Knight Therapeutics Inc. (TSX: GUD) ("Knight" or “the Company”), a
leading Pan-American (ex-US) specialty pharmaceutical company,
today reported financial results for its fourth quarter and year
ended December 31, 2021. All currency amounts are in thousands
except for share and per share amounts. All currencies are Canadian
unless otherwise specified.
2021 Highlights
Financials
- Revenues were $243,478, an increase
of $43,959 or 22% over prior year.
- Gross margin of $115,412 or 47%
compared to $81,690 or 41% in prior year.
- Adjusted EBITDA1 was $38,005, an
increase of $21,168 or 126% over prior year.
- Net gain on financial assets
measured at fair value through profit or loss of $18,944.
- Net income was $15,675, compared to
net income of $31,760 in prior year.
- Cash inflow from operations was
$44,618, compared to a cash outflow from operations of $12,205 in
prior year.
Corporate Developments
- Purchased 12,321,864 common shares
through Knight’s Normal Course Issuer Bid ("NCIB") at an average
price of $5.23 for an aggregate cash consideration of $64,415.
- Performed leadership change with
Samira Sakhia assuming role of CEO and Jonathan Goodman assuming
role of Executive Chairman effective September 1, 2021.
- Promoted Amal Khouri to Chief
Business Officer.
- Hired Jeff Martens as Global VP
Commercial, Monica Percario as Global VP Scientific Affairs,
Daniela Marino as Global VP Legal and Compliance and Susan Emblem
as Global VP Human Resources.
- Shareholders re-elected James C.
Gale, Jonathan Ross Goodman, Samira Sakhia, Robert N. Lande,
Michael J. Tremblay, Nicolás Sujoy and Janice Murray on the Board
of Directors.
Products
- Acquired, in May 2021, the
exclusive rights to manufacture, market and sell Exelon®
(rivastigmine) in Canada and Latin America for an upfront and
milestone payment of $217,331 [US$180,000].
- Entered into exclusive supply and
distribution agreement with Incyte for tafasitamab and pemigatinib
for Latin America.
- Launched Ibsrela® (tenapanor) in
Canada for the treatment of irritable bowel syndrome with
constipation ("IBS-C").
- Obtained regulatory approval for
NERLYNX® (neratinib) to treat subset of HER2-positive metastatic
breast cancer patients in Canada.
- Obtained regulatory approval for
Halaven® (eribulin mesylate) injection to treat locally advanced or
metastatic breast cancer in Colombia and to treat advanced or
metastatic liposarcoma.
- Obtained regulatory approval for
Lenvima® (lenvatinib) to treat radioiodine refractory
differentiated thyroid cancer (“RR-DTC”) and unresectable
hepatocellular carcinoma (“u-HCC”) in Colombia.
- Obtained regulatory approval of
Rembre® (dasatinib) to treat chronic myeloid leukemia in
Colombia.
1 Adjusted EBITDA is a non-GAPP measure, refer
to the definitions below for additional details.Strategic
Investments
- Disposed of 315,600 common shares
of Medexus for total proceeds of $2,624 realizing a gain of
$1,639.
- Received distributions of $30,931
from strategic fund investments, including $10,906 (US$8,774) final
distribution from the liquidation of NEMO II fund, and realized a
gain of $16,644.
Subsequent Events
- Launched Lenvima® and Rembre® in
Colombia in February 2022.
- Launched Halaven® in Colombia in
March 2022.
- Hired Leopoldo Bosano as VP
Manufacturing and Operations in March 2022.
- Purchased an additional 933,715
common shares through NCIB for an aggregate cash consideration of
$4,997.
“I am excited to announce that 2021 was a
record-setting year in Knight’s history, despite the ongoing
challenges posed by the pandemic. During the year, we made
significant strides towards completing the integration of the Grupo
Biotoscana acquisition, all while strengthening the team and
processes and driving strong performance.
As part of our integration activities, we
completed the implementation of several key systems including, a
global CRM, HR IS and a global pharmacovigilance system. In
addition, we implemented ERP for 14 legal entities in 6 countries.
We further strengthened Knight's management team with the addition
of a Global VP Commercial, a Global VP Scientific Affairs, a Global
VP Legal and Compliance and a Global VP Human Resources and most
recently added a VP Manufacturing and Operations, to continue
delivering on growth and operational excellence. Our business
development team closed the acquisition of Exelon® and entered into
an exclusive supply and distribution agreement with Incyte. Our
regulatory team advanced our portfolio with the approval of
Halaven®, Lenvima® and Rembre® in Colombia as well as the approval
of Nerlynx®, while our commercial team continued to deliver on
strong growth of our key brands.
It is thanks to the hard work of our employees
that we achieved unprecedented results in 2021 and we are entering
2022 with a stronger platform that is well equipped to continue
delivering on further growth and success.” said Samira Sakhia,
President and Chief Executive Officer of Knight Therapeutics
Inc.
SELECT FINANCIAL RESULTS REPORTED UNDER
IFRS[In thousands of Canadian dollars]
|
|
|
Change |
|
|
Change |
|
Q4-21 |
|
Q4-20 |
|
$1 |
|
%2 |
|
YTD-21 |
YTD-20 |
$1 |
|
%2 |
|
|
|
|
|
|
|
|
|
|
Revenues |
58,273 |
|
55,191 |
|
3,082 |
|
6 |
% |
243,478 |
199,519 |
43,959 |
|
22 |
% |
Gross margin |
28,195 |
|
20,060 |
|
8,135 |
|
41 |
% |
115,412 |
81,690 |
33,722 |
|
41 |
% |
Operating expenses4 |
42,829 |
|
32,413 |
|
(10,416 |
) |
32 |
% |
128,244 |
112,346 |
(15,898 |
) |
14 |
% |
Net (loss) income |
(8,301 |
) |
8,233 |
|
(16,534 |
) |
201 |
% |
15,675 |
31,760 |
(16,085 |
) |
51 |
% |
EBITDA3 |
4,101 |
|
(832 |
) |
4,933 |
|
593 |
% |
35,865 |
7,761 |
28,104 |
|
362 |
% |
Adjusted EBITDA3 |
5,696 |
|
1,771 |
|
3,925 |
|
222 |
% |
38,005 |
16,837 |
21,168 |
|
126 |
% |
1 A positive
variance represents a positive impact to net income (loss) and a
negative variance represents a negative impact to net income
(loss) |
2 Percentage change
is presented in absolute values |
3 EBITDA and
adjusted EBITDA are non-GAAP measures, refer to the definitions
below for additional details |
4 Operating expenses
include selling and marketing expenses, general and administrative
expenses, research and development expenses, amortization and
impairment of intangible assets |
SELECT FINANCIAL RESULTS AT CONSTANT
CURRENCY[In thousands of Canadian dollars]
|
Q4-21 |
Q4-20 |
|
Variance |
YTD-21 |
YTD-20 |
Variance |
Excluding impact of IAS 293 |
|
ConstantCurrency3 |
|
$1 |
|
%2 |
|
Constant Currency3 |
$1 |
|
%2 |
|
|
|
|
|
|
|
|
|
Revenues |
56,358 |
53,407 |
|
2,951 |
|
6 |
% |
239,238 |
190,406 |
48,832 |
|
26 |
% |
Gross margin |
28,634 |
21,705 |
|
6,929 |
|
32 |
% |
118,829 |
86,541 |
32,288 |
|
37 |
% |
Operating expenses4 |
41,148 |
31,756 |
|
(9,392 |
) |
30 |
% |
122,890 |
106,920 |
(15,970 |
) |
15 |
% |
EBITDA3 |
4,101 |
(1,193 |
) |
5,294 |
|
444 |
% |
35,865 |
5,122 |
30,743 |
|
600 |
% |
Adjusted EBITDA3 |
5,696 |
1,354 |
|
4,342 |
|
321 |
% |
38,005 |
13,836 |
24,169 |
|
175 |
% |
1 A positive
variance represents a positive impact to adjusted EBITDA and a
negative variance represents a negative impact to adjusted
EBITDA |
2 Percentage
change is presented in absolute values |
3 Financial
results at constant currency and excluding impact of IAS 29, EBITDA
and adjusted EBITDA are non-GAAP measures, refer to the definitions
below for additional details |
4 Operating
expenses include selling and marketing expenses, general and
administrative expenses, research and development expenses,
amortization and impairment of intangible assets |
SELECT BALANCE SHEET ITEMS[In
thousands of Canadian dollars]
|
|
|
Change |
|
12-31-21 |
12-31-20 |
$ |
%1 |
|
|
|
|
|
Cash, cash equivalents and marketable securities |
149,502 |
392,225 |
(242,723 |
) |
62 |
% |
Trade and other receivables |
103,875 |
116,510 |
(12,635 |
) |
11 |
% |
Inventory |
72,397 |
56,505 |
15,892 |
|
28 |
% |
Financial assets |
192,443 |
193,955 |
(1,512 |
) |
1 |
% |
Accounts payable and accrued
liabilities |
65,590 |
44,828 |
20,762 |
|
46 |
% |
Bank loans |
35,927 |
51,770 |
(15,843 |
) |
31 |
% |
1 Percentage change
is presented in absolute values |
Revenues: For the quarter ended
December 31, 2021 revenues increased by $3,082 or 6% compared to
the same prior year period. On a constant currency basis, revenues
increased by $2,951 or 6%. The growth in revenues on a constant
currency basis is explained as following:
- An increase in revenues of $7,095
driven by the acquisition of Exelon®.
- An increase in revenues of $1,612
or 13%, from $12,559 to $14,171, driven by the growth of our
recently launched products, including Cresemba®, Lenvima®,
Halaven®, Nerlynx®, Trelstar® and certain BGx products.
- The increase in revenues in Q4-21
vs. Q4-20 was offset by the buying pattern on certain of our
infectious disease’s products. It is estimated that approximately
$3,200 to $4,200 of products purchased in Q3-21 was not utilized in
that quarter and resulted in lower sales in Q4-21.
For the year ended December 31, 2021 revenues
increased by $43,959 or 22% compared to the same prior year period.
On a constant currency basis, revenues increased by $48,832 or 26%.
The growth in revenues on a constant currency basis is explained as
following:
- An estimated increase in revenues
of approximately $13,500 to $16,300 driven by the increased demand
of certain of our infectious diseases products to treat invasive
fungal infections associated with COVID-19.
- An increase in revenues of $21,187
driven by the acquisition of Exelon®
- An increase in revenues of $15,135
or 45%, from $33,897 to $49,032 driven by the growth of our
recently launched products, including, Cresemba®, Lenvima®,
Halaven®, Nerlynx®, Trelstar® and certain BGx products.
Gross margin: For the quarter
and year ended December 31, 2021, gross margin increased from 36%
to 48% and from 41% to 47% respectively, compared to the same
period in prior year due to a change in product mix, the
acquisition of Exelon® and related revenues recorded as a net
profit transfer, lower inventory provision recorded offset by the
re-negotiation of certain license agreements and the depreciation
of the LATAM currencies. For the quarter and year ended December
31, 2021, the gross margin would have been 51%, an increase of 3%,
from 48% and 50%, an increase of 3%, from 47%, after excluding the
adjustment of hyperinflation accounting in accordance with IAS
29.
Selling and marketing: For the
quarter ended December 31, 2021, selling and marketing increased by
$1,773 or 20% and on a constant currency basis by $1,155 or 13% as
compared to the same prior year period, driven by an increase in
certain variable costs such as logistics fees and annual incentive
compensation as well as an increase in selling and marketing
activities related to key promoted products and Exelon®.
For the year ended December 31, 2021, selling
and marketing expenses increased by $1,632 or 5% and on a constant
currency basis by $1,801 or 5% as compared to the prior year.
Excluding the non-recurring costs and the allowance for expected
credit losses, selling and marketing expenses increased by $5,738
or 19%, from $30,052 to $35,790, due to an increase in certain
variable costs such as logistics fees and annual incentive
compensation as well as an increase in selling and marketing
activities related to key promoted products and Exelon®.
General and administrative: For
the year ended December 31, 2021, general and administrative
expenses decreased by $1,686 or 4% and on a constant currency basis
by $1,136 or 3% as compared to the same period in prior year.
Excluding the non-recurring costs and acquisition costs including
the Unified Tender Offer, general and administrative expenses for
the year ended December 31, 2021, increased by $2,953 or 10%, from
$30,914 to $33,867, driven by an expense of $1,210 related to the
extension of the expiry date of certain stock options and an
increase in cost related to the annual incentive compensation.
Amortization of intangible
assets: For the quarter and year ended December 31, 2021,
amortization of intangible assets increased by $9,051, or 113% and
$15,641, or 61% respectively, mainly explained by the amortization
of $5,731 and $13,686 related to Exelon®, the accelerated
amortization of $5,435 related to the discontinuation of certain
distribution agreements partially offset by the depreciation of
LATAM currencies.
Interest income: Interest
income is the sum of interest income on financial instruments
measured at amortized cost and other interest income. For the
quarter and year ended December 31, 2021, interest income was
$2,196 and $7,382, a decrease of 22% or $611 and 48% or $6,940
respectively, compared to the same period in prior year due to a
lower average cash and marketable securities balances and loan
balance.
Interest expense: For the quarter ended
December 31, 2021 interest expense was $1,331, an increase of
$1,003 or 306%, compared to the same period in prior year due to
higher interest rates.
For the year ended December 31, 2021 interest expense was
$3,618, an increase of $220 or 6%, compared to prior year due to a
decrease in the average loan balance outstanding largely offset by
higher interest rates.
Adjusted EBITDA: For the
quarter ended December 31, 2021 adjusted EBITDA increased by $3,925
or 222% and on a constant currency basis by $4,342 or 321% compared
to Q4-20. The growth in adjusted EBITDA is driven by an increase in
gross margin of $6,929 on a constant currency basis offset by an
increase in operating expenses adjusted for non-recurring
expenses.
For the year ended December 31, 2021 adjusted
EBITDA increased by $21,168 or 126% and on a constant currency
basis by $24,169 or 175% compared to the same prior year period.
The growth in adjusted EBITDA is driven by an increase in gross
margin of $32,288 on a constant currency basis due to the increase
in revenues offset by an increase in operating expenses adjusted
for acquisition and transaction costs as well as non-recurring
expenses.
Net loss or income: For the
quarter ended December 31, 2021, net loss was $8,301 compared to
net income of $8,233 for the same period last year. The variance
mainly resulted from the above-mentioned items and (1) an income
tax recovery of $6,123 in the fourth quarter of 2021 due to the
recognition of certain deferred tax assets compared to an income
expense of $2,618 in the prior year period as well as (2) a lower
net gain on the revaluation of financial assets measured at fair
value through profit or loss of $2,300 in the fourth quarter of
2021 versus a net gain of $25,418 in the prior year period mainly
due to unrealized losses and gains on revaluation of the strategic
fund investments.
For the year ended December 31, 2021, net income
was $15,675 compared to net income of $31,760 in prior year. The
variance mainly resulted from the above-mentioned items and (1) an
income tax recovery of $8,985 in 2021 due to the recognition of
certain deferred tax assets compared to a prior year income tax
expense of $325 as well as (2) as well as a lower net gain on the
revaluation of financial assets measured at fair value through
profit or loss of $18,944 in 2021 versus a net gain of $48,060 in
prior year mainly due to unrealized losses and gains on revaluation
of the strategic fund investments.
Cash, cash equivalents and marketable
securities: As at December 31, 2021, Knight had $149,502
in cash, cash equivalents and marketable securities, a decrease of
$242,723 or 62% as compared to December 31, 2020. The variance is
primarily due to cash outflows related to the acquisition of
Exelon®, the shares repurchased through NCIB and the repayments of
bank loans offset by cash generated from operating activities and
our strategic fund investments.
Financial assets: As at
December 31, 2021, financial assets were at $192,443, a decrease of
$1,512 or 1%, as compared to the prior year, mainly due to an
increase of $19,329 due to mark-to-market adjustments offset by
decrease of $14,502 due to net distributions in Knight's fund
investments, loan repayments of $2,684 and disposal of equity
investments of $2,624 during the period. Given the nature of the
fund investments there could be significant fluctuations in the
fair value of the underlying assets.
Bank Loans: As at December 31,
2021, bank loans were at $35,927, a decrease of $15,843 or 31% as
compared to the prior period, mainly due to loan repayment of
$20,599 and a $4,674 decrease due to depreciation of LATAM
currencies, partially offset by proceeds from bank loans of
$9,423.
Product Updates
On March 1, 2021 the Company launched Ibsrela®
for the treatment of IBS-C. The Company entered into an exclusive
licensing agreement with Ardelyx to commercialize Ibsrela® in
Canada in March 2018. Ibsrela® is a first-in-class small molecule
treatment for IBS-C. Ardelyx received regulatory approval for
Ibsrela® from the US FDA in September 2019.
On May 26, 2021, the Company entered into an
agreement with Novartis to acquire the exclusive rights to
manufacture, market and sell Exelon®, in Canada and Latin America
as well as an exclusive license to use the intellectual property
and the Exelon trademark, from Novartis within those territories.
Exelon® is a prescription product that was first approved in 1997
and is currently registered and sold in approximately 90 countries.
Exelon® is indicated for the symptomatic treatment of mild to
moderately severe dementia in people with Alzheimer's disease and
Parkinson’s disease.
Knight has entered into a transition service
agreement with Novartis until transfer of marketing authorization,
on a country-by-country basis during which Knight will receive a
net profit transfer. Knight will begin distributing Exelon® upon
transfer of marketing authorization, on a country-by-country basis.
Knight has submitted the transfer of marketing authorizations for
Brazil, Colombia, Mexico and Chile. Furthermore, Knight has
received the regulatory notification that the marketing
authorization for Exelon® in Brazil will transfer to its affiliate
in June 2022 and expects the marketing authorizations for other
territories to start transferring in the second half of 2022.
On September 22, 2021, Knight entered into a
definitive agreement with Incyte Biosciences International Sàrl,
for the exclusive rights to distribute tafasitamab (sold as
Monjuvi® in the United States and Minjuvi® in Europe) and
pemigatinib (Pemazyre®) in Latin America. Under the terms of the
agreement Knight will be responsible for seeking the necessary
regulatory approvals and distributing both products in Latin
America. Knight expects to submit tafasitamab in key LATAM
countries in 2022 and pemigatinib in 2023.
Knight obtained regulatory approval for Rembre®
in Colombia, indicated for treatment of chronic myeloid leukemia
with positive Philadelphia chromosome (Ph+). The product was
launched in Colombia in February 2022.
Knight obtained INVIMA approval for Lenvima® in
Colombia, the orally available multiple receptor tyrosine kinase
inhibitor developed by Eisai, for the treatment of RR-DTC and
u-HCC. Knight launched Lenvima® in Colombia in February 2022.
Knight obtained INVIMA approval for Halaven®
injection in Colombia, indicated for the treatment of adult
patients with locally advanced or metastatic breast cancer which
has continued to spread after at least two previous treatment for
advanced cancer. Previous treatment should have included
anthracyclines and a taxane in either the adjuvant or metastatic
setting, unless these treatments were not suitable. Halaven® is
also used to treat patients with advanced or metastatic liposarcoma
that cannot be surgically removed and who have already been treated
with an anthracycline, unless deemed unsuitable. Knight launched
Halaven® in Colombia in March 2022.
NCIB
On July 12, 2021, the Company announced that the
Toronto Stock Exchange approved its notice of intention to launch a
NCIB (“2021 NCIB”). Under the terms of the 2021 NCIB, Knight may
purchase for cancellation up to 10,267,956 common shares of the
Company which represented 10% of its public float as at December
31, 2021. The 2021 NCIB commenced on July 14, 2021 and will end on
the earlier of July 13, 2022 or when the Company completes its
maximum purchases under the NCIB. Furthermore, Knight entered into
an agreement with a broker to facilitate purchases of its common
shares under the NCIB. Under Knight’s automatic share purchase
plan, the broker may purchase common shares which would ordinarily
not be permitted due to regulatory restrictions or self-imposed
blackout periods. For the year ended December 31, 2021, the Company
purchased 12,321,864 (2020: 5,748,716) common shares at an average
price of $5.23 (2020: $6.40) for an aggregate cash consideration of
$64,415 (2020: $36,787). Subsequent to 2021, the Company purchased
an additional 933,715 common shares at an average purchase price of
$5.35 for an aggregate cash consideration of $4,997.
Financial Outlook
Knight provides guidance on revenues1 on a
non-GAAP basis. This is due to both the difficulty in predicting
Argentinian inflation rates and its IAS 29 impact.
For fiscal 2022, Knight expects to generate $260
to $265 million in revenue. The guidance is based on a number of
assumptions, including but not limited to the following:
- no revenues for
business development transactions not completed as of December 31,
2021
- discontinuation
of certain distribution agreements
- Exelon®
marketing authorization transfer to Knight in June 2022 in
Brazil
- no interruptions
in supply whether due to global supply chain disruptions or general
manufacturing issues
- no new generic
entrants on our key pharmaceutical brands
- no unforeseen
changes to government mandated pricing regulations
- successful
commercial execution on product listing arrangements with HMOs,
insurers, key accounts, and public payers
- successful
execution and uptake of newly launched products
- no significant
restrictions or economic shut down due to the COVID-19
pandemic
- foreign currency
exchange rates remaining within forecasted ranges
Should any of the assumptions differ, the
financial outlook and the actual results may vary materially. Refer
to the risks and assumptions referred to in the Forward-Looking
Statements section of this news release for further details.
1 Revenues excluding the impact of IAS 29 is a
non-GAAP measure, refer to the definitions below for additional
details
Conference Call Notice
Knight will host a conference call and audio webcast to discuss
its fourth quarter and year-end results today at 8:30 am ET. Knight
cordially invites all interested parties to participate in this
call.
Date: Thursday, March 24,
2022Time: 8:30 a.m. ETTelephone:
Toll Free: 888-254-3590 or International
1-647-794-4605Webcast: www.gud-knight.com or
WebcastThis 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.gud-knight.com
About Knight Therapeutics Inc.
Knight Therapeutics Inc., headquartered in
Montreal, Canada, is a specialty pharmaceutical company focused on
acquiring or in-licensing and commercializing pharmaceutical
products for Canada and Latin America. Knight owns Biotoscana
Investments S.A., a pan-Latin American specialty pharmaceutical
company. Knight’s Latin American subsidiaries operate under United
Medical, Biotoscana Farma and Laboratorio LKM. 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, 2021 as filed on www.sedar.com. 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:
Investor Contact: |
|
Knight Therapeutics Inc. |
|
Samira Sakhia |
Arvind Utchanah |
President & Chief Executive
Officer |
Chief Financial Officer |
T: 514.484.4483 |
T. +598.2626.2344 |
F: 514.481.4116 |
|
Email: info@knighttx.com |
Email: info@knighttx.com |
Website: www.gud-knight.com |
Website: www.gud-knight.com |
IMPACT OF HYPERINFLATION[In
thousands of Canadian dollars]
The Company applies IAS 29, Financial Reporting
in Hyperinflation Economies, as the Company's Argentine
subsidiaries used the Argentine Peso as their functional currency.
IAS 29 requires that the financial statements of an entity whose
functional currency is the currency of a hyperinflationary economy
be adjusted based on an appropriate general price index to express
the effects of inflation. If the Company did not apply IAS 29, the
effect on the Company's operating income would be as follows:
|
Q4-21 |
|
|
YTD-21 |
|
|
|
Reported under IFRS |
|
Excluding impact of IAS 291 |
|
Variance |
Reported under IFRS |
|
Excluding impact of IAS 291 |
|
Variance |
|
$2 |
|
%3 |
$2 |
|
%3 |
|
|
|
|
|
|
|
|
|
Revenues |
58,273 |
|
56,358 |
|
1,915 |
|
3 |
% |
243,478 |
|
239,238 |
|
4,240 |
|
2 |
% |
Cost of goods sold |
30,078 |
|
27,724 |
|
(2,354 |
) |
8 |
% |
128,066 |
|
120,409 |
|
(7,657 |
) |
6 |
% |
Gross margin |
28,195 |
|
28,634 |
|
(439 |
) |
2 |
% |
115,412 |
|
118,829 |
|
(3,417 |
) |
3 |
% |
Gross margin (%) |
48% |
|
51% |
|
|
|
47% |
|
50% |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Selling and marketing |
10,430 |
|
10,050 |
|
(380 |
) |
4 |
% |
37,217 |
|
36,395 |
|
(822 |
) |
2 |
% |
General and administrative |
11,863 |
|
11,656 |
|
(207 |
) |
2 |
% |
37,159 |
|
35,591 |
|
(1,568 |
) |
4 |
% |
Research and development |
3,496 |
|
3,087 |
|
(409 |
) |
13 |
% |
12,692 |
|
12,080 |
|
(612 |
) |
5 |
% |
Amortization of intangible assets |
17,040 |
|
16,355 |
|
(685 |
) |
4 |
% |
41,176 |
|
38,824 |
|
(2,352 |
) |
6 |
% |
Operating loss |
(14,634 |
) |
(12,514 |
) |
(2,120 |
) |
17 |
% |
(12,832 |
) |
(4,061 |
) |
(8,771 |
) |
216 |
% |
1 Financial results
excluding the impact of hyperinflation is a non-GAAP measure. Refer
to the definitions below for additional details |
2 A positive
variance represents a positive impact to net income due to the
application of IAS 29 and a negative variance represents a negative
impact to net income due to the application of IAS 29 |
3 Percentage change
is presented in absolute values |
NON-GAAP MEASURES [In thousands
of Canadian dollars]
Non-GAAP measures
The Company discloses non-GAAP measures that do
not have standardized meanings prescribed by IFRS. The Company
believes that shareholders, investment analysts and other readers
find such measures helpful in understanding the Company’s financial
performance and in interpreting the effect of the GBT Transaction
on the Company. Non-GAAP financial measures do not have any
standardized meaning prescribed by IFRS and may not have been
calculated in the same way as similarly named financial measures
presented by other companies.
The Company uses the following non-GAAP
measures:
Revenues and Financial results excluding
the impact of hyperinflation under IAS 29: Revenues and
financial results under IFRS are adjusted to remove the impact of
hyperinflation under IAS 29. Impact of hyperinflation under IAS 29
is calculated by applying an appropriate general price index to
express the effects of inflation. After applying the effects of
translation, the statement of income is converted using the closing
foreign exchange rate of the month.
Financial results at constant
currency: Financial results at constant currency are
obtained by translating the prior period results from the
functional currencies to CAD using the conversion rates in effect
during the current period. Furthermore, with respect to Argentina,
the Company excludes the impact of hyperinflation and translates
the results at the average exchange rate in effect for each of the
periods.
Financial results at constant currency allow
results to be viewed without the impact of fluctuations in foreign
currency exchange rates thereby facilitating the comparison of
results period over period. The presentation of results under
constant currency is considered to be a non-GAAP measure and does
not have any standardized meaning under GAAP. As a result, the
information presented may not be comparable to similar measures
presented by other companies.
EBITDA: Operating income (loss)
adjusted to exclude amortization and impairment of intangible
assets, depreciation, PPA accounting adjustments, and the impact of
IAS 29 (accounting under hyperinflation) but to include costs
related to leases. In addition, EBITDA does not reflect the portion
of GBT’s results attributable to the non-controlling interests.
Adjusted EBITDA: EBITDA
adjusted for acquisition costs and non-recurring expenses.
Adjustments include the following:
- With the adoption of IFRS 16, the
lease payments of Knight are not reflected in operating expenses.
The IFRS 16 adjustment approximates the cash outflow related to
leases of Knight.
- Acquisition costs relate to costs
incurred on legal, consulting and advisory fees for the acquisition
of GBT and the acquisition of products.
- Other non-recurring expenses relate
to expenses incurred by Knight that are not due to, and are not
expected to occur in, the ordinary course of business.
The financial results under IFRS reconcile to the financial
results at constant currency as follows:
|
Q4-20 |
YTD-20 |
Reported under IFRS |
|
IAS 29 Adjustment |
|
Constant Currency Adjustment |
|
Constant Currency1 |
|
Reported under IFRS |
|
IAS 29 Adjustment |
|
Constant Currency Adjustment |
|
Constant Currency1 |
|
Revenues |
55,191 |
|
1,485 |
|
(3,269 |
) |
53,407 |
|
199,519 |
|
3,017 |
|
(12,130 |
) |
190,406 |
|
Cost of goods sold |
35,131 |
|
(1,362 |
) |
(2,067 |
) |
31,702 |
|
117,829 |
|
(5,268 |
) |
(8,696 |
) |
103,865 |
|
Gross margin |
20,060 |
|
2,847 |
|
(1,202 |
) |
21,705 |
|
81,690 |
|
8,285 |
|
(3,434 |
) |
86,541 |
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Selling and marketing |
8,657 |
|
630 |
|
(392 |
) |
8,895 |
|
35,585 |
|
724 |
|
(1,715 |
) |
34,594 |
|
General and administrative |
11,421 |
|
137 |
|
(378 |
) |
11,180 |
|
38,845 |
|
(631 |
) |
(1,487 |
) |
36,727 |
|
Research and development |
3,690 |
|
94 |
|
(71 |
) |
3,713 |
|
11,725 |
|
232 |
|
(248 |
) |
11,709 |
|
Amortization of intangible
assets |
7,989 |
|
(367 |
) |
(310 |
) |
7,312 |
|
25,535 |
|
(506 |
) |
(1,795 |
) |
23,234 |
|
Impairment of intangible assets |
656 |
|
— |
|
— |
|
656 |
|
656 |
|
— |
|
— |
|
656 |
|
Operating loss |
(12,353 |
) |
2,353 |
|
(51 |
) |
(10,051 |
) |
(30,656 |
) |
8,466 |
|
1,811 |
|
(20,379 |
) |
EBITDA2 |
(832 |
) |
— |
|
(361 |
) |
(1,193 |
) |
7,761 |
|
— |
|
(2,639 |
) |
5,122 |
|
Adjusted EBITDA2 |
1,771 |
|
— |
|
(417 |
) |
1,354 |
|
16,837 |
|
— |
|
(3,001 |
) |
13,836 |
|
1
Financial results at constant currency are non-GAAP measure, refer
above for additional details |
2 Financial
results at constant currency, EBITDA and adjusted EBITDA are
non-GAAP measures, refer to section “Non-GAAP measures” and
“Reconciliation to adjusted EBITDA” for additional details |
For the three-month period and year ended December 31, the
Company calculated EBITDA and adjusted EBITDA as follows:
|
|
|
Change |
|
|
Change |
|
Q4-21 |
|
Q4-20 |
|
$1 |
|
%2 |
YTD-21 |
|
YTD-20 |
|
$1 |
|
%2 |
Operating (loss) |
(14,634 |
) |
(12,353 |
) |
(2,281 |
) |
18 |
% |
(12,832 |
) |
(30,656 |
) |
17,824 |
|
58 |
% |
Adjustments to operating
(loss): |
|
|
|
|
|
|
|
|
Amortization of intangible
assets |
17,040 |
|
7,989 |
|
9,051 |
|
113 |
% |
41,176 |
|
25,535 |
|
15,641 |
|
61 |
% |
Impairment of intangible
assets |
— |
|
656 |
|
(656 |
) |
100 |
% |
— |
|
656 |
|
(656 |
) |
100 |
% |
Depreciation of property, plant
and equipment and ROU assets |
1,961 |
|
1,624 |
|
337 |
|
21 |
% |
6,739 |
|
6,540 |
|
199 |
|
3 |
% |
Lease costs (IFRS 16
adjustment) |
(874 |
) |
(734 |
) |
(140 |
) |
19 |
% |
(3,016 |
) |
(3,139 |
) |
123 |
|
4 |
% |
Impact of PPA accounting |
— |
|
— |
|
— |
|
0 |
% |
— |
|
865 |
|
(865 |
) |
100 |
% |
Impact of IAS 29 |
608 |
|
1,986 |
|
(1,378 |
) |
69 |
% |
3,798 |
|
7,960 |
|
(4,162 |
) |
52 |
% |
EBITDA |
4,101 |
|
(832 |
) |
4,933 |
|
593 |
% |
35,865 |
|
7,761 |
|
28,104 |
|
362 |
% |
Acquisition and transaction costs |
— |
|
— |
|
— |
|
0 |
% |
432 |
|
3,693 |
|
(3,261 |
) |
88 |
% |
Other non-recurring expenses |
1,595 |
|
2,603 |
|
(1,008 |
) |
39 |
% |
1,708 |
|
5,383 |
|
(3,675 |
) |
68 |
% |
Adjusted EBITDA3 |
5,696 |
|
1,771 |
|
3,925 |
|
222 |
% |
38,005 |
|
16,837 |
|
21,168 |
|
126 |
% |
1 A positive
variance represents a positive impact to net income (loss) and a
negative variance represents a negative impact to net income
(loss) |
2 Percentage change
is presented in absolute values |
3 EBITDA and
adjusted EBITDA are non-GAAP measures, refer above for additional
details |
CONSOLIDATED BALANCE SHEETS[In
thousands of Canadian dollars]
As at |
|
|
December 31, 2021 |
December 31, 2020 |
|
|
|
ASSETS |
|
|
Current |
|
|
Cash and cash equivalents |
85,963 |
229,592 |
Marketable securities |
63,539 |
147,316 |
Trade receivables |
55,388 |
62,515 |
Other receivables |
5,056 |
12,413 |
Inventories |
72,397 |
56,505 |
Prepaids and deposits |
2,165 |
2,214 |
Other current financial
assets |
13,491 |
34,431 |
Income
taxes receivable |
6,970 |
7,115 |
Total current assets |
304,969 |
552,101 |
|
|
|
Marketable securities |
— |
15,317 |
Prepaids and deposits |
3,046 |
4,208 |
Right-of-use assets |
4,671 |
4,035 |
Property, plant and
equipment |
25,265 |
22,127 |
Investment properties |
1,457 |
1,539 |
Intangible assets |
350,299 |
156,547 |
Goodwill |
75,403 |
77,725 |
Other financial assets |
178,952 |
159,524 |
Deferred income tax
assets |
2,048 |
2,432 |
Other
long-term receivables |
43,431 |
41,582 |
|
684,572 |
485,036 |
Assets held for sale |
2,350 |
2,539 |
Total assets |
991,891 |
1,039,676 |
CONSOLIDATED BALANCE SHEETS
(continued)[In thousands of Canadian dollars]
As at |
|
|
|
December 31, 2021 |
|
December 31, 2020 |
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
Current |
|
|
Accounts payable and accrued liabilities |
65,309 |
|
44,512 |
|
Lease liabilities |
1,614 |
|
1,875 |
|
Other liabilities |
1,989 |
|
1,291 |
|
Bank loans |
26,662 |
|
51,770 |
|
Income taxes payable |
7,073 |
|
13,559 |
|
Other balances payable |
2,655 |
|
1,053 |
|
Total current liabilities |
105,302 |
|
114,060 |
|
|
|
|
Accounts payable and accrued
liabilities |
281 |
|
316 |
|
Lease liabilities |
3,417 |
|
2,543 |
|
Bank loan |
9,265 |
|
— |
|
Other balances payable |
19,235 |
|
14,900 |
|
Deferred income tax
liabilities |
12,373 |
|
21,616 |
|
Total liabilities |
149,873 |
|
153,435 |
|
|
|
|
Shareholders’
Equity |
|
|
Share capital |
628,854 |
|
694,351 |
|
Warrants |
117 |
|
117 |
|
Contributed surplus |
21,776 |
|
18,731 |
|
Accumulated other comprehensive
loss |
(376 |
) |
(1,503 |
) |
Retained earnings |
191,647 |
|
174,545 |
|
Total shareholders’ equity |
842,018 |
|
886,241 |
|
Total liabilities and
shareholders’ equity |
991,891 |
|
1,039,676 |
|
CONSOLIDATED STATEMENTS OF (LOSS)
INCOME[In thousands of Canadian dollars, except for share
and per share amounts]
|
Three months ended December 31, |
Year ended December 31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
Revenues |
58,273 |
|
55,191 |
|
243,478 |
|
199,519 |
|
Cost of goods sold |
30,078 |
|
35,131 |
|
128,066 |
|
117,829 |
|
Gross margin |
28,195 |
|
20,060 |
|
115,412 |
|
81,690 |
|
|
|
|
|
|
Expenses |
|
|
|
|
Selling and marketing |
10,430 |
|
8,657 |
|
37,217 |
|
35,585 |
|
General and administrative |
11,863 |
|
11,421 |
|
37,159 |
|
38,845 |
|
Research and development |
3,496 |
|
3,690 |
|
12,692 |
|
11,725 |
|
Amortization of intangible
assets |
17,040 |
|
7,989 |
|
41,176 |
|
25,535 |
|
Impairment of intangible
assets |
— |
|
656 |
|
— |
|
656 |
|
Operating loss |
(14,634 |
) |
(12,353 |
) |
(12,832 |
) |
(30,656 |
) |
|
|
|
|
|
Interest income on financial
instruments measured at amortized cost |
(725 |
) |
(1,635 |
) |
(2,446 |
) |
(9,112 |
) |
Other interest income |
(1,471 |
) |
(1,172 |
) |
(4,936 |
) |
(5,210 |
) |
Interest expense |
1,331 |
|
328 |
|
3,618 |
|
3,398 |
|
Other income |
(321 |
) |
(36 |
) |
(128 |
) |
(169 |
) |
Net gain on financial assets
measured at fair value through profit or loss |
(2,300 |
) |
(25,418 |
) |
(18,944 |
) |
(48,060 |
) |
Net gain on mandatory tender
offer liability |
— |
|
— |
|
— |
|
(12,072 |
) |
Realized gain on sale of asset
held for sale |
— |
|
— |
|
— |
|
(2,948 |
) |
Realized gain on automatic share
purchase plan |
— |
|
— |
|
— |
|
(4,168 |
) |
Foreign exchange loss |
3,485 |
|
4,490 |
|
3,737 |
|
14,156 |
|
(Gain) Loss on
hyperinflation |
(209 |
) |
239 |
|
(423 |
) |
1,444 |
|
(Loss) income before income taxes |
(14,424 |
) |
10,851 |
|
6,690 |
|
32,085 |
|
|
|
|
|
|
Income tax |
|
|
|
|
Current |
(2,642 |
) |
951 |
|
(1,349 |
) |
2,337 |
|
Deferred |
(3,481 |
) |
1,667 |
|
(7,636 |
) |
(2,012 |
) |
Income tax (recovery) expense |
(6,123 |
) |
2,618 |
|
(8,985 |
) |
325 |
|
Net (loss) income for the period |
(8,301 |
) |
8,233 |
|
15,675 |
|
31,760 |
|
|
|
|
|
|
Attributable
to: |
|
|
|
|
Shareholders of the
Company |
(8,301 |
) |
8,233 |
|
15,675 |
|
42,067 |
|
Non-controlling interests |
— |
|
— |
|
— |
|
(10,307 |
) |
|
|
|
|
|
Attributable to
shareholders of the Company |
|
|
|
|
Basic net (loss) earnings per
share |
(0.07 |
) |
0.06 |
|
0.13 |
|
0.32 |
|
Diluted net (loss) earnings per
share |
(0.07 |
) |
0.06 |
|
0.13 |
|
0.32 |
|
|
|
|
|
|
Weighted average
number of common shares outstanding |
|
|
|
|
Basic |
120,112,158 |
|
130,104,506 |
|
124,480,259 |
|
131,783,255 |
|
Diluted |
120,163,668 |
|
130,108,744 |
|
124,521,641 |
|
131,985,025 |
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
[In thousands of Canadian dollars]
|
Three months ended December 31, |
Year ended December 31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
OPERATING ACTIVITIES |
|
|
|
|
Net (loss) income for the
period |
(8,301 |
) |
8,233 |
|
15,675 |
|
31,760 |
|
Adjustments reconciling net
income to operating cash flows: |
|
|
|
|
Depreciation and amortization |
19,001 |
|
9,613 |
|
47,915 |
|
32,075 |
|
Net gain on financial instruments |
(2,300 |
) |
(25,418 |
) |
(18,944 |
) |
(48,060 |
) |
Unrealized foreign exchange loss (gain) |
3,968 |
|
(237 |
) |
2,881 |
|
9,429 |
|
Other operating activities |
(1,589 |
) |
3,387 |
|
(900 |
) |
(13,833 |
) |
|
10,779 |
|
(4,422 |
) |
46,627 |
|
11,371 |
|
Changes in non-cash working
capital and other items |
(6,098 |
) |
8,719 |
|
(2,009 |
) |
(23,576 |
) |
Cash inflow (outflow) from operating
activities |
4,681 |
|
4,297 |
|
44,618 |
|
(12,205 |
) |
|
|
|
|
|
INVESTING
ACTIVITIES |
|
|
|
|
Purchase of marketable
securities |
3 |
|
— |
|
(47,892 |
) |
(37,778 |
) |
Proceeds on maturity of
marketable securities |
90 |
|
10,264 |
|
146,986 |
|
237,263 |
|
Investment in funds |
(5,466 |
) |
(756 |
) |
(16,429 |
) |
(15,766 |
) |
Acquisition of shares through
mandatory tender offer |
— |
|
— |
|
— |
|
(170,855 |
) |
Proceeds from distribution of
funds |
17,519 |
|
2,132 |
|
30,931 |
|
29,128 |
|
Purchase of intangible
assets |
(153 |
) |
(1,265 |
) |
(220,351 |
) |
(15,289 |
) |
Proceeds on sale of asset held
for sale |
— |
|
— |
|
— |
|
77,000 |
|
Other investing activities |
(2,524 |
) |
(2,175 |
) |
1,476 |
|
(2,350 |
) |
Cash inflow (outflow) from investing
activities |
9,469 |
|
8,200 |
|
(105,279 |
) |
101,353 |
|
|
|
|
|
|
FINANCING
ACTIVITIES |
|
|
|
|
Repurchase of common shares
through Normal Course Issuer Bid |
(23,508 |
) |
(1,786 |
) |
(64,415 |
) |
(36,787 |
) |
Principal repayment on bank
loans |
(5,688 |
) |
(6,495 |
) |
(20,599 |
) |
(14,714 |
) |
Proceeds from bank loans |
7,098 |
|
13,583 |
|
9,423 |
|
24,581 |
|
Other financing activities |
(788 |
) |
(677 |
) |
(2,719 |
) |
(2,313 |
) |
Cash (outflow) inflow from financing
activities |
(22,886 |
) |
4,625 |
|
(78,310 |
) |
(29,233 |
) |
|
|
|
|
|
(Decrease) increase in
cash and cash equivalents during the period |
(8,736 |
) |
17,123 |
|
(138,971 |
) |
59,916 |
|
Cash and cash equivalents,
beginning of the period |
92,490 |
|
218,091 |
|
229,592 |
|
174,268 |
|
Net foreign exchange difference |
2,209 |
|
(5,622 |
) |
(4,658 |
) |
(4,592 |
) |
Cash and cash equivalents, end of the period |
85,963 |
|
229,592 |
|
85,963 |
|
229,592 |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
85,963 |
|
229,592 |
|
Short-term marketable
securities |
|
|
63,539 |
|
147,316 |
|
Long-term marketable securities |
|
|
— |
|
15,317 |
|
Total cash, cash equivalents and marketable
securities |
|
|
149,502 |
|
392,225 |
|
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