knight committed to invest over $12 million into three life sciences funds which 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. To date, Knight has invested approximately $125 million into eight proven life science funds.
  • Knight sold the U.S. rights to Neuragen® for minimum aggregate consideration of $1.5 million [US$1.2 million] and selected Profounda Inc. ("Profounda") as its commercialization partner in the U.S. for Impavido®(miltefosine).
  • Knight expanded internationally into Israel through a strategic partnership via an equity swap with Medison Biotech (1995) Ltd., Israel's fourth largest specialty pharma company by revenue.
  • Knight added two consumer health products with sales in Canada: Neuragen® and Flat Tummy Tea.

Subsequent to the Year Ended December 31, 2015 Highlights

  • Knight issued secured loans to INTEGA Skin Sciences Inc. and Medimetriks Pharmaceuticals, Inc.
  • Knight entered into an exclusive licensing agreement with Braeburn Pharmaceuticals, Inc. to commercialize PROBUPHINE® in Canada, and announced that it will distribute and sell Impavido® in all countries other than the U.S. following the termination of its out-license agreement with Endo International plc.

Financial Results Reported in Thousands of Canadian Dollars 

For the quarter ended December 31, 2015, the Company reported revenue of $343 and net income of $5,554. For the year ended December 31, 2015, the Company reported revenue of $1,037 and net income of $34,167. As at December 31, 2015, the Company had $471,207 in cash, cash equivalents and marketable securities and 103,474,367 common shares outstanding.

"In 2015, we deployed or committed over $70 million in low risk, fair return opportunities while making substantial progress towards selling innovative products that touch the lives of patients. To that end, Knight now has secured the rights to a basket of over 20 products in various stages of development for Canada," said Jonathan Ross Goodman, President and CEO of Knight Therapeutics Inc. "In the year ahead, we will continue to focus on acquiring new product rights that improve the health of Canadians and work toward bringing our pipeline to market."

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 Thursday, April 21, 2016 at 11:59 p.m. ET. To access the replay, please call 1-800-585-8367 or 416-621-4642 and use access code 79492415. 

Notice of First Quarter 2016 Results 

Knight expects to release its first quarter 2016 financial results on the morning of Tuesday, May 10, 2016. 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 1-877-223-4471 (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 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.gud-knight.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, 2015. 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. 

CONSOLIDATED BALANCE SHEETS

[In thousands of Canadian dollars]

As at December 31

 

2015

2014

 

$

$

ASSETS

 

 

Current

 

 

Cash and cash equivalents

237,481

283,445

Marketable securities

233,726

133,412

Accounts receivable

2,994

1,024

Inventory

1,460

602

Other current financial assets

23,588

10,090

Income taxes receivable

231

-

Total current assets

499,480

428,573

Property and equipment

18

48

Intangible assets

3,320

846

Other financial assets

62,616

57,147

Investment in associate

81,027

-

Deferred income tax assets

2,527

-

Total assets

648,988

486,614

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

Current

 

 

Accounts payable and accrued liabilities

2,416

2,090

Income taxes payable

4,031

4,493

Deferred revenue

293

1,040

Total current liabilities

6,740

7,623

Deferred income tax liabilities

186

-

Total liabilities

6,926

7,623

 

 

 

Shareholders' equity

 

 

Share capital

439,148

341,065

Warrants

161

-

Contributed surplus

6,772

2,100

Accumulated other comprehensive income

35,955

9,967

Retained earnings

160,026

125,859

Total shareholders' equity

642,062

478,991

 

648,988

486,614

 

CONSOLIDATED STATEMENTS OF INCOME

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

Year ended December 31

 

2015

 

2014

 

 

$

 

$

 

 

 

 

 

 

Revenue

1,037

 

365

 

Cost of goods sold

428

 

-

 

Gross margin

609

 

365

 

 

 

 

 

 

Expenses

 

 

 

 

General and administrative

9,086

 

4,283

 

Research and development

2,707

 

1,029

 

 

(11,184

)

(4,947

)

Depreciation of property and equipment

30

 

22

 

Amortization of intangible assets

94

 

63

 

Interest expense

-

 

23

 

Interest income

(18,632

)

(3,900

)

Other income

(2,860

)

(435

)

Net gain on financial assets

(17,347

)

(16

)

Gain on sale of intangible asset

-

 

(129,371

)

Purchase gain on business combination

(515

)

-

 

Net loss on settlement of loans receivable

650

 

-

 

Foreign exchange gain

(8,579

)

(2,387

)

Share of net income of associate

(1,041

)

-

 

Income before income taxes

37,016

 

131,054

 

Income tax expense

1,939

 

4,423

 

Deferred income tax expense

910

 

772

 

Net income for the year

34,167

 

125,859

 

 

 

 

 

 

Attributable to shareholders of the Company

 

 

 

 

Basic earnings per share

$0.36

 

$2.20

 

Fully diluted earnings per share

$0.35

 

$2.20

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

 

 

Basic

96,191,285

 

57,248,473

 

Diluted

96,532,104

 

57,295,716

 

Knight Therapeutics Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

[In thousands of Canadian dollars]

Year ended December 31

 

2015

 

2014

 

$

 

$

 

 

 

 

Net income for the year

34,167

 

125,859

 

 

 

 

Realized gain on available-for-sale financial instruments reclassified to statement of income (net of tax of $1,345 (2014 -$nil))

(8,654

)

-

 

 

 

 

Other comprehensive income to be reclassified to income in subsequent periods:

 

 

 

 

 

 

 

Unrealized gain on available-for-sale financial instruments (net of tax of $528 (2014 - $1,101))

7,083

 

6,768

Unrealized gain on translating financial statements of foreign operations

27,559

 

3,199

Other comprehensive income for the year

25,988

 

9,967

Comprehensive income for the year

60,155

 

135,826

 

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

[In thousands of Canadian dollars]

 

Share
capital

 

Warrants

 

Contributed
surplus

 

Accumulated
other
comprehensive
income

Retained
earnings

Total
shareholders'
equity

 

 

$

 

$

 

$

 

$

$

$

 

Balance on January 1, 2014

-

 

-

 

-

 

-

-

-

 

Net income for the year

-

 

-

 

-

 

-

125,859

125,859

 

Unrealized gain on available-for-sale financial instruments, net of tax of $1,101

-

 

-

 

-

 

6,768

-

6,768

 

Unrealized gain on translating financial statements of foreign operations

-

 

-

 

-

 

3,199

-

3,199

 

Comprehensive Income

-

 

-

 

-

 

9,967

125,859

135,826

 

Share-based compensation expense

-

 

-

 

1,805

 

-

-

1,805

 

Issuance of common shares as part of Business Separation Agreement

11,909

 

-

 

-

 

-

-

11,909

 

Issuance of warrants, net of costs and deferred tax

-

 

245,735

 

492

 

-

-

246,227

 

Deemed exercise of Special Warrants into common shares

245,735

 

(245,735

)

-

 

-

-

-

 

Issuance of shares upon financing, net of costs and deferred tax

83,072

 

-

 

-

 

-

-

83,072

 

Exercise of compensation warrants

620

 

-

 

(197

)

-

-

423

 

Issuance of shares for acquisition of product rights

294

 

-

 

-

 

-

-

294

 

Issuance of shares under share purchase plan

30

 

-

 

-

 

-

-

30

 

Share purchase loans

(595

)

-

 

-

 

-

-

(595

)

Balance as at December 31, 2014

341,065

 

-

 

2,100

 

9,967

125,859

478, 991

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share
capital

Warrants

Contributed
surplus

 

Accumulated
other comprehensive
income

 

Retained
earnings

Total
shareholders'
equity

 

 

$

$

$

 

$

 

$

$

 

Balance on January 1, 2015

341,065

-

2,100

 

9,967

 

125,859

478,991

 

Net income for the year

-

-

-

 

-

 

34,167

34,167

 

Realized gain on available-for-sale financial instruments reclassified to statement of income, net of tax of $1,345

-

-

-

 

(8,654

)

-

(8,654

)

Unrealized gain on available-for-sale financial instruments, net of tax of $528

-

-

-

 

7,083

 

-

7,083

 

Unrealized gain on translating financial statements of foreign operations

-

-

-

 

27,559

 

-

27,559

 

Comprehensive Income

-

-

-

 

25,988

 

34,167

34,646

 

Share-based compensation expense

-

-

4,421

 

-

 

-

4,421

 

Issuance of shares upon financing, net of costs and includes deferred tax of $2,155

14,573

-

-

 

-

 

-

14,573

 

Issuance of shares and options upon investment in associate

80,684

-

1,100

 

-

 

-

81,784

 

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 due to share-based payments

332

-

-

 

-

 

-

332

 

Issuance of shares under share purchase plan

77

-

-

 

-

 

-

77

 

Balance as at December 31, 2015

439,148

161

6,772

 

35,955

 

160,026

642,062

 

Knight Therapeutics Inc.

CONSOLIDATED STATEMENT OF CASH FLOWS

[In thousands of Canadian dollars]

Year ended December 31

 

2015

 

2014

 

 

$

 

$

 

OPERATING ACTIVITIES

 

 

 

 

Net income

34,167

 

125,859

 

Adjustments reconciling net income to operating cash flows:

 

 

 

 

Deferred tax

910

 

772

 

Share-based compensation

4,421

 

1,805

 

Acquisition of product rights

-

 

294

 

Depreciation of property, plant and equipment

30

 

22

 

Amortization of intangible assets

94

 

63

 

Accretion of interest

(6,985

)

(349

)

Net loss on settlement of loans receivable

535

 

-

 

Gain on sale of other financial assets

(15,381

)

(32

)

Gain on sale of intangible asset

-

 

(129,371

)

Unrealized (gain) loss on derivatives

(1,966

)

16

 

Unrealized foreign exchange gain

(2,068

)

(2,410

)

Purchase gain on business combination

(515

)

-

 

Other income

-

 

(424

)

Net income from associate

(1,041

)

-

 

Changes in non-cash working capital related to operations

(3,818

)

4,510

 

Deferred revenue

(747

)

48

 

Cash inflow from operating activities

7,636

 

803

 

INVESTING ACTIVITIES

 

 

 

 

Purchase of marketable securities

(583,225

)

(133,411

)

Purchase of financial assets

(11,360

)

(2,239

)

Purchase of intangible assets

(1,750

)

-

 

Purchase of property and equipment

-

 

(70

)

Investment in funds

(15,694

)

(14,158

)

Investment in associate net of costs

(217

)

-

 

Issuance of loans receivable

(40,280

)

(38,941

)

Proceeds from repayments of loans receivable

40,420

 

-

 

Proceeds from disposal of financial assets

19,758

 

170

 

Proceeds from sale of marketable securities

503,935

 

-

 

Proceeds from sale of investment in funds

19,314

 

-

 

Proceeds from sale of intangible asset, net

-

 

139,564

 

Dividend income from associate

2,015

 

-

 

Cash outflow from investing activities

(67,084

)

(49,085

)

FINANCING ACTIVITIES

 

 

 

 

Net proceeds from share issuance

12,424

 

83,036

 

Net proceeds from warrants issuance

-

 

244,827

 

Cost related to prior period share issuance

(207

)

-

 

Proceeds from exercise of compensation warrants

635

 

423

 

Share option plan

933

 

-

 

Share purchase plan

77

 

30

 

Share purchase loans

-

 

(595

)

Net impact of a business separation agreement

-

 

1,000

 

Loan from related party

-

 

2,500

 

Repayment of loan from related party

-

 

(2,500

)

Cash inflow from financing activities

13,862

 

328,721

 

Increase (decrease) in cash during the year

(45,586

)

280,439

 

Cash, beginning of year

283,445

 

-

 

Net foreign exchange difference

(378

)

3,006

 

Cash, end of year

237,481

 

283,445

 

The following amounts are classified within operating activities:

Interest received

10,107

2,920

Interest paid

-

23

Income taxes paid

1,980

-

 

CONTACT INFORMATION:

 

Knight Therapeutics Inc.
Jeffrey Kadanoff, P.Eng., MBA
Chief Financial Officer
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

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