Robbins Umeda LLP Announces an Investigation of KV Pharmaceutical Company
Robbins Umeda LLP, a shareholder rights litigation firm, has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at KV Pharmaceutical Company (NYSE: KV-A, KV-B).
Robbins Umeda LLP’s investigation focuses on whether officials at KV Pharmaceuticals breached their fiduciary duties to shareholders, maintained woefully inadequate controls, and wasted corporate assets to the detriment of the company and investors. In particular, the firm is investigating allegations that officials at the company caused KV Pharmaceuticals to misrepresent the extent of expanded patent access granted by the U.S. Food and Drug Administration (the “FDA”) for its Makena product line. After gaining FDA approval, officials at the company made the decision to increase the price of Makena by over 1490% to $1,500.
On March 17, 2011, two United Stated Senators sent a letter to the Federal Trade Commission stating that “KV Pharmaceuticals actions will result in diminished access to appropriate healthcare for women and result in increased preterm birth.” Additionally, on March 30, 2011, the FDA issued a statement that it would not take enforcement action against companies that manufactured compound or generic versions of Makena.
Since these facts have emerged, KV Pharmaceuticals has been forced to lower the price of its Makena product line. In addition, the company is increasingly the subject of costly public and legal scrutiny. These events have apparently taken its toll on KV Pharmaceutical’s stock price. After recently trading as high as $13.07 per share on March 8, 2011, shares of KV Pharmaceuticals closed on October 19, 2011, at just $1.39 per share.
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