Shareholder Class Action Filed Against K-V Pharmaceutical Company by the Law Firm of Kessler Topaz Meltzer & Check, LLP
RADNOR, Pa., Nov. 1, 2011 /PRNewswire via COMTEX/ -- The following statement was issued today by the law firm of Kessler Topaz Meltzer & Check, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Eastern District of Missouri on behalf of purchasers of the securities of K-V Pharmaceutical Company ("K-V" or the "Company"), who purchased or otherwise acquired K-V Pharmaceutical securities between February 14, 2011 and April 4, 2011, inclusive (the "Class Period"). If you are a member of this class, you can view a copy of the Complaint or join this class action online at http://www.ktmc.com/cases_details.php?id=51 .
Members of the class may, not later than December 19, 2011, move the Court to serve as lead plaintiff of the class. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision of whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP (Darren J. Check, Esq. or David M. Promisloff, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at [email protected] For additional information about this lawsuit, or to join the class action online, please visit http://www.ktmc.com/cases_details.php?id=51 .
The Complaint charges K-V and certain of its officers with violations of the Securities Exchange Act of 1934. K-V is a specialty branded pharmaceutical company with a primary focus in the area of women's healthcare. Throughout the Class Period, the defendants assured investors that the U.S. Food and Drug Administration ("FDA") had granted K-V the exclusive distribution rights over its drug Makena (hydroxyprogesterone caproate, or 17P in generic form), a prescription hormone injection that had been prescribed by physicians for decades to help prevent preterm births. As such, the Company asserted that the FDA would enforce these rights by preventing K-V's competitors, including compounding pharmacies that had been custom making the drug, from distributing Makena in generic form. Further, the defendants asserted that the Company had a distribution program to "expand access" of Makena, making it available to low-income and other at-risk groups. Meanwhile, the defendants had dramatically increased the price of Makena. Whereas women had been charged between $10 and $20 per injection of 17P by compounding pharmacies, K-V raised the price of Makena to $1,500 per injection.
The Complaint alleges that the defendants failed to disclose and misrepresented the following material adverse facts which were known to them or recklessly disregarded by them: (1) that the FDA had not in fact granted K-V exclusive distribution rights over hydroxyprogesterone caproate; (2) that the Company had not expanded access of Makena in any meaningful way to low-income and at-risk groups; (3) that the exorbitant $1,500 per injection price of Makena would reduce the availability of the drug to physicians and patients and decrease meaningful demand; (4) that the Company lacked adequate internal and financial controls; and (5) that, as a result of the foregoing, the Company's statements about Makena's price, distribution program and the likelihood of financial success for the Company were lacking in any reasonable basis when made.
On March 17, 2011, two U.S. Senators announced that they had sent a letter to the Federal Trade Commission requesting a formal investigation into potential anticompetitive conduct arising out of K-V's decision to drastically increase the price of Makena after receiving exclusive distribution rights. On March 30, 2011, the FDA announced that, contrary to defendants' assertions, the agency did not intend to take enforcement action against pharmacies that compound 17P. On April 1, 2011, the defendants announced that they were reducing the price of Makena by nearly 55%, to $690 per injection.
On April 4, 2011, an article published by Bloomberg revealed that, even with the price reduction from $1,500 to $690 per dose, many physicians would still not recommend Makena to their patients, as they believed the cost of the drug was still too high. One physician spoke of the hostility generated by K-V's initial pricing of the drug, as well as the fact there was no guarantee that a patient or an insurance company would pay for Makena (meaning that a physician would have to assume financial responsibility for Makena inventory if they bought the drug from K-V).
During the Class Period, K-V shares traded as high as over $13.00 per share. However, upon the above revelations, shares of the Company's series A stock significantly declined to close on April 4, 2011 at $5.00 per share. Similarly, shares of the Company's series B stock also declined to close on April 4, 2011 at $5.03 per share.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Kessler Topaz Meltzer & Check, which prosecutes class actions in both state and federal courts throughout the country. Kessler Topaz Meltzer & Check is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world.
For more information about Kessler Topaz Meltzer & Check, or for additional information about participating in this action, please visit www.ktmc.com .
CONTACT: Kessler Topaz Meltzer & Check, LLP
Darren J. Check, Esq.
David M. Promisloff, Esq.
280 King of Prussia Road
Radnor, PA 19087
1-888-299-7706 (toll free) or 1-610-667-7706
Or by e-mail at [email protected]
SOURCE Kessler Topaz Meltzer & Check, LLP