Knight Reports Third Quarter 2014 Results

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