Knight Therapeutics Inc. (TSX:GUD) ("Knight"), a leading Canadian
specialty pharmaceutical company, today reported financial results
for its second quarter ended June 30, 2018.
Q2 2018 Highlights
Financials
- Revenues were $2,238, a decrease of $242 or 10% versus prior
period
- Net income was $4,019, an increase of $3,560 or 776% over prior
period
- Cash flows from operations at $4,059, an increase of $688 or
20% over prior period
- Cash, cash equivalents, and marketable securities of $806,746
as at June 30, 2018
Product
- Received regulatory approval from Health Canada for Probuphine™
for the treatment of opioid drug dependence
Strategic Lending and Investments
- Amended loan with 60P and disbursed US$647 out of a commitment
to lend up to an additional US$2,100
- Converted $500 Antibe debenture into 2,489,899 common shares
and sold the shares for proceeds of $1,011
- Received distributions of $1,856 from strategic fund
investments
Key Subsequent Events
- Received notice of reassessment from CRA
- Received $3,188 from Profound representing full loan repayment
and an early payment fee
- Entered into a licensing agreement with TherapeuticsMD, Inc.
(“TherapeuticsMD”) to commercialize two products in Canada and
Israel
- Invested USD$20,000 in common shares of TherapeuticsMD at a
price of US$5.10 per share
- Accepted the resignation of Dr. Sarit Assouline and appointed
Nancy Harrison to the Board of Directors
“I am pleased with our progress at strengthening Knight's
pipeline of innovative pharmaceuticals directed at touching the
lives of patients. Our recent strategic investment and license
agreement with TherapeuticsMD for two late stage, differentiated
women’s health products successfully leverages our strong balance
sheet to help Knight secure innovative pharmaceutical rights," said
Jonathan Ross Goodman, CEO of Knight Therapeutics Inc.
Select Financial Results
|
Q2-18 |
Q2-17 |
Change |
|
|
Change |
|
|
$1 |
|
%2 |
YTD-18 |
YTD-17 |
|
$1 |
|
%2 |
|
|
|
|
|
|
|
|
|
Revenues |
2,238 |
|
2,480 |
|
(242 |
) |
10 |
% |
5,392 |
4,230 |
|
1,162 |
|
27 |
% |
Gross margin |
1,900 |
|
2,008 |
|
(108 |
) |
5 |
% |
4,220 |
3,470 |
|
750 |
|
22 |
% |
Operating expenses |
3,401 |
|
4,246 |
|
845 |
|
20 |
% |
6,774 |
7,493 |
|
719 |
|
10 |
% |
Interest income |
4,746 |
|
5,698 |
|
(952 |
) |
17 |
% |
10,034 |
11,558 |
|
(1,524 |
) |
13 |
% |
Share of net (loss)
income of associate |
(151 |
) |
96 |
|
(247 |
) |
N/A |
352 |
415 |
|
(63 |
) |
15 |
% |
Net income |
4,019 |
|
459 |
|
3,560 |
|
776 |
% |
10,928 |
6,506 |
|
4,422 |
|
68 |
% |
Basic earnings per
share |
0.028 |
|
0.003 |
|
(0.025 |
) |
833 |
% |
0.077 |
0.046 |
|
0.031 |
|
67 |
% |
1 A positive variance represents a
positive impact to net income and a negative variance represents a
negative impact to net income2
Percentage change is presented in absolute values
Revenue: Variance for the
quarter and the six-month period was mainly attributable to the
timing of sales for Impavido® and growth in Movantik® sales.
Gross margin: Change in gross
margin was attributable to revenues variances and product mix.
Operating expenses: The
decrease in Q2-18 was driven by a reduction in general and
administrative expenses mainly related to lower stock-based
compensation expense. For the six-month period, the decrease was
driven by a reduction in general and administrative expenses mainly
related to lower stock-based compensation expense, offset by
commercial activities including the promotion of Movantik®.
Interest income: Interest
income was driven by the sum of interest income and interest
accretion. Interest income (excluding accretion) for the quarter
was $4,746, an increase of 3% or $154 versus the prior quarter
while interest income (excluding accretion) for the six-month
period was $10,034, an increase of 7% or $660 versus the prior
period. The increases are explained by an increase in the average
cash, cash equivalents, and marketable securities balances and an
increase in interest rates, offset by a lower average loan
balance.
Net income: Net income for the
quarter was driven by the above-mentioned items as well as a net
gain on the revaluation of financial assets measured at fair value
through profit or loss of $2,884. Similarly, net income for the
six-month period was impacted by (i) a net gain on revaluation of
financial assets measured at fair value through profit or loss of
$3,425, (ii) other income of $1,388 due to the early repayment of
fees on the Medimetriks loan, and (iii) a foreign exchange gain of
$2,548 from the relative gains on certain U.S. dollar denominated
financial assets as the Canadian dollar weakened.
Product Updates
On April 18, 2018, Probuphine™ was approved by Health Canada for
the treatment of opioid dependence. Probuphine™ is a subdermal
implant designed to deliver buprenorphine continuously for six
months following a single treatment, promoting patient compliance
and retention. Knight expects to launch Probuphine™ by the end of
2018.
On July 31, 2018, Knight entered into an exclusive licensing
agreement for the commercial rights of TX-004HR and TX-001HR in
Canada and Israel. TX-004HR is TherapeuticsMD's FDA-approved
product, marketed as Imvexxy™ (estradiol vaginal inserts) in the
U.S., for the treatment of moderate-to-severe dyspareunia (vaginal
pain associated with sexual activity), a symptom of vulvar and
vaginal atrophy (VVA), due to menopause. TX-001HR is
TherapeuticsMD's investigational bio-identical hormone therapy
combination of estradiol and progesterone in a single, oral softgel
for the treatment of moderate-to-severe vasomotor symptoms due to
menopause. Knight expects to submit both products to Health Canada
for regulatory approval in 2019.
Strategic Lending
Update
On April 24, 2018, Knight amended its loan agreement with 60P
and committed to lend an additional amount of up to US$2,100, at an
interest rate of 15%, to support the regulatory approval and
commercialization of tafenoquine. As consideration for the
amendment, 60P committed to pay Knight an additional US$3,000 plus
annual interest of 9% on April 23, 2023 (“60P Commitment”).
Under the terms of the 60P Commitment, Knight has the right to
convert the 60P Commitment into common shares of 60P at a
pre-determined exercise price at any time prior to the maturity
date. Furthermore, Knight obtained the rights to commercialize
tafenoquine in Latin America.
Corporate Update
Dr. Sarit Assouline resigned from Knight’s Board of Directors
and Nancy Harrison was appointed. “We are grateful to Sarit for her
time on our board and wish her every continued success,” Mr.
Goodman commented, “Nancy’s experience as a life sciences
specialist in the Canadian venture capital industry will be an
asset to Knight and we are fortunate to have her join our
board.”
Nancy Harrison is former Co-founder and President of MSI
Methylation Sciences, a private venture backed development company
with a novel treatment of depression in a Phase II clinical trial.
She is a former Partner and Senior Vice President of Ventures West
Management Inc. Ms. Harrison spent 13 years with Ventures West
leading its life sciences practice in Canada and the U.S. She is
one of the most experienced life sciences investors in the Canadian
venture capital industry and was instrumental in Ventures West’s
involvement in the sector and with companies such as Angiotech
Pharmaceuticals Inc., AnorMed Inc., Salmedix Inc. and Oncogenix
Pharmaceuticals Inc., Celator Pharmaceuticals Inc., and Caprion
BioSciences. During her time with Ventures West, the firm grew from
approximately $80 million to over $750 million. Ms. Harrison has an
undergraduate degree in Engineering from Queen’s University and an
MBA from McGill University.
TherapeuticsMD Transaction
A presentation with additional information about the
TherapeuticsMD transaction can be found on Knight's website
at www.gudknight.com under Presentations and will remain
available for 30 days.
Conference Call
Notice
Knight will host a conference call and audio webcast to discuss
its first quarter results today at 8:30 am ET. Knight cordially
invites all interested parties to participate in this call.
Date: Thursday, August 9,
2018Time: 8:30 a.m. ESTTelephone:
Toll Free 1-877-855-7766 or International 248-847-2346
Webcast:
www.gudknight.com or https://tinyurl.com/y8wmkzkr This is a
listen-only audio webcast. Media Player is required to listen to
the broadcast.Replay: An archived replay will be
available for 30 days at www.gudknight.com
Currency
All dollar amounts are in thousands except for share and per
share amounts. All currencies are Canadian unless otherwise
specified.
About Knight Therapeutics
Inc.
Knight Therapeutics Inc., headquartered in Montreal, Canada, is
a specialty pharmaceutical company focused on acquiring or
in-licensing and commercializing 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.gudknight.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, 2017. 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.
CONTACT INFORMATION:
Knight Therapeutics Inc. Samira Sakhia President and Chief
Financial Officer T: 514-678-8930 F: 514-481-4116
info@gudknight.com www.gudknight.com
INTERIM CONSOLIDATED BALANCE
SHEETS[In thousands of Canadian dollars][Unaudited]
As at |
June 30,2018 |
December 31, 2017 |
ASSETS |
|
|
Current |
|
|
Cash and cash
equivalents |
418,358 |
496,460 |
Marketable
securities |
318,388 |
232,573 |
Trade and other
receivables |
6,298 |
9,176 |
Inventories |
966 |
1,224 |
Other current financial
assets |
25,438 |
58,848 |
Income
taxes receivable |
1,002 |
792 |
Total current assets |
770,450 |
799,073 |
|
|
|
Marketable
securities |
70,000 |
36,000 |
Property and
equipment |
710 |
633 |
Intangible assets |
15,506 |
12,576 |
Other financial
assets |
90,676 |
76,988 |
Investment in
associate |
78,990 |
75,983 |
Deferred
income tax assets |
2,801 |
4,730 |
Total assets |
1,029,133 |
1,005,983 |
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
Current |
|
|
Accounts payable and
accrued liabilities |
4,100 |
5,025 |
Income taxes
payable |
8,911 |
7,599 |
Other balances
payable |
1,418 |
1,354 |
Deferred
other income |
268 |
282 |
Total current liabilities |
14,697 |
14,260 |
|
|
|
Deferred other
income |
42 |
167 |
Other balances
payable |
1,085 |
348 |
Total liabilities |
15,824 |
14,775 |
|
|
|
Shareholders’
equity |
|
|
Share capital |
761,595 |
761,490 |
Warrants |
785 |
785 |
Contributed
surplus |
13,383 |
12,196 |
Accumulated other
comprehensive income |
18,575 |
20,907 |
Retained
earnings |
218,971 |
195,830 |
Total shareholders’ equity |
1,013,309 |
991,208 |
Total liabilities and shareholders’ equity |
1,029,133 |
1,005,983 |
INTERIM CONSOLIDATED STATEMENTS OF
INCOME[In thousands of Canadian dollars, except for share
and per share amounts][Unaudited]
|
Three months ended June 30, |
Six months ended June 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
Revenues |
2,238 |
|
2,480 |
|
5,392 |
|
4,230 |
|
Cost of goods sold |
338 |
|
472 |
|
1,172 |
|
760 |
|
Gross margin |
1,900 |
|
2,008 |
|
4,220 |
|
3,470 |
|
|
|
|
|
|
Expenses |
|
|
|
|
Selling and
marketing |
892 |
|
1,050 |
|
1,681 |
|
1,413 |
|
General and
administrative |
1,937 |
|
2,329 |
|
4,032 |
|
4,797 |
|
Research and development |
572 |
|
867 |
|
1,061 |
|
1,283 |
|
|
(1,501 |
) |
(2,238 |
) |
(2,554 |
) |
(4,023 |
) |
|
|
|
|
|
Depreciation of property and equipment |
19 |
|
— |
|
35 |
|
— |
|
Amortization of intangible assets |
445 |
|
320 |
|
886 |
|
646 |
|
Interest
income |
(4,746 |
) |
(5,698 |
) |
(10,034 |
) |
(11,558 |
) |
Other
income |
(37 |
) |
(334 |
) |
(1,388 |
) |
(642 |
) |
Net loss
(gain) on financial assets |
— |
|
1,056 |
|
— |
|
(2,319 |
) |
Net gain on
financial assets measured at fair value through profit or loss |
(2,884 |
) |
— |
|
(3,425 |
) |
— |
|
Share of
net loss (income) of associate |
151 |
|
(96 |
) |
(352 |
) |
(415 |
) |
Foreign
exchange loss (gain) |
49 |
|
1,306 |
|
(2,548 |
) |
1,549 |
|
Income before income taxes |
5,502 |
|
1,208 |
|
14,272 |
|
8,716 |
|
|
|
|
|
|
Income tax expense |
|
|
|
|
Current |
911 |
|
628 |
|
1,552 |
|
1,108 |
|
Deferred |
572 |
|
121 |
|
1,792 |
|
1,102 |
|
Net income for the period |
4,019 |
|
459 |
|
10,928 |
|
6,506 |
|
|
|
|
|
|
|
|
Basic
earnings per share |
0.028 |
|
0.003 |
|
0.077 |
|
0.046 |
|
Diluted
earnings per share |
0.028 |
|
0.003 |
|
0.076 |
|
0.045 |
|
|
|
|
|
|
Basic |
142,819,960 |
|
142,760,357 |
|
142,816,677 |
|
142,740,562 |
|
Diluted |
143,270,324 |
|
143,557,171 |
|
143,247,377 |
|
143,177,337 |
|
INTERIM CONSOLIDATED STATEMENT OF CASH
FLOWS[In thousands of Canadian dollars][Unaudited]
|
Three months ended June 30, |
Six months ended June 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
OPERATING ACTIVITIES |
|
|
|
|
Net
income for the period |
4,019 |
|
459 |
|
10,928 |
|
6,506 |
|
Adjustments
reconciling net income to operating cash flows: |
|
|
|
|
Deferred tax |
572 |
|
121 |
|
1,792 |
|
1,102 |
|
Share-based compensation expense |
642 |
|
1,018 |
|
1,187 |
|
1,864 |
|
Depreciation and amortization |
464 |
|
320 |
|
921 |
|
646 |
|
Accretion of interest |
— |
|
(1,106 |
) |
— |
|
(2,184 |
) |
Net (gain) loss on financial assets |
(2,884 |
) |
1,056 |
|
(3,425 |
) |
(2,319 |
) |
Foreign exchange loss (gain) |
49 |
|
1,344 |
|
(2,548 |
) |
1,549 |
|
Share of net loss (income) of associate |
151 |
|
(96 |
) |
(352 |
) |
(415 |
) |
Other income |
— |
|
155 |
|
— |
|
— |
|
Deferred other income |
(45 |
) |
(84 |
) |
(139 |
) |
(231 |
) |
|
2,968 |
|
3,187 |
|
8,364 |
|
6,518 |
|
Changes in
non-cash working capital related to operations |
1,091 |
|
(2,341 |
) |
2,559 |
|
(1,436 |
) |
Dividends from associate |
— |
|
2,525 |
|
— |
|
2,525 |
|
Cash inflow from operating
activities |
4,059 |
|
3,371 |
|
10,923 |
|
7,607 |
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
Purchase of
marketable securities |
(232,762 |
) |
(98,182 |
) |
(283,517 |
) |
(142,473 |
) |
Purchase of
intangible |
— |
|
— |
|
(3,000 |
) |
— |
|
Purchase of
property and equipment |
(44 |
) |
— |
|
(86 |
) |
— |
|
Issuance of
loans receivables |
(831 |
) |
(1,807 |
) |
(831 |
) |
(1,807 |
) |
Purchase of
equities |
(310 |
) |
(120 |
) |
(710 |
) |
(2,939 |
) |
Investment
in funds |
(9,925 |
) |
(6,190 |
) |
(14,202 |
) |
(10,331 |
) |
Proceeds on
maturity of marketable securities |
64,091 |
|
106,073 |
|
165,409 |
|
126,559 |
|
Proceeds
from repayments of loans receivable |
1,594 |
|
2,266 |
|
35,034 |
|
30,324 |
|
Proceeds
from disposal of equities |
1,015 |
|
2,806 |
|
1,015 |
|
3,515 |
|
Proceeds
from distribution of funds |
5,756 |
|
1,222 |
|
6,099 |
|
3,376 |
|
Cash (outflow) inflow from investing
activities |
(171,416 |
) |
6,068 |
|
(94,789 |
) |
6,224 |
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
Proceeds
from exercise of stock options |
— |
|
— |
|
— |
|
345 |
|
Proceeds
from contributions to share purchase plan |
42 |
|
50 |
|
91 |
|
93 |
|
Cash inflow from financing
activities |
42 |
|
50 |
|
91 |
|
438 |
|
|
|
|
|
|
(Decrease) Increase in cash during the period |
(167,315 |
) |
9,489 |
|
(83,775 |
) |
14,269 |
|
Cash and
cash equivalents, beginning of the period |
583,408 |
|
519,522 |
|
496,460 |
|
514,942 |
|
Net foreign exchange difference |
2,265 |
|
(1,132 |
) |
5,673 |
|
(1,332 |
) |
Cash and cash equivalents, end of the
period |
418,358 |
|
527,879 |
|
418,358 |
|
527,879 |
|
|
|
|
|
|
Cash and cash
equivalents |
418,358 |
|
527,879 |
|
|
|
Short-term
marketable securities |
318,388 |
|
233,282 |
|
|
|
Long-term marketable securities |
70,000 |
|
— |
|
|
|
|
806,746 |
|
761,161 |
|
|
|
Knight Therapeutics (TSX:GUD)
Historical Stock Chart
From Apr 2024 to May 2024
Knight Therapeutics (TSX:GUD)
Historical Stock Chart
From May 2023 to May 2024