The swirl of paper surrounding KV Pharmaceuticals’ request for Chapter 11 bankruptcy protection continues to grow. The most pressing issue of the moment is the September 25 deadline which requires Hologic to file a brief to support its request that the court lift a stay on Makena, a drug approved for the prevention of premature birth, and a therapy Hologic sold to KV in exchange for a series of milestone and/or royalty payments.

Hologic alleges KV has botched the marketing and wants rights to the drug. The stay keeps creditors from pulling apart company assets while the bankrupt party negotiates next steps.

Hologic is trying to get the courts to lift the stay, and its September 5 filing outlines why. Among its allegations: that Makena is losing value while KV works its way through Chapter 11, and that the value is at further risk if KV can’t fund the post-marketing studies that come with being approved as an orphan drug.

The September document also takes aim at how 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 its sales potential.  

The drug, which is comprised of generic components, was initially priced at $1,500, while patients received its predecessor formulation for about $10 to $20 per injection. Hologic’s supporting documentation includes a March 2011 note from Sen. Sherrod Brown (D-Ohio) in which 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.”

Hologic documentation also includes a 2011 letter from the House Committee on Energy and Commerce, which also objected to the high price and asked for an accounting for research costs linked to the drug comprised of already available components, among other requests.

KV’s September 20 rebuttal 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 say the company is working to increase sales, which increases, rather than drives down, the asset’s value.

The Makena maker also objects to the allusion that the company will not be able to cover the cost of the FDA’s required trials, noting that Hologic has to provide evidence that KV won’t be able to pay for the trials. The filings also note “it is not the Debtors’ obligation to show that there is no conceivable circumstance that could result in diminution of the value of Makena – it is Hologic’s burden to come forward with actual evidence.”