Knight Therapeutics Inc.

Good morning, ladies and gentlemen. My name is Liz, and I'll be your operator today. Welcome to Knight Therapeutics' first quarter 2024 results conference call. Before turning the call over to Samira Sakhia, President and CEO of Knight, with me, I'll remind you that persons of today's session may, either not be, at the time of your call, and on your call, that could cause actual results to differ materially from those contemplated by the forward-looking statements. The company considers the assumptions on which these forward-looking statements are based to be reasonable at the time they were prepared, but cautions that these assumptions regarding the future events, many of which are beyond the control of the company and its subsidiaries, may ultimately prove to be incorrect. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether a result of new information, future events, except as required by law. We would also like to remind you questions during today's call will be taken from analysts only. Should there be any further questions, please contact Knight's Investor Relations Department via email to info at knighttx.com. or via phone at 514-484-4483. I would like to remind everyone that this call is being recorded today, May 9th, 2024, and would now like to turn the meeting over to your host for today's call, Samira Sakia. Please go ahead, Ms. Sakia.

Thank you, Liz. Good morning, everyone, and welcome to Knight Therapeutics' first quarter 2024 conference call. On today's call, I am joined by Amal Khoury, our Chief Business Officer, and Arvij Ujjana, our Chief Financial Officer. I'm pleased to report that in Q1 2024, we delivered revenues of over $85 million, a growth of $3 million or 4% over the same period last year, including 13% or $7.1 million growth from our promoted portfolio. In addition, during the first quarter, we launched three products in two different territories, Invexi and Bejuva in Canada, and Minjuvi in Brazil. Beyond delivering growth across our promoted portfolio, we have advanced our pipeline with the regulatory submission in Brazil for Fosdamatinib, which we licensed from Rigel, and the approval of Carfib, our branded generic of Carfilzomib in Colombia. At the end of Q1, we had nine products, including Dorn APM, under regulatory review in various countries across our regions. In parallel to advancing our products towards regulatory approval and launch, we are continuing to strengthen our pipeline and to add to our portfolio through business development. This year so far, we have added two products for Canada and LATAM. IPX203, a novel formulation of carbidopa, levodopa for Parkinson's disease. And as you saw this morning, we have added DronAPM, a novel formulation of methylphenidate for ADHD. With these two products and Calvary, which we added at the end of 2023, we are well on our way to building a strong neurology portfolio, allowing us to leverage our existing Exelon infrastructure. I will now turn the call over to Arvind to provide an update on our financial results.

Thank you, Samira. When speaking of our financial results, I will refer to EBITDA and adjusted EBITDA, which are non-IFRS measures. as well as adjusted EBITDA per share, which is a non-IFRS ratio. NITE defines EBITDA as operating income or loss excluding amortization and impairment of non-current assets, depreciation, purchase price accounting adjustment, and the impact of accounting under hyperinflation, but to include costs related to leases. Adjusted EBITDA excludes acquisition costs and non-recurring expenses. Knightley finds adjusted EBITDA per share as EBITDA over the number of common shares outstanding at the end of the respective periods. Furthermore, my discussion on the operating results will refer to figures that exclude hyperinflation. For the first quarter of 2024, we delivered revenues over $85 million, an increase of $3 million or 4% versus prior year. Our infectious disease portfolio contributed to $38 million of revenues, an increase of $7 million, or 23%, compared to the same period last year. This was driven by our key promoted products, including Ambisom and Cresemba, partly offset by the timing of demand for certain products, including Improvido. During this quarter, we sold a total of $9.2 million of Ambisom, under our sales contract with the Ministry of Health or MOH in Brazil, an incremental $6.8 million compared to the MOH sales in the same period last year. During 2024, we expect to deliver approximately $18.9 million to MOH, including the $9.2 million already delivered in Q1 2024. Now, moving to our oncology and hematology disease portfolio. We generated $30.8 million in the quarter, a growth of approximately $2 million, or 6% compared to the same period last year. Our key promoted brands, including Landima, Traltor, Akinzeo, Balboa Seal, and the launch of Menjuvi, contributed approximately $5 million of incremental revenues. This increase was offset by a decline of approximately $3 million in the sales of our mature and branded generic products due to the lifecycle. Turning to our other specialty portfolio. During the quarter, the portfolio generated $17 million in revenues, a decrease of $6 million or 26% compared to the same period last year. The decrease is mainly due to advanced purchases of Exelon in the first quarter of 2023, driven by the transition of commercial activities from Novartis to Knight, as well as the purchasing patterns of certain customers. Now moving on to gross margin. In the first quarter of 2024, we reported a gross margin of $40.7 million or 47% of revenues compared to $41.4 million or 50% of revenues versus Q1 last year. The decrease in gross margin as a percentage of revenues was due to product mix. I will now turn to our operating expenses, excluding amortization. Our operating expenses were approximately $27.5 million in Q1-24, an increase of $3.8 million, or 16%, compared to the same period last year. The increase was driven by higher marketing spend for the launches of Invaxi, Bijuva, and Minjuvi, an increase in our GNA costs due to our structure and higher compensation expenses, as well as development costs for our pipeline products. Moving on to adjusted EBITDA. For the first quarter of 2024, we reported $13.6 million of adjusted EBITDA, a decrease of $4.6 million or 25% compared to the same period last year driven by the investment in our product launches and pipeline. Our adjusted EBITDA per share was 13 cents for the quarter. I will now cover the unrealized losses on our financial assets, which are not reflected in our listed EBITDA. In Q1 24, we reported a net loss of approximately $16 million, driven by the unrealized losses on the valuation of certain private investments of our strategic funds. Finally, on to our cash flows. During Q1 24, Knight generated cash inflows from operations of $30.8 million, driven by our operating results as well as a decrease in working capital. Our working capital decreased by $15.5 million due to an increase in our accounts payable and a decrease in our trade receivable and inventory levels compared to December 31st, 2023. Our accounts payable excluding all investment activities increased by $9.4 million due to the purchases of inventory of our key promoted products. We expect to settle those payables in the second quarter of this year. I will now turn the call over to Amal to provide more details on our product pipeline.