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Knight Reports Second Quarter 2016 Results

MONTREAL, CANADA--(Marketwired - August 11, 2016) - Knight Therapeutics Inc. (TSX:GUD) ("Knight" or the "Company"), a leading Canadian specialty pharmaceutical company, today reported financial results for its second quarter ended June 30, 2016.

All figures are in thousands of Canadian dollars except for share and per share amounts.

Key Events in Second Quarter 2016

•Announced and completed a bought deal at $8.00 per common share for gross proceeds of $230,000 including over-allotment exercise.

•Received a Notice of Deficiency from Health Canada for ATryn®.

•Entered into a distribution agreement with EMPA Healthcare LLC to commercialize Neuragen® in the United Arab Emirates and Kuwait.

Key Events Subsequent to the Quarter Ended June 30, 2016

•Acquired 11,470,920 common shares of Pediapharm Inc. in exchange for 221,126 common shares and 221,126 four-year warrants of Knight with an exercise price of $10.00.

•Entered into a distribution agreement with S.I.F.I - Società Industria Farmaceutica Italiana S.p.A. to commercialize NETILDEX™ in Canada.

•Entered into a licencing and distribution agreement with 3D Signatures Inc. ("3D Signatures") and Plicit Capital Corp. ("Plicit"). Knight also committed to a minimum equity investment of $1,000 pursuant to a business combination and public listing transaction between 3D Signatures and Plicit.

•Expanded distribution agreement with Ember Therapeutics Inc. (“Ember”) to include the territories of Romania and the Caribbean and acquired the rights to two newly-acquired Ember products: Migralex™ and RHY/Vavelta®.

Financial Results Reported in Thousands of Canadian Dollars

For the quarter ended June 30, 2016, the Company reported revenues of $1,135 and net income of $4,446. As at June 30, 2016, the Company had $638,423 in cash, cash equivalents and marketable securities, total shareholders’ equity of $861,965 and 132,480,708 common shares outstanding.

"This past quarter marked our 4th successful equity-raise in 28 months all at increasing valuations,” said Jonathan Ross Goodman, President and CEO of Knight Therapeutics Inc. "We hope to demonstrate that we are as GUD at commercializing innovative pharmaceuticals that touch people’s lives as we are at raising money. To this end, we have deployed or committed over $300 million since our founding in low risk, fair return opportunities that will improve the health of Canadians and help build Knight into Canada’s leading specialty pharma company.”

Conference Call Notice 

Knight will host a conference call to discuss its second quarter 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 am ET until Sunday, September 11, 2016 at 11:59 pm ET. To access the replay, please call 1-800-585-8367 or 416-621-4642 and use access code 10254484. 

Notice of Third Quarter 2016 Results 

Knight expects to release its third quarter 2016 financial results on the morning of Thursday, November 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. 

 

CONTACT INFORMATION:

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

[Unaudited] [In thousands of Canadian dollars]

As at

June 30, 2016

December 31, 2015

ASSETS

 

 

Current

 

 

Cash and cash equivalents

363,713

237,481

Marketable securities

274,710

233,726

Trade and other receivables

4,505

2,994

Inventories

833

1,460

Other current financial assets

36,763

23,588

Income taxes receivable

146

231

Total current assets

680,670

499,480

Property and equipment

-

18

Intangible assets

5,956

3,320

Other financial assets

95,076

62,616

Investment in associate

81,393

81,027

Deferred income tax assets

4,904

2,527

Total assets

867,999

648,988

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

Current

 

 

Accounts payable and accrued liabilities

1,289

2,416

Income taxes payable

4,745

4,031

Deferred other income

-

293

Total current liabilities

6,034

6,740

Deferred income tax liabilities

-

186

Total liabilities

6,034

6,926

 

 

 

Shareholders' equity

 

 

Share capital

662,702

439,148

Warrants

161

161

Contributed surplus

7,712

6,772

Accumulated other comprehensive income

26,441

35,955

Retained earnings

164,949

160,026

Total shareholders' equity

861,965

642,062

Total liabilities and shareholders' equity

867,999

648,988

INTERIM CONSOLIDATED STATEMENTS OF INCOME

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

 

Three-months ended
June 30

 

Six-months ended
June 30

 

 

2016

 

2015

 

2016

 

2015

 

 

 

 

 

 

 

 

 

 

Revenues

1,135

 

333

 

2,203

 

580

 

Cost of goods sold

535

 

272

 

781

 

358

 

Gross margin

600

 

61

 

1,422

 

222

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

Selling and marketing

154

 

-

 

168

 

-

 

General and administrative

2,055

 

2,446

 

4,234

 

5,123

 

Research and development

524

 

301

 

807

 

635

 

 

(2,133

)

(2,686

)

(3,787

)

(5,536

)

 

 

 

 

 

 

 

 

 

Depreciation of property and equipment

10

 

7

 

18

 

15

 

Amortization of intangible assets

122

 

21

 

163

 

42

 

Interest income

(6,124

)

(3,596

)

(10,940

)

(7,562

)

Other income

(354

)

(525

)

(1,453

)

(966

)

Net gain on financial assets

(783

)

(6,495

)

(2,512

)

(14,024

)

Purchase gain on business combination

-

 

-

 

-

 

(550

)

Gain on settlement of loan receivable

-

 

(358

)

-

 

(358

)

Share of net income of associate

(805

)

-

 

(1,659

)

-

 

Foreign exchange loss (gain)

357

 

592

 

4,127

 

(3,818

)

Income before income taxes

5,444

 

7,668

 

8,469

 

21,685

 

 

 

 

 

 

 

 

 

 

Income tax expense (recovery)

578

 

(1,053

)

3,119

 

(1,053

)

Deferred income tax expense

420

 

201

 

427

 

402

 

Net income for the period

4,446

 

8,520

 

4,923

 

22,336

 

 

 

 

 

 

 

 

 

 

Attributable to shareholders of the Company

 

 

 

 

 

 

 

 

Basic earnings per share

0.04

 

0.09

 

0.05

 

0.24

 

Diluted earnings per share

0.04

 

0.09

 

0.05

 

0.24

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

Basic

112,681,825

 

93,089,609

 

108,078,434

 

92,816,245

 

Diluted

113,112,999

 

93,222,325

 

108,410,280

 

93,028,011

 

 

 

 

 

 

 

 

 

 

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

[Unaudited] [In thousands of Canadian dollars]

 

Three-months ended
June 30

 

Six-months ended
June 30

 

 

2016

 

2015

 

2016

 

2015

 

 

 

 

 

 

 

 

 

 

Net income for the period

4,446

 

8,520

 

4,923

 

22,336

 

 

 

 

 

 

 

 

 

 

Realized gain reclassified to statement of income net of tax of $1 and $65 for the three and six-month period ended June 30, 2016 (net of tax of $810 and $1,300 for the three and six-month period ended June 30, 2015)

(6

)

(5,206

)

(416

)

(8,050

)

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss) to be reclassified to income or loss in subsequent periods:

 

 

 

 

 

 

 

 

Unrealized gain on available-for-sale financial instruments net of tax of $75 and $147 for the three and six-month period ended June 30, 2016 (net of tax of $72 and $404 for the three and six-month period ended June 30, 2015)

2,127

 

898

 

2,548

 

3,000

 

Unrealized (loss) gain on translating financial statements of foreign operations

(668

)

(2,065

)

(11,646

)

10,852

 

Other comprehensive income (loss) for the period

1,453

 

(6,373

)

(9,514

)

5,802

 

Total comprehensive income (loss) for the period

5,899

 

2,147

 

(4,591

)

28,138

 

 

 

 

 

 

 

 

 

 

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

[Unaudited] [In thousands of Canadian dollars]

 

Notes

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

 

-

 

-

-

 

-

 

22,336

22,336

 

Realized gain reclassified to statement of income, net of tax of $1,300

 

-

 

-

-

 

(8,050

)

-

(8,050

)

Change in fair value of available-for-sale financial instruments, net of deferred tax of $404

 

-

 

-

-

 

3,000

 

-

3,000

 

Change in unrealized gain on translating financial statements of foreign operations

 

-

 

-

-

 

10,852

 

-

10,852

 

Comprehensive income

 

-

 

 

 

 

5,802

 

22,336

28,138

 

Share-based compensation expense

 

-

 

-

2,865

 

-

 

-

2,865

 

Issuance of shares upon financing, net of costs and deferred tax of $2,200

 

14,573

 

-

-

 

-

 

-

14,573

 

Issuance of shares upon exercise of stock options

 

1,487

 

-

(553

)

-

 

-

934

 

Issuance of warrants

 

-

 

161

-

 

-

 

-

161

 

Exercise of compensation warrants

 

930

 

-

(295

)

-

 

-

635

 

Issuance of shares under share purchase plan

 

42

 

-

-

 

-

 

-

42

 

Balance as at June 30, 2015

 

358,097

 

161

4,117

 

15,769

 

148,195

526,339

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as at January 1, 2016

 

439,148

 

161

6,772

 

35,955

 

160,026

642,062

 

Net income for the period

 

-

 

-

-

 

-

 

4,923

4,923

 

Realized gain reclassified to statement of income, net of tax for $65

 

-

 

-

-

 

(416

)

-

(416

)

Change in fair value of available-for-sale financial instruments, net of deferred tax of $147

 

 

 

 

 

 

2,548

 

 

2,548

 

Change in unrealized loss on translating financial statements of foreign operations

 

-

 

-

-

 

(11,646

)

-

(11,646

)

Comprehensive income (loss)

 

-

 

 

-

 

(9,514

)

4,923

(4,591

)

Share-based compensation expense

 

-

 

-

1,883

 

-

 

-

1,883

 

Issuance of shares upon bought deal, net of costs and deferred tax of $3,080

 

221,631

 

-

-

 

-

 

-

221,631

 

Issuance of shares to associate

 

2,073

 

-

(943

)

-

 

-

1,130

 

Share purchase loans

 

(200

)

-

-

 

-

 

-

(200

)

Issuance of shares under share purchase plan

 

50

 

-

-

 

-

 

 

50

 

Balance as at June 30, 2016

 

662,702

 

161

7,712

 

26,441

 

164,949

861,965

 

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

[Unaudited] [In thousands of Canadian dollars]

 

Six-month period ended June 30

 

 

2016

 

2015

 

OPERATING ACTIVITIES

 

 

 

 

Net income for the period

4,923

 

22,336

 

Adjustments reconciling net income to operating cash flows:

 

 

 

 

Deferred tax

427

 

403

 

Share-based compensation expense

1,883

 

2,865

 

Depreciation and amortization

181

 

57

 

Accretion of interest

(2,846

)

(2,220

)

Realized gain on sale of other financial assets

(142

)

(13,799

)

Unrealized gain on financial assets

(2,370

)

(225

)

Gain on settlement of loan receivable

-

 

(358

)

Foreign exchange loss (gain)

4,127

 

(4,146

)

Purchase gain on business combination

-

 

(550

)

Share of net income from associate

(1,659

)

-

 

Changes in non-cash working capital related to operations

963

 

(5,376

)

Deferred other income

(293

)

(709

)

Cash inflow (outflow) from operating activities

5,194

 

(1,722

)

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

Purchase of marketable securities

(283,125

)

(383,578

)

Purchase of financial assets

(5,423

)

(2,356

)

Purchase of intangibles

(2,924

)

-

 

Investment in funds

(9,225

)

(8,295

)

Issuance of loans receivable

(37,449

)

(31,347

)

Proceeds from repayments of loans receivable

2,023

 

10,028

 

Proceeds from disposal of financial assets

4,026

 

29,242

 

Proceeds from sale of marketable securities

234,104

 

420,691

 

Dividend income from associate

2,423

 

-

 

Consideration paid on business combination

-

 

(1,750

)

Cash (outflow) inflow from investing activities

(95,570

)

32,635

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

Issuance of shares upon bought deal

218,552

 

-

 

Proceeds from exercise of compensation warrants

-

 

635

 

Proceeds from exercise of an over-allotment option

-

 

12,424

 

Share option plan

-

 

934

 

Share purchase plan

50

 

42

 

Share purchase loans

(200

)

-

 

Cost related to prior period share issuance

-

 

(207

)

Cash inflow from financing activities

218,402

 

13,828

 

Increase in cash during the period

128,026

 

44,741

 

Cash and cash equivalents, beginning of the period

237,481

 

283,445

 

Net foreign exchange difference

(1,794

)

861

 

Cash and cash equivalents, end of the period

363,713

 

329,047

 

Supplemental cash flow information:

 

 

 

 

Interest received

6,821

 

4,991

 

Income taxes paid

2,334

 

2,068

 

 

 

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