K-V Pharmaceuticals ($KV.A) has been desperately trying to create a market for its premature birth drug Makena while it reorganizes in bankruptcy court. But the company now finds itself fighting a rearguard battle against the drug's developer.
Hologic ($HOLX) is asking the bankruptcy judge to let it reacquire the rights to Makena, which it sold to K-V four years ago, claiming K-V's mismanagement is destroying the drug's value, Dow Jones reports. K-V missed a $45 million licensing payment to Hologic in August and filed for bankruptcy protection. K-V disputed the mismanagement label in court and says that if it has to forfeit the drug, it is pretty much all over for the company and any hope of debtors getting repaid.
In an emailed statement the company said: "Hologic's claims relevant to K-V's filing for the protection of Chapter 11 are matters of pending litigation, and as such, it would be inappropriate for K-V to comment on them." It said it would "vigorously" defend Hologic's claims.
The FDA last year approved Makena, a hormone given to pregnant women with a history of giving birth premature. The agency, however, refused to ban compounded versions of the drug, which go for $10 to $20 a dose. K-V first priced the drug at $1,500 but dropped that to $595 when their was an outcry and payers balked at paying hundreds of dollars more. It now says it has negotiated with some state Medicaid programs to sell it for less than $300. K-V sued the FDA to try and force a ban on compounded versions, but a judge recently dismissed the case. Meanwhile, the company has sued several states to try to get them to pay for the drug and has gotten a favorable ruling in Georgia.
K-V claims in court that it is the FDA's refusal to act and and not mismanagement which led to the bankruptcy, Dow Jones reports, and that it is growing the drug's market share with its efforts to sue and negotiate prices with state Medicaid programs. A hearing is slated for today for both sides to make their pitch to the judge, the news service says.
- here's the Dow Jones story
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
FDA keeps door open to cheap versions of KV's Makena