Knight Therapeutics Inc

TSX:GUD

Earnings Call Transcript 2021-Q3

[Operator]

Good morning, ladies and gentlemen. My name is Liane, and I will be your operator today. Welcome to Knight Therapeutics Inc. 2021 Third Quarter Financial Results Conference Call. Before turning the call over to Samira Sakhia, President and CEO of Knight, listeners are reminded that portions of today's discussion may, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. The company considers the assumptions on which these forward-looking statements are based to be reasonable at the time they were prepared, but cautious that these assumptions regarding the future events, many of which are beyond the control of the company and its subsidiaries, may ultimately prove to be incorrect. The company disclaims any intention or obligation to update or revise any forward-looking statements whether a result of new information or future events, except as required by law. We would also like to remind you that questions during today's call will be taken from analysts only. Should there be any further questions, please contact Knight's Investor Relations department via e-mail to [e-mail] or via phone at [phone]. I would like to remind everyone that this call is being recorded today, November 11, 2021. And would now like to turn the meeting over to your host today, Samira Sakhia. Please go ahead, Mr. Sakhia.

[Samira Sakhia, President, CEO & Director]

Thank you, Liane. Good morning, everyone, and welcome to Knight Therapeutics Third Quarter 2021 Conference Call. I'm joined today on today's call with Amal Khouri, our Chief Business Officer; Arvind Utchanah, our Chief Financial Officer; and Jeff Martens, our Global VP of Commercial.I will now walk you through some of our corporate updates. I'm excited to announce that for the second consecutive quarter, Knight achieved record quarterly results despite the ongoing challenges posed by the pandemic. In fact, similar to last quarter, it is due to the pandemic that we have seen an increase in sales of our infectious disease products that were used extensively by physicians to save lives. In addition to the great results, we also had some significant changes to our management team last quarter, not just myself and Jonathan, but more importantly, the addition of 3 seasoned executives.Monica Percario joined Knight in September as Global VP of Scientific Affairs with nearly 30 years of experience in the pharmaceutical industry. Monica joins us after a successful career at Sanofi in Brazil, where she had been working since 2008, most recently as Head of Regulatory and Center of Expertise for LatAm. At Sanofi, she also participated in the integration of Aventis with Medley, a Brazilian branded generic pharmaceutical company, and developed a strong expertise in the generics market as well as mature products. Further, she implemented the regional regulatory functions with teams across Latin America. Prior to Sanofi, Monica worked in various regulatory roles at Farmasa, now part of Hypera Pharma. During her time there, she created the pharmacovigilance department and participated in clinical research studies in the development of biologic products.Daniella Marino joined us as Global VP of Legal and Compliance with over 20 years of experience in the legal field and the pharma industry. Daniela was previously at Bausch Health, formerly Valeant, in Brazil where she had been working since 2013, most recently as Head of Legal and Compliance for Latin America. At Bausch, she was responsible for all activities carried out by the legal and compliance department in Latin America, including supporting the various business units throughout LatAm as well as providing transaction support to both legal and corporate teams. In addition, she was responsible for managing all activities related to the legal department and the compliance area. Prior to Bausch, Daniela was at a specialty law firm in Sao Paulo, where she advised clients on mergers and acquisitions, corporate reorganizations and deal negotiation.Finally, Susan Emblem joined Knight as Global VP of Human Resources. Susan had worked for over 20 years at Paladin Labs, where she held a number of leadership roles, including Vice President of HR and Corporate Communications. In fact, Susan played a key role in the integration of Paladin into Endo. Monica and Daniela are based in Sao Paulo and Susan is based in Montreal.We also continued to execute on expanding our portfolio through our business development activities, and we closed a distribution agreement with Incyte for 2 innovative products. Turning now to the NCIB. We launched a 2021 NCIB on July 14, 2021. And under this NCIB, we can purchase for cancellation up to 10.2 million shares. During the quarter, we purchased approximately 3 million common shares for an aggregate cash consideration of $15.3 million at an average share price of $5.18 per share. Subsequent to the quarter, Knight has purchased an additional 1 million common shares for an aggregate cash consideration of $5.3 million or $5.21 per share.I will now turn the call over to Jeff to provide more details on our product results.

[Jeff Martens]

Thank you, Samira. Building on our hard work of 2020, our efforts in 2021 remain focused on executional excellence of our new product launches. Overall, our revenues on a constant currency basis increased by $27.4 million or 62% during the quarter versus Q3 last year. The growth in revenues is driven by an incremental demand estimated to be between $9.2 million and $11.5 million, primarily due to our infectious disease products that treat invasive fungal infections associated with COVID-19. Of this amount, we estimate that are approximately $3.2 million to $4.2 million was not utilized during the 9-month period. In addition, we had an increase of $6 million in net revenues related to the growth of our recently launched products and $9.9 million from the addition of Exelon. Overall, the remainder of the year, we remain focused on the execution and acceleration of our launches in our infectious disease portfolio and in our oncology portfolio as well as for the commercial efforts behind Exelon. With vaccination rates improving in many of our territories, we have started to cautiously return to field.I will now turn the call over to Arvind to go over financial results.

[Arvind Utchanah, Chief Financial Officer]

Thank you, Jeff. In the course of this conference call, I will refer to EBITDA and adjusted EBITDA as well as constant currency, which are non-IFRS measures. Knight defined EBITDA as operating loss or income excluding amortization and impairment of intangible assets, depreciation, purchase price accounting adjustment and the impact of accounting under hyperinflation but to include costs related to leases. Adjusted EBITDA excludes acquisition costs and nonrecurring expenses. In addition, constant currency is also a non-GAAP measure used to exclude foreign currency fluctuations. Financial results at constant currency are obtained by translating the prior period results at the average foreign exchange rates in effect during the current period, except for Argentina, where we only exclude the impact of hyperinflation.As Jeff already mentioned, we achieved record revenues of $73.3 million, an increase of $27.4 million or 62% on a constant currency basis partially due to increased demand for our infectious diseases portfolio as a result of the pandemic. As for gross margin, we reported $37.8 million or 51% of revenues compared to $19.5 million or 43% of revenues in the same period last year. The increase is mainly due to higher revenues, lower inventory provision and a change in product mix partially offset by the renegotiation of certain license agreements and the depreciation of the LatAm currencies. Excluding the impact of hyperinflation, the gross margin will be 54% for the quarter. Our total operating expenses of $22.5 million for the third quarter increased by $1 million compared to the same period last year. Excluding the nonrecurring costs, such as the unified tender costs incurred in the third quarter of 2020, the increase was $5 million. The increase is mainly due to an increase in variable costs such as logistic expenses, variable compensation and an increase in medical and marketing initiatives on the new product launches as well as Exelon.Moving on to EBITDA. The EBITDA for the quarter was $17.3 million compared to a negative EBITDA of $700,000 on a constant currency basis in the third quarter of last year. Adjusted EBITDA was $17.3 million for the quarter compared to an adjusted EBITDA of $3.7 million on a constant currency basis in the same period last year. The increase of $13.6 million, or 369%, was mainly driven by the previously mentioned increase in gross margin, partially offset by the higher operating expenses.Now moving on to certain items that are not reflected in our adjusted EBITDA. During the quarter, we reported $21.3 million of net loss on financial assets measured at fair value through profit or loss, which is mainly coming from our strategic fund investments. The unrealized loss in the quarter was mainly driven by Singular Genomics System, a public company held by Domain with share price significantly decreased during the quarter. On a life today basis, Knight has recorded an unrealized gain of $12.9 million on SGS.Furthermore, the NEMO II investment fund managed by Sectoral was liquidated in the third quarter of 2021, following the sale of the shares of Atea Pharmaceutical, Inc. We have realized a life-to-date net gain of approximately $9.6 million in connection with Atea.Despite the unrealized loss on financial assets recorded in the third quarter of 2021, we have recorded a net gain on financial assets of $16.6 million for the 9-month period ended September 30, 2021. The net gain was driven by unrealized as well as realized gains on our strategic fund investments.Finally, Knight generated cash inflow from operations of $10.3 million for the third quarter of 2021 and $40 million for the 9-month period ended September 30, 2021. The cash flow from operation generated is driven by our operating results.I will now turn the call over to Amal to provide an update on business development activities.

[Amal Khouri, Chief Business Officer]

Thank you, Arvind. As Samira previously mentioned, during the quarter, we entered into an exclusive supply and distribution agreement with Incyte for Latin America for the rights to tafasitamab sold as Monjuvi in the U.S. and Minjuvi in Europe, and pemigatinib marketed as Pemazyre in the U.S., Europe and Japan. Tafasitamab is approved in combination with lenalidomide in the U.S. and Europe for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma who are not eligible for stem cell transplant. DLBCL is the most common type of non-Hodgkin lymphoma and there are approximately 12,000 to 16,000 new cases each year in Latin America. Pemigatinib has improved in the U.S., Europe and Japan for the treatment of adult patients with locally advanced or metastatic cholangiocarcinoma with a fibroblast growth factor receptor 2 or FGFR2 fusion or rearrangement that have progressed after at least one prior line of systemic therapy. Cholangiocarcinoma is the most common cancer of the bile duct. FGFR2 fusions or rearrangements have been observed in 10% to 16% of patients with intrahepatic cholangiocarcinoma, whereas the incidence in patients with extrahepatic cholangiocarcinoma is rare. There are approximately 4,000 to 6,000 new cases of intrahepatic cholangiocarcinoma each year in Latin America.We expect to file both products for regulatory approval in key LatAm markets in the second half of 2022. In addition, our team has been actively working on onboarding Exelon, which we acquired in the second quarter of this year. We also continue to focus on leveraging our pan-American ex U.S. footprint to build our portfolio along our three-pronged growth strategy, which includes acquiring products or companies with existing sales, in-licensing innovative pipeline assets and developing our branded generics portfolio.I will now turn the call back to Samira for concluding remarks.

[Samira Sakhia, President, CEO & Director]

Thank you, Amal. Looking forward, we remain committed to continuing and building a leading pan-American ex U.S. specialty pharma company. We have over $155 million in cash, cash equivalents and marketable securities to continue to execute on our strategy to in-license and acquire innovative pharmaceuticals as well as developing our branded generic portfolio.Thank you for your support and confidence in the Knight team. This concludes our formal remarks. I would now like to turn the call over to questions. Over to you, Liane.

[Operator]

Before we begin, may I please remind you, ladies and gentlemen, questions during today's call will be taken from analysts only. Should there be any further questions, please contact Knight's Investor Relations department via e-mail to [e-mail] or via phone at [phone]. [Operator Instructions] And we will take our first question from David Martin with Bloom Burton.

[David C. Martin, MD & Head of Equity Research]

First question is, can you explain what's meant by $3.2 million to $4.2 million not utilized during the 9 months? Is that excess stock that was built up in the channel inventory?

[Samira Sakhia, President, CEO & Director]

That's pretty much it. So one of the issues -- there was quite a pandemic crisis in some of these major countries, especially Brazil, and to a certain extent in Mexico. And what we were tracking was not -- we were -- everybody was trying to make sure that inventory was available. And what we saw kind of closer to the end of the quarter, to the best that we could, is that there is probably somewhere between $3 million to $4 million of inventory that didn't end up being utilized because the cases started to come down and hospitalizations started to come down a bit.

[David C. Martin, MD & Head of Equity Research]

And was that mostly infectious disease products?

[Samira Sakhia, President, CEO & Director]

That's it, yes.

[David C. Martin, MD & Head of Equity Research]

Okay. So another question on the infectious disease products. The revenues are holding up very well despite the fact that case counts, as you said, were down, people are getting vaccinated. You've got 2 things going on here, the launch of new products and COVID. Coming out of COVID, do you anticipate that franchise will be at a substantially higher level than it was pre-COVID, even once COVID goes away because of the launch of the new products and maybe better familiarity with your products and gaining market share?

[Samira Sakhia, President, CEO & Director]

So it's a little bit multifactorial. So there's 2 real products in this category. One is AmBisome and the second is Cresemba. AmBisome is a well-established brand, and it took -- it's used for different kinds of ongoing infections that come after multiple types of utilization. So whether it's bone marrow transplant, whether it's oncology patients that are immunocompromised that may develop a fungal infection.The second one is Cresemba, which is in early launch phase. During COVID, a lot of the surgeries and treatments that would normally happen that would drive utilization of AmBisome didn't happen. And Cresemba was being launched during COVID. So both of those brands stumbled a little bit because of COVID. In the last few months, we've been seeing a lot of COVID utilization. What we do expect is that there is familiarity now. It's really, in the case of AmBisome, treatments do start going back up, whether it's oncology, bone marrow transplant or whatever else it can be used for. And in the case of Cresemba, our commercial teams capitalizing on that experience and continuing to reinforce that message. Jeff, I don't know if you want to add something else.

[Jeff Martens]

Well, maybe the only thing I would add is, because of the inventory build, you can expect maybe a softening in Q4 because of that excess inventory you asked about earlier. And other than that, yes, there's been some past experience, especially with Cresemba and the new launch that we have a plan to action.

[David C. Martin, MD & Head of Equity Research]

So sorry, is it Cresemba only that is used in COVID patients or AmBisome as well?

[Samira Sakhia, President, CEO & Director]

Both.

[David C. Martin, MD & Head of Equity Research]

Both, okay. And...

[Samira Sakhia, President, CEO & Director]

So just kind of -- they're both for the treatment of invasive fungal infections. One has a little bit of a broader indication, but the -- it really depends on what fungal infection has been diagnosed. And in the case of AmBisome, if they don't have time to figure it out, they're able to use AmBisome.

[David C. Martin, MD & Head of Equity Research]

Okay. And do you see sales at the end-user level? Like the infection rates have dropped off substantially in Brazil. Are you not only seeing drawdown of inventory but less use of the products? Or is there a rate of use holding up?

[Samira Sakhia, President, CEO & Director]

So we -- the use in relation to COVID is coming down, obviously. The issue is that -- that's not what they were designed for, they were designed for fungal infections that could come for whatever reason, right? So a patient who is immunocompromised. The issue with that is that kind of utilization rate, we expect to pick up as those treatments start to rehappen. What you usually see is a few months of gap between the treatment and the need for a fungal infection product.

[Operator]

We take our next question from David Novak with Raymond James.

[David Novak, MD & Healthcare Research Analyst]

Just 2 quick ones, starting on the top line here. Looking at revenues by jurisdiction, you showed really healthy growth across your key geographies, but Brazil really sticks out here at almost 95% growth year-over-year. Could you share any comments on the uniqueness of that particular market?

[Samira Sakhia, President, CEO & Director]

Sure. So one of the issues and we -- is really related to COVID. One of the bigger products in the Brazilian market is AmBisome. And like I mentioned earlier, AmBisome took a big hit last year because it was being utilized for patients who are being treated for -- in oncology, in hematology, whatever the case may be, and because those treatments weren't happening, sales of AmBisome had come down. In this quarter, what you're see -- and Cresemba was in a very early launch phase. What you see in this quarter on a year-over-year basis is both of those products are being used -- or used heavily by physicians because COVID infections were so high, hospitalizations were high and fungal infections with that -- with patients in ICUs happened. As Jeff said, what we expect is that Q4 will be -- there will be softness on this. But we expect that as the world, and especially Brazil returns to normal, these brands will start to pick back up in the long term.

[David Novak, MD & Healthcare Research Analyst]

Got it. So is the majority of inventory for Cresemba and AmBisome that's moving through the channel, it's being utilized in Brazil versus your other sort of key jurisdictions? Is that sort of what I'm understanding it?

[Samira Sakhia, President, CEO & Director]

We have AmBisome primarily in Brazil. We have Cresemba throughout our region. And so that one is kind of a little bit all over the place.

[David Novak, MD & Healthcare Research Analyst]

Okay. So maybe more specifically of the $15 million, $16 million growth that we saw in the quarter in Brazil, could you sort of paint a relative picture as to what that would be from Cresemba or AmBisome?

[Samira Sakhia, President, CEO & Director]

I don't have it at the top of my head, but there is also Exelon that's in Brazil. I can get that to you later.

[David Novak, MD & Healthcare Research Analyst]

Okay. No worries. And just lastly, I don't mean to beat a dead horse here, but based on what you're seeing on the demand side and your own projections, the inventory that's currently sitting in the channel for Cresemba and AmBisome, is that likely to destock in Q4? I guess what would be helpful here is to understand the probability of any potential inventory write-downs or returns that going forward?

[Samira Sakhia, President, CEO & Director]

Sure. So we don't expect a return of this inventory. We do expect all of it to be utilized in the Q. What we also expect in the Q, because this is Q4, and there's usually a bit of seasonality of high purchases in advance of the holiday season, some of that will be -- like some of that kind of downturn of this $3.2 million will be offset by the seasonality. We don't expect any write-downs or returns.

[Operator]

We take our next question from Justin Keywood with Stifel GMP.

[Justin Keywood, Director of Equity Research]

Just on the impact of the infectious disease products related to COVID. Are you able to quantify what that did to the adjusted EBITDA in the quarter?

[Samira Sakhia, President, CEO & Director]

So like you see what our margins are, right? So that would have been dropping to the -- it's kind of the similar rate as the margin.

[Justin Keywood, Director of Equity Research]

Sorry, the consolidated EBITDA margin or the gross margin?

[Samira Sakhia, President, CEO & Director]

The gross margin.

[Justin Keywood, Director of Equity Research]

Okay. All right. That's helpful. And then as we look into Q4, should we -- like just to get an idea of the softness for those 2 infectious disease products, should we assume basically a zero contribution, just given the extra inventory in the channel? Or do you still anticipate some seasonal purchasing ahead of the holiday season?

[Samira Sakhia, President, CEO & Director]

We do. We do expect -- so this isn't a quarter's worth of inventory. I'm going to say this is normally somewhere between 6 to 10 weeks of inventory that's here, the $3 million to $4 million. The -- and then the second -- so that's kind of the estimate of what we have. The rest of it is that there will be a little bit of pickup because of the holiday season.

[Justin Keywood, Director of Equity Research]

Okay. Understood. So a few moving parts here. I'm wondering just as we look into next year, obviously, there is some new drug launches and some variability with the infectious disease products. But do you have any broad target goals for organic growth in the business?

[Samira Sakhia, President, CEO & Director]

We're working on that right now. As we come out of COVID, a lot of the teams are kind of working through what the uptakes would be and we'll be providing guidance when we announce Q4.

[Operator]

We take our next question from Stephen Kwai with National Bank Financial.

[Stephen Kwai, Associate]

I'm just calling in for Endri. And I know you guys touched upon the infectious disease products quite a bit already. But outside of that, looking at oncology, hematology and the other products, now with the reopenings and things coming back to a little bit of normalized levels in LatAm, how are you seeing those other products trending?

[Samira Sakhia, President, CEO & Director]

I'm going to turn that over to Jeff.

[Jeff Martens]

Yes. Thanks for the question, Stephen. So our oncology products in both oncology and heme had a year-over-year growth of 20% on the Q. So these launches -- or these drugs include Lenvima, Halaven, Trelstar, Nerlynx and some of our heme-onc branded generics medicines as well. So COVID did negatively impact some of the diagnosis rates. I'd have to say that this impact probably varies widely depending on the country, the vaccination rate, situation that they were in. But overall, I am, I think, encouraged that we showed this 20% growth even during a pandemic.

[Samira Sakhia, President, CEO & Director]

And just to add just kind of to answer a bit more of your question, what we are seeing is that if you take, for example, a market like Canada, where we have significant vaccinations, the pace of return is there, but it's still pretty slow. And we expect that, that's going to continue into -- the pace will be a slow uptake into the first half of the year. You have to remember markets like Brazil, Argentina, Chile, they're going into their summer months and summer vacations. So there will -- there is a return, but it's slow and paced.

[Stephen Kwai, Associate]

Got it. That's great. And my next one here, just how have you seen the new product launches pick up that you've done recently? And do you have any more significant launches coming up in the near future?

[Samira Sakhia, President, CEO & Director]

Sure. I'm going to turn -- I'm going to answer a little bit, and then I'll ask Jeff to add to it. So the launches that we have coming up in the first half of next year are Lenvima and Halaven in Colombia. Those products are pending approval right now. We have -- we are in launch phase on those 2 products in a couple of other markets, including like Chile and Argentina. And in Canada, we have the launch of Trelstar and Nerlynx. The issue that we have is we don't disclose revenue by products. And in the case of the LatAm markets, the third party like IMS or IQVIA data is not as readily available, but we do have some info on the Canadian products.

[Jeff Martens]

Yes. Maybe the only thing I'd add is, yes, I think we already mentioned that $6 million on the Q was related to these launches. And those drugs, yes, the Nerlynx, Cresemba, Lenvima, Halaven, Trelstar and there's also some BGx launches in there as well. And maybe the only other pending launches that I want to comment on was Imvexxy and Bijuva in Canada. We're currently evaluating the CADTH situation, and we'll evaluate -- launch of those new medicines, hopefully, in next year.

[Stephen Kwai, Associate]

Okay. Perfect. That's great color. And just my last one here. I know you mentioned in the past that agreements are renewed throughout the year. Do you have any other ones coming up soon that are worth highlighting?

[Amal Khouri, Chief Business Officer]

Stephen, this is Amal. Yes, I mean, agreement renewals are a normal course for this business. You may have seen -- or you will see that we disclosed, that we signed a new agreement with BMS Celgene in the quarter. So this is a -- it has been a long-standing relationship that we have had, and this was a renewal that we signed in the quarter for Abraxane and Vidaza in Brazil.

[Operator]

And we take our next question from Scott McAuley with Paradigm Capital.

[Scott McAuley, Analyst of Healthcare and Biotechnology]

I wanted to switch a little over to Exelon. And I just wanted to ask if there's been progress on changing the Exelon kind of registration transfers kind of from Novartis to Knight and how much of the Exelon revenues at the moment are -- kind of profit transfers versus revenue and sales from the products kind of fully from you guys.

[Amal Khouri, Chief Business Officer]

Scott, this is Amal. Thank you for the question. For Exelon, we're still working on executing the transfers with Novartis. We have started to file for MA transfers, but we haven't had any MA transfer already. We expect the first to occur in the first half of 2022. But so far, the numbers that you are seeing are really the profit transfer that we're booking.

[Scott McAuley, Analyst of Healthcare and Biotechnology]

Got it. That's great. And then just one last one. In terms of on-the-ground physicians' offices and marketing conferences and things like that, how are things opening up in the various kind of LatAm countries? You're obviously getting growth in some of those launch products. But just a bit of color in terms of kind of how things are working on the ground.

[Samira Sakhia, President, CEO & Director]

Sure. It really depends on the country and their vaccination rates. So things are picking up. There are -- I'll give you an example. For example, in Canada, depending on the therapeutic areas, some physicians continue to see patients through telemedicine and they're seeing their rep's telemedicine as well. In markets like Chile and Brazil, things are opening up. And most physicians are starting to see patients. Markets like Colombia, it's somewhere in the middle right now.

[Operator]

We take our next question from Doug Miehm with RBC Capital Markets.

[Douglas Miehm, Analyst]

I think both of these questions would be mostly for Amal. But Amal, when I look at the revenues associated with the Exelon, they were a bit stronger than we had anticipated. Is there any seasonality to that product or anything that occurred with Exelon during the quarter that pumped out the revenues or profit share?

[Amal Khouri, Chief Business Officer]

Sure. It's not so much seasonality, more like buying patterns, because it's not all kind of retail, there are some institutional buying that happened. So that's why you see the numbers. I think, overall, we haven't changed really our view of both the products. So we're still expecting the product to remain flattish to the levels that we acquired at. So it's kind of in the mid-$50 million range on an annual basis.

[Douglas Miehm, Analyst]

Okay. Good. Perfect. And then just generally, as you look at other opportunities in various markets that you're looking at right now, can you tell us what that pipeline looks like, if it's changed in regard over the last quarter or 2?

[Amal Khouri, Chief Business Officer]

The pipeline continues to be quite full. The team is quite busy across -- if you look at our growth strategies, we've kind of outlined -- really 3 prongs due to the increase of our product portfolio. So in terms of acquisitions, looking at products or portfolios or companies with existing sales and licensing of innovative assets and on the BGx side, the development and in-licensing as well. So across all 3, the team is quite active and deal flow continues to be quite strong across the territory.

[Operator]

And we take a follow-up question from David Martin with Bloom Burton.

[David C. Martin, MD & Head of Equity Research]

I may have missed it, but when you signed the new agreement for Abraxane, did you say your economics got a little less than they were previously? Or do things stay the same?

[Samira Sakhia, President, CEO & Director]

We didn't announce the terms and we didn't comments on the terms, but there is nothing materially different.

[David C. Martin, MD & Head of Equity Research]

Okay. What percentage of your LatAm revenues is represented by licensed products versus products that you own?

[Samira Sakhia, President, CEO & Director]

Actually, I know that our branded generics were about 1/3 of our business. It's shifting with Exelon. That's the issue. So I don't have the number. It used to be about 30-70, but that's without Exelon.

[David C. Martin, MD & Head of Equity Research]

Okay. Okay. And then I just want to go back to Cresemba and AmBisome once more quickly. Would you say the markets that they were previously used in are bigger than the COVID market? Or is COVID a bigger market than where they were previously used? Or they're still used, but to a lesser extent?

[Samira Sakhia, President, CEO & Director]

The...

[Jeff Martens]

Yes. Maybe I'll hop in and answer, and then I'll pass it back to you, Samira, if there's anything you'd like to add. So the COVID market is an in and out, a flash in the pan. So you'll see big swings in a quarter. But the over -- the baseline business, which is fungal infections caused by all kinds of reasons, right, including bone marrow transplantation, hematology patients that are immune compromised, oncology patients that are immunocompromised, that base business over the long term is far more sustainable in large in size. I don't know if that helps answer the question. Samira, anything to add?

[Samira Sakhia, President, CEO & Director]

No, that's it.

[Operator]

[Operator Instructions] And as it seems we have no further questions, I would like to turn the call back over to you, Ms. Sakhia, for any additional or closing remarks. Thank you.

[Samira Sakhia, President, CEO & Director]

Thank you, Liane. Thank you for joining our Q3 2021 conference call and for the confidence in the Knight team. We'll speak soon.

[Operator]

And that will conclude today's conference call. Thank you for your participation, you may now disconnect.