Financial Results
- Delivered revenues of $92,263, an increase of $10,763 or 13% or $13,801 or 18% on a constant currency 1 basis, over the same period in the prior year. The increase is driven by growth of our key promoted products partly offset by declines of our mature products.
- Gross margin of $45,017 or 49% of revenues compared to $40,182 or 49% of revenues in the same period in the prior year.
- Adjusted EBITDA 1 was $13,454, a decrease of $2,058 or 13% over the same period in the prior year.
- Adjusted EBITDA per share 1 of $0.13, a decrease of $0.02 or 10% over the same period in the prior year driven by investments on our new launches and pipeline.
- Net income was $85, compared to $9,588 in the same period in the prior year.
- Cash inflow from operations was $5,016, compared to $15,166 in the same period in the prior year.
Corporate Developments
- Purchased 437,500 common shares through Knight's NCIB at an average price of $5.65 for an aggregate cash consideration of $2,474.
Subsequent to quarter- end
- Obtained regulatory approval for Minjuvi ® (tafasitamab) in Mexico.
- Recorded an unrealized gain of $14,412 recognized in other comprehensive income in Q3-24 on our shares of Synergy driven by its IPO in October 2024.
"I am excited to report that for the nine months ended September 30, 2024, we delivered record revenues of over $271 million and adjusted EBITDA of over $42 million. This strong performance is the result of the growth of our key promoted products and our commercial execution across Canada and Latin America. In addition, we have advanced our pipeline with the regulatory approval of Minjuvi ® in Mexico with a launch expected in the first half of 2025. We remain committed to advancing our pipeline products with regulatory submissions and approvals to grow our business in Canada and Latin America." said Samira Sakhia, President and Chief Executive Officer of Knight Therapeutics Inc.
______________________
1 Adjusted EBITDA, Adjusted EBITDA per share and revenues at constant currency are non-GAAP measures. Refer to section Non-GAAP measures for additional details.
SELECTED FINANCIAL RESULTS REPORTED UNDER IFRS
[In thousands of Canadian dollars]
|
| | | | | Change | | | | | | Change | |
| Q3- 24 | | Q3-23 | | $ 1 | | % 2 | | YTD- 24 | | YTD-23 | | $ 1 | | % 2 | |
| | | | | | | | | | | | | | | | |
| Revenues | 92,263 | | 81,500 | | 10,763 | | 13% | | 274,440 | | 254,002 | | 20,438 | | 8% | |
| Gross margin | 45,017 | | 40,182 | | 4,835 | | 12% | | 134,053 | | 118,437 | | 15,616 | | 13% | |
| Gross margin % | 49 % | | 49 % | | | | | | 49 % | | 47 % | | | | | |
| Selling and marketing | 13,372 | | 11,924 | | (1,448 | ) | 12% | | 39,285 | | 35,463 | | (3,822 | ) | 11% | |
| General and administrative | 12,110 | | 11,080 | | (1,030 | ) | 9% | | 34,747 | | 29,305 | | (5,442 | ) | 19% | |
| Research and development | 5,153 | | 4,768 | | (385 | ) | 8% | | 15,939 | | 13,291 | | (2,648 | ) | 20% | |
| Amortization of intangible assets | 11,179 | | 11,480 | | 301 | | 3% | | 33,725 | | 33,925 | | 200 | | 1% | |
| Operating expenses | 41,814 | | 39,252 | | (2,562 | ) | 7% | | 123,696 | | 111,984 | | (11,712 | ) | 10% | |
Operating income | 3,203 | | 930 | | 2,273 | | 244% | | 10,357 | | 6,453 | | 3,904 | | 60% | |
Net (loss) income | 85 | | 9,588 | | (9,503 | ) | 99% | | (6,403 | ) | 7,491 | | (13,894 | ) | 185% | |
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.
SELECTED FINANCIAL RESULTS EXCLUDING IAS 29 1
[In thousands of Canadian dollars]
|
| | | | | Change | | | | | | Change | |
| Q3- 24 | | Q3-23 | | $ | | % | | YTD- 24 | | YTD-23 | | $ | | % | |
| | | | | | | | | | | | | | | | |
| Revenues | 91,430 | | 81,669 | | 9,761 | | 12% | | 271,346 | | 254,736 | | 16,610 | | 7% | |
| Gross margin | 43,196 | | 42,121 | | 1,075 | | 3% | | 129,173 | | 123,751 | | 5,422 | | 4% | |
| Gross margin % | 47 % | | 52 % | | | | | | 48 % | | 49 % | | | | | |
| Selling and marketing | 13,197 | | 11,937 | | 1,260 | | 11% | | 38,658 | | 35,635 | | 3,023 | | 8% | |
| General and administrative | 11,922 | | 11,009 | | 913 | | 8% | | 33,711 | | 29,084 | | 4,627 | | 16% | |
| Research and development | 5,372 | | 4,651 | | 721 | | 1% | | 15,789 | | 13,376 | | 2,413 | | 18% | |
| Amortization of intangible assets | 11,161 | | 11,475 | | (314 | ) | 3% | | 33,707 | | 33,789 | | (82 | ) | —% | |
| Operating expenses | 41,652 | | 39,072 | | 2,580 | | 7% | | 121,865 | | 111,884 | | 9,981 | | 9% | |
| | | | | | | | | | | | | | | | |
| EBITDA 1 | 13,330 | | 15,512 | | (2,182 | ) | 14% | | 42,560 | | 48,018 | | (5,458 | ) | 11% | |
| Adjusted EBITDA 1 | 13,454 | | 15,512 | | (2,058 | ) | 13% | | 42,787 | | 48,018 | | (5,231 | ) | 11% | |
| Adjusted EBITDA per share 1 | 0.13 | | 0.15 | | (0.02 | ) | 10% | | 0.42 | | 0.46 | | (0.04 | ) | 7% | |
1 Financial results excluding the impact of IAS 29, EBITDA, adjusted EBITDA and adjusted EBITDA per share are non-GAAP measures. Refer to section " Non- GAAP measures" for additional details.
Revenues
For the quarter ended September 30, 2024, revenues excluding the impact of IAS 29 were $91,430 an increase of $9,761 or 12% mainly driven by a growth of $13,526 or 25% from our key promoted products offset by a decline in our mature products. On a constant currency 1 basis, revenues increased by $13,801 or 18% for the three period ended September 30, 2024. The table below provides revenues by therapeutic area.
| Excluding the impact of IAS 29 1
|
| | | Change |
| Therapeutic Area | Q3- 24 | Q3- 23 | $ | | % |
| Oncology/Hematology | 36,821 | 31,336 | 5,485 | | 18% |
| Infectious Diseases | 33,827 | 29,195 | 4,632 | | 16% |
| Other Specialty | 20,782 | 21,138 | (356 | ) | 2% |
| Total | 91,430 | 81,669 | 9,761 | | 12% |
1 Revenues excluding the impact of IAS 29 is a non-GAAP measure, refer to section " Non-GAAP measures" for additional details.
The increase in revenues is explained by the following:
- Oncology/Hematology : The oncology/hematology portfolio increased by $5,485 or 18% or $6,729 or 22% on a constant currency 1 basis driven by continued growth of key promoted products including Lenvima ® , Akynzeo ® , Trelstar ® and the launch of Minjuvi ® in Brazil. Furthermore, in Q3-24, a competitor in Brazil launched both a branded generic and a generic of Lenvima ® . Knight and Eisai are collaborating to defend Lenvima ® 's market exclusivity in Brazil. While we continue to challenge the generic entrants, the introduction of generics and branded generics will increase competitive pressures and negatively impact future sales and margins of Lenvima ® in Brazil.
- Infectious Diseases: The infectious diseases portfolio increased by $4,632 or 16% or $6,572 or 24% on constant currency 1 basis mainly driven by the timing of orders for Ambisome ® under the MOH contract and growth of our key promoted products including Cresemba ® , partly offset by a decrease in the demand of Impavido ® . During Q3-24 the Company delivered $6,700 of Ambisome ® to MOH compared to nil in Q3-23.
MOH Contract : The Company signed a contract with the Ministry of Health of Brazil for Ambisome ® in December 2022 ("2022 MOH Contract"). Knight delivered a total of $34,600 under the 2022 MOH Contract as follows: $7,000 in 2022, $25,200 in 2023 ($2,400 in Q1-23, $18,000 in Q2-23 and $4,800 in Q4-23) and $2,400 Q1-24. In December 2023, Knight signed a new contract with the MOH ("2024 MOH Contract") and delivered $6,800 in Q1-24, $8,900 in Q2-24 and $6,700 in Q3-24. The total MOH sales AmBisome ® delivered in Q3-24 and YTD-24 was $6,700 and $24,800, respectively.
- Other Specialty : The specialty portfolio decreased by $356 or 2%. There was no significant variance.
Gross margin
Excluding the impact of IAS 29, gross margin as a percentage of revenues was 47% in Q3-24 compared to 52% in Q3-23. The decrease in the Q3-24 gross margin, as a percentage of revenues, was due to product mix including a higher proportion of Ambisome ® sales to MOH.
Selling and marketing ("S&M") expenses: For the quarter ended September 30, 2024, S&M expenses excluding the impact of IAS 29, were $13,197 in Q3-24 compared to $11,937 in Q3-23, an increase of $1,260 or 11%. The increase was mainly driven by the marketing spend for the launches of Minjuvi ® in Brazil, Imvexxy ® and Bijuva ® in Canada as well as pre-launch activities for Jornay PM™.
1 Revenues at constant currency is a non-GAAP measure. Refer to section " Non-GAAP measures" for additional details.
General and administrative ("G&A") expenses: For the quarter ended September 30, 2024, G&A expenses excluding the impact of IAS 29, were $11,922 in Q3-24 compared to $11,009 in Q3-23, an increase of $913 or 8%. The increase was mainly driven by structure and compensation expenses along with higher spending on professional and consulting fees.
Research and development ("R&D") expenses: For the quarter ended September 30, 2024, R&D expenses excluding the impact of IAS 29, were $5,372 in Q3-24 compared to 4,651 in Q3-23, an increase of $721 or 16%. The increase was driven by medical initiatives related to key promoted products.
Adjusted EBITDA
For the quarter ended September 30, 2024, adjusted EBITDA decreased by $2,058 or 13%. The decrease was driven by higher marketing spend related to the launches of Minjuvi ® in Brazil, Imvexxy ® and Bijuva ® in Canada as well as pre-launch activities for Jornay PM™, higher general and administrative expenses mainly related to structure and compensation increase along with higher spending on professional and consulting fees, and an increase in research and development expenses mainly driven by medical initiatives related to key promoted products, partly offset by a higher gross margin.
Net Income
For the quarter ended September 30, 2024, the net income was $85 compared to $9,588 for the same period in prior year. The variance mainly resulted from the above-mentioned items and a net loss on the revaluation of $2,820 financial assets measured at fair value through profit or loss of versus a net gain of $5,562 in the same period in prior year and income tax expense of $523 in Q3-24 versus an income tax recovery of $690 in Q3-23 mainly driven by operating income and timing differences related to our financial assets
SELECT BALANCE SHEET ITEMS
[In thousands of Canadian dollars]
|
| | | Change
| |
| September 30, 2024 | December 31, 2023 | $ | | % | |
| | | | | | |
| Cash, cash equivalents and marketable securities | 151,500 | 161,825 | (10,325 | ) | 6 | % |
| Trade and other receivables | 142,943 | 141,684 | 1,259 | | 1 | % |
| Inventories | 114,959 | 91,834 | 23,125 | | 25 | % |
| Financial assets | 126,457 | 128,369 | (1,912 | ) | 1 | % |
| Accounts payable and accrued liabilities | 93,795 | 90,617 | 3,178 | | 4 | % |
| Bank loans | 51,651 | 61,866 | (10,215 | ) | 17 | % |
Cash, cash equivalents and marketable securities : As at September 30, 2024, Knight had $151,500 in cash, cash equivalents and marketable securities, a decrease of $10,325 or 6% as compared to December 31, 2023. The decrease is mainly due to the settlement of upfront and milestone payments in connection with product licensing agreements including Qelbree TM , IPX203, Jornay PM TM and Cresemba ® , principal and interest payments on bank loans and repurchase of shares through the NCIB, partly offset by the cash inflows from operations. The cash inflows from operating activities were $34,811 for the nine-month period ended September 30, 2024 driven by the operating results adjusted for noncash items such as depreciation, amortization as well as increase in working capital of $7,416. The increase in working capital was mainly due to an increase in inventory due to the timing of purchases as well as investments on our new product launches.
Financial assets: As at September 30, 2024, financial assets were at $126,457, an decrease of $1,912 or 1% as compared December 31, 2023 mainly driven by unrealized gain on the fair value of our equity investment in Synergy as a result of Synergy's IPO partly offset by unrealized losses on the valuation of certain private investments of our strategic funds.
Bank loans: As at September 30, 2024, bank loans were at $51,651, a decrease of $10,215 or 17% as compared December 31, 2023 mainly due to principal repayments of bank loans as well as the depreciation of the Brazilian Real, Mexican Peso and Colombian Peso.
Product update
Minjuvi ®
In Q4-24, Knight obtained regulatory approval by COFEPRIS, the Mexican health regulatory agency, for Minjuvi ® (tafasitamab) in combination with lenalidomide followed by Minjuvi ® monotherapy 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). The Company expects to launch Minjuvi ® in Mexico in the first half of 2025.
Lenvima ®
During 2023, two companies received ANVISA's approval for generic lenvatinib in Brazil. During 2024, both of those companies received the approval for a branded generic lenvatinib. Additionally, in Q3-24, a competitor received the approval of a generic lenvatinib in Chile.
In Q3-24, a competitor in Brazil launched both a branded generic and a generic of Lenvima ® . Knight and Eisai are collaborating to defend Lenvima ® 's market exclusivity in Brazil. While we continue to continue to challenge the generic entrants, the introduction of generics and branded generics will increase competitive pressures and negatively impact future sales and margins of Lenvima ® in Brazil.
Corporate Update
NCIB
On July 15, 2024, the Company commenced an NCIB where Knight may purchase for cancellation up to 5,312,846 common shares of the Company. During the three-month period ended September 30, 2024, the Company purchased 437,500 common shares at an average price of $5.65 for aggregate cash consideration of $2,474 under the NCIB. Subsequent to the quarter-end up to October 31, 2024, the Company purchased an additional 190,000 common shares at an average purchase price of $5.66 for an aggregate cash consideration of $1,076.
Financial Outlook
Knight provides guidance on revenues on a non-GAAP basis. This is due to both the difficulty in predicting Argentinian inflation rates and its IAS 29 impact.
Knight reconfirmed its financial guidance targets for 2024. Knight expects to generate between $355 million to $365 million in revenues and adjusted EBITDA 1 to be approximately 16% of revenues. The guidance is based on a number of assumptions, including but not limited to the following:
- no revenues or expenses for business development transactions not completed as at November 6, 2024
- no unforeseen termination to our license, distribution & supply 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 material increase in provisions for inventory or trade receivables
- no significant variations of forecasted foreign currency exchange rates
- inflation 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 and adjusted EBITDA are 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, 2024, today at 8:30 am ET. Knight cordially invites all interested parties to participate in this call.
Date: Thursday, November 7, 2024
Time: 8:30 a.m. ET
Telephone : Toll Free: 1-800-836-8184 or International 1-289-819-1350
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.sedarplus.ca .
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, 2023 as filed on www.sedarplus.ca . 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:
NON-GAAP MEASURES
[In thousands of Canadian dollars]
The Company discloses non-GAAP measures and ratios 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 and adjusted EBITDA per share ratio 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.
[i] Revenues and Financial results excluding the impact of hyperinflation under IAS 29
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.
Revenues and financial results under IFRS are adjusted to remove the impact of hyperinflation under IAS 29. The 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 and financial results excluding the impact of hyperinflation under IAS 29 allow results to be viewed without the impact of IAS 29 thereby facilitating the comparison of results period over period. The presentation of revenues and financial results excluding the impact of hyperinflation under IAS 29 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.
The following tables are reconciliations of financial results under IFRS to financial results excluding the impact of hyperinflation under IAS 29.
| Q3- 24
| | YTD- 24 | |
| Reported
under IFRS | | IAS 29
Adjustment | | Excluding the
Impact of
IAS 29 | | Reported
under IFRS | | IAS 29
Adjustment | | Excluding the
Impact of
IAS 29 | |
| | | | | | | | | | | | |
| Revenues | 92,263 | | (833 | ) | 91,430 | | 274,440 | | (3,094 | ) | 271,346 | |
| Cost of goods sold | 47,246 | | 988 | | 48,234 | | 140,387 | | 1,786 | | 142,173 | |
| Gross margin | 45,017 | | (1,821 | ) | 43,196 | | 134,053 | | (4,880 | ) | 129,173 | |
| Gross margin (%) | 49 % | | | | 47 % | | 49 % | | | | 48 % | |
Expenses | | | | | | | | | | | | |
| Selling and marketing | 13,372 | | (175 | ) | 13,197 | | 39,285 | | (627 | ) | 38,658 | |
| General and administrative | 12,110 | | (188 | ) | 11,922 | | 34,747 | | (1,036 | ) | 33,711 | |
| Research and development | 5,153 | | 219 | | 5,372 | | 15,939 | | (150 | ) | 15,789 | |
| Amortization of intangible assets | 11,179 | | (18 | ) | 11,161 | | 33,725 | | (18 | ) | 33,707 | |
| Operating income (loss) | 3,203 | | (1,659 | ) | 1,544 | | 10,357 | | (3,049 | ) | 7,308 | |
| Q3-23 | | YTD-23 | |
| Reported
under IFRS | | IAS 29
Adjustment | | Excluding the
Impact of
IAS 29 | | Reported
under IFRS | IAS 29
Adjustment | | Excluding the
Impact of
IAS 29 | |
| | | | | | | | | | | |
| Revenues | 81,500 | | 169 | | 81,669 | | 254,002 | 734 | | 254,736 | |
| Cost of goods sold | 41,318 | | (1,770 | ) | 39,548 | | 135,565 | (4,580 | ) | 130,985 | |
| Gross margin | 40,182 | | 1,939 | | 42,121 | | 118,437 | 5,314 | | 123,751 | |
| Gross margin (%) | 49 % | | | | 52 % | | 47 % | | | 49 % | |
Expenses | | | | | | | | | | | |
| Selling and marketing | 11,924 | | 13 | | 11,937 | | 35,463 | 172 | | 35,635 | |
| General and administrative | 11,080 | | (71 | ) | 11,009 | | 29,305 | (221 | ) | 29,084 | |
| Research and development | 4,768 | | (117 | ) | 4,651 | | 13,291 | 85 | | 13,376 | |
| Amortization of intangible assets | 11,480 | | (5 | ) | 11,475 | | 33,925 | (136 | ) | 33,789 | |
| Operating income | 930 | | 2,119 | | 3,049 | | 6,453 | 5,414 | | 11,867 | |
[ii] Revenues and Financial results at constant currency
Revenues and financial results at constant currency are obtained by translating the prior period revenues and financial 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 revenues and results at the average exchange rate in effect for each of the periods.
Revenues and 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 revenues and 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.
The following tables are reconciliations of financial results under IFRS to financial results and financial results at constant currency.
| Q3- 23 | YTD- 23 |
| Excluding the
impact of
IAS 29 1 | | Constant
Currency
Adjustment | | Constant
Currency | | Excluding the
impact of
IAS 29 1 | Constant
Currency
Adjustment | | Constant
Currency | |
| Revenues | 81,669 | | (4,040 | ) | 77,629 | | 254,736 | (448 | ) | 254,288 | |
| Cost of goods sold | 39,548 | | (2,455 | ) | 37,093 | | 130,985 | (1,002 | ) | 129,983 | |
| Gross margin | 42,121 | | (1,585 | ) | 40,536 | | 123,751 | 554 | | 124,305 | |
| Gross margin (%) | 52 % | | | | 52 % | | 49 % | | | 49 % | |
Expenses | | | | | | | | | | | |
| Selling and marketing | 11,937 | | (559 | ) | 11,378 | | 35,635 | (354 | ) | 35,281 | |
| General and administrative | 11,009 | | (249 | ) | 10,760 | | 29,084 | 252 | | 29,336 | |
| Research and development | 4,651 | | (111 | ) | 4,540 | | 13,376 | (15 | ) | 13,361 | |
| Amortization of intangible assets | 11,475 | | 129 | | 11,604 | | 33,789 | 256 | | 34,045 | |
| Operating income | 3,049 | | (795 | ) | 2,254 | | 11,867 | 415 | | 12,282 | |
1 Refer to Subsection - [ i ] Revenues and Financial results excluding the impact of hyperinflation under IAS 29 for additional details.
[iii] EBITDA
EBITDA is defined as operating income or loss adjusted to exclude amortization and impairment of intangible assets, depreciation, purchase price allocation accounting adjustments, and the impact of IAS 29 (accounting under hyperinflation) but to include costs related to leases.
EBITDA allows results to be viewed without the impact of amortization and impairment of intangible assets, depreciation, purchase price allocation accounting adjustments, and the impact of IAS 29 (accounting under hyperinflation) but to include costs related to leases fluctuations in foreign currency exchange rates thereby facilitating the comparison of results period over period. The presentation of EBITDA 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.
[iv] Adjusted EBITDA
Adjusted EBITDA is defined EBITDA adjusted for acquisition costs and non-recurring expenses.
Adjusted EBITDA allows results to be viewed without the impact of amortization and impairment of intangible assets, depreciation, purchase price allocation accounting adjustments, and the impact of IAS 29 (accounting under hyperinflation), acquisition costs and non-recurring expenses but to include costs related to leases fluctuations in foreign currency exchange rates thereby facilitating the comparison of results period over period. The presentation of adjusted EBITDA 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.
The following table is a reconciliation of operating income (loss) to EBITDA and adjusted EBITDA.
| Q3- 24 | | Q3- 23 | | YTD- 24 | | YTD- 23 | |
| Operating income | 3,203 | | 930 | | 10,357 | | 6,453 | |
| Adjustments to operating income: | | | | | | | | |
| Amortization of intangible assets | 11,179 | | 11,480 | | 33,725 | | 33,925 | |
| Depreciation of property, plant and equipment and ROU assets | 2,210 | | 2,218 | | 5,414 | | 5,014 | |
| Lease costs (IFRS 16 adjustment) | (997 | ) | (779 | ) | (2,861 | ) | (2,146 | ) |
| Impact of IAS 29 | (2,265 | ) | 1,663 | | (4,075 | ) | 4,772 | |
| EBITDA | 13,330 | | 15,512 | | 42,560 | | 48,018 | |
| Acquisition and transition costs | 18 | | — | | 121 | | — | |
| Other non-recurring expenses | 106 | | — | | 106 | | — | |
| Adjusted EBITDA | 13,454 | | 15,512 | | 42,787 | | 48,018 | |
[v] Adjusted EBITDA per share
Adjusted EBITDA per share is defined as Adjusted EBITDA over number of common shares outstanding at the end of the respective period. The presentation of adjusted EBITDA per share is considered to be a non-GAAP ratio 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.
The following table calculates adjusted EBITDA per share as follows:
| Q3- 24 | | Q3- 23 | | YTD- 24 | | YTD- 23 | |
| Adjusted EBITDA | 13,454 | | 15,512 | | 42,787 | | 48,018 | |
| Adjusted EBITDA per common share | 0.13 | | 0.15 | | 0.42 | | 0.46 | |
| Number of common shares outstanding at period end (in thousands) | 100,976 | | 105,045 | | 100,976 | | 105,045 | |
SELECTED FINANCIAL RESULTS AT CONSTANT CURRENCY 1
[In thousands of Canadian dollars]
|
| Excluding impact of IAS 29 |
| | | Constant
Currency 1 | | Change | | | | Constant
Currency 1 | | Change | |
| Q3- 24 | | Q3-23 | | $ | | % | | YTD- 24 | | YTD-23 | | $ | | % | |
Revenues | 91,430 | | 77,629 | | 13,801 | | 18% | | 271,346 | | 254,288 | | 17,058 | | 7% | |
| Gross margin | 43,196 | | 40,536 | | 2,660 | | 7% | | 129,173 | | 124,305 | | 4,868 | | 4% | |
| Gross margin % | 47 % | | 52 % | | | | | | 48 % | | 49 % | | | | | |
| Operating expenses | 41,652 | | 38,282 | | (3,370 | ) | 9% | | 121,865 | | 112,023 | | (9,842 | ) | 9% | |
| EBITDA | 13,330 | | 14,757 | | (1,427 | ) | 10% | | 42,560 | | 48,672 | | (6,112 | ) | 13% | |
| Adjusted EBITDA | 13,454 | | 14,757 | | (1,303 | ) | 9% | | 42,787 | | 48,672 | | (5,885 | ) | 12% | |
| Adjusted EBITDA per share | 0.13 | | 0.14 | | (0.01 | ) | 7% | | 0.42 | | 0.45 | | (0.03 | ) | 7% | |
1 Financial results at constant currency is a non-GAAP measure. Refer to section "Non-GAAP measures" for additional details.
Revenues at Constant Currency 1 by Therapeutic Area
| Three months ended September 30,
| | Nine months ended September 30, | |
| Excluding impact of IAS 29 |
| | | Constant
Currency 1 | | | | | | | | Constant
Currency 1 | | | | | |
| Innovative | 2024 | | 2023 | | $ | | % | | 2024 | | 2023 | | $ | | % | |
| Oncology/Hematology | 36,821 | | 30,092 | | 6,729 | | 22 | % | 103,288 | | 88,979 | | 14,309 | | 16 | % |
| Infectious Diseases | 33,827 | | 27,255 | | 6,572 | | 24 | % | 109,714 | | 104,687 | | 5,027 | | 5 | % |
| Other Specialty | 20,782 | | 20,282 | | 500 | | 2 | % | 58,344 | | 60,622 | | (2,278 | ) | 4 | % |
| Total | 91,430 | | 77,629 | | 13,801 | | 18 | % | 271,346 | | 254,288 | | 17,058 | | 7 | % |
1 Revenues at constant currency is a non-GAAP measure. Refer to Section 15 - Non-GAAP measures for additional details.
INTERIM CONSOLIDATED BALANCE SHEETS
[In thousands of Canadian dollars]
[Unaudited]
|
| As at | September 30, 2024 | December 31, 2023 |
| ASSETS | | |
| Current | | |
| Cash and cash equivalents | 73,755 | 58,761 |
| Marketable securities | 73,965 | 95,657 |
| Trade receivables | 91,250 | 88,722 |
| Other receivables | 7,294 | 7,427 |
| Inventories | 114,959 | 91,834 |
| Prepaids and deposits | 7,287 | 4,881 |
| Other current financial assets | 24,598 | 15,753 |
| Income taxes receivable | 4,458 | 2,080 |
| Total current assets | 397,566 | 365,115 |
Marketable securities | 3,780 | 7,407 |
| Prepaids and deposits | 7,682 | 7,767 |
| Right-of-use assets | 6,352 | 6,190 |
| Property, plant and equipment | 15,292 | 11,669 |
| Intangible assets | 279,681 | 289,960 |
| Goodwill | 84,783 | 79,844 |
| Other financial assets | 101,859 | 112,616 |
| Deferred income tax assets | 20,900 | 19,390 |
| Other long-term receivables | 44,399 | 45,535 |
| Total non-current assets | 564,728 | 580,378 |
| Total assets | 962,294 | 945,493 |
INTERIM CONSOLIDATED BALANCE SHEETS (continued)
[In thousands of Canadian dollars]
[Unaudited]
|
| As at | September 30, 2024 | December 31, 2023 |
LIABILITIES AND EQUITY | | |
| Current | | |
| Accounts payable and accrued liabilities | 86,620 | 85,366 |
| Lease liabilities | 3,015 | 1,728 |
| Other liabilities | 2,193 | 1,046 |
| Bank loans | 18,691 | 17,850 |
| Income taxes payable | 2,493 | 1,182 |
| Other balances payable | 5,140 | 6,857 |
| Total current liabilities | 118,152 | 114,029 |
Accounts payable and accrued liabilities | 7,175 | 5,251 |
| Lease liabilities | 3,551 | 5,497 |
| Bank loans | 32,960 | 44,016 |
| Other balances payable | 22,284 | 27,012 |
| Deferred income tax liabilities | 4,263 | 2,817 |
| Total liabilities | 188,385 | 198,622 |
Shareholders' equity | | |
| Share capital | 539,317 | 540,046 |
| Warrants | 117 | 117 |
| Contributed surplus | 26,215 | 25,991 |
| Accumulated other comprehensive income | 64,077 | 29,829 |
| Retained earnings | 144,183 | 150,888 |
| Total shareholders' equity | 773,909 | 746,871 |
| Total liabilities and shareholders' equity | 962,294 | 945,493 |
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, | |
| 2024 | | 2023 | | 2024 | | 2023 | |
Revenues | 92,263 | | 81,500 | | 274,440 | | 254,002 | |
| Cost of goods sold | 47,246 | | 41,318 | | 140,387 | | 135,565 | |
| Gross margin | 45,017 | | 40,182 | | 134,053 | | 118,437 | |
Expenses | | | | |
| Selling and marketing | 13,372 | | 11,924 | | 39,285 | | 35,463 | |
| General and administrative | 12,110 | | 11,080 | | 34,747 | | 29,305 | |
| Research and development | 5,153 | | 4,768 | | 15,939 | | 13,291 | |
| Amortization of intangible assets | 11,179 | | 11,480 | | 33,725 | | 33,925 | |
| Operating income (loss) | 3,203 | | 930 | | 10,357 | | 6,453 | |
Interest income on financial instruments measured at amortized cost | (2,458 | ) | (2,024 | ) | (6,554 | ) | (6,218 | ) |
| Other interest income | (65 | ) | (1,031 | ) | (1,194 | ) | (3,276 | ) |
| Interest expense | 1,915 | | 2,603 | | 6,776 | | 8,398 | |
| Other expense | (795 | ) | (1,907 | ) | (1,006 | ) | (2,123 | ) |
| Net loss (gain) on financial instruments measured at fair value through profit or loss | 2,820 | | (5,562 | ) | 19,752 | | 2,346 | |
| Foreign exchange loss (gain) | 2,326 | | 1,317 | | 5,934 | | 6,162 | |
| Gain on hyperinflation | (1,148 | ) | (1,364 | ) | (7,528 | ) | (3,000 | ) |
| (Loss) income before income taxes | 608 | | 8,898 | | (5,823 | ) | 4,164 | |
Income tax | | | | |
| Current | 1,862 | | 1,112 | | 4,776 | | 3,251 | |
| Deferred | (1,339 | ) | (1,802 | ) | (4,196 | ) | (6,578 | ) |
| Income tax expense (recovery) | 523 | | (690 | ) | 580 | | (3,327 | ) |
| Net income (loss) for the period | 85 | | 9,588 | | (6,403 | ) | 7,491 | |
Basic and diluted net income (loss) per share | — | | 0.09 | | (0.06 | ) | 0.07 | |
| Weighted average number of common shares outstanding | | | | |
| Basic | 101,132,799 | | 106,250,793 | | 101,211,415 | | 108,728,924 | |
| Diluted | 101,132,799 | | 106,511,761 | | 101,211,415 | | 108,958,045 | |
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
[In thousands of Canadian dollars]
[Unaudited]
|
| Three months ended
September 30, | | Nine months ended
September 30, | |
| 2024 | | 2023 | | 2024 | | 2023 | |
| OPERATING ACTIVITIES | | | | |
| Net (loss) income for the period | 85 | | 9,588 | | (6,403 | ) | 7,491 | |
| Adjustments reconciling net income to operating cash flows: | | | | |
| Depreciation and amortization | 13,389 | | 13,698 | | 39,139 | | 38,939 | |
| Net loss (gain) on financial instruments | 2,820 | | (5,562 | ) | 19,752 | | 2,346 | |
| Unrealized foreign exchange (gain) loss | 98 | | 3,619 | | (6,231 | ) | 1,557 | |
| Other operating activities | (384 | ) | 1,058 | | (4,030 | ) | 966 | |
| 16,008 | | 22,401 | | 42,227 | | 51,299 | |
| Changes in non-cash working capital and other items | (10,992 | ) | (7,235 | ) | (7,416 | ) | (33,303 | ) |
| Cash inflow (outflow) from operating activities | 5,016 | | 15,166 | | 34,811 | | 17,996 | |
INVESTING ACTIVITIES | | | | |
| Purchase of marketable securities | (45,417 | ) | (52,118 | ) | (123,339 | ) | (237,668 | ) |
| Proceeds on maturity of marketable securities | 58,703 | | 81,204 | | 150,693 | | 262,372 | |
| Investment in funds | (1,372 | ) | (1,006 | ) | (2,575 | ) | (1,176 | ) |
| Purchase of intangible assets | (1,671 | ) | (60 | ) | (28,488 | ) | (7,727 | ) |
| Other investing activities | 1,284 | | 7,736 | | 2,623 | | 15,441 | |
| Cash inflow (outflow) from investing activities | 11,527 | | 35,756 | | (1,086 | ) | 31,242 | |
FINANCING ACTIVITIES | | | | |
| Repurchase of common shares through Normal Course Issuer Bid | (2,474 | ) | (9,833 | ) | (3,716 | ) | (34,396 | ) |
| Principal repayment of bank loans | (2,039 | ) | (2,571 | ) | (10,698 | ) | (8,580 | ) |
| Proceeds from bank loans | 1,638 | | 2,706 | | 2,930 | | 4,796 | |
| Other financing activities | (1,052 | ) | (1,541 | ) | (6,702 | ) | (7,124 | ) |
| Cash outflow from financing activities | (3,927 | ) | (11,239 | ) | (18,186 | ) | (45,304 | ) |
Increase (decrease) in cash and cash equivalents during the period |
12,616 | |
39,683 | |
15,539 | |
3,934 | |
| Cash and cash equivalents, beginning of the period | 60,807 | | 37,844 | | 58,761 | | 71,679 | |
| Net foreign exchange difference | 332 | | (109 | ) | (545 | ) | 1,805 | |
| Cash and cash equivalents, end of the period | 73,755 | | 77,418 | | 73,755 | | 77,418 | |
Cash and cash equivalents |
73,755 | |
77,418 | |
73,755 | |
77,418 | |
| Marketable securities | 77,745 | | 76,397 | | 77,745 | | 76,397 | |
| Total cash, cash equivalents and marketable securities | 151,500 | | 153,815 | | 151,500 | | 153,815 | |
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