Knight Therapeutics Lifts 2026 Outlook After 13% Q3 Revenue Rise

Knight Therapeutics (TSX: GUD) raised its full-year 2026 revenue guidance to CAD 560 million to CAD 570 million, implying growth of at least 24% from 2025. The Montreal-based specialty pharmaceutical company, which acquires and commercializes products across Canada and Latin America, also lifted its adjusted EBITDA (earnings before interest, tax, depreciation and amortization) forecast to roughly 17.5% of revenue, or growth of at least 34% year over year.

President and CEO Samira Sakhia said the improved outlook reflects stronger performance from promoted products across multiple countries. It also rests on Latin American currencies holding up better against the Canadian dollar than previously anticipated, and assumes no material adjustment from hyperinflation accounting in Argentina.

What drove the third quarter?

Third-quarter revenue rose 13% to CAD 138 million from a year earlier, CFO Arvind Utchanah told the Nov. 5 earnings call. On a constant-currency basis, growth was a more modest 4%. The gap between the two numbers tells its own story about the peso's generosity.

Launch pipeline products generated CAD 21 million in quarterly revenue, up CAD 12 million, or 137%, in constant currency. Utchanah credited launches including ORGOVYX, IMVEXXY, Xcopri, Myfembree, Jornay PM and Minjuvi. Promoted strategic products contributed CAD 65 million, down CAD 5 million, or 7%, in constant currency, dragged by customer purchasing patterns and lower Lenvima revenue in Colombia after the drug entered a direct price control regime in August. Excluding purchasing patterns, that portfolio grew by CAD 2 million.

The mature portfolio held steady at CAD 52 million. Adjusted gross margin improved to 51% of revenue from 49%, on product mix. Adjusted EBITDA rose 13% to CAD 24 million, and adjusted EBITDA per share increased 15% to CAD 0.24. Operating expenses climbed 21% to CAD 48 million as Knight expanded its sales structure, raised promotional spending and absorbed higher legal fees tied to tax litigation in Canada and Brazil.

How large is the pipeline prize?

Knight now expects peak annual revenue from pipeline and launch pipeline products to exceed CAD 300 million, up from a prior estimate of more than CAD 200 million. Sakhia said most of that contribution comes from products already approved.

The pipeline spans more than 75 launches across Canada and Latin America, including 22 completed since January 2024. Launch pipeline products generated more than CAD 67 million in revenue over the trailing twelve months. On timing, Sakhia said products launched in 2024 and 2025 should start reaching peak sales in roughly four to five years, and the estimate already accounts for possible delays or attrition.

For the first nine months of 2026, revenue grew 36% to CAD 430 million and adjusted EBITDA rose 57% to more than CAD 76 million. The nine-month EBITDA figure, Sakhia noted, exceeded the total reported for all of 2025.

What about AmBisome and cash?

A competitor won Brazilian approval in September for a generic and a branded generic of AmBisome. Knight expects those launches to reduce AmBisome sales and EBITDA contribution in Brazil from 2027. No AmBisome sales went to Brazil's Ministry of Health in the quarter because the 2026 contract closed by the end of the second quarter. The 2027 contract has not been awarded to the generic rival; Knight is in advanced negotiations and hopes to retain most of it, with its consistent supply cited as leverage. Sakhia expects the competitor to contend for the 2028 contract.

On margins, Sakhia expects EBITDA margins to stay broadly consistent for the next couple of years as the company invests, then expand as newer, higher-margin products contribute. Launch pipeline products generally carry better gross margins than older distribution agreements, while AmBisome is a lower-margin product.

Knight generated CAD 96 million in operating cash flow over nine months and ended the quarter with CAD 137 million in cash and marketable securities, a net cash position of CAD 115 million. Utchanah cautioned that quarterly cash flow could remain uneven, though the company expects high conversion of EBITDA to cash.

During and after the quarter, Knight signed an exclusive deal with Kyowa Kirin International to commercialize Poteligeo — approved in the US and Europe for relapsed or refractory mycosis fungoides and Sézary syndrome — in certain Latin American markets, with submissions planned within months. It filed Gemtesa in Canada and Minjuvi in Brazil, and won approvals for Tavalisse in Colombia, Niktimvo in Brazil and Minjuvi for follicular lymphoma in Mexico.