Second Leading Independent Proxy Advisory Firm Supports Medison and Recommends Change and a New Strategy at Knight Therapeutics

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–(BUSINESS WIRE)–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

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
  • “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

(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
  • “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
  • “…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
  • “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
  • “[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”

  • “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 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.



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

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.



Shorecrest Group
Christine Carson

Gagnier Communications
Dan Gagnier
[email protected]


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