ST. LOUIS, March 1, 2011 /PRNewswire/ -- K-V Pharmaceutical
Company (NYSE: KVa/KVb) (the "Company") announced today that it
intends to offer $200 million of
senior secured notes due 2015 (the "Notes") in a private placement,
subject to market conditions.
The Notes will be offered only to accredited investors pursuant
to Regulation D under the Securities Act of 1933, as amended (the
"Securities Act"). The Notes have not been registered under
the Securities Act or any state or other securities laws and may
not be offered or sold in the United
States absent registration or an applicable exemption from
registration requirements of the Securities Act and applicable
state securities laws.
The Company intends to use the net proceeds from the offering of
the Notes to repay in full the Company's outstanding obligations
under its credit agreement with U.S. Healthcare I, L.L.C. and U.S.
Healthcare II, L.L.C. (including the payment of related premiums)
and terminate the related future loan commitments, to establish an
escrow reserve for one year of interest payments on the Notes and
for general corporate purposes.
This press release is for informational purposes only and is not
an offer to buy or the solicitation of an offer to sell any
securities.
About K-V Pharmaceutical Company
K-V Pharmaceutical Company is a fully-integrated specialty
pharmaceutical company that develops, manufactures, markets, and
acquires technology-distinguished branded prescription
pharmaceutical products. The Company markets its
technology-distinguished products through Ther-Rx Corporation, its
branded drug subsidiary.
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 press release contains various forward-looking statements
within the meaning of the United States Private Securities
Litigation Reform Act of 1995 (the "PSLRA") and that may be based
on or include assumptions concerning the operations, future results
and prospects of the Company. 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
development, product launches, regulatory approvals, governmental
and regulatory actions and proceedings, market position,
acquisitions, sale of assets, revenues, expenditures, resumption of
manufacturing and distribution of products and the impact of the
recall and suspension of shipments on revenues, 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, the Company provides 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:
- The Company's ability to successfully complete the proposed
private placement of senior secured notes as described above;
- the ability to continue as a going concern;
- the terms of our secured loan agreement with U.S. Healthcare I,
L.L.C. and U.S. Healthcare II, L.L.C. (together, the "Lenders"), as
more fully described in Item 1- "Business-(b) Significant Recent
Developments-Financing" in the Company's Annual Report on Form 10-K
for the year ended March 31, 2010
(the "Form 10-K"), as amended, could have an adverse effect on us
if we are not able to refinance it or repay it at maturity on
March 20, 2013, or earlier if we
experience an event of default that is not waived by the Lenders or
if a waiver expires and is not extended, and such terms contain
numerous affirmative and negative covenants and conditions that
must be met in order to avoid default and/or to qualify for
additional loan tranches, and there are substantial risks of
triggering defaults with respect to such covenants and/or the
occurrence or non-occurrence of conditions that would preclude the
Company from being able to draw down additional loan tranches,
which could materially adversely impact the Company, lead to
foreclosure on the Company assets acting as collateral for the loan
agreement, and adversely affect the Company's ability to operate,
including the launch of Makena™;
- the possibility of not obtaining FDA approvals or delay in
obtaining FDA approvals;
- new product development and launch, including the possibility
that any product launch may be delayed or unsuccessful, including
with respect to Makena™;
- acceptance of and demand for the Company's new pharmaceutical
products, including Makena™, and for our current products upon
their return to the marketplace, as well as the number of preterm
births for which Makena™ may be prescribed and its safety profile
and side effects profile;
- the possibility that any period of exclusivity may not be
realized, including with respect to Makena™, a designated Orphan
Drug;
- the satisfaction or waiver of the terms and conditions for the
acquisition and continued ownership of the full U.S. and worldwide
rights to Makena™ set forth in the previously disclosed Makena™
acquisition agreement, as amended;
- the consent decree between the Company and the U.S. Food and
Drug Administration ("FDA") and the Company's suspension of the
production and shipment of all of the products that it manufactures
(other than the Potassium Chloride ER Capsule products that are the
subject of the FDA letter received September
8, 2010 allowing the return of those products to the
marketplace) and the related nationwide recall affecting all of the
other products that it manufactures, as well as the related
material adverse effect on its revenue, assets and liquidity and
capital resources, as more fully described in Item 1-"Business-(b)
Significant Recent Developments-Discontinuation of Manufacturing
and Distribution; Product Recalls; and the FDA Consent Decree" in
the Form 10-K;
- the two agreements between the Company and the Office of
Inspector General of the U.S. Department of Health and Human
Services ("HHS OIG") pertaining to the exclusion of our former
chief executive officer from participation in federal healthcare
programs and pertaining to the dissolution of our ETHEX subsidiary,
in order to resolve the risk of potential exclusion of our company,
as more fully described in Note 15-"Commitments and
Contingencies-Litigation and Governmental Inquiries" of the Notes
to the Consolidated Financial Statements included in the Form
10-K;
- the plea agreement between the Company and the U.S. Department
of Justice and the Company's obligations therewith, as well as the
related material adverse effect, if any, on its revenue, assets and
liquidity and capital resources, as more fully described in Item
1-"Business-(b) Significant Recent Developments-Plea Agreement with
the U.S. Department of Justice" in the Form 10-K;
- changes in the current and future business environment,
including interest rates and capital and consumer spending;
- the availability of raw materials and/or products, including
Makena™, manufactured for the Company under contract manufacturing
agreements with third parties;
- the regulatory environment, including regulatory agency and
judicial actions and changes in applicable laws or regulations,
including the risk of obtaining necessary state licenses in a
timely manner;
- fluctuations in revenues;
- the difficulty of predicting the pattern of inventory movements
by the Company's customers;
- the impact of competitive response to the Company's sales,
marketing and strategic efforts, including introduction or
potential introduction of generic or competing products against
products sold by the Company and its subsidiaries, including
Makena™, and including competitive pricing changes;
- risks that the Company may not ultimately prevail in
litigation, including product liability lawsuits and challenges to
its intellectual property rights by actual or potential competitors
or to its ability to market generic products due to brand company
patents and challenges to other companies' introduction or
potential introduction of generic or competing products by third
parties against products sold by the Company or its subsidiaries
including without limitation the litigation and claims referred to
in Note 15 – "Commitments and Contingencies" of the Notes to the
Consolidated Financial Statements in the Form 10-K, and that any
adverse judgments or settlements of such litigation, including
product liability lawsuits, may be material to the Company;
- the possibility that our current estimates of the financial
effect of certain announced product recalls could prove to be
incorrect;
- whether any product recalls or product introductions result in
litigation, agency action or material damages;
- failure to supply claims by certain of the Company's customers,
including CVS Pharmacy, Inc., that, despite the formal
discontinuation action by the Company of its products, the Company
should compensate such customers for any additional costs they
allegedly incurred for procuring products the Company did not
supply;
- the series of putative class action lawsuits alleging
violations of the federal securities laws by the Company and
certain individuals, as more fully described in Note 15 –
"Commitments and Contingencies – Litigation and Governmental
Inquiries" of the Notes to the Consolidated Financial Statements in
the Form 10-K;
- the possibility that insurance proceeds are insufficient to
cover potential losses that may arise from litigation, including
with respect to product liability or securities litigation;
- the informal inquiries initiated by the SEC and any related or
additional government investigation or enforcement proceedings as
more fully described in Note 15 – "Commitments and Contingencies –
Litigation and Government Inquiries," of the Notes to the
Consolidated Financial Statements in the Form 10-K;
- the possibility that the pending investigation by the Office of
Inspector General of the Department of Health and Human Services
into potential false claims under the Title 42 of the U.S. Code as
more fully described in Note 15 – "Commitments and Contingencies –
Litigation and Government Inquiries" of the Notes to the
Consolidated Financial Statements in the Form 10-K could result in
significant civil fines or penalties, including exclusion from
participation in federal healthcare programs such as Medicare and
Medicaid;
- delays in returning, or failure to return, certain or many of
the Company's approved products to market, including loss of market
share as a result of the suspension of shipments, and related
costs;
- the ability to sell or license certain assets, and the purchase
prices, milestones, terms and conditions of such transactions;
- the possibility that default on one type or class of the
Company's indebtedness, or in certain contracts or agreements
referenced in our recently executed secured loan agreement with the
Lenders, could result in cross default under, and the acceleration
of, its other indebtedness or such secured loan agreement;
- the risks that present or future changes in the Board of
Directors or management may lead to an acceleration of the
Company's bonds or to adverse actions by government agencies, our
lenders or our auditors;
- the risk that even though the price and 30-day average price of
the Company's Class A common stock and Class B common stock have
recently again begun satisfying the quantitative listing standards
of the New York Stock Exchange, including with respect to minimum
share price and public float, the Company can provide no assurance
that they will remain at such levels thereafter; and
- 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 the Company's forward-looking
statements. Because the factors referred to above, as well as
the statements included under the captions Part I, Item 1A-"Risk
Factors," Part II, Item 7-"Management's Discussion and Analysis of
Financial Condition and Results of Operations" and elsewhere in the
Form 10-K, could cause actual results or outcomes to differ
materially from those expressed in any forward-looking statements
made by the Company or on the Company's behalf, you should not
place undue reliance on any forward-looking statements.
All forward-looking statements attributable to the Company 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 – "Risks
Factors" in the Form 10-K , as supplemented by the Company's
subsequent SEC filings. Further, any forward-looking
statement speaks only as of the date on which it is made and the
Company is 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
the Company to predict which factors will arise, when they will
arise and/or their effects. In addition, the Company cannot assess
the impact of each factor on its 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