Knight Therapeutics Inc., the Montreal drug distributor created by former Paladin Labs Inc. boss Jonathan Goodman, has bought back the distribution rights to the first drug it had in its portfolio.
Knight was set up in 2014 after Mr. Goodman sold Paladin, a star player in the pharmaceutical sales business, for roughly $3-billion. He started the new firm with just one drug that was transferred from Paladin – Impavido, a treatment for the rare parasitic disease leishmaniasis.
But Knight had just two employees at the start – Mr. Goodman and chief financial officer Jeffrey Kadanoff – and no means of actually selling the drug. So it sold the non-U.S. distribution rights to an affiliate of Endo International PLC, the company that had bought Paladin.
Now, Knight has built up a full staff, so it decided to reacquire the rights to sell Impavido everywhere in the world outside of the United States, Mr. Kadanoff said in an interview. "Two years ago, we didn't have the infrastructure or the setup to sell the product on our own," he said. "Now we've built a team and it is a product we are familiar with."
While Knight had always hung on to the intellectual property related to Impavido, it had sold the non-U.S. distribution rights for 10 years, Mr. Kadanoff said. He would not reveal how much Knight had to pay to get back the rights for the final eight years of the arrangement. (The U.S. rights were sold to another company, Profounda Inc., where they remain. Knight plans to distribute its products only outside the United States.)
In the meantime, Knight has acquired the distribution rights to about 20 other drugs, although only three are currently being sold to consumers. The rest are in "various stages of development," Mr. Kadanoff said.
The company has also built up a significant stockpile of cash – $247-million at the end of September – and signed partnerships and loan agreements with several other firms.
One factor in Knight's strong financial position is a windfall the company received related to its initial ownership of Impavido.
When Mr. Goodman started Knight, Impavido came with a bonus: Attached to the drug was a rare "priority review voucher" created by the U.S. Food and Drug Administration to encourage companies to develop new treatments for tropical and pediatric diseases. The voucher, which could be sold, guaranteed a fast-track of any future drug's approval process.
Knight sold the voucher 18 months ago to California pharmaceutical company Gilead Sciences Inc. for $125-million (U.S.). Gilead used it to jump-start a new HIV treatment called Odefsey, cutting the drug's FDA review time and getting the product to market more quickly than it would have otherwise.