Knight Therapeutics’ Earnings Call: Growth Amid Challenges

Knight Therapeutics ((TSE:GUD)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for Knight Therapeutics painted a mixed picture of the company’s financial health and strategic direction. While the company reported commendable revenue growth and strategic acquisitions, these were counterbalanced by a decline in adjusted EBITDA, financial asset losses, and increased operating expenses. The call highlighted promising developments in the promoted portfolio and upcoming product launches, yet underscored the financial challenges that need to be addressed.

Revenue Growth

Knight Therapeutics reported revenues of $88 million for the first quarter of 2025, marking a 3% increase compared to the same period last year. This growth, although modest, reflects the company’s ability to sustain its revenue stream amidst a challenging financial landscape.

Promoted Portfolio Performance

The promoted portfolio was a standout performer, accounting for over 75% of total revenues and growing by $9 million or 16% on a constant currency basis. This robust performance underscores the strength and market demand for Knight’s promoted products.

Oncology and Hematology Portfolio Growth

Knight’s oncology and hematology portfolio delivered $32 million in revenues, showing a growth of 3% and 6% on a constant currency basis. This steady growth highlights the portfolio’s resilience and potential for future expansion.

Infectious Disease Portfolio Growth on Constant Currency

Despite a nominal decrease, the infectious disease portfolio grew by $1 million or 3% on a constant currency basis. This indicates a stable performance in a sector that remains crucial for Knight’s overall strategy.

Pipeline and Product Launches

Knight continued to advance its portfolio with regulatory submissions and approvals, including the launch of Minjuvi in Mexico and the relaunch of Onicit in Brazil and Mexico. These developments are expected to enhance the company’s market presence and revenue potential.

Paladin Acquisition

In a strategic move, Knight entered into an agreement to acquire the assets of Paladin for $100 million plus $20 million of inventory, with potential future contingent payments up to $15 million. This acquisition is anticipated to bolster Knight’s portfolio and market position.

Adjusted EBITDA Decline

The adjusted EBITDA for Q1 2025 decreased by $1.5 million or 11% compared to the same period last year, with adjusted EBITDA per share decreasing by 8%. This decline highlights the financial challenges Knight faces in maintaining profitability.

Financial Assets Loss

Knight recorded a total net loss of $3.8 million on its financial assets due to mark-to-market revaluation and changes in the value of certain equities. This loss reflects the volatility and risks associated with financial asset management.

Increased Operating Expenses

Operating expenses increased by $3 million or 10%, driven by commercial spend for new launches and transaction fees related to the Paladin acquisition. This rise in expenses underscores the cost pressures Knight faces as it expands its operations.

Financial Outlook for 2025

Knight Therapeutics has set its financial guidance for fiscal 2025, anticipating revenues between $390 million and $405 million, with an adjusted EBITDA margin of approximately 13%. The company also executed a share buyback under the NCIB and secured a $40 million line of credit to support its financial strategy. These measures indicate Knight’s proactive approach to managing its financial future.

In summary, Knight Therapeutics’ earnings call revealed a company navigating through a mix of growth opportunities and financial challenges. While revenue growth and strategic acquisitions are promising, the decline in adjusted EBITDA and increased operating expenses highlight areas needing attention. The company’s forward-looking guidance suggests a cautious yet optimistic outlook for the remainder of the fiscal year.