ST. LOUIS, Aug. 4, 2012 /PRNewswire/ -- K-V
Pharmaceutical Company (NYSE: KVa/ KVb) ("K-V" or "the Company")
and certain of its domestic subsidiaries today filed voluntary
Chapter 11 petitions under the U.S. Bankruptcy Code in the United States Bankruptcy Court for the
Southern District of New York,
seeking the protection of Chapter 11 while it seeks to restructure
its financial obligations.
The Company intends to continue to operate during the
reorganization, subject to the supervision and orders of the
Bankruptcy Court and in accordance with applicable provisions of
the Bankruptcy Code, paying employees and vendors in the normal
course of business for goods and services provided postfiling, and
providing its women's health care products without interruption to
meet the needs of the healthcare providers and patients it
serves.
"K-V came to this decision to seek the protection of Chapter 11
reluctantly, after exploring a full range of options," said
Greg Divis, President and CEO of K-V
Pharmaceutical. "Prior to filing our petitions, our Company has
worked tirelessly to address significant financial obligations,
stemming from legacy regulatory and legal issues. The Company has
been unable to realize the full value of its most important
product, Makena® (hydroxyprogesterone caproate injection), because
of a lack of enforcement of the orphan drug marketing exclusivity
granted to K-V for Makena® by the Food and Drug Administration
(FDA). The lack of enforcement has also led certain state Medicaid
agencies to impose barriers to access to Makena® on low-income
pregnant women at high risk for recurrent preterm birth, despite
those states' legal obligation to cover FDA-approved drugs.
The Chapter 11 filing is intended to provide K-V with the
time needed to continue to conduct our business and restructure our
financial obligations as we continue our efforts to ensure that all
clinically-indicated patients have access to Makena®. It is
our intention to emerge from this restructuring as a stable and
competitive company, able to continue to provide quality products
to support the health of women across the stages of their
lives."
Further Background to K-V's Chapter 11 Petition
The Company reported in its filing papers that restrictions
on reimbursement imposed by a number of State Medicaid agencies, as
well as significant restrictions on manufacturing and marketing of
other K-V products imposed by a previous FDA Consent Decree agreed
to by the Company in March 2009 have
also had a major negative impact on its revenues and ability to
meet short and long-term obligations.
These obligations include a milestone payment under the terms of
the Company's agreement with Hologic Inc. pursuant to which the
Company purchased all rights to Makena®. The Company was
unsuccessful prior to the filing in obtaining a renegotiation of
the milestone payments owed to Hologic on terms that were
acceptable to the Company. As a result, the Company was
forced to file these Chapter 11 cases. The Company has enough
cash on hand to operate its business in the near term and intends
to seek new financing and use of cash collateral to provide
additional time to enable the Company to continue operations, as it
takes additional steps to restructure its financial
obligations.
The Company has also been actively managing a number of legacy
liabilities, most notably the impact of the consent decree formed
with the FDA in March 2009, the
penalties associated with its settlement with the U.S. Department
of Justice in December 2011 related
to the Company's former ETHEX generic pharmaceutical subsidiary,
and other ongoing securities and other litigation matters.
Subject to the approval of the Bankruptcy Court, K-V has
retained the services of Willkie
Farr & Gallagher LLP as bankruptcy counsel, Williams
& Connolly LLP as special litigation counsel, and SNR Denton as
special litigation counsel. In addition, K-V has retained Jefferies
& Co., Inc. as financial advisor and investment
banker.
About K-V Pharmaceutical Company
K-V Pharmaceutical Company is a specialty branded
pharmaceutical company with a primary focus in the area of women's
healthcare. As such, we are committed to advancing the health of
women across all the stages of their lives.
For further information about K-V Pharmaceutical Company, please
visit the Company's corporate Website at
www.kvpharmaceutical.com.
Cautionary Note Regarding Forward-looking Statements
This release contains various forward-looking statements
within the meaning of the United States Private Securities
Litigation Reform Act of 1995 (the "PSLRA") and which may be based
on or include assumptions concerning our operations, future results
and prospects. Such statements may be identified by the use of
words like "plan," "expect," "aim," "believe," "project,"
"anticipate," "commit," "intend," "estimate," "will," "should,"
"could," "potential" and other expressions that indicate future
events and trends.
All statements that address expectations or projections about
the future, including, without limitation, statements about product
launches, governmental and regulatory actions and proceedings,
market position, revenues, expenditures and the impact of the
recall and suspension of shipments on revenues, adjustments to the
financial statements, the filing of amended SEC filings 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
PSLRA's "safe harbor" provisions, we provide the following
cautionary statements identifying important economic, competitive,
political, regulatory and technological factors, among others, that
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):
(1) the ability of the Company and its subsidiaries to continue as
a going concern; (2) the ability of the Company and its
subsidiaries to obtain Bankruptcy Court approval with respect to
motions in the Chapter 11 cases; (3) the ability of the Company and
its subsidiaries to prosecute, develop and consummate one or more
plans of reorganization with respect to the Chapter 11 cases; (4)
the effects of the bankruptcy filing on the Company and its
subsidiaries and the interests of various creditors, equity holders
and other constituents; (5) the effects of rulings of the
Bankruptcy Court in the Chapter 11 cases and the outcome of the
cases in general; (6) the length of time the Company and its
subsidiaries will operate under the Chapter 11 cases; (7) risks
associated with third-party motions in the Chapter 11 cases, which
may interfere with the ability of the Company and its subsidiaries
to develop one or more plans of reorganization and consummate such
plans once they are developed; (8) the potential adverse effects of
the Chapter 11 proceedings on the Company's liquidity or results of
operations; (9) the ability to execute the Company's business and
restructuring plans; (10) increased legal costs related to the
Company's bankruptcy filing and other litigation; (11) the ability
to continue listing of its Class A Common Stock and Class B Common
Stock on the New York Stock Exchange; and (12) the ability of the
Company and its subsidiaries to maintain contracts that are
critical to their operation, including to obtain and maintain
normal terms with their vendors, customers and service providers
and to retain key executives, managers and employees.
This discussion is not exhaustive, but is designed to highlight
important factors that may impact our forward-looking
statements.
Because the factors referred to above, as well as the statements
included in Part I, Item 1A—"Risk Factors," of our Annual Report on
Form 10-K for the fiscal year ended March
31, 2012 and under the heading "Risk Factors" in our
Registration Statement on Form S-1 filed with the Securities and
Exchange Commission on July 31, 2012,
could cause actual results or outcomes to differ materially from
those expressed in any forward-looking statements made by us or on
our behalf, you should not place undue reliance on any
forward-looking statements. All forward-looking statements
attributable to us 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 of the our Annual Report on Form 10-K for the
fiscal year ended March 31, 2012 and
under the heading "Risk Factors" in our Registration Statement on
Form S-1 filed with the Securities and Exchange Commission on
July 31, 2012. Further, any
forward-looking statement speaks only as of the date on which it is
made and we are under no obligation to update any of the
forward-looking statements after the date of this release. New
factors emerge from time to time, and it is not possible for us to
predict which factors will arise, when they will arise and/or their
effects. In addition, we cannot assess the impact of each factor on
our 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.
Contact Information:
Brainerd Communicators, Inc.
Tony Herrling
212-739-6738
herrling@braincomm.com
Brad Edwards
212-739-6724
edwards@braincomm.com
SOURCE K-V Pharmaceutical Company