KV Pharmaceutical Hologic Settle Makena Dispute

KV Pharmaceutical Co., taking a big step toward emerging from bankruptcy, announced Thursday that it has obtained $85 million in financing and reached a settlement with a Massachusetts company over the prenatal drug Makena, the St. Louis Post-Dispatch reported yesterday. The financing and settlement would allow the drug manufacturer to move forward with a reorganization plan, KV officials said. KV plans to file its reorganization plan with the bankruptcy court in the next few weeks. The court is scheduled to consider approval of the settlement with Hologic Inc. at a hearing Dec. 26. Once among the St. Louis region's strongest public companies, the scandal-plagued company filed for chapter 11 bankruptcy in August. The move followed a string of troubles involving oversized morphine tablets, a criminal prosecution of a subsidiary, and the banishment of KV's former chairman from doing business with federal health programs. A crippling blow came last year when the Food and Drug Administration declined to enforce the company's exclusive right to sell Makena, which aims to reduce the risk of premature births, following public outrage about the drug's high price. Court papers indicate that KV will pay Hologic $60 million by the end of the year to satisfy claims related to Makena, which KV had purchased from Hologic. KV's bankruptcy petition, which was filed in U.S. Bankruptcy Court for the Southern District of New York in Manhattan, listed the company's assets as $237 million and its debts as $728 million.