KV halts manufacturing, recalls most drugs
Drug company KV Pharmaceutical Co. said Monday that it has suspended manufacturing and shipping of all products it makes and is recalling most of its drugs. Following the news, the value of the Brentwood-based company’s stock has fallen as much as 78 percent.
Brentwood-based KV did not elaborate on its actions, but said it is cooperating with an investigation by the Food and Drug Administration. The investigation caused the company in December to suspend shipping its tablet drugs and recall one of its painkillers. KV said it chose to suspend its operations Thursday. It did not suspend distribution of three products manufactured by other companies.
In a release, the company said it also has received requests for information from the Securities and Exchange Commission and the U.S. Attorney for the Eastern District of Missouri.
Michael Anderson, vice president of industry presence and development, declined to say what products are being recalled or when the company would provide that information.
KV said its actions could cause the company to fall out of compliance with one or more covenants included in a credit agreement with lenders. The
outstanding balance on its line of credit was about $30 million as of Dec. 31.
Nearly three weeks before it suspended shipping of tablet drugs, KV’s board of directors fired Chief Executive Marc Hermelin, who had held the post since 1974 instant payday loan. At that time, the company said a board committee and the FDA were investigating allegations including "management misconduct."
KV employs about 1,500 people, with most in the St. Louis area. Anderson declined to say if this would have any impact on its employees.
Phone calls to the FDA on Monday were not returned.
KV also fired its senior vice president and general counsel, Gregory Bentley , on Jan. 16, the company said Monday in a separate filling with the SEC.
Get more business news, blogs and opinion cboyce@post-dispatch.com | 314-340-8345