MANAGEMENT REPORT

In the accordance with the terms of legal and bylaws dispositions, the management of Biotoscana Investments S.A. (“Company”, “GBT” or “Grupo Biotoscana”) submits to its shareholders the Management Report an our interim condensed consolidated statement of financial position as at 31 March 2020, and the interim condensed consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows and notes to the interim condensed consolidated financial statements, as well as the independent auditors review report, regarding the three month period ended March 31, 2020. All the below information is provided to the best of our knowledge at the time of signing this letter as well as based on information received from our subsidiaries, auditors and advisors as well as external sources.

MESSAGE FROM MANAGEMENT

Started in third quarter 2018, reported numbers are presented applying IAS 29 – “Financial Reporting in Hyperinflationary Economies” for our Argentinean operations. This standard requires that the entity or components financial information whose functional currency is that of an economy considered hyperinflationary be restated using a general price index that reflects changes in general purchasing power (Note 2.1.1 of the interim condensed consolidated financial statements).

We achieved for the first quarter 2020 (1Q20), Net revenues amounting to BRL 146,2 million compared to BRL 148,7 million in 1Q19. There was a decrease in the quarter substantially due to impact of COVID 19. That generate delay in sales but mainly due to devaluation of the BRL.

Gross profit reached BRL 61,3 million, Gross margin reached 41,9%, and Adjusted1 EBIDTA margin 8,2% for the quarter.

Our OPEX (without impairment of goodwill but including the expenses related to the change ofcontrol), represent approximately 44,8% of our net revenues for the quarter.

We are working on the proper launch and promotion across the region of our pipeline. We have evolved with the main products in our pipeline in several countries, like CRESEMBA®, that it is already approved in Peru, Mexico, Colombia, Argentina, Brazil and Chile.

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1 ^{In this document, we present certain Non-GAAP measures, including EBITDA, EBITDA Adjusted, Operating Profit, Net Financial Position/Indebtedness and Financial Indebtedness.}

 ^{We define “EBITDA” as operating profit before financial expenses and income taxes (“EBIT”) plus amortization and depreciation. “EBITDA Adjusted” refers to EBITDA as adjusted to remove accounting effects and costs associated with some non-recurring income and expenses considered by our management to be non-recurring and exceptional in nature. It uses similar indicators for its net financial indebtedness, the components of which are described in the relative section of the notes.}

 ^{We believe that EBITDA is a useful indicator of our ability to incur and service our indebtedness and can assist shareholders, investors, security analysts and other interested parties in evaluating us. We believe that EBTIDA Adjusted is a relevant measure for assessing our performance because it is adjusted for changes which we believe, are not indicative of our underlying operating performance and thus aid in an understanding of EBITDA.}

^{EBITDA and EBITDA Adjusted and similar measures are used by distinct companies for differing purposes and are often calculated in ways that reflect the circumstances of those companies. Reader should exercise caution in comparing EBITDA and EBITDA Adjusted as reported by us to EBITDA and EBITDA Adjusted of other companies. The information presented by each of EBITDA and EBITDA Adjusted is unaudited and has not been prepared in accordance with IFRS or any other accounting standards. None of EBITDA or EBITDA Adjusted is a measurement of performance under IFRS and you should not consider EBITDA and EBITDA Adjusted as an alternative to net income or operating profit determined in accordance with IFRS as the case may be, or to cash flows from operations, investing activities EBITDA and EBITDA Adjusted have limitations as analytical tools and you should not consider them in isolation. Some of these limitations are:}

^{– they do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;}

^{– they do not reflect changes in or cash requirements for our working capital needs;}

^{– they do not reflect the significant interest expense, or the cash requirements necessary, to service interest or principal payments on our debt;}

^{– although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often need to be replaced in the future and EBITDA and EBITDA Adjusted do not reflect any cash requirements that would be required for such replacements, and the fact that other companies in our industry may calculate EBITDA and EBITDA Adjusted differently than we do, which limits their usefulness as comparative measures.}

Grupo Biotoscana continues to build and deliver pipeline with important progress, bringing innovative products into the region.

Last year, GBT participated at several congresses to discuss the latest outbreaks in several therapy lines, like SBOC, ESMO, ECCMID, among others. GBT also organized several events throughout the region, allowing physicians and healthcare specialists to get the most update information. We are waiting to the evolution of the pandemic to continue participating at several congresses.

For R&D, GBT continues to work on the development of branded generic products, where there is a
high unmet medical need. Biotoscana has invested into the remodeling of the R&D lab in Argentina,
with new equipment and personnel.

CHANGE OF CONTROL
On November 29, 2019, Knight Therapeutics Inc. (“Knight” or “the Buyer”) announced that it has completed the acquisition of a 51,21% interest (Sale of Control) in the Company from a controlling shareholder group. The purchase price of the Sale of Control was BRL 596 million (Purchase Price), being BRL 10,96 per share or BDR.

Considering the completion of this first step, Knight became the controlling shareholder and appointed its representatives to the board of directors of the Company. In addition, as a consequence of the closing of the Sale of Control, the Buyer is conducting a tender offer of the remaining shares and BDRs, according to section 12 of the Bylaws of Biotoscana Investments S.A. According to the Buyer’s information, the tender offer will be launched with similar terms and conditions of the Sale of Control.

As of 31March 2020, the ownership structure is the following:

References:
¹ Free float (excluding shares/BDRs held in treasury) refers to the outstanding shares that are traded in the Brazil
Stock Exchange (BOVESPA). Please note that within the Free Float there is no investor that helds a ownership in
excess of 10%.
² Controlling shareholder of the Company. Knight is listed in the Toronto Stock Exchange under the ticker symbol
“GUD”.

The current Board of Directors of the Company was designated in the General Shareholder´s Meeting
held on November 22nd, 2019 with effects as of November 29th, 2019 and is integrated as follows:
– Samira Sakhia
– Robert Lande
– Nicolas Sujoy
– Gaelle Lamotte

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Luxembourg, June 23, 2020

Updated on 06/26/2020 at 01:40 pm