K-V Pharmaceutical Company (NYSE:KV-A) is the only specialty pharmaceutical company that competes in the branded, generic/non-branded, and value-added, specialty ingredient market. KV had revenue of $602 million for fiscal 2008 with their three wholly owned subsidiaries Ther-Rx Corporation, ETHEX Corporation, and Particle Dynamics, Inc.
According to a report from American City Business Journals issued on Friday 09/04/09, KV Pharmaceutical Co.’s chief financial officer, Ronald Kanterman, stepped down Wednesday.
Kanterman will continue to serve as a member of the board of directors.
KV did not give a reason for the change.
Thomas McHugh, vice president of finance and corporate controller, was named interim CFO.
The company said it formed a search committee led by Interim President and Chief Executive David Van Vliet to find a permanent replacement.
On Wednesday, KV said it hadbegun rehiringemployees to produce test batches of drugs as the company works to regain compliance with the FDA.
The U.S. Food and Drug Administration also said it gave initial approval to KV’s plan to regain compliance.
Late last year they suffered a blow by the the FDA and where required to stop production on a majority of their production. Last years September crash could not hurt KV/A stock but the FDA did.This was a stock that was trading in the late teens and twenties at the time and then they suffered a blow. The FDA after giving them warnings halted some production for oversized tablets.The company suspended shipments as it voluntarily recalled a production lot of the narcotic painkiller hydromorphone because an oversized tablet was reported.
Over the year K-V has been working to rectify that situation and its plan to address the problems was accepted by the FDA recently according to their 8-K filing on Sept 2 , 2009. The past year they have fired and re-hired a majority of the corporate positions. They recently have been filling positions for factory workers. They expect to start production and shipping on certain drugs later this year.
The filing also talks about the Gestiva Asset Purchase Agreement.
A Summary from the the 8-K filing
FDA Approval of Work Plan
As previously disclosed, on March 2, 2009, K-V Pharmaceutical Company (the "Company") entered into a consent decree with the U.S. Food and Drug Administration (the "FDA") regarding the Company's drug manufacturing and distribution, which was entered by the U.S. District Court, Eastern District of Missouri, Eastern Division on March 6, 2009. The consent decree provides a series of measures that, when satisfied, will permit the Company to resume the manufacture and distribution of approved drug products marketed by its subsidiaries, ETHEX Corporation and Ther-Rx Corporation. As part of such measures set forth in the consent decree, the Company is required to provide, and has provided, to the FDA a work plan (the "Work Plan") for approval, which sets forth the steps the Company has taken and will subsequently take to address previously identified deficiencies in the Company's compliance with current good manufacturing practice ("cGMP") regulations.
On July 27, 2009, a representative of the Compliance Branch of the FDA's Kansas City District, acting in conjunction with the Office of Compliance of the FDA's Center for Drug Evaluation and Research (CDER), notified the Company by electronic mail that the FDA had completed its review of the Work Plan. Subject to the addition of certain changes, to which the Company has agreed and has now incorporated into it, the FDA has accepted the Work Plan. While acceptance of the Work Plan was pending, the Company, with the knowledge of the FDA, had already begun implementing certain measures set forth therein. The consent decree requires the Company, before resuming manufacturing, to retain an independent cGMP expert to undertake a review of the Company's facilities, policies, procedures and practices and to certify compliance with the FDA's cGMP regulations. Based on the Company's current schedule and progress to date, the Company anticipates it will request Lachman Consultants ("Lachman"), the Company's independent cGMP expert, to conduct its certification review later this calendar year. Upon Lachman's certification, if any, to the FDA that the Company is in compliance with cGMP regulations, the FDA will re-inspect the Company's facilities and determine whether the Company's facilities are in compliance. A successful FDA inspection is a prerequisite to the Company resuming shipment of its products.
As previously disclosed, the Company currently does not expect to resume product shipments before the third quarter of the Company's fiscal year 2010 (which is the fourth quarter of calendar year 2009) at the earliest. In addition, the Company expects that any resumption of shipments will be limited initially to certain selected products and will be expanded incrementally thereafter. In preparation for the resumption of commercial production, the Company has begun rehiring certain employees to accommodate the production of verification batches of certain products. Such production is taking place with the FDA's knowledge, under the oversight of Lachman and as part of the Company's continued enhancement of its manufacturing processes and regulatory compliance, but not for commercial distribution.
Gestiva Asset Purchase Agreement
As previously disclosed, the Company entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") dated as of January 16, 2008, by and among the Company, Cytyc Prenatal Products, Corp. and Hologic, Inc. (Cytyc Prenatal Products, Corp. and Hologic, Inc. are referred to in this report collectively as the "Seller") to acquire the U.S. and worldwide rights to Gestiva (17-alpha hydroxyprogesterone caproate) upon approval of the pending New Drug Application for Gestiva (the "Gestiva NDA") under review by the FDA. A copy of the Asset Purchase Agreement was filed as Exhibit 10(ii) to the Company's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the "SEC") on June 26, 2008 and is incorporated herein in its entirety by reference thereto as Exhibit 10.1.
Under the terms of the Asset Purchase Agreement, the Company agreed to pay $82 million for the U.S. and worldwide rights to Gestiva. In accordance with the Asset Purchase Agreement, the Company made a $7.5 million cash payment on February 20, 2008, the initial closing date, and a $2 million cash payment in May 2008 when the Seller received an acknowledgement from the FDA that the Seller's response to the FDA's October 20, 2006 "approvable" letter was sufficient for the FDA to proceed with its review of the Gestiva NDA. The remaining purchase price of $72.5 million is payable on the transfer date (the "Transfer Date"), which is the date on which the U.S. and worldwide rights to Gestiva are transferred and sold to the Company.
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