Ms. Samira Sakhia reports

KNIGHT THERAPEUTICS REPORTS THIRD QUARTER 2023 RESULTS

Knight Therapeutics Inc. has released financial results for its third quarter ended Sept. 30, 2023. All currency amounts are in thousands except for share and per share amounts. All currencies are Canadian unless otherwise specified.

Q3 2023 Highlights

Financial Results

• Revenues were $81,500, an increase of $9,219 or 13 per cent over the same period in prior year.
• Gross margin of $40,182 or 49 per cent compared to $30,401 or 42 per cent in the same period in prior year.
• Adjusted EBITDA1 was $15,512, an increase of $6,503 or 72 per cent over the same period in prior year.
• Adjusted EBITDA per share1 of $0.15, an increase of $0.07 or 87 per cent over the same period in prior year.
• Net gain on financial assets measured at fair value through profit or loss of $5,562.
• Net income was $9,588, compared to $1,591 in the same period in the prior year.
• Cash inflow from operations was $15,166, an increase of $3,374 or 29 per cent over the same period in prior year.

Corporate Developments

• Launched a NCIB to purchase up to 5,999,524 common shares of the Company over the next 12 months.
• Purchased 2,158,091 common shares through Knight's NCIB at an average price of $4.55 for aggregate cash consideration of $9,833.

Products

• Submitted marketing authorization for Tavalisse(TM) (fostamatinib) in Colombia and Mexico.
• Obtained regulatory approval for Minjuvi(TM) (tafasitamab) in Brazil.
• In-licensed a branded generic molecule in Oncology/Hematology for Brazil.
• Subsequent to quarter-end
• Obtained CMED pricing approval for Minjuvi(TM) in Brazil.
• Submitted marketing authorization for Pemazyre(TM) (pemigatinib) in Brazil.

"I am excited to announce that for the nine months ended September 30, 2023, we reported record revenues and record adjusted EBITDA of over $254,000 and over $48,000, respectively, which represents a growth of 20 per cent and 19 per cent, respectively, over the same period last year, putting us on track to deliver record 2023 results. In addition, we advanced our product pipeline with the Brazilian pricing approval for Minjuvi(TM) which we expect to launch in the second quarter of 2024. We continue to execute on our mission to build a leading Pan-American ex US specialty pharmaceutical company by bringing innovative and branded generic products to our markets," said Samira Sakhia, President and Chief Executive Officer of Knight Therapeutics Inc.

Revenues: For the quarter ended September 30, 2023, excluding the impact of hyperinflation, revenues increased by $12,558 or 18 per cent compared to the same period in prior year. The appreciation of select LATAM currencies led to an increase in revenues of $4,248 in Q3-23 compared to Q3-22. The revenues by therapeutic areas are as follows:

The increase in revenues excluding the impact of hyperinflation is explained by the following:

Oncology/Hematology: The oncology/hematology portfolio grew by approximately $7,300 primarily due to continued growth of key promoted products including Lenvima(TM), Trelstar(TM), Palbocil(TM) launched in Argentina in Q1-23 and the assumption of commercial activities of Akynzeo(TM) in Brazil, Argentina and Canada in 2022. The increase is offset by a reduction of approximately $2,200 in revenues of our mature and branded generics products due to their lifecycle including the entrance of new competitors.

Infectious Diseases: The increase is driven by our key promoted products, including Cresemba(TM), as well as higher demand of Impavido(TM), offset by the purchasing patterns for certain products. Furthermore, Knight received an order for Ambisome(TM) for $4,875 from MOH, which is expected to be delivered in Q4-23 ("Q4-23 MOH Order").

Other Specialty: The increase in the other specialty portfolio is primarily driven by the transition of commercial operations of Exelon(TM) from Novartis to Knight. The revenues of Exelon(TM) increased by approximately $5,700 in Q3-23 versus Q3-22. In Q3-22, Knight recorded lower revenues of Exelon(TM) due to advance purchases of $3,000 in Brazil and Colombia in Q2-22, in connection with the transition of commercial activities. The remainder of the variance is explained by the change in accounting treatment from net profit transfer to revenues with related costs of sales upon the transition as well as timing of purchases from certain customers.

Gross margin: For the quarter ended September 30, 2023, gross margin, as a percentage of revenues, was 49 per cent compared to 42 per cent in Q3-22. Excluding the impact of IAS 29, gross margin, as a percentage of revenues, was 52 per cent in Q3-23 and 49 per cent in Q3-22. The increase is driven by the change in product mix.

Selling and marketing ("S&M"): For the quarter ended September 30, 2023, S&M expenses were $11,924, a decrease of $1,532 or 11 per cent, compared to the same period in prior year. Excluding the impact of IAS 29, the decrease is $634 or 5 per cent. There is no significant variance in S&M expenses.

General and administrative ("G&A"): For the quarter ended September 30, 2023, G&A expenses were $11,080, an increase of $664 or 6 per cent, compared to the same period in prior year. Excluding the impact of IAS 29, the increase is $1,902 or 21 per cent, mainly due to an increase in our compensation costs related to Knight's long term incentive plan as well as higher spending on professional and consulting fees.

Research and development ("R&D"): For the quarter ended September 30, 2023, R&D expenses were $4,768, an increase of $548 or 13 per cent, compared to the same period in prior year. Excluding the impact of IAS 29, the increase is $968 or 26 per cent. The increase is driven by an expansion in our product development and medical initiatives.

Amortization of intangible assets: For the quarter ended September 30, 2023, amortization of intangible assets was $11,480, a decrease of $763 or 6 per cent compared to the same period in prior year. There is no significant variance.

Impairment of intangible assets: For the quarter ended September 30, 2023, impairment of intangible assets was nil, compared to an impairment of $2,080 recognized in Q3-22 which represents the write-down of upfront and certain milestones payments made under certain product license agreements as a result of changes in commercial expectations.

Interest income: Interest income is the sum of interest income on financial instruments measured at amortized cost and other interest income. For the quarter ended September 30, 2023, interest income was $3,055, an increase of $593 or 24 per cent, compared to the same period in prior year. The increase is driven by higher interest rates on cash and marketable securities.

Interest expense: For the quarter ended September 30, 2023, interest expenses were $2,603, an increase of $1,124 or 76 per cent, compared to the same period in prior year. The increase is driven by the higher average loan balance resulting from IFC loan which closed in December 2022 and higher variable interest rates, partially offset by principal repayments of Itau Unibanco Brasil and Bancolombia bank loans.

Adjusted EBITDA: For the quarter ended September 30, 2023, adjusted EBITDA increased by $6,503 or 72 per cent, driven by an increase in gross margin (excluding impact of IAS 29) of $8,324, offset by an increase in operating expenses.

Net income : For the quarter ended September 30, 2023, net income was $9,588 compared to net income of $1,591 for the same period in prior year. The variance mainly resulted from the above-mentioned items and (1) a net gain on the revaluation of financial assets measured at fair value through profit or loss of $5,562 versus a net loss of $5,446 in the same period in prior year mainly driven by realized and unrealized gains and losses in the fair value of financial assets, (2) a foreign exchange loss of $1,317 in Q3-23 mainly driven by unrealized losses due to the appreciation of select LATAM currencies versus a foreign exchange gain of $10,787 in Q3-22 mainly driven by unrealized gains due to the appreciation of the USD and (3) other income of $1,907 in Q3-23 relating to certain fees recognized on strategic loans, as well as a gain on a disposal of a property in Colombia compared to an income of $5,860 in Q3-22 mainly relating to the gain recognized upon execution of a settlement agreement and general release with the former shareholders of GBT.

Cash, cash equivalents and marketable securities: As at September 30, 2023, Knight had $153,815 in cash, cash equivalents and marketable securities, a decrease of $18,859 or 11 per cent as compared to December 31, 2022. The variance is primarily due to cash outflows for certain regulatory and sales milestones on certain products, including Akynzeo(TM) and Aloxi(TM) from Helsinn, shares repurchased through NCIB and repayment of bank loans, partially offset by cash inflows from operating activities, principal loan repayments from Moksha8, proceeds from the disposal of Medimetriks and net proceeds from marketable securities and bank loans.

Financial assets: As at September 30, 2023, financial assets were at $158,470, a decrease of $18,093 or 10 per cent, as compared to December 31, 2022, driven mainly by a decrease of $18,170 due to negative mark-to-market adjustments from the decline in share prices of publicly-traded equities held by our strategic fund investments, strategic loan repayments of $12,454 from Moksha8, offset by the increase in the fair value of equity investments and derivatives of $12,520. Given the nature of the fund investments there could be significant fluctuations in the fair value of the underlying assets.

Bank Loans: As at September 30, 2023, bank loans were at $75,364, an increase of $5,292 or 8 per cent as compared to December 31, 2022.

Product Updates

Fostamatinib: Knight submitted marketing authorization applications for fostamatinib, for the treatment of thrombocytopenia in adult patients with chronic immune thrombocytopenia (ITP) who have had an insufficient response to a previous treatment, for regulatory approval in Mexico and Colombia.

Minjuvi(TM): Knight received regulatory approval in Brazil for Minjuvi(TM), in combination with lenalidomide followed by tafasitamab monotherapy, for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL), including DLBCL due to low-grade lymphoma, who are not eligible for autologous stem cell transplantation (ASCT). Subsequent to the quarter, the Company received pricing approval for Minjuvi(TM) (tafasitamab) from the Drugs Market Regulation Chamber ("CMED"). As a result, Knight expects to launch Minjuvi(TM) in Brazil in the second quarter of 2024.

Pemigatinib: Subsequent to the quarter, Knight submitted a marketing authorization application for pemigatinib to ANVISA, the Brazilian health regulatory agency, under the rare diseases approval pathway, for the treatment of adults with locally advanced or metastatic cholangiocarcinoma with a FGFR2 fusion or rearrangement that have progressed after at least one prior line of systemic therapy.

Corporate Updates

Normal Course Issuer Bid

During the three month period ended September 30, 2023, the Company purchased 2,158,091 common shares at an average price of $4.55 for aggregate cash consideration of $9,833 of which $211 remains to be settled as at September 30, 2023. Subsequent to quarter-end up to October 31, 2023, the Company purchased an additional 676,775 common shares at an average purchase price of $4.53 for an aggregate cash consideration of $3,069.

Financial Outlook Update

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 2023, Knight has updated its financial guidance on revenues and expects to generate between $325 million to $335 million in revenues an increase of $15 million on the lower end and $5 million on the upper end of the range. The adjusted EBITDA is expected to be approximately 18 per cent of revenues. The increase in the financial outlook is primarily due to the Q4-23 MOH Order, as well as improvement in forecasted LATAM currencies against the Canadian dollar. 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 at November 9, 2023
• discontinuation of certain distribution agreements
• 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 global pandemics
• 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.

Conference Call Notice

Knight will host a conference call and audio webcast to discuss its third quarter ended September 30, 2023, today at 8:30 am ET. Knight cordially invites all interested parties to participate in this call.

Date: Thursday, November 9, 2023

Time: 8:30 a.m. ET

Telephone: Toll Free: 1-888-664-6383 or International 1-416-764-8650

Webcast: www.knighttx.com or Webcast

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.knighttx.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'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.knighttx.com or www.sedar.com .

We seek Safe Harbor.