K-V Pharmaceutical Company Announces Completion of U.S. Food and Drug Administration Inspection and Approval to Return its First Product to Market
ST. LOUIS, Mo., Sept. 10 /PRNewswire-FirstCall/ -- K-V Pharmaceutical Company (NYSE: KVa/KVb) announced today that it has received notice from the U.S. Food and Drug Administration ("FDA") of the successful completion of an inspection of the Company's facilities and approval to return its first product to market. Under the Company's Consent Decree, successful FDA inspections of the Company's quality systems, processes and facilities are expected to be required before K-V is permitted to resume manufacturing and shipment of particular products. During the week of August 16, 2010, the FDA undertook an inspection of the Company's quality systems, manufacturing processes and facilities focusing on the first product dosage form for reintroduction by the Company into the marketplace. The inspection was successfully completed.
The Company received notification from the FDA on September 8, 2010 of approval to ship into the marketplace the first product approved under the consent decree, i.e. Potassium Chloride. The Company expects that initial shipments of its Micro-K®10mEq and Micro-K® 8mEq will begin the week of September 13, 2010. The FDA is expected to conduct additional inspections with respect to other Company products before deciding whether other products may be manufactured and marketed.
Greg Divis, President of Ther-Rx Corporation and Interim President and Chief Executive Officer of K-V Pharmaceutical Company, stated, "Today marks a significant milestone in our efforts to restore business operations at K-V. The successful FDA inspection of our facilities and approval of our return to market demonstrates our hard work and commitment to meeting and sustaining current Good Manufacturing Practices ("cGMP") requirements. We are committed to continuing to move K-V through further successful inspections and to obtain additional product approvals from the FDA."
About K-V Pharmaceutical Company
K-V Pharmaceutical Company is a fully-integrated specialty pharmaceutical company that develops, manufactures, markets and acquires technology-distinguished branded prescription products. The Company markets its technology-distinguished products through Ther-Rx Corporation, its branded drug subsidiary.
For further information about K-V Pharmaceutical Company, please visit the Company's website at www.kvpharmaceutical.com.
Safe Harbor Statement
The information in this release may contain various forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 ("PSLRA") and which may be based on or include assumptions concerning the Company's operations, future results and prospects. Such statements may be identified by the use of words like "plans," "expects," "aim," "believe," "projects," "anticipates," "commit," "intend," "estimate," "will," "should," "could," and other expressions that indicate future events and trends.
All statements that address expectations or projections about the future, and the Company's strategy for growth, product development, product launches, regulatory approvals, market position, acquisitions, revenues, expenditures and other financial results, are forward-looking statements. All forward-looking statements are based on current expectations and are subject to risk and uncertainties. In connection with the "safe harbor" provisions, the Company provides the following cautionary statements identifying important economic, political and technology factors, which among others, could cause actual results or events to differ materially from those set forth or implied by the forward-looking statements and related assumptions. Such factors include (but are not limited to) the following:
the ability to continue as a going concern;
difficulties and uncertainties with respect to obtaining additional
capital, as more fully described in Part I, Item 2 –
"Management's Discussion and Analysis of Financial Condition and
Results of Operations – Liquidity and Capital Resources" in
the Quarterly Report on Form 10-Q for the quarter ended December
31, 2009 (the third quarter of the Company's fiscal year ended
March 31, 2010 (the "Form 10-Q"));
the decisions the Company makes in order to maintain and increase
our limited cash and financial resources may result in significant
charges for impairment of inventory, property and equipment and
intangible and other long-lived assets;
based on our cash balance and estimates of our operating
expenditures, our existing cash and financial resources will not be
sufficient to fund our operations beyond the quarter ending
September 30, 2010, unless we are able to raise additional capital
by selling assets or through external financing;
the consent decree between the Company and the FDA and the
Company's suspension of the production and shipment of all of the
products that it manufactures (other than the Potassium Chloride
Micro-K® 10mEq and Micro-K® 8mEq products that are the
subject of the just-received FDA letter) and the related nationwide
recall affecting all of the other products that it manufactures, as
well as the related material adverse effect on its revenue, assets
and liquidity and capital resources, as more fully described in
Part I, Item 2 – "Management's Discussion and Analysis of
Financial Condition and Results of Operations – Background
– Discontinuation of Manufacturing and Distribution; Product
Recalls; and the FDA Consent Decree" in the Form 10-Q;
the possibility of further reducing the Company's operations,
including further reductions of its employee base and significantly
curtailing some or all of its efforts to meet the consent decree's
requirements and return its approved products to market in order to
maintain and attempt to increase its limited cash and financial
resources, and related costs and accounting charges from taking
such actions;
the plea agreement between the Company and the U.S. Department of
Justice and the Company's obligations therewith, as well as the
related material adverse effect, if any, on its revenue, assets and
liquidity and capital resources, as more fully described in Note 20
– "Subsequent Events" of the Notes to the Consolidated
Financial Statements in the Form 10-Q;
changes in the current and future business environment, including
interest rates and capital and consumer spending;
the difficulty of predicting FDA approvals, including timing, and
that any period of exclusivity may not be realized;
the possibility of not obtaining FDA approvals or delay in
obtaining FDA approvals, including with respect to Gestiva™,
as well as the number of preterm births for which Gestiva™
may be prescribed, its safety profile and side effects
profile;
acceptance of and demand for the Company's new pharmaceutical
products or current products upon their return to the
marketplace;
the introduction and impact of competitive products and pricing,
including as a result of so-called authorized generic drugs;
new product development and launch, including the possibility that
any product launch may be delayed;
reliance on key strategic acquisitions;
the availability of raw materials and/or products manufactured for
the Company under contract manufacturing agreements with third
parties;
the regulatory environment, including regulatory agency and
judicial actions and changes in applicable laws or
regulations;
fluctuations in revenues;
the difficulty of predicting international regulatory approvals,
including timing;
the difficulty of predicting the pattern of inventory movements by
the Company's customers;
the impact of competitive response to the Company's sales,
marketing and strategic efforts, including introduction or
potential introduction of generic or competing products against
products sold by the Company and its subsidiaries;
risks that the Company may not ultimately prevail in litigation,
including product liability lawsuits and challenges to its
intellectual property rights by actual or potential competitors or
to its ability to market generic products due to brand company
patents and challenges to other companies' introduction or
potential introduction of generic or competing products by third
parties against products sold by the Company or its subsidiaries
including without limitation the litigation and claims referred to
in Note 18 – "Commitments and Contingencies" of the Notes to
the Consolidated Financial Statements in the Form 10-Q, and that
any adverse judgments or settlements of such litigation, including
product liability lawsuits, may be material to the Company;
the possibility that our current estimates of the financial effect
of certain announced product recalls could prove to be
incorrect;
whether any product recalls or product introductions result in
litigation, agency action or material damages;
failure to supply claims by certain of the Company's customers,
including CVS Pharmacy, Inc., that, despite the formal
discontinuation action by the Company of its products, the Company
should compensate such customers for any additional costs they
allegedly incurred for procuring products the Company did not
supply;
the satisfaction or waiver of the terms and conditions for the
acquisition of the full U.S. and worldwide rights to Gestiva™
set forth in the previously disclosed Gestiva™ acquisition
agreement, as amended;
the series of putative class action lawsuits alleging violations of
the federal securities laws by the Company and certain individuals,
as more fully described in Note 18 – "Commitments and
Contingencies – Litigation and Governmental Inquiries" of the
Notes to the Consolidated Financial Statements in the Form
10-Q;
the possibility that insurance proceeds are insufficient to cover
potential losses that may arise from litigation, including with
respect to product liability, failure to supply or securities
litigation;
the informal inquiry initiated by the SEC and any related or
additional government investigation or enforcement proceedings as
more fully described in Note 18 – "Commitments and
Contingencies – Litigation and Government Inquiries, of the
Notes to the Consolidated Financial Statements" in the Form
10-Q;
the possibility that the pending investigation by the Office of
Inspector General of the Department of Health and Human Services
into potential false claims under the Title 42 of the U.S. Code as
more fully described in Note 18 – "Commitments and
Contingencies – Litigation and Government Inquiries" of the
Notes to the Consolidated Financial Statements in the Form 10-Q
could result in significant civil fines or penalties, including
exclusion from participation in federal healthcare programs such as
Medicare and Medicaid;
delays in returning, or failure to return, certain or many of the
Company's approved products to the market, including loss of market
share as a result of the suspension of shipments, and related
costs;
the ability to sell or license certain assets, and the terms of
such transactions;
the possibility that default on one type or class of the Company's
indebtedness could result in cross default under, and the
acceleration of, its other indebtedness;
the risks that present or future changes in the Board of Directors
or management may lead to an acceleration of the Company's bonds or
to adverse actions by government agencies or our auditors;
if a director of our company, or a shareholder with an ownership
interest in our company of 5% or more, is excluded from
participating in federal or state health care programs, then HHS
may use its discretionary authority to also exclude our company
from participation in federal healthcare programs;
the risk that even though the price and 30-day average price of the
Company's Class A common stock and Class B common stock have
recently again begun satisfying the quantitative listing standards
of the New York Stock Exchange, including with respect to minimum
share price and public float, the Company can provide no assurance
that they will remain at such levels thereafter;
the risk that BDO will be unable to complete the audit of the
Company's financial statements to be included in its annual report
for its fiscal year ended March 31, 2010 on a timely basis which
would impact the Company's compliance with New York Stock Exchange
listing standards, and the Securities Exchange Act of 1934, as
amended;
the risk that BDO will be unable to complete on a timely basis the
review of the Company's financial statements to be included in its
fiscal 2011 Form 10-Q's; and
the risks detailed from time-to-time in the Company's filings with
the SEC.
This discussion is not exhaustive, but is designed to highlight
important factors that may impact the Company's forward-looking
statements.
Because the factors referred to above, as well as the statements included elsewhere in this press release, could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by the company or on the Company's behalf, you should not place undue reliance on any forward-looking statements. All forward-looking statements attributable to the Company are expressly qualified in their entirety by the cautionary statements in this "Cautionary Note Regarding Forward-Looking Statements" and the risk factors that are included under Part I, Item 1A – "Risks Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2009 and referred to in Part II, Item 1A – "Risk Factors" in the Form 10-Q, as supplemented by the Company's subsequent SEC filings.
Further, any forward-looking statement speaks only as of the date on which it is made and the Company is under no obligation to update any of the forward-looking statements after the date of this press release. New factors emerge from time-to-time, and it is not possible for the Company to predict which factors will arise, when they will arise and/or their effects. In addition, the Company cannot assess the impact of each factor on its future business or financial condition or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
SOURCE K-V Pharmaceutical Company
Posted: September 2010
