MONTREAL, July 06, 2018 (GLOBE NEWSWIRE) -- Knight Therapeutics Inc. (TSX: GUD ) (“Knight”), a leading Canadian specialty pharmaceutical company, announced today that it has received a notice of reassessment (“CRA Notice”) from the Canada Revenue Agency (“CRA”) for its fiscal year ended December 31, 2014.
The CRA Notice relates to the disposition of the Priority Review Voucher ("PRV") granted on March 19, 2014, upon the US Food & Drug Administration’s (“FDA”) approval of Impavido®. The PRV was disposed of by Knight’s wholly-owned subsidiary, Knight Therapeutics (Barbados) Inc. (“KTB”), to a third party in November 2014 for gross proceeds of US$125 million. The proceeds have contributed to the development of the business operations of KTB, including the out-licensing of Impavido®, as well as business development strategies designed to acquire additional pharmaceutical product rights. The CRA Notice provides that Knight is liable to pay to the CRA an aggregate of $23.3 million in additional taxes and interest. It is likely that the Quebec Revenue Agency (“QRA”) will propose a similar adjustment which will result in an estimated additional tax liability of $19.0 million increasing the total additional taxes, interest and penalties to $42.3 million (“Total Tax Liability”).
Knight believes that the CRA Notice is unfounded and intends to contest vigorously the CRA Notice by filing a notice of objection to start the appeals process. However, there can be no assurance regarding the outcome of the appeals process or when a resolution may be reached. In connection with the appeals process, Knight has made a deposit of $23.3 million to the CRA and will make an estimated deposit of $19.0 million to QRA. Knight has not recorded any tax provision for the Total Tax Liability in its financial statements. Although Knight believes its tax provisions are adequate, the final determination of tax audits and any related disputes could be materially different from historical income tax provisions and accruals.
About the FDA PRV Program
A Priority Review Voucher is a transferrable asset that entitles the holder to a priority review for a drug of its choice. A priority review means that the review time of the FDA for a new drug application is reduced by approximately six months. The PRV program was designed to incentivize the development of treatments for diseases that might otherwise not attract development interest due to the cost and the lack of market opportunities.
About Knight Therapeutics Inc.
Knight Therapeutics Inc., headquartered in Montreal, Canada, is a specialty pharmaceutical company focused on acquiring or in-licensing 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.
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.
CONTACT INFORMATION:
Knight Therapeutics Inc. Samira Sakhia President & Chief Financial Officer T: 514-678-8930 F: 514-481-4116 info@gudknight.com www.gudknight.com
