Knight Receives Adverse Notice of Reassessment from CRA
July 06 2018 - 7:00AM
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.comwww.gudknight.com
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