ST. LOUIS, July 2, 2012 /PRNewswire/ -- K-V
Pharmaceutical Company (the "Company") (NYSE: KV.A/KV.B)
today addressed the additional guidance provided by the U.S. Food
and Drug Administration (FDA), which issued a Questions and Answers
document on June 29 to clarify its
June 15, 2012 statement on compounded
versions of hydroxyprogesterone caproate (the active ingredient in
Makena®). FDA provides further guidance to healthcare
providers and pregnant women at high risk for recurrent preterm
birth, recommending the use of FDA-approved Makena® rather than
compounded drug formulations of hydroxyprogesterone caproate.
The agency also describes its enforcement policy towards compounded
formulations of hydroxyprogesterone caproate. Makena® is the
only FDA-approved medication indicated to reduce the risk of
preterm birth in women with a singleton pregnancy who have a
history of singleton spontaneous preterm birth.
FDA's June 29, 2012 Q&A can be
found here:
http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm310215.htm
FDA's Questions and Answers document recommends that healthcare
providers prescribe FDA-approved Makena® first-line for clinically
indicated patients and provides guidance on how patients can know
if they are receiving Makena®. FDA states, in part:
- "If there is an FDA-approved drug that is medically appropriate
for a patient, the FDA-approved product should be prescribed and
used."
- "Makena® was approved based on an affirmative showing of safety
and efficacy. The company also demonstrated the ability to
manufacture a quality product. The pre-market review process
included a review of the company's manufacturing information, such
as the source of the API used in the manufacturing of the drug,
proposed manufacturing processes, and the firm's adherence to
current good manufacturing practice."
- "Compounded drugs do not undergo the same premarket review and
thus lack an FDA finding of safety and efficacy and lack an FDA
finding of manufacturing quality."
"It is important for healthcare providers to take the time to
read and understand FDA's Questions and Answers document issued on
June 29, and counsel patients
accordingly," said Douglas Laube,
M.D., M.Ed., Professor, Department of Obstetrics and Gynecology,
University of Wisconsin Medical School,
and Former President, ACOG. "I encourage the medical
community to help resolve issues in disparity of care that may have
resulted from confusion about the differences between FDA-approved
and compounded products, and work together towards addressing the
issue of prematurity in the United
States."
FDA also describes its enforcement policy towards compounded
formulations of hydroxyprogesterone caproate. FDA states:
- "The compounding of any drug, including hydroxyprogesterone
caproate, should not exceed the scope of traditional pharmacy
compounding ... The FDA does not consider compounding large
volumes of copies, or what are essentially copies, of any approved
commercially-available drug to fall within the scope of traditional
pharmacy practice."
- "The FDA's June 15, 2012
statement should not be interpreted to mean that the FDA will take
enforcement action only if the agency identifies a particular
safety problem."
- "The FDA may take enforcement action against pharmacies that
compound large volumes of drugs that are essentially copies of
commercially available products and for which there does not appear
to be a medical need for individual patients to whom the drug is
dispensed."
Tens of thousands of pregnant women at high risk for recurrent
preterm birth are being denied FDA-approved Makena® by certain
payers whose coverage policies cite outdated March 2011 statements from FDA and the Center for
Medicare and Medicaid Services (CMS). As a result of these
unreasonable coverage policies, in certain states, Medicaid
participants, in particular, have been denied access to the only
FDA-approved medication for their condition - despite the clinical
judgment made by many healthcare providers that FDA-approved
Makena® is the appropriate choice for their patients, and despite
FDA's repeated statements that Makena® offers greater assurance of
safety and effectiveness than compounded 17P
formulations.
Low-income pregnant women are known to be at higher risk for
premature birth. Policies imposed by certain state Medicaid
agencies force a pregnant woman at high risk for recurrent preterm
birth to "try and fail" or be "unable to tolerate" compounded 17P
formulations before the state will approve Makena® for her; others
require that she and her physician must demonstrate "medical
necessity" for Makena® instead of compounded formulations.
These coverage policies disregard guidance issued by FDA and CMS,
including the most recent statements. Notably, some states
with such policies in place also have prematurity rates above the
national average of 12.2 percent - an outcome with heartbreaking
results for families and the potential for high life-long medical
costs, a significant portion of which will likely be borne by
Medicaid.
"Babies born early put a very large financial strain on our
healthcare delivery system, and many of these children have
persistent developmental delay or lifelong disability. The
patient population for Makena® is known to be at particularly high
risk for having repeat preterm births," said Casey Younkin, MD, Associate Professor, Division
of General OB/GYN, Southern Illinois
University School of Medicine. "Potency and purity can
vary in compounded formulations. I want to ensure that all of
my patients, regardless of their socioeconomic status, have access
to FDA-approved Makena®. It is important for State Medicaid
programs - including my home state of Illinois - to examine their coverage policies
to ensure they are in alignment with both FDA's guidance and
evidence-based protocols. No other form of progesterone has
been determined by FDA to be effective in this patient
population."
As part of its commitment to patients and healthcare providers,
the Company has made substantial efforts to work with payers to
facilitate insurance coverage of Makena®. The Company's
significantly reduced pricing to both commercial and Medicaid
payers make the cost of a full course of therapy a fraction of the
average cost of a preterm birth. Further, patient co-pays are
averaging approximately $8 per
injection (often less than the cost to patients for compounded drug
formulations). The Company provides Makena® at no out-of-pocket
cost to clinically-indicated uninsured women through its financial
assistance programs.
KV President and CEO Greg Divis
commented, "FDA's further guidance issued on June 29 underscores the need for payers who have
made access to Makena difficult to promptly remove roadblocks that
have prevented patients from receiving the only FDA-approved drug
for their condition. Changing their coverage policies is in
the best interests of pregnant women."
About Makena® (hydroxyprogesterone caproate injection)
Makena is a progestin indicated to reduce the risk of
preterm birth in women with a singleton pregnancy who have a
history of singleton spontaneous preterm birth. The effectiveness
of Makena is based on improvement in the proportion of women who
delivered 2% of subjects and at a higher rate in the Makena group
than in the control group were injection site reactions (pain [35%
vs. 33%], swelling [17% vs. 8%], pruritus [6% vs. 3%], and nodule
[5% vs. 2%]), urticaria (12% vs. 11%), pruritus (8% vs. 6%), nausea
(6% vs. 5%), and diarrhea (2% vs. 1%)
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)
the following:
(1)
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our
ability to continue as a going concern;
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(2)
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the risk
that the Company may be insolvent in the near term, if it is not
able to generate sufficient liquidity to satisfy its upcoming
payment obligations including $95.0 million of milestone payments
owed to Hologic beginning August 4, 2012 and a $13.5 million
interest payment owed on its senior secured notes due on September
15, 2012;
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(3)
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the risk
that, if necessary, the Company will be unsuccessful in attempts to
restructure its existing capital structure and
operations;
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(4)
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risks
associated with the introduction and growth strategy related to the
Company's Makena® product, including:
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(a)
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the impact
of competitive, commercial payor, governmental (including Medicaid
program), physician, patient, public or political responses and
reactions, and responses and reactions by medical professional
associations and advocacy groups, on the Company's sales,
marketing, product pricing, product access and strategic
efforts;
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(b)
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the
possibility that the benefit of any period of exclusivity resulting
from the designation of Makena® as an orphan drug may
not be realized as a result of U.S. Food and Drug Administration's
(the "FDA") decision announced on March 30, 2011 to decline to take
enforcement action with regards to compounded alternatives, as
updated on June 15, 2012;
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(c)
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the Center
for Medicare and Medicaid Services' ("CMS") prior policy regarding
Medicaid reimbursement for Makena®, as updated on June
15, 2012, and the resulting coverage decisions for
Makena® by various state Medicaid and commercial
payors;
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(d)
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the
statements made on June 15, 2012 by FDA and CMS may not lead to
state Medicaid and other payers making Makena® easily
accessible to patients, that unreasonable policies and conditions
may continue to be imposed and compounding of hydroxyprogesterone
caproate could continue to exceed the scope of traditional pharmacy
compounding;
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(e)
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the
satisfaction or waiver of the terms and conditions for our
continued ownership of the full U.S. and worldwide rights to
Makena® set forth in the previously disclosed
Makena® acquisition agreement;
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(f)
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the number
of preterm birth risk pregnancies for which Makena® may
be prescribed, its safety and side effects profiles and acceptance
of pricing;
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(g)
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the risk
that, if needed, future modifications or amendments to the
agreement with Cytyc Prenatal Products Corp. and Hologic, Inc.
(Cytyc Prenatal Products Corp. and Hologic, Inc. are referred to
collectively as "Hologic") may be unsuccessful; and
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(h)
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our
ability to generate sufficient capital to satisfy the $95.0 million
of remaining milestone payments to Hologic related to the purchase
of Makena®, which are due beginning August 4,
2012;
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(5)
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the
possibility of further delay or inability to obtain FDA approvals
to relaunch Clindesse® and Gynazole-1® and
the possibility that any other product relaunch may be delayed or
unsuccessful;
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(6)
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risks
related to compliance with various agreements and settlements with
governmental entities including, including:
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(a)
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the
consent decree between the Company and the FDA and the Company's
suspension in 2008 and 2009 of the production and shipment and the
nationwide recall of all of the products that it formerly
manufactured, as well as the related material adverse effect on our
revenue, assets, liquidity and capital resources;
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(b)
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the
agreement between the Company and the Office of Inspector General
of the U.S. Department of Health and Human Services ("HHS OIG") to
resolve the risk of potential exclusion of the Company from
participation in federal health care programs;
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(c)
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our
ability to comply with the plea agreement between a now-dissolved
subsidiary of the Company and the U.S. Department of Justice,
including the remaining payments owed under the plea agreement;
and
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(d)
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our
ability to comply with the Settlement Agreement dated December 6,
2011 with the Department of Justice, the United States Attorney's
Office for the District of Massachusetts, the Office of Inspector
General of the Department of Health and Human Services and the
TRICARE Management Activity (collectively the "Parties") resolving
certain claims under the qui tam provisions of the False Claims
Act, including the remaining payments owed under the Settlement
Agreement, which could result in significant penalties including
exclusion from participation in federal health care
programs;
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(7)
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the
availability of raw materials and/or products manufactured for the
Company under contract manufacturing agreements with third
parties;
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(8)
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risks that
the Company may not ultimately prevail in, or that insurance
proceeds, if any, will be insufficient to cover potential losses
that may arise from:
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(a)
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the series
of putative class action lawsuits alleging violations of the
federal securities laws by the Company and certain
individuals;
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(b)
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product
liability lawsuits, including the possibility that our current
estimates of the financial effects of ongoing product liability
claims and lawsuits could prove to be incorrect;
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(c)
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lawsuits
pertaining to indemnification and employment agreement obligations
involving the Company and its former Chief Executive Officer;
and
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(d)
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challenges
to our intellectual property rights by actual or potential
competitors and challenges to other companies' introduction or
potential introduction of generic or competing products by third
parties against products sold by the Company;
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(9)
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the
possibility that our current estimates of the financial effect of
previously announced product recalls could prove to be
incorrect;
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(10)
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risks
related to the Company's highly leveraged capital structure,
including:
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(a)
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the risk
that the maturities of our debt obligations may be accelerated due
to our inability to comply with scheduled interest and principal
payments, covenants and restrictions contained in our loan
agreements;
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(b)
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restrictions on the ability to increase our revenues
through certain transactions, including the acquisition or
in-licensing of products or relaunch of certain of our
products;
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(c)
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the risk
that, if required, efforts to negotiate amendments to, modification
or restructuring of our existing debt obligations may not be
successful; and
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(d)
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risks that
future changes in the Board of Directors may lead to an
acceleration of the maturities of the Company's debt;
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(11)
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the risk
that we may not be able to again satisfy the quantitative listing
standards of the New York Stock Exchange ("NYSE") with respect
shares of our Class A common stock. On June 26, 2012 we
received a notice from the NYSE that shares of our Class A common
stock fell below the quantitative listing standard to maintain a 30
day average price of greater than $1.00 per share. While the NYSE
does allow a period of time to recover and again meet the
quantitative listing in the future face, we face the risk that the
price per share may not rise to a level to satisfy this
requirement. We face the additional risk that we may not meet
other quantitative listing standards in the future, including with
respect to minimum share price of our Class B shares, public float
and minimum market capitalization; and
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(12)
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the risks
detailed from time to time in the Company's filings with the
Securities and Exchange Commission (the "SEC").
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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 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 Fiscal 2012 Form 10-K. 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.
Media
Contact:
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Ken
Fields
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Fleishman-Hillard
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314-982-0556 (office)
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314-640-2529 (cell)
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ken.fields@fleishman.com
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Investor Relations Contact:
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Brad
Edwards
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Brainerd Communicators, Inc.
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212-986-6667
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edwards@braincomm.com
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SOURCE K-V Pharmaceutical Company