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Knight Addresses Misleading and Self-Serving Plan Issued by Disgruntled Director
The Jakobsohn Scheme
is full of glaring holes, inconsistencies, and
misleading statements designed to provide Mr. Meir
Jakobsohn with access to Knight’s resources for Medison’s
MONTREAL, March 14, 2019 (GLOBE NEWSWIRE) -- Knight Therapeutics Inc. (TSX: GUD) ("Knight"), a Canadian specialty pharmaceutical company, today issued the following statement addressing a press release and presentation from Medison Biotech Ltd. (“Medison”) and its CEO, Meir Jakobsohn, who is also a director and shareholder of Knight as the result of a 2015 agreement between the two companies.
Knight continues to be disappointed by Mr. Jakobsohn’s ongoing attempts to extort Knight’s Board of Directors (the “Board”) into agreeing to a scheme that is not in the best interest of Knight’s shareholders and only advances his own self-serving agenda.
Knight has attempted to maintain an open and constructive dialogue with Mr. Jakobsohn and, over the past several months, has repeatedly asked him to provide the company with a presentation outlining his views about the company’s strategy and again opened the door for him to present to his fellow directors in person. Unfortunately, it was not until the morning of Wednesday, March 13, that such a presentation was provided on short notice before a scheduled Board meeting. Despite the limited time the Board had to consider the presentation, it operated in good faith to engage Mr. Jakobsohn in a constructive dialogue in an effort to identify avenues of cooperation that would be beneficial to Knight’s shareholders. Following Mr. Jakobsohn’s presentation, the Board expressed the desire of continuing their dialogue and asked about next steps. The Board is therefore disappointed by Mr. Jakobsohn’s public release of his presentation and elimination of private discussions. It appears that rather than meaningfully attempting to find an outcome that is in the best interest of Knight’s shareholders, Mr. Jakobsohn has instead opted to engage in yet another self-serving proxy fight tactic.
“Let’s be clear, the scheme released today is an attempt to extort Knight shareholders for the sole benefit of Mr. Jakobsohn. He wants to take Knight’s resources and reputation and use them to prop up Medison which is making less and less money each and every year since 2015,” said Knight CEO Jonathan Ross Goodman. “The direction he outlines is based on a flawed understanding of the Canadian market, full of holes and inconsistencies, and demonstrates the fact he is devoid of industry experience outside of Israel. The message we have heard from shareholders since Mr. Jakobsohn launched his campaign has been clear: Do not give him access to Knight’s money and do not risk derailing the steady progress we are seeing. I can assure all shareholders that we remain committed to successfully executing on our long-term strategic plan and protecting the interests of all Knight shareholders. We will not allow a 7% shareholder in Knight to use his position to benefit his 70% stake in Medison.”
While Knight will provide more detailed commentary on The Jakobsohn Scheme in due course, shareholders should be aware of an immediate series of glaring holes, inconsistencies, and misleading statements.
THE JAKOBSOHN SCHEME LACKS SUBSTANCE, CREDIBILITY
MEIR LOOKING OUT FOR MEIR. Mr.
Jakobson’s primary thesis is that Knight should focus its
effort on commercializing highly innovative biotech
products but he is careful not to say why.
Shareholders should be aware of his motivation and
understand that Knight is not averse to these
products. In fact, Knight directly in-licensed highly
innovative products and has had and will continue to have
discussions with many of the companies that Mr. Jakobsohn
names. However, Knight will not make high risk or binary
bets with its money that if successful would
disproportionately benefit Medison. It is because
Knight will not adopt this scheme that Mr. Jakobson is
trying to gain access to Knight’s funds so that he can
carry it out himself to the detriment of our shareholders.
The “strategic changes” he is pushing for are entirely
self-serving ,not in line with Knight's long-term strategy
for value creation and inconsistent with what Knight
shareholders invested in.
FULL OF HOLES AND
INCONSISTENCIES. The Jakobsohn
Scheme is filled with misleading information and
distorted commentary on everything from Knight’s current
strategy to the company’s value creation compared to its
peers. Tellingly, what he has discussed with Knight
privately is not consistent with what he is presenting
publicly, suggesting that he knows that shareholders will
not be receptive to his true cash grab agenda. Mr.
Jakobsohn had initially sought $450m of
Knight’s cash to be routed to high risk investments,
including to a VC fund he himself would operate but now has
lowered his public demand to $50m.
DOESN’T UNDERSTAND CANADA OR THE INDUSTRY
INTERNATIONALLY. The Jakobsohn
Scheme is illustrative of the fact that he just
doesn’t understand Canada, Knight’s primary market. Mr.
Jakobsohn has no understanding of the Canadian pharma
market, regulatory requirements, or of public company
governance. Moreover, prior to yesterday, in more than
three years as a Knight director he has only attended two
board meetings in person and has questionable pharma
business acumen as Medison, which is solely focused on
Israel, has seen declining profits since 2015.
JONATHAN GOODMAN: KNIGHT FIRST. As Mr.
Jakobsohn knows full well, Mr. Goodman is an indirect,
passive minority shareholder in Pharmascience.
Decisions at Pharmascience are completely isolated
from Mr. Goodman and he provides zero input. Mr.
Jakobsohn’s allegations of conflict of interest regarding
Mr. Goodman and Pharmascience—a business run separately by
Mr. Goodman’s father and brother—are no more than a red
herring that insults the intelligence of Knight’s
shareholders, who are aware that Mr. Goodman has competed
against Pharmascience since 1996 and will continue to do so
to ensure Knight is successful. Mr. Goodman decided
decades ago to chart his own course in the pharmaceutical
business, one that is separate from his family, and that
decision has served Knight shareholders well. Mr.
Goodman participated in all 5 Knight equity financings and
personally invested $75 million at increasing valuations
- KNIGHT HAS BEST-IN-CLASS GOVERNANCE PRACTICES. Knight’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. This is demonstrated in Knight’s commitment to ongoing Board refreshment that has seen several new directors appointed all with Mr. Jakobsohn’s support.
KNIGHT IS ON THE RIGHT TRACK
Knight is confident that it has the right plan in place to build long term shareholder value.
Since its launch in 2014, Knight has:
- Raised $685 million at increasing valuations ($3.50, $5.25, $6.75. $8.00, $10.00 per share)
- In-licensed over 20 innovative pipeline products from 10 companies
- Received FDA approval for Impavido® in March 2014 and sold PRV for US$125M
- Acquired NeurAxon Inc. and the Neuragen brands
- Sold or out-licensed rights to Neuragen, Impavido, and NeurAxon
- Lent over $170m to 15 strategic loan partners generating double digit returns
- Generated approx. $219m of net income to date (as of Dec. 31, 2018)
- Cautiously rolled out a Rest of the World licensing strategy with the purchase of 28.3% of Israeli based Medison Pharma Inc. and lending of up to US$25 million (up to an additional US$100 million) to Mexico and Brazil based Moksha8
- Built the foundation for a successful Canadian based specialty pharma company focused on Canada and select international markets.
Knight’s strategy is on track: As reported in Knight’s Q4, 2018 report, year over year revenue and net income increased by 45% and 40% respectively. The company has a well-defined strategic plan —regularly reviewed and refined to maximize shareholder value—that is working.
Knight advises shareholders to take no action with respect to Mr. Jakobsohn’s latest missive. The Board and its advisors will carefully review the ideas included and provide a detailed response to shareholders in due course.
Knight has retained Kingsdale Advisors as its strategic shareholder and communications advisor and Davies Ward Phillips & Vineberg LLP as its legal advisors.
About Knight Therapeutics
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.gud-knight.com or www.sedar.com.
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, 2018. 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
Executive Vice President, Communication Strategy
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