KV trains regulatory, GMP firepower on comeback

KV Pharmaceutical continues to show that even without Big Pharma clout, life in the pharma business is possible after an FDA manufacturing consent decree. It's not easy, nor will it ever be quick, but flexibility and quick thinking along the way can yield promising results.

KV continues to transform itself into a branded and generic specialty prescription pharma developer, manufacturer and marketer. The company operates Ther-Rx for KV's branded pharma products, including the notorious Makena preemie-prevention treatment known for its dramatic price hike over traditional treatment, and Nesher Pharma, the generics arm now being sold.

Previous holding Particle Dynamics was sold a year ago as the KV well ran dry following an FDA shutdown of a manufacturing plant and the abrupt halt to revenues. Meanwhile, generics arm Ethex garnered a 2009 FDA manufacturing consent decree.

KV's cGMP expert hired as a condition of the consent decree, Lachman Consultants, certified the company as compliant in April 2010. Follow-on FDA inspections encountered a few bumps, but the company expects to be back on track, reopening two significant revenue streams, by late fiscal 2012.

KV has been weakened financially, and its corporate stature as a manufacturer is significantly diminished. It's down, but it's not out. It's been so far managing the financial upheaval. And it's presumably putting the finishing touches on finely tuned cGMP systems, up to snuff for both regulators and consultancy experts.

So some, including Mike Young writing in Seeking Alpha, would say it's on the rise. "Despite the risk, I believe the upside could be worth it. Investing in a drug company as it transitions into a profitable business can be extremely rewarding to investors...The current management team could be well on their way to turning the company around."

Young discloses he is long KV.A.

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