KV Pharmaceutical ($KV-A) says it is back in the game. It says it has a deal with its debtors, $85 million in financing, and if the bankruptcy court approves a reorganization plan, will emerge from bankruptcy protection more or less intact.
The announcement came a day after KV reached a $60 million arrangement with Hologic ($HOLX) settling its claim over control of Makena, KV's primary product. The first $60 million out of the pot goes to Hologic, which had tried to reclaim premature birth drug Makena after KV missed a $45 million payment in August and filed for bankruptcy.
It says its senior lenders have agreed to new terms and that it will get the so-called Debtor-in-Financing deal, essentially a high interest loan that gets paid ahead of everyone else, from a group led by Silver Point Finance.
The FDA last year approved Makena, a hormone given to pregnant women with a history of giving birth prematurely. The agency, however, refused to ban compounded versions of the drug, which go for $10 to $20 a dose compared to the $595 price KV finally landed on. The St. Louis, MO-area company sued the FDA and said if the agency didn't ban compounded versions of the drug, it would have to file for bankruptcy, but the suit was dismissed and KV headed for bankruptcy court. It meanwhile has been trying to go state by state, getting agreements with Medicaid programs to pay for Makena.
After KV filed, Hologic leveled a $95 million claim and tried to reacquire the rights to Makena, which it sold to KV four years ago. All of Hologic's claims will be neutralized, KV says, if the court accepts its reorganization plan.
- here's the release
KV, Hologic reach $60M deal on Makena
Hologic says KV 'mismanagement' killing Makena
Loss of Makena suit against FDA compounds KV's problems
KV bargaining with states on price of Makena
Escalating problems culminate in K-V Pharmaceutical bankruptcy