Glass Lewis Report Highlights the Conflicts Rampant in Knight’s Board, Management and the Goodman Family

Report Also Discusses the Failed Strategy and Underperformance at Knight and Recommends Implementing Medison’s Plan

Glass Lewis Also Recommends Jonathan Goodman Divest of his Pharmascience Stake or Resign as CEO and for Shareholders Vote FOR Medison’s Proposed “No Conflict” Bylaw

PETACH TIKVA, Israel, April 26, 2019 – 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 Glass Lewis & Co., LLC, a leading independent proxy advisory firm, has noted the underperformance of Knight, severe conflicts of interest among the directors, management and the Goodman family and the need for change to the Knight Board of Directors. Glass Lewis recommends that shareholders vote for change by using the GOLD proxy card and vote FOR the election of Medison nominees Michael Cloutier and Bob Oliver.

Institutional Shareholder Services (“ISS”) has also recently recommended Knight shareholders support change and vote using the GOLD proxy card to elect Elaine Campbell and Christophe Robert Jean.

Commenting on the report, Medison said, “The Glass Lewis report exposes the severity of the issues at Knight – inferior returns, lack of an operating business, a failed strategy, conflicted directors and a campaign to try to fool shareholders. The independent report also calls on Jonathan Goodman to divest his conflicted holdings or resign immediately as CEO. In addition, Knight’s Chairman, James Gale, is exposed for related party transactions and conflicts of interest.”

Added Medison, “We are very pleased that shareholders are finally able to see, in detail, the issues with this board, but to also have the opportunity to vote for new, skilled directors that have a real plan to create value for all. This is an important time for Knight and we urge shareholders to vote FOR all of the Medison nominees on the GOLD proxy today.”

In its recommendation, Glass Lewis stated:*

• “Ultimately, giving full consideration to the factors discussed above, the entirety of the materials released by the Company and the Dissident, and our engagement meetings with the principal parties and investors, we are of the opinion that Knight’s public shareholders would be best served by supporting Medison’s campaign for board change.”

• “In our view, this action is justified due to the combination of several factors:

(i) Knight’s poor absolute and relative performance over the last three years,

(ii) the lack of significant progress in the last five years toward building a lasting specialty pharmaceutical business of scale and value (the reason shareholders invested in Knight in the first place),

(iii) the unwillingness or inability of management and the board to deploy the significant capital that the Company has raised from shareholders (even if that requires modifications to the strategy or an increase in risk tolerance in order to adapt to the current environment), or else to return capital,

(iv) multiple governance concerns, most notably with respect to the CEO’s conflict of interest due to his larger economic stake in the family business which recently became a direct competitor of Knight, and

(v) the current board’s rigidness, defensive posture and generally dismissive tone with respect to taking action to address what we consider to be valid and serious concerns, which in our opinion are likely to continue to impair the Company’s ability to maximize value for shareholders if they are not resolved.”

In its report, Glass Lewis discussed the severity of the Goodman family conflict:

  • “In addition to Medison’s criticisms of Knight’s business strategy and performance, the Dissident’s campaign has brought renewed attention to several corporate governance issues at Knight, on the board level and in the executive suite. Chief among them is what appears to be a serious conflict of interest for Knight’s CEO, Jonathan Goodman.”
  • “The new reality that Mr. Goodman has a much larger economic interest in a competitor than he does in Knight came as a concerning revelation to some Knight shareholders we spoke with. Their newfound concern is completely understandable, in our view.”
  • “The Company now argues that shareholders have long known about this issue and that nothing has really changed, despite the [recent] developments…. [W]e find his latest explanation far less plausible or comforting.”
  • “Given the stark differences between past and current circumstances, we don’t agree with the Company’s and the board’s stated position that nothing has changed with respect to Mr. Goodman’s conflict of interest.”
  • “…Pharmascience’s recent move into Knight’s primary area of focus, together with the recent disclosure of the size of Mr. Goodman’s economic interest, has made this an entirely different situation than it was 20 years ago at Paladin, or even five years ago when Knight was founded. The implications for Knight’s shareholders should not be dismissed or taken lightly, in our opinion.”
  • “Therefore, as Medison argues, we believe it’s reasonable and justified for shareholders to demand that Mr. Goodman divest his stake in Pharmascience in order to remain the CEO of Knight. Alternatively, we believe it would be acceptable from a corporate governance perspective for Mr. Goodman to relinquish the role of CEO of Knight, but to remain on the board where his conflict would be more manageable and less likely to impact day-to-day operations or execution of Knight’s strategic priorities.”
  • “[W]e note that while Knight has justified its low level of deal activity in recent years by pointing to high valuations in the specialty pharmaceutical market, the timing of Pharmascience’s entry into Knight’s market segment raises questions as to whether this has also made Mr. Goodman even more reluctant to pursue potential acquisition targets as of late.”
  • “Ultimately, placing Mr. Goodman’s stake into a blind trust simply doesn’t address the issue because, as Medison points out, even without managerial or voting control over Pharmascience, he knows Pharmascience is broadening its scope and activities into Knight’s market and that his stake in Pharmascience is worth much more than his stake in Knight.”
  • “[W]e see only two ways for Knight to fully address the issue: he should divest his Pharmascience stake or resign as CEO of Knight, which we again clarify does not necessarily mean he has to resign from the board of Knight.”
  • “Furthermore, the board of directors, which has a fiduciary duty to represent the interests of all shareholders, including by addressing any serious conflicts of interest of its executives and directors, especially the founder and CEO, is ultimately responsible for holding Mr. Goodman accountable on this issue, by forcing one outcome or the other. To date, the board has not shown a willingness to step up in this regard.”In its report, Glass Lewis highlighted the lack of independence on the Knight Board:
  • “The board’s unwillingness to hold Mr. Goodman accountable for Knight’s recent performance, or to meaningfully address his significant conflict of interest, is likely the result of the long- standing personal and business ties Mr. Goodman has with several members of the board, including the chairman, Mr. Gale, who also chairs the corporate governance and nomination committee, and the other two members of that committee, who have served on the board for five years.”
  • “One of the greater concerns, in our view, is that the chairman does not appear to be fully independent …. Specifically, Mr. Gale’s investment management business, Signet, has partnered with the Goodman family, including Jonathan and other members, in funding other pharmaceutical companies and serving on the boards of those companies.”

In its report, Glass Lewis highlighted the following on Knight’s shareholder returns:

• “…over the last one, two and three years, Knight’s shareholder returns have not only been flat or negative, but they have in general significantly underperformed the average returns of both peer groups and all three indexes included in our analysis, save for a few periods where Knight’s performance was, at best, in line with certain of these benchmarks.”

• “We believe our analysis further supports the Dissident’s main contention that, rather than building a specialty pharmaceutical business over the last five years, Knight has raised hundreds of millions in capital and engaged primarily in investment and lending activities to generate income and returns, building only a small operating business that has declined significantly in value over the last three years, as measured by Knight’s share price ex-cash/investments.”

• “[T]he implied market value of Knight’s operating business has declined by more than 80% over the last two years, while two of the Canadian pharmaceutical peers we selected saw the market values of their business skyrocket more than 300% and 1,400%”

• “All told, our TSR, adjusted market value and enterprise value analyses lend broad support for the Dissident’s critique and central thesis that, after five years, Knight has not executed its stated strategy of deploying capital to build a leading specialty pharmaceutical company in Canada and international markets in order to deliver healthy returns for its shareholders.”

• “Further, we believe the Dissident’s share price analysis and our analyses refute the board’s claim that Knight has outperformed Canadian pharmaceutical and global specialty pharmaceutical peers, particularly over the last one, two and three years.”

In its report, Glass Lewis highlighted the following on Knight’s failed strategy:

• Knight has failed to execute its strategic plan, and arguably has made little progress toward its stated mission. …[T]he Company has generated scant revenues to date and operating losses every quarter, focusing on what the Dissident considers to be non-innovative, low-economic- value products, while also acting like a financial intermediately by engaging in non-strategic, illiquid and risky lending and venture investing activities.”

• “In the last few years, Knight’s lending program and venture investing have not merely been supplementary, but instead have accounted for the bulk of the Company’s activity. We doubt that this is what shareholders, including CI Investments, bought into when they invested in Knight.”

• “Shareholders invested in Knight primarily due to Paladin’s track record in executing such a strategy and the expectation that Knight would replicate that success, but that has not been the case five years in at Knight.”

• “Knight also states that analysts and shareholders have expressed ‘overwhelming support’ for Knight’s disciplined strategy, and that shareholders have expressed privately the same supportive views as the analysts who follow the Company. Yet, the only shareholder who has expressed its views publicly, CI Investments, has endorsed Medison’s alternative strategy and director slate.”

In its report, Glass Lewis highlighted the following on Medison’s “Diamond” strategy:

  • “In our opinion, Medison’s alternative plan seems to address the capital allocation and strategic issues that have prevented Knight from building a meaningful pharmaceutical business in the last five years and from delivering adequate returns for shareholders.”
  • “Perhaps the most important distinction between the two plans: Medison and its nominees seem intent on actually deploying Knight’s significant cash balance to generate returns and value for shareholders, and to return excess capital back to shareholders.”

Medison encourages shareholders to view new profiles of its director nominees and read its Information Circular at 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.



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 [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

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 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.

For more information: Investors

Shorecrest Group
Christine Carson


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Dan Gagnier
[email protected]