NEW YORK (AP) — K-V Pharmaceutical Co. has filed filing for Chapter 11 bankruptcy protection as it deals with weak sales, a payment related to its costly preterm birth drug Makena, and sanctions related to past manufacturing problems.
The St. Louis company's shares have been suspended from the New York Stock Exchange. K-V said Monday that it will not fight the suspension and its shares will trade over-the-counter. Class A shares of K-V last traded at 32 cents.
K-V filed for bankruptcy protection in New York on Saturday so it could restructure its financial obligations. The company said it will continue to operate.
K-V said it has been unable to realize the value of Makena and still owes a milestone payment to Hologic Inc., which developed the drug. It has not been able to renegotiate that payment. K-V said restrictions related to 2008 and 2009 manufacturing problems are also hurting its business.
Makena is intended to prevent preterm birth in women who've already had one premature birth and now are pregnant again. The drug is a synthetic version of the hormone progesterone. Makena was approved in February 2011 and costs $690 per weekly injection. That price has been a source of controversy even after K-V lowered the cost from $1,500 per injection and announced a patient assistance program designed to help uninsured and low-income women get the drug at little or no cost.
Specialty pharmacies can make a generic version of progesterone that costs $10 to $20 a dose, which has hurt K-V's sales. After approving Makena, the FDA said it would not stop specialty pharmacies from making the generic version. K-V announced the price cut after the FDA's made that decision, and it has complained the FDA is not enforcing the marketing exclusivity that was awarded to Makena.
When a product has marketing exclusivity, competing versions are barred from the market for up to seven years. K-V has said the quality of Makena is more consistent than versions compounded by pharmacies.
The FDA told K-V to stop making some time-release drugs in 2008, but K-V did not comply. The FDA later seized millions of dollars' worth of K-V products. The company stopped all manufacturing and shipping in January 2009 after a series of product recalls. In February 2010 K-V pleaded guilty to charges it failed to inform regulators about manufacturing problems that caused some of its pills to be too large, increasing the risk of accidental overdoses. It agreed to pay $27.6 million to settle government investigations.
K-V also closed its Ethex generic-drug business. It later created a new generic unit but sold the division in 2011.