ISS Notes "Stark" Underperformance, Recommends
Election of New Independent Directors and for Knight Shareholders
to Vote on the GOLD Proxy Card
Knight's Third Largest Shareholder Publicly
States its Support for All Medison Director Nominees
Medison issues new profile videos of its director
nominees at www.NewDayForKnight.com
PETACH TIKVA, Israel,
April 25, 2019 /CNW/ - Medison
Biotech (1995) Ltd. ("Medison"), which together with its
affiliates owns more than 10.4 million shares or 7.3% of Knight
Therapeutics, Inc. (TSX:GUD) ("Knight" or the
"Company"), today announced that Institutional Shareholder
Services ("ISS"), a leading independent proxy advisory firm,
has noted the "stark" underperformance of the Company and the need
for change to the Knight Board of Directors. ISS recommends
that shareholders vote for change by using the GOLD proxy
card. In its reports, ISS recommends Knight shareholders vote
FOR the election of Medison nominees Elaine
Campbell and Christophe Robert
Jean.
Medison agrees that significant change at the Board of Knight is
needed to ensure that conflicts are removed, and skilled directors
are put in place in order to build a sustainable pharma business
and long-term value for its shareholders. Medison is grateful
for the publicly expressed support of Knight's third largest
shareholder, Cambridge Global Asset Management, which has indicated
that it intends to vote for all of Medison's director nominees.
"We appreciate the recommendation by ISS that change is needed
at Knight," said Meir Jakobsohn, CEO of Medison, Knight's second
largest shareholder. "Given the acknowledged conflicts
between the CEO, the current Board and the Goodman family, in
addition to the recognized underperformance of the company, we urge
shareholders to support real change by voting FOR all of the
Medison nominees on the GOLD proxy card. Without real change,
there can be little hope that Knight will ever be worth more than
the cash and financial assets on its balance sheet."
In its report ISS stated*:
- "… it appears that the company would benefit from the election
of independent directors with relevant operating experience in the
pharmaceutical industry. Such a reconstituted board might be better
able to strike the right balance from a capital allocation
perspective, by not being overly risk averse (a factor possibly
contributing to the company's declining share price) and not
exposing the company to unnecessary risks…"
- "It appears that a more independent and less conflicted board
may be needed for the company to adjust its course, without
exposing itself to unnecessary risks."
- "Knight underperformed the peer median, the industry benchmark,
and the broader index over the one- and three- year periods. The
underperformance is particularly stark over the three-year period.
Knight also significantly underperformed the peer median since its
IPO."
- "… it appears the market currently does not price in any
premium for the company's business prospects and ascribes a low
probability to above market returns on the company's cash."
- "Over the past two years, however, the company has failed to
significantly increase the size of its total assets. The company
has stopped raising additional funds, while the returns from
ongoing investments have been modest, which could be a reflection
of the company's overly cautious investment approach and risk
aversion."
- "Knight's board independence appears to be significantly below
most other S&P/TSX Composite Index constituents."
- "Shareholders may also be concerned with Goodman's connection
to Pharmascience, which was founded by his father, is currently run
by his brother, and appears to be in competition with Knight.
Goodman and his three siblings each hold 25 percent of
Pharmascience through the Goodman family office."
- "Some of Knight's independent directors also appear to have
longstanding relationships with the CEO. James Gale, the company's Chairman since 2014,
also served on Paladin's board from 2008 to 2014, and is the
founding partner of Signet Healthcare Partners ('Signet'). Through
Signet, Gale appears to have a significant business relationship
with the Goodman family. Robert
Lande and Nancy Harrison also
appear to have longstanding relationships with Goodman."
- "The dissident has highlighted legitimate concerns around the
company's strategy and its execution – issues that have contributed
to a lagging share price performance over the past two years. The
dissident campaign has also raised several questions regarding the
structure of the current board, which, at the very least, seems to
fall short of the broader Canadian market with respect to overall
independence."
On April 18, 2019, Bloomberg
published the following regarding Cambridge Global Asset
Management's intention to vote for all of the Medison director
nominees*:
- "One of the largest investors in Knight Therapeutics Inc. has
thrown its support behind a push for change at the Canadian
pharmaceutical company. Cambridge Global Asset Management said it
supports a slate of directors put forth by Meir Jakobsohn, who has
been on Knight's board since 2015. The investment firm, which is a
subsidiary of CI Investments Inc., said it would also like to see a
'significant' portion of its cash balance returned to shareholders.
It owns a 6.1 percent stake in the company and is its third-largest
holder, according to Bloomberg data."
- "'We would prefer to see a substantial portion of the cash
returned than a value-destroying transaction, which is what we fear
with the current team and their strategy,' Greg Dean, portfolio manager at Cambridge
Global, said in an email. 'Knight's management team has been
unwilling to engage us in thoughtful dialogue regarding their
capital allocation decision-making,' he added."
- "While Goodman's track record of success and leadership were
reasons behind the Cambridge stake
in Knight, 'he must hold himself accountable and acknowledge the
current strategy is not what shareholders trusted him to execute,'
Dean said. Goodman, who has a more than 15 percent stake in the
company, 'deserves to have a say in how the business is run but
this is not his company.'"
Medison encourages shareholders to view new profiles of its
director nominees and read its Information Circular at
www.NewDayForKnight.com for the complete, truthful story about
Knight's failure to create value for shareholders, Medison's highly
qualified and independent nominees, and the best way forward for
Knight and its shareholders.
TIME IS OF THE ESSENCE
VOTE ONLY GOLD TODAY
If you have any questions and/or need assistance completing your
GOLD form of proxy or VIF, please call Shorecrest at 1-888-637-5789
(toll-free) or 647-931-7454 (collect calls accepted), or e-mail
contact@shorecrestgroup.com.
*Permission to use quotations neither sought nor obtained.
About Medison
Medison is one of the world's largest commercial partners of
leading global biotech companies. Backed by three generations of
experience in the healthcare industry since 1937, Medison is
uniquely qualified to provide the complete spectrum of integrated
services for international companies looking to enter or expand
their presence in Israeli and selected ROW markets. Over the years,
Medison has become the partner of choice for biotech companies that
produce highly innovative, cutting edge therapeutics for
commercialization in the Israeli market and is currently the second
largest pharmaceutical company in Israel, with over CAD
250 million in revenues annually and over 270
employees. Medison runs a corporate venture arm with a
dedicated research and evaluation team boasting deep scientific and
commercial backgrounds. Medison also operates a scouting program to
cater to its partners and is an active investor in life science
projects around drug development and digital health.
Additional information can be found
at www.medison.co.il.
Forward Looking Statement
This news release contains forward-looking statements and
forward-looking information within the meaning of applicable
securities laws, including, without limitation, Medison's and
Knight's respective priorities, plans and strategies. All
statements and information, other than statements of historical
fact, included herein are forward-looking statements, including,
without limitation, statements regarding activities, events or
developments that Medison expects or anticipates may occur in the
future. These forward-looking statements can be identified by the
use of forward-looking words such as "may", "will", "expect",
"intend", "plan", "estimate", "anticipate", "believe" or "continue"
or similar words and expressions or the negative thereof. There can
be no assurance that the plans, intentions or expectations upon
which these forward-looking statements are based will occur or,
even if they do occur, will result in the performance, events or
results expected. We caution readers not to place undue reliance on
forward-looking statements contained herein, which are not a
guarantee of performance, events or results and are subject to a
number of risks, uncertainties and other factors that could cause
actual performance, events or results to differ materially from
those expressed or implied by such forward-looking statements.
These factors include: changes in Knight's strategies, plans or
prospects; general economic, industry, business, regulatory and
market conditions; actions of Knight and its competitors;
conditions in the pharmaceutical industry; risks relating to
government regulation and changes thereto, including in respect of
the regulations concerning board composition, proxy solicitation
and shareholder meetings; the state of the economy including
general economic conditions globally and economic conditions in the
jurisdictions in which Knight operates; the unpredictability and
volatility of Knight's share price; and dilution and future sales
of securities of the Company. These factors should not be construed
as exhaustive. Certain forward-looking statements contained herein
may be considered to be future-oriented financial information or a
financial outlook for the purposes of applicable Canadian
securities laws. Future oriented financial information and
financial outlook contained herein about prospective financial
performance, financial position or cash flows are based on
assumptions about future events, including economic conditions and
proposed courses of action, based on the applicable management
team's assessment of the relevant information available to them at
the applicable time, and to become available in the future. In
particular, the information contains projected operational
information for future periods which are based on a number of
material assumptions and factors. The actual results of the
applicable operations for any period could vary from the amounts
set forth in these projections, and such variations may be
material. Further, there is no assurance or guarantee with respect
to the prices at which any securities of Knight will trade, and
such securities may not trade at prices that may be implied herein.
See above for a discussion of the risks that could cause actual
results to vary from such forward-looking statements. Readers are
cautioned that all forward-looking statements involve known and
unknown risks and uncertainties, including those risks and
uncertainties detailed in the continuous disclosure and other
filings of Knight, copies of which are available on the System for
Electronic Document Analysis ("SEDAR") at www.sedar.com. We urge
you to carefully consider those risks and uncertainties. The
forward-looking statements contained herein are expressly qualified
in their entirety by this cautionary statement. Unless expressly
stated otherwise, the forward-looking statements included herein
are made as of the date of this news release and Medison disclaims
any obligation to publicly update such forward-looking statements,
except as required by applicable law.
SOURCE Medison Biotech Ltd.