KV Pharmaceutical Co. tumbled the most since March after saying it was “evaluating its liquidity outlook” because of a delay by U.S. regulators to approve the company’s treatment to prevent preterm birth. KV shares fell 45 cents, or 20 percent, to $1.83 at 4 p.m. in New York Stock Exchange composite trading. The Bridgeton, Missouri-based company said in a statement today it plans to release an update when its liquidity evaluation is complete.
KV’s production and shipment of some products remain halted by the FDA because of manufacturing flaws, the company said today. KV said in November that Marc Hermelin resigned as director after becoming the first drug-company owner to be banned, for two decades, from doing business with the U.S. government under a Medicaid anti-fraud push.
The terms of KV’s financing “could have an adverse effect on us if we are not able to refinance it or repay it at maturity on March 20, 2013,” the company said in the statement. Default on the loans could “lead to foreclosure on the company assets acting as collateral for the loan agreement, and adversely affect the company’s ability to operate.”
KV said in December 2008 that its board fired Hermelin as chairman and chief executive officer “for cause.”
The company said in November 2010 that it reached a financing agreement with lenders for as much as $120 million.
The FDA’s evaluation of the company’s treatment to prevent preterm birth, called Gestiva, was delayed until April 13, according to today’s statement. The FDA had previously asked Hologic Inc., which helped develop the drug, for additional materials, which were supplied on Jan. 19, KV said.
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