Leading Independent Proxy Advisory Firm ISS Recommends Change at Knight Therapeutics

ISS Notes "Stark" Underperformance, Recommends Election of New Independent Directors and for Knight Shareholders to Vote on the GOLD Proxy Card

Knight's Third Largest Shareholder Publicly States its Support for All Medison Director Nominees

Medison issues new profile videos of its director nominees at www.NewDayForKnight.com

PETACH TIKVA, Israel, April 25, 2019 /CNW/ - Medison Biotech (1995) Ltd. ("Medison"), which together with its affiliates owns more than 10.4 million shares or 7.3% of Knight Therapeutics, Inc. (TSX:GUD) ("Knight" or the "Company"), today announced that Institutional Shareholder Services ("ISS"), a leading independent proxy advisory firm, has noted the "stark" underperformance of the Company and the need for change to the Knight Board of Directors.  ISS recommends that shareholders vote for change by using the GOLD proxy card.  In its reports, ISS recommends Knight shareholders vote FOR the election of Medison nominees Elaine Campbell and Christophe Robert Jean. 

Medison agrees that significant change at the Board of Knight is needed to ensure that conflicts are removed, and skilled directors are put in place in order to build a sustainable pharma business and long-term value for its shareholders.  Medison is grateful for the publicly expressed support of Knight's third largest shareholder, Cambridge Global Asset Management, which has indicated that it intends to vote for all of Medison's director nominees.

"We appreciate the recommendation by ISS that change is needed at Knight," said Meir Jakobsohn, CEO of Medison, Knight's second largest shareholder.  "Given the acknowledged conflicts between the CEO, the current Board and the Goodman family, in addition to the recognized underperformance of the company, we urge shareholders to support real change by voting FOR all of the Medison nominees on the GOLD proxy card.  Without real change, there can be little hope that Knight will ever be worth more than the cash and financial assets on its balance sheet."

In its report ISS stated^*:

• "… it appears that the company would benefit from the election of independent directors with relevant operating experience in the pharmaceutical industry. Such a reconstituted board might be better able to strike the right balance from a capital allocation perspective, by not being overly risk averse (a factor possibly contributing to the company's declining share price) and not exposing the company to unnecessary risks…"
  
  
• "It appears that a more independent and less conflicted board may be needed for the company to adjust its course, without exposing itself to unnecessary risks."
  
  
• "Knight underperformed the peer median, the industry benchmark, and the broader index over the one- and three- year periods. The underperformance is particularly stark over the three-year period. Knight also significantly underperformed the peer median since its IPO."
  
  
• "… it appears the market currently does not price in any premium for the company's business prospects and ascribes a low probability to above market returns on the company's cash."
  
  
• "Over the past two years, however, the company has failed to significantly increase the size of its total assets. The company has stopped raising additional funds, while the returns from ongoing investments have been modest, which could be a reflection of the company's overly cautious investment approach and risk aversion."
  
  
• "Knight's board independence appears to be significantly below most other S&P/TSX Composite Index constituents."
  
  
• "Shareholders may also be concerned with Goodman's connection to Pharmascience, which was founded by his father, is currently run by his brother, and appears to be in competition with Knight. Goodman and his three siblings each hold 25 percent of Pharmascience through the Goodman family office."
  
  
• "Some of Knight's independent directors also appear to have longstanding relationships with the CEO. James Gale, the company's Chairman since 2014, also served on Paladin's board from 2008 to 2014, and is the founding partner of Signet Healthcare Partners ('Signet'). Through Signet, Gale appears to have a significant business relationship with the Goodman family. Robert Lande and Nancy Harrison also appear to have longstanding relationships with Goodman."
  
  
• "The dissident has highlighted legitimate concerns around the company's strategy and its execution – issues that have contributed to a lagging share price performance over the past two years. The dissident campaign has also raised several questions regarding the structure of the current board, which, at the very least, seems to fall short of the broader Canadian market with respect to overall independence."

On April 18, 2019, Bloomberg published the following regarding Cambridge Global Asset Management's intention to vote for all of the Medison director nominees*:

• "One of the largest investors in Knight Therapeutics Inc. has thrown its support behind a push for change at the Canadian pharmaceutical company. Cambridge Global Asset Management said it supports a slate of directors put forth by Meir Jakobsohn, who has been on Knight's board since 2015. The investment firm, which is a subsidiary of CI Investments Inc., said it would also like to see a 'significant' portion of its cash balance returned to shareholders. It owns a 6.1 percent stake in the company and is its third-largest holder, according to Bloomberg data."
  
  
• "'We would prefer to see a substantial portion of the cash returned than a value-destroying transaction, which is what we fear with the current team and their strategy,' Greg Dean, portfolio manager at Cambridge Global, said in an email. 'Knight's management team has been unwilling to engage us in thoughtful dialogue regarding their capital allocation decision-making,' he added."
  
  
• "While Goodman's track record of success and leadership were reasons behind the Cambridge stake in Knight, 'he must hold himself accountable and acknowledge the current strategy is not what shareholders trusted him to execute,' Dean said. Goodman, who has a more than 15 percent stake in the company, 'deserves to have a say in how the business is run but this is not his company.'"

Medison encourages shareholders to view new profiles of its director nominees and read its Information Circular at www.NewDayForKnight.com for the complete, truthful story about Knight's failure to create value for shareholders, Medison's highly qualified and independent nominees, and the best way forward for Knight and its shareholders.  

TIME IS OF THE ESSENCE

VOTE ONLY GOLD TODAY

If you have any questions and/or need assistance completing your GOLD form of proxy or VIF, please call Shorecrest at 1-888-637-5789 (toll-free) or 647-931-7454 (collect calls accepted), or e-mail [email protected].

*Permission to use quotations neither sought nor obtained.

About Medison

Medison is one of the world's largest commercial partners of leading global biotech companies. Backed by three generations of experience in the healthcare industry since 1937, Medison is uniquely qualified to provide the complete spectrum of integrated services for international companies looking to enter or expand their presence in Israeli and selected ROW markets. Over the years, Medison has become the partner of choice for biotech companies that produce highly innovative, cutting edge therapeutics for commercialization in the Israeli market and is currently the second largest pharmaceutical company in Israel, with over CAD 250 million in revenues annually and over 270 employees.  Medison runs a corporate venture arm with a dedicated research and evaluation team boasting deep scientific and commercial backgrounds. Medison also operates a scouting program to cater to its partners and is an active investor in life science projects around drug development and digital health.

Additional information can be found at www.medison.co.il.

Forward Looking Statement

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws, including, without limitation, Medison's and Knight's respective priorities, plans and strategies. All statements and information, other than statements of historical fact, included herein are forward-looking statements, including, without limitation, statements regarding activities, events or developments that Medison expects or anticipates may occur in the future. These forward-looking statements can be identified by the use of forward-looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "believe" or "continue" or similar words and expressions or the negative thereof. There can be no assurance that the plans, intentions or expectations upon which these forward-looking statements are based will occur or, even if they do occur, will result in the performance, events or results expected. We caution readers not to place undue reliance on forward-looking statements contained herein, which are not a guarantee of performance, events or results and are subject to a number of risks, uncertainties and other factors that could cause actual performance, events or results to differ materially from those expressed or implied by such forward-looking statements. These factors include: changes in Knight's strategies, plans or prospects; general economic, industry, business, regulatory and market conditions; actions of Knight and its competitors; conditions in the pharmaceutical industry; risks relating to government regulation and changes thereto, including in respect of the regulations concerning board composition, proxy solicitation and shareholder meetings; the state of the economy including general economic conditions globally and economic conditions in the jurisdictions in which Knight operates; the unpredictability and volatility of Knight's share price; and dilution and future sales of securities of the Company. These factors should not be construed as exhaustive. Certain forward-looking statements contained herein may be considered to be future-oriented financial information or a financial outlook for the purposes of applicable Canadian securities laws. Future oriented financial information and financial outlook contained herein about prospective financial performance, financial position or cash flows are based on assumptions about future events, including economic conditions and proposed courses of action, based on the applicable management team's assessment of the relevant information available to them at the applicable time, and to become available in the future. In particular, the information contains projected operational information for future periods which are based on a number of material assumptions and factors. The actual results of the applicable operations for any period could vary from the amounts set forth in these projections, and such variations may be material. Further, there is no assurance or guarantee with respect to the prices at which any securities of Knight will trade, and such securities may not trade at prices that may be implied herein. See above for a discussion of the risks that could cause actual results to vary from such forward-looking statements. Readers are cautioned that all forward-looking statements involve known and unknown risks and uncertainties, including those risks and uncertainties detailed in the continuous disclosure and other filings of Knight, copies of which are available on the System for Electronic Document Analysis ("SEDAR") at www.sedar.com. We urge you to carefully consider those risks and uncertainties. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. Unless expressly stated otherwise, the forward-looking statements included herein are made as of the date of this news release and Medison disclaims any obligation to publicly update such forward-looking statements, except as required by applicable law.

SOURCE Medison Biotech Ltd.

Investors: www.NewDayForKnight.com, Shorecrest Group, Christine Carson, 647-931-7396; Media: Gagnier Communications, Dan Gagnier, 646-569-5897, [email protected]