Accusing regulators of failing to protect its birth drug, K-V Pharmaceutical has filed for bankruptcy with debts listed at $728.3 million and assets valued at $236.6 million, Reuters reported over the weekend. The bankruptcy comes about a month after the Missouri-based maker of the pre-term birth drug Makena hit the FDA with a lawsuit claiming that the agency failed to crack down on pharmacies making their own preparations of the treatment.
K-V's ($KV.A) shares have tanked over the past year amid measly sales of Makena and a string of unsuccessful attempts to boost adoption of the drug with a lower price and restrictions on reimbursement. The drug is an FDA-approved version of a drug that has been available on the cheap from pharmacies for a long time, and the company's claims that its sanctioned treatment was safer than the drug store preparations fell on deaf ears after lawmakers accused the outfit of price-gouging, Reuters reported in July.
"The company has been unable to realize the full value of its most important product, Makena, because of a lack of enforcement of the orphan drug marketing exclusivity granted to K-V for Makena by the Food and Drug Administration," Greg Divis, K-V's CEO, said in a statement, as quoted by Bloomberg. "The lack of enforcement has also led certain state Medicaid agencies to impose barriers to access to Makena on low-income pregnant women at high risk for recurrent preterm birth, despite those states' legal obligation to cover FDA-approved drugs."
As the news wire reports, the 70-year-old company's business also suffered from manufacturing and marketing restrictions placed on the group because of a 2009 consent decree from the Justice Department. Its Ethex group later took a $23.4 million fine for drug manufacturing no-no's and saw ex-CEO Mark Hermelin plead guilty to flouting labeling regulations.
On the Makena front, K-V has become a sad case of a drugmaker that has failed to succeed with a drug that isn't easily differentiated from existing treatment options. And it's another example of how an FDA approval offers no assurance of a drug's success on the market.