Knight Reports First Quarter 2017 Results

MONTREAL, QUEBEC--(Marketwired - May 11, 2017) - Knight Therapeutics Inc. (TSX:GUD) ("Knight" or the "Company"), a leading Canadian specialty pharmaceutical company, today reported financial results for its first quarter ended March 31, 2017. All dollar amounts are in thousands except for per share amounts. All currencies are Canadian unless otherwise specified.

"This quarter marked a major milestone for Knight as we began commercializing our first innovative pharmaceutical product in Canada with the relaunch of Movantik^®," said Jonathan Ross Goodman, CEO of Knight Therapeutics Inc. "Looking ahead, we are focused on advancing our product pipeline and capitalizing on opportunities to add new products to our portfolio that will improve the health of Canadians."

Financial Results

For the quarter ended March 31, 2017, Knight reported revenues of $1,750, an increase of $682 over the same period last year, and net income of $6,047, an increase of $5,570 over the same period last year.

As at March 31, 2017, the Company had $763,778 in cash, cash equivalents and marketable securities and 142,759,326 common shares outstanding.

First Quarter Highlights

• Announced the commercial relaunch of Movantik^® in Canada
• Submitted Iluvien^® for regulatory approval by Health Canada
• Received full repayment of the balance of secured loans to Apicore Inc. and Pro Bono Bio PLC

Conference Call Notice

Knight will host a conference call to discuss its first quarter 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 June 11, 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 13628658.

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.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, 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.

INTERIM CONSOLIDATED BALANCE SHEETS

[Unaudited] [In thousands of Canadian dollars]

As at	March 31, 2017	December 31, 2016
ASSETS
Current
Cash and cash equivalents	519,522	514,942
Marketable securities	244,256	221,108
Trade and other receivables	7,977	6,440
Inventories	689	790
Other current financial assets	41,635	51,789
Income taxes receivable	4,786	4,683
Total current assets	818,865	799,752
Property and equipment	37	32
Intangible assets	13,787	14,153
Other financial assets	78,076	90,643
Investment in associate	77,907	80,113
Deferred income tax assets	5,621	6,077
Total assets	994,293	990,770
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities	2,933	3,207
Income taxes payable	6,007	5,659
Other balances payable	532	537
Deferred other income	263	355
Total current liabilities	9,735	9,758
Deferred other income	363	417
Other balances payable	900	877
Total liabilities	10,998	11,052
Shareholders' equity
Share capital	761,003	760,447
Warrants	785	785
Contributed surplus	10,120	9,469
Accumulated other comprehensive income	26,754	30,431
Retained earnings	184,633	178,586
Total shareholders' equity	983,295	979,718
Total liabilities and shareholders' equity	994,293	990,770

INTERIM CONSOLIDATED STATEMENTS OF INCOME

[Unaudited] [In thousands of Canadian dollars, except for share and per share amounts]

	Three months ended March 31,
	2017		2016
Revenues	1,750		1,068
Cost of goods sold	288		246
Gross margin	1,462		822
Expenses
Selling and marketing	363		-
General and administrative	2,468		2,193
Research and development	416		283
	(1,785	)	(1,654	)
Depreciation of property and equipment	-		8
Amortization of intangible assets	326		41
Interest income	(5,860	)	(4,816	)
Other income	(308	)	(1,099	)
Net gain on financial assets	(3,375	)	(1,729	)
Share of net income of associate	(319	)	(854	)
Foreign exchange loss	243		3,770
Income before income taxes	7,508		3,025
Income tax expense
Current	480		2,541
Deferred	981		7
Net income for the period	6,047		477
Attributable to shareholders of the Company
Basic earnings per share	0.04		0.005
Diluted earnings per share	0.04		0.005
Weighted average number of common shares outstanding
Basic	142,720,536		103,475,043
Diluted	143,626,773		103,688,167

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

[Unaudited] [In thousands of Canadian dollars]

Three months ended March 31,
	2017		2016
Net income for the period	6,047		477
Realized gain reclassified to statement of income net of tax of $64 (2016: net of tax of $64)	(973	)	(410	)
Other comprehensive income (loss) to be reclassified to statement of income in subsequent periods:
Unrealized (loss) gain on available-for-sale financial instruments net of tax of $434 (2016: net of tax of $72)	(1,046	)	421
Unrealized loss on translation of foreign operations	(1,658	)	(10,978	)
Other comprehensive (loss) for the period	(3,677	)	(10,967	)
Total comprehensive income (loss) for the period	2,370		(10,490	)

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

[Unaudited] [In thousands of Canadian dollars]

	Share capital	Warrants	Contributed surplus		Accumulated other comprehensive income		Retained earnings	Total shareholders' equity
Balance as at January 1, 2016	439,148	161	6,772		35,955		160,026	642,062
Net income for the three-month period	-	-	-		-		477	477
Realized gain reclassified to statement of income	-	-	-		(410	)	-	(410	)
Unrealized gain on available for sale financial instruments	-	-	-		421		-	421
Unrealized loss on translation of foreign operations	-	-	-		(10,978	)	-	(10,978	)
Comprehensive (loss) income	-	-	-		(10,967	)	477	(10,490	)
Share-based compensation expense	-	-	1,073		-		-	1,073
Issuance under share purchase plan	28	-	-		-		-	28
Balance as at March 31, 2016	439,176	161	7,845		24,988		160,503	632,673
Balance as at January 1, 2017	760,447	785	9,469		30,431		178,586	979,718
Net income for the three-month period	-	-	-		-		6,047	6,047
Realized gain reclassified to statement of income	-	-	-		(973	)	-	(973	)
Unrealized loss on available for sale financial instruments	-	-	-		(1,046	)	-	(1,046	)
Unrealized loss on translation of foreign operations	-	-	-		(1,658	)	-	(1,658	)
Comprehensive (loss) income	-	-	-		(3,677	)	6,047	2,370
Share-based compensation expense	-	-	846		-		-	846
Issuance under share option plan	513	-	(195	)	-		-	318
Issuance under share purchase plan	43	-	-		-		-	43
Balance as at March 31, 2017	761,003	785	10,120		26,754		184,633	983,295

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

[Unaudited] [In thousands of Canadian dollars]

		Three months ended March 31,
		2017		2016
OPERATING ACTIVITIES
Net income for the period		6,047		477
Adjustments reconciling net income to operating cash flows:
	Deferred tax	981		7
	Share-based compensation expense	846		1,073
	Depreciation and amortization	326		49
	Accretion of interest	(1,078	)	(1,105	)
	Realized gain on financial assets	(976	)	(656	)
	Unrealized gain on financial assets	(2,399	)	(1,073	)
	Foreign exchange loss	204		3,760
	Share of net income from associate	(319	)	(854	)
	Dividends from associate	-		2,423
	Other adjustments	(301	)	(142	)
		3,331		3,959
Changes in non-cash working capital related to operations		905		576
Cash inflow from operating activities		4,236		4,535
INVESTING ACTIVITIES
Purchase of marketable securities		(44,291	)	(147,399	)
Purchase of intangibles		-		(2,924	)
Issuance of loans receivable		-		(34,851	)
Purchase of equities		(2,819	)	(3,461	)
Investment in funds		(4,141	)	(5,833	)
Proceeds from marketable securities		20,486		152,226
Proceeds from repayments of loans receivable		28,058		1,018
Proceeds from disposal of equities		709		5,619
Proceeds from distribution of funds		2,154		-
Cash inflow (outflow) from investing activities		156		(35,605	)
FINANCING ACTIVITIES
Share option plan		345		-
Share purchase plan		43		28
Cash inflow from financing activities		388		28
Increase (decrease) in cash during the period		4,780		(31,042	)
Cash and cash equivalents, beginning of the period		514,942		237,481
Net foreign exchange difference		(200	)	(1,654	)
Cash and cash equivalents, end of the period		519,522		204,785
Supplemental cash flow information:
Interest received		4,018		3,773
Income taxes paid		286		2,334
Cash and cash equivalents		519,522		204,785
Marketable securities		244,256		221,450
		763,778		426,235