TLGT - Earnings call transcript Q3 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Teligent Incorporated Third Quarter 2019 Results Conference Call. At this time, all participants 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 products statements. and Administration Food forward-looking Drug FDA are approvals for future

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

uncertainties, its including Annual its on quarterly the reflect to risks description Company’s the additional statements developments. forward-looking and with latest Form new Commission, to The For assumes a to information XX-K Securities latest of Exchange and Form no please refer obligation and company update reports its XX-Q. on and Report filings

to the now ahead, like you. go speaker and CEO. hand Grenfell-Gardner, would conference Thank Please your over sir. today, I Jason to President

Jason Grenfell-Gardner

you to Chris, XXXX. detailed I’ll our am be by will our our performance quarter Damian Damian afternoon, and this breakout you you, development afternoon. and of on more business the quarter the today joined President our the third financial provide joining Teligent, for the I’m Grenfell-Gardner, latest elements a of then ladies Thank and of covering for Finio, update Teligent Financial the us providing an on the and of gentlemen. core good update Jason plans. Welcome business I Thank Officer. and third XXXX. CEO Chief of

of continued on is expectations also the our gross Today, of our tracking slightly performance the gross million. customers in business of are solid with for for of showed year. our the that our strong XX.X%. for based results ahead consistent for XX% quarter the base we was with the $XX.X Year-to-date, quarter revenue The guidance quarter third announced margin mix margin

to in Our EBITDA quarters focus profitability basis has on adjusted the in drive business. as an prior been

know of EBITDA million operations on with evidencing call adjusted pleased our our $X.X earnings positions this to reported $X.X The to strong inventory our quarter on and drive international last control the continued for progress revenue in the million. efforts in We’re improvement of helps drive Canada costs. of margin

work volumes continue year. on supply These suppliers after to recover their inventory our disruptions positions rely production earlier the challenging however to dynamics this as chain

As a result, inventory has leading often to volatility revenue. been delayed and

shipments team stocks, impact Although we attempted execute customers. fourth could to our delays quarter revenue to in and for potential releases safety through build that our to guidance this the any widened have has accommodate managed to

Teligent’s is Although not team our control, impact. minimize will all this of work potential to in any

me the let the subsequent three have issues that address announced Now, quarter. been to

First, hydrochloride prior the assets, the Series for fundraising, ranitidine of the third, B of filing review the approval injection. second, and non-core supplement

assets plan, in review a interest. and the we logic announced of it's potential of unsolicited divestiture assets growth best appointment On of SVB conduct overall injectable the shareholders to the of explore a inbound to of the receipt some October in X, interest indebtedness. the reduction consideration believe of facilitates company's Leerink following accelerates company's these We into a

execute summary a more fundraising note this who to part but fulsome and the Series important B last strategy balance which project, to sheet. Damian our that an will executed was I'm week, advisors investors provide ongoing the we of grateful company's Second, manage of help transaction. our

Jersey. we for operations supplement New the an of the site injection sterile hydrochloride approval anticipate ranitidine trigger that company prior manufacturing of Indiana, the will FDA submitted we Finally, inspection

ranitidine the of steps, ranges both many potential that there's product material finished extra carcinogen. As you’re significant recent the N-nitrosodimethylamine approved its ensure complies a took NDMA product NDMA. with own and around aware, with result raw human a a our for Teligent impurities, for of safe the FDA’s known molecule its concern or to as supplier been with

steps always patient quality While took maintained these time, extra product first come we've at will the safety Teligent. and

further our is all development look result own submission of into inspect first we of our that site requiring This months. We within guidelines, to of execute exciting injectable already teams. the of products of the us. as approved forward as aims sterile PDUFA plan, getting next Under products on our developed FDA a six supplements of facilities XX% four to for the pipeline transfers to development stage of out and we internally inspection

I'd before what approvable at thing our to Damian, on our we Based our last on update interactions that we like with be generic product I turn goal orphan FDA, you December. over recent to in will believe late drug. date call One GDUFA

believe market we on drug, the still to we version significant will then we ready product be for first and with launch of Although to near date. our generic approval holds be not a that Teligent opportunity will or market the this

Let Damian me to Damian? of know quarter. turn the financial performance the review call the over to

Damian Finio

a performance you, relating last to the like issued several to have for order and Thank releases would Today clear SEC and some Jason highlight I quarter In good understanding, also everyone. key week takeaways our afternoon, financial press from and I to those communications. provide third you will filings. we context

highlights of Let quarter third XXXX with financial Teligent’s performance. start me

of second adjusted XX.X% posted quarter, million margin a $XX expenses also EBITDA. consecutive XX%. and XX%. than consecutive of quarter margin exceeding of third EBITDA gross we XX.X% adjusted gross revenue, or and the million more margin quarter and is It's of our positive third operating $X.X declining generated an of revenues In $XX.X our year-to-date million, exceeds This our

the products discretionary evidence just of efforts to just improve path reduce with began a chain, quality in focus are for that that gaps our few supply These our to our year-ago forging the on spending. a further profitability trends over demand the conscious address and

with of of and products. topical derived products $X.X included $X.X the injectable remaining for quarter $XX.X revenue from U.S. sales injectable third million Canadian topical quarter Canadian sales quarter sales manufacturing. million million and the contract U.S. were strong were Third sales

year-to-date general comparison X.X% On our a in selling, are expenses the down XXXX. to period and basis, in same administrative

we SEC incurred of on as anticipated fees primarily disclosed more previous than and both However, in are have calls, disputes, previous which legal mentioned connection explained with in two filings.

the XX%. SG&A both expansion our XX% base, we which If reduced growth the the comparison, fees quality by from quarter despite respect cash employee compared cash available excluding we $X.X exclude million the related teams. and of essentially of breakeven a financing, to sales reduction million legal In with XX% position, $X.X we've our to of to company's was the this in June to global XX year-on-year the at majority cash year-on-year movements quarter. for specifically flow ended related That's cash

of EBITDA financial compliance which to XXXX, $X.X In company agreement, EBITDA EBITDA million purposes defined Ares for realized XX-months $X EBITDA million used X% million respect consolidated and XX-month year-to-date the equal XX, loan the in the adjusted trailing therefore adjusted $X the September performance, covenants. covenant the margin. adjusted September financial an is for passing company ending realized XX, And Teligent’s to period

of the financial trailing quarter adjusted $X $XXX,XXX to is adjusted EBITDA consolidated year-end the XX-months EBITDA pass of Given million. this needed covenant performance in fourth

competitively our to impact prior-year Overall, reflect portion address savings improvements those customer our while and this growing fund financial our expand products manufacturing price performance actions business. to reinvesting of needed to of positive base, and our continues ongoing the to a bottlenecks continue

and positioned are in for well approximately of million confident the We’re to deliver a with believe quarter full-year, of $XX.X in excess the we million fourth achieving for full-year. full-year margin project of to for EBITDA $XX.X strong gross XX% the an adjusted margins revenues XX%

a SVB of announcing thoughts as interest Form quarter on X-Ks non-core a last has from to act our me and assets This advisors. let X, and XXXX Leerink engage press assets. share week. we press on non-core release our On that financial generated few communicated and release we press Now results, moving review issued financial further October our filed Teligent’s the third releases in strategic

be intend that comment initiative approved no concluded the review process for unless assurance action. of is required. timeline disclosures However, of does of there's will by to course a strategic result specific Directors, no there any is The review company the Board in the not defined and completion further can

XX, private placement X-K October a pricing release press with $XX.X B a we of an issued events. that we the announcing Series we filed another On and of Form XXXX of filed announcing the a Series other had update May On X-K notes million Form along deal. October XX, closed on convertible B

of issuance the company use and the down B the was road. a the generated intended any of potential with address to both this of review assets, equitize intent of for improve Consistent strategic non-core the by liquidity the bonds convertible company's debt proceeds total debt. portion opportunity recent our capital The raise our to provide with Series

Of of for bonds. attributable $XX.X the bonds a was Series A discount bonds million the remaining a B at million $X.X to whereas $X was debt. issued, the million $XX.X $X.X XXXX a new million swapping Series represented to swapping million existing new The of company these at bonds total Series of May of discount par reduction capital net B effect

net bonds to debt million of of result $XX this of a a increase of December on extinguish revolver total advance $XX.X an into to pay-off transaction just allocating proceeds XXXX, with consideration, $X.X $X.X million in this maturing forma million reduction a be the intent Taking will our basis net convertible to million. along portion million and debt pro $XX

X% pass expected of positive $X boost organization. company's our X%. of or interest pick the In taken interest convertible financial The approximately pick average to bonds closing, reduce of an but We weighted defer health by XX option would steps pay cash cost increase Teligent to of Series include points. Accessing has to several XXXX basis to an estimate another just B liquidity. improve million the a the capital this coupon our option

last ranitidine filed achieved Jersey. issued non-core put a review more injection two our of As with a trigger to the expanded for use year position debt another quarter debt improve commercial improve in I in equitize will debt, hydrochloride of began portfolio the pay efforts optimize prior the recently, But four New and EBITDA, which the one, potentially and approval of when spending. to we to discretionary road and mentioned liquidity, down facility our three reduce liquidity assets intent FDA’s positive earlier, we refinance company took and the down these we supplement actions initiated inspection pre-approval Buena, bonds to strategic existing proceeds a convertible adjusted

leaders. its a a the of indicative most work culture that's progress and company in of I'm short lot ton a at but period here proud of one time for of that it's size hard of of is a Now of really our Teligent

to you week. to would by thank with financial the our on our be More of end filed in the provided employees. I be end a quarter all like XX-Q details will huge third the of XXXX to scheduled performance Form

Now the back turn to I'll call over Jason.

Jason Grenfell-Gardner

right. All Damian. Thank you,

up based sterile injectable business summarize profitable to Teligent. liquid opening products. where state-of-the-art able semi-solid to I'd and in solid a for with We've now and been for drugs a a both as pipeline Before as questions, environment facilities we're non-sterile as establish like headed challenging well

that market. this building injectable believe the we it the drug market exactly respond we have where In to be positioned challenges needs Teligent in to to capability, sterile

systems you shortages may challenges health on October of availability calls and impacting drug the patients. XX FDA’s on report that drugs specific out of critical the seen for Some the have released

you encourage If it. I you read haven't, to

cancer For United gone like false interrupted the as recently think States markets happening. epinephrine, a is quality through in failed challenges isn't resolve in approach had Perhaps, or we this that drug that has as a as this hospital most we have that Vincristine past guide, this There regulatory XX new but years of series and a shortages somehow significant hope, past action a system water, or absent itself. the will impacted hope supply rolling have been the America. things every so systems. have sterile or far situation pediatric XX which failed of result years, is at and all for Simple have

safely, some have solution. this us we’re to part the longer at them of than this least and produce need we're part with taken practitioners to I the be the where the and to exactly just patients provides technology drugs patients point capable would get be health need Teligent team of of like, ready solution to and developing manufacturing to

forward. I'd like and all you our work have to Teligent do point. thanking in to U.S., join get us for Damian that move teams tirelessly who worked Canada in of Estonia you to to Thank the the this you

open let's Chris, this that, up to With questions.

Operator

Thank Capital. Hewitt line you. the first [Operator Instructions] question comes Craig-Hallum And Matt from our with of

is Your open. now line

Matt Hewitt

taking thank afternoon the questions. you for and Good

Jason Grenfell-Gardner

pleasure, hi Matt. It’s

Damian Finio

Hello Matt.

Matt Hewitt

ask the speculate current the and questions a desire question as going Hi, to But that the little you to ranitidine on bit. situation and think the look the to I'm get quickly is assume to so NDMA, that is for in in? come and into the product in waiting first market, product possible I stable completed at a related four incentivized you than to rather it as get would market for inspection your the come safe and to months FDA us to as

Jason Grenfell-Gardner

FDA the so a behind molecule Matt, complicated with risks really is and Hey impurity patients through their to the the issue the respect science to and I to look, think working safety. that potential and detecting here the

making been problem. of the complex and OTC its focused has the to the is So do it recently which per drug drug that about course, Most analytics are standards its has this determine complex, of and RX there is million to a of really form form on whether form, effort complex. sure oral we're a obviously parts talking obviously this and present the been

part. on of the efforts still piece this commend is So this The outstanding. FDA’s I injectable

communications If testing were weekend, of gave and ongoing, there. out you injectable the this they the reporting terms the they where testing still various been in that noting update an FDA’s reviewed is form that's of with

solution. be I act always that of And the around safety. will we think that patient and we're patients part FDA that hope to expeditious

Matt Hewitt

bit. right, shifting gears All a little and then

cleared they've once the in, come facility. has the FDA So

I having that that You've cleared? product about should things we approved, approved, once but last injectable first you is we once thinking talked and ready launch how facility to XX pipeline? thinking about potentially for be about how think should to your quarter, gotten XX cadence be products file

Jason Grenfell-Gardner

Yes.

comments speed. that to said with team we had as the in that So XX to the XXXX. what I go the quarter execute going into made call, the to work as facility up still plan. to products developed our That's was in second to drive the build into goal back that to if five coming drugs to eight cadence months that's the I go what And team already we're I continues injectable the

Matt Hewitt

do All but now how particularly on those your and one, plan here we for sounds go injectable it mean incremental that layer right, year-to-date, as we from that as that will last getting guidance But from think gross think margin? from about year where I’m the far comfortable we so facility? like about maybe side, starting XX impact out will of provided of asking a perspective. with products mean, you’re then products feel what launched sterile those guidance this you margin I ahead you. and as Thank on to months that gross not the

Damian Finio

Thank you.

being injectable margin be further the facility will look in structured. cost to-date. that some you at get manufacturing into That should as both Obviously, that and if support are sterile drug total currently imply facility uplift the So there the in in gross borne we is XXXX. launching injectable of shared products services the that way

and of depend to on magnitude insight thank near product sense guidance mix, as competitive as them. able and the that we those course be the around for have that enter we’ll will dynamics The that give markets of a But time, the question. we of better better of you

Operator

from with Thank ROTH our the next line Henry you. Capital. comes And question of Scott

is open. line Your now

Scott Henry

good you Thank and afternoon.

with follow-up of Going a to start questions. couple

until the that? prior a you eight something filing, regards after that? Have you to well and to the a do is to Or you as you. then to will ranitidine, have regards gotten to date get that GDUFA inspection? for can wait with XX, the do Just Thank follow-on GDUFA with date you

Jason Grenfell-Gardner

supplement. So the that's to we date from with a the believe respect supplement, our months PDUFA receive the that timing should of for that submission. of probably date five I

had present with we of the being simultaneously said, drug in with had the that stability the a already FDA that the agreed a molecule to shortages Now, in review of NDMA product the prior that question as data been that is past. drug this this result to generation remember

on that that expect with with regulatory review still FDA and concurrently So to and be its generation. product, able our this is pathway will inspect that we they data

relates subsequent to with the they on of basis but it they appropriate accelerated an stability new to not data are generate to stability filings traditional the As supplements being able because to are filings require concurrently reviewed application. traditional instead us be length filings, which data support the are or ANDA

to with required data support new You'll in the to transfer form will of a course, months FDA submit stability that of to ANDA to of remember, of the stability supplements a months six three require are the respect data. site

continue that be think data the generated much present I that So and be along pretty to will will

for the the inspecting already probably the FDA which would same inspection. ranitidine means as knowing the timeline application the is facility facility disposition we submit of them

Scott Henry

Okay, great. color. color Thanks other know the terms Could sounds of us you size And the in then It about market. of opportunity? you'd how with XXX(b)(X). there's I into update update that the on the player. for that given should we one think like

this looks you. wondering that how time? in Just at point Thank

Jason Grenfell-Gardner

drug data QDI you're Under we it referring or the So call is the data guess moment. product. what I data I approximately a generic the at at moment IMS $XX Trailing XX-month think orphan we million revenue today. million that recently and based that heard in nets $XX market some the million somewhere think in $XX the probably of on to we've net the of reporting industry, between to that

Scott Henry

generic, out other there one now I there is should say. player other Okay, and one

Jason Grenfell-Gardner

We at out generic there. one least that other there's know

Scott Henry

talk some given clear-up you any that tell it? could could for as now, real pieces, of events? but think about where us assumptions And you've great. in time Okay, up, beyond debt come incorrect all of the cash you the know and Damian to could these are kind subsequent us perhaps we of couple of a just questions Damian, I quarter

Damian Finio

Right.

I million mentioned, at and is cash excluding quarter. the basically cash as So for the was breakeven the $X.X end any financing quarter of movements

bonds of million need December of bonds million. debt and a $XX the just In December now maturing of debt about terms retire I between the to will X. to we as We $XX.X mentioned, issued XXXX increase have net

next when mentioned that's June $XX on it's million pro I so million extinguished we why the forma about quarter-on-quarter XX bonds. the change of incremental So $XX basis, from a round

Scott Henry

us Okay, covenants we great. end you the just should think terms at give question, the final look Any through color the about if XXXX? of that, XXXX. then some covenants you've that on in And in color we will us like about all? should what how And think can the given of

Damian Finio

because in for earlier mentioned loan agreement. Ares the so can covenant, I we $X.X adjusted million always I there are calls were believe by Right, quarter on certain press EBITDA the terms third release the under allowable backs $X of the on where ad million versus go the

So for endings nine-months $X.X XX, to the covenant go. we million have September or $XXX,XXX XX-months

terms course next process budgeting guidance we give now right our in year, XXXX. we're call, will the covenants for on next of In of

So back you to a we’ll date. come question Scott later on that at

Scott Henry

you Thank great. Okay, questions. taking the for

Damian Finio

Scott. Thanks

Jason Grenfell-Gardner

Thanks Scott.

Operator

comes Elliot our Thank question James. Wilbur with from Raymond of you. last And line the

now Your line is open.

Elliot Wilbur

afternoon. good Thanks,

margin from on Damian. trends, the Just earlier question a guess follow-up I for gross regarding commentary

in inventory on much filings, actually fixed mentioned the currently could not about but So, currently margin that's I’m be impact that noticeable XXXX? that think the running whether begin you costs how costs just to as through to running would submit have Services additional how you through gross Shared had any trends wondering it allocated or are P&L, R&D

Damian Finio

Jason his Yes, I'll to I’ll let start add comments. then and

SG&A would the to quality. I that’s as address in staff the of and our If quality addressed ramp-up on quality, in quality, broke source for injectables. prior So as well growth down and year-on-year and headcount primary despite sales additional those XX% be I mentioned to as down between quarters XX% came issues is sales board

said. installed at point, the as this Jason bulk the So of are overheads

are that'll overheads already. installed injectables, part, we the those and going the cost costs more down forward, bring spread but Elliot, for So unit both units with across per topical most

Elliot Wilbur

mean, that And strategic multiple of of on potential you now to the the as pivot have I you’re then about recent table, think kind strategy follow-up, that able do How a just the next also seemingly a funding. TICO Okay. obviously, there's given towards year. development I execution yet injectables. been thinking options secure

at will only? continue injectables there no a other given R&D point can investments the So of headed, incremental limited but not I now don't on know where to topical say you be specifically the we definitively, whether where strategy if be or in company's TICO going it's execute elements to or you're to

Jason Grenfell-Gardner

filings growth filed so think a start just I with Today, still I I space, of and see XX ANDAs will I'll continue function a will at FDA. down it's Well, north the emphasis TICO couple strategy, of road. that in still we years. the the the where mean, the incremental the XX And we we that. over is of coming there's further think, there XX of or but have topical that handful rates of pending progress topical course be to

was Some what in pipeline. that development is finishing the out of already

Some relates that compared to of as because the support than would guidances work have filings make clinical market. are in they that interesting to the way that more addressable to of the of some the been particularly changing, the cost projects it those past, FDA of is may size

in billion room where addressable is emphasis a both here billion, U.S. business. is generics change over market obviously would is I The on the in So and a change rather of The growing than and to well market this injectable as focus. Canada. much a really it's total as $XX to say injectable emphasis grow our in have the $X.X developing develop about bigger compared certainly in we business,

the our orphan Complex I drug proving we're was science kind of think project, drug generic was

works. that that out

partner being be course anticipate of it do together will submitted and we over next Now the what we're in XXXX. product going to as do that market, we ophthalmics, that we for to are bring developed products have a we to understand with three that finally have us with ophthalmic

us us, value around various that for and the learning to again, chain are out pivot of we to where part market, there of continuing opportunities Teligent while finding markets And manufacturing. there parts apply that's to different

obviously not our be goes foot what gas quantum the to necessarily that of another. the we we’ll the that will So, say injectables through will facility. off the and ANDAs volume submit taking of core of the be That's

Elliot Wilbur

then last And question. Okay.

Given chain of asset not synergies or may or American you're strategic where kind the business want to that part have then reasons having not help some been least reasons a Thanks. respect cash just Topicals you've various of of a given that injectable North Can based us simply supply versus you my about little a that to presented, asset, around that U.S. just at the the about injectables that inbound or operations, necessarily there's been generic there inquiries think U.S.? and global bit the business versus U.S. strategic options of with or just the intensity business. whether you of Canadian business two aspects with longer-term in synergies the relative capital the progressing

Jason Grenfell-Gardner

Sure.

So, all I by that's good triggered to to in the North look an had that outset. in injectable to us has I with And assets. solution been American believe value think a important there again, is these be people interest having drugs. approaching say of from sterile this exercise

Canadian we've of in market the at challenges seen the over the look course that we the When

had we've related quite much address supply like challenges. past couple to nimble of while to seen and what be States, scramble supply those United in to years we've the

business, to an and patients. the the to serve can Buena with our make believe serve that amount significant our that customers we of site able that opportunities also some in They've manufacturing have sense. being strategically into enormous grow to plug and I come

being been think as changing. the business both years. the has past plant line many business I from to the as relative filling drive business capital growth. and the think perspective part capital Clearly is think speed of a incremental intensity, the topical more over about intensive high a we pipeline intensive as it's about If an XXXX, we obviously, of product able investment capital installation R&D injectable our about to our XXXX and The more part physical of becoming and eventually well

to those So today. and though sheet amount significant have of I of be context the have think of The company into balance debt a a value things, company. does all taken as

all that can And I that. sheet be of assets interesting, think that as at value in injectable advisors allows said, think we to to as all have And yet. balance we'll don't the consideration project. that invest but some us continue and with the acknowledge that there to they the I their our business these continue we're Damian of review business right our to execute de-risk

Operator

conclude remarks. session. Thank Grenfell-Gardner turn you. Jason today's And to President, this now question-and-answer does would and I for CEO closing call like back to the any

Jason Grenfell-Gardner

your later this good support All for and Thank and Teligent time. again We this joining your us you thank right. evening. a for conferences upcoming you Have to look of for Thank you, of Chris everyone afternoon. forward seeing some you month. the at

Operator

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

now You disconnect. may

Teligent (TLGTQ) 4 Nov 192019 Q3 Earnings call transcript