Medison Issues Open Letter to Knight Therapeutics Shareholders Urging Jonathan Goodman to Build Real Business during the Grace Period Knight Received

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 issued the following open letter from Medison CEO Meir Jakobsohn
on Knight’s continued underperformance and conflicts of interest:

June 19, 2019

Dear Fellow Knight Therapeutics Shareholder:

Medison Biotech (1995) Ltd. and its affiliates (“Medison”) are
collectively the second largest shareholders of Knight Therapeutics,
Inc. (“Knight”) holding approximately 7.3% of the share capital of
Knight.

Six weeks have passed since Knight’s annual meeting.

This meeting was a focal point of our first public activist campaign to
create positive change for the benefit of all Knight’s shareholders. Our
campaign has achieved its main goal by highlighting and creating
awareness of shareholders to the problems from which Knight suffers —
chronic underperformance of Knight’s share price, the lack of a business
strategy, the hording of an unused pile of approximately CAD$800 million
in cash, the existence of acute conflicts of interest and other serious
governance related issues. At the annual meeting, the shareholders of
Knight have afforded Knight’s management and Mr. Goodman a short grace
period to change its course and create value for all its stakeholders.

Since the annual meeting, Knight is trying very hard to generate an
appearance of real activity, but to no avail. Knight’s recent press
releases regarding Knight’s participation in some industry conferences
is embarrassing for a company traded on TSX with a market capitalization
of over one billion dollars and is just a smoke screen for its lack of
news about real business initiatives that will generate value for
shareholders. Another example is Knight’s press release from yesterday,
which was nothing more than a recycling of a non-material non-event,
regarding the full repayment (a mere CAD$750,000) of the balance of a
February 2016 loan that was provided to Medimetriks Pharmaceuticals Inc.
Knight’s lending activity is non-strategic and does not generate any
recurring revenues or other meaningful benefits to Knight. Specifically
with respect to Medimetriks, the loan was extended to a company that
identifies itself, just like Knight, as a “leading independent specialty
pharmaceutical company.” Instead of deploying cash to build its own
pharma business, Knight is financing third parties’ initiatives. What
Knight is also not telling its shareholders is that the sales from the
in-licensing rights granted in connection with the Medimetriks
(non-strategic) loan in the last 3.5 years were zero and the prospects
in the coming years for sales for these products for Knight are marginal
at best. Not a wise use of capital in our opinion.

Knight’s Share Performance

Throughout the election contest, we demonstrated that the market assigns
no value to Knight’s pharma business and sees no premium or value over
Knight’s asset value. This means the market has no faith in management
to generate positive returns on its assets.

Since the annual meeting took place, the share price of Knight has not
improved. Today, the share price appears mired where it was when we
initiated our public campaign, again reflecting the market’s refusal to
assign any value to management’s ability to create additional future
cash flows and value from its existing assets.

Over the last three-year period Knight’s stock price has suffered from a
negative return of approximately 25%. The experience of the last six
months suggests this trend will continue. Since its last capital raise
in 2016, the premium reflected in Knight’s share price in excess of its
asset value has been eroded by approximately 90%.

We find this experience and these results to be unacceptable. As the
second largest shareholder of Knight, we are focused on creating a
return on our investment and, like all our fellow shareholders,
generating positive returns on our investment in Knight. In response to
our criticisms, Jonathan Goodman and his team bragged and highlighted
that sell-side analysts hold an average target share price that is much
higher than current market price (and some of them, like Raymond James,
as high as CAD$10.25). We now urge Mr. Goodman and Knight’s leadership
to execute a strategy based on deploying Knight’s massive pile of unused
cash to create a real business with increased future cash flows and a
higher share price. Complacency and the status quo will not advance
shareholder interests.

Conflicts of Interest

Our campaign exposed and made public previously undisclosed information
regarding serious conflicts of interest of Knight’s CEO, Mr. Goodman,
and Knight’s Chairman of the Board of Directors, Mr. James Gale. Mr.
Goodman holds a higher percentage interest of Pharmascience, a direct
leading competitor of Knight, than the percentage interest he holds at
Knight.

Mr. Gale is also entangled with numerous business and personal
relationships with the Goodman family. Among others, the Goodman’s
family owned entity, JODDES, is the anchor investor and partner in
Signet Health, a venture capital fund established and managed by Mr.
Gale.

We believe that these acute conflicts of interest make both Mr. Goodman
and Mr. Gale unfit to serve in their current positions, CEO and Chairman
of the Board, respectively.

We are not alone in being concerned with these conflicts. Other key
shareholders and independent shareholder advisory services (Glass, Lewis
& Co., LLC and Institutional Shareholders Services Inc.), who specialize
in governance related matters, have also expressed similar concerns.
Glass Lewis, in their report stated:

“… 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.”

Knight’s actions and inactions will be analyzed and scrutinized by the
market and shareholders with special attention devoted to the conflicts
of interest. We believe that if these conflicts of interests are not
removed, they will frustrate any expectation that Knight can develop and
execute a value creation strategy.

Medison will continue to closely monitor Knight’s performance and will
not rest until all hindrances to a successful Knight are fully removed
and Knight fulfils its potential and reaches CAD$10.25 per share.

Medison will also continue to evaluate Knight’s decisions and actions
(if any) and will not hesitate to exercise its rights as a shareholder
(as part of our ongoing effort to create positive change and value
creation) to further the interests of all of Knight’s stakeholders.

Sincerely,

/s/

Meir Jakobsohn

Medison has maintained its website, www.NewDayForKnight.com,
and encourages shareholders to visit for updates.

About Medison

Medison is one of the world’s largest commercial partners of leading
global biotech companies. Medison is uniquely qualified to provide the
complete spectrum of integrated services for international companies
looking to enter or expand their presence in selected ROW markets
(Israel, Romania, Hungary, Croatia, Slovenia, Slovakia, Bulgaria and
Canada). 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 its partners and is an
active investor in life science projects around drug development and
digital health.

Contacts

Media
Gagnier Communications
Dan Gagnier
646-569-5897
[email protected]