On August 13, 2021 GT Biopharma, Inc. ("GT Biopharma" or the "Company") (NASDAQ: GTBP), a clinical stage immuno-oncology company focused on developing innovative therapeutics based on the Company’s proprietary natural killer (NK) cell engager (TriKE) protein biologic technology platform, reported a general business update of events in the second quarter ending June 30, 2021 (Press release, GT Biopharma, AUG 13, 2021, View Source [SID1234586568]).

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"I am pleased with the corporate and clinical development milestones that GT Biopharma continues to achieve throughout the first half of 2021," said Anthony J. Cataldo, GT Biopharma’s Chairman and Chief Executive Officer. "The Company continues to demonstrate that our proprietary TriKE platform technology is both safe and efficacious, demonstrated through our recent positive, interim data announcement of our ongoing Phase I/II dose expansion clinical trial of GTB-3550 TriKE. The TriKE platform is robust, focusing not only on hematologic cancers but also on solid tumor cancers such as lung, prostate, breast and ovarian cancers. The TriKE platform includes our B7H3, PD-L1 and HER2 TriKE product candidates. Our breadth of indications and the utility of TriKE as a therapeutic agent reduces the risk profile of our therapeutic platform and pipeline. Our collaborative efforts were strengthened through the Company’s research agreement with Dr. Jeffrey S. Miller and the University of Minnesota, and signifies that we are continuing to hit important strides in the clinic. These positive milestones reinforce GT Biopharma’s need to continue developing this first-in-human treatment for patients living with AML, MDS and other CD33+ hematologic cancers."

Clinical Highlights

Reported Positive, Interim Data Results from First-in-Human GTB-3550 TriKE Phase I Clinical Trial for the Treatment of Refractory/Relapsed Acute Myeloid Leukemia (AML) and High-Risk Myelodysplastic Syndromes (MDS): In June 2021, GT Biopharma and Dr. Jeffrey S. Miller presented positive, interim results from the Phase I dose-escalation portion of the Phase I/II dose expansion clinical trial of GTB-3550 TriKE at the 2021 Raymond James Human Health Innovation Conference. Results demonstrated that 57% of patients achieved significant reduction in AML/MDS cancer cell burden, with one patient reaching up to 63.7% reduction in bone marrow blast levels. Across all patients, treatment of GTB-3550 TriKE was well tolerated and no signs of cytokine release syndrome (CRS) were detected. This portion of the Phase I/II dose expansion trial is focused on determining the recommended Phase II dose, the maximum tolerated dose (MTD), optimal dose schedule, safety and tolerability of GTB-3550 TriKE administration. The Phase I safety study is expected to complete later this fall and the Company has scheduled an interim data publication for September 16-21, 2021 at the European Society for Medical Oncology Conference to be held in Paris, France.
Corporate Highlights

Announced Strategic Research Agreement with Dr. Jeffrey S. Miller of the University of Minnesota: In July 2021, GT Biopharma announced that it has entered a research agreement with Dr. Jeffrey S. Miller, associated with the University of Minnesota to further develop the Company’s proprietary TriKE technology. This agreement reinforces the clinical success that TriKE continues to demonstrate in patients with acute myeloid leukemia (AML) and myelodysplastic syndromes (MDS).
Inclusion in the Russell 2000 Index: In June 2021, GT Biopharma was added to the Russel 2000 Index, signifying corporate and clinical development milestones that the Company continues to achieve. This listing enhances GT Biopharma’s visibility to a broader investment community, and increases long-term growth potential as the Company continues to achieve important clinical milestones associated with both their robust preclinical and clinical pipelines.
Announced $16M Cash Increase from Warrant Exercise Proceeds: In July 2021, the Company announced a $16M increase in cash from exercised warrant proceeds that were a part of the recent $27M financing completed in February of this year. This capital will be used to further develop the TriKE technology in both preclinical and clinical pipelines.
Conference Call

The Company will host a conference call at 8:30 a.m. EST today to provide a general business update. To join the call U.S. callers should dial 1-877-870-4263 and international callers should dial 1-412-317-0790. All participants should ask to be connected to the GT Biopharma conference call.

A live webcast of the event will be available by visiting the "Presentations" page in the Investors section of GT Biopharma’s website at www.gtbiopharma.com/news-media/presentations. A replay of the webcast will be archived for 30 days following the presentation.

About GTB-3550 TriKE

GTB-3550 is the Company’s first TriKE product candidate being initially developed for the treatment of acute myeloid leukemia (AML), myelodysplastic syndromes (MDS) and other CD33+ hematologic cancers. GTB-3550 is a single-chain, tri-specific scFv recombinant fusion protein conjugate composed of the variable regions of the heavy and light chains of anti-CD16 and anti-CD33 antibodies and a modified form of Interleukin 15 (IL-15). The natural killer (NK) cell-stimulating cytokine human IL-15 portion of the molecule provides a self-sustaining signal that activates NK cells and enhances their ability to kill. We intend to study GTB-3550 in CD33 positive leukemias such as AML, MDS and other CD33+ hematopoietic malignancies.

On August 13, 2021 Merck (NYSE: MRK), known as MSD outside the United States and Canada, reported that the U.S. Food and Drug Administration (FDA) has approved WELIREG, an oral hypoxia-inducible factor-2 alpha (HIF-2α) inhibitor, for the treatment of adult patients with von Hippel-Lindau (VHL) disease who require therapy for associated renal cell carcinoma (RCC), central nervous system (CNS) hemangioblastomas, or pancreatic neuroendocrine tumors (pNET), not requiring immediate surgery (Press release, Merck & Co, AUG 13, 2021, View Source [SID1234586567]). The recommended dose of WELIREG (40 mg tablets) is 120 mg once daily until disease progression or unacceptance toxicity. The approval is based on results from the open-label Study 004 trial (N=61), where the major efficacy endpoint was overall response rate (ORR) in patients with VHL-associated RCC.

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WELIREG is the first HIF-2α inhibitor therapy approved in the U.S. As an inhibitor of HIF-2α, WELIREG reduces transcription and expression of HIF-2α target genes associated with cellular proliferation, angiogenesis and tumor growth.

The WELIREG label contains a boxed warning that exposure to WELIREG during pregnancy can cause embryo-fetal harm. Verify pregnancy status prior to the initiation of WELIREG. Advise patients of these risks and the need for effective non-hormonal contraception. WELIREG can render some hormonal contraceptives ineffective. WELIREG can cause severe anemia that can require a blood transfusion. Monitor for anemia before initiation of WELIREG and periodically throughout treatment. WELIREG can cause severe hypoxia that may require discontinuation, supplemental oxygen, or hospitalization. Monitor oxygen saturation before initiation of and periodically throughout treatment with WELIREG. For more information, see "Selected Safety Information" below.

"VHL disease is a rare and serious condition. Until today, there were no systemic therapies approved to help treat patients diagnosed with certain types of VHL-associated tumors," said Dr. Eric Jonasch, principal investigator of Study 004 and professor, Department of Genitourinary Medical Oncology, Division of Cancer Medicine, The University of Texas MD Anderson Cancer Center. "The approval of WELIREG, which is based on data showing an overall response rate across three different types of VHL-associated tumors, addresses this significant unmet need by introducing a new option for physicians and their patients impacted by this disease."

"WELIREG is the first and only approved systemic therapy for patients with certain types of VHL-associated tumors, representing an important new treatment option for patients affected by this rare condition," said Dr. Scot Ebbinghaus, vice president, clinical research, Merck Research Laboratories. "Today’s approval of WELIREG is a significant milestone and is a testament to Merck’s commitment to bring forward innovative new treatment options for more patients."

"The approval of a non-surgical treatment option is meaningful for helping patients with certain types of VHL-associated tumors," said Dr. Ramaprasad Srinivasan, head, Molecular Cancer Therapeutics Section, Urologic Oncology Branch, National Cancer Institute (NCI), and principal investigator on the Cooperative Research and Development Agreement (CRADA) under which the NCI served as a site in Study 004. "In Study 004, nearly half of all patients with VHL-associated renal cell carcinoma, as well as the majority of patients with VHL-associated central nervous system hemangioblastomas or pancreatic neuroendocrine tumors, who were treated with WELIREG experienced a reduction of their respective tumor size. The FDA’s approval of WELIREG marks an important step forward by introducing a systemic therapy that has the potential to improve the current treatment paradigm for patients with certain types of VHL-associated tumors."

Merck is working to optimize production of WELIREG to allow for a sustainable supply to meet anticipated U.S. demand. Commercial supply is expected to be available by early September.

Data Supporting the Approval

The approval was based on data from Study 004 (ClinicalTrials.gov, NCT03401788), an open-label trial in 61 patients with VHL-associated RCC diagnosed based on a VHL germline alteration and with at least one measurable solid tumor (as defined by Response Evaluation Criteria in Solid Tumors [RECIST] v1.1) localized to the kidney. Enrolled patients had other VHL-associated tumors, including CNS hemangioblastomas and pNET. CNS hemangioblastomas and pNET in these patients were diagnosed based on the presence of at least one measurable solid tumor in the brain/spine or pancreas, respectively, as defined by RECIST v1.1 and identified by an independent review committee (IRC). The study excluded patients with metastatic disease. Patients received WELIREG at a dose of 120 mg once daily until progression of disease or unacceptable toxicity. In Study 004, the median duration of exposure to WELIREG was 68 weeks (range, 8.4 to 104.7).

The study population characteristics were: median age of 41 years (range, 19 to 66), 3.3% age 65 or older; 53% male; 90% white, 3.3% Black or African American, 1.6% Asian, and 1.6% Native Hawaiian or other Pacific Islander; 82% had an Eastern Cooperative Oncology Group (ECOG) performance status (PS) of 0, 16% had an ECOG PS of 1, and 1.6% had an ECOG PS of 2; and 84% had VHL type I disease. The median diameter of RCC target lesions per central IRC was 2.2 centimeters (range, 1 to 6.1). Median time from initial radiographic diagnosis of VHL-associated RCC tumors that led to enrollment on Study 004 to the time of treatment with WELIREG was 17.9 months (range, 2.8 to 96.7). Seventy-seven percent of patients had prior surgical procedures for RCC.

The major efficacy endpoint for the treatment of VHL-associated RCC was ORR measured by radiology assessment using RECIST v1.1 as assessed by IRC. Additional efficacy endpoints included duration of response (DoR) and time to response (TTR).

In patients with VHL-associated RCC (n=61), WELIREG showed an ORR of 49% (95% CI, 36-62); all responses were partial responses. Median DoR had not yet been reached (range, 2.8+ to 22.3+ months); among responders, 56% (n=17/30) were still responding after at least 12 months. Median TTR was eight months (range, 2.7 to 19).

In patients with VHL-associated CNS hemangioblastomas (n=24), WELIREG showed an ORR of 63% (95% CI, 41-81), with a complete response rate of 4% (n=1) and a partial response rate of 58% (n=14). Median DoR had not yet been reached (range, 3.7+ to 22.3+ months); among responders, 73% (n=11/15) were still responding after at least 12 months. Median TTR was three months (range, 3 to 11).

In patients with VHL-associated pNET (n=12), WELIREG showed an ORR of 83% (95% CI, 52-98), with a complete response rate of 17% (n=2) and a partial response rate of 67% (n=8). Median DoR had not yet been reached (range, 10.8+ to 19.4+ months); among responders, 50% (n=5/10) were still responding after at least 12 months. Median TTR was eight months (range, 3 to 11).

Serious adverse reactions occurred in 15% of patients who received WELIREG, including anemia, hypoxia, anaphylaxis reaction, retinal detachment and central retinal vein occlusion (1 patient each). Permanent discontinuation of WELIREG due to adverse reactions occurred in 3.3% of patients. Adverse reactions that resulted in permanent discontinuation of WELIREG were dizziness and opioid overdose (1.6% each).

Dosage interruptions of WELIREG due to an adverse reaction occurred in 39% of patients. Adverse reactions that required dosage interruption in >2% of patients were fatigue, decreased hemoglobin, anemia, nausea, abdominal pain, headache and influenza-like illness. Dose reductions of WELIREG due to an adverse reaction occurred in 13% of patients. The most frequently reported adverse reaction that required dose reduction was fatigue (7%).

The most common adverse reactions (≥25%), including laboratory abnormalities, that occurred in patients treated with WELIREG were decreased hemoglobin (93%), anemia (90%), fatigue (64%), increased creatinine (64%), headache (39%), dizziness (38%), increased glucose (34%) and nausea (31%).

About Von Hippel-Lindau Disease

The incidence of von Hippel-Lindau (VHL) syndrome is estimated to be one in 36,000 individuals. This is a rare genetic disease with an estimated incidence of 10,000 people in the U.S. Patients with VHL disease are at risk for benign blood vessel tumors as well as some cancerous ones, including renal cell carcinoma.

WELIREG (belzutifan) Indication in the U.S.

WELIREG (belzutifan) is indicated for the treatment of adult patients with von Hippel-Lindau (VHL) disease who require therapy for associated renal cell carcinoma (RCC), central nervous system (CNS) hemangioblastomas, or pancreatic neuroendocrine tumors (pNET), not requiring immediate surgery.

Selected Safety Information

Warning: Embryo-Fetal Toxicity

Exposure to WELIREG during pregnancy can cause embryo-fetal harm. Verify pregnancy status prior to the initiation of WELIREG. Advise patients of these risks and the need for effective non-hormonal contraception as WELIREG can render some hormonal contraceptives ineffective.

Anemia

WELIREG can cause severe anemia that can require blood transfusion. In Study 004, anemia occurred in 90% of patients and 7% had Grade 3 anemia. In Study 001, a clinical trial in patients with advanced solid tumors (n=58) treated at the recommended dose, anemia occurred in 76% of patients and 28% had Grade 3 anemia.

Monitor for anemia before initiation of and periodically throughout treatment. Closely monitor patients who are dual UGT2B17 and CYP2C19 poor metabolizers due to potential increases in exposure that may increase the incidence or severity of anemia.

Transfuse patients as clinically indicated. For patients with hemoglobin <9g/dL, withhold WELIREG until Hb≥9g/dL, then resume at reduced dose or permanently discontinue depending on the severity of anemia. For life threatening anemia or when urgent intervention is indicated, withhold WELIREG until hemoglobin ≥9g/dL, then resume at a reduced dose or permanently discontinue.

The use of erythropoiesis stimulating agents (ESAs) for treatment of anemia is not recommended in patients treated with WELIREG.

Hypoxia

WELIREG can cause severe hypoxia that may require discontinuation, supplemental oxygen, or hospitalization. In Study 004, hypoxia occurred in 1.6% of patients. In Study 001, a clinical trial in patients with advanced solid tumors (n=58) treated at the recommended dose, hypoxia occurred in 29% of patients; 16% were Grade 3 hypoxia.

Monitor oxygen saturation before initiation of and periodically throughout treatment. For decreased oxygen saturation with exercise (e.g., pulse oximeter <88% or PaO2 ≤55 mm Hg), consider withholding WELIREG until pulse oximetry with exercise is greater than 88%, then resume at the same or a reduced dose. For decreased oxygen saturation at rest (e.g., pulse oximeter <88% or PaO2 ≤55 mm Hg) or when urgent intervention is indicated, withhold WELIREG until resolved and resume at a reduced dose or discontinue. For life-threatening or recurrent symptomatic hypoxia, permanently discontinue WELIREG. Advise patients to report signs and symptoms of hypoxia immediately to a healthcare provider.

Embryo-Fetal Toxicity

Based on findings in animal studies, WELIREG may cause fetal harm when administered to a pregnant woman.

Advise pregnant women and females of reproductive potential of the potential risk to the fetus. Advise females of reproductive potential to use effective non-hormonal contraception during treatment with WELIREG and for 1 week after the last dose. WELIREG can render some hormonal contraceptives ineffective. Advise male patients with female partners of reproductive potential to use effective contraception during treatment with WELIREG and for 1 week after the last dose.

Adverse Reactions

In Study 004, serious adverse reactions occurred in 15% of patients, including anemia, hypoxia, anaphylaxis reaction, retinal detachment, and central retinal vein occlusion (1 patient each).

WELIREG was permanently discontinued due to adverse reactions in 3.3% of patients for dizziness and opioid overdose (1.6% each).

The most common adverse reactions (≥25%) were decreased hemoglobin (93%), anemia (90%), fatigue (64%), increased creatinine (64%), headache (39%), dizziness (38%), increased glucose (34%), and nausea (31%).

In Study 001, a clinical trial in patients with advanced solid tumors (n=58) treated at the recommended dose, the following additional adverse reactions have been reported: edema, cough, musculoskeletal pain, vomiting, diarrhea, and dehydration.

Drug Interactions

Coadministration of WELIREG with inhibitors of UGT2B17 or CYP2C19 increases plasma exposure of belzutifan, which may increase the incidence and severity of adverse reactions. Monitor for anemia and hypoxia and reduce the dosage of WELIREG as recommended.

Coadministration of WELIREG with CYP3A4 substrates, including hormonal contraceptives, decreases concentration of CYP3A4 substrates, which may reduce the efficacy of these substrates. Coadministration of WELIREG with hormonal contraceptives may lead to contraceptive failure or an increase in breakthrough bleeding.

Lactation

Because of the potential for serious adverse reactions in breastfed children, advise women not to breastfeed during treatment with WELIREG and for 1 week after the last dose.

Females and Males of Reproductive Potential

WELIREG can cause fetal harm when administered to a pregnant woman. Verify the pregnancy status of females of reproductive potential prior to initiating treatment with WELIREG.

Use of WELIREG may reduce the efficacy of hormonal contraceptives. Advise females of reproductive potential to use effective non-hormonal contraception during treatment with WELIREG and for 1 week after the last dose. Advise males with female partners of reproductive potential to use effective contraception during treatment with WELIREG and for 1 week after the last dose.

Based on findings in animals, WELIREG may impair fertility in males of reproductive potential and the reversibility of this effect is unknown.

Pediatric Use

Safety and effectiveness of WELIREG in pediatric patients under 18 years of age have not been established.

Merck’s Focus on Cancer

Our goal is to translate breakthrough science into innovative oncology medicines to help people with cancer worldwide. At Merck, the potential to bring new hope to people with cancer drives our purpose and supporting accessibility to our cancer medicines is our commitment. As part of our focus on cancer, Merck is committed to exploring the potential of immuno-oncology with one of the largest development programs in the industry across more than 30 tumor types. We also continue to strengthen our portfolio through strategic acquisitions and are prioritizing the development of several promising oncology candidates with the potential to improve the treatment of advanced cancers. For more information about our oncology clinical trials, visit www.merck.com/clinicaltrials.

On August 13, 2021 Sesen Bio (Nasdaq: SESN), a late-stage clinical company developing targeted fusion protein therapeutics for the treatment of patients with cancer, reported that it received a Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA) regarding its Biologics License Application (BLA) for Vicineum (oportuzumab monatox-qqrs) for the treatment of BCG-unresponsive non-muscle invasive bladder cancer (NMIBC) (Press release, Sesen Bio, AUG 13, 2021, View Source [SID1234586566]).

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The FDA has determined that it cannot approve the BLA for Vicineum in its present form and has provided recommendations specific to additional clinical/statistical data and analyses in addition to Chemistry, Manufacturing and Controls (CMC) issues pertaining to a recent pre-approval inspection and product quality.

"We are deeply disappointed by this unexpected result, and it is an unfortunate day for patients suffering from BCG-unresponsive NMIBC," said Dr. Thomas Cannell, president, and chief executive officer of Sesen Bio. "We remain dedicated to our mission to save and improve the lives of patients by bringing new treatment options to patients, and we intend to work closely with the FDA to understand next steps."

The Company plans to request a Type A meeting as soon as possible with the FDA to discuss the next steps that are needed before the application may be approved.

As of June 30, 2021, the Company had $151.1 million in cash, cash equivalents and restricted cash.

Conference Call and Webcast Information

Members of the Sesen Bio management team will host a conference call Monday, August 16, 2021, at 8:00 AM ET. To participate in the conference call, please dial (844) 831-3025 (domestic) or (315) 625-6887 (international) and refer to conference ID 2772032. The teleconference details can be accessed in the Investor Relations section of the Company’s website at www.sesenbio.com. A replay of the teleconference will be available in the investor section of the Company’s website at www.sesenbio.com for 60 days following the call.

About Vicineum

Vicineum, a locally administered fusion protein, is Sesen Bio’s lead product candidate being developed for the treatment of BCG-unresponsive non-muscle invasive bladder cancer (NMIBC). Vicineum is comprised of a recombinant fusion protein that targets epithelial cell adhesion molecule (EpCAM) antigens on the surface of tumor cells to deliver a potent protein payload, Pseudomonas Exotoxin A. Vicineum is constructed with a stable, genetically engineered peptide tether to ensure the payload remains attached to the antibody binding fragment until it is internalized by the cancer cell. This fusion protein design is believed to decrease the risk of toxicity to healthy tissues, thereby improving its safety. In prior clinical trials conducted by Sesen Bio, EpCAM has been shown to be overexpressed in NMIBC cells with minimal to no EpCAM expression observed on normal bladder cells. Sesen Bio is currently in the follow-up stage of a Phase 3 registration trial in the US for the treatment of BCG-unresponsive NMIBC. In February 2021, the FDA accepted the Company’s BLA file for Vicineum for the treatment of BCG-unresponsive NMIBC and granted the application Priority Review with a target PDUFA date of August 18, 2021. On August 13, 2021, the Company received a Complete Response Letter (CRL) from the FDA regarding its BLA for Vicineum. Additionally, Sesen Bio believes that cancer cell-killing properties of Vicineum promote an anti-tumor immune response that may potentially combine well with immuno-oncology drugs, such as checkpoint inhibitors. For this reason, the activity of Vicineum in BCG-unresponsive NMIBC is also being explored at the US National Cancer Institute in combination with AstraZeneca’s immune checkpoint inhibitor durvalumab.

On August 13, 2021 Compass Therapeutics, Inc. (OTC:CMPX), a clinical-stage biotechnology company developing proprietary antibody therapeutics reported that Thomas Schuetz, MD, PhD, Co-Founder and Chief Executive Officer will participate in a fireside chat at the Citi 16th Annual Biopharma Conference (Press release, Compass Therapeutics, AUG 13, 2021, View Source [SID1234586565]).

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Fireside Chat with Compass Therapeutics, CEO, Thomas Schuetz: Wednesday, September 8, 2021, at 3:15pm ET.
A replay of the Fireside chat will be available at the "Investors – Events and Presentations" tab on the Compass website www.compasstherapeutics.com.

On August 13, 2021 Knight Therapeutics Inc. (TSX: GUD) ("Knight" or "the Company"), a leading Pan-American (ex-US) specialty pharmaceutical company, reported financial results for its second quarter ended June 30, 2021 (Press release, Knight Therapeutics, AUG 13, 2021, View Source [SID1234586563]). All currency amounts are in thousands except for share and per share amounts. All currencies are Canadian unless otherwise specified.

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Q2 2021 Highlights

Financials

Revenues were a record $65,796, an increase of $12,546 or 24% over prior year.
Gross margin of $28,871 or 44% compared to $22,237 or 42% in prior year.
Adjusted EBITDA1 was $9,396, an increase of $1,743 or 23% over prior year.
Gain from strategic fund investments of $28,479, of which $4,872 was realized.
Net income was $29,004, an increase of $13,492 or 87% over prior year.
Cash inflow from operations was $12,409, an increase of $4,337 or 54% over prior year.
Corporate Developments

Purchased 1,324,076 common shares through a Normal Course Issuer Bid ("NCIB") for an aggregate cash consideration of $6,954.
Shareholders re-elected James C. Gale, Jonathan Ross Goodman, Samira Sakhia, Robert N. Lande, Michael J. Tremblay, Nicolás Sujoy and Janice Murray on the Board of Directors.
Announced leadership change with Samira Sakhia assuming role of CEO and Jonathan Goodman assuming role of Executive Chairman effective September 1, 2021.
Products

Acquired exclusive rights to manufacture, market and sell Exelon in Canada and Latin America for an upfront and milestone payment of $217,331 [US$180,000].
Strategic Investments

Received distributions of $7,034 from strategic fund investments and realized a gain of $4,872.
Key Subsequent Events

Obtained regulatory approval for NERLYNX to treat subset of HER2-positive metastatic breast cancer patients in Canada.
Launched a NCIB in July 2021 to purchase up to 10,267,956 common shares of the Company over the next 12 months.
Purchased an additional 2,675,917 common shares through NCIB for an aggregate cash consideration of $13,865.
"After 104 quarters of leading publicly-traded specialty pharmaceutical companies since the tender age of 28 and with the majority of these quarters with Samira by my side, it is the right time for both Knight and for Canadian society for me to step aside and make room for a female superstar. I look forward to fulfilling my new role as Chair and to support Samira and our talented team to the best of my abilities. I do this not just because I am the Gudest and the largest Knight shareholder but because teams support each other during both GUD and bad times.

1 Adjusted EBITDA is not a defined term under IFRS, refer to the definitions below for additional details.

Thank you to our shareholders and to Amal Khouri, Jody Engel, Corey Richardson, Arvind Utchanah, Georgette Lessard-Boyer, Gerry Mazzei and the many others who followed me from Paladin Labs Inc. for the confidence over the last 27 years. A special thank you goes to James Gale, managing partner at Signet Healthcare Partners for assuming the role of Lead Director. Imagine what we are going to do now that we are warmed up", said Jonathan Goodman, CEO of Knight Therapeutics Inc.

"It has been a privilege to have worked hand-in-hand with and learned from Jonathan for the last twenty years. I am honored and humbled to take on the role of CEO of Knight and to lead an exceptionally talented and dedicated executive team and Knights across Canada and Latin America.

I am excited to announce that for Q2 Knight achieved record quarterly results despite the ongoing challenges posed by the pandemic. During the last 6 months we executed on multiple fronts with our business development team closing Exelon and already beginning work on integration, the commercial team delivering on strong growth of our key brands and the operational teams executing on integration and systems implementation", said Samira Sakhia, President and Chief Operating Officer of Knight Therapeutics Inc.

Revenue: For the quarter ended June 30, 2021, revenues increased by $12,546 or 24% and on a constant currency basis increased by $14,379 or 28%. The growth in revenues on a constant currency basis is explained as following:

An estimated increase in revenues of approximately $5,500 to $7,000 driven by the increased demand of certain of our infectious diseases products to treat invasive fungal infections associated with COVID-19.
An increase in revenues of $4,187 driven by the acquisition of Exelon.
An increase in revenues of $4,807 or 64% driven by the growth of our recently launched products, including Cresemba, Lenvima, Halaven, Nerlynx, Trelstar and certain BGx products.
Gross margin: For the quarter ended June 30, 2021, the gross margin increased from 42% to 44% compared to the same period in the prior year due to lower inventory provision and a change in product mix, partially offset by re-negotiation of certain license agreements and the depreciation of the LATAM currencies. The gross margin would have been 46%, an increase of 2%, from 44% after excluding the adjustment of hyperinflation accounting in accordance with IAS 29.

Selling and marketing: For the quarter ended June 30, 2021, selling and marketing increased by $133 or 1% and on a constant currency basis by $117 or 1% as compared to the same prior year period. The increase is driven by promotional activities related to newly launched products and Exelon, offset by a net reduction of $1,719 in ECL expenses.

General and administrative: For the quarter ended June 30, 2021, general and administrative expenses increased by $1,280 or 16% and on a constant currency basis by $873 or 11% as compared to the same period in prior year. The increase is driven by an expense of $1,210 related to the extension of expiry date of certain stock options held by executive officers, directors and employees, offset by a lower cost of restructuring activities during the quarter compared to the same prior year period.

Amortization of intangible assets: For the quarter ended June 30, 2021, amortization of intangible assets increased by $1,831, or 32%, mainly explained by the amortization of Exelon acquired during Q2-21, partially offset by the depreciation of LATAM currencies.

Interest income: Interest income is the sum of interest income on financial instruments measured at amortized cost and other interest income. For the quarter ended June 30, 2021, interest income was $1,786, a decrease of $1,892 or 51%, compared to the same prior year period, due to a decrease in interest rates, the average cash and marketable securities balances and a lower average loan balance.

Interest expense: The interest expense relates to interest incurred on bank loans. For the quarter ended June 30, 2021 interest expenses was $668, a decrease of $433 or 39% compared to the same period in the prior year due to a decrease in the average loan balance outstanding.

Adjusted EBITDA: For the quarter ended June 30, 2021 adjusted EBITDA increased by $1,743 or 23% and on a constant currency basis by $3,007 or 47%, compared to the same prior year period. The growth in adjusted EBITDA is driven by an increase in gross of margin of $5,665 due to the increase in revenues offset by higher operating expenses of $1,304 due to the cost of the extension of the stock options and a reduction in the adjustments of reconciling items from operating income to adjusted EBITDA including acquisition and transaction costs, non-recurring expenses and purchase price accounting adjustments by $1,354.

Net income or loss: For the quarter ended June 30, 2021, net income was $29,004 compared to net income of $15,512 for the same period last year. The variance mainly resulted from the above-mentioned items as well as a net gain on the revaluation of financial assets measured at fair value through profit or loss of $28,472 in the second quarter of 2021 versus a net gain of $16,499 in the prior year period.

Cash, cash equivalents and marketable securities: As at June 30, 2021, Knight had $166,121 in cash, cash equivalents and marketable securities, a decrease of $226,104 or 58% as compared to December 31, 2020. The variance is primarily due to cash outflows related to the acquisition of Exelon, the shares repurchased through NCIB and the repayments of bank offset by cash generated from operating activities.

Financial assets: As at June 30, 2021, financial assets were at $217,364, an increase of $23,409 or 12%, as compared to the prior period, mainly due to an increase of $27,045 due to mark-to-market adjustments in Knight’s fund investments offset by loan repayments of $2,479 and a decrease of $1,731 driven by the disposal of equity investments. Given the nature of the fund investments there could be significant fluctuations in the fair value of the underlying assets. More specifically, on May 26, 2021 Singular Genomics Systems, Inc. ("SGS"), an investment held within Domain Associated LLC ("Domain"), announced the closing of its initial public offering at a public offering price of USD 22 per share. The shares held by Domain are subject to a 180-day lockup period. During the quarter ended June 30, 2021, the Company recorded an unrealized gain of $30,522 [USD 24,626]. As at August 11, 2021, SGS’s share price closed at USD 15.23. Should the share price of SGS remain at this level, the Company would record an unrealized loss of approximately $14,030 [USD 11,320] in Q3-21. The unrealized gain recorded on SGS was partially offset by an unrealized loss recorded, in the second quarter ended June 30, 2021, of $13,533 related to Atea Pharmaceuticals an investment held within Sectoral Asset Management fund. To date, Knight has recorded a net gain of $8,881 in connection with Sectoral’s investment in Atea.

Bank Loans: As at June 30, 2021, bank loans were at $35,149, a decrease of $16,621 or 32% as compared to the prior period, mainly due to loan repayment of $14,911, a further decrease of $2,323 due to the foreign exchange revaluation partially offset by an overdraft increase of $613.

Product Updates

On May 26, 2021, the Company entered into an agreement with Novartis to acquire the exclusive rights to manufacture, market and sell Exelon, in Canada and Latin America as well as an exclusive license to use the intellectual property and the Exelon trademark, from Novartis within those territories. Exelon is a prescription product that was first approved in 1997 and is currently registered and sold in approximately 90 countries. Exelon is indicated for the symptomatic treatment of mild to moderately severe dementia in people with Alzheimer’s disease and Parkinson’s disease.

Knight has entered into a transition service agreement with Novartis until transfer of marketing authorization, on a country-by-country basis during which Knight will receive a net profit transfer. Knight will begin distributing Exelon upon transfer of marketing authorization, on a country-by-country basis.

NCIB

On July 10, 2020, the Company announced that the Toronto Stock Exchange approved its notice of intention to launch for a NCIB ("2020 NCIB"). Under the terms of the 2020 NCIB, Knight may purchase for cancellation up to 10,856,710 common shares of the Company which represented 10% of its public float as at July 6, 2020. The 2020 NCIB commenced on July 14, 2020 and ended on July 13, 2021.

On July 12, 2021, the Company announced that the Toronto Stock Exchange approved its notice of intention to launch a NCIB ("2021 NCIB"). Under the terms of the 2021 NCIB, Knight may purchase for cancellation up to 10,267,956 common shares of the Company which represented 10% of its public float as at June 30, 2021. The 2021 NCIB commenced on July 14, 2021 and will end on the earlier of July 13, 2022 or when the Company completes its maximum purchases under the NCIB. Furthermore, Knight entered into an agreement with a broker to facilitate purchases of its common shares under the NCIB. Under Knight’s automatic share purchase plan, the broker may purchase common shares which would ordinarily not be permitted due to regulatory restrictions or self-imposed blackout periods.

During the three-month period ended June 30, 2021, the Company purchased 1,324,076 common shares for an aggregate cash consideration of $6,954, of which $2,503 remains to be settled as at June 30, 2021. Subsequent to quarter end, the Company purchased an additional 2,675,917 common shares, for an aggregate cash consideration of $13,865.

Conference Call Notice

Knight will host a conference call and audio webcast to discuss its second quarter results today at 8:30 am ET. Knight cordially invites all interested parties to participate in this call.