MONTREAL, QUÉBEC–(Marketwired – March 16, 2017) – 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, 2016. All dollar amounts are in thousands except for per share amounts. All currencies are Canadian unless otherwise specified.
“In 2016, we continued to make substantial progress towards building Canada’s leading speciality pharmaceutical company by strengthening our team, our product pipeline and our balance sheet,” said Jonathan Ross Goodman, CEO of Knight Therapeutics Inc. “In the year ahead, we look forward to advancing our product pipeline, commercializing Movantik® in Canada and making a difference to the health of patients.”
Financial Results
For the quarter ended December 31, 2016, Knight reported revenues of $1,845, an increase of $1,502 over the same period last year, and net income of $7,939, an increase of $2,385 over the same period last year.
For the year ended December 31, 2016, Knight reported revenues of $5,940, an increase of $4,903 over the same period last year, and net income of $18,560, a decrease of $15,607 over the same period last year.
As at December 31, 2016, the Company had $736,050 in cash, cash equivalents and marketable securities and 142,713,489 common shares outstanding.
2016 Highlights
- Signed license agreements for Netildex™ and Probuphine™ for Canada, and Movantik® for Canada and Israel.
- Terminated the agreement with Paladin Labs Inc. related to the distribution and sale of Impavido® in all countries other than the U.S.
- Launched Impavido® in U.S. through commercialization partner Profounda, Inc.
- Issued secured loans of US$23,000 to Medimetriks Pharmaceuticals Inc. and $6,841 to Crescita Therapeutics Inc. as part of secured lending strategy.
- Appointed Samira Sakhia, former CFO of Paladin Labs Inc., as President of Knight.
- Completed two bought deals at $8 and $10 per common share for gross proceeds of $230,000 and $100,050, respectively, including over-allotment exercise.
Key Subsequent Events
- Submitted Iluvien® for regulatory approval by Health Canada.
- Announced the commercial relaunch of Movantik® in Canada.
- Received a Notice of Deficiency Withdrawal from Heath Canada with respect to its ATryn® regulatory submission.
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 Sunday, April 16, 2017 at 11:59 p.m. ET. To access the replay, please call 1-800-585-8367 or 416-621-4642 and use access code 16647769.
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, 2016. 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, | 2016 | 2015 |
| ASSETS | ||
| Current | ||
| Cash and cash equivalents | 514,942 | 237,481 |
| Marketable securities | 221,108 | 233,726 |
| Trade and other receivables | 6,440 | 2,994 |
| Inventories | 790 | 1,460 |
| Other current financial assets | 51,789 | 23,588 |
| Income taxes receivable | 4,683 | 231 |
| Total current assets | 799,752 | 499,480 |
| Property and equipment | 32 | 18 |
| Intangible assets | 14,153 | 3,320 |
| Other financial assets | 90,643 | 62,616 |
| Investment in associate | 80,113 | 81,027 |
| Deferred income tax assets | 6,077 | 2,527 |
| Total assets | 990,770 | 648,988 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
| Current | ||
| Accounts payable and accrued liabilities | 3,207 | 2,416 |
| Income taxes payable | 5,659 | 4,031 |
| Other balances payable | 537 | – |
| Deferred other income | 355 | 293 |
| Total current liabilities | 9,758 | 6,740 |
| Deferred other income | 417 | – |
| Other balances payable | 877 | – |
| Deferred income tax liabilities | – | 186 |
| Total liabilities | 11,052 | 6,926 |
| Shareholders’ equity | ||
| Share capital | 760,447 | 439,148 |
| Warrants | 785 | 161 |
| Contributed surplus | 9,469 | 6,772 |
| Accumulated other comprehensive income | 30,431 | 35,955 |
| Retained earnings | 178,586 | 160,026 |
| Total shareholders’ equity | 979,718 | 642,062 |
| Total liabilities and shareholders’ equity | 990,770 | 648,988 |
| CONSOLIDATED STATEMENTS OF INCOME | ||||
| [In thousands of Canadian dollars, except for share and per share amounts] | ||||
| 2016 | 2015 | |||
| Revenues | 5,940 | 1,037 | ||
| Cost of goods sold | 1,550 | 428 | ||
| Gross margin | 4,390 | 609 | ||
| Expenses | ||||
| Selling and marketing | 532 | – | ||
| General and administrative | 9,302 | 9,086 | ||
| Research and development | 1,955 | 2,707 | ||
| (7,399 | ) | (11,184 | ) | |
| Depreciation of property and equipment | 18 | 30 | ||
| Amortization of intangible assets | 419 | 94 | ||
| Interest income | (24,414 | ) | (18,632 | ) |
| Other income | (3,894 | ) | (2,860 | ) |
| Net gain on financial assets | (1,659 | ) | (17,347 | ) |
| Purchase gain on business combination | – | (515 | ) | |
| Net loss on settlement of loans receivable | – | 650 | ||
| Share of net income of associate | (2,793 | ) | (1,041 | ) |
| Foreign exchange loss (gain) | 1,451 | (8,579 | ) | |
| Income before income taxes | 23,473 | 37,016 | ||
| Income tax expense | 4,190 | 1,939 | ||
| Deferred income tax expense | 723 | 910 | ||
| Net income for the year | 18,560 | 34,167 | ||
| Basic earnings per share | 0.15 | 0.36 | ||
| Diluted earnings per share | 0.15 | 0.35 | ||
| Basic | 120,723,270 | 96,191,285 | ||
| Diluted | 121,263,522 | 96,532,104 | ||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
| [In thousands of Canadian dollars] | ||||
| 2016 | 2015 | |||
| Net income for the year | 18,560 | 34,167 | ||
| Realized gain on available for sale financial instruments reclassified to statement of income net of tax of $247 (2015: $1,345) | (1,592 | ) | (8,654 | ) |
| Other comprehensive (loss) income to be reclassified to statement of income in subsequent periods: | ||||
| Unrealized gain on available for sale financial instruments net of tax of $245 (2015: $528) | 1,146 | 7,083 | ||
| Unrealized (loss) gain on translation of foreign operations | (5,078 | ) | 27,559 | |
| Other comprehensive (loss) income for the year | (5,524 | ) | 25,988 | |
| Total comprehensive income for the year | 13,036 | 60,155 | ||
| 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 as at January 1, 2015 | 341,065 | – | 2,100 | 9,967 | 125,859 | 478,991 | ||||
| Net income for the year | – | – | – | – | 34,167 | 34,167 | ||||
| Realized gain 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 translation of foreign operations | – | – | – | 27,559 | – | 27,559 | ||||
| Comprehensive income | – | – | – | 25,988 | 34,167 | 60,155 | ||||
| Share-based compensation expense | – | – | 4,421 | – | – | 4,421 | ||||
| Issuance of shares upon financing, net of costs and deferred tax of $2,155 | 14,573 | – | – | – | – | 14,573 | ||||
| Issuance upon investment in associate | 80,684 | – | 1,100 | – | – | 81,784 | ||||
| Issuance due to share-based payments | 332 | – | – | – | – | 332 | ||||
| Exercise of stock options | 1,487 | – | (554 | ) | – | – | 933 | |||
| Issuance of warrants | – | 161 | – | – | – | 161 | ||||
| Exercise of compensation warrants | 930 | – | (295 | ) | – | – | 635 | |||
| Issuance under share purchase plan | 77 | – | – | – | – | 77 | ||||
| Balance as at December 31, 2015 | 439,148 | 161 | 6,772 | 35,955 | 160,026 | 642,062 | ||||
| Balance as at January 1, 2016 | 439,148 | 161 | 6,772 | 35,955 | 160,026 | 642,062 | ||||
| Net income for the year | – | – | – | – | 18,560 | 18,560 | ||||
| Realized gain reclassified to statement of income, net of tax of $247 | – | – | – | (1,592 | ) | – | (1,592 | ) | ||
| Unrealized gain on available for sale financial instruments, net of tax of $245 | – | – | – | 1,146 | – | 1,146 | ||||
| Unrealized loss on translation of foreign operations | – | – | – | (5,078 | ) | – | (5,078 | ) | ||
| Comprehensive (loss) income | – | – | – | (5,524 | ) | 18,560 | 13,036 | |||
| Share-based compensation expense | – | – | 3,640 | – | – | 3,640 | ||||
| Issuance upon bought deals, net of costs and includes deferred tax of $4,465 | 317,616 | – | – | – | – | 317,616 | ||||
| Issuance of shares to associate | 2,073 | – | (943 | ) | – | – | 1,130 | |||
| Issuance upon investment | 1,846 | 624 | 2,470 | |||||||
| Share purchase loans | (350 | ) | – | – | – | – | (350 | ) | ||
| Issuance under share purchase plan | 114 | – | – | – | 114 | |||||
| Balance as at December 31, 2016 | 760,447 | 785 | 9,469 | 30,431 | 178,586 | 979,718 | ||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | |||||
| [In thousands of Canadian dollars] | |||||
| 2016 | 2015 | ||||
| OPERATING ACTIVITIES | |||||
| Net income for the year | 18,560 | 34,167 | |||
| Adjustments reconciling net income to operating cash flows: | |||||
| Deferred tax | 723 | 910 | |||
| Share-based compensation expense | 3,640 | 4,421 | |||
| Depreciation and amortization | 437 | 124 | |||
| Accretion of interest | (6,201 | ) | (6,985 | ) | |
| Other income | (1,274 | ) | – | ||
| Realized gain on financial assets | (2,569 | ) | (15,381 | ) | |
| Unrealized loss (gain) on financial assets | 910 | (1,966 | ) | ||
| Net loss on settlement of loans receivable | – | 535 | |||
| Foreign exchange loss (gain) | 1,451 | (2,068 | ) | ||
| Purchase gain on business combination | – | (515 | ) | ||
| Share of net income from associate | (2,793 | ) | (1,041 | ) | |
| Deferred other income | 479 | (747 | ) | ||
| 13,363 | 11,454 | ||||
| Changes in non-cash working capital related to operations | (3,462 | ) | (3,818 | ) | |
| Dividends from associate | 4,837 | 2,015 | |||
| Cash inflowfrom operating activities | 14,738 | 9,651 | |||
| INVESTING ACTIVITIES | |||||
| Purchase of marketable securities | (535,685 | ) | (583,225 | ) | |
| Purchase of equities | (16,371 | ) | (11,360 | ) | |
| Purchase of property and equipment | (7 | ) | – | ||
| Purchase of intangibles | (9,853 | ) | (1,750 | ) | |
| Investment in funds | (16,503 | ) | (15,694 | ) | |
| Issuance of loans receivable | (43,274 | ) | (40,280 | ) | |
| Investment in associate | – | (217 | ) | ||
| Proceeds from repayments of loans receivable | 11,324 | 40,420 | |||
| Proceeds from sale of marketable securities | 544,812 | 503,935 | |||
| Proceeds from distribution of funds | 4,610 | 19,314 | |||
| Proceeds from disposal of equities | 9,572 | 19,758 | |||
| Proceeds from disposal of derivatives | 2,157 | – | |||
| Cash outflow from investing activities | (49,218 | ) | (69,099 | ) | |
| FINANCING ACTIVITIES | |||||
| Proceeds from share issuance | 313,574 | 12,424 | |||
| Proceeds from exercise of compensation warrants | – | 635 | |||
| Share option plan | – | 933 | |||
| Share purchase plan | 105 | 77 | |||
| Share purchase loans | (350 | ) | – | ||
| Cost related to prior period share issuance | – | (207 | ) | ||
| Cash inflow from financing activities | 313,329 | 13,862 | |||
| Increase (decrease) in cash during the year | 278,849 | (45,586 | ) | ||
| Cash and cash equivalents, beginning of the year | 237,481 | 283,445 | |||
| Net foreign exchange difference | (1,388 | ) | (378 | ) | |
| Cash and cash equivalents, end of the year | 514,942 | 237,481 | |||
| Supplemental cash flow information: | |||||
| Interest received | 15,665 | 10,107 | |||
| Income taxes paid | 7,010 | 1,980 | |||
Jeffrey Kadanoff, P.Eng., MBA
Chief Financial Officer
514-484-GUD1 (4831)
514-481-4116 (FAX)
[email protected]
www.gudknight.com
