|On October 19, 2011, Scott+Scott LLP filed a class action complaint against K-V Pharmaceutical Company and certain of the Company's officers in the U.S. District Court for the Eastern District of Missouri. The action for violations of the Securities Exchange Act of 1934 is brought on behalf of those purchasing the common stock of K-V between February 14, 2011 and April 4, 2011, inclusive.
If you purchased the common stock of K-V during the Class Period and wish to serve as a lead plaintiff in the action, you must move the Court no later than 60 days from today. Any member of the investor class may move the Court to serve as lead plaintiff through counsel of its choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have questions concerning this notice or your rights, please contact Scott+Scott
The complaint filed in the action charges that during the brief Class Period, the Company issued false and misleading statements claiming the Food and Drug Administration had granted K-V the exclusive distribution rights over its Makena, a drug compound that had previously been prescribed by physicians for decades to prevent miscarriages, and that the agency would enforce those rights by preventing K-V's competitors from distributing generic compounds of Makena. The complaint also alleges that defendants told investors K-V's Makena distribution program was designed to expand access to the drug compound, including to low-income and other at-risk groups, while concealing that the $1,500 list price K-V was charging would actually reduce availability of the drug compound to physicians and their patients. As a result, based on a fundamental misperception of K-V's sales and earnings potential, the complaint charges that K-V's stock traded at artificially inflated prices during the Class Period, allowing K-V to sell $200 million worth of senior secured notes, with the proceeds used in large part to pay down the Company's debts.
The complaint alleges that the truth began to come to light on March 17, 2011, when two U.S. Senators publicly questioned the bona fides of K-V's distribution program, stating the financial assistance is not sufficient and does not extend to certain groups of women, and so that in reality, KV Pharmaceutical's actions will result in diminished access to appropriate health care for women and result in increased preterm births. It is alleged that this partial disclosure caused K-V's stock price to fall precipitously, removing some of the stock inflation. Then, following the FDA's own March 30, 2011 statement that the agency did not intend to take enforcement action against K-V's competitors for distributing the generic version of K-V's Makena, K-V's stock fell further on extremely high trading volume. Finally, following K-V's April 1, 2011 disclosure that K-V was reducing Makena's list price by nearly 55% to $690 per injection -- versus the previous list price of $1,500 -- the market learned on April 4, 2011 that many physicians would never prescribe Makena to their patients due to flaws in the distribution program. On this news, K-V's stock price fell an additional 9.5% in a single trading session.
Scott+Scott has significant experience in prosecuting major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, foundations, individuals and other entities worldwide.