Teligent: Micro-Cap Specialty Generic

Teligent (NASDAQ: TLGT) currently produces over 70 topical and injectable products across the US and Canada. TLGT was once an exciting high growth generic manufacturer but stumbled in the last few years as they invested to expand their manufacturing capabilities. The company embarked on a strategy to focus on TICO, topical, injectable, complex and ophthalmic generics in 2014 under the premise that there are less competition and greater pricing stability in these niche portions of the generic market. Given the small size of TLGT, these niche markets still provide plenty of room for growth. While the strategy to shift the focus of the company toward TICO and away from the historic lower barrier oral generics was and is sound, in this author’s view, it hasn’t been a smooth ride for shareholders. The combination of high debt and severe pricing pressure in the generic drug industry perhaps combined with poor timing/luck conspired to create a company flirting with bankruptcy.

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