Knight Therapeutics Reports Second Quarter 2025 Results

Executive Summary

• Knight Therapeutics reported Q2 2025 financial results, achieving record-high quarterly revenues of $107.4M CAD (up 12% YoY) but reporting a net loss of $12.6M CAD due to acquisition costs and hyperinflation accounting impacts.
• The company completed two significant acquisitions: the Paladin Pharma business for ~$107M CAD and a portfolio from Sumitomo Pharma for an upfront of $25.4M CAD, adding over 50 products to its portfolio.
• Knight increased its full-year 2025 revenue guidance to $410–$420M CAD and secured a $50M USD revolving credit facility with National Bank of Canada, of which $60M CAD was drawn to fund acquisitions.

Key Details

• Q2 2025 Financial Performance:
  • Revenues: $107,358k CAD (up 12% or $11,785k from prior year).
  • Gross Margin: $44,831k CAD (42% of revenue), down from 50% in prior year, primarily due to hyperinflation accounting in Argentina and product mix.
  • Operating Loss: $(3,669)k CAD (vs. income of $4,494k in prior year).
  • Net Loss: $(12,622)k CAD (vs. loss of $1,942k in prior year).
  • Loss Per Share: $0.13 CAD.
  • Cash Flow from Operations: $20,252k CAD inflow (vs. outflow of $1,086k in prior year).
• Non-GAAP Measures:
  • Adjusted Revenues: $108,541k CAD (up 15% or $14,420k; up 21% or $18,867k on constant currency basis).
  • Adjusted Gross Margin: $49,431k CAD (46% of adjusted revenues).
  • Adjusted EBITDA: $15,507k CAD (down 2% or $237k from prior year).
  • Adjusted EBITDA per Share: $0.16 CAD.
• M&A Transactions:
  • Paladin Transaction: Closed June 17, 2025. Knight acquired the international business of Endo Operations Limited (Paladin Pharma).
    • Cash paid at closing: $106,885k CAD (including $22,341k for inventory).
    • Holdback: $15,458k CAD (of which $10,000k may be released upon conditions; remaining $5,458k to settle liabilities).
    • Contingent payments: Up to US$15,000k upon achieving sales milestones.
    • Post-closing integration: Paladin headcount reduced by ~25% as of August 6, 2025.
  • Sumitomo Transaction: Closed June 5, 2025. Exclusive license and supply agreements with Sumitomo Pharma America Inc.
    • Products: Myfembree®, Orgovyx®, vibegron, and certain mature products in Canada.
    • Upfront payment: $25,400k CAD.
    • Contingent payments: Up to $15,750k CAD upon sales milestones.
    • Holdback: $1,300k CAD released upon conditions.
• Financing Activities:
  • NBC Credit Facility: Entered into a US$50,000k revolving credit facility with National Bank of Canada.
    • Amount withdrawn: $60,000k CAD (approx. US$44,000k) at closing to fund Paladin acquisition.
    • Terms: 3-year initial term, extendable annually. Interest rate: SOFR/CORRA + 1.25% to 2.75%.
    • Future plans: NBC syndication expected to increase facility to US$100M + US$50M accordion by end of 2025.
  • Citibank Line: Fully repaid US$35,000k withdrawn from uncommitted working capital line in June 2025.
  • Synergy Loan Settlement: Collected $13,758k CAD (US$10,000k) in cash and received warrants valued at $1,116k CAD.
• Product Updates & Regulatory:
  • Pemazyre®: Obtained regulatory approval in Argentina for cholangiocarcinoma.
  • Crexont®: Submitted for regulatory approval in Canada and Mexico.
  • Minjuvi®: Submitted for ANVISA approval in Brazil for follicular lymphoma.
  • Incyte Deal: Amended Supply and Distribution Agreement to add exclusive rights to distribute ZYNYZ® (retifanlimab) and NIKTIMVO™ (axatilimab) in Latin America.
  • Other: Re-launched Onicit® IV in Mexico and Brazil; added over 50 products including 5 pipeline/early launch assets.
• Shareholder Actions:
  • Shareholders re-elected six directors to the Board.
  • Completed NCIB (Normal Course Issuer Bid) launched in July 2024: Purchased 2,019,906 common shares at average price of $5.48 CAD for $11,065k CAD.
• Financial Outlook:
  • Increased 2025 Revenue Guidance: $410M – $420M CAD (previously $390M – $405M).
  • Expected Adjusted EBITDA: Approximately 13% of revenues.
  • Drivers: Better H1 performance and incremental revenues from Sumitomo Transaction.

Notable Quotes

• “I am excited to announce that for the first half of 2025, we achieved a record-high adjusted revenues of $197 million, a growth of 9% and an adjusted EBITDA of approximately $28 million. Our innovative promoted product portfolio delivered an organic growth of 15% on a constant currency basis during the same period. In addition, we have added over fifty products with the Paladin and Sumitomo transactions. These profitable portfolios included seven pipeline and early launch assets that will further accelerate the growth trajectory of our Canadian business. In addition, we secured a revolving credit facility with NBC ensuring we remain well positioned to continue to transact and execute on our mission to acquire, in-license, develop, and commercialize pharmaceutical products in Latin America and Canada,” said Samira Sakhia, President and CEO of Knight Therapeutics Inc.