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Edited Transcript of TLGT earnings conference call or presentation 22-May-20 12:00pm GMT

Q1 2020 Teligent Inc (NEW JERSEY) Earnings Call

Buena Jun 28, 2020 (Thomson StreetEvents) -- Edited Transcript of Teligent Inc (NEW JERSEY) earnings conference call or presentation Friday, May 22, 2020 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Damian Finio

Teligent, Inc. - CFO & Corporate Secretary

* Timothy B. Sawyer

Teligent, Inc. - President, CEO & Director

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Conference Call Participants

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* Gregory B. Gilbert

SunTrust Robinson Humphrey, Inc., Research Division - Analyst

* Matthew Gregory Hewitt

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

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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. First Quarter 2020 Results Conference Call. (Operator Instructions) Please be advised that today's conference may be recorded. (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 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 report 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, Mr. Tim Sawyer, President and Chief Executive Officer. Thank you. Please go ahead, sir.

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Timothy B. Sawyer, Teligent, Inc. - President, CEO & Director [2]

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Thank you, Daniel. Good morning, everybody. Thank you for joining us today. I'm Tim Sawyer, President and CEO of Teligent, and I'm joined on this morning's call by our Chief Financial Officer, Damian Finio.

I'd like to start by thanking our Teligent employees around the world, and particularly those in Buena, New Jersey. As evidenced by what they continue to accomplish on a daily basis, they are clearly committed to our organization and extremely capable professionals. Their desire to win the right way during these unprecedented and challenging times is truly an inspiration. Thanks to each and every one of you.

In alignment with the directives in the state of New Jersey, as a pharmaceutical manufacturing facility, we're considered essential. We will remain open as long as permitted and conditions remain safe for our employees in order to continue to supply pharmaceutical products to the patients that need them.

Teligent has taken a number of preventative measures to help ensure business continuity while continuing to support safe and stable operations. We have directed all nonproduction employees to work from home in accordance with state and local guidelines. Our employees on-site are provided daily personal protective equipment, including masks and gloves, upon their arrival to our facility. And we have implemented temperature monitoring services at our newly established single point of entrance. We adjusted shift hours and have implemented social distancing measures to help limit the number of employees in certain areas and the related distance between employees where feasible.

We've also implemented a biweekly deep sanitization process and adjusted our production schedule to concentrate on high demand or low stock products to help reduce employee concentrations while continuing to fulfill customer demand. Our efforts have paid off as, thankfully, none of our employees have tested positive for COVID-19 to date.

As a consequence of COVID-19, dermatology visits were down in March and April. Although estimates differ, nearly all I've come across in my research suggests a decline of at least 50% in comparison to pre-COVID-19 levels. Not surprisingly, less visits to the dermatologist translates into less demand for our U.S. portfolio of topical pharmaceuticals.

As we mentioned on our last earnings call, we expected an approximate 50% decline in first quarter revenues versus Q4 2019. Revenues were, in fact, down 53%. But as shelter-in-place guidelines across the country begin to lessen, we anticipate demand to begin to build towards pre-pandemic levels. And in fact, we've started to see some really positive signs in May. Given the level of uncertainty and potential consequences of less stringent guidelines, it's still extremely challenging to predict the pace of the anticipated ramp and whether or not there might be a second wave of decline.

That said, based on what we've seen second quarter to date in terms of demand and the aggressive actions we've taken to reduce costs that Damian will walk you through momentarily, we anticipate an improved top and bottom line financial performance in the second quarter versus the first quarter. As I mentioned on our last call, my initial observation when joining Teligent was that the strategy was sound, but the organization needed to focus relentlessly on execution.

Putting the challenges of COVID-19 aside for a moment, I want to share some good news and evidence of what I mean it when I talk about execution. We received a Warning Letter from the FDA in late 2019. There are 2 phases to respond to a Warning Letter, the first of which was completed in early March and then shortly after our last call and about 9 weeks after I joined the company, on April 12 to be exact, we completed the second and final phase of our response to the FDA for the Warning Letter. And then just 2 days later on April 14, we filed a prior approval supplement for another injectable [pharmaceutical] product. This filing will serve as a backup to our first injectable prior approval supplement filed for ranitidine early in fourth quarter of 2019 that at the time we anticipated would trigger the FDA pre-approval inspection.

With both our Warning Letter response and second filing of an injectable prior approval supplement submitted to the FDA, we anxiously anticipate an FDA inspection, COVID-19 travel restrictions or otherwise permitted. COVID-19 has created uncertainty in our business, in our lives and in nearly everything we once knew and took for granted. However, as our world begins to return to our new normal, as a U.S.-based pharmaceutical manufacturer with topical and soon-to-have injectable manufacturing capacity and a leaner infrastructure, I'm confident that Teligent will be well positioned for future growth.

I believe that made in America resonates with patients now more than ever. And before I close, I wanted to say a few words about the strategic review of noncore assets the company initiated on October 1, 2019, prior to my arrival. We fully recognize that the process was initiated over 8 months ago and that many stakeholders, including me, assumed the process would have concluded by now. However, it's fair to say that those initial expectations did not factor in the Warning Letter received in late November 2019, the leadership transition in early February 2020 or a global pandemic that commenced in March. The process continues. It is a priority of mine and the possibility remains that a transaction may be executed. If there is relevant progress in this area, I commit that I will provide you with a more meaningful update.

Let me now turn the call over to Damian to provide you more detail on both our first quarter financial performance and the actions we've taken and will continue to take to lead Teligent through these challenging times. At the conclusion of Damian's opening remarks, I'll share some final thoughts before opening the call up to questions. Damian?

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

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Thank you, Tim. And good morning, everybody. This morning, I will provide detail on our first quarter 2020 financial performance, the aggressive actions we've taken to preserve cash by reducing expenses and our NASDAQ listing status.

Let's start with first quarter financial performance. On our last call, I mentioned that we anticipated reporting an approximate 50% decline in first quarter 2020 revenues. In line with that projection, actual first quarter revenues were down 53% or $8.5 million in comparison to the fourth quarter of 2019. Of the $8.5 million decline from the prior quarter, $2.3 million was attributable to supply challenges in Canada. The remaining $6.2 million decline was driven primarily by weaker demand for our U.S. topical products and price erosion.

As a consequence of the company's intentional strategy to generate cash by selling slow-moving product, we recorded an incremental lower of cost or market inventory reserve of $1.1 million as well as an incremental unrelated inventory reserve of $0.3 million. These incremental inventory reserves are reflected in cost of sales.

The combination of these factors resulted in a negative gross margin for the quarter. Simply put, low first quarter revenues were further dampened by incremental inventory reserves, the net of which was not enough to cover the fixed cost of running our manufacturing facility. That said, we do foresee an improved top line performance in the second quarter given the recent relaxing of shelter-in-place guidelines in various states, and the underlying assumption that this change will translate into patients returning to the dermatologist.

The reduction in first quarter development costs versus the fourth quarter of 2019 was reflective of one-off costs incurred last quarter. The $1.8 million of first quarter development costs are in line with our expectations. Selling, general and administrative costs for the quarter were $6.7 million. This is a $1.6 million increase over the fourth quarter of 2019 and a $1.2 million increase over the same quarter in the prior year.

First quarter 2020 selling, general and administrative costs include continued incremental legal fees associated with ongoing litigation, NASDAQ delisting-related items and the loan agreement amendments ultimately executed with Ares Capital in early April.

Lastly, both current and anticipated future financial performance of the company have been negatively impacted by COVID-19. As a consequence, the company recorded a noncash intangible asset impairment charge of $8.4 million in the current quarter. There were no such impairment charges recorded in the same quarter of the prior year or in the fourth quarter of 2019.

In short, the first quarter was a challenge, but we expect improvement in the second quarter. In this uncertain macro environment, we are working diligently to control what we can. From a top line perspective, we are encouraged by the positive signs suggesting patients are beginning to return to the dermatologists and demand for our products is improving. And we are taking aggressive actions to reduce costs and preserve cash.

I will highlight 4 of these actions to give you a sense of how we are managing our business. First, on May 4, Tim and I, along with the rest of our executive leadership team, accepted a voluntary 8-week 20% reduction in pay and asked other employees earning more than $100,000 in annual salary to take a 15% reduction over that same 8-week period.

Second, on the same day, we furloughed a portion of our employees in Buena as we ramped down topical manufacturing for the short term given adequate inventory levels on hand.

Third, we initiated a company-wide effort to reduce discretionary spending, simplify the organization and focus only on what's critically important.

And fourth, we were approved and received COVID-19 relief of $3.3 million on May 15 under the Small Business Administration's Payroll Protection Program, referred to more commonly as a PPP. We are now operating within the loan forgiveness period and are actively working to balance the employee-related actions taken previously with the needs of the business to ensure the majority of the loan will be forgiven.

We are projecting improvement in both top and bottom line financial performance in the second quarter. Due to the uncertainty surrounding the duration and severity of the COVID-19 pandemic and its impact on our business, we are unable to reliably estimate our future financial results and, therefore, we are not in a position to provide guidance for the remainder of 2020. And although we're projecting improved second quarter financial performance, COVID-19 may hinder the company's ability to meet financial covenants in the short term.

Switching gears. In regard to Teligent's NASDAQ listing status, on the last earnings call, I communicated the deadline to regain compliance was June 1, 2020. Since then, NASDAQ issued file number 2020-021 permitting a longer period of time for companies to regain compliance. As such, our deadline was deferred again. However, we plan to initiate a reverse stock split in the ratio of 10:1 to remove the uncertainty that a potential delisting presents to current and future investors. We anticipate the reverse split will be effectuated on May 28, 2020.

And in terms of the first quarter Form 10-Q, we applied for an extension on Friday, May 15. The COVID-19-related extension provides us until June 29 to file our first quarter Form 10-Q. However, we are planning to file next Tuesday or very shortly thereafter, barring no unforeseen events.

In closing, we will continue to generate and preserve cash through the sale of slow-moving inventories, take aggressive actions to reduce costs, explore opportunities to divest noncore assets and work with debtors to minimize cash interest paid. By resolving the Warning Letter, passing the pre-approval inspection and focusing on cost reduction, COVID-19 aside, our credit profile should improve, and we will be in a better position to work with existing debtors and potentially new creditors to address our capital structure and thus reduce total debt and our cost of capital.

Let me now turn the call back to Tim for final remarks before we move to the question-and-answer portion of today's call. Tim?

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Timothy B. Sawyer, Teligent, Inc. - President, CEO & Director [4]

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Thank you, Damian. I've now been on Board for about 14 weeks. And although I've been working for nearly 30 years, this has been, without a doubt, one of the most challenging 14-week stretches of my career. As Damian and I highlighted, the company continues to navigate through some significant headwinds. The difficult decisions we are making to rightsize all aspects of the business are not without challenge, but are absolutely required to untap Teligent's full potential.

I remain confident. I have the management team and employee base needed to achieve our priorities. We are proud to run a U.S. pharmaceutical manufacturing facility. As I said earlier, we believe made in America has more value now than ever. We look forward to the FDA's inspection and launching injectables soon thereafter. Lastly and most importantly, we hope that you and your families are safe and in good health.

With that, I will now ask Daniel to open the call 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 Matt Hewitt with Craig-Hallum Capital Group.

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

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Maybe a couple of numbers to start off and then I've got some bigger picture items that I'd like to go over. But first, Damian, can we get an update on the cash balance as of the end of the quarter?

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

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Matt, yes, absolutely. Cash at the end of the quarter was $11 million. We'll have the balance sheet in the 10-Q that's filed next week. It's a reduction of about $4.5 million from year-end. As a consequence, I would say, we had pretty decent cash collections in the first quarter because we had a pretty decent fourth quarter 2019 in terms of revenue. I'd say this cash decline was more driven by incremental expenses that I mentioned in my opening remarks.

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

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Okay. And I guess along those lines, the incremental expenses, obviously, you and most companies in the country and in the world, in fact, have taken steps to ensure the safety and health of their employees and it sounds like you've taken similar steps. Help us, maybe not specifics but what are those costs? And how should we be thinking about those? I mean you added it sounds like an extra shift or extending shifts to create some of that separation for employees, but there's a cost to that, how should we be thinking about that as we look at Q2 here and maybe the rest of the year?

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Damian Finio, Teligent, Inc. - CFO & Corporate Secretary [5]

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Yes. Maybe if I could start and Tim, I'll talk about the cost and then maybe hand it over to you to talk a little bit more about process. In terms of costs, honestly, Matt, there's not significant costs with the changes that we made. We do -- we are doing things like temperature checks, and there's a cost to that. We've also done things such as the sanitization of the facility every 2 weeks plus additional cleaning on a daily basis, et cetera. So in terms of the cost of COVID-19, from that perspective, it hasn't been significant. What we spent incremental costs on in the first quarter were primarily around professional fees, as I mentioned, legal fees and other fees associated with the NASDAQ delisting as well as the noncore asset process which continues, as Tim mentioned in his opening remarks as well.

So I would say the cost of COVID-19 from more of an SG&A perspective has been minimal, but the process changes have been significant.

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

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Okay.

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Timothy B. Sawyer, Teligent, Inc. - President, CEO & Director [7]

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Yes. Matt, we really tried to -- I mean the safety of our employees is critical to us. Obviously, their safety means that we can produce products for our patients. So we've taken multiple steps that I sort of outlined some of them. But when you talk about the shifts, we didn't add -- just to be clear, we did not add a shift. We just staggered, for example, one shift would come in, they used to cross paths just as one example, used to cross paths, one would be coming in as the other was going out, and that would create person-to-person contact. We've staggered timing so that the one that leaves, leaves and then the new one comes in. And we've also created a single way process flow through the building so that you come in through 1 door and everybody must come in through that door, and everybody leaves through a different door so that there is no commingling there as well. So -- and those aren't costly things. They're just operational and logistical things that we're doing to protect the employees.

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Matthew Gregory Hewitt, Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst [8]

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Understood. Okay. That's helpful. As we look at -- you talked about an improved financial performance for Q2. I'm assuming gross margin will improve as well. How should we be thinking about that ramping back to maybe a more normalized level, whether it's 40%, 50%, whatever? Do we get halfway back maybe in Q2 without getting specific, but what kind of improvement should we anticipate?

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Damian Finio, Teligent, Inc. - CFO & Corporate Secretary [9]

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So Matt, I'll start. And again, Tim, if you want to jump in afterwards, that would be great.

Yes. As I mentioned, we expect top line and bottom line improvement in the second quarter. And of course, we're already into the second quarter as we speak. So we have a good sign as to customer demand for our products and the top line. So we feel comfortable there.

In terms of margin, as I mentioned, there were some onetime sales in order to generate cash flow in the first quarter. I think there'll always be some of that, Matt. It's in our position right now. It's better to move inventory and get the cash rather than have the inventory sit on the shelves. So I think there'll continue to be short sales such as at a discount. But I would say that with some of the changes Tim has made about how we're pricing our products, especially in response to ROFRs, right of first refusal. I think you'll see improvement in margin. And we'll also take out, from a COGS perspective, some of these inventory reserves. So I had mentioned we took lower of cost or market adjustments on inventory on the shelf because of some of the pricing of sales that went out the door in the first quarter. So we may still have some of that in the second quarter, but I don't expect it to be as much. So I would see gross margins certainly improving back to being positive.

Last year, this time, I think we posted probably mid-30s in terms of gross margin, a little bit north of that for 2019. I don't see us quite returning back to those levels, Matt, in the second quarter, but I do think we could approach trend towards back in that direction, I think starting in the second quarter, a bit of improvement in the third and a bit improvement in the fourth. But everything I just said is caveated with that COVID-19 uncertainty that I mentioned and why we weren't prepared to give full year guidance on this morning's call.

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Timothy B. Sawyer, Teligent, Inc. - President, CEO & Director [10]

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The only thing I'd add to that, Matt, is that one of the things that we, as a company, have invested in and have done is we've increased our inventory levels so that we can be that supplier of choice for our customers, right? We want to improve our positioning so that we don't have out of stocks that we are a steady supplier to our customers that they're -- we don't end up with failure to supply penalties. And so we've invested in that. And I think that creates some challenges and some advantages, but I feel good about being able to satisfy all of our customers' needs and demands, and that should help us improve on the margin side as we go forward.

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Matthew Gregory Hewitt, Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst [11]

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Okay. I got it. I guess, regarding the failure to supply penalties, that was a hit in the fourth quarter. It sounds like you had some incremental here in Q1, but we're seeing some improvement. Where do those sit in? And do -- are you past that point now with some of the changes you've implemented? Or maybe another quarter or 2 to work through some of those issues?

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Damian Finio, Teligent, Inc. - CFO & Corporate Secretary [12]

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Yes. We have had failure to supply in the first quarter and in the second quarter. In the first quarter, it was about $0.5 million. The second quarter, may be about that same range. But I would say there's been a shift in failure to supply fees. So what we recorded last year was primarily in the U.S. What we're seeing this year, it's primarily Canada. But as I mentioned, part of our improvement in the second quarter top line is supply challenges being addressed in Canada. So I would say, Matt, it's probably fair to say another quarter or 2 of failure to supply penalties. Again, the majority, most likely in Canada. But again, I think we hope to have those behind us as supply normalizes both in the U.S. and in Canada going forward.

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Matthew Gregory Hewitt, Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst [13]

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Okay. And then just a point of clarification. In the press release, you mentioned loss contract volume. That's related to coronavirus, not competitive pressures, correct?

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Timothy B. Sawyer, Teligent, Inc. - President, CEO & Director [14]

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Sorry, can you say that again, Matt? I didn't quite understand. Can you say that again?

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Matthew Gregory Hewitt, Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst [15]

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Yes. So in the press release, you comment that part of the impact on revenues in the first quarter was related to loss contract volume. And I just -- just for clarification, was that related to coronavirus? Or were there sort of competitive pressures?

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Timothy B. Sawyer, Teligent, Inc. - President, CEO & Director [16]

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Good question, competitive pressures. That was not coronavirus related.

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Matthew Gregory Hewitt, Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst [17]

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Okay. And that's then also being reflected in some of the pricing that you saw in the first quarter as well?

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Timothy B. Sawyer, Teligent, Inc. - President, CEO & Director [18]

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Correct.

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Matthew Gregory Hewitt, Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst [19]

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Okay. And then I guess last one for me and then I'll hop back into the queue. Regarding the orphan drug, any status update on that and where that currently sits?

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Timothy B. Sawyer, Teligent, Inc. - President, CEO & Director [20]

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Thanks, Matt. So we're -- obviously, our complex product is very important to us, and we are in constant dialogue with both our development partner as well as the FDA to understand what's needed to address their concerns. As soon as we have clarity -- the FDA really has slowed way down in terms of their -- at least with us on this specific product, they've slowed way down in their responses. And so we're really waiting for them to provide us with an update. And we expect -- quite frankly, we expect an update just to have occurred already and it hasn't. So as soon as we have clear information, we'll share that with you all. But I don't have an update right now in terms of timing.

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Operator [21]

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(Operator Instructions) Our next question comes from Gregg Gilbert with SunTrust.

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Gregory B. Gilbert, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [22]

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Tim, I thought we'd start with maybe a more macro industry question. I know you have a lot of company-specific things to address. But as it relates to kind of the pricing environment, the larger players as well as described by the distributors, the generic pricing environment seems pretty stable for a while at whatever the erosion rate is, obviously, not flat, but the rate of erosion has been pretty stable. But I've heard from some smaller companies that maybe things are picking up in terms of competitive intensity as smaller companies with late approvals to a category are acting a little more competitively. Are you seeing that in the categories you play in? Or would you say you're in agreement with the broader commentary that the pricing environment sort of is what it is and has been for several quarters?

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Timothy B. Sawyer, Teligent, Inc. - President, CEO & Director [23]

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Good question, Gregg. I would tell you that in the categories that we participate in, we're definitely seeing some of that competitive pressure. We're seeing some declines and we're responding to those as such. And obviously, we want to continue to service our customers and satisfy their needs. But we are seeing those competitive pressures in the marketplace intensify.

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Gregory B. Gilbert, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [24]

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Sure. As it relates to your longer term injectable strategy, you're getting your facility on track and cleaned up, it is obviously priority number one. But where do you see yourselves fitting in, in terms of the types of products that Teligent would be going after in the next few years versus aspirationally longer than that? But -- what does sort of Phase 1 of Teligent as an injectables player look like?

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Timothy B. Sawyer, Teligent, Inc. - President, CEO & Director [25]

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Phase 1 -- from my perspective, Phase 1 are the -- the company has a number of products that they acquired over time. Obviously, long prior to being here. So Phase 1 includes that -- those baskets of products as well as a few others. However, longer term -- and our construction and our facility that we've put together is really built right now and outfitted for some of the lower volume type products. So we have space that's been constructed in order to enable us to make the higher volume products. But we haven't necessarily fitted that all out yet. So we're going to focus on some of the more niche or lower volume products at the outset.

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Gregory B. Gilbert, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [26]

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Got it. And lastly, you've commented a couple of times this quarter and last about the made in the USA angle. So I was curious what you think that means in a tangible sense? Is it an M&A sort of attractiveness comment? Is it as an independent company, we think we can get more business with government entities or even nongovernment entities? Can you maybe just frame the advantages you think you have as a U.S.-centric player?

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Timothy B. Sawyer, Teligent, Inc. - President, CEO & Director [27]

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Sure. Thank you. So a couple of things. One, I think that we've seen in the marketplace that there's been some government contracting that's been focused towards U.S. development and U.S. manufacturing. So we think that, that's a positive sign. And so it could have an economic impact in terms of sales to government entities. So that could be one area that it assists us.

Actually, you hit on all the areas, to be honest with you. It could be a foothold from an M&A perspective, if somebody wanted to come into the United States and participate in the marketplace for an entity that had -- was desirous of doing that would be possible. And we think over time, that it may resonate with our customers if we do a good job in ensuring that our supply is right so that they can feel like they have clear, uninterrupted supply from their partners -- from their local partners.

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Damian Finio, Teligent, Inc. - CFO & Corporate Secretary [28]

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And I would just add, in addition to the value, Gregg, that we see with made in America, I would categorize our injectable strategy is focused on previously approved products, generally lower in volume but higher in value. If I was to, I think, sort of summarize where we're headed. The products that are previously approved, again, were bought in acquisitions Teligent made prior to Tim and I's arrival.

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Operator [29]

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And our next question is a follow-up from Matt Hewitt with Craig-Hallum Capital Group.

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Matthew Gregory Hewitt, Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst [30]

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Just a couple more. Would it be possible to get an update on your current pipeline, maybe number of applications pending at the FDA, realized it's contingent upon getting the Warning Letter revoked? But where does that pipeline sit today?

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Damian Finio, Teligent, Inc. - CFO & Corporate Secretary [31]

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So Matt, we still have 16 Teligent label topical ANDAs on file with the FDA that are awaiting approval. There wasn't -- when we originally did our budget, we didn't have reliance for the most part on new launches to drive growth this year. And obviously, this was all pre-COVID-19.

Given the Warning Letter, we haven't seen an approval, I want to say since it was about third week of October. So we still have products on file. We hope with the resolution of the Warning Letter and then with further filings of prior approval supplements for injectables, we should start to see that approval flow pick up again at the back end of the year. So there's been really no movement worth mentioning, I would say, in the past couple of months because of the Warning Letter.

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Matthew Gregory Hewitt, Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst [32]

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Understood. And then I guess, the last one for me. With the injectable facility coming online, hopefully soon, but coming online and looking at the current environment with coronavirus and not just from a vaccine and treatment standpoint, but even some of the other drugs that are in high demand because of the virus, does that create an opportunity from a strategic standpoint where you could be going to the FDA? Or have you gone to the FDA and said, "Listen, we've got the state-of-the-art facility sitting here ready to go. Let us help. We can help you." And if you have had those discussions, what has been the response?

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Timothy B. Sawyer, Teligent, Inc. - President, CEO & Director [33]

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Thanks. So we have not had those discussions yet. We are -- we -- the first thing we wanted to make sure that we did internally was get our house in order, which we've now completed, including submitting to the agency. So that is certainly an opportunity for us in the future to go to them and try to leverage the things that we just talked about, perhaps being the made in USA and the types of products that we're coming out with. It's an opportunity for us as we go forward to affect the timing of our -- both the PAI so that they can release the facility as well as perhaps product approvals. So we'll work towards that.

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Operator [34]

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I'm not showing any further questions at this time. I would now like to turn the call back over to Tim Sawyer for any closing remarks.

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Timothy B. Sawyer, Teligent, Inc. - President, CEO & Director [35]

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All right. Thank you, and thank you all for your time this morning. I hope you have a great Memorial Day weekend, and we'll be in touch soon. Bye.

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Operator [36]

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