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Knight Reports Second Quarter 2017 Results

MONTREAL, CANADA--(Marketwired - August 10, 2017) - Knight Therapeutics Inc. (TSX: GUD) ("Knight"), a leading Canadian specialty pharmaceutical company, today reported financial results for its second quarter ended June 30, 2017. All dollar amounts are in thousands except for per share amounts. All currencies are Canadian unless otherwise specified.

 

Q2-2017 Highlights

•Revenues reached $2,480, an increase of $1,345 or 119% over the same period in prior year

•Cash flows from operations were $3,371, an increase of $289 or 9% over the same period in prior year

•Submitted Probuphine™ for approval by Health Canada

•Issued additional secured loan tranches of US$1,807 to 60 Degree Pharmaceuticals (“60P”) 

•Contributed capital of $6,190 and received distributions of $1,222 from strategic fund investments

 

Subsequent Events

•Realized gain of $1,457 on disposal of common shares of Merus upon the close of its acquisition by Norgine B.V. 

•Medison Biotech (1995) Ltd.’s (“Medison”) board of directors declared and approved dividends of $2,466 [ILS7,068]

•Issued an additional secured loan of US$10,000 to Synergy CHC Corp. (“Synergy”)

“This past quarter was highlighted by continued revenue growth, as well as the submission of Probuphine™ for approval by Health Canada, bringing a novel product one step closer to improving the health of Canadians,” said Jonathan Ross Goodman, CEO of Knight. “In the quarters ahead, we will continue to be focused on advancing our pipeline and capitalizing on GUD opportunities for growth.”


 

Financial Results

 

Revenue for Q2 2017 was $2,480, an increase of $1,345 or 119% versus Q2 2016. Revenue for the first half of 2017 was $4,230, an increase of $2,027 or 92% versus the first half of 2016. The increase is due to the addition of Movantik® as well as to an increase of Impavido® sales.

 

Operating expenses for Q2 2017 were $4,246, an increase of $1,513 or 55% versus Q2 2016. The increase is explained by commercial activities including sales force promotion of Movantik®, an increase in the number of employees as Knight expands commercialization and prepares to launch new products in Canada, and the fees related to the submission of Probuphine™ for regulatory approval by Health Canada.

 

Interest income for Q2 2017 was $5,698, a decrease of $426 or 7% versus Q2 2016. The decrease is driven by a lower average loan balance outstanding, offset by an increase in the average cash, cash equivalents and marketable securities balances due to proceeds from equity raises in June and December 2016.

 

Share of income of associate for Q2 2017 was $96, a decrease of $709 or 88% versus Q2 2016. The decrease is due to Medison’s lower net income mainly attributable to increases in marketing and selling expenses linked to new product launches as well as to an increase in the amortization of fair value adjustments recorded by Knight.

 

Net income for Q2 2017 was $459, a decrease of $3,987 or 90% versus Q2 2016. Net income for the first half of 2017 was $6,506, an increase of $1,583 or 32% versus the first half of 2016. 

 

As at June 30, 2017, Knight had $761,161 in cash, cash equivalents and marketable securities and 142,765,432 common shares outstanding.  From this strong cash position, Knight will continue to pursue business and corporate development opportunities.


 

Product Updates

 

During the quarter, Knight submitted a new drug submission for Probuphine™ for approval by Health Canada. Probuphine™, indicated for the treatment of opioid drug dependence, is a subdermal implant designed to deliver buprenorphine continuously for six months following a single treatment, promoting patient compliance and retention. Knight entered into an exclusive licensing agreement with Braeburn to commercialize Probuphine™ in Canada in February 2016.

According to IMS data, Movantik® sales in Canada were $213 and $381 for the three and six-month periods ended June 30, 2017. In December 2016, Knight entered into an agreement with AstraZeneca for the rights to Movantik® in Canada and Israel under which Knight is responsible for all commercial, regulatory and certain supply chain activities. Movantik® is the first once-daily oral peripherally-acting mu-opioid receptor antagonist for the treatment of opioid-induced constipation in adult patients with non-cancer pain who have had an inadequate response to laxative(s).

 

Strategic Lending Updates 

 

During the three-month period ended June 30, 2017, Knight issued an additional US$1,356 to 60P. As at June 30, 2017, Knight had issued a total of US$4,197 to 60P as part of a secured loan agreement. The loan bears interest at 15% per annum and matures on December 31, 2020. 

Subsequent to quarter end, Knight issued an additional secured loan of US$10,000 to Synergy which bears interest at 10.5% per annum and matures on August 9, 2020. As part of the transaction, Knight will receive a success fee paid at maturity, plus other consideration. In 2015, Knight issued two loans to Synergy totaling US$11,500 which have a current remaining balance of US$3,100 and are scheduled to be fully repaid by January 20, 2018.


 

Conference Call Notice 

 

Knight will host a conference call and audio webcast to discuss its second quarter results today at 8:30 am ET. Knight cordially invites all interested parties to participate in this call.

Date: Thursday, August 10, 2017

Time: 8:30 a.m. EST

Telephone: 1-877-223-4471 or 647-788-4922

Webcast: www.gudknight.com or http://bit.ly/2u1eeo9

This is a listen-only audio webcast. Media Player is required to listen to the broadcast.


 

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.gudknight.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, 2016. 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)
F: 514-481-4116
This email address is being protected from spambots. You need JavaScript enabled to view it.
www.gudknight.com

 

 

 


INTERIM CONSOLIDATED BALANCE SHEETS

[In thousands of Canadian dollars]

[Unaudited]

 

As at

 

June 30, 2017

December 31, 2016

ASSETS

 

 

 

Current

 

 

 

Cash and cash equivalents

 

527,879

514,942

Marketable securities

 

233,282

221,108

Trade and other receivables

 

7,598

6,440

Inventories

 

839

790

Other current financial assets

 

35,779

51,789

Income taxes receivable

 

5,456

4,683

Total current assets

 

810,833

799,752

Property and equipment

 

68

32

Intangible assets

 

13,482

14,153

Other financial assets

 

84,073

90,643

Investment in associate

 

78,003

80,113

Deferred income tax assets

 

5,521

6,077

Total assets

 

991,980

990,770

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Current

 

 

 

Accounts payable and accrued liabilities

 

3,123

3,207

Income taxes payable

 

6,617

5,659

Other balances payable

 

610

537

Deferred other income

 

250

355

Total current liabilities

 

10,600

9,758

Deferred other income

 

292

417

Other balances payable

 

908

877

Total liabilities

 

11,800

11,052

 

 

 

 

Shareholders’ equity

 

 

 

Share capital

 

761,063

760,447

Warrants

 

785

785

Contributed surplus

 

11,138

9,469

Accumulated other comprehensive income

 

22,102

30,431

Retained earnings

 

185,092

178,586

Total shareholders’ equity

 

980,180

979,718

Total liabilities and shareholders’ equity

 

991,980

990,770

 


 

INTERIM CONSOLIDATED STATEMENTS OF INCOME

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

[Unaudited]

 

 

 

Three months ended June 30

Six months ended June 30

 

 

2017

2016

2017

2016

 

 

 

 

 

 

Revenues

 

2,480

1,135

4,230

2,203

Cost of goods sold

 

472

535

760

781

Gross margin

 

2,008

600

3,470

1,422

 

 

 

 

 

 

Expenses

 

 

 

 

 

Selling and marketing

 

1,050

154

1,413

168

General and administrative

 

2,329

2,055

4,797

4,234

Research and development

 

867

524

1,283

807

 

 

(2,238)

(2,133)

(4,023)

(3,787)

 

 

 

 

 

 

Depreciation of property and equipment

 

10

18

Amortization of intangible assets

 

320

122

646

163

Interest income

 

(5,698)

(6,124)

(11,558)

(10,940)

Other income

 

(334)

(354)

(642)

(1,453)

Net loss (gain) on financial assets

 

1,056

(783)

(2,319)

(2,512)

Share of net income of associate

 

(96)

(805)

(415)

(1,659)

Foreign exchange loss

 

1,306

357

1,549

4,127

Income before income taxes

 

1,208

5,444

8,716

8,469

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

Current

 

628

578

1,108

3,119

Deferred

 

121

420

1,102

427

Net income for the period

 

459

4,446

6,506

4,923

 

 

 

 

 

 

Attributable to shareholders of the Company

 

 

 

Basic earnings per share

 

0.003

0.039

0.046

0.046

Diluted earnings per share

 

0.003

0.039

0.045

0.045

 


 

 

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

[In thousands of Canadian dollars]

[Unaudited]

 

 

 

Three months ended June 30

Six months ended June 30

 

 

2017

2016

2017

2016

OPERATING ACTIVITIES

 

 

 

 

 

Net income for the period

 

459

4,446

6,506

4,923

Adjustments reconciling net income to operating cash flows:

 

 

 

 

 

Deferred tax

 

121

420

1,102

427

Share-based compensation expense

 

1,018

810

1,864

1,883

Depreciation and amortization

 

320

132

646

181

Accretion of interest

 

(1,106)

(1,741)

(2,184)

(2,846)

Realized (gain) loss on financial assets

 

(665)

514

(1,641)

(142)

Unrealized (gain) loss on financial assets

 

1,721

(1,297)

(678)

(2,370)

Foreign exchange loss

 

1,344

367

1,549

4,127

Share of net income from associate

 

(96)

(805)

(415)

(1,659)

Other adjustments

 

71

(151)

(231)

(293)

 

 

3,187

2,695

6,518

4,231

Changes in non-cash working capital related to operations

 

(2,341)

387

(1,436)

963

Dividends from associate

 

2,525

2,525

2,423

Cash inflow from operating activities

 

3,371

3,082

7,607

7,617

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

Purchase of marketable securities

 

(98,182)

(135,726)

(142,473)

(283,125)

Purchase of intangibles

 

(2,924)

Issuance of loans receivables

 

(1,807)

(2,598)

(1,807)

(37,449)

Purchase of equities

 

(120)

(3,999)

(2,939)

(7,460)

Investment in funds

 

(6,190)

(3,392)

(10,331)

(9,225)

Proceeds from sale of marketable securities

 

106,073

81,878

126,559

234,104

Proceeds from repayments of loans receivable

 

2,266

1,005

30,324

2,023

Proceeds from disposal of equities

 

2,806

616

3,515

6,235

Proceeds from distribution of funds

 

1,222

3,376

Cash inflow (outflow) from investing activities

 

6,068

(62,216)

6,224

(97,821)

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

Issuance of shares upon bought deal

 

218,552

218,552

Proceeds from share option plan

 

345

Proceeds from share purchase plan

 

50

22

93

50

Issuance of share purchase loans

 

(200)

(200)

Cash inflow from financing activities

 

50

218,374

438

218,402

Increase in cash during the period

 

9,489

159,240

14,269

128,198

Cash and cash equivalents, beginning of the period

 

519,522

204,785

514,942

237,481

Net foreign exchange difference

 

(1,132)

(312)

(1,332)

(1,966)

Cash and cash equivalents, end of the period

 

527,879

363,713

527,879

363,713

Marketable securities, end of the period

 

233,282

274,710

233,282

274,710

Cash, cash equivalents and marketable securities, end of the period

 

761,161

638,423

761,161

638,423

             

 

 

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