ST. LOUIS, July 20, 2012 /PRNewswire/ -- K-V
Pharmaceutical Company (NYSE: KVa/ KVb) ("the Company") today
announced that on July 16, 2012 it
was notified by the New York Stock Exchange Regulation, Inc.,
("NYSE") that it is below listing standard criteria due to the
Company's average market capitalization being less than
$50 million over a 30-day trading
period and its stockholder's equity being less than $50 million. Per NYSE regulations, K-V intends to
submit a plan to the NYSE within 45 days of receipt of the
notification to demonstrate its ability to achieve compliance with
these continued listing standards within 18 months of receipt of
the notice.
In addition, the Company was notified by the NYSE that its Class
B common shares are below criteria for the average closing price of
a security of less than $1.00 over a
consecutive 30-day trading period. The Company will have a
six-month period from the date of the NYSE notification to cure the
deficiency related to its Class B common shares. Per NYSE
procedures, K-V intends to notify the NYSE within 10 business days
from the receipt of the NYSE notification of its intent to cure the
deficiency related to its Class B common shares within the
six-month cure period.
As previously announced on June 29,
2012, the Company's Class A common shares are below criteria
for the average closing price of a security of less than
$1.00 over a consecutive 30 day
trading period. The Company informed the NYSE of its intent to cure
this deficiency within the six-month cure period on July 10, 2012.
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) our ability to continue as a going concern, as
discussed in Note 3—"Going Concern and Liquidity Considerations" of
the Notes to Consolidated Financial Statements included in our
Annual Report on Form 10-K for the fiscal year ended March 31, 2012 ("2012 Form 10-K");
(2) 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 Cytyc
Prenatal Products Corp. and Hologic, Inc. (Cytyc Prenatal Products
Corp. and Hologic, Inc. are referred to collectively as "Hologic")
beginning August 4, 2012 and a
$13.5 million interest payment owed
on its senior secured notes due on September
15, 2012;
(3) the risk that, if necessary, the Company will be
unsuccessful in attempts to restructure its existing capital
structure and operations;
(4) risks associated with the introduction and growth
strategy related to the Company's Makena® product,
including:
(a) 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;
(b) 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 the decision of
the U.S. Food and Drug Administration (the "FDA") announced on
March 30, 2011 to decline to take
enforcement action with regards to compounded alternatives, as
updated on June 15, 2012 and
June 29, 2012;
(c) 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;
(d) the statements made on June 15,
2012 by the FDA, as updated, 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 ("17P") could continue to exceed the scope of traditional
pharmacy compounding;
(e) 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;
(f) the number of preterm birth risk pregnancies for
which Makena® may be prescribed, its safety and side
effects profiles and acceptance of pricing;
(g) the risk that, if needed, future modifications or
amendments to the agreement with Hologic may be unsuccessful;
(h) 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; and
(i) the costs and risks associated with litigation we
recently initiated against the FDA and the U.S. Department of
Health and Human Services (the "HHS") seeking increased patient
access to Makena®, including the possibility that we will not
prevail on the merits of our claims or, even if our claims are
meritorious, there could be substantial difficulties or delays in
obtaining the relief sought which, as a practical matter, could
deprive us of the benefit we might realize from prevailing in the
litigation;
(5) 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;
(6) risks related to compliance with various agreements
and settlements with governmental entities including those
discussed in Note 15—"Commitments and Contingencies" of the Notes
to Consolidated Financial Statements included in our 2012 Form
10-K, including:
(a) 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;
(b) the agreement between the Company and the HHS to
resolve the risk of potential exclusion of the Company from
participation in federal health care programs;
(c) 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
(d) 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;
(7) the availability of raw materials and/or products
manufactured for the Company under contract manufacturing
agreements with third parties;
(8) 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, litigation discussed in
Note 15—"Commitments and Contingencies—Litigation and Governmental
Inquiries" of the Notes to Consolidated Financial Statements
included in our 2012 Form 10-K, including:
(a) the series of putative class action lawsuits alleging
violations of the federal securities laws by the Company and
certain individuals;
(b) 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;
(c) lawsuits pertaining to indemnification and employment
agreement obligations involving the Company and its former Chief
Executive Officer; and
(d) 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;
(9) the possibility that our current estimates of the
financial effect of previously announced product recalls could
prove to be incorrect;
(10) risks related to the Company's highly leveraged
capital structure discussed in Item 7—"Management's Discussion and
Analysis of Financial Condition and Results of Operations—Liquidity
and Capital Resources" of our 2012 Form 10-K, including:
(a) 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;
(b) 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;
(c) the risk that, if required, efforts to negotiate
amendments to, modification or restructuring of our existing debt
obligations may not be successful; and
(d) risks that future changes in the Board of Directors
may lead to an acceleration of the maturities of the Company's
debt;
(11) the risk that we may not be able to again satisfy the
quantitative listing standards of the NYSE; on June 26, 2012 and July 16,
2012, respectively, the NYSE notified us that the average
closing share price of our Class A Common Stock and Class B Common
Stock each fell below the NYSE's quantitative continued listing
standard to maintain a minimum average closing share price of
$1.00 during any consecutive 30
trading-day period; on July 16, 2012,
we also received notice from the NYSE that the Company failed to
meet two other continued listing standards that require the Company
to maintain a market capitalization of at least $50.0 million over a consecutive 30 trading-day
period and total stockholders' equity of at least $50.0 million; although the NYSE allows us a cure
period to again meet these continued listing standards before our
stock is delisted from the NYSE, our stock price, market
capitalization and stockholders' equity may not rise to a level to
satisfy these requirements; moreover, we may not meet other NYSE
listing standards in the future; and
(12) the risks detailed from time to time in the Company's
filings with the SEC.
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.
SOURCE K-V Pharmaceutical Company