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Generic drugmaker Teligent approved to tap bankruptcy loan

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REUTERS/Srdjan Zivulovic

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(Reuters) - Teligent Inc on Friday secured court approval to access part of a $12 million loan to fund operations while the generic drugmaker works through its bankruptcy and sale process.

U.S. Bankruptcy Judge Brendan Linehan Shannon in Wilmington, Delaware approved the company to tap $6 million of the financing on an interim basis during the company’s first hearing since filing for Chapter 11 on Thursday. Teligent reported nearly $130 million in debt and blamed its troubles on the combination of manufacturing violations identified by the U.S. Food and Drug Administration and the COVID-19 pandemic.

A final hearing on the full amount of the loan is scheduled for Nov. 9. There were no objections to the financing at Friday’s hearing.

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Teligent, represented by Young Conaway Stargatt & Taylor and K&L Gates, is pursuing a sale process that it expects to conclude at the end of January. Interested parties looking to make lead bids for the company have until Nov. 22 to do so.

The New Jersey-based company makes topical and injectable pharmaceutical products that are used for cosmetics and treatments for dermatological conditions.

In 2019, the FDA identified several violations of manufacturing regulations at Teligent’s Buena, New Jersey facility and required the company to come into compliance. Teligent then conducted a product review and recalled certain products, while halting manufacturing on others.

Those developments hurt the company’s operations and cash flow. Its declining financial position was then exacerbated by the impact of the COVID-19 pandemic in part because dermatological products are often elective.

Teligent’s Canadian affiliate is not involved in the bankruptcy proceedings but is pursuing an out-of-court sale.

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

For first lien lenders: Ted Dillman of Latham & Watkins

Read more:

Generic drugmaker Teligent files for Chapter 11, plans sale

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Reporting by Maria Chutchian

Our Standards: The Thomson Reuters Trust Principles.

Maria Chutchian reports on corporate bankruptcies and restructurings. She can be reached at maria.chutchian@thomsonreuters.com.

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