| Company: | KV Pharmaceutical Company |
| Ticker Symbol: | KV-A, KV-B |
| Class Period: | Feb-15-08 to Nov-12-08 |
| Date Filed: | Dec-2-08 |
| Lead Plaintiff Deadline: | Jan-31-09 |
| Court: | Eastern District of Missouri |
| Allegations: | |
The complaint charges KV and certain of its officers and directors with violations of the Securities Exchange Act of 1934. KV engages in the development, manufacture, acquisition, marketing, and sale of branded and generic/nonbranded prescription pharmaceutical products.
The complaint alleges that during the Class Period, defendants made materially false and misleading statements about KV's compliance with federal regulations concerning the manufacture and marketing of certain generic drug products as well as the Company's current and future financial prospects. Specifically, defendants failed to disclose: (i) that KV's manufacturing facilities were in disarray resulting in the manufacture of unsafe drug products that would have to be recalled due to the fact that they may contain oversized tablets that may contain more than the intended levels of the active drug ingredient, which could result in patients receiving as much as about twice the expected dosage of these drugs; (ii) that KV's management engaged in misconduct by failing to recall the Company's unsafe drug products; (iii) that KV's manufacturing facilities failed to comply with federal regulations, including FDA requirements and guidelines, generally referred to as current "Good Manufacturing Practices;" (iv) that manufacturing disruptions and inefficiencies were resulting in a material backlog of unshipped customer orders, thus further eroding the Company's revenues and earnings; (v) that the Company failed to write off at least $24 million in inventories of discontinued products, seized by the U.S. Attorney for the Eastern District of Missouri due to defendants' violation of FDA enforcement notices; (vi) that KV's post-January 2008 sales of generics were being negatively impacted by material price erosion following the expiration of the Company's exclusive sales period for the drug metoprolol succinate; (vii) that KV's financial statements failed to comply with Generally Accepted Accounting Principles; and (vii) that, based on the foregoing, defendants lacked a reasonable basis for their current and future financial prospects.
Then, on November 13, 2008, KV announced that it would be unable to file its Form 10-Q for the quarter ended September 30, 2008 due to a continuing investigation by the Company's Audit Committee into allegations of management misconduct concerning recalls of the Company's drug products. Following this statement, the price of KV common stock fell from $14.26 per share to $5.90 per share – a drop of nearly 59 percent - on extremely heavy volume of more than 6.6 million shares, 33 times the stock's average trading volume
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
