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Knight Therapeutics Comments on Flawed Accusations by Disgruntled Board Member; Remains Committed to Executing Strategy that is Working

Knight Therapeutics Responds to Meir Jakobsohn's Open Letter

MONTREAL, Feb. 28, 2019 (GLOBE NEWSWIRE) -- Knight Therapeutics Inc. (TSX: GUD) ("Knight" or the “Company”), a leading Canadian specialty pharmaceutical company, confirms it is aware of statements made by Mr. Meir Jakobsohn regarding Knight’s business strategy.

/EIN News/ -- As part of the Company’s active and ongoing communications with all shareholders, Knight’s Board of Directors (the “Board”) and management appreciate constructive input and take all shareholder views seriously, especially when a shareholder is also a director. What Knight and its shareholders do not appreciate is the unfortunate decision of one director with a self-serving personal agenda to attempt to manipulate the Board with bullying tactics and now choosing to create a distraction for the Company by taking his grievances public.

Mr. Jakobsohn has been a director of the Company since 2015 when Knight became a 28% shareholder of Medison, a private Israeli company founded by Mr. Jakobsohn. As part of the agreement, Mr. Jakobsohn was appointed to Knight’s Board with Medison and its affiliates currently holding approximately 7% of the shares of Knight.

The complaints being made by Mr. Jakobsohn are puzzling, especially since he has been on the Board for more than three years and has never complained about the Board’s construct or decision-making process until very recently when it became clear his interests were not aligned with those of other shareholders. Notably, Mr. Jakobsohn’s complaints about Knight’s strategic direction came only after the Board rejected a proposal that would have benefited Mr. Jakobsohn and Medison at the expense of Knight shareholders. Specifically, Mr. Jakobsohn proposed a transaction pursuant to which Medison would part ways with Knight on terms whereby Mr. Jakobsohn stood to make significant gains while the rest of Knight’s shareholders would suffer a loss. Knight has continued to negotiate in good faith to come to separation terms with Mr. Jakobsohn. Instead of negotiating, Mr. Jakobsohn resorted to several tactics including withholding a dividend from Knight that Medison was contractually obligated to pay and withholding books and records that were essential to Knight’s preparation of its financial statements. Mr. Jakobsohn only relented from these bullying tactics under threat of legal action. Unfortunately, and to the detriment of Knight’s shareholders, rather than coming to reason, Mr. Jakobsohn has chosen as his latest tactic to wage a public campaign aimed at pressuring the Board to agree to terms that are not in the best interest of Knight’s shareholders. These tactics will not succeed.

In the Board’s dialogue with Mr. Jakobsohn and upon review of his newfound concerns he has now publicly expressed, shareholders should be aware that it is clear when Mr. Jakobsohn speaks about “new, experienced directors” he is really talking about his desire for a board he can control as a non-independent Chair.

As a director, Mr. Jakobsohn has been invited to present, in person, his proposed strategy to the Board but has repeatedly refused to do so. In fact, in his three years as a director he has only attended two board meetings in person.

Knight is Executing on a Plan that is Working

The Company has a well-defined strategic plan —regularly reviewed and refined to maximize shareholder value — being facilitated by a leadership team made up of industry professionals with a track record of success. A significant amount of wealth has been created for shareholders through the sustained execution of this plan. The Company’s total shareholder return has outperformed relative to all indices as well as the Company’s peer group since its IPO.

Since starting operations in 2014 and through to September 30, 2018, Knight has raised $685 million at increasing valuations ($3.50, $5.25, $6.75, $8.00, and $10.00 per share) and generated approximately $220 million of net income. The Company has focused on building a portfolio of innovative pharmaceuticals through licensing or acquiring product rights, strategic fund investments and strategic lending for product rights. Knight’s approach is to take on commercialization risk, not development risk, and therefore selects later-stage products (Phase II, Phase III, or approved in foreign markets).

In contrast, Mr. Jakobsohn is advocating a radical change of strategy where the Company would be dedicated to investing in risky early stage pharma-companies and products. The strategic changes he is pushing for are not in line with the Company’s long-term strategy for value creation nor is it the belief of the rest of the Board that this is a warranted shift. 

While the Board regularly critically assesses the Company’s strategy, the fact is Knight’s strategy is working: Knight has more than 20 products in various stages of development, growing cash flows and strong cash reserves to support future in-license deals and acquisitions; Knight continues to aggressively pursue partnerships and deals with independent biotech companies. In addition to Impavido®, Knight is currently commercializing two products in Canada with a national sales force, is preparing to launch one product later this year, has two products under Health Canada review and will be submitting three products to Health Canada in 2019. 

Mr. Goodman’s Independence and Alignment with Knight Shareholders

Mr. Jakobsohn has incorrectly alleged that Mr. Goodman is not aligned with Knight shareholders because of his indirect shareholdings in the Goodman family business, Pharmascience. These allegations are patently false and demonstrate exactly how disingenuous Mr. Jakobsohn’s public statements are. Pharmascience is a competitor just like any other company. Mr. Goodman is an indirect, passive shareholder in Pharmascience and has absolutely no involvement in its operations, management or decision making. In fact, Mr. Goodman does not sit on the board of directors of Pharmascience or its holding company. Mr. Goodman’s family business connections are and have been well known to the market place for decades, both when he was at the helm of Paladin and since the inception of Knight. This history has served to engrain Mr. Goodman with an innate understanding of the pharmaceutical business which has manifested in massive success, including the founding and continued proven track record demonstrated by Knight’s performance in contrast to its peers. Mr. Goodman is the largest shareholder in Knight and is driven to make Knight a successful rest-of-world specialty pharmaceutical company.

Knight Board Remains Committed to Best-In-Class Governance

Knight’s Board is comprised of highly qualified directors who are fully-engaged, know Knight well, are leaders in their respective fields and have the right mix of experience in biotech, pharmaceuticals and finance. The Company’s Compensation, Corporate Governance and Nominating Committee ensures that Knight’s Board is comprised of members with the relevant skill-sets and experience to provide effective guidance and oversight on management. This is demonstrated in the Company’s commitment to ongoing Board refreshment: Since 2015, following Mr. Jakobsohn’s addition to the Board, Knight has added several new directors allowing for new voices and viewpoints, all of whom had the support of Mr. Jakobsohn.

It is unfortunate that one self-interested director with a personal grievance against Knight has chosen to distract from the Company’s progress. Despite the distraction, Knight will remain focused on continuing to deliver on its strategic plan and building long-term value for all shareholders.

Advisors

The Company has retained Kingsdale Advisors as its strategic shareholder and communications advisor and Davies Ward Phillips & Vineberg LLP as its legal advisors.

About Knight Therapeutics Inc.

Knight Therapeutics Inc., headquartered in Montreal, Canada, is a specialty pharmaceutical company focused on acquiring or in-licensing and commercializing innovative pharmaceutical products for the Canadian and select international markets. 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.gudknight.com or www.sedar.com.

Knight 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, 2017. Knight Therapeutics Inc. disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information or future events, except as required by law.


Investor Contact:
Knight Therapeutics Inc.
Samira Sakhia
President & Chief Financial Officer
T: 514-678-8930
F: 514-481-4116
info@gudknight.com
www.gud-knight.com

Media Contact:
Kingsdale Advisors

Ian Robertson
Executive Vice President, Communication Strategy
Direct: 416-867-2333
Cell: 647-621-2646
irobertson@kingsdaleadvisors.com

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