What Knight Therapeutics (GUD) Said on Its Q3 Earnings Call

Key Points

• Knight raised its 2026 outlook, forecasting revenue of CAD 560 million to CAD 570 million—at least 24% growth—and adjusted EBITDA equal to about 17.5% of revenue, up at least 34% year over year.
• Third-quarter revenue rose 13% to CAD 138 million, while adjusted EBITDA increased 13% to CAD 24 million. Launch products grew strongly, partly offset by lower promoted-product revenue in constant currency.
• Knight increased its estimated peak annual revenue from pipeline and launch products to more than CAD 300 million, mostly from already approved products. It also expects new generic competition to pressure AmBisome sales and EBITDA in Brazil starting in 2027.

Knight Therapeutics TSE: GUD raised its 2026 revenue and adjusted EBITDA outlook after reporting third-quarter growth driven by its promoted products and launches in Canada and Latin America.

The pharmaceutical company now expects full-year revenue of CAD 560 million to CAD 570 million, representing growth of at least 24% from 2025. It expects adjusted EBITDA to equal approximately 17.5% of revenue, or growth of at least 34% from last year.

President and CEO Samira Sakhia said the increased outlook reflects stronger performance from promoted products across multiple countries and Latin American currencies performing better against the Canadian dollar than previously anticipated. The guidance assumes no material adjustment from hyperinflation accounting in Argentina, among other assumptions.

Knight also raised its estimate of peak annual revenue from pipeline and launch pipeline products to more than CAD 300 million, from more than CAD 200 million. Sakhia said most of the increase and most of the estimated CAD 300 million contribution come from products that are already approved.

Quarterly Revenue Rises 13%

Third-quarter revenue increased 13% to CAD 138 million from a year earlier, Chief Financial Officer Arvind Utchanah said on the Nov. 5 earnings call. On a constant-currency basis, revenue rose 4%.

Launch pipeline products generated CAD 21 million in quarterly revenue, up CAD 12 million, or 137%, in constant currency. Utchanah attributed the increase to launches including ORGOVYX, IMVEXXY, Xcopri, Myfembree, Jornay PM and Minjuvi.

Promoted strategic products generated CAD 65 million, down CAD 5 million, or 7%, in constant currency. Utchanah cited customer purchasing patterns and lower Lenvima revenue in Colombia after the product was included in a direct price control regime in August. Excluding the impact of purchasing patterns, he said, the portfolio grew by CAD 2 million.

The mature portfolio contributed CAD 52 million, remaining relatively stable year over year. Adjusted gross margin improved to 51% of revenue from 49%, reflecting a change in product mix.

Adjusted EBITDA rose 13% to CAD 24 million, while adjusted EBITDA per share increased 15% to CAD 0.24. Higher revenue and gross margin were partly offset by increased operating expenses, Utchanah said. Sales and marketing, general and administrative, and research and development expenses rose 21% to CAD 48 million as Knight expanded its sales structure, increased promotional spending and incurred higher legal fees related to tax litigation in Canada and Brazil.

For the first nine months of 2026, revenue grew 36% to CAD 430 million and adjusted EBITDA increased 57% to more than CAD 76 million, Sakhia said. Nine-month adjusted EBITDA exceeded the amount reported for all of 2025.

Pipeline Outlook and New Agreement

Knight’s pipeline covers more than 75 product launches across Canada and Latin America, including 22 completed since January 2024, Sakhia said. Launch pipeline products generated more than CAD 67 million in revenue over the last 12 months.

Asked about the timing of peak sales, Sakhia said the company looks at a nearer-term horizon, with products launched in 2024 and 2025 starting to reach their peaks in roughly four to five years. She said the revenue estimate accounts for the possibility that a product could be delayed or fall off, and that most of the estimated contribution is from products already approved.

During the quarter, Knight signed an exclusive distribution agreement with Kyowa Kirin International to commercialize Poteligeo in certain Latin American countries. Chief Business Officer Amal Khouri said Knight plans to submit the treatment for approval in the coming months.

Khouri said Poteligeo is approved in the United States and Europe for adults with relapsed or refractory mycosis fungoides or Sézary syndrome after at least one prior systemic therapy. She said the product fits Knight’s existing hematology and oncology portfolio.

Since the beginning of the third quarter, Knight submitted Gemtesa for regulatory approval in Canada and Minjuvi for first-line diffuse large B-cell lymphoma in Brazil. It also obtained approvals for Tavalisse in Colombia, Niktimvo in Brazil and Minjuvi for follicular lymphoma in Mexico, Sakhia said.

AmBisome Competition and Margins

Sakhia said a competitor received Brazilian approval in September for a generic and a branded generic to AmBisome. Knight expects launches of those products to reduce AmBisome sales and adjusted EBITDA contribution in Brazil beginning in 2027.

There were no AmBisome sales to Brazil’s Ministry of Health in the third quarter because the 2026 contract was completed by the end of the second quarter, Sakhia said. The 2027 contract had not been awarded to the generic competitor, she said, and Knight was in advanced negotiations, with the hope of retaining most of it.

Sakhia expects the competitor to be in contention for the 2028 contract but said Knight expects to retain some government sales, citing its consistent supply.

Looking beyond 2026, Sakhia said she expects EBITDA margins to remain broadly consistent for the next couple of years as Knight invests, before expanding as newer products contribute more. She said the launch pipeline products generally have better gross margins than older distribution agreements, while AmBisome is a lower-margin product.

Knight generated CAD 96 million in operating cash flow during the first nine months of 2026 and ended the third quarter with CAD 137 million in cash and marketable securities and a net cash position of CAD 115 million. Utchanah said quarterly cash flow could remain uneven, but the company expects a high conversion of EBITDA to cash flow.

About Knight Therapeutics (TSE:GUD)

Knight Therapeutics Inc, headquartered in Montreal, Canada, is a pharmaceutical company focused on acquiring or in-licensing and commercializing pharmaceutical products for Canada and Latin America. Knight's Latin American subsidiaries operate under United Medical, Biotoscana Farma and Laboratorio LKM. Knight Therapeutics Inc's shares trade on the TSX under the symbol GUD. For more information about Knight Therapeutics Inc, please visit the company's web site at www.knighttx.com or www.sedarplus.ca.

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