Knight Reports First Quarter 2016 Results

MONTREAL, CANADA--(Marketwired - May 10, 2016) - Knight Therapeutics Inc. (TSX:GUD) ("Knight" or the "Company"), a leading Canadian specialty pharmaceutical company, today reported financial results for its first quarter ended March 31, 2016. In thousands of Canadian dollars except for share and per share amounts.

First Quarter 2016 Highlights

• On January 4, 2016, Knight issued to 60 Degrees Pharmaceuticals LLC ("60P") US$1.5 million as a second tranche of a secured loan of up to US$4 million. Knight entered into the secured loan agreement with 60P and issued the first tranche of US$0.5 million on December 10, 2015. The loan bears interest at 15.0% per annum and will mature on December 31, 2020.
  
  
• On January 22, 2016, Knight extended secured loans in the aggregate amount of $9 million to INTEGA Skin
  Sciences Inc. ("INTEGA") to support its acquisition of Valeant Groupe Cosméderme Inc. In conjunction with the financing transaction, Knight entered into an exclusive distribution, license and supply agreement to commercialize all INTEGA's current and future products, to the extent that INTEGA possesses the right to commercialize such products, in Israel, Romania, Russia, Sub-Saharan Africa and the Caribbean. Subject to conditions, Knight may also receive rights to certain future products in Canada.
  
  
• On February 1, 2016, Knight entered into an exclusive licensing agreement with Braeburn Pharmaceuticals, Inc. to commercialize PROBUPHINE® in Canada. PROBUPHINE^® is an investigational subdermal implant designed to deliver buprenorphine continuously for six months following a single treatment, promoting patient compliance and retention as well as helping to prevent accidental paediatric exposure.
  
  
• On February 17, 2016, Knight announced that it had agreed to issue a secured loan of up to US$20 million to
  Medimetriks Pharmaceuticals, Inc. ("Medimetriks") to support its acquisition of the exclusive U.S. development and commercialization rights for OPA-15406 from Otsuka Pharmaceutical Co., Ltd. In addition to the secured loan, Knight and Medimetriks have entered into a license and distribution agreement whereby Knight will be Medimetriks' exclusive distribution partner in Canada, Israel, Romania, Russia, Sub-Saharan Africa and the Caribbean for future Medimetriks products. Medimetriks currently does not have rights to any products in these territories.
  
  
• On March 15, 2016, Knight announced that it had terminated its agreement with Paladin Labs (Barbados) Inc., (an affiliate of Endo International plc) related to the distribution and sale of Impavido® in all countries other than the U.S.
  
  
• On March 22, 2016, Knight, through one of its wholly-owned subsidiaries, announced that its U.S. commercialization partner, Profounda Inc. ("Profounda"), has launched Impavido® (miltefosine) in the United
  States. Knight entered into an exclusive distribution agreement with Profounda in September 2015 to commercialize Impavido®, an oral treatment for visceral, mucosal and cutaneous leishmaniasis in the U.S.
  
  
• On March 23, 2016, Knight, through one of its wholly-owned subsidiaries, announced the receipt of a ILS 7.1 million [$2.4 million] dividend from Medison Biotech (1995) Ltd.
  
  

Subsequent to the Quarter Ended March 31, 2016 Highlights

• On April 25, 2016, Knight, through one of its wholly-owned subsidiaries announced that it had entered into an exclusive distribution agreement with EMPA Healthcare LLC ("EMPA") to commercialize Neuragen®, in the United Arab Emirates and Kuwait.
  
  
• On April 25, 2016, Knight, announced that it had received a Notice of Deficiency for its ATryn® New Drug Submission. In its notice, Health Canada requested additional technical information on ATryn® in order to complete its assessment of the product.
  
  

Financial Results Reported in Thousands of Canadian Dollars

For the quarter ended March 31, 2016, the Company reported revenue of $1,068 and net income of $477. As at March 31, 2016, the Company had $426,235 in cash, cash equivalents and marketable securities and 103,478,063 common shares outstanding.

"We are off to a GUD start in 2016 having signed long-term partnerships with Braeburn, EMPA, INTEGA and Medimetriks," said Jonathan Ross Goodman, President and CEO of Knight Therapeutics Inc. "Rest assured that the Knight team is working diligently toward deploying capital in low risk, fair return opportunities."

Conference Call Notice

Knight will host a conference call to discuss its first quarter 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 Friday, June 10, 2016 at 11:59 p.m. ET. To access the replay, please call 1-800-585-8367 or 416-621-4642 and use access code 77734316.

Notice of Second Quarter 2016 Results

Knight expects to release its second quarter 2016 financial results on the morning of Thursday, August 11, 2016. Knight expects to hold a conference call at 8:30 am ET on the morning of the release. All interested parties are cordially invited to attend. Investors and other interested parties may call 1-877-223-4471 (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 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.comor 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, 2015. 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.

INTERIM CONSOLIDATED BALANCE SHEETS

[In thousands of Canadian dollars]

As at
[Unaudited]
	March 31,	December 31,
	2016	2015
	$	$
ASSETS
Current
Cash and cash equivalents	204,785	237,481
Marketable securities	221,450	233,726
Accounts receivable	2,983	2,994
Inventory	1,339	1,460
Other current financial assets	31,222	23,588
Income taxes receivable	197	231
Total current assets	461,976	499,480
Property and equipment	10	18
Intangible assets	6,079	3,320
Other financial assets	88,492	62,616
Investment in associate	79,458	81,027
Deferred income tax assets	2,321	2,527
Total assets	638,336	648,988
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities	1,294	2,416
Income taxes payable	4,218	4,031
Deferred revenue	151	293
Total current liabilities	5,663	6,740
Deferred income tax liabilities	-	186
Total liabilities	5,663	6,926
Shareholders' equity
Share capital	439,176	439,148
Warrants	161	161
Contributed surplus	7,845	6,772
Accumulated other comprehensive income	24,988	35,955
Retained earnings	160,503	160,026
Total shareholders' equity	632,673	642,062
Total liabilities and shareholders' equity	638,336	648,988

INTERIM CONSOLIDATED STATEMENTS OF INCOME

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

For the period ended March 31
[Unaudited]
	2016		2015
	$		$
Revenue	1,068		247
Cost of goods sold	246		86
Gross margin	822		161
Expenses
General and administrative	2,193		2,677
Research and development	283		334
	(1,654	)	(2,850	)
Depreciation of property and equipment	8		8
Amortization of intangible assets	41		21
Interest income	(4,816	)	(3,966	)
Other income	(1,099	)	(441	)
Net gain on financial assets	(1,729	)	(7,529	)
Purchase gain on acquisition	-		(550	)
Share of net income of associate	(854	)	-
Foreign exchange loss (gain)	3,770		(4,410	)
Income before income taxes	3,025		14,017
Income tax expense	2,541		-
Deferred income tax expense	7		201
Net income for the period	477		13,816
Attributable to shareholders of the Company
Basic earnings per share	$0.005		$0.15
Fully diluted earnings per share	$0.005		$0.15
Weighted average number of common shares outstanding
Basic	103,475,043		92,539,843
Diluted	103,688,167		92,820,153

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

[In thousands of Canadian dollars]

For the period ended March 31
[Unaudited]
	2016		2015
	$		$
Net income for the period	477		13,816
Realized gain reclassified to statement of income (net of tax of $64 and $440 as at March 31, 2015)	(410	)	(2,844	)
Other comprehensive income to be reclassified to income in subsequent periods:
Change in fair value of available-for-sale financial instruments (net of tax of $72 and $332 as at March 31, 2015)	421		2,102
Unrealized (loss) gain on translating financial statements of foreign operations	(10,978	)	12,917
Other comprehensive (loss) income for the period	(10,967	)	12,175
Comprehensive (loss) income for the period	(10,490	)	25,991

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

[In thousands of Canadian dollars]

[Unaudited]
					Accumulated
					other			Total
	Share		Contributed		comprehensive		Retained	shareholders'
	capital	Warrants	surplus		income		earnings	equity
	$	$	$		$		$	$
Balance on January 1, 2015	341,065	-	2,100		9,967		125,859	478,991
Net income for the period	-	-	-		-		13,816	13,816
Realized gain reclassified to statement of income, net of tax of $440	-	-	-		(2,844	)	-	(2,844	)
Change in fair value of available-for-sale financial instruments, net of tax of $332	-	-	-		2,102		-	2,102
Unrealized gain on translating financial statements of foreign operations	-	-	-		12,917		-	12,917
Comprehensive Income	-	-	-		22,142		139,675	504,982
Share-based compensation expense	-	-	1,314		-		-	1,314
Issuance of shares upon financing, net of costs and deferred tax of $93	12,510	-	-		-		-	12,510
Exercise of compensation warrants	930	-	(295	)	-		-	635
Issuance of shares under share purchase plan	10	-	-		-		-	10
Balance as at March 31, 2015	354,515	-	3,119		22,142		139,675	519,451

	Share capital	Warrants	Contributed surplus	Accumulated other comprehensive income		Retained earnings	Total shareholders' equity
	$	$	$	$		$	$
Balance on January 1, 2016	439,148	161	6,772	35,955		160,026	642,062
Net income for the period	-	-	-	-		477	477
Realized gain reclassified to statement of income, net of tax of $64	-	-	-	(410	)	-	(410	)
Change in fair value of available-for-sale financial instruments, net of tax of $72	-	-	-	421		-	421
Change in unrealized loss on translating financial statements of foreign operations	-	-	-	(10,978	)	-	(10,978	)
Comprehensive Income	-	-	-	24,988		160,503	631,572
Share-based compensation expense	-	-	1,073	-		-	1,073
Issuance of shares under share purchase plan	28	-	-	-		-	28
Balance as at March 31, 2016	439,176	161	7,845	24,988		160,503	632,673

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

[In thousands of Canadian dollars]

For the period ended March 31
[Unaudited]
	2016		2015
	$		$
OPERATING ACTIVITIES
Net income	477		13,816
Adjustments reconciling net income to operating cash flows:
Deferred tax	7		201
Share-based compensation	1,073		1,313
Depreciation of property and equipment	8		8
Amortization of intangible assets	41		21
Accretion of interest	(1,105	)	(1,318	)
Gain on sale of other financial assets	(656	)	(7,551	)
Unrealized (gain) loss on derivatives	(1,073	)	23
Unrealized foreign exchange gain (loss)	3,760		(4,399	)
Purchase gain on business combination	-		(550	)
Share of net income from associate	(854	)	-
Changes in non-cash working capital related to operations	(969	)	(1,990	)
Deferred revenue	(142	)	(463	)
Cash inflow (outflow) from operating activities	567		(889	)
INVESTING ACTIVITIES
Purchase of marketable securities	(147,399	)	(273,933	)
Purchase of financial assets	(3,633	)	(356	)
Purchase of intangible assets, net	(2,924	)	-
Investment in funds	(5,833	)	(312	)
Issuance of loans receivable	(34,851	)	(8,525	)
Proceeds from repayments of loans receivable	1,018		9,971
Proceeds from disposal of financial assets	3,410		12,227
Proceeds from sale of marketable securities	152,226		267,505
Dividend income from associate	2,423		-
Consideration paid on business combination	-		(1,750	)
Cash (outflow) inflow from investing activities	(35,563	)	4,827
FINANCING ACTIVITIES
Cost related to prior period share issuance	-		(207	)
Proceeds from exercise of compensation warrants	-		635
Proceeds from exercise of an over-allotment option	-		12,424
Share purchase plan	28		10
Cash inflow from financing activities	28		12,862
Increase (decrease) in cash during the period	(34,968	)	16,800
Cash, beginning of period	237,481		283,445
Net foreign exchange difference	2,272		1,048
Cash, end of period	204,785		301,293
The following amounts are classified within operating activities:
Interest received	3,773		2,587
Income taxes paid	2,334		-