MONTREAL, CANADA--(Marketwired - March 24, 2016) - 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, 2015.
2015 Highlights
- Knight secured the rights to over 20 innovative pharmaceutical products, consumer health products and medical devices, in various stages of development, for Canada and select international markets.
- Knight provided over $40 million of secured loans in 9 separate transactions with the objective of deploying capital in low risk, fair return opportunities while helping to secure Canadian and select international product rights.
- Knight committed to invest over $12 million into three life sciences funds which have the ability to leverage their broad life sciences industry experience and existing relationships with key life science companies to help secure Canadian and select international product rights. To date, Knight has invested approximately $125 million into eight proven life science funds.
- Knight sold the U.S. rights to Neuragen® for minimum aggregate consideration of $1.5 million [US$1.2 million] and selected Profounda Inc. ("Profounda") as its commercialization partner in the U.S. for Impavido®(miltefosine).
- Knight expanded internationally into Israel through a strategic partnership via an equity swap with Medison Biotech (1995) Ltd., Israel's fourth largest specialty pharma company by revenue.
- Knight added two consumer health products with sales in Canada: Neuragen® and Flat Tummy Tea.
Subsequent to the Year Ended December 31, 2015 Highlights
- Knight issued secured loans to INTEGA Skin Sciences Inc. and Medimetriks Pharmaceuticals, Inc.
- Knight entered into an exclusive licensing agreement with Braeburn Pharmaceuticals, Inc. to commercialize PROBUPHINE® in Canada, and announced that it will distribute and sell Impavido® in all countries other than the U.S. following the termination of its out-license agreement with Endo International plc.
Financial Results Reported in Thousands of Canadian Dollars
For the quarter ended December 31, 2015, the Company reported revenue of $343 and net income of $5,554. For the year ended December 31, 2015, the Company reported revenue of $1,037 and net income of $34,167. As at December 31, 2015, the Company had $471,207 in cash, cash equivalents and marketable securities and 103,474,367 common shares outstanding.
"In 2015, we deployed or committed over $70 million in low risk, fair return opportunities while making substantial progress towards selling innovative products that touch the lives of patients. To that end, Knight now has secured the rights to a basket of over 20 products in various stages of development for Canada," said Jonathan Ross Goodman, President and CEO of Knight Therapeutics Inc. "In the year ahead, we will continue to focus on acquiring new product rights that improve the health of Canadians and work toward bringing our pipeline to market."
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 Thursday, April 21, 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 79492415.
Notice of First Quarter 2016 Results
Knight expects to release its first quarter 2016 financial results on the morning of Tuesday, May 10, 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.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, 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.
CONSOLIDATED BALANCE SHEETS
[In thousands of Canadian dollars]
As at December 31
| 2015 | 2014 | |
| $ | $ | |
| ASSETS | ||
| Current | ||
| Cash and cash equivalents | 237,481 | 283,445 |
| Marketable securities | 233,726 | 133,412 |
| Accounts receivable | 2,994 | 1,024 |
| Inventory | 1,460 | 602 |
| Other current financial assets | 23,588 | 10,090 |
| Income taxes receivable | 231 | - |
| Total current assets | 499,480 | 428,573 |
| Property and equipment | 18 | 48 |
| Intangible assets | 3,320 | 846 |
| Other financial assets | 62,616 | 57,147 |
| Investment in associate | 81,027 | - |
| Deferred income tax assets | 2,527 | - |
| Total assets | 648,988 | 486,614 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current | ||
| Accounts payable and accrued liabilities | 2,416 | 2,090 |
| Income taxes payable | 4,031 | 4,493 |
| Deferred revenue | 293 | 1,040 |
| Total current liabilities | 6,740 | 7,623 |
| Deferred income tax liabilities | 186 | - |
| Total liabilities | 6,926 | 7,623 |
| Shareholders' equity | ||
| Share capital | 439,148 | 341,065 |
| Warrants | 161 | - |
| Contributed surplus | 6,772 | 2,100 |
| Accumulated other comprehensive income | 35,955 | 9,967 |
| Retained earnings | 160,026 | 125,859 |
| Total shareholders' equity | 642,062 | 478,991 |
| 648,988 | 486,614 |
Knight Therapeutics Inc.
CONSOLIDATED STATEMENTS OF INCOME
[In thousands of Canadian dollars, except for share and per share amounts]
Year ended December 31
| 2015 | 2014 | |||
| $ | $ | |||
| Revenue | 1,037 | 365 | ||
| Cost of goods sold | 428 | - | ||
| Gross margin | 609 | 365 | ||
| Expenses | ||||
| General and administrative | 9,086 | 4,283 | ||
| Research and development | 2,707 | 1,029 | ||
| (11,184 | ) | (4,947 | ) | |
| Depreciation of property and equipment | 30 | 22 | ||
| Amortization of intangible assets | 94 | 63 | ||
| Interest expense | - | 23 | ||
| Interest income | (18,632 | ) | (3,900 | ) |
| Other income | (2,860 | ) | (435 | ) |
| Net gain on financial assets | (17,347 | ) | (16 | ) |
| Gain on sale of intangible asset | - | (129,371 | ) | |
| Purchase gain on business combination | (515 | ) | - | |
| Net loss on settlement of loans receivable | 650 | - | ||
| Foreign exchange gain | (8,579 | ) | (2,387 | ) |
| Share of net income of associate | (1,041 | ) | - | |
| Income before income taxes | 37,016 | 131,054 | ||
| Income tax expense | 1,939 | 4,423 | ||
| Deferred income tax expense | 910 | 772 | ||
| Net income for the year | 34,167 | 125,859 | ||
| Attributable to shareholders of the Company | ||||
| Basic earnings per share | $0.36 | $2.20 | ||
| Fully diluted earnings per share | $0.35 | $2.20 | ||
| Weighted average number of common shares outstanding | ||||
| Basic | 96,191,285 | 57,248,473 | ||
| Diluted | 96,532,104 | 57,295,716 |
Knight Therapeutics Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
[In thousands of Canadian dollars]
Year ended December 31
| 2015 | 2014 | ||
| $ | $ | ||
| Net income for the year | 34,167 | 125,859 | |
| Realized gain on available-for-sale financial instruments reclassified to statement of income (net of tax of $1,345 (2014 -$nil)) | (8,654 | ) | - |
| Other comprehensive income to be reclassified to income in subsequent periods: | |||
| Unrealized gain on available-for-sale financial instruments (net of tax of $528 (2014 - $1,101)) | 7,083 | 6,768 | |
| Unrealized gain on translating financial statements of foreign operations | 27,559 | 3,199 | |
| Other comprehensive income for the year | 25,988 | 9,967 | |
| Comprehensive income for the year | 60,155 | 135,826 |
Knight Therapeutics Inc.
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 on January 1, 2014 | - | - | - | - | - | - | ||||
| Net income for the year | - | - | - | - | 125,859 | 125,859 | ||||
| Unrealized gain on available-for-sale financial instruments, net of tax of $1,101 | - | - | - | 6,768 | - | 6,768 | ||||
| Unrealized gain on translating financial statements of foreign operations | - | - | - | 3,199 | - | 3,199 | ||||
| Comprehensive Income | - | - | - | 9,967 | 125,859 | 135,826 | ||||
| Share-based compensation expense | - | - | 1,805 | - | - | 1,805 | ||||
| Issuance of common shares as part of Business Separation Agreement | 11,909 | - | - | - | - | 11,909 | ||||
| Issuance of warrants, net of costs and deferred tax | - | 245,735 | 492 | - | - | 246,227 | ||||
| Deemed exercise of Special Warrants into common shares | 245,735 | (245,735 | ) | - | - | - | - | |||
| Issuance of shares upon financing, net of costs and deferred tax | 83,072 | - | - | - | - | 83,072 | ||||
| Exercise of compensation warrants | 620 | - | (197 | ) | - | - | 423 | |||
| Issuance of shares for acquisition of product rights | 294 | - | - | - | - | 294 | ||||
| Issuance of shares under share purchase plan | 30 | - | - | - | - | 30 | ||||
| Share purchase loans | (595 | ) | - | - | - | - | (595 | ) | ||
| Balance as at December 31, 2014 | 341,065 | - | 2,100 | 9,967 | 125,859 | 478, 991 | ||||
| Share capital |
Warrants | Contributed surplus |
Accumulated other comprehensive income |
Retained earnings |
Total shareholders' equity |
||||
| $ | $ | $ | $ | $ | $ | ||||
| Balance on January 1, 2015 | 341,065 | - | 2,100 | 9,967 | 125,859 | 478,991 | |||
| Net income for the year | - | - | - | - | 34,167 | 34,167 | |||
| Realized gain on available-for-sale financial instruments 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 translating financial statements of foreign operations | - | - | - | 27,559 | - | 27,559 | |||
| Comprehensive Income | - | - | - | 25,988 | 34,167 | 34,646 | |||
| Share-based compensation expense | - | - | 4,421 | - | - | 4,421 | |||
| Issuance of shares upon financing, net of costs and includes deferred tax of $2,155 | 14,573 | - | - | - | - | 14,573 | |||
| Issuance of shares and options upon investment in associate | 80,684 | - | 1,100 | - | - | 81,784 | |||
| 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 due to share-based payments | 332 | - | - | - | - | 332 | |||
| Issuance of shares under share purchase plan | 77 | - | - | - | - | 77 | |||
| Balance as at December 31, 2015 | 439,148 | 161 | 6,772 | 35,955 | 160,026 | 642,062 |
Knight Therapeutics Inc.
CONSOLIDATED STATEMENT OF CASH FLOWS
[In thousands of Canadian dollars]
Year ended December 31
| 2015 | 2014 | |||
| $ | $ | |||
| OPERATING ACTIVITIES | ||||
| Net income | 34,167 | 125,859 | ||
| Adjustments reconciling net income to operating cash flows: | ||||
| Deferred tax | 910 | 772 | ||
| Share-based compensation | 4,421 | 1,805 | ||
| Acquisition of product rights | - | 294 | ||
| Depreciation of property, plant and equipment | 30 | 22 | ||
| Amortization of intangible assets | 94 | 63 | ||
| Accretion of interest | (6,985 | ) | (349 | ) |
| Net loss on settlement of loans receivable | 535 | - | ||
| Gain on sale of other financial assets | (15,381 | ) | (32 | ) |
| Gain on sale of intangible asset | - | (129,371 | ) | |
| Unrealized (gain) loss on derivatives | (1,966 | ) | 16 | |
| Unrealized foreign exchange gain | (2,068 | ) | (2,410 | ) |
| Purchase gain on business combination | (515 | ) | - | |
| Other income | - | (424 | ) | |
| Net income from associate | (1,041 | ) | - | |
| Changes in non-cash working capital related to operations | (3,818 | ) | 4,510 | |
| Deferred revenue | (747 | ) | 48 | |
| Cash inflow from operating activities | 7,636 | 803 | ||
| INVESTING ACTIVITIES | ||||
| Purchase of marketable securities | (583,225 | ) | (133,411 | ) |
| Purchase of financial assets | (11,360 | ) | (2,239 | ) |
| Purchase of intangible assets | (1,750 | ) | - | |
| Purchase of property and equipment | - | (70 | ) | |
| Investment in funds | (15,694 | ) | (14,158 | ) |
| Investment in associate net of costs | (217 | ) | - | |
| Issuance of loans receivable | (40,280 | ) | (38,941 | ) |
| Proceeds from repayments of loans receivable | 40,420 | - | ||
| Proceeds from disposal of financial assets | 19,758 | 170 | ||
| Proceeds from sale of marketable securities | 503,935 | - | ||
| Proceeds from sale of investment in funds | 19,314 | - | ||
| Proceeds from sale of intangible asset, net | - | 139,564 | ||
| Dividend income from associate | 2,015 | - | ||
| Cash outflow from investing activities | (67,084 | ) | (49,085 | ) |
| FINANCING ACTIVITIES | ||||
| Net proceeds from share issuance | 12,424 | 83,036 | ||
| Net proceeds from warrants issuance | - | 244,827 | ||
| Cost related to prior period share issuance | (207 | ) | - | |
| Proceeds from exercise of compensation warrants | 635 | 423 | ||
| Share option plan | 933 | - | ||
| Share purchase plan | 77 | 30 | ||
| Share purchase loans | - | (595 | ) | |
| Net impact of a business separation agreement | - | 1,000 | ||
| Loan from related party | - | 2,500 | ||
| Repayment of loan from related party | - | (2,500 | ) | |
| Cash inflow from financing activities | 13,862 | 328,721 | ||
| Increase (decrease) in cash during the year | (45,586 | ) | 280,439 | |
| Cash, beginning of year | 283,445 | - | ||
| Net foreign exchange difference | (378 | ) | 3,006 | |
| Cash, end of year | 237,481 | 283,445 |
The following amounts are classified within operating activities:
| Interest received | 10,107 | 2,920 |
| Interest paid | - | 23 |
| Income taxes paid | 1,980 | - |
Contact Information:
Jeffrey Kadanoff, P.Eng., MBA
Chief Financial Officer
514-484-GUD1 (4831)
514-481-4116 (FAX)
info@gud-knight.com
www.gud-knight.com