Q2 2021 Teligent Inc (NEW JERSEY) Earnings Call
[music].
Greetings and welcome to the Telegent second quarter 2021 earnings results Conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad as a reminder, this conference is.
Recorded it is now my pleasure to introduce your host Philip Jack <unk> Executive Vice President and Chief Legal officer. Thank you you may begin.
Thank you operator.
Welcome to all of you joining us for <unk> second quarter 2021 earnings Conference call.
Before we begin we want to draw your attention to our legal disclosure regarding forward looking statements.
During the course of this conference call and the Q&A. Following the company will make forward looking statements regarding future events.
Including statements about financial business, and commercialization plans and strategies as well as certain critical strategic assessments, we have undertaken.
Which could impact fiscal year 2021 and beyond.
As well as the currently ongoing infection and re inspection by the U S. FDA.
We encourage you to review the Companys past and future filings with the SEC in.
In particular, our annual report on Form 10-K for the period ending December 31.
<unk>.
Which identify specific factors that may cause the actual results or events to differ materially.
From those described in the forward looking statements.
You can find the SEC filings in the Edgar database at Www Dot SEC dot Gov or.
Or in the Investor Relations section at the company's website at Www Dot Telegent Dot com.
Please note that any comments made on today's call speak only as of today.
August 16, 2021, and may not be accurate at the time of any replay or transcript rereading.
I would now like to hand, the conference call over to Tim Sawyer, Our President and Chief Executive Officer.
Jim.
Thank you Bill good morning.
And I'd like to thank all of you for joining us today on Telegent second quarter 2021.
Earnings call.
Joining me on the call intelligence Executive Vice President and Chief Legal Officer.
And our Chief Financial Officer, Ernie de Paolantonio.
Although our second quarter was relatively quiet with respect.
New announcements.
Telegent productivity did not weighed.
In fact, our continued focus on remediation of the Beulah facility.
<unk> extremely important.
As we will discuss further later in this call the FDA began.
<unk> profit in mid July.
Which is earlier than we anticipated.
Our operating performance for the quarter was impacted by a combination of factors, including remediation related activities.
The ongoing effects of the COVID-19, pandemic and modest generic pricing erosion within the topical segment.
Looking forward <unk>.
Telegent Senior management, and our board continue to assess how to maximize shareholder value.
By leveraging all of our existing asset base.
With physical assets and human capital, including the possible expansion into proprietary injectable development and manufacturing services.
And we anticipate providing additional updates on the progress we are making on this effort throughout the remainder of 2021.
Before commenting further on these items.
Ernie de Paolantonio will review, our financial results for the second quarter of 2021.
Ernie.
Thank you, Tim and good morning, everyone.
Total revenues were $10.4 million for the three months ended June 32021 versus $13.6 million in the prior period for 2020.
The decrease was driven primarily by loss contract volume due to remediation related activities. The continuing effects of the COVID-19, pandemic and modest product price erosion due to generic competition.
Cost of revenues increased $2.1 million to $13.1 million for the current period versus $11.1 million for the prior period, mainly attributable to the cost of inventory reserves as well as the ongoing cost of remediation and product expenses combined with lower.
Absorptions.
Selling general and administrative expenses of $5.7 million for the current period increased from $5 million for the prior period. The increase was primarily due to higher professional fees, resulting from our debt restructuring offset slightly by a decrease in personnel related cost.
<unk>.
Product development and research expenses were $2.2 million for the current period.
Versus $1.9 million for the prior period. The increase was primarily due to API related expenses offset by decreases in personnel costs outside testing and pilot batch expense.
Net loss attributable to common stockholders decreased by $1.5 million or 10% to $12.9 million for the current period.
From $14.3 million for the prior year period.
The decrease was primarily due to a decrease in interest and other expenses of $4.5 million and a $4.6 million decrease in change in the fair value of derivative liabilities.
Operating loss has increased by $6.3 million from the period to period to $10.7 million as a result of lower net product revenues and higher overall cost and expenses discussed above.
Our cash and cash equivalents at June 32021 were approximately $22.6 million.
Versus $27.5 million at March 31.
And compared to $5.9 million at December 31, 2020.
We estimate that we will have sufficient operating cash until the end of 2021 or into the first quarter of 2022.
I will now turn the call back over to Tim Tim.
Thank you Ernie.
Realizing that our ongoing remediation of the FDA warning letter issued in November of 2019.
As a focal point for our company and our investors. Let me now provide a brief update on our recent interactions with the FDA.
As previously stated.
During our first quarter call in May based on our assessment of the status of our remediation efforts at the <unk>, New Jersey manufacturing facility.
We believe we would be ready to inform the FDA.
Our inspection readiness during the third quarter of 2021.
However.
Fire two hour informing the FDA of our inspection readiness.
We were informed by the FDA that they would commence a periodic current good manufacturing practices.
Section.
A re inspection to follow up on the FDA warning letter remediation actions in mid July.
This inspection and reinfection is still ongoing as of this time.
Therefore, we cannot predict when the inspection reinspection will be completed.
When the results of the inspection will be made available to us by the FDA.
What.
<unk> of those results may be.
How those results may impact the restrictions imposed on the company.
The FDA warning letter.
And whether and when the results of the inspection and re inspection.
May or May not result in the removal or abating of the restrictions imposed on the company by the FDA warning letter.
It should also be specifically noted that we have no control and are unable to predict when the FDA will provide formal communication of the results of the inspection and re inspection and more importantly, the impact if any on the existing warning letter.
Therefore until such time as the results of the Fda's inspection and reinspection are formally made available to us.
And we have had ample opportunity to review and analyze those results with our consultants and our advisers.
We will have no further comment on that.
It's Matt.
As we continue to work with the FDA to resolve these issues we.
We are also continuing to diligently pursue with our financial strategic and legal advisers critical assessment of our asset base.
Manufacturing capabilities.
Operational and strategic strength.
And how we can best leverage that moving forward to maximize shareholder value.
As part of this strategic review one of the most important decision is assessing and determining the highest quality long term growth opportunities for our company.
And.
Part of this analysis is examining in detail the evolving business trend in regards to technology.
<unk> and outsourcing within the pharmaceutical manufacturing sector.
So we can fully assess our end market.
And position our company to take advantage of these trends.
To that end over the last several months intelligent.
In consultation with external industry experts and our financial and strategic advisors has undertaken a comprehensive review of our end market.
Based upon our current asset base, we believe that our future growth prospects can be significantly improved by directing and optimizing our efforts towards providing services for the development and manufacturing of proprietary objected bowls.
There are several reasons why we believe.
Further refining our ability to provide services.
Or the development and manufacturing of proprietary injectable products represent a major future growth opportunities.
First and foremost.
The growth trends within the proprietary injectables market.
At significantly higher rates than topical.
And we expect these trends will only continue over time.
We believe that strong and sustainable growth in our end markets will provide intelligent a demand driven tailwind for our core manufacturing services offering.
Which over time should enable us to fully utilize our asset base.
And improve our potential profitability.
Secondly, many drug developers.
Particularly the small to mid sized companies continue to outsource manufacturing of their key pipeline assets, particularly injectable based formulations, which often times require more complex manufacturing processes.
Industry sources indicate that by the end of 2020, approximately 70% of all small to midsize pharmaceutical companies, we are outsourcing their drug manufacturing.
Up from 60% back in 2017.
Given the lack of internal capability, coupled with variable cost structure associated with building out and operating such asset.
It's not surprising to see the strong trend towards outsourcing continue overtime. Additionally.
Additionally, we also believe the existing capacity constraints seen in pharmaceutical manufacturing provide a natural supply driven benefit that creates highly attractive pricing.
For outsourced manufacturing services.
Thus.
We believe these outsourcing trends provide yet another demand driven potential benefit for the intelligence business model and with our.
Directing and optimizing our services towards injectable based pipeline assets and.
And capabilities, we believe that these dynamics could provide sustainable growth in our end markets for years to come.
Having touched upon the industry trends, we see in the injectable side of our business.
I'd also like to address our internal capabilities and why we're optimistic about the potential for our future growth prospects.
As our investors know our buner manufacturing facilities represents a major investments into expanding our manufacturing capabilities.
Upon FDA approval.
<unk> will enable us to significantly expand our production capabilities within the sterile injectable product for.
For both bio and agile presentation.
In addition, the sterile production area of the Buena facility is designed around the Isolator based technology.
And the facility also includes a versatile bio and agile filling lines capable of producing between four and 8 million units per year.
We also have space and critical utilities already in the build out or a potential future higher speed filling lines.
Thus, we believe that once the once approved by the FDA.
Sterile production capability will support our pipeline of sterile injectable products in vial and actual presentation and we anticipate that this expansion will secure our long term growth in contract and private label manufacturing and related services.
We still have additional work to complete in regard to our strategic plan moving forward.
And we will continue to keep you posted as we advance and finalize these plans.
However, we believe that based on our current asset base in Vienna, our future growth prospects will be improved by directing and optimizing our development and manufacturing services.
Towards proprietary injectable products.
We believe it's important to share with you our preliminary thinking at this stage and we'll continue to keep our investors apprised in.
In the future quarters.
Thank you for taking the time to join us today.
I would now like to turn the call back over to the operator for the question and answer session.
Kevin.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Asian tone will indicate your line is another question Kim you May Press Star two if you would like to remove your question from the queue for participants using speaker equipment, and maybe necessary pick up your handset before pressing the star keys one.
One moment, please while we poll for questions.
Okay.
Our first question comes from the line of Matt Hewitt with Craig Hallum. Please proceed with your question.
Good morning, and thanks for providing the update.
First question for me without getting into I guess going into too deep into that the remediation efforts and all of that but how quickly once the FDA comes back and let's say to give you. The all clear how quickly do you think that you can transition to ramp that facility back up.
What would be required to do so.
Okay. Thanks, Matt.
<unk> it.
So just to make sure I understand the question you are saying.
If the FDA were to provide a positive inspection youre looking for the timeline for us too.
Up.
Finalize the.
Upgrades to the to the injectable facility no I'm just even on the topical side I mean, how quickly can you ramp that back up I mean, I know that you've got a number of and as that have been pending approval <unk> got drugs that you have been manufacturing.
Guessing that you're not running at full speed right now so how quickly once you've gotten the all clear on the topical side I guess, we can get to the hospitals in a second but just on the commodity side sorry.
Sorry didn't understand you're there I just wanted to make sure so.
Our manufacturing topical today obviously.
So.
We're doing the necessary work to make sure those products meet all of the.
FDA guidelines. So so we are manufacturing today, we will be able to.
Yes.
Ramp up it will take a little bit of time, but we will be able to ramp up but I would say to you that.
Dependent on that is going to be the timeline that it takes for the FDA to approve any new applications. We do have a number of applications that are pending.
Be dependent on the FDA too.
Those new products for us to be able to launch.
Okay Fair enough and then I guess on the flip side with the Injectables facility that would still need an FDA inspection and an all clear.
Do you feel like you are ready on the injectable side or have you been focused primarily on the remediation.
We've been focused.
Very good question and we've been focused primarily on the remediation. We definitely have continued work to do.
<unk> ourselves for the.
For the Injectables.
For the Injectables manufacturing.
The real key there we're going to the real key there, though obviously is that we're going to need to have a product.
Filing of Pis filings that will trigger that inspection.
I would tell you that we have additional work to do at this point in time to be ready for that.
Sure.
Fair enough, Okay and then.
Maybe I.
I don't know fast forward too.
Whether it's a year from now or whatever once the remediation efforts are complete and I know, there's always ongoing work to do but what how much of a cost savings will that be your how much of these current cost go away. Once the remediation is complete you've gotten the all clear from the <unk>.
Not just on the.
On the topical side, but on the injectable side. Once those facilities are cleared I mean are we talking a couple million dollars a quarter of costs that go away that can start to flow back through to the bottom line.
I don't know that its.
It's that high obviously, the remediate the additional costs that we extend on <unk>.
Third party consultants and whatnot would go away and then we could improve our manufacturing efficiency.
So it looks I would tell you that.
It takes a while for that to flow out because you are right.
But it probably would be a couple of million dollars a year.
Matt This is Ernie.
You would also have higher gross profit on those products, because Europe you'd be working as a CMO.
And those so your cost would be offset.
Okay Fair enough all right. Thank you and I guess, maybe the last one.
Have you continued efforts on developing new products for the pipeline and maybe an update if you have one on where the pipeline currently sits.
Sure. We currently have.
<unk> products.
Topical products pending at the agency and three.
Injectables products pending at the agency that we're prosecuting.
Variety of Anda and NDA application.
And so those are the ones we're actively prosecuting at this moment in time.
We have been spending the majority of our.
Research efforts.
Most recently <unk>.
And the individual product remediation too.
Ensure their viability in the markets that we have not been focused on new product development.
Understood Alright, thank you very much for the update.
Just going back to your initial question I think part of it may have been.
You were looking for some guidance on the topical products that we may have paused due to remediation efforts and when they may.
When they start generating revenue again.
Once we finish the remediation on those products that we pause they will be reintroduced into the market. They don't require any sort of a.
FDA clearance.
We paused them voluntarily.
To remediate the quality issues, we may have spotted or the quality concerns. We may we may have spotted.
But once we've.
Fully remediate those to our satisfaction.
Re introducing those products right back into the market. Therefore, the revenue picking up again from those Pas product.
That's very helpful. Thank you.
Thanks.
We have no further questions at this time I would like to turn the floor back over to Tim Schneider for closing comments.
Thank you Devin.
Listen Thank you all for joining US today, we appreciate your time and we appreciate your continued support and I wish you a great day. Thank you bye bye.
This does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.
[music].
[music].
Greetings and welcome to the Telegent second quarter 2021 earnings results Conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad as a reminder, this conference is.
Being recorded it is now my pleasure to introduce your host Philip stock, Let's executive Vice President and Chief Legal officer. Thank you you may begin.
Thank you operator.
Welcome to all of you joining us for Telegent second quarter 2021 earnings Conference call.
Before we begin we want to draw your attention to our legal disclosure regarding forward looking statements.
During the course of this conference call and the Q&A. Following the company will make forward looking statements regarding future events.
Including statements about financial business, and commercialization plans and strategies as well as certain critical strategic assessments, we have undertaken.
Which could impact fiscal year 2021 and beyond.
As well as the currently ongoing inspection and re inspection by the U S. FDA.
We encourage you to review the Companys past and future filings with the SEC in.
In particular, our annual report on Form 10-K for the period ending December 31.2020.
Which identify specific factors that may cause the actual results or events to differ materially.
From those described in the forward looking statements.
You can find the SEC filings in the Edgar database at Www Dot SEC Gov or.
Or in the Investor Relations section at the company's website at Www Dot Telegent Dot com.
Please note that any comments made on today's call speak only as of today.
August 16th 2021, and may not be accurate at the time of any replay or transcript rereading.
I would now like to hand, the conference call over to Tim Sawyer, Our President and Chief Executive Officer.
Jim.
Thank you Bill good morning.
And I'd like to thank all of you for joining us today on Telegent second quarter 2021.
Earnings call.
Joining me on the call intelligence Executive Vice President and Chief Legal Officer Phillip.
And our Chief Financial Officer, Ernie de Paolantonio.
Although our second quarter was relatively quiet with respect.
New announcements.
Telegent productivity did not weight.
In fact, our continued focused on remediation of the Beulah facility proved extremely important as.
As we will discuss further later in this call.
Began.
<unk> process in mid July.
Which is earlier than we anticipated.
Our operating performance for the quarter was impacted by a combination of factors, including remediation related activities.
The ongoing effects of the COVID-19, pandemic and modest generic pricing erosion within the topical segment.
Looking forward.
Telegent Senior management, and our board continue to assess how to maximize shareholder value.
By leveraging all of our existing asset base.
With physical assets and human capital, including the possible expansion into proprietary injectable development and manufacturing services.
And we anticipate providing additional updates on the progress we are making on this effort throughout the remainder of 2021.
Before commenting further on these items.
Ernie de Paolantonio will review, our financial results for the second quarter of 2021.
Ernie.
Thank you, Tim and good morning, everyone.
Total revenues were $10.4 million for the three months ended June 32021 versus $13.6 million in the prior period for 2020.
The decrease was driven primarily by loss contract volume due to remediation related activities. The continuing effects of the COVID-19, pandemic and modest product price erosion due to generic competition.
Cost of revenues increased $2.1 million to $13.1 million for the current period versus $11.1 million for the prior period, mainly attributable to the cost of inventory reserves as well as the ongoing cost of remediation and product expenses combined with lower.
Absorptions.
Selling general and administrative expenses of $5.7 million for the current period.
Increased from $5 million for the prior period. The increase was primarily due to higher professional fees, resulting from our debt restructuring offset slightly by a decrease in personnel related costs.
<unk> development and research expenses were $2.2 million for the current period versus $1.9 million for the prior period. The increase was primarily due to API related expenses offset by decreases in personnel costs outside testing and pilot batch expense.
Net loss attributable to common stockholders decreased by $1.5 million or 10% to $12.9 million for the current period.
From $14.3 million for the prior year period.
The decrease was primarily due to a decrease in interest and other expenses of $4.5 million and a $4.6 million decrease in change in the fair value of derivative liabilities.
Operating loss has increased by $6.3 million from the period to period to $10.7 million as a result of lower net product revenues and higher overall cost and expenses discussed above.
Our cash and cash equivalents at June 32021 were approximately $22.6 million.
Versus $27.5 million at March 31.
And compared to $5.9 million at December 31, 2020.
We estimate that we will have sufficient operating cash until the end of 2021 or into the first quarter of 2022.
I will now turn the call back over to Tim Tim.
Thank you Ernie.
Realizing that our ongoing remediation of the FDA warning letter issued in November of 2019.
As a focal point for our company and our investors. Let me now provide a brief update on our recent interactions with the FDA.
As previously stated.
During our first quarter call in May based on our assessment of the status of our remediation efforts at the Puma, New Jersey manufacturing facility.
We believe we would be ready to inform the FDA.
Our inspection readiness during the third quarter of 2021.
However.
Prior to our informing the FDA of our inspection readiness.
We were informed by the FDA that they wouldn't commence a periodic current good manufacturing practices.
Inspection.
And a re inspection to follow up.
The FDA warning letter remediation action in mid July.
This inspection and reinfection is still ongoing as of this time.
Therefore, we cannot predict when the inspection and re inspection will be completed.
When the results of the inspection will be made available to us by the FDA.
What.
Specific of those results may be.
How those results may impact the restrictions imposed on the company by the FDA warning letter.
And whether and when the results of the inspection and re inspection may or may not result in the removal or abating of the restrictions imposed on the company by the FDA warning letter.
It should also be specifically noted that we have no control and are unable to predict when the FDA will provide formal communication of the results of the inspection and re inspection and more importantly, the impact if any on the existing warning letter.
Therefore until such time as the results of the Fda's inspection and re inspection or formally made available to us.
And we have had ample opportunity to review and analyze those results with our consultants and our advisers.
We will have no further comment on that.
As we continue to work with the FDA to resolve these issues.
We are also continuing to diligently pursue with our financial strategic and legal advisers critical assessment of our asset base.
Any factoring capabilities.
Racial and strategic strength.
And how we can best leverage that moving forward to maximize shareholder value.
As part of this strategic review one of the most important decision is assessing and determining the highest quality long term growth opportunities for our company.
An integral part of this analysis is examining in detail.
Evolving business trends in regards to technology.
Utilization in outsourcing within the pharmaceutical manufacturing sector.
So we can fully assess our end market.
And position our company to take advantage of these trends.
To that end over the last several months intelligent income.
Consultation with external industry experts and our financial and strategic advisors is undertaking a comprehensive review of our end market.
Based upon our current asset base, we believe that our future growth prospects can be significantly improved by directing and optimizing our efforts towards providing services for the development and manufacturing.
Our proprietary objectives.
There are several reasons why we believe further refining our ability to provide services for.
The development and manufacturing of proprietary injectable products represented a major future growth opportunities.
First and foremost.
The growth trends within the proprietary injectables market are at significantly higher rates than topical.
And we expect these trends will only continue over time.
We believe that strong and sustainable growth in our end markets will provide intelligent a demand driven tailwind for our core manufacturing services offerings.
Which over time should enable us to fully utilize our asset base.
And improve our potential profitability.
Secondly, many drug developers.
Particularly the small to midsize companies continue to outsource manufacturing of their key pipeline assets, particularly injectable based formulations, which oftentimes require more complex manufacturing processes.
Industry sources indicate that by the end of 2020, approximately 70% of all small to midsized pharmaceutical companies, we are outsourcing their drug manufacturing.
Up from 60% back in 2017.
Given the lack of internal capability, coupled with variable cost structure associated with building out and operating such asset.
It's not surprising to see the strong trend towards outsourcing continue overtime. Additionally.
Additionally, we also believe the existing capacity constraints seen in pharmaceutical manufacturing provide a natural supply driven benefit that creates highly attractive pricing.
For the outsourced manufacturing services.
Thus.
We believe these outsourcing trends provide yet another demand driven potential benefit for the intelligence business model and with our.
Directing and optimizing our services towards injectable based pipeline assets.
And capabilities, we believe that these dynamics could provide sustainable growth in our end markets for years to come.
Having touched upon the industry trends, we see in the Injectables side of our business.
I'd also like to address our internal capabilities and why we're optimistic about the potential for our future growth prospects.
As our investors know our buner manufacturing facilities represents a major investments into expanding our manufacturing capability.
Upon FDA approval.
<unk> will enable us to significantly expand our production capabilities within the sterile injectable product for.
For both bio and agile presentation.
In addition, the sterile production area of the Buena facility is designed around the Isolator based technology.
The facility also includes a versatile and agile filling lines capable of producing between four and 8 million units per year.
We also have space and critical utilities already and the build out or a potential future higher speed filling lines.
Thus, we believe that once the once approved by the FDA.
Sterile production capability will support our pipeline of sterile injectable products and vial and actual presentation and we anticipate that this expansion will secure our long term growth in contract and private label manufacturing and related services.
We still have additional work to complete.
Guard to our strategic plan moving forward.
And we will continue to keep you posted as we advance and finalize these plans.
However, we believe that based on our current asset base and data are.
Future growth prospects will be approved by directing and optimizing our development and manufacturing services.
Towards proprietary injectable product.
We believe it's important to share with you our preliminary thinking at this stage and we'll continue to keep our investors apprised.
In the future quarters.
Thank you for taking the time to join US today and I'd now like to turn the call back over to the operator for the question and answer session.
Kevin.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is this a question Ken you May Press Star two if you would like to remove your question from the queue for participants using speaker equipment it may be necessary.
With your handset before pressing the star one moment, please while we poll for questions.
Okay.
Our first question comes from the line of Matt Hewitt with Craig Hallum. Please proceed with your question.
Good morning, and thanks for providing the update.
First question for me without getting into I guess going into too deep into that the remediation efforts and all that but how quickly once the FDA comes back and let's say to give you. The all clear how quickly do you think that you can transition to ramp that facility back up.
What would be required to do so.
Okay. Thanks, Matt.
<unk> it.
So just to make sure I understand the question you are saying.
If the FDA were to provide a positive inspection youre looking for the timeline for us too.
Up to finalize the.
Upgrades to the to the injectable facility no I'm just even on the topical side I mean, how quickly can you ramp that back up I mean, I know that you've got a number of and as that had been pending approval <unk> got drugs that you have been manufacturing.
And I'm guessing that you're not running at full speed right now so how quickly once you've gotten the all clear on the topical I guess, we can get to the hospitals in a second but just on the commodity Nevada, alright, sorry didn't understand you're there I just wanted to make sure. So.
Our manufacturing topical today obviously.
So.
We're doing the necessary work to make sure those products meet all of the.
Sure.
FDA guidelines. So so we are manufacturing today, we will be able to.
<unk>.
Ramp up.
We'll take a little bit of time, but we will be able to ramp up but I would say to you that.
Dependent on that is going to be the timeline that it takes for the FDA to approve any new applications.
We do have a number of applications that are pending.
It will be dependent on the FDA too.
Approve those new products for us to be able to launch.
Okay Fair enough and then I guess on the flip side with the Injectables facility that would still need and.
FDA inspection and an all clear.
Do you feel like you are ready on the injectable side or have you been focused primarily on the remediation.
We've been focused.
Very good question and we've been focused primarily on the remediation. We definitely have continued work to do to prepare ourselves for the.
For the Injectables.
For the Injectables manufacturing.
The real the real key there we're going to the real key there, though obviously is that we're going to need to have a product.
Filing.
S filings that will trigger that inspection, but I would tell you that we have additional work to do at this point in time to be ready for that.
Thanks.
Fair enough, Okay and then.
Maybe.
I don't know fast forward too.
Whether it's a year from now or whatever once the remediation efforts are complete and I know I know, there's always ongoing work to do but.
How much of a cost savings would that be your how much of these current cost go away. Once the remediation is complete and you've gotten the all clear from the FDA not just on the <unk>.
On the topical side, but on the injectable side. Once those facilities are cleared I mean are we talking a couple million dollars a quarter of costs that go away that can start to flow back through to the bottom line.
I don't know that its.
But it's that high obviously the remediate the additional cost that we spend on third.
Party consultants and whatnot would go away and then we could improve our manufacturing efficiency.
So it looks.
I would tell you that.
It takes a while for that to flow out because you are right.
But it probably would be a couple of million dollars a year.
Matt This is Ernie.
You would also have higher gross profit on those products because Europe, we'd be working as a CMO around those so your cost would be offset.
Okay Fair enough all right. Thank you and I guess, maybe the last one.
Have you continued efforts on developing new products for the pipeline and maybe an update if you have one on where the pipeline currently sits.
Sure. We currently have seven products.
Topical products and then at the agency.
<unk>.
Injectables products pending at the agency that we're prosecuting.
Yes.
Variety of Anda and NDA application.
And so those are the ones we're actively prosecuting at this moment in time.
We have been spending the majority of our.
Research efforts.
Most recently <unk>.
And the individual product remediation to ensure their viability in the markets that we have not been focused on new product development.
Understood Alright, thank you very much for the update.
Just going back to your initial question I think part of it may have been.
You were looking for some guidance on the topical products that we may have paused due to remediation efforts and when they may.
When they start generating revenue again.
Once we finish the remediation on those products that we pause they will be reintroduced into the market. They don't require any sort of a.
FDA clearance.
We paused them voluntarily.
To remediate the quality issues, we may have spotted or the quality concerns. We may we may have spotted.
But once we've.
Fully remediated those to our satisfaction.
The re introducing those products right back into the market. Therefore, the revenue would start picking up again from those plus product.
That's very helpful. Thank you.
Thanks.
We have no further questions at this time I would like to turn the floor back over to Tim Sawyer for closing comments.
Thank you Devin.
Listen Thank you all for joining US today, we appreciate your time and we appreciate your continued support and I wish you a great day. Thank you bye bye.
This does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.