Life Science News

Knight Therapeutics Inc. (TSX: GUD) ("Knight" or "the Company"), a leading pan-American (ex-US) specialty pharmaceutical company, today reported financial results for its third quarter ended September 30, 2022. All currency amounts are in thousands except for share and per share amounts. All currencies are Canadian unless otherwise specified.

Q3 2022 Highlights

Financials

  • Revenues were $72,281, a decrease of $1,059 or 1% over the same period in prior year.
  • Gross margin of $30,401 or 42% compared to $37,766 or 51% in the same period in prior year.
  • Adjusted EBITDA 1 was $9,009, a decrease of $8,325 or 48% over the same period in prior year.
  • Net loss on financial assets measured at fair value through profit or loss of $5,446.
  • Net income was $1,591, compared to net loss of $8,586 in the same period in prior year.
  • Cash inflow from operations was $11,329, compared to a cash inflow from operations of $10,321 in the same period in prior year.

Corporate Developments

  • Executed a settlement agreement with former controlling shareholders of GBT and received $6,030 (US$4,600).
  • Launched a normal course issuer bid ("NCIB") in July 2022 to purchase up to 7,988,986 common shares of the Company over the next 12 months.
  • Purchased 800,700 common shares through Knight's NCIB at an average price of $5.57 for an aggregate cash consideration of $4,463.

Products

  • Re-launched AKYNZEO® (netupitant/palonosetron /fosnetupitant/palonosetron) in Brazil and Argentina in July 2022.
  • Transferred marketing authorization of Exelon® (rivastigmine) and assumed commercial activities in Chile and Argentina.
  • Assumed full commercial activities and re-launched Exelon® (rivastigmine) in Brazil in July 2022.

Subsequent Events

  • Transferred marketing authorization of Exelon® (rivastigmine) and assumed commercial activities in Mexico, Peru & Canada.
  • Submitted tafasitamab in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) who are not eligible for autologous stem cell transplantation (ASCT) to ANVISA for regulatory approval in Brazil.
  • Purchased an additional 887,800 common shares through NCIB for an aggregate cash consideration of $4,750.

"I am excited to announce that for the nine months ended September 30, 2022, we reported record revenues of over $210,000 which represents a growth of 14% over the same period last year and record adjusted EBITDA of over $40,000 which represents a growth of 24% over the same period last year. This growth was generated by the full year effect of Exelon® and the continued growth performance of our recent launches. We continue to focus on our mission to bring innovative medicines and high-quality treatments to improve the health of patients in Latin America and Canada. During the past months, we have assumed the commercial activities of Exelon® in Brazil, Colombia, Argentina, Mexico, Chile, Peru and Canada as well as AKYNZEO® in Brazil and Argentina. Furthermore, we continue to advance on our pipeline with the submission of tafasimab for regulatory approval in Brazil.", said Samira Sakhia, President and Chief Executive Officer of Knight Therapeutics Inc.

____________________________________

1 Adjusted EBITDA is a non-GAAP measure, refer to section "Non-GAAP measures" and "Reconciliation to adjusted EBITDA" for additional details

SELECT FINANCIAL RESULTS
[In thousands of Canadian dollars]

Change
Change
Q3-22 Q3-21 $ 1
% 2 YTD-22 YTD-21 $ 1 % 2
Revenues 72,281 73,340 (1,059 ) 1 % 211,908 185,205 26,703 14 %
Gross margin 30,401 37,766 (7,365 ) 20 % 101,173 87,217 13,956 16 %
Gross margin % 42 % 51 % 48 % 47 %
Operating expenses 4 42,415 33,745 (8,670 ) 26 % 111,167 85,415 (25,752 ) 30 %
Net income (loss) 1,591 (8,586 ) 10,177 119 % (14,704 ) 23,976 (38,680 ) 161 %
EBITDA 3 9,009 17,334 (8,325 ) 48 % 40,211 31,764 8,447 27 %
Adjusted EBITDA 3 9,009 17,334 (8,325 ) 48 % 40,211 32,309 7,902 24 %
  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 in section "Non-GAAP measures" 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
09-30-22 12-31-21 $ % 1
Cash, cash equivalents and marketable securities 145,142 149,502 (4,360 ) 3 %
Trade and other receivables 136,410 103,875 32,535 31 %
Inventory 84,942 72,397 12,545 17 %
Financial assets 166,911 192,443 (25,532 ) 13 %
Accounts payable and accrued liabilities 91,134 65,590 25,544 39 %
Bank loans 33,220 35,927 (2,707 ) 8 %
  1. Percentage change is presented in absolute values

Revenues: For the quarter ended September 30, 2022, revenues, excluding the impact of IAS 29, was $69,111 a decrease of $2,502 or 3% compared to the same prior year period. The revenues by therapeutic areas are as follows:

Excluding impact of IAS 29 3
Change
Therapeutic Area Q3-22 Q3-21 $ 1 % 2
Oncology/Hematology 26,271 23,049 3,222 14 %
Infectious Diseases 27,243 30,931 (3,688 ) 12 %
Other Specialty 15,597 17,633 (2,036 ) 12 %
Total 69,111 71,613 (2,502 ) 3 %
  1. 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
  2. Percentage change is presented in absolute values
  3. Revenues excluding the impact of IAS 29 is a non-GAAP measure, refer to section "Non-GAAP measures" for additional details.

The change in revenues by therapeutic areas is explained by the following:

  • Oncology/Hematology: The increase in revenues of $3,222 is driven by growth in our key promoted brands, including newly launched Lenvima® and Halaven® in Colombia, the growth of Trelstar® in Canada and the assumption of commercial activities of AKYNZEO® in Brazil. This increase is offset by a reduction in revenues of our branded generics products due to market entrance of new competitors.
  • Infectious Diseases: With the increase in patient treatments as our markets reduce COVID-19 restrictions as well as the growth of our key promoted products the infectious disease portfolio grew by approximately $7,000. The growth is offset by an estimated $10,500 due to lower demand for certain of our infectious diseases products to treat invasive fungal infections associated with COVID-19 as well as the planned transition and termination agreement with Gilead effective July 1, 2022.
  • Other Specialty: The decrease in revenues is mainly due to advance purchases of certain customers in Brazil in Q2-22 in anticipation of the transfer of the commercial activities of Exelon® from Novartis to Knight of approximately $2,000.

Gross margin: For the quarter ended September 30, 2022, excluding the impact of IAS 29, gross margin is 49% compared to 54% in the same period in prior year. The decrease is explained by the change in the accounting of Exelon® from a net profit transfer to the recognition of revenues and related costs upon the transfer of commercial activities from Novartis to Knight in Colombia at the end of Q2-22 and Brazil at the beginning of Q3-22, as well as a change in product mix.

Under IFRS, for the quarter ended September 30, 2022, gross margin decreased from 51% in Q3-21 to 42% in Q3-22. In addition to the change in the accounting of Exelon® and product mix, the gross margin under IFRS was further impacted by a higher level of inflation in Argentina in the current quarter as compared to Q3-21. The inflation in Argentina has increased to 66% in the first nine months of 2022 from 37% in the same prior year period, which further negatively impact the gross margin under IAS 29.

Knight expects gross margin as a % of revenues to decline over the next quarters as the commercial activities of Exelon® are transferred to Knight on a country-by-country basis and the Company records revenues with related cost of sales instead of a net profit transfer. In addition, the gross margin under IFRS, as a % of revenues, is expected to decline due to an increasing inflation environment in Argentina.

Selling and marketing ("S&M"): For the quarter ended September 30, 2022, S&M expenses were $13,456, an increase of $3,466 or 35% compared to the same period in prior year. Excluding the impact of IAS 29, the increase is $2,905 or 30% driven by an increase in compensation expenses, certain variable costs such as logistics fees, as well as an increase in selling and marketing activities related to key promoted products and Exelon®.

General and administrative ("G&A"): For the quarter ended September 30, 2022, G&A expenses were $10,416, an increase of $1,653 or 19%, compared to the same period in prior year. Excluding the impact of IAS 29, the increase is $1,007 or 12% mainly driven by an increase in compensation expense.

Research and development ("R&D"): For the quarter ended September 30, 2022, R&D expenses were $4,220, an increase of $427 or 11%, compared to the same period in prior year.

Amortization of intangible assets: For the quarter ended September 30, 2022, amortization of intangible assets increased by $1,044 driven by in-licensing of AKYNZEO® and ALOXI® from Helsinn as well as fostamatinib from Rigel, and the appreciation of the USD vs. the CAD.

Impairment of intangible assets: For the quarter ended September 30, 2022, the company recorded an impairment of intangible assets of $2,080 related to the 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, 2022, interest income was $2,462, an increase of 76% or $1,060, compared to the same period in prior year due to higher interest rates on cash and marketable securities.

Interest expense: For the quarter ended September 30, 2022, interest expense was $1,479, an increase of $520 or 54%, compared to the same period in prior year due to higher interest rates offset by a lower average bank loan balance.

Adjusted EBITDA: For the quarter ended September 30, 2022, adjusted EBITDA decreased by $8,325 or 48%. The decrease in adjusted EBITDA is driven by a decrease in gross margin of $7,365 and an increase in operating expenses.

Net loss or income: For the quarter ended September 30, 2022, net income was $1,591 compared to net loss of $8,586 for the same period in prior year. The variance mainly resulted from the above-mentioned items and (1) a net loss on the revaluation of financial assets measured at fair value through profit or loss of $5,446 versus a net loss of $21,301 in the same period in prior year, mainly due to unrealized revaluations of the strategic fund investments, (2) a foreign exchange gain of $10,787 mainly due to the unrealized gains on intercompany balances driven by the appreciation of the USD compared to a foreign exchange gain of $7,143 in the same period in prior year mainly due to the appreciation of the USD and (3) a gain of $6,030 as a result of execution of settlement agreement and general release with the former shareholders of GBT.

Cash, cash equivalents and marketable securities : As at September 30, 2022, Knight had $145,142 in cash, cash equivalents and marketable securities, a decrease of $4,360 or 3% as compared to December 31, 2021. The variance is primarily due to outflows related to due to upfront payments and certain milestones mainly related to in-licensing of AKYNZEO® and ALOXI® from Helsinn as well as fostamatinib from Rigel, shares repurchased through NCIB, principal repayments on bank loans partially offset by cash inflows from operating activities and foreign exchange gain on cash and cash equivalents.

Financial assets: As at September 30, 2022, financial assets were at $166,911, a decrease of $25,532 or 13%, as compared to the prior year, mainly due to negative mark-to-market adjustments of $29,688 driven by the decline in the share prices of the publicly-traded equities of our strategic fund investments due to general market conditions and distributions of $5,520, offset by capital calls of $3,300, net loans issued of $2,723 and foreign exchange gains of $5,336. 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, 2022, bank loans were at $33,220, a decrease of $2,707 or 8% as compared to the prior period, due to loan repayments of $5,447, partially offset by the appreciation of BRL and accrued interest.

Product Updates

As at November 9, 2022, the marketing authorizations of Exelon® for Brazil, Colombia, Argentina, Mexico, Chile, Peru and Canada were transferred to Knight. In addition, Knight has assumed the commercial activities of Exelon® in Colombia in Q2-22, Brazil, Argentina & Chile in Q3-22 and Mexico, Peru & Canada in Q4-22.

On May 12, 2022, Knight entered into an exclusive license, distribution and supply agreement with Helsinn for AKYNZEO® oral/IV (netupitant/palonosetron / fosnetupitant/palonosetron) in Canada, Brazil and select LATAM countries and ALOXI® oral/IV (palonosetron) in Canada. Knight has assumed commercial activities and re-launched AKYNZEO® in Brazil and Argentina in July 2022 and expects to begin commercial activities in Canada in Q4-22 following the transition from Helsinn's current licensee.

Corporate Updates

NCIB

On July 12, 2022, the Company announced that the Toronto Stock Exchange approved its notice of intention to launch a NCIB ("2022 NCIB"). Under the terms of the 2022 NCIB, Knight may purchase for cancellation up to 7,988,986 common shares of the Company which represented 10% of its public float as at June 30, 2022. The 2022 NCIB commenced on July 14, 2022 and will end on the earlier of July 13, 2023 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 three-month period ended September 30, 2022, the Company purchased 800,700 common shares at an average price of $5.57 for an aggregate cash consideration of $4,463, of which $655 remains to be settled as at September 30, 2022. Subsequent to quarter-end up to November 9, 2022, the Company purchased an additional 887,800 common shares at an average purchase price of $5.35 for an aggregate cash consideration of $4,750.

Settlement Agreement

Knight executed a settlement agreement and general release ("Settlement Agreement") with the former shareholders of GBT. The Company made certain claims ("Claims") with respect to its indemnification rights under the purchase agreement for the acquisition of GBT. Under the Settlement Agreement, Knight received $6,030 (US$4,600) as settlement for the Claims.

Financial Outlook Update

Knight provides guidance on revenues 1 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 has updated its guidance and expects to generate $265 to $275 million in revenue, an increase of $5 million on the lower and upper range. 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, 2022
  • 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 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 in section " Non-GAAP measures " for additional details

Conference Call Notice

Knight will host a conference call and audio webcast to discuss its third quarter ended September 30, 2022, today at 8:30 am ET. Knight cordially invites all interested parties to participate in this call.

Date: Thursday, November 10, 2022
Time: 8:30 a.m. ET
Telephone : Toll Free: 1-888-394-8218 or International 1-647-484-0475
Webcast: www.gud-knight.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.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'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 because 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:

Q3-22 YTD-22
Reported
under
IFRS

Excluding
impact of
IAS 29
1
Variance Reported
under IFRS

Excluding
impact of
IAS 29
1
Variance
$ 2 % 3 $ 2
% 3
Revenues 72,281 69,111 3,170 5 % 211,908 207,966 3,942 2 %
Cost of goods sold 41,880 35,314 (6,566 ) 19 % 110,735 99,536 (11,199 ) 11 %
Gross margin 30,401 33,797 (3,396 ) 10 % 101,173 108,430 (7,257 ) 7 %
Gross margin (%) 42 % 49 % 48 % 52 %
Expenses
Selling and marketing 13,456 12,571 (885 ) 7 % 34,072 33,010 (1,062 ) 3 %
General and administrative 10,416 9,107 (1,309 ) 14 % 29,814 27,368 (2,446 ) 9 %
Research and development 4,220 3,683 (537 ) 15 % 10,615 9,690 (925 ) 10 %
Amortization of intangible assets 12,243 11,465 (778 ) 7 % 34,586 32,837 (1,749 ) 5 %
Impairment of intangible assets 2,080 2,080 0 % 2,080 2,080 0 %
Operating (loss) income (12,014 ) (5,109 ) (6,905 ) 135 % (9,994 ) 3,445 (13,439 ) 390 %
  1. Financial results excluding the impact of hyperinflation (IAS 29) is a non-GAAP measure. Refer to the definitions in section "Non-GAAP measures" 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. 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.

Revenues/financial results at constant currency allow revenues/financial 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 revenues/financial 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 or loss adjusted to exclude amortization and impairment of intangible asset, depreciation, purchase price allocation accounting adjustments, and the impact of IAS 29 (accounting under hyperinflation) but to include costs related to leases.

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.

For the three and nine-month periods ended September 30, the Company calculated EBITDA and adjusted EBITDA as follows:

Change Change
Q3-22
Q3-21
$ 1
% 2 YTD-22
YTD-21
$ 1 % 2
Operating (loss) income (12,014 ) 4,021 (16,035 ) 399 % (9,994 ) 1,802 (11,796 ) 655 %
Adjustments to operating (loss) income:
Amortization of intangible assets 12,243 11,199 1,044 9 % 34,586 24,136 10,450 43 %
Impairment of intangible assets 2,080 2,080 100 % 2,080 2,080 100 %
Depreciation of property, plant and equipment and ROU assets 3,025 1,796 1,229 68 % 7,841 4,778 3,063 64 %
Lease costs (IFRS 16 adjustment) (625 ) (744 ) 119 16 % (1,914 ) (2,141 ) 227 11 %
Impact of IAS 29 4,300 1,062 3,238 305 % 7,612 3,189 4,423 139 %
EBITDA 9,009 17,334 (8,325 ) 48 % 40,211 31,764 8,447 27 %
Acquisition and transaction costs 0 % 432 (432 ) 100 %
Other non-recurring expenses 0 % 113 (113 ) 100 %
Adjusted EBITDA 3 9,009 17,334 (8,325 ) 48 % 40,211 32,309 7,902 24 %

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 in section "Non-GAAP measures" for additional details

INTERIM CONSOLIDATED BALANCE SHEETS
[In thousands of Canadian dollars]
[Unaudited]

As at
September 30, 2022 December 31, 2021
ASSETS
Current
Cash and cash equivalents 101,822 85,963
Marketable securities 43,320 63,539
Trade receivables 80,054 55,388
Other receivables 10,345 5,056
Inventories 84,942 72,397
Prepaids and deposits 2,000 2,165
Other current financial assets 17,172 13,491
Income taxes receivable 3,193 6,970
Total current assets 342,848 304,969
Prepaids and deposits 3,777 3,046
Right-of-use assets 5,647 4,671
Property, plant and equipment 29,927 25,265
Investment properties 1,457
Intangible assets 370,888 350,299
Goodwill 83,412 75,403
Other financial assets 149,739 178,952
Deferred income tax assets 1,308 2,048
Other long-term receivables 46,011 43,431
690,709 684,572
Assets held for sale 1,786 2,350
Total assets 1,035,343 991,891

INTERIM CONSOLIDATED BALANCE SHEETS (continued)
[In thousands of Canadian dollars]
[Unaudited]

As at
September 30, 2022 December 31, 2021
LIABILITIES AND EQUITY
Current
Accounts payable and accrued liabilities 90,865 65,309
Lease liabilities 2,293 1,614
Other liabilities 6,447 1,989
Bank loans 25,148 26,662
Income taxes payable 2,728 7,073
Other balances payable 12,051 2,655
Total current liabilities 139,532 105,302
Accounts payable and accrued liabilities 269 281
Lease liabilities 3,550 3,417
Bank loan 8,072 9,265
Other balances payable 24,321 19,235
Deferred income tax liabilities 5,083 12,373
Total liabilities 180,827 149,873
Shareholders' Equity
Share capital 607,765 628,854
Warrants 117 117
Contributed surplus 23,196 21,776
Accumulated other comprehensive loss 46,529 (376 )
Retained earnings 176,909 191,647
Total shareholders' equity 854,516 842,018
Total liabilities and shareholders' equity 1,035,343 991,891

INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS)
[In thousands of Canadian dollars, except for share and per share amounts]
[Unaudited]

Three months ended September 30, Nine months ended September 30,
2022 2021 2022 2021
Revenues 72,281 73,340 211,908 185,205
Cost of goods sold 41,880 35,574 110,735 97,988
Gross margin 30,401 37,766 101,173 87,217
Expenses
Selling and marketing 13,456 9,990 34,072 26,787
General and administrative 10,416 8,763 29,814 25,296
Research and development 4,220 3,793 10,615 9,196
Amortization of intangible assets 12,243 11,199 34,586 24,136
Impairment of intangible assets 2,080 2,080
Operating (loss) income (12,014 ) 4,021 (9,994 ) 1,802
Interest income on financial instruments measured at amortized cost (1,096 ) (188 ) (2,150 ) (1,721 )
Other interest income (1,366 ) (1,214 ) (4,219 ) (3,465 )
Interest expense 1,479 959 4,307 2,287
Other (income) expense (5,860 ) 286 (5,989 ) 193
Net loss (gain) on financial instruments measured at fair value through profit or loss 5,446 21,301 29,501 (16,644 )
Foreign exchange (gain) loss (10,787 ) (7,143 ) (9,105 ) 252
Gain on hyperinflation (681 ) (92 ) (1,514 ) (214 )
Income (loss) before income taxes 851 (9,888 ) (20,825 ) 21,114
Income tax
Current 1,204 1,351 2,175 1,293
Deferred (1,944 ) (2,653 ) (8,296 ) (4,155 )
Income tax recovery (740 ) (1,302 ) (6,121 ) (2,862 )
Net income (loss) for the period 1,591 (8,586 ) (14,704 ) 23,976
Basic net earnings (loss) per share 0.01 (0.07 ) (0.13 ) 0.19
Diluted net earnings (loss) per share 0.01 (0.07 ) (0.13 ) 0.19
Weighted average number of common shares outstanding
Basic 114,466,484 123,059,239 115,569,933 125,946,921
Diluted 114,597,655 123,059,239 115,569,933 125,970,589

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
[In thousands of Canadian dollars]
[Unaudited]

Three months ended September 30, Nine months ended September 30,
2022 2021 2022 2021
OPERATING ACTIVITIES
Net income (loss) for the period 1,591 (8,586 ) (14,704 ) 23,976
Adjustments reconciling net income to operating cash flows:
Depreciation and amortization 15,268 12,995 42,427 28,914
Net gain on financial instruments 5,446 21,301 29,501 (16,644 )
Unrealized foreign exchange loss (8,104 ) (6,443 ) (7,435 ) (1,087 )
Other operating activities 1,242 (1,366 ) (1,931 ) 689
15,443 17,901 47,858 35,848
Changes in non-cash working capital and other items (4,114 ) (7,580 ) (12,129 ) 4,089
Cash inflow from operating activities 11,329 10,321 35,729 39,937
INVESTING ACTIVITIES
Purchase of marketable securities (21,412 ) (80,647 ) (47,895 )
Proceeds on maturity of marketable securities 21,370 101,240 146,896
Investment in funds (2,847 ) (5,359 ) (3,300 ) (10,963 )
Proceeds from distribution of funds 230 2,042 3,408 13,412
Purchase of intangible assets (74 ) (1,705 ) (18,524 ) (220,198 )
Other investing activities (563 ) (688 ) (232 ) 4,000
Cash inflow (outflow) from investing activities (3,296 ) (5,710 ) 1,945 (114,748 )
FINANCING ACTIVITIES
Repurchase of common shares through Normal Course Issuer Bid (4,463 ) (17,864 ) (21,385 ) (40,907 )
Principal repayment on bank loans (56 ) (5,447 ) (14,911 )
Proceeds from bank loans 2,325 422 2,325
Other financing activities (560 ) (668 ) (1,686 ) (1,931 )
Cash outflow from financing activities (5,079 ) (16,207 ) (28,096 ) (55,424 )
Increase (decrease) in cash and cash equivalents during the period 2,954 (11,596 ) 9,578 (130,235 )
Cash and cash equivalents, beginning of the period 93,119 102,582 85,963 229,592
Net foreign exchange difference 5,749 1,504 6,281 (6,867 )
Cash and cash equivalents, end of the period 101,822 92,490 101,822 92,490
Cash and cash equivalents 101,822 92,490
Marketable securities 43,320 63,539
Total cash, cash equivalents and marketable securities 145,142 156,029

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Salix Pharmaceuticals Culminates Year-Long Constipation Awareness Campaign with New Social Media and Digital Initiatives Empowering Patients to Discuss Their Symptoms with a Health Care Provider

  • Launching in December for Constipation Awareness Month, Initiatives Include Partnerships with Well-Known Lifestyle and Health Care Practitioner Influencers
  • Campaign Coincides with Salix's Continued Support of Advocacy Groups Building Innovative Patient Education Programs and Advancing Disease State Research in 2023

Salix Pharmaceuticals ("Salix"), the gastroenterology business of Bausch Health Companies Inc. (NYSE:BHC)(TSX:BHC) ("Bausch Health"), today announced the launch of a series of social media and digital initiatives to raise awareness during Constipation Awareness Month in December. The initiatives will discuss constipation diseases, including opioid-induced constipation (OIC), irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC). It is estimated that approximately up to 80% of patients receiving opioid medications for chronic pain experience OIC,1 30 million adults have CIC,2,3 and 3.4 million have IBS-C.2,3

The initiatives launching this month culminate a year in which Salix invested in a multipronged educational campaign that included the publication of digital content reaching more than 240 million consumers with valuable information about the symptoms of OIC, IBS-C, and CIC and treatment options they can discuss with their health care providers.

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Johnson & Johnson Names CEO Joaquin Duato as Chairman of the Board

Alex Gorsky to Step Down After 30-Year Career at Johnson & Johnson

Johnson & Johnson (NYSE: JNJ) today announced that its Board of Directors has elected Chief Executive Officer, Mr. Joaquin Duato, to assume the additional position of Chairman, effective in January 2023. Mr. Duato succeeds Mr. Alex Gorsky, who will step down from his role as Executive Chairman following a brief transitional period.

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Bausch Health Announces the Unrestricting of Bausch + Lomb Under Bausch Health Debt Documents

Bausch Health Companies Inc. (NYSE:BHC)(TSX:BHC) ("Bausch Health" or the "Company") has designated 1261229 B.C. Ltd., the entity that directly or indirectly holds 88.7% of the issued and outstanding shares of Bausch + Lomb Corporation ("Bausch + Lomb"), as an unrestricted subsidiary of the Company in accordance with the terms of the Company's debt documents. In connection therewith, all of the subsidiaries of 1261229 B.C. Ltd., including Bausch + Lomb and its subsidiaries, are also now unrestricted subsidiaries of the Company and, as a result, are no longer subject to the covenants under the Bausch Health debt documents

The Company continues to evaluate potential options to maximize stakeholder value, which include its ongoing focus on its balance sheet and liquidity.

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Viemed Announces New Senior Secured Credit Facilities

Viemed Healthcare, Inc. (the "Company" or "Viemed") (NASDAQ:VMD and TSX:VMD.TO), a national leader in respiratory care and technology-enabled home medical equipment services, announced that it has entered into new syndicated credit facilities, consisting of a five-year senior secured revolving credit facility of up to $30 million and a five-year delayed draw term loan facility of up to $30 million, which may be borrowed in multiple drawdowns. The new credit facilities contain an accordion feature that allow the Company to increase the size of the facilities by up to $30 million, subject to certain conditions, for a total borrowing capacity of up to $90 million. Concurrently with the entry into the new credit facilities, the Company retired its previous senior credit facility, which included a $10 million unfunded line of credit commitment and a building term note in the principal amount of $4.7 million, scheduled to expire and mature in 2023 and 2026, respectively.

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Medtronic executives to speak at the Evercore ISI 5th annual HealthCONx conference

- Medtronic plc (NYSE:MDT), a global leader in healthcare technology, today announced it will participate in the Evercore ISI 5 th annual HealthCONx conference on Tuesday, November 29 2022.

Geoff Martha , Medtronic chairman and chief executive officer, and Karen Parkhill , executive vice president & chief financial officer, will answer questions on the company beginning at 5:10 p.m. EST ( 4:10 p.m. CST ).

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2 Biggest Medical Device ETFs in 2022

2 Biggest Medical Device ETFs in 2022

Exchange-traded funds (ETFs) are a popular investment strategy, and generally contain a variety of publicly traded companies under one stock symbol, often with a focus on a specific sector.

Depending on the ETF, investors may be able to track up-and-coming companies, get exposure to top firms or a mix of both. Aside from stocks, some ETFs also track commodities or bonds.

In the healthcare industry, medical device ETFs bring together companies that go to great lengths to develop pharmaceutical-based technology that can improve the lives of patients.

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