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Knight Reports Third Quarter Financial 2015 Results

MONTREAL, CANADA - (November 11, 2015) - Knight Therapeutics Inc. (TSX:GUD) (“Knight” or the “Company”), a leading Canadian specialty pharmaceutical company, today reported its third quarter ended September 30, 2015 financial results. 

Third Quarter 2015 Highlights

Product Development

•Entered into an exclusive Canadian distribution agreement with Alimera Sciences, Inc. for ILUVIEN®, a sustained release intravitreal implant for the treatment of diabetic macular edema.

•Entered into an exclusive Canadian distribution agreement with Akorn, Inc. for AzaSite®, an eye drop solution for topical treatment of bacterial conjunctivitis, commonly known as pink eye.

•Entered into an exclusive distribution agreement with Ember Therapeutics Inc. (“Ember”) for its Bone Morphogenetic Protein-7 pipeline in Canada and select international markets.

•Received notice that New Drug Submission (NDS) for ATryn® (Antithrombin (Recombinant), indicated for the prevention of peri-operative and peri-partum thromboembolic events in hereditary antithrombin deficient patients, was accepted for review by Health Canada.

•Entered into an exclusive licensing agreement with Advaxis, Inc. to commercialize in Canada its product portfolio including its lead drug candidates for HPV-associated cancers, prostate cancer and HER2 expressing solid tumors.

•Entered into an exclusive out-licencing agreement with Profounda Inc. to commercialize Impavido® (miltefosine) in the United States. 

Corporate Development

•Acquired a 28.3% equity interest in Medison Biotech (1995) Ltd. (“Medison”) in exchange for approximately a 10% equity interest in Knight (10.33 million common shares) as part of a strategic collaboration. 

Other Developments

•Invested $0.5M in the Bloom Burton Healthcare Lending Trust.

•Issued a secured loan of $1.3 million [US$1.0 million] to Ember.

•Received a distribution of $2.0 million [US$1.5 million] related to its investment in Sectoral Asset Management Inc.’s New Emerging Medical Opportunities Fund II, Ltd.

Subsequent to the Quarter Ended September 30, 2015 Highlights

•Announced that a dividend to Knight in the amount of $1.9 million [ILS 5.66 million] was approved by the Board of Directors of Medison which related to the Company’s 28.3% equity interest in Medison. 

Third Quarter 2015 Financial Results Reported in Canadian Dollars 

The Company’s financial statements for the period ended September 30, 2015 have been prepared in accordance with IAS 34, Interim Financial Reporting.

For the quarter ended September 30, 2015, the Company reported revenues of $114 thousand and net income of $6.3 million. As at September 30, 2015, the Company had $445.9 million in cash and marketable securities and 103,450,125 common shares outstanding.

“This quarter was marked by our strategic and financial partnership with Medison, often referred to as the Paladin of Israel,” said Jonathan Ross Goodman, President and CEO of Knight. “Looking ahead, our team will remain disciplined, yet aggressive in our pursuit of opportunities to expand our promising pipeline of innovative pharmaceuticals.”

Conference Call Notice 

Knight will host a conference call to discuss its third 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, December 9, 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 9981901.


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 thousands of Canadian dollars]

[Unaudited]

 

 

 

September 30, 2015

December 31, 2014

 

$

$

ASSETS

 

 

Current

 

 

Cash and cash equivalents

246,606

283,445

Marketable securities

199,283

133,412

Accounts receivable

1,641

740

Investment tax credits receivable

200

Inventory

1,588

602

Other current financial assets

9,333

10,090

Other current assets

433

284

Total current assets

459,084

428,573

Property and equipment

25

48

Intangible assets

3,316

846

Other financial assets

80,756

57,147

Investment in associate

82,096

Deferred income tax assets

2,544

Total assets

627,821

486,614

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

Current

 

 

Accounts payable and accrued liabilities

801

2,090

Income taxes payable

1,041

4,493

Deferred revenue

530

1,040

Total current liabilities

2,372

7,623

 

 

 

Shareholders’ equity

 

 

Share capital

438,960

341,065

Warrants

161

Contributed surplus

6,159

2,100

Accumulated other comprehensive income

25,697

9,967

Retained earnings

154,472

125,859

Total shareholders’ equity

625,449

478,991

Total liabilities and shareholders’ equity

627,821

486,614

 

 INTERIM CONSOLIDATED STATEMENTS OF INCOME

 

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

[Unaudited]

 

 

Three-month period ended

 

Nine-month period ended

 

September 30, 2015

September 30, 2014

 

September 30, 2015

September 30, 2014

 

$

$

 

$

$

 

 

 

 

 

 

Revenue

114

7

 

694

255

Cost of goods sold

18

 

376

Gross margin

96

7

 

318

255

 

 

 

 

 

 

Expenses

 

 

 

 

 

General and administrative

2,123

1,227

 

7,247

1,998

Research and development

1,819

687

 

2,453

814

 

(3,846)

(1,907)

 

(9,382)

(2,557)

Depreciation of property and equipment

7

7

 

22

14

Amortization of intangible assets

22

19

 

64

44

Interest expense

 

23

Interest income

(4,297)

(1,135)

 

(11,858)

(2,054)

Other income

(376)

(329)

 

(1,343)

(434)

Net gain on financial assets

(1,965)

 

(15,989)

Purchase gain on business combination

 

(550)

Gain on settlement of loan receivable

 

(358)

Share of net income of associate

(95)

 

(95)

Foreign exchange gain

(3,658)

(976)

 

(7,476)

(977)

Income before income taxes

6,516

507

 

28,201

827

Income tax expense (recovery)

143

(1)

 

(911)

4

Deferred income tax expense (recovery)

96

(54)

 

499

(54)

Net income for the period

6,277

562

 

28,613

877

Basic earnings per share

0.07

0.007

 

0.31

0.018

Diluted earnings per share

0.07

0.007

 

0.30

0.018

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

 

 

 

Basic

95,570,089

77,781,587

 

93,744,281

49,898,141

Diluted

95,737,299

77,869,627

 

93,961,953

49,963,080

 

                                                                                                                    

 


                                                                                                                                                                                           

 

INTERIM CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME

 

[In thousands of Canadian dollars]

[Unaudited]

 

                                                                                                                    

 

Three-month period ended

 

Nine-month period ended

 

September 30, 2015

September 30, 2014

 

September 30, 2015

September 30, 2014

 

$

$

 

$

$

 

 

 

 

 

 

Net income for the period

6,277

562

 

28,613

877

 

 

 

 

 

 

Realized gain reclassified to statement of income

(net of tax of $109 and $1,368 for the three and nine-month periods ended September 30, 2015)

(755)

 

 

 

(8,805)

 

 

 

 

 

 

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 $70  and $482 for the three and nine-month periods ended September 30, 2015, respectively and $27 and $293 for the three and nine-month periods ended September 30, 2014)

125

175

 

 

 

 

 

 

3,125

1,886

Unrealized gain on translating financial statements of foreign operations

10,557

 

 

21,410

Other comprehensive income for the period

9,927

175

 

15,730

1,886

Comprehensive income for the period

16,204

737

 

44,343

2,763

 

 

 

[In thousands of Canadian dollars]

[Unaudited]

 

INTERIM CONSOLIDATED STATEMENT OF

CHANGES IN SHAREHOLDERS’ EQUITY

 

Share
capital

Warrants

Contributed surplus

Accumulated other comprehensive income

Retained earnings

Total shareholders’ equity

 

$

$

$

$

$

$

Balance on Incorporation and as at January 1, 2014

Net income and comprehensive income for the period

1,886

877

2,763

Stock based compensation expense

1,010

1,010

Issuance of common shares as part of Business Separation Agreement

11,909

11,909

Issuance of warrants, net of costs and including deferred tax

244,559

492

245,051

Deemed exercise of Special Warrants into common shares

244,559

(244,559)

Share purchase loans

(450)

(450)

Issuance of shares for acquisition of product rights

294

294

Balance as at September 30, 2014

256,312

1,502

1,886

877

260,577

 

 

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

28,613

28,613

Realized gain reclassified to statement of income, net of tax of $1,368

(8,805)

(8,805)

Change in fair value of available-for-sale financial instruments, net of tax of $482

3,125

3,125

Unrealized gain on translating financial statements of foreign operations

21,410

21,410

Share-based compensation expense

3,808

3,808

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

14,573

14,573

Issuance of shares and options upon investment of associate

80,684

1,100

81,784

Issuance of shares due to share-based payment

165

165

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 under share                  purchase plan

56

56

Balance as at September 30, 2015

438,960

161

6,159

25,697

154,472

625,449

 

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

[In thousands of Canadian dollars]

[Unaudited]          

 

Nine-month period ended

 

September 30, 2015

September 30, 2014

 

$

$

OPERATING ACTIVITIES

 

 

Net income

28,613

877

Adjustments reconciling net income to operating cash flows:

 

 

Deferred income tax (recovery)

499

(54)

Share-based compensation

3,808

1,010

Acquisition of product rights

294

Depreciation of property and equipment

22

14

Amortization of intangible assets

64

44

Other income

(290)

Accretion of interest

(3,373)

Gain on disposal of other financial assets

(15,376)

Gain on settlement of loan receivable

(358)

Purchase gain on business combination

(550)

Share of net income of associate

(95)

 

Unrealized gain on derivative

(615)

Unrealized foreign exchange gain

(7,426)

(988)

Changes in non-cash working capital related to operations

(7,400)

(316)

Deferred revenue

(510)

Cash inflow (outflow) from operating activities

(2,697)

591

INVESTING ACTIVITIES

 

 

Purchase of marketable securities

(460,369)

Proceeds from disposal of marketable securities

411,944

Purchase of other current financial assets

(2,356)

Proceeds from disposal of other financial assets

31,265

Investment in funds

(9,032)

(11,202)

Issuance of loans and debentures receivable

(31,929)

(7,791)

Proceeds from repayments on loans receivable

11,111

Purchase of property and equipment

(70)

Consideration paid on business combination

(1,750)

Investment in associate

(212)

Cash outflow from investing activities

(51,328)

(19,063)

FINANCING ACTIVITIES

 

 

Net impact of Business Separation Agreement

1,000

Net proceeds from warrants issuance

245,145

Proceeds from exercise of Over-Allotment Option

12,424

Proceeds from exercise of compensation warrants

635

Costs related to prior period share financing

(207)

Share option plan

934

Share purchase plan

55

Share purchase loans

(450)

Loan from related party

2,500

Repayment of loan from related party

(2,500)

Cash inflow from financing activities

13,841

245,695

Increase (decrease) in cash during the period

(40,184)

227,223

Cash, beginning of period

283,445

Net foreign exchange difference

3,345

Cash, end of period

246,606

227,223

 

 

 

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