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Generic Drugmaker Teligent Files for Chapter 11, Plans Sale
October 18, 2021
Source: Reuters
(Reuters) - Generic drugmaker Teligent Inc filed for bankruptcy protection on Thursday with plans to sell itself, citing "regulatory and legal setbacks" including a warning letter from the U.S. Food and Drug Administration related to its manufacturing processes.
Publicly traded Teligent filed for Chapter 11 protection in U.S. bankruptcy court in Wilmington, Delaware, with nearly $130 million in debt, saying the COVID-19 pandemic had also contributed to it facing tightening liquidity in 2021.
The company, represented by Michael Nestor of Young Conaway Stargatt & Taylor, in a statement said it is in ongoing discussions with several interested parties about acquiring its business and expects to consummate a sale by early 2022.
In connection with the bankruptcy filing, Teligent appointed Vladimir Kasparov, managing director at Portage Point Partners, as chief restructuring officer, putting him in charge of overseeing the restructuring process.
K&L Gates has been retained as corporate counsel to advise on transactional issues in connection with the bankruptcy. Raymond James & Associates is serving as its investment banker.
To fund its operations during the Chapter 11 process, the company said it arranged $12 million in debtor-in-possession financing from its senior secured lenders.
In a court filing, Kasparov said the company, which manufactured topical pharmaceutical products and other generic drugs, pointed to a 2019 warning letter by the FDA as an initial event leading to the bankruptcy.
The letter, which stemmed from an inspection of Teligent's plant in Buena, New Jersey, identified several violations of good manufacturing practice regulations and required the company to take steps to come into compliance.
A product review launched by the company prompted recalls and the halting of production of certain products, and the company was prevented from launching a new sterile injectable product line.
Kasparov said the FDA's ongoing inspections "had a significant negative impact on the Company's business, financial position, results of operations and cash flow."
The onset of the COVID-19 pandemic in March 2020 further negatively impacted the company and exacerbated the strain on its operations and liquidity, he said. It received $3.3 million under the federal Paycheck Protection Loan program.
The case is In re: Teligent Inc, U.S. Bankruptcy Court, District of Delaware, No. 21-11332.
For Teligent: Michael Nestor and Matthew Lunn of Young Conaway Stargatt & Taylor
Nate Raymond
Nate Raymond reports on the federal judiciary and litigation. He can be reached at nate.raymond@thomsonreuters.com.
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