Hologic challenges KV over Makena

Sen. Sherrod Brown
Sen. Sherrod Brown

The swirl of paper surrounding KV Pharmaceuticals' request for Chapter 11 bankruptcy protection continues to grow. At the center of the proceedings is the controversy surrounding Makena, a drug approved for the prevention of premature birth. Hologic sold KV the rights to Makena in exchange for a series of milestone and/or royalty payments.

In September, Hologic filed a brief to support a request that the court lift a stay on Makena. The stay is meant to keep creditors from pulling apart KV's assets while the company works its way through Chapter 11. Hologic alleges KV has botched the marketing and wants rights to the drug.

Hologic outlined the reasons why it wants the courts to lift the stay in a September 5 filing. Among the allegations in that filing: Makena is losing value during KV's bankruptcy proceedings, and the value of the drug stands to be at further risk if KV can't fund the post-marketing studies that come along with being approved as an orphan drug.

Hologic also takes aim at the way in which KV has marketed the drug, saying KV pursued an “ill-advised pricing strategy,” and that a poor relationship with the FDA has chipped away at Makena's sales potential.

The drug, which is comprised of generic components, was initially priced at $1,500 per injection, while patients received its predecessor formulation for about $10 to $20 per injection. The supporting documentation in Hologic's filing includes a March 2011 note from Sen. Sherrod Brown (D-Ohio). In that note, Brown wrote he was “gravely concerned that the exorbitant price increase...will increase rates of preterm birth nationwide” because “fewer women will be able to afford the drug.”

KV's rebuttal to Hologic's filing is having none of it and says “the law is clear that the movant seeking to lift the stay must show diminution since the filing of the debtor's Chapter 11 petition.” KV's documents also note that the company is working to increase sales, which they say increases, rather than drives down, the asset's value.
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