Operator: Good morning, ladies and gentlemen. My name is Lilly, and I will be your operator for today. Welcome to Knight Therapeutics Third Quarter 2025 Results Conference Call. Before turning the call over to Ms. Samira Sakhia, 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 the 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 that 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 obligation to update or revise any forward-looking statements, whether a result of new information and/or 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 e-mail to ir@knightpx.com or via phone at (514) 484-4483. I would like to remind everyone that this call is being recorded today, November 6, 2025. I would now like to turn the meeting over to your host for today's call, Ms. Samira Sakhia. Please go ahead.
Samira Sakhia: Thank you, Lilly. Good morning, everyone, and welcome to Knight Therapeutics Third Quarter 2025 Conference Call. I'm joined on today's call with Amal Khouri, our Chief Business Officer; and Arvind Utchanah, our Chief Financial Officer. I'm excited to announce that we achieved record high adjusted revenues of $319 million as well as record high adjusted EBITDA of approximately $49 million for the 9 months period ended September 30, 2025. During that period, our revenues grew by approximately $48 million or 18% compared to the same period last year. This growth was not only driven by the Paladin and Sumitomo transactions, which contributed $27 million of incremental revenues, but also our key promoted products, which delivered organic growth of 12% on a constant currency basis. In addition to achieving record financial results, we have continued to strengthen our oncology portfolio. This quarter, we expanded our partnership with Incyte by in-licensing the LatAm rights to 2 innovative drugs, retifanlimab and axatilimab. Furthermore, we have advanced our pipeline with the launches of 3 products in multiple countries. We have launched JORNAY PM in Canada, MINJUVI in Argentina and PEMAZYRE in both Brazil and Mexico. Moving on to our regulatory update, in the third quarter, we received a rejection from our -- of our marketing authorization application for TAVALISSE from Anvisa, the Brazilian Health Agency. We have already submitted an appeal to Anvisa, which could take up to 14 months. In addition, subsequent to the quarter, we have received a notice of noncompliance or NON from Health Canada on the drug submission for Qelbree. The NON requires additional information, which we will submit in 2026. Despite these setbacks on these 2 products, we expect to address the health agency's request and bring both drugs to market. Moving on to the NCIB, in August 2025, Knight launched an NCIB under which we can purchase for cancellation up to 3 million common shares over the next 12 months. Subsequent to the quarter, we purchased 389,000 shares at an average price of $5.84 for an aggregate cash consideration of $2.3 million. I will now turn the call over to Arvind to provide an update on our financial results.
Arvind Utchanah: 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 defined adjusted EBITDA as operating income or loss, excluding amortization and impairment of noncurrent assets, depreciation, the impact of accounting under hyperinflation, acquisition costs and transaction costs, inventory step-up expense and other nonrecurring 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 non-GAAP measures. Financial results at constant currency are 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. Adjusted gross margin is defined as revenues less cost of goods sold, adjusted for the impact of accounting under both hyperinflation and purchase price accounting. Furthermore, my discussion on operating results will refer to figures that exclude hyperinflation unless otherwise noted. For the third quarter of 2025, we delivered record revenues of $122.6 million, an increase of $31.2 million or 34% versus the same period last year. On a constant currency basis, revenues increased by approximately $29 million or 31%. The Paladin and Sumitomo portfolios contributed to $25 million of incremental revenues. The rest of the variance was mainly driven by our key promoted products, which grew by $5.5 million or 8% on a constant currency basis as well as purchasing patterns of certain products. This was partly offset by declines in our mature and branded generic products and the termination of a nonstrategic agreement in Colombia. Moving on to revenues by therapeutic area, the oncology and hematology portfolio delivered $38.3 million in Q3 2025, relatively unchanged compared to the same period last year. Excluding the termination of a nonstrategic distribution agreement in Colombia and on a constant currency basis, the portfolio increased by just under $1 million or 2%. The increase was driven by our key promoted products, which grew by $2.8 million or 15% as a result of the growth of AKYNZEO, the launch of MINJUVI and the addition of both ORGOVYX and ONICIT. This growth was partly offset by declines in our mature and branded generics products due to their life cycle. Our infectious disease portfolio delivered approximately $37.2 million, an increase of $3.4 million or 10%. On a constant currency basis, the portfolio grew by $2.3 million or 6% compared to the same period last year. The increase was due to the growth of CRESEMBA and the purchasing patterns of certain products. Turning to our other specialty therapeutic area, the portfolio generated $47.1 million in revenues, an increase of $26.3 million or 127% compared to the same period last year. The incremental revenues from the Paladin and Sumitomo portfolio were $23.4 million. The rest of the variance was driven by the launches of IMVEXXY and BIJUVA and the purchasing patterns of certain customers. Now moving on to gross margin, we reported adjusted gross margin of $59.9 million in Q3 2025 versus $43 million in Q3 last year. The adjusted gross margin as a percentage of adjusted revenues increased by 2%, going from 47% in Q3 2024 to 49% in Q3 2025. The increase is mainly explained by the addition of the Paladin and Sumitomo portfolios, resulting in the higher weighting of the Canadian business in Q3 2025 when compared to Q3 2024. I will now turn to our operating expenses, excluding amortization. For the third quarter, our operating expenses were $39.7 million, an increase of $9 million or 30% compared to the same period last year. The increase was driven by higher selling and marketing as well as R&D expenses. Our selling and marketing expenses increased by $4.5 million, mainly driven by the expansion of our sales and commercial structure behind the addition of the Paladin and Sumitomo portfolios. In addition to structure, the increase included higher promotion and marketing expenses for the promoted brands acquired in the Paladin and Sumitomo transactions, including ORGOVYX, MYFEMBREE, XCOPRI, ENVARSUS as well as spend on our prelaunch and recently launched brands, including JORNAY PM, IMVEXXY, MINJUVI, TAVALISSE, Qelbree and PEMAZYRE. Our R&D expenses increased by $3.5 million due to the expansion of our scientific affairs structure, including field-based personnel related to the Paladin and Sumitomo portfolios. In addition to structure, the increase included incremental medical, regulatory and pharmacovigilance spend on the Paladin and Sumitomo portfolios as well as on our pipeline and recent launches. Moving on to adjusted EBITDA, for the third quarter of 2025, we reported $21 million of adjusted EBITDA, an increase of $7.5 million or 56% compared to the same period last year. The increase was mainly driven by the higher adjusted gross margin, partly offset by higher operating expenses. Our adjusted EBITDA per share was $0.21, an increase of $0.08 or 62% compared to the same period last year. I will now cover our financial assets, which are valued at $94 million. In the third quarter, we recorded a net loss of $4.6 million driven by the mark-to-market revaluations of our strategic fund investments. As a reminder, our funds continue to be a source of cash. During 2025, we received net proceeds of $5.7 million and $45 million since 2020. Moving on to our cash position and cash flows, at the end of Q3, our net debt position was just under $1 million. We held $96.5 million in debt and $95.6 million in cash and marketable securities. During the quarter, we generated cash inflows from operations of $10 million despite an investment of $11 million in working capital. The increase in working capital was due to the higher accounts receivable given the growth in our Canadian operations, partly offset by a decrease in inventory and an increase in accounts payable. Finally, as announced last week, we have closed the syndication process with a group of 4 lenders and doubled our revolving credit facility from USD 50 million to USD 100 million, with an accordion feature for another USD 100 million. This facility is secured by Knight assets held in Canada, Luxembourg and Uruguay and has an initial term of 3 years with the option to extend annually for an additional 1-year term. As a reminder, we drew down CAD 60 million from the facility in Q2 to fund part of the Paladin acquisition. I will now turn the call back to Samira.
Samira Sakhia: Thank you, Arvind. Now on to our financial outlook for fiscal 2025, I would like to remind everyone that the guidance provided assumes that there is no material adjustment due to hyperinflation accounting in Argentina. In addition, our guidance is based on a number of assumptions, which are described in our press release. Should any of these assumptions differ, the actual results may vary materially. We are increasing our outlook for fiscal 2025 and expect to generate revenues between $430 million and $440 million and an adjusted EBITDA between 13.5% to 14.5% of revenues. The increase in our financial outlook is driven primarily by the strong performance of our promoted products. Our team has been extremely successful in executing on our pan-American ex-U.S. strategy and building a profitable business. In the first 9 months, we have delivered record results. We in-licensed 3 new products, and we completed 2 acquisitions, which strengthened our Canadian operations. We are already starting Q4 on a high note. At the beginning of the quarter, we announced the relaunch of ORGOVYX and MYFEMBREE. And just last week, we announced the launches of JORNAY PM in Canada and MINJUVI in Argentina. We also added more flexibility to our balance sheet upon closing the syndication of the revolving credit facility. Following the closing of this credit facility, we can now borrow up to an additional $100 million and another $135 million through the accordion feature. This is in addition to the $95 million of cash and marketable securities that we reported at the end of Q3. With our expanded portfolio, increased operational scale and capital flexibility, we remain well positioned to drive long-term value and deliver on our mission to acquire, in-license, develop and commercialize pharmaceutical products for Canada and Latin America. This concludes our formal remarks. I would now like to open up the call for questions.
Operator: 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 e-mail to ir@knightpx.com or via phone at (514) 484-4483. [Operator Instructions] Your first question comes from Michael Freeman of Raymond James.
Michael Freeman: Congratulations on these results. I wonder if you could spend some time and dig into the organic growth of the branded products a bit further. What products stood out? What geographies stood out? What do you think drove this very positive performance?
Samira Sakhia: So it's really across the board where we're seeing good performance. So we're seeing good performance in our oncology portfolio. AKYNZEO, the launch of MINJUVI. We're seeing it on CRESEMBA. We had some buying patterns on AmBisome even though we didn't have MOH in the quarter. We're seeing it -- we continue to see growth of LENVIMA in Colombia. We're seeing growth in Canada behind -- these are not in the organic, but again, ORGOVYX, MYFEMBREE, XCOPRI, so all of these products are growing. And what I would highlight is in the Canadian portfolio, Q3 was an integration quarter. As you recall, we only closed in the middle of June. The team was -- yes, the teams were in the field, but there was a lot of focus on integrating. And now we're -- now, as we announced at the beginning of the quarter, the field force is completely in place. Everybody has been trained. We've launched -- relaunched ORGOVYX, MYFEMBREE and the team is on XCOPRI, they're on JORNAY PM. So we expect to have all of these products continuing to grow in Q4 and into next year.
Michael Freeman: Okay. Okay. I appreciate all that color. Now on the expansion of your credit facility, and it looks like you're shoring up capacity. I wonder if you could describe if -- where your geographic focus will be when it comes to future business development, future potential M&A. There has been a lot of activity in Canada recently. Should we expect that to continue or maybe more a broadly distributed effort?
Amal Khouri: Michael, it's Amal. I think you can expect really more of the same as we've been doing and executing in the last few years. So really across all of our countries, and also in terms of type of deal as well, like whether it's acquiring products with existing sales, acquiring -- and that includes acquiring one product at a time, portfolio of products or even M&A as well as pipeline products as well. So really more of the -- more execution -- more of the same execution as we've been doing across our markets.
Samira Sakhia: And I just wanted to highlight, if you look at this year, we've had the 2 transactions that we had for Canada, but we had multiple transactions that also had LatAm. So the license agreement, the Incyte agreement expansion was for 2 products for LatAm. Honestly, it was for LatAm. If you look at last year, we had JORNAY PM, we had Incyte's products, both for Canada and Latin America. And I'm sure I'm missing a couple of other deals that we signed last year. But it's really -- we are a partnering organization. We're going to do what's right for the business, and we have to be flexible for our territories. And the fact that we have all of these territories allows us to be extremely productive when it comes to our transactions.
Michael Freeman: Okay. And I can ask one more quick one. The -- your agreements with the Brazilian Ministry of Health, these renew on an annual basis. I wonder if there's any news relating to the renewal of your contracts with the MOH on Amazon.
Samira Sakhia: Sure. So we did sign at the end of last year. That agreement -- they bought what they've bought so far this year. We are in discussions with them for their 2026 purchases. We -- it's a government organization. They take their time. We're dealing with bureaucrats. It could be -- we -- it's really still too early to tell whether -- when this agreement gets signed and if there will be a shipment in Q4. And I know I'm talking at the beginning of November, and there's not a lot of weeks left in the year. But again, I'm -- we're dealing with bureaucrats and it could either get signed this year with a small shipment this year or it gets signed later in the year or early next, and we ship everything in 2026.
Operator: Your next question comes from David Martin of Bloom Burton.
David Martin: Congratulations on the quarter. The first one is a follow-up to the last question. For the Amazon Ministry of Health in Brazil, I think previously, there had been a competitor. Is there a competitor now? Or are you going into this as the sole source?
Samira Sakhia: At this time, there's -- we don't see -- the competitor is not there. So we are a single source, and we expect that -- like I said, the team has been in discussions, discussions continue. We do expect something -- we will be successful in this, but it's a question of time at this point.
David Martin: Okay. Got it. Can you provide more color on the Brazilian action on TAVALISSE and Health Canada on Qelbree? What are the regulators looking for? Are these things that are in your control or out of your control, such as run another trial? And you mentioned 14 months for the response in Brazil. Once you refile Qelbree, how long do you expect it will take Health Canada to render a decision?
Samira Sakhia: So on both, we didn't really provide details. What I -- so in the case of Qelbree, it is not going back to doing more clinical trials. And our team is working on the response. We expect to refile in 2026 and get approval by the end of 2026. In the case of TAVALISSE, it's really more on a technicality, and that is why we are appealing to Anvisa. And we -- the normal course of this appeal process is in the range of 14 months, and we'll continue to pursue that. And again, I'm confident that TAVALISSE will get approval even if worst case, we have to refile the product.
David Martin: Okay. Okay. And one last quick question. You mentioned Q3 was an integration quarter in Canada. Were there headcounts in Q3 that will be reduced in Q4?
Samira Sakhia: So as you know, in the integration at the end of last Q, we had announced that we had restructured 20-some percent. At the end of this quarter, we've announced that we've restructured about 30%. The integration was not just in relation to restructuring the teams, but really on the commercial front, where we are bringing the Paladin team onto the new portfolio that -- into the new products that Knight was launching, including JORNAY PM, including the Sumitomo portfolios. There was a lot of territory assignment, product training. So while, yes, people were in the field, I would say activity was a bit lower. So going into Q4, our activities are actually ramping up.
Operator: Your next question comes from Scott McAuley of Paradigm Capital.
Scott McAuley: A lot has been touched on already, but I wanted to highlight the EBITDA margin expansion for 2025, which is great to see as we're kind of nearing the end of the year. I know you haven't given guidance for 2026, but kind of the levels you're looking for 2025, like do you see those as sustainable going forward even with, as you say, you're launching new products and investing in the platform for the next little while and the new product growth?
Samira Sakhia: So what I will say is we will guide to 2026 when we announce March. As I said in the earlier question that there was a slowdown of activity in Q3. That activity picks up and there's more products that are launching next year. So all in all, more investments, we're going to continue to have a lot of investment behind new products.
Scott McAuley: Yes, absolutely. That's great. Another thing is on the cash flow. I know the cash flow from operations is a little lumpy, but it's great to see, I think it was $10 million this quarter, $20 million last quarter versus kind of single digits in kind of a number of quarters in the past. So are you seeing some more normalization of that? Should we continue to expect kind of relatively lumpy or swings in that kind of cash flow from operations perspective?
Samira Sakhia: Sure. So one of the things is we're a very healthy company. We generate good EBITDA and a good EBITDA from cash. Where we get impacted is really in association with inventory that comes with some lumpiness. So whether we acquire an asset or whether we are preparing for a launch or some purchasing commitments that we have with our partners. So it remains -- it could be lumpy. But in general, we are aiming -- and you have to look -- you can't look at it on a quarter-by-quarter basis, you have to look at it over multiple quarters at a time. And we aim to be between 60% to 80% cash flow as a percentage of EBITDA.
Scott McAuley: That's great. Good to hear. And just lastly, on the M&A front, obviously, with the increased credit facility gives you guys some more firepower. Just wanted to check in terms of visibility on the entire territories. I know you highlighted signing more deals that take advantage of Canada and throughout LatAm. In terms of conversations you're having or the things you're looking at, are you seeing more of those type of interest for signing for products that take advantage of your entire geographic reach?
Amal Khouri: Scott, this is Amal. I think we're seeing like on the fact that we cover the footprint that we have, we've been getting very positive feedback from potential partners, but also existing partners that it's much easier for them to deal with one company that covers all of these markets. At the same time, and I think Samira mentioned it earlier, we do remain flexible because in some cases, for example, there are companies who have their own affiliates in Canada. So in that case, we do a deal just for LatAm. So we have that flexibility, but we also have the ability to execute on the entire territory, and we have been getting good feedback, and you see it in the deal flow. We've been relatively consistent and productive. In the last few years, we've been averaging about 3 deals per year. Of course, it varies like from 1 year to the other, but it's been a really consistent productive deal flow.
Operator: [Operator Instructions] Your next question comes from David Martin of Bloom Burton.
David Martin: I have 2 follow-ups. The first one, what does the launch schedule look like for your branded generics business? Are you launching a few products each quarter? Do you expect there'll be a bolus of new products launched sometime in the near term?
Samira Sakhia: So in our branded generics, we have a couple of products that are launching in Argentina in the next few months. So between the end of this Q to kind of first half of next quarter. These products will be relatively small. We have a pipeline, and it's in our pipeline table kind of when the timings of those launches will be but they pace over several years. I believe the earliest probably starts in '27. And we're really rebuilding that pipeline at this point in time.
David Martin: Are these a couple in Argentina over the next few months, are they the first you've launched in a while? Or have there been others in previous quarters?
Samira Sakhia: They're the first in a while. There's been a few that launched, but it would have been in smaller territories like a Chile, which basically provides cash flow, it's opportunistic. It's at market access. It provides us a tool when it comes to market access and negotiating with accounts relatively small, but again, good for the business.
David Martin: Okay. And last question. The XBIs moved up about 20% in the third quarter. Knight's other financial assets were a little down. Can you walk us through the gives and takes on that? I would have expected maybe your financial assets would have increased.
Samira Sakhia: I'm going to take a wing at it and then maybe Arvind can add. So our portfolio is venture cap funds. A lot of those assets are private companies, and we follow what the fund managers, the VC is doing to account for the write-downs or the write-ups. In the case of the assets that are in that portfolio, we do take an increase or decrease based on how they are performing in the public markets. And this quarter, we did have one of those assets on which there was a decline in the share price. We continue to monitor. It is -- it seems to be coming back. There may be a small write-up going into -- when we report Q4. Arvind, I'm not sure if you wanted to add anything.
Arvind Utchanah: That's correct. And I would just add that some of the biotech do hold some public equities. And that too has been very volatile going up and down depending on the share price at the end of each quarter.
Operator: The next question comes from Michael Freeman. [Operator Instructions].
Michael Freeman: Yes, one follow-up. I just wanted to ask how we should be thinking about SG&A moving forward? Do we expect things to be stable through the end of the year? And then, also, should we expect a ramp through 2026 as you are launching your slate of products?
Samira Sakhia: So what I can say is that we are already in a lot of launch -- over this year, multiple things have been changing along the way. We've added a whole lot of portfolio, a whole lot of products that are in our -- in what we just signed needs promotion activities. As I said, in Q3, kind of due to integration, some of the activities were less than what would be normally in Q3. So as we go into Q4, where there is a full field force that is out in Canada, you can expect a bit of a rise. Going into next year, and again, we don't guide towards quarters, but we have JORNAY PM. JORNAY PM will continue to be part of that. It's launched mid-Q4. We have MINJUVI launching in Argentina. We have TAVALISSE launching in in Mexico, and we have a new portfolios that we just licensed ZYNYZ, Niktimvo. And again, there will be prelaunch efforts behind both of those products. We have MINJUVI follicular, which is a second indication for MINJUVI, that will be launching some point next year in Brazil. So we are building a great portfolio, and each one of these products requires investment.
Operator: There are no further questions at this time. I will now turn the call over to Ms. Sakhia. Please continue.
Samira Sakhia: Thank you, Lilly. Once again, thank you for the confidence in the Knight team and joining our Q3 2025 conference call. Have a great morning.
Operator: Ladies and gentlemen, this concludes today's conference. You may now disconnect your lines at this time. Thank you for your participation.