The aim of this research is to empirically investigate the relationships among the three vital knowledge management processes of acquisition, integration and application, and their effects on organisational innovation in the pharmaceutical manufacturing industry in Jordan; a knowledge-intensive business service (KIBS) sector. Structural equation modelling findings show an excellent fit among all these processes and innovation, with positive and significant relationships. Moreover, knowledge integration and knowledge application emerged as having strong and significant mediation effects upon the relationship between knowledge acquisition and innovation. As such, an organisation's innovation efforts would significantly benefit from the synergistic effects of properly integrating and applying externally acquired knowledge. The findings make a valuable contribution to pharmaceutical knowledge management and innovation literature, especially in an era of open innovation. Pharmaceutical companies are advised to focus on developing proficient assimilation and application capabilities in order for acquired knowledge to have notable effects on their innovation performance.