Knight Reports Third Quarter Financial 2015 Results
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E-mailMONTREAL, CANADA -- (Marketwired) -- 11/11/15 -- 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 ILUVIENr, a sustained release intravitreal implant
for the treatment of diabetic macular edema.
-- Entered into an exclusive Canadian distribution agreement with Akorn,
Inc. for AzaSiter, 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 ATrynr (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 Impavidor (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.
Knight Therapeutics Inc.
INTERIM CONSOLIDATED BALANCE SHEETS
As at
(In thousands of Canadian dollars)
(Unaudited)
September 30, December 31,
2015 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
--------------------------------
--------------------------------
Knight Therapeutics Inc.
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 September September September
30, 2015 30, 2014 30, 2015 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
----------------------------------------------------
----------------------------------------------------
Knight Therapeutics Inc.
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands of Canadian dollars)
(Unaudited)
Three-month period Nine-month period
ended ended
September September September September
30, 2015 30, 2014 30, 2015 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
----------------------------------------
----------------------------------------
Knight Therapeutics Inc.
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(In thousands of Canadian dollars)
(Unaudited)
Share Contributed
capital Warrants surplus
$ $ $
------------------------------------------
Balance on Incorporation and as at
January 1, 2014 - - -
Net income and comprehensive
income for the period - - -
Stock based compensation expense - - 1,010
Issuance of common shares as part
of Business Separation Agreement 11,909 - -
Issuance of warrants, net of costs
and including deferred tax - 244,559 492
Deemed exercise of Special
Warrants into common shares 244,559 (244,559) -
Share purchase loans (450) - -
Issuance of shares for acquisition
of product rights 294 - -
------------------------------------------
Balance as at September 30, 2014 256,312 - 1,502
------------------------------------------
------------------------------------------
Accumulated
other Total
comprehensive Retained shareholders'
income earnings 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
Issuance of common shares as part
of Business Separation Agreement - - 11,909
Issuance of warrants, net of costs
and including deferred tax - - 245,051
Deemed exercise of Special
Warrants into common shares - - -
Share purchase loans - - (450)
Issuance of shares for acquisition
of product rights - - 294
------------------------------------------
Balance as at September 30, 2014 1,886 877 260,577
------------------------------------------
------------------------------------------
Share Contributed
capital Warrants surplus
$ $ $
------------------------------------------
Balance as at January 1, 2015 341,065 - 2,100
Net income for the period - - -
Realized gain reclassified to
statement of income, net of tax
of $1,368 - - -
Change in fair value of available-
for-sale financial instruments,
net of tax of $482 - - -
Unrealized gain on translating
financial statements of foreign
operations - - -
Share-based compensation expense - - 3,808
Issuance of shares upon financing,
net of costs and includes
deferred tax of $2,200 14,573 - -
Issuance of shares and options
upon investment of associate 80,684 - 1,100
Issuance of shares due to share-
based payment 165 - -
Issuance of shares upon exercise
of stock options 1,487 - (554)
Issuance of warrants - 161 -
Exercise of compensation warrants 930 - (295)
Issuance of shares under share
purchase plan 56 - -
------------------------------------------
Balance as at September 30, 2015 438,960 161 6,159
------------------------------------------
------------------------------------------
Accumulated
other Total
comprehensive Retained shareholders'
income earnings equity
$ $ $
------------------------------------------
Balance as at January 1, 2015 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
Issuance of shares upon financing,
net of costs and includes
deferred tax of $2,200 - - 14,573
Issuance of shares and options
upon investment of associate - - 81,784
Issuance of shares due to share-
based payment - - 165
Issuance of shares upon exercise
of stock options - - 933
Issuance of warrants - - 161
Exercise of compensation warrants - - 635
Issuance of shares under share
purchase plan - - 56
------------------------------------------
Balance as at September 30, 2015 25,697 154,472 625,449
------------------------------------------
------------------------------------------
Knight Therapeutics Inc.
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands of Canadian dollars)
(Unaudited)
Nine-month period ended
September 30, September 30,
2015 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) 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
--------------------------------
--------------------------------
Contacts: Knight Therapeutics Inc. Jeffrey Kadanoff, P.Eng., MBA Chief Financial Officer 514-484-GUD1 (4831) 514-481-4116 (FAX) [email protected] www.gud-knight.com
Source: Knight Therapeutics Inc.
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