Teligent, Inc. Announces Fourth Quarter And Year-End 2016 Results

BUENA, N.J., March 7, 2017

Fourth Quarter 2016 Highlights

• Total net revenues of $17.9 million in the fourth quarter of 2016, an increase of 37% over the same quarter in 2015, and an increase of 11% over the third quarter in 2016.
• Total net revenues generated from the sale of our generic topical and injectable pharmaceutical products for the fourth quarters of 2016 and 2015 of $14.7 million and $8.1 million, respectively, compared to $13.9 million in the third quarter of 2016.
• Total net revenues generated from contract manufacturing services and other income for the fourth quarters of 2016 and 2015 of $3.2 million and $4.9 million, respectively, compared to $2.3 million in the third quarter of 2016.
• Total net international revenues for the fourth quarters of 2016 and 2015 of $3.1 million and $1.5 million, respectively, compared to $2.7 million in the third quarter of 2016.
• Gross margin for the fourth quarter of 2016 equaled 51% as compared to 45% in the fourth quarter of 2015, and 50% in the third quarter of 2016.
• Operating income was $0.3 million in the fourth quarter of 2016, compared to operating loss of $2.8 million in the same quarter in 2015, which includes $2.3 million of costs related to the acquisition of Alveda Pharmaceuticals, Inc., and operating income of $0.3 million in the third quarter of 2016.
• Our operating results in the fourth quarter of 2016 include $4.6 million in research and development costs, compared to $3.9 million in the same quarter in 2015, and $4.0 million in the third quarter of 2016.
• Adjusted EBITDA (as defined and reconciled to GAAP) for the fourth quarters of 2016 and 2015 were $2.1 million and $0.9 million, respectively.
• Adjusted income (loss) per fully diluted share (as defined and reconciled to GAAP) for the fourth quarters of 2016 and 2015 were $0.01 and ($0.02), respectively.
• As a result of the fluctuation in foreign exchange rates during the fourth quarter of 2016, we recorded a non-cash loss in the amount of $2.2 million related to the foreign currency translation of our intercompany loans to three of our wholly-owned subsidiaries, compared to a non-cash gain in the amount of $0.1 million in the same quarter in 2015 and a non-cash gain of $0.4 million in the third quarter of 2016.
• Total net revenues of $66.9 million for the year ended December 31, 2016, an increase of 51% over the year ended December 31, 2015.
• Operating income was $2.5 million for the year ended December 31, 2016, compared to operating loss of $3.2 million for the same period in 2015, which includes $2.3 million of costs related to the acquisition of Alveda Pharmaceuticals, Inc.
• Our operating results for the year ended December 31, 2016 include $17.1 million in research and development costs, compared to $13.2 million for the same period in 2015.
• Teligent filed six Abbreviated New Drug Applications (ANDAs) in the fourth quarter of 2016 with the U.S. Food and Drug Administration (FDA) for a total of 12 in 2016.
• Nine FDA approvals and five launches in the U.S.; eight Health Canada approvals in 2016.

Full Year 2017 Financial Guidance

• The Company expects total revenue between $85 and $100 million for the year ending December 31, 2017.
• The Company anticipates gross margin of 50% to 54% for the year ending December 31, 2017.
• In order to complete all of the development work required for the 2017 filings, the Company expects to spend between 24% and 27% of total revenue in research and development by the end of 2017.  The Company intends to continue its aggressive R&D commitment in 2017 in both the U.S. and Canada.

Teligent's President and Chief Executive Officer, Jason Grenfell-Gardner, stated, "In 2016 we continued our transformation into a specialty generics pharmaceutical company.  We nearly doubled the size of our U.S. product portfolio to 20 products in 50 presentations, up from 11 products at the end of 2015.  Our portfolio now includes four generic injectable products and 16 topical generic products, including the nine product approvals from our internally developed pipeline that we received from the U.S. FDA in 2016.  Despite some headwinds in our industry, Teligent continued to execute and grow our business.  We grew revenue by 51% compared to 2015 and gross profit increased by 62%, or $13.4 million, and we increased R&D spending by $4.0 million to continue to invest in our organic pipeline.  We submitted 12 new ANDAs with the U.S. FDA in 2016, and an additional eight applications to Health Canada in 2016.   As of today, after our approval of Triamcinolone Acetonide Ointment USP 0.5% yesterday, we have 35 ANDAs on file in the U.S. with a total addressable market of $2 billion, based on January 2017 QuintilesIMS data." 

Mr. Grenfell-Gardner continued, "We are well underway with the significant expansion of our manufacturing facility located in Buena, NJ.  We completed the first phase of the project with the renovation and expansion of our R&D laboratory in 2016. This upgrade expanded our in-house development equipment and capabilities to include sterile injectable products.  Completion of the facility expansion by the end of 2017 will allow us to plan to submit our first injectable ANDA to the FDA in the first half of 2018.  The automation of our topical manufacturing and the addition of our innovative isolator-based sterile manufacturing capacity will be the foundation for Teligent's future growth."

Mr. Grenfell-Gardner concluded, "We believe that we are well-positioned to increase revenue up to $85 to $100 million in 2017.  We will invest in necessary resources to support our new sterile manufacturing capacity, which we expect will lead to gross margins of between approximately 50% and 54% for 2017.  As we continue to invest in R&D to drive our future growth, we expect to increase R&D expense to approximately 24% to 27% of total revenue in 2017. This investment would allow us to continue to file aggressively in the U.S. and Canada in 2017, and to advance our first organically-developed sterile injectable products.  Over the next few years, as our product pipeline advances to commercialization, we expect total R&D as a percentage of revenue to approach closer to 8% to 10% of revenue."