MONTREAL, CANADA–(Marketwired – Nov. 12, 2014) – Knight Therapeutics Inc. (“Knight”) (TSX:GUD) today reported its financial results for the quarter ended September 30, 2014.
Third Quarter 2014 Highlights
- On July 3, 2014, Knight entered into a secured debt agreement whereby it issued a secured loan of $6.9 million [US$6.5 million] to Apicore Inc. and Apigen Investments Limited (collectively “Apicore”) bearing interest at a rate of 12% per annum and maturing on June 30, 2018.
- On September 2, 2014, Knight entered into an asset purchase agreement with Orphan Canada Inc. (“Orphan”) related to the Canadian rights for ATryn® and PHOTOFRIN® (porfimer sodium), two innovative pharmaceutical products approved for sale in multiple jurisdictions.
- Also on September 2, 2014, the Company announced that Bourne Partners, a leading healthcare-focused merchant banking firm, has been engaged by Knight to assist with its corporate development efforts.
Subsequent to the quarter ended September 30, 2014:
- On October 2, 2014, Knight entered into an agreement with Forbion Capital Partners (“Forbion”) whereby the Company will be investing $27.5 million [EUR19.5 million] into Forbion Capital Fund III C.V. (“FCF III”).
- On October 28, 2014, Knight entered into an agreement with Teralys Capital (“Teralys”) whereby the Company will be investing $30 million into Teralys Capital Innovation Fund LP (“Teralys Fund”).
To date, Knight has allocated $70 million out of the $130 million that the Company intends to invest in successful life science funds. These investments including Sectoral Asset Management, Forbion and Teralys have an ability to leverage their broad life sciences industry experience and existing relationships with key life science companies, including well placed introductions to their investee companies, to help secure Canadian product rights for the Company.
Third Quarter 2014 Financial Results Reported in Canadian Dollars
The Company's financial statements for the period ended September 30, 2014 have been prepared in accordance with IAS 34, Interim Financial Reporting.
For the three-month period ended September 30, 2014, the Company reported Revenues of $6,901 and Net Income of $562,558. For the nine-month period ended September 30, 2014, the Company reported Revenues of $255,715 and Net Income of $877,434. As at September 30, 2014, the Company had $227.2 million of cash and 77,818,403 common shares outstanding.
“We are making GUD progress on becoming a Paladin 2.0. In the last nine months, we have 1) committed $70 million toward our fund strategy to secure Canadian rights to innovative products, 2) licensed in two late stage products through the acquisition of Orphan Canada, 3) lent $8 million on a secured basis to two life science companies, 4) received approval for Impavido in the U.S. by the FDA, 5) were granted the fourth priority review voucher ever issued by the FDA and hired a banker to monetize it, and most importantly 6) built a team of excellence to make it all happen.” said Jonathan Ross Goodman, President and CEO of Knight Therapeutics Inc.
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).
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 world markets. For more information about Knight Therapeutics Inc., please visit the Company's website at www.gud-knight.com or at www.sedar.com.
This press release may contain forward-looking statements and predictions. 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 that these assumptions regarding the 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 final application for listing on TSX Venture Exchange and in two Short Form Prospectuses which can be found on SEDAR at www.sedar.com, which investors should consult for additional information. 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.
Neither TSX nor its Regulation Services Providers (as that term is defined in policies of TSX) accepts responsibility for the adequacy or accuracy of this release.
Knight Therapeutics Inc.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
As at
[In Canadian dollars]
[unaudited]
September 30, 2014 |
December 31, 2013 |
|
$ | $ | |
ASSETS | ||
Current assets | ||
Cash | 227,223,348 | 1 |
Interest, royalties and other receivable | 527,477 | – |
Other current assets | 238,795 | – |
Total current assets | 227,989,620 | 1 |
Property and equipment | 55,274 | – |
Intangible assets | 864,731 | – |
Intangible asset held for sale | 10,000,000 | – |
Other financial assets | 22,704,212 | – |
Total assets | 261,613,837 | 1 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Current liabilities | ||
Accounts payable and accruals | 755,990 | – |
Deferred revenue | 280,308 | – |
Total current liabilities | 1,036,298 | – |
Shareholders' equity | ||
Share capital | 256,312,458 | 1 |
Contributed surplus | 1,501,760 | – |
Accumulated other comprehensive income | 1,885,887 | – |
Retained earnings | 877,434 | – |
Total shareholders' equity | 260,577,539 | 1 |
Total liabilities and shareholders' equity | 261,613,837 | 1 |
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
[In Canadian dollars except for share amounts]
[unaudited]
Three months ended September 30, 2014 | Nine months ended September 30, 2014 | |||
$ | $ | |||
REVENUE | ||||
Royalty income | 6,901 | 255,715 | ||
EXPENSES | ||||
General and administrative | 1,227,438 | 1,998,070 | ||
Research and development | 686,517 | 814,290 | ||
(1,907,054 | ) | (2,556,645 | ) | |
Depreciation of property and equipment | 7,401 | 14,409 | ||
Amortization of intangible assets | 18,970 | 44,264 | ||
Interest expense | – | 23,538 | ||
Interest income | (1,134,970 | ) | (2,054,697 | ) |
Other income | (329,295 | ) | (434,153 | ) |
Foreign exchange gain | (976,145 | ) | (977,355 | ) |
Income before income taxes | 506,985 | 827,349 | ||
Income tax (recovery) expense | (1,177 | ) | 4,311 | |
Deferred income tax recoverable | (54,396 | ) | (54,396 | ) |
Net income for the period | 562,558 | 877,434 | ||
Basic and diluted earnings per share | 0.007 | 0.018 | ||
Weighted average number of common shares outstanding | ||||
Basic | 77,781,587 | 49,898,141 | ||
Diluted | 77,869,627 | 49,963,080 |
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
[In Canadian dollars]
[unaudited]
Three months ended September 30, 2014 | Nine months ended September 30, 2014 | |
$ | $ | |
Net income for the period | 562,558 | 877,434 |
Other comprehensive income to be reclassified to income or loss in subsequent periods: | ||
Change in fair value of available-for-sale financial instruments (net of tax of $27,141 and $293,070 for the three and nine month-periods, respectively) | 174,651 | 1,885,887 |
Other comprehensive income for the period | 174,651 | 1,885,887 |
Comprehensive income for the period | 737,209 | 2,763,321 |
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the nine months ended September 30, 2014
[In Canadian dollars]
[unaudited]
Share capital |
Warrant | Contributed Surplus |
Accumulated Other Comprehensive Income |
Retained Earnings | Total Shareholders' Equity |
||||
$ | $ | $ | $ | $ | $ | ||||
Balance on Incorporation and as at January 1, 2014 | 1 | – | – | – | – | 1 | |||
Net income and comprehensive income for the period | – | – | – | 1,885,887 | 877,434 | 2,763,321 | |||
Stock based compensation expense | – | – | 1,009,883 | – | – | 1,009,883 | |||
Issuance of common shares as part of Business Separation Agreement | 11,909,000 | – | – | – | – | 11,909,000 | |||
Issuance of warrants, net of costs and deferred tax recoverable | – | 244,559,373 | 491,877 | – | – | 245,051,250 | |||
Deemed exercise of Special Warrants into common shares | 244,559,373 | (244,559,373 | ) | – | – | – | – | ||
Share purchase loans | (450,000 | ) | – | – | – | – | (450,000 | ) | |
Issuance of shares for acquisition of product rights | 294,084 | – | – | – | – | 294,084 | |||
Balance as at September 30, 2014 | 256,312,458 | – | 1,501,760 | 1,885,887 | 877,434 | 260,577,539 | |||
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
[In Canadian dollars]
[unaudited]
Nine months ended September 30, 2014 | ||
$ | ||
OPERATING ACTIVITIES | ||
Net income | 877,434 | |
Deferred income tax recovery | (54,396 | ) |
Stock based compensation | 1,009,883 | |
Acquisition of product rights | 294,084 | |
Depreciation of property and equipment | 14,409 | |
Amortization of intangible assets | 44,264 | |
Other income | (289,762 | ) |
Unrealized foreign exchange gain | (988,518 | ) |
Changes in non-cash working capital related to operations | (315,918 | ) |
Cash inflow from operating activities | 591,480 | |
INVESTING ACTIVITIES | ||
Purchase of property and equipment | (69,683 | ) |
Loans receivable | (7,790,700 | ) |
Investment in fund | (11,202,290 | ) |
Cash outflow from investing activities | (19,062,673 | ) |
FINANCING ACTIVITIES | ||
Net impact of Business Separation Agreement | 1,000,000 | |
Net proceeds from warrants issuance | 245,144,540 | |
Share purchase loans | (450,000 | ) |
Loan from related party | 2,500,000 | |
Repayment of loan from related party | (2,500,000 | ) |
Cash inflow from financing activities | 245,694,540 | |
Increase in cash during the period | 227,223,347 | |
Cash, beginning of period | 1 | |
Cash, end of period | 227,223,348 | |
The following amounts are classified within operating activities: | |
Interest received | 1,571,548 |
Interest paid | 22,534 |