MONTREAL, QUÉBEC–(Marketwired – March 16, 2017) – 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, 2016. All dollar amounts are in thousands except for per share amounts. All currencies are Canadian unless otherwise specified.

“In 2016, we continued to make substantial progress towards building Canada’s leading speciality pharmaceutical company by strengthening our team, our product pipeline and our balance sheet,” said Jonathan Ross Goodman, CEO of Knight Therapeutics Inc. “In the year ahead, we look forward to advancing our product pipeline, commercializing Movantik® in Canada and making a difference to the health of patients.”

Financial Results

For the quarter ended December 31, 2016, Knight reported revenues of $1,845, an increase of $1,502 over the same period last year, and net income of $7,939, an increase of $2,385 over the same period last year.

For the year ended December 31, 2016, Knight reported revenues of $5,940, an increase of $4,903 over the same period last year, and net income of $18,560, a decrease of $15,607 over the same period last year. 

As at December 31, 2016, the Company had $736,050 in cash, cash equivalents and marketable securities and 142,713,489 common shares outstanding.

2016 Highlights

  • Signed license agreements for Netildex™ and Probuphine™ for Canada, and Movantik® for Canada and Israel. 
  • Terminated the agreement with Paladin Labs Inc. related to the distribution and sale of Impavido® in all countries other than the U.S.
  • Launched Impavido® in U.S. through commercialization partner Profounda, Inc.
  • Issued secured loans of US$23,000 to Medimetriks Pharmaceuticals Inc. and $6,841 to Crescita Therapeutics Inc. as part of secured lending strategy.
  • Appointed Samira Sakhia, former CFO of Paladin Labs Inc., as President of Knight.
  • Completed two bought deals at $8 and $10 per common share for gross proceeds of $230,000 and $100,050, respectively, including over-allotment exercise.

Key Subsequent Events

  • Submitted Iluvien® for regulatory approval by Health Canada.
  • Announced the commercial relaunch of Movantik® in Canada.
  • Received a Notice of Deficiency Withdrawal from Heath Canada with respect to its ATryn® regulatory submission.

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 Sunday, April 16, 2017 at 11:59 p.m. ET. To access the replay, please call 1-800-585-8367 or 416-621-4642 and use access code 16647769.

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, 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.

 
CONSOLIDATED BALANCE SHEETS
[In thousands of Canadian dollars]
As at December 31, 2016 2015
ASSETS    
Current    
Cash and cash equivalents 514,942 237,481
Marketable securities 221,108 233,726
Trade and other receivables 6,440 2,994
Inventories 790 1,460
Other current financial assets 51,789 23,588
Income taxes receivable 4,683 231
Total current assets 799,752 499,480
Property and equipment 32 18
Intangible assets 14,153 3,320
Other financial assets 90,643 62,616
Investment in associate 80,113 81,027
Deferred income tax assets 6,077 2,527
Total assets 990,770 648,988
     
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Current    
Accounts payable and accrued liabilities 3,207 2,416
Income taxes payable 5,659 4,031
Other balances payable 537
Deferred other income 355 293
Total current liabilities 9,758 6,740
Deferred other income 417
Other balances payable 877
Deferred income tax liabilities 186
Total liabilities 11,052 6,926
     
Shareholders’ equity    
Share capital 760,447 439,148
Warrants 785 161
Contributed surplus 9,469 6,772
Accumulated other comprehensive income 30,431 35,955
Retained earnings 178,586 160,026
Total shareholders’ equity 979,718 642,062
Total liabilities and shareholders’ equity 990,770 648,988
CONSOLIDATED STATEMENTS OF INCOME  
[In thousands of Canadian dollars, except for share and per share amounts]  
     
  2016   2015  
         
Revenues 5,940   1,037  
Cost of goods sold 1,550   428  
Gross margin 4,390   609  
         
Expenses        
Selling and marketing 532    
General and administrative 9,302   9,086  
Research and development 1,955   2,707  
  (7,399 ) (11,184 )
         
Depreciation of property and equipment 18   30  
Amortization of intangible assets 419   94  
Interest income (24,414 ) (18,632 )
Other income (3,894 ) (2,860 )
Net gain on financial assets (1,659 ) (17,347 )
Purchase gain on business combination   (515 )
Net loss on settlement of loans receivable   650  
Share of net income of associate (2,793 ) (1,041 )
Foreign exchange loss (gain) 1,451   (8,579 )
Income before income taxes 23,473   37,016  
         
Income tax expense 4,190   1,939  
Deferred income tax expense 723   910  
Net income for the year 18,560   34,167  
         
     
Basic earnings per share 0.15   0.36  
Diluted earnings per share 0.15   0.35  
     
Basic 120,723,270   96,191,285  
Diluted 121,263,522   96,532,104  
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  
[In thousands of Canadian dollars]  
  2016   2015  
Net income for the year 18,560   34,167  
         
Realized gain on available for sale financial instruments reclassified to statement of income net of tax of $247 (2015: $1,345) (1,592 ) (8,654 )
         
Other comprehensive (loss) income to be reclassified to statement of income in subsequent periods:        
         
Unrealized gain on available for sale financial instruments net of tax of $245 (2015: $528) 1,146   7,083  
Unrealized (loss) gain on translation of foreign operations (5,078 ) 27,559  
Other comprehensive (loss) income for the year (5,524 ) 25,988  
Total comprehensive income for the year 13,036   60,155  
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 as at January 1, 2015 341,065   2,100   9,967   125,859 478,991  
Net income for the year       34,167 34,167  
Realized gain 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 translation of foreign operations     27,559   27,559  
Comprehensive income     25,988   34,167 60,155  
Share-based compensation expense   4,421     4,421  
Issuance of shares upon financing, net of costs and deferred tax of $2,155 14,573       14,573  
Issuance upon investment in associate 80,684   1,100     81,784  
Issuance due to share-based payments 332       332  
Exercise of stock options 1,487   (554 )   933  
Issuance of warrants   161     161  
Exercise of compensation warrants 930   (295 )   635  
Issuance under share purchase plan 77       77  
Balance as at December 31, 2015 439,148   161 6,772   35,955   160,026 642,062  
                     
Balance as at January 1, 2016 439,148   161 6,772   35,955   160,026 642,062  
Net income for the year       18,560 18,560  
Realized gain reclassified to statement of income, net of tax of $247     (1,592 ) (1,592 )
Unrealized gain on available for sale financial instruments, net of tax of $245     1,146   1,146  
Unrealized loss on translation of foreign operations     (5,078 ) (5,078 )
Comprehensive (loss) income     (5,524 ) 18,560 13,036  
Share-based compensation expense   3,640     3,640  
Issuance upon bought deals, net of costs and includes deferred tax of $4,465 317,616       317,616  
Issuance of shares to associate 2,073   (943 )   1,130  
Issuance upon investment 1,846   624           2,470  
Share purchase loans (350 )     (350 )
Issuance under share purchase plan 114         114  
Balance as at December 31, 2016 760,447   785 9,469   30,431   178,586 979,718  
CONSOLIDATED STATEMENT OF CASH FLOWS  
[In thousands of Canadian dollars]  
  2016   2015  
OPERATING ACTIVITIES        
Net income for the year 18,560   34,167  
Adjustments reconciling net income to operating cash flows:        
  Deferred tax 723   910  
  Share-based compensation expense 3,640   4,421  
  Depreciation and amortization 437   124  
  Accretion of interest (6,201 ) (6,985 )
  Other income (1,274 )  
  Realized gain on financial assets (2,569 ) (15,381 )
  Unrealized loss (gain) on financial assets 910   (1,966 )
  Net loss on settlement of loans receivable   535  
  Foreign exchange loss (gain) 1,451   (2,068 )
  Purchase gain on business combination   (515 )
  Share of net income from associate (2,793 ) (1,041 )
  Deferred other income 479   (747 )
  13,363   11,454  
Changes in non-cash working capital related to operations (3,462 ) (3,818 )
Dividends from associate 4,837   2,015  
Cash inflowfrom operating activities 14,738   9,651  
         
INVESTING ACTIVITIES        
Purchase of marketable securities (535,685 ) (583,225 )
Purchase of equities (16,371 ) (11,360 )
Purchase of property and equipment (7 )  
Purchase of intangibles (9,853 ) (1,750 )
Investment in funds (16,503 ) (15,694 )
Issuance of loans receivable (43,274 ) (40,280 )
Investment in associate   (217 )
Proceeds from repayments of loans receivable 11,324   40,420  
Proceeds from sale of marketable securities 544,812   503,935  
Proceeds from distribution of funds 4,610   19,314  
Proceeds from disposal of equities 9,572   19,758  
Proceeds from disposal of derivatives 2,157    
Cash outflow from investing activities (49,218 ) (69,099 )
         
FINANCING ACTIVITIES        
Proceeds from share issuance 313,574   12,424  
Proceeds from exercise of compensation warrants   635  
Share option plan   933  
Share purchase plan 105   77  
Share purchase loans (350 )  
Cost related to prior period share issuance   (207 )
Cash inflow from financing activities 313,329   13,862  
Increase (decrease) in cash during the year 278,849   (45,586 )
Cash and cash equivalents, beginning of the year 237,481   283,445  
Net foreign exchange difference (1,388 ) (378 )
Cash and cash equivalents, end of the year 514,942   237,481  
Supplemental cash flow information:        
Interest received 15,665   10,107  
Income taxes paid 7,010   1,980