Knight Therapeutics Inc (KHTRF) (Q3 2026) Earnings Call Highlights: Record Revenue, Raised ...

Q: As you think about margins into 2027 and beyond, will the Ambizome MOH contract be retained at existing pricing or could it be lower due to generics, and how should we think about margins next year? A: Samira Sakia (CEO) said many launch pipeline products have already been on market for several years, so their contribution will be higher next year. Newer licensing agreements carry better gross margins than legacy distribution agreements. While Ambizome sales are expected to decline and it is a lower-margin product, higher-margin products will contribute more. She expects EBITDA margins to remain consistent over the next couple of years, then start accelerating about three years out as launches contribute more.

Q: Were there any Ambizome sales to the Brazilian MOH this quarter, and has the 2027 MOH contract gone to the generic? A: Samira Sakia (CEO) confirmed there were no Q3 sales to the MOH because the 2026 contract was completed by the end of Q2. The 2027 contract has not been granted to the generic; the team is in advanced negotiations and hopes to conclude within the next couple of weeks, expecting to retain the majority of that contract.

Q: We expected EBITDA margins to compress moderately in the second half of 2026 on Mexico infrastructure build-out and pre-launch spending, but margins ticked up versus Q2. Why haven't we seen a tick down, and will that persist through Q4? A: Samira Sakia (CEO) said expenses are in line with expectations, but brands are performing better than expected. That outperformance is why the company raised both top-line and bottom-line guidance, as well as pipeline product guidance based on observed performance.

Q: With $150 million net cash and ample credit capacity, how is the business development opportunity set evolving, and has your view of the market changed given your strengthening position? A: Amal Khuri (Chief Business Officer) said the approach remains the same: pursuing growth assets in pipeline and new launches, plus acquisitions of products or portfolios with existing sales that provide cash flow to fund investments while minimizing bottom-line impact. There are no restrictions given the balance sheet and access to cash and credit, and the company continues to see many opportunities in its markets. Samira Sakia (CEO) added that Knight is becoming a partner of choice, and its stable of partners gives access to their pipelines.

Q: In Canada, products like Orgovix, Xcopri, Myfembre and Invexi continue to outperform. How are they tracking against internal expectations, and how much growth runway remains? A: Samira Sakia (CEO) pointed to the pipeline guidance increase from over $200 million to over $300 million as evidence these products are performing ahead of expectations. The company was cautious partly because Orgovix and Xcopri received reimbursement right before the agreements were signed, and the uptake curve has been much faster than originally expected. Products like Orgovix and Myfembre expanded physician reach, and Invexi is exceeding expectations across all provinces, driven by strong access and fit within the portfolio.

Q: Can you provide more color on Poteligeo's product profile and its relative importance in the launch pipeline? A: Amal Khuri (Chief Business Officer) noted Poteligeo is already approved in the U.S. and Europe, has strong clinical data, and serves a high unmet need in second-line mycosis fungoides and Sezary syndromeboth treated by hem/oncs, fitting well within Knight's portfolio. He noted it generates about $200 million in U.S. sales over the last 12 months. Knight is well established in hem/onc and plans submissions in Latin America over the coming months.

Q: Operating cash flow has nearly tripled year-to-date versus last year and has been consistently positive for three quarters. What's driving that consistency, and do you expect lumpiness going forward? A: Samira Sakia (CEO) attributed the increase to a diversified portfolio and geographies, with results translating into cash flow, plus a larger portion of business coming from Canada where collections are faster. Arvind Duchena (CFO) added that EBITDA growth is converting directly into operating cash flow, working capital is now at a normal level in 2026, and while there could be quarter-to-quarter lumpiness, the company still expects high EBITDA-to-cash-flow conversion going forward.

Q: On the peak revenue number, what is the expected timingfive years, eight years, ten years? A: Samira Sakia (CEO) said the company looks at it nearer term, at the lower end of that rangecloser to four to five yearswhen these products, especially those launched in 2024 and 2025, will reach peak.

Q: What regulatory risk is embedded in the $300 million peak sales expectationis the potential even higher with conservatism applied for regulatory hiccups? A: Samira Sakia (CEO) said the guidance is "at least $300 million," which accounts for potential delays or one product falling off. The majority comes from already-approved products, with a lesser component from not-yet-approved products. Most unapproved pipeline products, such as Poteligeo and Prexan, are already approved in the U.S. and Europe, though she acknowledged regulatory risk since different agencies evaluate approvals differently.

Q: Is the generic expected to win the Ambizome MOH contract in 2028 and beyond, or could supply stability keep Knight in play? A: Samira Sakia (CEO) said the company believes the generic will be in place for the 2028 contract, but noted generic manufacturers often go on back order and Knight has consistent supplythe particular competitor has

For the complete transcript of the earnings call, please refer to the full earnings call transcript .