Knight Therapeutics Raises Guidance on Record First Half; Launch Growth and FX Tailwinds Lift Q2
Knight Therapeutics (TSE:GUD) raised its full-year 2026 guidance after posting record results for the first half of the year, citing broad-based gains across its promoted portfolio, a growing number of newly launched products and a favorable foreign-exchange backdrop.
For the first six months, the Montreal-based drugmaker reported revenue of C$293 million, adjusted EBITDA of C$52 million and operating cash flow of C$70 million. President and CEO Samira Sakhia said on the company's second-quarter conference call that the promoted portfolio generated nearly C$200 million during the period, an increase of more than C$50 million, or 36% on a constant-currency basis.
Second-quarter revenue came in at C$144 million, up C$37 million, or 34%, from the same period last year. On a constant-currency basis, revenue rose C$26 million, or 22%, with CFO Arvind Utchanah attributing the gain to promoted-portfolio growth, recent product launches and the addition of mature products acquired through the Paladin and Sumitomo transactions.
The launch-pipeline portfolio contributed C$18 million in quarterly revenue, an increase of C$14 million, or 297%, on a constant-currency basis. Utchanah connected that jump to the 17 product launches the company has completed over the past two and a half years. According to IQVIA data cited by Knight, sales of the Canadian launch-pipeline products climbed 189% year over year in the second quarter.
Knight's promoted strategic products generated C$76 million in the quarter. Excluding sales of AmBisome to Brazil's Ministry of Health, this part of the portfolio grew C$9 million, or 16%, on a constant-currency basis, with management pointing to CRYSVITA, Lenvima, AKYNZEO and INVOKANA as contributors.
The mature portfolio added C$48 million in the quarter, up C$12 million, or 32%, on a constant-currency basis, largely reflecting assets from the Paladin and Sumitomo deals.
Adjusted gross margin widened to 49% of revenue from 46% a year earlier, helped by a larger share of sales coming from Canada. Operating expenses excluding amortization rose 25% to C$47 million as Knight expanded its structure and spending to support launches and manage the larger mature portfolio.
Adjusted EBITDA totaled more than C$24 million, up 58% from the prior year, while adjusted EBITDA per share rose 61% to C$0.25. The quarter also included a C$12 million net loss on financial assets, which Utchanah attributed to mark-to-market revaluations of strategic fund and equity investments.
Knight has completed six launches in Canada and 11 in Latin America over the last two and a half years. Canadian launches include IMVEXXY, BIJUVA, Jornay PM, Xcopri, MYFEMBREE and ORGOVYX. In Latin America, MINJUVI has been launched in Brazil, Mexico and Argentina for diffuse large B-cell lymphoma, and in Brazil for follicular lymphoma; Pemazyre in Brazil, Mexico and Argentina; TAVALISSE in Mexico; and AKYNZEO in Paraguay.
In the second half, the company expects to launch TAVALISSE in Brazil after receiving regulatory approval in the second quarter, along with WYNZORA in Canada and certain branded generics in Latin America.
Knight also received a Notice of Non-Compliance from Health Canada for its CREXONT new drug submission. Sakhia said the company would work with its partner to respond, but cautioned that it was too early to say whether additional clinical work could be required. CREXONT was approved and launched in the U.S. in 2024 and received a positive CHMP recommendation in Europe in June, with European approval expected in September, according to the company.
The regulatory hurdle clouds an otherwise positive quarter, but it also highlights a broader shift in Knight's story: after a period of integrating acquisitions, the company is increasingly relying on its own launch pipeline and commercial execution to drive growth. The steep constant-currency gains in launch-pipeline revenue are still small in absolute terms relative to the mature portfolio, but they are expected to become a more meaningful earnings contributor as those products scale.
Knight increased its 2026 guidance and now expects revenue of C$540 million to C$560 million, representing at least 20% growth from 2025. The company also expects adjusted EBITDA to equal at least 15% of revenue, which implies EBITDA growth of at least 10% from the prior year.
Sakhia said the higher outlook was primarily driven by stronger promoted-product performance across markets, while better-than-expected Latin American currency performance against the Canadian dollar also helped. She estimated the exchange-rate effect added about C$10 million to first-half revenue versus a year earlier, though she noted much of that benefit had already been realized.
Management reiterated that cash deployment remains focused on acquiring or in-licensing products, with share repurchases continuing when opportunities arise. Sakhia also said EBITDA margins should improve over the next several years as newly launched products contribute more revenue and the company's infrastructure becomes more stable.
Knight Therapeutics Inc., headquartered in Montreal, is a pharmaceutical company focused on acquiring or in-licensing and commercializing products in Canada and Latin America. Its Latin American subsidiaries operate under United Medical, Biotoscana Farma and Laboratorio LKM. Knight's shares trade on the TSX under the symbol GUD.