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Edited Transcript of TLGT earnings conference call or presentation 4-Nov-19 9:30pm GMT

Q3 2019 Teligent Inc Earnings Call

Buena Nov 9, 2019 (Thomson StreetEvents) -- Edited Transcript of Teligent Inc earnings conference call or presentation Monday, November 4, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Damian Finio

Teligent, Inc. - Corporate Secretary & CFO

* Jason Grenfell-Gardner

Teligent, Inc. - President, CEO & Director

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Conference Call Participants

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* Elliot Henry Wilbur

Raymond James & Associates, Inc., Research Division - Senior Research Analyst

* Matthew Gregory Hewitt

Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst

* Scott Robert Henry

Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by and welcome to the Teligent Inc. Third Quarter 2019 Results Conference Call. (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 Inc. are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties, for example, without limitation, statements about the company's anticipated growth and future operations, the current or expected market size for its products, the success of current or future product offerings and the research and development efforts and the company's ability to file for and obtain U.S. Food and Drug Administration, FDA, approvals for future products are forward-looking statements.

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

For a description of additional risks and uncertainties, please refer to the company's filings with the Securities and Exchange Commission, including its latest annual report on Form 10-K and its latest quarterly reports on Form 10-Q. The company assumes no obligation to update its forward-looking statements to reflect new information and developments.

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

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Jason Grenfell-Gardner, Teligent, Inc. - President, CEO & Director [2]

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Thank you, Chris, and good afternoon, ladies and gentlemen. Welcome to the Teligent business update covering the third quarter 2019. I am Jason Grenfell-Gardner, the President and CEO of Teligent; and I'm joined today by Damian Finio, our Chief Financial Officer. Thank you for joining us this afternoon.

I'll be providing you an update on the core elements of our business and the latest on our development plans. Damian will then provide a more detailed breakout of our financial performance for the third quarter of 2019.

Today, we announced solid results for the third quarter that showed continued performance in our base business with revenue for the quarter of $18.5 million. The gross margin for the quarter was also consistent with our expectations based on the mix of customers at 39.4%. Year-to-date, our gross margin of 43% is tracking slightly ahead of our guidance for the year.

Our focus as in prior quarters has been to drive profitability on an adjusted EBITDA basis in the business. We're pleased to note the progress on this with adjusted EBITDA for the quarter of $2.1 million, evidencing our continued efforts to drive margin and control costs. The improvement of inventory positions in Canada, recorded on our last earnings call, helps drive strong revenue in our international operations of $5.1 million. These inventory positions, however, continue to rely on challenging supply chain dynamics as our suppliers work to recover their production volumes after the disruptions earlier this year. As a result, inventory has often been delayed leading to volatility in revenue.

Although our team has managed to execute through this and attempted to build safety stocks, we have widened our revenue guidance for the fourth quarter to accommodate any potential delays in releases that could impact shipments to customers. Although, not all of this is in Teligent's control, our team will work to minimize any potential impact.

Now let me address the 3 issues that have been announced subsequent to the quarter; first, the review of non-core assets; second, the Series B fundraising; and third is the filing of the prior approval supplement for ranitidine hydrochloride injection.

On October 1, we announced the appointment of SVB Leerink to conduct a review of the company's assets following the receipt of unsolicited inbound interest. We believe it's in shareholders' best interest to explore the potential logic of a divestiture of some of these assets if the consideration accelerates the company's injectable growth plan and facilitates a reduction in overall indebtedness.

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

Finally, we submitted the prior approval supplement for ranitidine hydrochloride injection that we anticipate will trigger an FDA inspection of the sterile manufacturing operations of the company's site in Buena, New Jersey. As many of you are aware, there's been a recent concern around the ranitidine molecule as a result of the potential for N-nitrosodimethylamine or NDMA impurities, a known human carcinogen. Teligent took significant extra steps, both with its raw material supplier and with its own finished product, to ensure that our product complies with the FDA's approved safe ranges for NDMA. While these extra steps took time, we've always maintained that product quality and patient safety will come first to Teligent.

This first submission is exciting for all of us. Under GDUFA guidelines, the FDA aims to inspect 90% of facilities requiring inspection as a result of supplements within 4 months. We look forward to getting onto the next stage of our development plan as we execute further transfers into the site of approved products that we already own and our internally developed pipeline of sterile injectable products out of our 6 development teams.

One last thing before I turn over to Damian. I'd like to update you on what we call our generic orphan drug. Based on recent interactions with the FDA, we believe that our product will be approvable at our GDUFA goal date in late December. Although, we will not be the first to market with the generic version of this drug, we believe that the market still holds significant opportunity for Teligent and that we will be ready to launch product on or near our approval date.

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

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Damian Finio, Teligent, Inc. - Corporate Secretary & CFO [3]

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

Let me start with highlights of Teligent's 2019 third quarter financial performance. In the third quarter, we posted $18.5 million of revenue, a 39.4% gross margin and generated $2.1 million or 11.3% of positive adjusted EBITDA. This is our second consecutive quarter of revenues exceeding $18 million and an adjusted EBITDA margin of more than 11%. It's also our third consecutive quarter of declining operating expenses. And our year-to-date gross margin exceeds 43%.

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

Third quarter revenue included strong sales of U.S. topical products and Canadian injectable products. U.S. topical sales for the quarter were $13.3 million, and Canadian injectable sales were $5.1 million, with the remaining $0.1 million of third quarter sales derived from contract manufacturing.

On a year-to-date basis, our selling, general and administrative expenses are down 1.4% in comparison to the same period in 2018. However, as mentioned on previous calls, we've incurred more than anticipated legal fees in connection with primarily 2 disputes, both of which are disclosed and explained in previous SEC filings. If we exclude legal fees from this comparison, we have reduced year-on-year SG&A by 10%. That's a 10% reduction despite a 25% year-on-year growth in our global employee base, the majority of which related specifically to the expansion of both our quality and sales teams.

In respect to the company's cash position, we ended the quarter with $6.7 million of available cash compared to $4.1 million at June 30. Excluding cash movements related to financing, cash flow was essentially breakeven for the quarter.

In respect to Teligent's EBITDA performance, the company realized $4 million of year-to-date adjusted EBITDA equal to an 8% adjusted EBITDA margin. And for the 12-month period ending September 30, 2019, consolidated adjusted EBITDA, which is used for financial covenant compliance purposes and defined in the Ares loan agreement, the company realized $4.8 million, therefore, passing the $3 million September 30th trailing 12-month financial covenant.

Given this performance, $414,000 of adjusted EBITDA is needed in the fourth quarter to pass the year-end trailing 12-month consolidated adjusted EBITDA financial covenant of $5 million.

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

We are confident in achieving gross margins in excess of 40% for the full year, believe we are well positioned to deliver an adjusted EBITDA margin of approximately 10% for the full year and, with the strong fourth quarter, project revenues of $68.5 million to $72.5 million for the full year.

Now moving on from Teligent's third quarter financial results, let me share a few thoughts on our press releases and Form 8-Ks communicated and filed last week. On October 1, 2019, we issued a press release announcing the strategic review of non-core assets and that we engaged SVB Leerink to act as our financial advisers. This press release has generated further interest in our non-core assets. However, there is no defined time line, and there can be no assurance the strategic review will result in the completion of any course of action. The company does not intend to comment further unless a specific initiative is approved by the Board of Directors, the review process is concluded, or disclosure is required.

On October 28, we issued a press release and filed a Form 8-K announcing the pricing of a private placement of $34.4 million of May 2023 Series B convertible notes along with an update on other events. On October 31, we filed another Form 8-K announcing that we had closed the Series B deal. Consistent with the intended use of any proceeds generated by the strategic review of non-core assets, our intent with this recent capital raise was both to improve the company's liquidity and address our debt. The issuance of Series B convertible bonds provide the potential opportunity for the company to equitize a portion of total debt down the road.

Of the $34.4 million Series B bonds issued, $29.3 million represented new capital, whereas the remaining $5.1 million was attributable to the company swapping $9 million of existing May 2023 Series A bonds at a discount to par for new Series B bonds. The net effect of swapping these bonds at a discount was a $3.9 million reduction of total debt. Taking this $3.9 million debt reduction into consideration, along with allocating a portion of net proceeds to pay off the $2.5 million revolver advance and our intent to extinguish $13 million of convertible bonds maturing in December 2019, the net result of this $34.4 million transaction on a pro forma basis will be an increase to total debt of just $12 million. The Series B convertible bonds pay a 7% cash coupon but include an option to pick or defer interest at 8%. Accessing this pick option would reduce our expected 2020 cash interest by approximately $1 million, another boost to the company's liquidity. We estimate an increase to our weighted average cost of capital of just 32 basis points.

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

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

I would like to end with a huge thank you to all of our employees. More details on our third quarter 2019 financial performance will be provided in the Form 10-Q scheduled to be filed by the end of the week. Now I'll turn the call back over to Jason.

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Jason Grenfell-Gardner, Teligent, Inc. - President, CEO & Director [4]

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All right. Thank you Damian.

Before opening up for questions, I'd like to summarize where we're headed now as Teligent. We've been able to establish a profitable base business in a challenging environment with a solid pipeline and state-of-the-art facilities for both non-sterile liquid and semisolid drugs as well as sterile injectable products. In building this capability, we believe that we have positioned Teligent exactly where it needs to be to respond to the market challenges in the sterile injectable drug market.

Some of you may have seen the FDA's report on drug shortages released on October 29 that calls out the specific challenges impacting the availability of critical drugs for health systems and patients. If you haven't, I encourage you to read it.

For the past 11 years, we have had a series of rolling drug shortages in the United States that have impacted every hospital system in America, simple things like sterile water or epinephrine or most recently, Vincristine for pediatric cancer, have all gone through significant challenges as markets have failed and as supply has been interrupted as a result of regulatory action and failed quality systems.

There is this hope, which we think is a false hope that somehow absent a new approach that this situation will resolve itself, perhaps. But so far, if the past 11 years are a guide, this isn't happening.

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

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

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

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from the line of Matt Hewitt with Craig-Hallum Capital.

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Matthew Gregory Hewitt, Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst [2]

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So first question on ranitidine. And I'm going to ask you to speculate a little bit. But as you look at the current situation in the market for that product and the questions related to NDMA and the desire, I would think, to get a stable product into the market, is it safe for us to assume that the FDA is incentivized to come in and get your inspection completed as quickly as possible rather than waiting the 4 months to come in?

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Jason Grenfell-Gardner, Teligent, Inc. - President, CEO & Director [3]

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Matt, so look, I think that the FDA is really working through a complicated issue here with respect to the molecule and to the science behind detecting the potential impurity and the risk to patients and their safety. So it is obviously a complex problem. Most of the effort recently of course has been focused on the oral form of this drug, in its OTC form and in its Rx form, and obviously making sure that the standards are there to do the analytics to determine whether this drug is present, which we're talking about parts per billion, has been really complex. So I commend the FDA's efforts on this part. The injectable piece of this is still outstanding. If you reviewed the FDA's communications this weekend, they gave an update in terms of where they were with the various reporting and testing that's been ongoing, noting that testing of the injectable form is still out there. I think that the FDA will always act to be expeditious around patients and patient safety, and we hope that we're part of that solution.

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Matthew Gregory Hewitt, Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst [4]

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All right. And then shifting gears a little bit. So once the FDA has come in, they've cleared the facility, you've gotten that first product approved, how should we be thinking about cadence for your injectable pipeline? I think last quarter, you talked about having 13 to 15 products ready to file and potentially launch once approved. But how should we be thinking about cadence once that facility is cleared?

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Jason Grenfell-Gardner, Teligent, Inc. - President, CEO & Director [5]

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Yes. So if I go back to the comments that I made in the second quarter call, what I said was that the team had already developed 5 injectable drugs to go into the facility with the goal to drive that cadence up to 8 to 10 products in the coming months as the team continues to build speed. That's still our plan, and that's what we're going to execute as we work into 2020.

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Matthew Gregory Hewitt, Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst [6]

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All right. And then last one, as we think about maybe 12 months from now -- and I'm not asking for guidance, but as we think about those products starting to layer on, particularly on the sterile injectable side, how will that impact your gross margin? I mean where do we go from here? It sounds like you're ahead of plan so far year-to-date, feel comfortable with the guidance that you provided this year from a gross margin perspective, but what will that mean getting those incremental products launched out of that facility?

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Jason Grenfell-Gardner, Teligent, Inc. - President, CEO & Director [7]

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Thank you. So if you look at the way the facility is currently structured, obviously, the total cost of the shared services that support both sterile and injectable manufacturing are being born in that facility today. That should imply that there will be some uplift in gross margin as we get into launching further injectable drug products in 2020. The magnitude of that will depend of course on product mix, the competitive dynamics of those markets as we enter them. But as we have a better sense of that nearing the time, we'll be able to give better insight and guidance around that. And thank you for the question.

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Operator [8]

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And our next question comes from the line of Scott Henry with Roth Capital.

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Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [9]

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Going to start with a couple of follow-up questions. Just with regards to ranitidine, will you get a GDUFA date for that? Or have you gotten a GDUFA date? And then as well with regards to the follow-on filings, the 8 to 10, do you have to wait until after the inspection? Or is that something you can do prior to that?

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Jason Grenfell-Gardner, Teligent, Inc. - President, CEO & Director [10]

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So with respect to the timing of the supplement, we should receive a GDUFA date for that supplement. I believe that, that's probably 5 months from the date of our submission. Now that being said, remember that this is a drug that we had already agreed with FDA prior to the NDMA question to review the product simultaneously with the generation of stability data as a result of the drug shortages that had been present in this molecule in the past. So that is still our regulatory pathway with FDA on this product, and we expect that they will be able to review and inspect that data concurrently with its generation.

As it relates to the subsequent filings. Because they are not filings which are on an accelerated basis with stability data being reviewed concurrently, but are instead traditional supplements or traditional new ANDA filings, they require us to generate the appropriate length of stability data to be able to support the application. You will remember of course that in the form of the supplements, we're required to submit 3 months of stability data to the FDA to support a site transfer. With respect to a new ANDA, would require 6 months of stability data. So I think that, that data will continue to be generated and will be present pretty much along the same time line as the FDA inspecting the facility for the ranitidine application, which means we would probably submit them already knowing the disposition of the facility inspection.

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Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [11]

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Okay. Great. And then with the update on the 505(b)(2), could you update us in terms of the size of that opportunity? It sounds like there's one other player. I know you've given color into how we should think about that market. Just wondering how that looks at this point in time.

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Jason Grenfell-Gardner, Teligent, Inc. - President, CEO & Director [12]

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So I think you're referring to the generic orphan drug product. Under IMS data at the moment or what, I guess, we call it IQVIA data at the moment, trailing 12-month data is approximately $80 million. Based on some of the reporting that we have heard recently in the industry, we think that, that probably nets to somewhere between $60 million and $70 million of net revenue in the market today.

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Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [13]

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Okay. And there's one other player out there now, one other generic, I should say?

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Jason Grenfell-Gardner, Teligent, Inc. - President, CEO & Director [14]

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

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Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [15]

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

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Damian Finio, Teligent, Inc. - Corporate Secretary & CFO [16]

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Right. So as I mentioned cash at the end of the quarter was $6.7 million, excluding any financing movements in cash, is basically breakeven for the quarter. In terms of debt, as I mentioned, the $34.4 million of bonds we just issued, we'll have a net increase to debt of about $12 million. We need to retire the bonds that mature in December 2019 between now and December 1. So that's what I mentioned on a pro forma basis, it's incremental $12 million, so quarter-on-quarter, about a $12 million change from June 30 to when we extinguish the next round of bonds.

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Scott Robert Henry, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Head of Pharmaceuticals Research [17]

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Okay. Great. And then just a final question. You've given us some color on the covenants through the end of 2019. Any color you can give us in terms of what the covenants will look like in 2020? And how we should think about that if we should think about that at all?

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Damian Finio, Teligent, Inc. - Corporate Secretary & CFO [18]

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Right. So in terms of where we were for the third quarter, $4.8 million versus the $3 million covenant. I believe I mentioned on earlier calls, we can't always go by the adjusted EBITDA on the press release because there are certain add backs allowable under the Ares loan agreement. So $4.8 million for the 9 months -- the 12-month covenant ending September 30. We have $414,000 to go. In terms of covenants next year, we will give guidance on our next call. Of course, we're in the budgeting process right now for 2020. So we'll come back to you, Scott, on that question at a later date.

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Operator [19]

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

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Elliot Henry Wilbur, Raymond James & Associates, Inc., Research Division - Senior Research Analyst [20]

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Just a follow-up question regarding some of the earlier commentary on gross margin trends, I guess, for Damian. So it was mentioned that the shared services cost are currently running through the P&L. But as you begin to submit filings, wondering how much additional fixed cost that's currently running through R&D could be allocated inventory. Just how to think about that, whether or not it would actually have any noticeable impact on gross margin trends in 2020?

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Damian Finio, Teligent, Inc. - Corporate Secretary & CFO [21]

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Yes. I'll start, and I'll let Jason add his comments. So as I mentioned, our SG&A is down 10% year-on-year and that's despite a 25% growth in sales and quality. If I broke down between sales and quality, the primary source of the additional headcount would be quality. Those quality staff came on board to address issues addressed in prior quarters as well as to ramp up for injectables. So the bulk of the overheads are installed at this point. As Jason said so, going forward, we spread those overheads across more units with both topicals and injectables, and that will bring down cost per unit. But for the most part, Elliot, the costs are installed already.

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Elliot Henry Wilbur, Raymond James & Associates, Inc., Research Division - Senior Research Analyst [22]

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Okay. And then as a follow-up. Just thinking that given that you now have seemingly kind of multiple potential strategic options on the table, yet you are also able to secure recent funding, how do I think about the execution of the TICO development strategy next year? I mean obviously there's been a pivot towards injectables. So I don't know if you're at a point now where you can say definitely there will be no incremental R&D investment in topicals given where the company is headed but we continue to execute on other elements of the TICO strategy or whether or not it's going to be specifically limited to injectables only.

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Jason Grenfell-Gardner, Teligent, Inc. - President, CEO & Director [23]

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Well, so I'll start with that. I mean I think that TICO is still the strategy, but it's just a function of emphasis in where we see the growth rates further down the road. Today, we have filed I think north of 50 ANDAs in the topicals space. There's 16 or 17 still pending at FDA. And there will be a handful of incremental topical filings that we will continue to progress over the course of the coming couple of years. Some of that is finishing out what was already in the development pipeline. Some of that is because of the way that FDA guidances are changing. That may make some projects more interesting than they would have been in the past, particularly as it relates to the cost of clinical work to support those filings compared to the size of the addressable markets. So I would say this is really a change in emphasis rather than a change in focus. The emphasis obviously is on growing and developing the injectable business. The injectable total addressable market of generics is over $11 billion compared to about $2.5 billion of derm. It's certainly a much bigger market where we have room to grow and develop our business both here in the U.S. as well as in Canada.

The complex drug, the generic orphan drug was kind of our science project. I think we're proving out that, that works. Now we're going to have to understand what we do with it next as we bring that product to market.

And finally, in ophthalmics, we do have 3 ophthalmic products that are being developed for us together with a partner that we anticipate will be submitted over the course of 2020. And again that's part of us learning that market, finding out where there are opportunities for us there and continuing to apply the various parts of the Teligent value chain to different markets while we pivot around manufacturing. So obviously injectables will be the core of the quantum of ANDAs that we will submit and the volume of what goes through the facility. But that's not to say that we'll be taking our foot off the gas necessarily in other areas.

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Elliot Henry Wilbur, Raymond James & Associates, Inc., Research Division - Senior Research Analyst [24]

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Okay. And then last question, given that you've been presented or at least there have been inbound inquiries with respect to some of the strategic optionality around various aspects of the business. Can you just help us think a little bit about the relative capital or cash intensity of the 2 operations, U.S. topicals versus Canadian injectables? And then just longer-term about the strategic synergies of having a North American generic injectable business versus simply a U.S.-based business, whether or not there's global supply chain synergies or just reasons that, that asset might -- reasons that you may not want to necessarily part with that asset kind of given where you're progressing the business in the U.S.?

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Jason Grenfell-Gardner, Teligent, Inc. - President, CEO & Director [25]

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Sure. So look, again, all of this exercise has been triggered by people approaching us with an interest in these assets. And I think that's important to say from the outset. I believe that there is good value to be had in having a North American solution to sterile injectable drug. When we look at the challenges that we've seen in the Canadian market over the course of the past couple of years related to supply, much like what we've seen in the United States, while we've had to scramble and be quite nimble to address those supply challenges, they've also come with some significant opportunities to grow the business and to serve our customers and to serve our patients. I believe that, strategically, being able to plug that into the manufacturing site that we have in Buena can make an enormous amount of sense. If I think about the relative capital intensity, obviously, it's changing. The topical business has been the more capital-intensive part of our business from both a physical plant as well as an investment in R&D perspective over the past many years. Clearly, the injectable part of our business is becoming more capital-intensive as we think about 2020 to 2023. We think about eventually the installation of a high-speed filling line and being able to drive incremental pipeline and product growth. So I think all of those things though have to be taken into context, the value and the balance sheet of the company. The company does have a significant amount of debt today. I think we all acknowledge that. And all of these assets of the business have some value that at the right consideration that allows us to derisk the balance sheet and to invest in our injectable business can be interesting. But I don't think that we're there yet. And as Damian said, we will continue to review that with our advisers as they continue to execute their project.

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Operator [26]

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

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Jason Grenfell-Gardner, Teligent, Inc. - President, CEO & Director [27]

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

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Operator [28]

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