Embattled drugmaker K-V Pharmaceutical Co (KVa.N) (KVb.N) said U.S. health regulators approved its drug for reducing the risk of preterm birth in women with singleton pregnancy, and its shares more than doubled to their highest in a year.
According to the terms of an existing agreement with Hologic Inc (HOLX.O), worldwide rights to the drug — Makena — will be transferred to K-V pending certain terms and conditions.
K-V had bought the worldwide rights to the drug — then known as Gestiva — from a Hologic unit in January 2008.
K-V expects to satisfy the terms within 5 business days and said the drug will be marketed by its branded drug unit, Ther-Rx Corp.
The FDA approval comes at a crucial time for St. Louis, Missouri-based K-V, which, plagued by lawsuits and manufacturing problems that forced the company to suspend all its drug shipments, had expressed doubts about its ability to continue as a going concern.
The company had to stop making and marketing all its products on recurring manufacturing issues of oversized tablets, while its management faced several class-action lawsuits that alleged the officers of misconduct and trying to unethically inflate stock price.
Friday's approval was based on a study of 463 women who had experienced a previous singleton preterm birth. The study showed that treatment with Makena reduced the proportion of women who delivered preterm at less than 37 weeks.
Makena is administered by a healthcare provider via a weekly intramuscular injection and is not intended for use in women with multiple gestations or other risk factors for preterm birth.
K-V shares were up 140 percent to $3.67 in heavy trade on Friday morning on the New York Stock Exchange. They touched a high of $3.80 earlier.