K-V Pharmaceutical Enters Loan Agreement In Wake Of FDA Approval

   DOW JONES NEWSWIRES 

K-V Pharmaceutical Co. (KVA, KVB) has reached a $20 million loan agreement in the wake of a recent U.S. Food and Drug Administration approval as the struggling specialty-drug company seeks to recover from regulatory and compliance issues.

Class A shares were up 3.5% at $2.47 in recent trading. The stock has dropped 33% this year.

K-V had stopped manufacturing and shipping all of its products in early 2009 and recalled most already on the market as it dealt with an FDA investigation into compliance matters and management misconduct, among other issues.

But the company said last week it received FDA permission to return potassium supplement Micro-K to market following successful inspection of its facilities. It hadn't expected to be able to ship any product before the fourth quarter.

The loan agreement, which expires Jan. 31, 2011, calls for a 16.5% annual interest rate. K-V also has agreed to an exclusive two-week negotiating period with the lender over an expanded, longer-term financing pact. The party was identified in a Tuesday statement from K-V as U.S. Healthcare I LLC and U.S. Healthcare II LLC.

-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; [e-mail]