Earnings call transcript: Knight Therapeutics hits record high revenues in Q4 2024

Knight Therapeutics Inc., a pharmaceutical company with a market capitalization of $435 million, reported record revenues of $365 million for the year 2024, marking a 6% increase from the previous year. The company’s Q4 2024 revenues reached $94 million, also up 6% year-over-year. Despite these positive results, the adjusted EBITDA for 2024 decreased by 4% to $57.8 million. The company continues to expand its product portfolio and strategic initiatives across the Pan-American region. According to InvestingPro analysis, Knight maintains strong financial health with a score of 3.48 (rated as "GREAT"), supported by robust liquidity metrics.

Key Takeaways

• Knight Therapeutics achieved record revenues of $365 million in 2024.
• Q4 2024 revenues rose to $94 million, an increase of 6% year-over-year.
• Adjusted EBITDA decreased by 4% to $57.8 million.
• The company launched several new products and expanded its presence in international markets.
• Forward guidance projects 2025 revenues between $390 million and $450 million.

Company Performance

Knight Therapeutics demonstrated strong performance in 2024, achieving record revenues of $365 million, a 6% increase compared to 2023. The company’s strategic focus on expanding its product portfolio and international market presence contributed to this growth. However, the adjusted EBITDA saw a decline of 4%, reflecting increased investments in new product launches and acquisitions.

Financial Highlights

• Revenue: $365 million in 2024, up 6% year-over-year
• Q4 2024 Revenue: $94 million, a 6% increase from Q4 2023
• Adjusted EBITDA: $57.8 million, down 4% from the previous year
• Gross Margin: 47% for 2024
• Cash inflows from operations: $36 million in 2024

Outlook & Guidance

Knight Therapeutics has set its revenue guidance for 2025 between $390 million and $450 million, with an expected adjusted EBITDA of approximately 13% of revenues. The company anticipates the closure of the Paladin transaction by mid-2025 and plans to continue investing in new product launches to drive future profitability. InvestingPro analysis suggests the stock is currently undervalued, with analysts projecting positive earnings growth for the upcoming year. The company’s strong financial position is evidenced by its impressive Altman Z-Score of 11.53, indicating minimal bankruptcy risk.

Executive Commentary

CEO Sameera Zakir stated, "We have delivered eleven years of consecutive record high revenues," highlighting the company’s consistent performance. Zakir also emphasized the success of the Pan-American ex-U.S. strategy, noting, "Our team has been extremely successful in executing our strategy." CBO Amal Khouri added, "We look to acquire products with existing sales that will bring in profitability," underscoring the company’s focus on strategic acquisitions.

Risks and Challenges

• Increased competition: Generic competition for products like LENVIMA in Brazil could impact market share.
• Regulatory hurdles: Delays in regulatory approvals for new products could affect launch timelines.
• Market volatility: Economic fluctuations in key markets may impact revenue projections.
• Supply chain disruptions: Potential disruptions could affect product availability and operational efficiency.
• Integration risks: The successful integration of new acquisitions is crucial for achieving projected synergies.

Knight Therapeutics’ strategic initiatives and product expansions set a promising outlook for 2025, with expectations for continued revenue growth and operational efficiencies. The company’s low beta of 0.42 suggests relatively stable stock performance compared to the market. However, the company must navigate various risks to maintain its competitive edge and achieve its financial targets. For comprehensive analysis of Knight Therapeutics and similar investment opportunities, consider accessing the detailed Pro Research Report available on InvestingPro, which provides in-depth analysis of over 1,400 stocks.

Full transcript - Knight Therapeutics Inc (GUD) Q4 2024:

Sylvie, Conference Operator, Knight Therapeutics: Good morning, ladies and gentlemen. My name is Sylvie, and I will be your conference operator today. Welcome to Knight Therapeutics’ Fourth Quarter twenty twenty four Results Conference Call. Before turning the call over to Sameera Zakir, President and CEO of Knight, listeners are reminded that portions of today’s discussion may, by their nature, necessarily involve risks and uncertainties 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 intentions or obligations 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 that 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 irknighttx dot com or via phone at (514) 484-4483. I would like to remind everyone that this call is being recorded today, 03/20/2025. And now I would like to turn the meeting over to your host, Samira Sakir.

Please go ahead.

Sameera Zakir, President and CEO, Knight Therapeutics: Thank you, Sylvie. Good morning, everyone, and welcome to Knight Therapeutics’ fourth quarter and year end twenty twenty four conference call. I’m joined on today’s call with Amal Khouri, our Chief Business Officer and Arvind Ujana, our Chief Financial Officer. I am proud to announce that we have delivered eleven years of consecutive record high revenues since the inception of Knight. In 2024, we delivered revenues of over three sixty five million dollars and adjusted EBITDA of approximately $58,000,000 Our growth was driven by our key promoted products, which account for 75% of our total revenues.

The promoted portfolio grew by 16% over the period over the prior year period and has delivered a three year CAGR of more than 30%. While delivering on excellent results, we made significant progress in expanding our pipeline with five new products. We have expanded our neurology portfolio with the licensing of Krexant from Amneal and JournePM from Collegium for all of our territories. In addition, we have strengthened our partnership with Hellsens with the addition of Oniset for certain LatAm countries. With respect to our branded generic portfolio, we added two branded generic molecules in oncology and hematology for select LatAm countries.

To date, we have a pipeline of 18 products, including recent launches, which is expected to generate peak sales of over $150,000,000 In addition, we further advanced our pipeline with regulatory submissions of Calbri in Canada and TAVALISSE in Brazil and Argentina. With these submissions, we now have four innovative products namely Calbri, TAVALISSE, MINJUVY and PEMESYR awaiting regulatory approval in multiple territories. In addition, we have five branded generic products pending regulatory approval in multiple countries. We not only executed on regulatory submissions, we also obtained several regulatory approvals, namely MINJUVY and TAVALISSE in Mexico and Jernapeum in Canada and Pemazir in both Mexico and Brazil. In addition to the regulatory process, we launched two products in Canada, BIJUVA and IMVEXXY.

The latter competes in a growing market valued at over $110,000,000 in 2024. Outside of Canada, we launched MINJUVY in Brazil. Moving to our NCIB, during 2024, we purchased approximately 1,600,000.0 common shares for $9,000,000 In the first quarter of twenty twenty five, we purchased approximately 600,000 common shares for $3,300,000 I will now turn the call over to Arvind to provide a financial update.

Arvind Ujana, Chief Financial Officer, Knight Therapeutics: Thank you, Samira. When speaking of our financial results, I will refer to adjusted EBITDA and financial results at constant currency, which are non IFRS measures as well as adjusted EBITDA per share, which is a non IFRS ratio. Knight defines adjusted EBITDA as operating income or loss excluding amortization and impairment of non current assets, depreciation, the impact of accounting under hyperinflation, acquisition costs and non recurring expenses, but to include costs related to leases. We define adjusted EBITDA per share as adjusted EBITDA over the number of common shares outstanding at the end of the respective period. In addition, revenues and financial results at constant currency are also a non GAAP measure.

Financial results at constant currency obtained by translating the prior period results at the average foreign exchange rates in effect during the current period, except for Argentina, where we only exclude hyperinflation. Furthermore, my discussion on the operating results will refer to figures that exclude hyperinflation unless otherwise indicated. For the fourth quarter of twenty twenty four, we delivered revenues of over $94,000,000 representing an increase of $6,000,000 or 6% versus prior year. In 2024, as Samira mentioned, we delivered record high revenues of over $365,000,000 representing an increase of $22,000,000 or 6%. On a constant currency basis, revenues increased by approximately $29,000,000 or 9% versus prior year, driven by growth across all of our therapeutic areas.

In 2024, our oncology and hematology disease portfolio delivered approximately $137,600,000 a growth of $15,000,000 or 12% compared to last year. This increase was driven by the continued growth of our key promoted brands, which contributed approximately $24,000,000 of incremental revenues, mainly coming from LENVIMA, AKINZEO, TRILSTOR as well as the launch of MINJUV in Brazil. This growth was partially offset by a decline in our mature and branded generic products due to their lifecycle and the market entrance of new competitors as well as the impact of LatAm currency’s depreciation. Our infectious diseases portfolio delivered approximately $149,000,000 an increase of $8,500,000 or 6% compared to the same period last year. The increase was driven by the growth of our key promoted products, including AmbiSom and Crestamba, partly offset by a decrease in U.

S. Demand for ImpaVito. As a reminder, under our sales contract with the Ministry of Health in Brazil or MOH, in 2024, we delivered $24,800,000 of AmbiSONE compared to $25,200,000 in 2023. In January 2025, we have signed a new contract for AmbiSONE with the MOH and we expect to deliver approximately $22,400,000 in 2025. Other specialty therapeutic area.

The portfolio generated $79,000,000 in revenues remaining relatively unchanged compared to last year. Now moving on to gross margin. We reported $44,300,000 or a gross margin of 47% of revenues in the fourth quarter of twenty twenty four compared to $42,400,000 or 48% of revenues in the same period last year. For the year ended 12/31/2024, we reported $173,000,000 or a gross margin of 47% of revenues, compared to $166,000,000 or 48% of revenues 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. Our operating expenses excluding amortization and impairment of non current assets for the fourth quarter was $31,200,000 remaining relatively unchanged compared to the same period last year. For 2024, our operating expenses excluding amortization and impairment of non current assets were $119,300,000 an increase of $10,800,000 or 10% compared to last year. The increase in operating expenses was driven by an increase in marketing and medical initiatives behind the launches of MINJUVY, IMVEXXY, BIJUVA and pre launch activities for JONEAPM in Canada. In addition, our R and D costs increased driven by product development activities in connection with our pipeline as well as regulatory submission fees.

Lastly, our G and A costs increased due to our structure and higher compensation expenses. As a reminder, all costs related to development activities have been expensed, which typically include regulatory submission, analytical method transfers, stability studies and bioequivalence studies. Moving on to adjusted EBITDA. For the fourth quarter of twenty twenty four, we reported $15,000,000 an increase of $2,900,000 or 24% compared to the same period last year. For 2024, we reported $57,800,000 a decrease of $2,000,000 or 4% compared to last year.

Our adjusted EBITDA per share was $0.58 remaining relatively unchanged compared to 2023. I will now cover our financial assets, which are valued at $134,000,000 at the end of twenty twenty four. During the year, we recorded a total net loss of $2,800,000 on our financial assets, driven by the revaluations of our strategic fund investment, offset by the change in the value of our synergy shares. In 2024, our synergy shares were revalued at $8,300,000 compared to Niel in the prior year. With respect to our strategic fund investment, we have recorded a net loss of $11,400,000 driven by mark to market adjustments.

As a reminder, our funds continue to be a source of cash. In 2024, we collected $14,700,000 including $5,800,000 for certain contingent milestones, which were not previously recorded on the balance sheet. Moving on to our cash flows. During 2024, Knight generated cash inflows from operations of $36,000,000 including a net working capital increase of $20,000,000 The investment in net working capital was driven by an increase in our accounts receivable due to both higher revenues and timing of collection as well as investments in our inventory due to timing of purchases and new product launches. I will now turn the call over to Amal to provide more details on our business development activities.

Amal Khouri, Chief Business Officer, Knight Therapeutics: Thank you, Arvind, and good morning, everyone. In the last fifteen months, we grew our portfolio by adding five new products. In January 2024, we unlicensed Crexant for Canada and Latin America. Crexant is a novel overall formulation of Carbidopa Levodopa extended release capsules designed for the treatment of Parkinson’s disease. Knight expects to submit Caraxanth in Canada and certain LatAm countries in 2025.

According to IQVIA, the carbidopa levodopa market is valued at $50,000,000 in Canada and $120,000,000 in Brazil. The controlled release segment is valued at around $15,000,000 in each of Canada and Brazil. In May 2024, we announced an exclusive supply and distribution agreement for JournePM for Canada and Latin America. JournePM is an innovative extended release formulation of methylcandidate, a highly differentiated treatment option for ADHD. In November 2024, JournePM was approved by Health Canada and is expected to be launched in the second half of twenty twenty five.

According to IQVIA, the Canadian ADHD market totals approximately 1,250,000,000 of which the methylphenidate segment represents $500,000,000 and has been growing at over 14% CAGR over the last four years. In addition, during 2024, we unlicensed two branded generic molecules in oncology and hematology for certain territories in LatAm. Furthermore, in the first quarter of twenty twenty five, we announced the addition of ONISET from HealthN for Mexico, Brazil and certain other LatAm countries. ONYSIT is used for the prevention of chemotherapy induced nausea and vomiting and the prevention of post operative nausea and vomiting. ONYSIT is sold in Canada as Aloxxi, which was part of our original agreement with Halcyn.

Finally, in addition to expanding our pipeline, as announced last week, we entered into an agreement with Endo to acquire all of the assets of Palatin. In 2024, Palatin generated revenues of $70,000,000 excluding products that they had stopped commercializing or are in the process of discontinuing. The Paladin portfolio mainly consists of mature, primarily owned assets as well as promoted licensed products. As a reminder, the purchase price for this transaction is $100,000,000 plus an additional $20,000,000 of inventory, all payable in cash at closing. In addition to the upfront and inventory, Unite may pay future contingent payments of up to US15 million dollars upon achievements of certain sales milestones.

These recent deals illustrate our focused approach to building on the strong platform and capabilities that we have, specifically in oncology and neurology, as well as our strategy to build a balanced portfolio that includes innovative growing promoted products, mature cash flow generating products as well as branded generics. I will now turn the call back to Sameer.

Sameera Zakir, President and CEO, Knight Therapeutics: Thank you, Amal. Now on to our financial outlook for fiscal twenty twenty five. I would like to remind everyone that this guidance includes the assumption that we will close the Paladin transaction in the middle of twenty twenty five and also assumes that there is no material adjustment due to hyperinflation accounting in Argentina. In addition, our guidance is based on a small on a number of assumptions, which are described in our press release. Should any of these assumptions differ, the financial outlook and actual results may vary materially.

We expect to generate revenues between $390,000,000 to $4.00 $5,000,000 and adjusted EBITDA of approximately 13% of revenues. The decrease in our adjusted EBITDA as a percent of revenues compared to 2024 is driven by investments behind new product launches such as JOURNEYPM in Canada and MINJUVY in Mexico, as well as advancing our pipeline of 18 products through development, submission and pre launch across our territories. Our team has been extremely successful in executing our Pan American ex U. S. Strategy and has built a profitable business with a unique platform and a strong foundation from where to continue growing over the long term.

Looking ahead, we are very excited that we can deliver to our stakeholders with the launches of MINJUVY in Mexico, GRN APM in Canada and additional pipeline products. In addition, we expect to close the Paladin transaction in the middle of the year. This synergistic transaction adds critical mass and significantly increases the size of our Canadian business and adds a portfolio of stable cash flow generating products that will help fund our growth in Canada and Latin America. We remain well positioned to continue to execute on our mission to acquire and license, develop and commercialize pharmaceutical products in Latin America and Canada. This concludes our remarks.

I’d like to turn the open up the call for questions. Silly?

Sylvie, Conference Operator, Knight Therapeutics: Thank you. Before we begin, may I please 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 urnighttx dot com or via phone at (514) 484-4483. Thank you. You.

First, we will hear from Michael Freeman at Raymond James. Please go ahead.

Michael Freeman, Analyst, Raymond James: Hey, good morning, Sameera, Amal, Arvind. Congratulations on finishing another strong year. I know we had a call on this last week, but I’ll start with a question on Paladin. I’m wondering how your acquisition of Paladin might adjust your business development approach in Canada? And also how do you feel about the balance sheet pro form a this transaction?

Thanks.

Amal Khouri, Chief Business Officer, Knight Therapeutics: Good morning, Michael. This is Amal. I’ll start with your first question. There is the acquisition doesn’t really change our business development approach. It’s actually very much in line with our business development approach, which as a reminder, we are is really three pronged, right?

We look to acquire products with existing sales that will bring in profitability to help fund the second growth vertical, which is in licensing innovative products and then bringing on brand generics. So this acquisition really is very much in line with that. The bulk of the portfolio is products with existing sales, existing profitability that will help fund a lot of the launches and future growth that we have across all of our countries. The portfolio also has a couple of growth assets. So it really hits it’s well within our business development approach and we will continue going forward with the same.

If you look back at the deals that we have done in the last few years, the majority of the deals are licensing deals, so really bringing in growth assets. And these products don’t really these types of deals, I should say, don’t really require the type of upfront and purchase prices that go with this type of acquisitions. And I think as we said, as Mira said on the call last week, in terms of capacity, again, we have a very strong business that with this deal is even stronger in terms of profitability and cash flow generation. And we still have a lot of capacity on the debt side if we needed to add anything behind the current business, but also if we were to do another acquisition that would require additional funding, that acquisition would be coming with EBITDA and profitability. So we’re not concerned about capacity to do more deals.

So no change.

Michael Freeman, Analyst, Raymond James: Thanks very much, Amal. Now I’ll ask a question. Just asking for an update on the situation with LindVimant LATAM with a generic competitor launch. I’m wondering if you could describe the I guess the impact you’re seeing on sales, how you’re seeing that generic received in the market, what the effect is on pricing and any legal action that you and your partners might be taking?

Justin Keywood, Analyst, Stifel: Hi. So

Sameera Zakir, President and CEO, Knight Therapeutics: the generic was introduced kind of in the second half of last year. We have we know that it’s on the market. Some of our I would say, we had a small amount of sales that were in the public market. We are seeing that as a slowdown in Brazil. But generally, the product continues to sell well and the legal pursuit will continue, but we don’t expect that to have a like even at the end of the day, if we get a positive outcome, we don’t really believe that we think that it will have no impact on the market.

Michael Freeman, Analyst, Raymond James: Okay. That’s very helpful. I’m just going to shoehorn one more in here. Really positive news on the new MOH contract in Brazil for Amazon. I wonder like is there opportunity to I recognize this is the single drug that you sell into the MOH, like is there an opportunity to secure further contracts with that organization?

Sameera Zakir, President and CEO, Knight Therapeutics: Actually, that’s one of the things that I’m actually really proud of, of our Brazilian team. We are not only selling Ambison, but we have been able to introduce KRYSTEMBA because of this relationship. And over the last year, we’ve seen some expansion of their purchasing of KRYSTEMBA as well.

Michael Freeman, Analyst, Raymond James: Fantastic. Okay. I’ll hand the call over. Thank you.

Sylvie, Conference Operator, Knight Therapeutics: Thank you. Next question will be from Justin Keywood at Stifel. Please go ahead.

Justin Keywood, Analyst, Stifel: Good morning. Thanks for taking my call. Just on the 18 products that are in early launch phase, I mentioned in the outlook, how should we look at that as far as contributing to financials in 2025, ’20 ’20 ’6 and beyond?

Sameera Zakir, President and CEO, Knight Therapeutics: So the of the 18 products that are in the pipeline, three of them are in early launch today. So that’s MINJUVY, BIJUVA and IMVEXXY. And MINJUVY is going to be launched in Mexico in this queue. We’re also adding JournePM that launches in Canada later this year. And we’re expecting to launch TAVALISSE in Mexico and Brazil next year.

So they’re all stepping up. And then the rest kind of come on between and it’s in our MD and A kind of the launch dates that we expect for the rest of them. And they all step up over time. So the January or at least 150,000,000 is their peak potential.

Justin Keywood, Analyst, Stifel: So that’s combined $150,000,000 I assume that’s Canadian dollars. And thank you. Of the 15 to be launched, is that in the next couple of years or some of these still very early stage assets in trials or regulatory review?

Sameera Zakir, President and CEO, Knight Therapeutics: They go from launching as early as ’26, like I mentioned, to as late as 02/1930.

Justin Keywood, Analyst, Stifel: Okay. So some real early assets within that. And just as the Paladin starts to contribute, I realize there’s a number of sales reps already in Canada. How should we look at that, I guess, a platform in Canada? Like how much additional revenue could that support?

Will you need to have some additional hire for some new launches? Or how should we be looking at that?

Sameera Zakir, President and CEO, Knight Therapeutics: So as I said last in our call last week, one of the things is our Canadian business today is about the Knight Canadian business today is about 60 people. A quarter of them actually are in global function. So it really leaves about 45. We do have a lot of open positions as we prepare for the launch of Jern APM this year, CalBri early next year, and we’re going to look to optimize our structure between the two companies. And as I said also in last week’s call, the $70,000,000 that we’re really providing for the business that is Paladin, we expect that to stay flattish over the next couple of years.

The Paladin acquisition is majority non promoted legacy assets.

Justin Keywood, Analyst, Stifel: Okay. Thank you. And then just finally on the $130,000,000 of financial assets, any are there any liquidity events in the near term to anticipate?

Sameera Zakir, President and CEO, Knight Therapeutics: One of the things that we have seen with the investment funds is that they are a source of cash. We only have capital calls of about $5,000,000 left on that and we do expect them to be cash flow generating. Our loans are going to be they’re also starting to pay back as well. Nothing material though.

Justin Keywood, Analyst, Stifel: Okay. Thank you for taking my questions.

Sylvie, Conference Operator, Knight Therapeutics: Thank you. Next question will be from Dagme Hymn at RBC Capital Markets. Please go ahead.

Doug Hymn, Analyst, RBC Capital Markets: Good morning Sameer, Amil, Couple questions with respect to the business over the longer term. When you think about the mix of Canadian versus rest of worldSouth America, would you expect it to remain in 20% to 25% level for Canada post the Paldan deal? Or is it just going to be based on opportunities and execution pricing of those opportunities?

Amal Khouri, Chief Business Officer, Knight Therapeutics: Good morning, Doug. This is Amal. It’s really the latter. So our again, our approach is and our goal is really to grow our business across all of the countries that we have, whether it’s acquiring products or portfolios with existing sales or growth assets. And we’re going to be looking at doing that across our markets and it’s really going to be we’re going to continue to do with the same level of discipline of looking opportunity by opportunity to see what makes the most sense to grow our business across the board.

Doug Hymn, Analyst, RBC Capital Markets: Right. But is there a chance that based on the opportunities in Canada, we could see something in the range of 35% to 50% over the next year or two based on potential acquisitions or should we not think about it that way?

Sameera Zakir, President and CEO, Knight Therapeutics: What I would say, Doug, we’re going to be opportunistic when it comes to asset acquisitions. So whether they’re in Canada or somewhere else. That being said, if I look at our portfolio in Canada with the Paladin acquisition, with Journe APM, with Calbri, with Croixant launching, Canada is going to start with the Powder business today where we will be getting to kind of that 20 ish percentage. But as these products grow, it will rise as a percentage without us doing any more transactions in Canada.

Doug Hymn, Analyst, RBC Capital Markets: Okay, perfect. And then just to wrap up, when you think about all these launches over the next, let’s just say two years, When you think about the expense that is typically required to launch products, number one, these are likely going to be profitable until the third year is my guess, but maybe second year, you can correct me there. But can you sort of frame how large those investments are that you’re spending on all these drugs over the next while?

Sameera Zakir, President and CEO, Knight Therapeutics: So you’re right. You don’t really hit profitability until the third year, where you’re closer to breakeven than really profitability. You’re seeing that in our guidance as to the level of spend, you’re really seeing that in our guidance, right, where you see even with the Paladin acquisition, our EBITDA is declining and it’s declining in the range of about $8,000,000 to $10,000,000 because of that investment that we’re making. And we expect that over the next couple of years, this year or next year, then these brands start to feed into that top line and profitability as we launch more.

Doug Hymn, Analyst, RBC Capital Markets: Perfect. Okay. So next several years should have some good growth and then accelerating profitability as well. Okay. Thank you.

Absolutely.

Sylvie, Conference Operator, Knight Therapeutics: Thank you. Next question will be from David Martin at Bloom Burton. Please go ahead.

David Martin, Analyst, Bloom Burton: Good morning. This is a follow-up to Doug’s question. So the SG and A, the sales and marketing expenses is going to increase in 25% based on the guidance you’ve given for revenues and EBITDA margin. Beyond ’25, will you see stabilization of operating expenses or will they continue to grow? Once you’ve built out your infrastructure, will it need to grow in line with the revenue growth as the new products launch?

Or will you reach a point of stability by the end of twenty twenty five?

Sameera Zakir, President and CEO, Knight Therapeutics: The infrastructure is probably going to be right sized. There still will be more A and P that will be brand specific given the launches that are there, but that’s not going to be a significant increase.

David Martin, Analyst, Bloom Burton: And as you roll from one launch product to the next launch product, you’ll be able to redeploy the investment to the new products and ease off on the ones that were previously launched?

Sameera Zakir, President and CEO, Knight Therapeutics: So what I would say like I’ll give you an example. In the case of Jern APM, we’re launching that this year. We’re going to have a lot of investment behind it this year. We’re going to have a lot of investment behind it next year. And we’re going to expand that same team as we add Calgary.

Going into 2026, there’s not going to be that much more incremental, but there will be continued investments. So we’re going to be launching IPX at the same time. That’s going to require more money. But hopefully by the time I’m getting into 2027, the investments behind IMVEXXY and BIJUVA will start to come off as we are investing in IPX. And that because by that time IMVEXXY and BIJUVA have been promoted for three plus years.

And that’s how we’re really cycling. You do need investments and promotion, significant investment and promotion for this first three years and then you can start pulling back.

David Martin, Analyst, Bloom Burton: And what about in Latin America? I know you’re building out in Mexico, but is there a build out in other countries in anticipation of launches or are you right sized there?

Sameera Zakir, President and CEO, Knight Therapeutics: Majority of our territories are right sized when it comes to hematology and oncology. They’re right sized on neurology, but more on the Alzheimer’s and the so the Alzheimer’s team can support Krexon’s. As we look to invest in ADHD, we may have some expansion of our teams.

David Martin, Analyst, Bloom Burton: Okay, great. Thank you. That’s it.

Sylvie, Conference Operator, Knight Therapeutics: Thank you. Next, we will hear from Tanya Armstrong at Canaccord Genuity. Please go ahead.

Amal Khouri, Chief Business Officer, Knight Therapeutics: Good morning. Just a couple of questions for me. So congrats on refining that Brazil MOH contract. And just wondering if you can speak to the quarterly impact of that $22,400,000 in revenue. Should we expect it all to come early in the year, back half of the year?

Sameera Zakir, President and CEO, Knight Therapeutics: Hi, Tania. I think we’re going to start with from what I have from the Brazilian team, we’re going to start in this queue. I’m not really sure if it’s actually even already shipped or not. We’re a couple of weeks left in the queue and probably be done by Q3, but it’s really unpredictable with the MOH.

Amal Khouri, Chief Business Officer, Knight Therapeutics: Okay. Okay. That’s there. And then just definitely for me with JernapePM launching this year, could you give us an idea of peak sales expected for that drug?

Sameera Zakir, President and CEO, Knight Therapeutics: Sure. So we haven’t really guided on the product itself. What as Amal said in her comments, the methylphenidate market is over $500,000,000 and growing at a rate of 14% CAGR. The one thing that I would give you as an example is Focquest, which was the last launch in this category prior to getting public reimbursement had sales of $30,000,000 The one thing I would note there, we don’t expect to get to that number because Fowquest was for people over six years. Journe APM is indicated for children, so six to 12.

But what you need to know and what we have from The U. S. Market is 85% of the Journe APM sales are pediatric.

Amal Khouri, Chief Business Officer, Knight Therapeutics: That’s good insight. And maybe on the $150,000,000 in potential peak sales that you outlined in the MD and A, could you give us a sense of how much of that is attributable to products that are in early launch phase or expected to launch in the near term? So I guess MINJUVY, IMVEXXY, Jardine PM and SEVELASE?

Sameera Zakir, President and CEO, Knight Therapeutics: I would say more than half is coming from the near term launches.

Amal Khouri, Chief Business Officer, Knight Therapeutics: Perfect. Okay. Okay. That’s all for me. Thank you, Simeon.

Sylvie, Conference Operator, Knight Therapeutics: Thank you. Next question will be from Andre Oden at Research Capital. Please go ahead. Please go ahead, Andre.

Andre Oden, Analyst, Research Capital: Hi, everyone. I realize I usually don’t discuss gross Can you hear me?

Sylvie, Conference Operator, Knight Therapeutics: Yes.

Doug Hymn, Analyst, RBC Capital Markets: Hello?

Sameera Zakir, President and CEO, Knight Therapeutics: Hi, Andre.

Andre Oden, Analyst, Research Capital: Good morning, everyone. I just realized, usually don’t discuss gross margins. But if we look at your 18 pipeline products, Can you hear me now?

Sameera Zakir, President and CEO, Knight Therapeutics: Yes. You can

Andre Oden, Analyst, Research Capital: I realize you should not discuss gross margins, but if you look at your twenty eighteen pipeline products, so basically you have $150,000,000 of peak sales in your pipeline products? Do you expect that to move the needle on your gross margins? Any color there would be appreciated.

Sameera Zakir, President and CEO, Knight Therapeutics: We don’t really guide to gross margins, but we don’t really expect the margins really to change. They will change over they may grow over time, but not that significantly.

Andre Oden, Analyst, Research Capital: That’s appreciated. Thanks. That’s all for me.

Sylvie, Conference Operator, Knight Therapeutics: Thank you. And at this time, we have no other questions registered. So I would like to turn the conference back over to Samira Sakaiya. Please go ahead.

Sameera Zakir, President and CEO, Knight Therapeutics: Thank you, Sylvie. Thank you for joining Knight’s Q4 and year end twenty twenty four call. Once again, thank you for your confidence in the Knight team and for joining our call. Have a great morning.

Sylvie, Conference Operator, Knight Therapeutics: Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we ask that you please disconnect your line.

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