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TLGTQ Teligent

Participants
Tim Sawyer President and CEO
Damian Finio CFO
Matt Hewitt Craig-Hallum Capital
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Teligent Incorporated Fourth Quarter and Full Year 2019 Results Conference Call. At this time, all participants lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions].

Except for historical facts, the statements in this presentation as well as oral statements or other written statements made or to be made by Teligent Incorporated are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties.

or statements current Company’s for efforts or the of limitation, future growth its and without and U.S. success the offerings, to operations, expected current and the example, Company’s about and file anticipated the and products, the ability For research product for development obtain future market size are and Administration Food statements. Drug approvals forward-looking for future products

obtained materially the The actual will anticipated. merely that are that Company’s the differ statements results and profitable operations as inherently statements of assurance events. make that current will herein. Forward-looking future achieve made FDA approvals and are uncertain, could no and levels There filings from statements be predictions will its or the is sales company the completed

uncertainties, its including Annual update over Please its on quarterly to now the to risks the description Company’s Officer. the additional and Incorporated you. to hand with Financial latest Form Commission, The For and sir. information assumes a ahead, today, XX-K Securities latest of Exchange Form no to like please I new conference refer obligation [Operator and company Chief reports reflect XX-Q. on Instructions]. your Damian and developments. Report Finio, would speaker Thank Mr. Teligent forward-looking go to its statements filings

Damian Finio

Tim Teligent. CEO, Daniel and and on joined I'm this of the Finio new morning's Officer President you, Thank by Financial good morning Damian everyone. Chief call our I'm Sawyer.

his significant at made I moment thank and to introducing organization. Grenfell-Gardner CEO, President you on a vision take contributions Before wanted our to all and Tim, this of for Teligent, to to behalf former employees Jason

Executive senior Global of joining Vice XX and He as XX new you eventually brings marketing to to Barr morning, of held pharmaceutical in of where years led held executive Tim a and President this to Most at over-the-counter President, years pharmaceuticals. serving I'm he Teligent, the Chief Tim at Inc. positions in team Generic Marketing, marketer Sawyer. Tim such management, Now, and Prior and at in of Doctors having X-XXX general a XXXX Senior Laboratories, positions variety Development nearly Vice Geritrex, President Tim sales. Officer as Sales Executive industry, CEO, President, Subsequently, manufacturer served a over Mylan Strategic Medicine Retail employees countries. our of excited as and generic experience introduce spent XX recently, Corporate

listener, expectations, has no Tim holding Since success not style in been February quickly, he's at clear with crystal adept his it's great relationships surprise his joined on and accountable. this hesitate had Xth, leadership building a individuals in He's consistent does industry. and

are lead that confident with organization Tim. his phase mike introduction, of through over evolution. the to in this to Tim. our I ability And hand next will the We

Tim Sawyer

appreciate for thanks I'm time Thank I'm helping and morning the last Teligent's Teligent. morning. morning since a I full XXXX Damian and with topics the call five year you've introduction. Teligent. I Good to Tim to and with you of Damian. truly so this speed quickly. been this get cover here spent me say, results discuss of Thanks, the for new It's to you. kind to and be that CEO investors President up delighted Sawyer, to needless QX lot months have

customers, to I Thank many and the Teligent drive as forward like welcome. to business Teligent's including with you you. for Directors, the stakeholders I'd by and warm start we of forward. Board look their employees, thanking working vendors creditors, shareholders,

clear I've with Teligent During these been about top very eight weeks all at my stakeholders of three priorities. first my

manufacturing of facility flow. passing managing the New our the cash injectable First, pre-approval resolving November the of warning new third, Jersey; second, letter issued in Buena, FDA in inspection and by XXXX;

of company's strategy, industry companies, high the has injectables it. succeed strategies, companies people it. delivering like I to and to these customers. uninterrupted you My changing But this this My faced walking execute through to ever focused and complex also fundamentally to ophthalmic the priorities plan not pharmaceutical XX is worked and more cost and in hyper the on need I've executing build that Before is shifting low pharmaceutical supply believe go. for detail the strategy, grounded headwinds plan products in that execute its the to not seen organization regardless an change to execute efficiently topicals, how come I'd decades, in TICO, products TICO you an industry know I of on quality, years, nearly strategy. highlight for

two and the days. market expiry verified complete the expect we to documentation, agency and has Phase audit are nearly talk the that our final FDA is fit safe, the policies within third the a warning to physical This completed This by ensures intended phase conducted on one as was is the and is effective, to that use. products. phase and and the a procedures, auditor. of Let's remediation. the This the products for submitted of is priority, to party two are phase first show the our about all to There pharmaceutical resolving report in FDA. warning file letter for are current been facility phases review. coming are our response compliant Phase that audit processes, letter. company This

by can in to the quality team. confident ultimately company's lift led efforts decide the Although the letter, warning FDA our feel enhanced remediation only I

of the are facility, operational address and and third priority, second We conduct the observations. worked have audit the prior their findings the the teams included Regarding we pre-approval mock prepared our party engaged a previously sterile believe the facility. inspection, diligently quality auditor reviewed FDA the we Buena supplement our audit of to mentioned we which passing the new to inspection. the and At for conclusion approval application

Our to this trigger our product to was use original intent PAI. Ranitidine

our of to trigger all in Ranitidine in products, filed next withdrawal warning the on to the market FDA week, coming days. This action However, product we light and product submitted the PAI. unlikely be to the in including this injectable last letter of is after the is expected is will shift shortly Ranitidine requesting

it's integral ultimately although a to commercial priority under both lift perform decide, our intent to and work to warning Managing spending been on goods that inspection fund savings agency my cost to and enable company be in in department the to and competitive our the to organization savings Cost that and approve an to production. we to the to reducing what's with of a our preference necessary was focus is in letter in previously. Again, more sterile leadership. of discretionary covers generic The cash for impact the to combined are cost continue the Buena has will continue and flows FDA redeploying savings part will facility however, Teligent a investment quality our successful up marketplace. remain

on focus the of been company's area has capital structure. Another

team revolving evolve. with from led has retiring, credit swapping costs the the term bonds to Damian, will facility structure hear continue and and capital you'll he convertible Ares and will to Capital. As Efforts to loan on addition reduce in in issuing, amendments our executing continue

And letter address on asset and with divestiture our our continue drug Leerink the with process finally, non-core initiated to application. we on complete FDA to October the received to partner continue of work the also in second response complex work development XXXX. We

call it insight can updates opening topics. final me I'll a some turn of our before actual provide progressing financial appropriate. thoughts important projected are to performance and Damian's other point, At more up provide over as let few the share Damian. we'll conclusion the so this We your Damian questions. he and to At remarks, to and

Damian Finio

Thanks, Tim.

liquidity; four I like two, status usual topics. of projected one, with last Our earlier in actual on to to performance; in and finally would with four, today; NASDAQ. highlights minutes listing earnings full so Number and few a financial call was more provide update a announced amendments spend our areas XXXX of loan November you the number key order important than three,

So fees let's bringing our the or quantify, revenues were $XX.X million, And products. FDA the the in to by asset last quarter start were assume of on projected to a which revenues disruptions with performance. non-core XXXX supply of October topic, failure full revenues first X% XXXX net million, by Fourth $XX.X in XXXX year supply million to guidance. $X.X to coupled fourth $X.X full that of actual Xst the difficult short for late incurred initiated Consolidated dampened year financial past process Canada. million and combined with quarter issued were to divestiture of our reasonable it's letter for and although November demand warning the dampen

COVID-XX related confident process we to be experience area, efforts interruptions. I through Tim's work smooth get balancing that emphasized and with of will these As and and this remain the any will challenges demand absent we there leadership in further ongoing business supply

in XX% decline. consistent we margin decline the realized to mix a asset for quarter-on-quarter incremental Specific total non-cash we and incremental those Specific decline another XXXX XXXX fourth Fourth write between research quarter. expenses $.X relating Price quarter expenses our defend in vigorously by September the accounted quarter delayed XXXX fourth product injectable of basis of the a and for as and of quarter expenses, points development position was results. to year-to-date ongoing the reserves erosion contract driven XX%, transfer year-to-date prepaid product of expense a as fourth XXXX. manufacturers. basis XX, with points point XXth September GROSS tech continue incur while XXXX inventory for for off realized litigation. basis reported was Unfavorable two general, customer remaining accounted previously the our fees to the of portion to operating were million accounted legal the selling, in administrative from

XXXX of for the our are company a $X.X for of full year in However, fees fourth million quarter and $X material. legal million size,

this and research the million continuing in million as quarter said, loss press costs. I product what an was revenue, $X.X to supply failure penalties includes the offset recorded development reported million. a of the write defense for and $X.X today's As described off adjusted fourth legal loss of in consistent earlier, the expenses, That EBITDA recorded with release, $X.X

consistent performance revenue, basis Despite from performance, XXX XXXX, XXXX. while margin to the in full gross of improved fourth year-on-year than terms improved million which posted XX%. points XX.X quarter profit or with XX% gross less In the expected $X.X year X%, the of million company of by is

profitability The EBITDA for in in the posted XX-K us full days. as March to Fourth XXth. a forging of quarter year. on to XXXX the we filed financial with our loss million increment Monday, adjusted for of shortfall equivalent XX provides a We led extension path extension $X.X performance goal a to an

to the before We the this week, of intend certainly April Additional of resulting to the execute extended end but and loan Ares Form by amendments subsequent to required XX. event deadline was with needed disclosures and time XX-K. add file the

be not weighing accurately today's XXXX will Lastly, we are on several ability financial financial our guidance There providing our major on XXXX projected deliver in and variables terms of financial performance, call. targets. to project

might capability the products, have also a our manufacturing patients from warning our COVID-XX for and to demand Aside operating our impact letter. under Teligent on is

be of and the will inspection consequence resolution. pre-approval injectable as assets non-core ANDAs that divestiture pre-approval process within topical happen a such warning not are or either As letter, will warning approved and material inspection, Variables control. after our complex and letter the our letter, COVID-XX, parallel warning application, filed a entirely not in drug

these guidance reasons, providing be of all we not today. For will XXXX

anticipate revenues. quarter an first XXXX do decline approximate reporting we in XX% However,

the year. XXXX, remainder Looking calendar to the of mentioned, beyond of expect the we successful see over would first material resolution events performance financial of the assuming improvement quarter

This with I'd creditor financial highlights to projections Both Ares the and cover. were our leads the earlier providing to key Matters the amendments and today. me detail second to our reviewed XXXX announced loan performance medium-term secured topics discussed in four like actual Capital. of

amendments original revolver the announced to our covenants, discussions on financial we served fourth reducing XXXX As lean and These covenants of secondly those some collaborative performance to X, first financial term quarter required in April executed while XXXX. significantly agreements forward. to amendments meet both financial the eliminate going

company of trailing $XX and For $XX $XX $XX respectively. month net must record XX revenues million, quarters million, the the of million four XXXX, million,

EBIDTA XXXX XX, adjusted backs beginning last prior range within now $XX a limitations. XX legal March EBITDA calculation million excess the company certain but includes Beginning quarter add the of month report with trailing certain performance for in to the increasing limited to maturity. amendment ended expenses must to of just the loan quarter Also, the including adjusted not $XX.X million, with for

injectable continue by occurs time company term to the addition, been pay to the time may In resolving has the deferring loan interest December paid company inspection the in those of an in this the cash the provide time amendments one option the with picking XXXX, is year elect letter pre-approval only If satisfied. by additional passing from successful during the for warning second XXXX. if still but items on and or then only condition the company interest the

interest Beyond may December loans X.XX% a continue XXXX, a be paid on rate accruing to time. portion of of per at the in annum

rate points prior points in XXX to new the is increased. at versus LIBOR the floor. the the The to The ability than today first X.X% difference to to this Although X.X% the in basis credit the is consideration generate XXX our inception is more versus or at prior relates debt month the LIBOR. just between new capital loan strategy. the term the XXXX points executing second also lean loan service The company's revolving inception more of with loan inception plus LIBOR floor. on with needed relaxed December execute to or XXX The is today ticking to our increment at basis points operating interest than the the the pick amendment. to XX cash than Again, our is X.X% compounding on LIBOR. LIBOR needed increment plus interest rate facility loan in more about loan at the decline liquidity preference The option, rate In amendment. just potential basis the more cost the month extend XX% difference executing of the and basis to flow decline XX effect the inception provision improves lean to covenants maintain interest, the than of rate rate a the XXX LIBOR avoid amended about relates to between rate amended

XX% Lastly, XX, of detail Ares today. made just X-K of December approximately million be when equivalent granted shares outstanding the available at loan the to at of $X.XX the XXXX. Form closed per under we file the was X.X warrant, will on cost these market company to public amendments More after warrants

cost passing bondholders, pre-approval we should Going our position in the creditors letter, results, a structure profiles potentially of consistently address aside, inspection, COVID-XX our improve with new our to forward by Ares resolving and and warning capital. the to work will better Capital, financial existing and reduce and positive be capital achieving credit our must

the of our four, Having topic let's reviewed the amendments of move key to highlights loan three liquidity.

in to his in manage remarks, As is our and I you add, flows priorities XXXX. one heard Tim of mentioned the cash will opening top particularly second quarter of

current pay the provide anticipated issued loan retire course customers have final in liabilities, and XX.X the further fourth capital used from than with Series COVID-XX on consequence with the XXXX company term convertible might draw proceeds revenues, a We balances Given business and of in plus $XX quarter. May impact bonds, XXXX. will XXXX Ares We over from cash bonds the of of of December down of quarter the collections bonds, with cover available the as less from raise, XXXX our decline associated the first liquidity. convertible cash of million our fees B decline quarter million gross the those to million $XX.X this

specifically, has what declining With improvement current capital loan we from the resolve associated potential and keeping another on for or the and bond $XX we XXXX term year million will defer XXXX. assets September XX, inspection in million increasing a sheet. cash More December at continue loan at represents preserve the to this with interest December B pre-approval we this convertible extend in This order on with XXXX capital liabilities to the payments mind the balance XXXX. our the able Ares bonds option increased In $XX.X pass million. company current to Series with working year draw, cash, term XX, are to cash letter May if issuance we now of XX.X pick working and the reported and to by ended warning

regular pay interest XXXX facility, bonds. well credit our as as Series to May Ares our continue revolving We A on convertible

$XXX,XXX. increase payment loan point about on facility. quarterly to revolving credit increase XXXX by And XXX the amendments to the estimated payable announced relates increase semi-annual will and is million to is bondholders Ares cash With the payable XXXX. next on interest This $X.X interest May basis today, Teligent's our solely

are Lastly, reimbursements Small cost we, and have passed than loans. other employees and for Federal made like related less the many Association XXX Business relief COVID-XX recently payroll in by form exploring companies of with applied State and low available Legislation

X, that we The requested XX denied for received December XXXX trade end reverse range prior chose me per above consecutive date we hearing, after common last Subsequent approved appeal we the of being split June the to to from and our reverse in trading regain to for our file day for soon X, January let gears below delisting share notice for and $X We potential to informed XX yet switch that share an the of were price to was that XXX company to company XXXX. Now second number In any ranging notice extension, XX X to had denied. compliance. days. topic, and and NASDAQ specified common XXXX listing the trading a a our a granted appeal. request of the December X XXXX from NASDAQ shareholders prevent whole hearing a appeal by from stock NASDAQ was stock. NASDAQ due days $X share order the our The in split our for On price to our trading consecutive must stock delisted. status

to XXXX. deadline compliance a markets, on regain In X, of impact June set light the COVID-XX the NASDAQ of

required we the the to challenges, share shares the performance from delisted that If the would $X. not NASDAQ, seek to through navigate our thus our only be Although will leaving bonds, is of waiver default prevent we this price catalyst option COVID-XX to covenant occurrence. senior possible, a alone, or convertible need non-financial reverse and in facilities increase the would business above related split it particularly and we as probable are as new be remaining capital, stock by credit seek

$X provide call split the turn While XX portion price me share before the ultimately increase question-and-answer reverse today's be let his over will to remarks we for our Tim? for to believe that, stock days, required this final the can move With above the we the consecutive that no of case. back assurances trading we now call. will Tim

Tim Sawyer

Thanks, confirm can Damian. first here exciting. have months I two my at Teligent been

As and the headwinds. company highlighted, I some has Damian

However, I the our that families untapped thrilled health. achieve base potential needed and here that hope this you be is in objectives. of have evident team your and and safe are to execute company I'm the efficiently management We confident and to and employee to good

day. Our onsite and customers our Buena, to and and working teams dedication, Their company here Teligent, every is inspire at patients commitment, those particularly me loyalty both in this admirable.

employees pandemic, employee extra COVID-XX. we During report to for glad that protect have taken steps I'm no and tested positive our has Teligent this many to

Buena logistics and from has provider party our third distribution in Manufacturing been thankfully uninterrupted.

recognized as where we each are such are We are in normal. operating country located, and and an we essential business as municipality as

of approval FDA. With We necessary proud products. U.S. to thanks we products. to facility from that, up closely have will to production you. questions. our expanded now capacity the ensure materials the a delays We're manufacturing our not To-date, I have continue to our experienced Thank to ask to its our to the Daniel forward upon look significant supply monitor open call for utilizing We the have commitment operators. any chain to produce we in

Operator

[Operator Instructions].

Capital Our Craig-Hallum from first Group. comes question with Hewitt Matt

is line now open. Your

Matt Hewitt

you start few near-term the you that welcome, this you do morning. Maybe I've can you hanging where and first see do this to is morning. the Good to nice a questions. could with opportunity, got attracted you from on capitalize what fruit, you Tim hear that? low how quickly think that

Tim Sawyer

Thanks.

portfolio of company at today, you things I Obviously, things transition had the what me is and attracted first, So product what injectables specifically about to opportunity? to undergoing the headwinds I the the think that attracted me and the heard couple but bunch was that the opportunity that time joined. a a

think to the I component a injectables are treatment critical medical protocol.

particularly that lots drug seen I they think an opportunity, in track if of you area you've area. are there where the shortages is as marketplace with that

ability market interesting So think I me very really to into company and think this exciting. that to of was that very, the launch is I that

So first that's the part.

are do as supply. The our that I see what doing first and the think second low I improving part, fruit? thing hanging we is did product

things your customers. in that previously marketplace, the burdened company were be supplier intermittent demanded reliable of in not causes your to in that And this with unable customers this a one lumps was So and that for sales, lumps was being an supplier they earnings.

we've business processes And our how for comprehensive overhaul a forward. and and work so our we chain our undertaken predict forecast to going plan supply and

become that that's are out to looking off reliable new first call we and us day see they're a thing, in pay dividends will their on the day is such able for year to in products. our for supplier So as rely become when customers when And first our customers. and when us

think I very a low third of us. your might And was. part fruit the hanging think what have question I forgotten for So that's I

Matt Hewitt

Thank No, that's perfect. you.

and the the of was getting drug approved by a it history you one of touched one had was whatever. as shortages, a drug the up of the was that on injectables opportunities facility look that You the that at first FDA, so things, submitted with

a the submission inspection there's being later? than to FDA you at trigger that history and that or is second As the defined sooner look the a has within your would on virus submission garner maybe where something within plan trigger treatments maybe come either a or shortage shortage, corona to there's demand that a need is in a is an opportunity even of where opportunity rather or drug at that second an currently is to with it's to shifting

Tim Sawyer

so Yeah, good question.

here filed what a will So looking we're doesn't obviously at, shortly. have product be shortage It currently. the second

supplement, as -- in a good I the a to come there's FDA part that timeline has will of to to a happen because supplement However, respond what mentioned, and certain ANDA pre-approval the within for months. and a have statutory -- the of they number inspect it's is to what's as agent

number this what allows looking always push is you always, product track faster we mentioned that. opportunities Number for one, are important, a So, to if accelerate are two, to on to related and us COVID-XX the And we do work facility. that are for vigorously with the accelerate the pursue ways to there timeline. them that, get to agency will we approval to

Matt Hewitt

but then -- if and anecdotally Okay the country it are any issues that they're considered with business with inspections, know I down you process heard? don't I'd know now still obviously they're know there the essential work and conducting the have I the I'd you hearing thought you situation the right any an answer given inspection slowing going that in are to FDA but ask to this, way and that -- anyway, is

Tim Sawyer

we would are capacity. this a believe a frankly, -- Jersey incentive them there the to They about U.S. We that that, believe about the -- inspections on that we talked we we quite as manufacturing pandemic, particular that certain approve the facility in for of want fact of New with that types. to have made what's delaying with domestic is manufacturing call couple an agency announcements on at going located

and do reason with we'll will And want so that us give us. to we believe approve every they them to that

to them going forward incentive that move to an do we're we quickly. that. So But for think there's

Matt Hewitt

over happened on appears desire we let's the what's the forward what up, a these that China, you you into and bring next elaborate does given corona capacity? touched How regarding further, at initial least up does just just Understood, domestic the and get versus little had through year, bit maybe that how another country your of you not. more inspections what I what manufacturing and headwinds through get virus be question given not, to back the sets to a stages actually COVID-XX assume India, the sets going

Tim Sawyer

manufacturer. I there think domestic in are up Obviously, wheelhouse being well. us a sets right the we it

about predict about potential the for manufacturer success up future. quite we good what the -- hard I exactly frankly, opportunities a for think but we that's do the will it being FDA the what if while for sets and what or it's we to we know us also the us feel don't domestic can government going present feel to good in and exactly

Matt Hewitt

great. Thank much. very you that's Okay,

Tim Sawyer

Thank you.

Operator

Thank and turn call back and President question-and-answer you. would CEO, session. like I the Ladies closing Tim over our for any Sawyer, concludes now gentlemen, to remarks. this to

Tim Sawyer

for time Alright. attention call. great That all Thank your this you and Have morning. concludes day. our a

Operator

and conference call. this Thank concludes gentlemen participating. Ladies for today's you

You may now disconnect.