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KV Pharmaceutical is also recalling a single production lot ofHydromorphone HCl 2 mg tablets (Lot 90219, Exp: 3/2010; NDC 58177-0620-04), apain management drug, following the report of an oversized tablet. Additionaldetails on this recall were provided in an ETHEX Corporation press releasealso issued today and will be posted on http://www.kvpharmaceutical.com.
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"We are convinced that holding product shipments is the fastest track toenhancing quality systems. The traditional approach of a methodical, slowertrack was an option, but Terry Hatfield, the new chairman of the KVPharmaceutical board of directors, and I believe that the short-term,financial investment will better improve the quality reputation allstakeholders value," David Van Vliet, newly appointed KV PharmaceuticalInterim CEO, said.
"I want to reassure patients, physicians, pharmacists, and care-giversthat we are committed to providing them with safe and effective products,"said Van Vliet, who was named to the Interim CEO position on Dec. 5. "Thecompany's new leadership team is taking immediate action to identify allpractices and processes that can be enhanced to improve the efficiency andconsistency of the company's manufacturing."
"We will continue to work closely with the FDA as we move forward, givingthese matters our highest priority," Van Vliet said. "We have retainedLachman Consultants, a team of highly experienced experts from industry andgovernment, to help us identify opportunities in the design and implementationof processes that assure sustainable compliance."
At this time, the company is unable to determine when distribution oftablet-form products will resume, or estimate what the financial impact of therecall and suspension will be. While the specific financial impact of theseevents cannot be presently estimated, management believes that the Company'soperating results are likely to be materially adversely affected. The companygenerated net revenues in fiscal 2008 of $159 million from the products thatare the subject of the current product shipment hold. The timing ofre-starting shipments of the affected products will depend on the timerequired to implement the modifications guided by KV's new leadership team andoverseen by Lachman Consultants, keeping the FDA informed about actions taken.At this time, we do not anticipate that all of the manufacturing and qualityassurance issues will be resolved by the end of the current fiscal year.
"KV's leadership team is fully engaged and committed to this effort.These changes are an investment in the future success and growth of thecompany. While this will be a near-term hardship for KV, with reducedrevenues and higher costs, we are committed to acting decisively and to makingnecessary enhancements across our operations. By taking these bold actions,we will emerge far stronger as a company," Van Vliet said.
A full list of products included in the suspension of shipments can beviewed on the Company's website at http://www.kvpharmaceutical.com, where alink can be found on the home page to "Products Effected by ShipmentSuspension".
About KV Pharmaceutical Company
KV Pharmaceutical Company is a fully integrated specialty pharmaceuticalcompany that develops, manufactures, markets, and acquirestechnology-distinguished branded and generic/non-branded prescriptionpharmaceutical products. The company markets its technology distinguishedproducts through ETHEX Corporation, a national leader in pharmaceuticals thatcompete with branded products, and Ther-Rx Corporation, its branded drugsubsidiary.
Safe Harbor
The information in this release may contain various forward-lookingstatements within the meaning of the United States Private SecuritiesLitigation Reform Act of 1995 ("PSLRA") and which may be based on or includeassumptions concerning KV's operations, future results and prospects. Suchstatements may be identified by the use of words like "plans", "expect","aim", "believe", "projects", "anticipates", "commit", "intend", "estimate","will", "should", "could" and other expressions that indicate future eventsand trends.
All statements that address expectations or projections about the future,including without limitation, product development, product launches,regulatory approvals, market position, acquisitions, revenues, expenditures,resumption of distribution of tablet-form products and the impact of therecall and suspension of shipments on revenues, and other financial results,are forward-looking statements.
All forward-looking statements are based on current expectations and aresubject to risk and uncertainties. In connection with the "safe harbor"provisions, KV provides the following cautionary statements identifyingimportant economic, political and technology factors, which among others,could cause actual results or events to differ materially from those set forthor implied by the forward-looking statements and related assumptions.
Such factors include (but are not limited to) the following: (1) changesin the current and future business environment, including interest rates andcapital and consumer spending; (2) the difficulty of predicting FDA approvals,including timing, and that any period of exclusivity may not be realized; (3)acceptance and demand for new pharmaceutical products; (4) the introductionand impact of competitive products and pricing, including as a result ofso-called authorized-generic drugs; (5) new product development and launch,including the possibility that any product launch may be delayed or thatproduct acceptance may be less than anticipated; (6) reliance on key strategicalliances; (7) the availability of raw materials and/or products manufacturedfor the Company under contract manufacturing arrangements with third parties;(8) the regulatory environment, including regulatory agency and judicialactions and changes in applicable law or regulations; (9) fluctuations inrevenues; (10) the difficulty of predicting international regulatory approval,including timing; (11) the difficulty of predicting the pattern of inventorymovements by the Company's customers; (12) the impact of competitive responseto the Company's sales, marketing and strategic efforts, including theintroduction or potential introduction of generic or competing productsagainst products sold by the Company and its subsidiaries; (13) risks that theCompany may not ultimately prevail in litigation, including challenges to ourintellectual property rights by actual or potential competitors or to ourability to market generic products due to brand company patents and challengesto other companies' introduction or potential introduction of generic orcompeting products by third parties against products sold by the Company orits subsidiaries including without limitation the litigation and claimsreferred to in Note 16 of the Notes to the Consolidated Financial Statementsin the Company's Form 10-Q for the quarter ended June 30, 2008; (14) thepossibility that KV's current estimates of the financial effect of certainannounced product recalls could prove to be incorrect; (15) whether anyproduct recalls or product introductions results in litigation, agency actionor material damages; (16) the possibility that the findings of the AuditCommittee inquiry referenced in the Company's Form 10-Q for the quarter endedJune 30, 2008, and Form 12b-25 filed with the SEC on November 13, 2008, couldhave a material impact on the Company's financial results; (17) whether anysuspension of shipments could have a material affect on the Company'sfinancial results; (18) the satisfaction or waiver of the other closingconditions in the previously disclosed Gestiva(TM) acquisition agreement; (19)the possibility that the auction rate securities held by the Company may notreturn to liquidity or at their face value; and (20) the risks detailed fromtime-to-time in the Company's filings with the Securities and ExchangeCommission. This discussion is by no means exhaustive, but is designed tohighlight important factors that may impact the Company's outlook. We areunder no obligation to update any of the forward-looking statements after thedate of this release.
SOURCE KV Pharmaceutical Company
