8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (date of earliest event reported): February 14, 2011

K-V PHARMACEUTICAL COMPANY

(Exact name of registrant as specified in its charter)

Commission File Number 1-9601

Delaware	1-9601	43-0618919
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
One Corporate Woods Drive Bridgeton, MO		63044
(Address of principal executive offices)		(Zip Code)

(314) 645-6600

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act.

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act.

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.

Item 7.01 Regulation FD Disclosure.

As previously disclosed, K-V Pharmaceutical Company (NYSE: KVa/KVb) (the “Company”) hosted a conference call today Monday, February 14, 2011 at 11:00 a.m. EST to discuss the U.S. Food & Drug Administration approval of Makena^TM as well as provide a general update on other company matters.

The presentation slides used during the call are attached hereto as Exhibit 99. The information in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.

Item 9.01 Financial Statements and Exhibits.

(d) The following exhibit is furnished as part of this report:

Exhibit Number	Description
99	Presentation slides prepared for use in connection with conference call to be held February 14, 2011.

The Registrant will post this Form 8-K on its Internet website at www.kvpharmaceutical.com. References to the Registrant’s website address are included in this Form 8-K and the press release only as inactive textual references and the Registrant does not intend them to be active links to its website. Information contained on the Registrant’s website does not constitute part of this Form 8-K or the press release.

*    *    *

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: February 14, 2011

K-V PHARMACEUTICAL COMPANY
By:	/s/ Gregory J. Divis, Jr.
	Gregory J. Divis, Jr.
	President and Chief Executive Officer

EX-99

Form –

8K

Makena™

Conference Call

February 14, 2011

Exhibit 99

2

Cautionary Language

This document contains various forward-looking statements within the meaning of the United States Litigation

Reform

Act

of

1995

(the

“PSLRA”)

and

that

may

be

based

on

or

include

assumptions

concerning

the

operations,

future results and prospects of the Company.   Such statements may be identified by the use of words like “plan,”

“expect,”

“aim,”

“believe,”

“project,”

“anticipate,”

“commit,”

“intend,”

“estimate,”

“will,”

“should,”

“could,”

“potential”

and other expressions that indicate future events and trends.

All statements that address expectations or projections about the future, including without limitation, statements

about product development, product launches, regulatory approvals, governmental and regulatory actions and

proceedings, market position, acquisitions, sale of assets, revenues, expenditures, resumption of manufacturing

and distribution of products and the impact of the recall and suspension of shipments on revenues, and other

financial results, are forward-looking statements.

All

forward-looking

statements

are

based

on

current

expectations

and

are

subject

to

risk

and

uncertainties.

In

connection with the PSLRA’s “safe harbor”

provisions, the Company provides the cautionary statements set forth

on Appendix A

hereto which identify important economic, competitive, political, regulatory and technological

factors,

among

others,

that

could

cause

actual

results

or

events

to

differ

materially

from

those

set

forth

or

implied

by the forward-looking statements and related assumptions.

New factors emerge from time-to-time, and it is not possible for the Company to predict which factors will arise,

when they will arise and/or their effects.   In addition, the Company cannot assess the impact of each factor on its

future business or financial condition or the extent to which any factor, or combination of factors, may cause actual

results to differ materially from those contained in any forward-looking statements.

3

Cautionary Language

In connection with the PSLRA’s “safe harbor”

provisions, the Company provides the following cautionary statements which identify

important economic, competitive, political, regulatory and technological factors, among others, that could cause actual results or events to

differ materially from those set forth or implied by the forward-looking statements and related assumptions.

Such factors include (but are not limited to) the following:

1.

the ability to continue as a going concern

2.

the terms of our recently executed secured loan agreement with U.S. Healthcare I, L.L.C. and U.S. Healthcare II, L.L.C.

(together,

the

“lenders”),

as

more

fully

described

in

Item

1

–

“Business

–

(b)

Significant

Recent

Developments-Financing”

in the Company’s Annual Report on Form 10-K for the year ended March 31, 2010 (the “Form 10-K”) could have an

adverse

effect

on

us

if

we

are

not

able

to

refinance

it

or

repay

it

at

maturity

on

March

20,

2013,

or

earlier

in

accordance

with its terms or if we experience an event of default and such terms contain numerous affirmative and negative covenants and

conditions that must be met in order to avoid default and/or to qualify for additional loan tranches, and there are substantial risks

of triggering defaults with respect

to

such

covenants

and/or

the

occurrence or non-occurrence of conditions that would preclude

the Company from being able to draw down additional loan tranches, which could materially adversely impact the Company,

lead to foreclosure on the Company assets acting as collateral for the loan agreement, and adversely affect the Company’s

ability to operate;

3.

the possibility of not obtaining FDA approvals or delay in obtaining FDA approvals;

4.

new product development and launch, including the possibility that any product launch may be delayed or unsuccessful,

including with respect to Makena™.

5.

acceptance of and demand for the Company’s new pharmaceutical products, including Makena™, and for our current

products

upon

their

return

to

the

marketplace,

as

well

as

the

number

of

preterm

births

for

which

Makena™

may

be

prescribed and its safety profile and side effects profile;

6.

the

possibility

that

any

period

of

exclusivity

may

not

be

realized,

including

with

respect

to

Makena™,

a

designated

Orphan

Drug;

7.

the satisfaction or waiver of the terms and conditions for the acquisition of the full U.S. and worldwide rights to Makena™

set

forth

in

the

previously

disclosed

Makena™

acquisition

agreement,

as

amended;

4

Cautionary Language

8.

the consent decree between the Company and the U.S. Food and Drug Administration (“FDA”) and the Company’s

suspension of the production and shipment of all of the products that it manufactures (other than the Potassium Chloride ER

Capsule products that are the subject of the FDA letter received September 8, 2010 allowing the return of those products to

the marketplace) and the related nationwide recall affecting all of the other products that it manufactures, as well as the

related material adverse effect on its revenue, assets and liquidity and capital resources, as more fully described in Item 1 –

“Business – (b) Significant Recent Developments – Discontinuation of Manufacturing and Distribution; Product Recalls; and

the FDA Consent Decree” in the Form 10-K for fiscal 2010;

9.

the two agreements between the Company and the Office of Inspector General of the U.S. Department of Health and

Human Services (“HHS OIG”) pertaining to the exclusion of our former chief executive officer from participation in federal

healthcare programs and pertaining to the dissolution of our ETHEX subsidiary, in order to resolve the risk of potential

exclusion of our Company, as more fully described in Note 15 – “Commitments and Contingencies – Litigation and

Governmental Inquiries” of the Notes to the Consolidated Financial Statements included in the Form 10-K for fiscal 2010;

10.

the plea agreement between the Company and the U.S. Department of Justice and the Company’s obligations therewith, as

well as the related material adverse effect, if any, on its revenue, assets and liquidity and capital resources, as more fully

described in Item 1 – “:Business – (b) Significant Recent Developments – Plea Agreement with the U.S. Department of

Justice” in the Form 10-K for fiscal 2010;

11.

changes in the current and future business environment, including interest rates and capital and consumer spending;

12.

the availability of raw materials and/or products manufactured for the Company under contract manufacturing agreements

with third parties;

13.

the regulatory environment, including regulatory agency and judicial actions and changes in applicable laws or regulations,

including the risks of obtaining necessary state licenses in a timely manner;

14.

fluctuations in revenues;

5

Cautionary Language

15.

the difficulty of predicting the pattern of inventory movements by the Company’s customers;

16.

the impact of competitive response to the Company’s sales, marketing and strategic efforts, including introduction or

potential introduction of generic or competing products sold by the Company and its subsidiaries, including Makena™,

and including competitive pricing changes;

17.

risks that the Company may not ultimately prevail in litigation, including product liability lawsuits and challenges to its

intellectual property rights by actual or potential competitors or to its ability to market generic products due to brand

company patents and challenges or other companies’ introduction or potential introduction of generic or competing

products by third parties against products sold by the Company or its subsidiaries including without limitation the

litigation and claims referred to in Note 15 – “Commitments and Contingencies” of the Notes to the Consolidated

Financial Statements in the Form 10-K, and that any adverse judgments or settlements of such litigation, including

product liability lawsuits, may be material to the Company;

18.

the possibility that our current estimates of the financial effect of certain announced product recalls could prove to be

incorrect;

19.

whether any product recalls or product introductions result in litigation, agency action or material damages;

20.

failure to supply claims by certain of the Company’s customers, including CVS Pharmacy, Inc., that, despite the formal

discontinuation action by the Company of its products, the Company should compensate such customers for any

additional costs they allegedly incurred for procuring products the Company did not sell;

21.

the series of putative class action lawsuits alleging violations of the federal securities laws by the Company and

certain individuals, as more fully described in Note 15 – “Commitments and Contingencies – Litigation and

Governmental Inquiries” of the Notes to the Consolidated Financial Statements in the Form 10-K for fiscal 2010;’

22.

the possibility that insurance proceeds are insufficient to cover potential losses that may arise from litigation, including

with respect to product liability or securities litigation;

6

Cautionary Language

23.

the informal inquiries initiated by the SECX and any related or additional government investigation or enforcement  proceedings as more

fully described in Note 15 – “Commitments and Contingencies – Litigation and Government  Inquiries,” of the Notes to the Consolidated

Financial Statements in the Form 10-K for fiscal 2010;

24.

the possibility that the pending investigation by the Office of Inspector General of the Department of Health and Human  Services into

potential false claims under the Title 42 of the U.S. Code as more fully described in Note 15 – “Commitments and Contingencies –

Litigation and Government Inquiries” of the Notes to the Consolidated Financial  Statements in the Form 10-K for fiscal 2010 could result

in significant civil fines or penalties including exclusion from  participation in federal healthcare programs such as Medicare and

Medicaid;

25.

delays in returning, or failure to return, certain or many of the Company’s approved products to market, including loss of  market share

as a result of the suspension of shipments, and related costs;

26.

the ability to sell or license certain assets, and the purchase prices, milestones, terms and conditions of such  transactions; 

27.

the possibility that default on one type or class of the Company’s indebtedness, or in certain contracts or agreements referenced in our

recently executed secured loan agreement with the Lenders, could result in cross default under, and  the acceleration of , its other

indebtedness or such secured loan agreement;

28.

the risks that present or future changes in the Board of Directors or management may lead to an acceleration of the Company’s bonds or

to adverse actions by government agencies, our lenders or our auditors;

29.

the risks that even though the price and 30-day average price of the Company’s Class A common stock and Class B common stock

have recently again begun satisfying the quantitative listing standards of the New York Stock Exchange,  including with respect to

minimum share price and public float, the Company can provide no assurances that they will  remain at such levels thereafter; and;

30.

the risks detailed from time-to-time in the Company’s filings with the SEC.

7

Cautionary Language

This discussion is not exhaustive, but is designed to highlight important factors that may impact the Company’s

forward-looking statements.  Because the factors referred to above, as well as the statements included under the

captions Part I, Item 1A –

“Risks Factors”, Part II, Item 7 –

“Management’s Discussion and Analysis of Financial

Condition and Results of Operations”

and elsewhere in the Form 10-K, could cause actual results or outcomes to

differ materially from those expressed in any forward-looking statements made by the Company or on the Company’s

behalf, you should not place undue reliance on any forward-looking statements.

All forward-looking statements attributable to the Company are expressly qualified in their entirety by the

cautionary

statements

in

the

“Cautionary

Note

Regarding

Forward-Looking

Statements”

and

the

risk

factors

that

are

included

under

Part

I,

Item

1A

–

“Risks

Factors”

in

the

Form

10-K,

as

supplemented

by

the

Company’s

SEC

filings. 

Further, any forward-looking statements speaks only as of the date on which it is made and the Company is under

no obligation to update any of the forward-looking statements after the date of this release.

8

KV Pharmaceutical Conference Call –

Milestone:  FDA Approval of Makena™

•

Strengthened Liquidity Position

•

Review of Clinical Data

•

Commercialization Plans

•

Update on Recent Financing

•

Update on Plans for Generic Business

•

General Update on Other Areas of the Business

9

KV Pharmaceutical –

Latest Liquidity Update

•

Today is another important step forward for KV in our return to

sustainability   

•

First, we have secured an additional $32MM via a private placement

that we announced this morning

•

Additionally, we have reached an agreement on terms to amend our

current loan with Centerbridge/US Healthcare I and II and received a

commitment for a $130MM loan 

•

Both of these milestones provide a significant liquidity boost at a

critical time as we prepare for the launch of Makena in the upcoming

weeks 

•

Our CFO Tom McHugh will cover both important developments in

more detail later in the call

10

Makena™

FDA Approval –

Overview

•

First and only FDA-approved treatment to reduce the risk of preterm

birth in women with a singleton pregnancy who have a history of

singleton spontaneous preterm birth. It is important to note that

Makena

is

not

intended

for

use

in

women

with

multiple

gestations

or

other risk factors for preterm birth.

•

FDA

approval

of

Makena™

is

an

important

step

towards

achievement of our Company’s primary strategy, which is to focus

on the development and commercialization of branded specialty

pharmaceuticals, with an emphasis on women’s health.

•

The

trade

name

was

changed

from

Gestiva™

to

Makena™

to

ensure there is no confusion with other pharmaceutical products

already on the market that may not be suitable for use during

pregnancy. 

11

•

The March of Dimes has characterized preterm birth as a public

health crisis. The Institute of Medicine estimated that preterm birth

cost the nation at least $26 billion in 2005. Preterm birth affects

more than half a million babies and their families every year.

•

Once a woman experiences a preterm birth, she is at increased risk

of having a future preterm birth. 

•

Makena™

is the first and only FDA-approved treatment to reduce

the risk of preterm birth in women with a singleton pregnancy who

have a history of singleton spontaneous preterm birth. It is important

to note that Makena

is not intended for use in women with multiple

gestations or other risk factors for preterm birth.

•

FDA approval of Makena™

is a major advance for clinically eligible

mothers and their healthcare providers, because for the first time,

the

many

benefits

associated

with

FDA

approval

will

be

available to

them.

Makena™

FDA Approval –

Overview

12

Makena™

FDA Approval –

Indications and Usage

•

On February 3, 2010 the U.S. Food and Drug Administration approved

Makena, formerly known as Gestiva, to reduce the risk of preterm

birth in

women with a singleton pregnancy who have a history of singleton

spontaneous preterm birth.  The effectiveness of Makena is based

on

improvement in the proportion of women who delivered at less than 37

weeks of gestation.  There are no controlled trials demonstrating a direct

clinical benefit, such as improvement in neonatal mortality and morbidity. 

•

Limitation of use:  While there are many risk factors for preterm birth, the

safety and efficacy of Makena has been demonstrated only in women with a

prior spontaneous singleton preterm birth.  Makena is not intended for use

in women with multiple gestations or other risk factors for preterm birth.   

•

For those on the call interested in seeing the full prescribing information for

Makena, please visit our Web site at www.kvpharmaceutical.com.

13

Makena™

FDA Approval –

Clinical Data

•

The

safety

and

efficacy

of

Makena™

in

reducing

the

risk of spontaneous preterm birth was demonstrated in a

multicenter, double-blind, placebo-controlled clinical trial with results

published

in

the

New

England

Journal

of

Medicine

in

2003.

•

This clinical trial enrolled 463 women (ranging in age from 16 to 43

years old) who were pregnant with a single baby, and who had a

documented history of a singleton spontaneous preterm birth.

•

Women

in

the

study

were

randomized

to

receive

either

Makena™

or

placebo at a dose of 250 mg, administered weekly by intramuscular

injection, starting between 16 and 20 weeks of gestation, and

continuing until 37 weeks of gestation or delivery, whichever came

first.

14

Makena™

FDA Approval –

Clinical Data

•

This

study

demonstrated

that

Makena™

reduces

the

risk

of

preterm birth.  Compared to placebo, treatment with

Makena™

reduced the proportion of women who delivered at

less than 37 weeks of gestation. However, after adjusting for

time in the study, 7.5% of Makena-treated patients delivered

at less than 25 weeks of gestation compared to 4.7% of

control patients.  

•

Certain complications or events associated with pregnancy

were numerically increased in women who received Makena. 

These included miscarriage, stillbirth, hospital admission for

preterm labor, preeclampsia, gestational hypertension,

gestational diabetes, and low amniotic fluid levels.

15

Makena™

FDA Approval –

Clinical Data

•

Prescribers should also be aware that Makena may cause serious

side effects including blood clots, allergic reactions, depression, and

yellowing of skin and the whites of eyes. The most common side

effects of Makena are injection site reactions (such as pain, swelling,

itching, bruising, or a hard bump), hives, itching, nausea, and

diarrhea.

•

The effectiveness of Makena is based on improvement in the

proportion of women who delivered at less than 37 weeks of

gestation.  There are no controlled trials demonstrating a direct

clinical benefit, such as improvement in neonatal mortality and

morbidity.

16

Makena™

FDA Approval –

Clinical Data

•

Makena™

was approved through the FDA’s Accelerated

Approval Regulations (also known as “Sub-Part H”).

•

Sub-Part H applies to certain new drug products that have

been studied for their safety and efficacy in treating serious

or life-threatening illnesses, and that provide meaningful

therapeutic benefit to patients over existing treatments.

•

Under this approval path, FDA may grant marketing

approval for the new drug product on the basis of one

adequate and well-controlled clinical trial, but may also

require that additional clinical trials be conducted following

the drug’s approval to verify the drug’s clinical benefit.

17

Makena™

FDA Approval –

Clinical Data

•

KV has initiated and will continue to invest in a large scale

long-term Phase IIIB study of Makena™, consistent with

our post-approval commitment to FDA on the approval of

Makena™.  Our Scientific Team is dedicated to the

continued study of Makena, just as our Company is

committed to the ongoing investment required to complete

this study.  The data generated from this global study will

add substantially to the medical knowledge available on

preterm birth.

•

For full prescribing information for Makena, please visit our

website at www.kvpharmaceutical.com.

18

Makena™

FDA Approval –

Commercialization Plans

•

Prior to FDA approval of Makena, mothers who could benefit

from therapy faced significant barriers to accessing treatment

due to the absence of a commercially-available, FDA-approved

product.

•

Our Company has carefully studied how to best remove these

barriers and built our go-to-market strategy to ensure that we

are

in

position

to

help

fulfill

the

promise

of

Makena™

by

facilitating access to this critically important medication for

every eligible patient.

•

In addition to carefully studying the specific issues associated

with preterm birth, our Company has a distinguished heritage

in women’s health and a deep appreciation for how to best

engage the healthcare providers who care for Makena-eligible

moms. 

19

Makena™

FDA Approval –

Commercialization Plans

•

Ther-Rx

has

more

than

10

years’

of

experience

and

extensive

relationships with a majority of the audience for Makena,

which is comprised of approximately 2,200 MFM specialists

and approximately 18,000 OBs. 

•

To directly support our commitment to ensuring access for all

eligible patients, we will be launching Makena with a

dedicated sales force of 150 Representatives, an expansion

from our current team of approximately 55 representatives.

•

In approximately 30 days, our launch sales force will be

thoroughly trained, properly deployed, and fully prepared to

help ensure that healthcare providers know exactly how to

access Makena for their patients. 

20

Makena™

FDA Approval –

Commercialization Plans

•

Specialty

injectible

products

like

Makena™

require

a

sophisticated and customized approach to distribution. 

•

Specialty injectable products like Makena require a

sophisticated and customized approach to access.

•

Our network of leading specialty pharmacies and specialty

distributors will be anchored by a dedicated customer support

center –

the “Makena™

Care Connection”

–

that has been

designed to help ensure access to this important medication. 

21

Makena™

FDA Approval –

Commercialization Plans

•

Makena™

Care Connection

–

Comprehensive program for patients and healthcare providers

that provides administrative, financial and treatment support for

Makena™

in one single point of contact. 

–

Fully developed, staffed and ready to process the first Makena™

prescription.

–

Will work closely with our customers to ensure that prescriptions

for

Makena™

are

processed

rapidly

and

that

Makena™

vials

are

delivered reliably.

–

Services designed to support therapy for patients include:

•

Administrative support such as insurance benefit investigation and

prescription fulfillment.

•

Wherever

needed,

help

connect

Makena™

eligible

patients

with

the

appropriate financial and co-pay assistance programs.

•

Help coordinate treatment support, such as education information,

home health care service, and scheduled treatment reminders.

22

Makena™

FDA Approval –

Manufacturing

•

Makena™

will be manufactured by a reputable third-party contract

manufacturing organization and is expected to be available for

prescribing before the end of March.  We have secured enough

product supply to meet eligible patient needs starting on Day 1 of

distribution.

•

FDA-approved

Makena™

offers

healthcare

providers

and

eligible

women the comfort of knowing that they are prescribing and

receiving:

–

A product that has been rigorously reviewed for safety and

efficacy.

–

A product that is manufactured in a facility that is compliant with

FDA regulations.

–

A product that is consistent from dose-to-dose.

23

Makena™

FDA Approval –

Pricing and Access

•

Makena™

has been designated orphan drug status by the FDA.  As

an

orphan

drug,

the

Makena™

eligible

population

of

women is

relatively small, but easily identifiable and very important.

•

Makena™

is used for a relatively short and well-defined period

during pregnancy to help give babies the time they need to develop

in the womb.

•

Along with increased risk for a recurrent preterm birth, the average

first-year medical costs for a preterm birth, including both in-patient

and outpatient care, is more than $51,000, which is 10 times greater

than a full-term infant birth, according to the March of Dimes in

2008.

•

FDA-approved

Makena™

fulfills

critical

unmet

needs

for

the

high-

risk population of Makena-eligible moms who have experienced a

singleton spontaneous preterm birth

24

Makena™

FDA Approval –

Pricing and Access

•

The list price of Makena™

will be $1,500 per injection.  

Intramuscular injections are administered weekly starting

between 16 and 20 weeks of gestation, and continuing until

37 weeks of gestation or delivery, whichever comes first.   We

believe that patients will receive approximately 15-20

injections on average.

•

Based on the eligible patient population, which has been

estimated in the literature at approximately 140,000, and

given that preterm birth can be costly to a health plan, we

anticipate that commercial payers and state Medicaid

programs will cover and reimburse Makena™.

•

Many of our payer partners have a distinguished history in

working toward the prevention of preterm birth as part of their

ongoing corporate social responsibility and quality

improvement initiatives.

25

Makena™

FDA Approval –

Pricing and Access

•

We anticipate that some patients may need financial assistance,

and we have established a comprehensive patient assistance

program to help facilitate access to Makena through the Makena

Care Connection.

•

Exemplifying our commitment to patient access, our comprehensive

financial assistance program covers both uninsured and insured

patients, based on income eligibility requirements.  Specifically,

women with household incomes up to $100,000 will be eligible for

financial assistance.  Notably, this income level includes

approximately 85% of U.S. households.

26

Other Items –

Financial Update

•

Management’s focus since our January 2011 announcement

of Makena’s approval delay and the Company’s liquidity

evaluation

–

Re-negotiating the agreement with Hologic to change the

milestone payment schedule which was completed about a week

and a half ago and has been announced, resulting in a near term

liquidity improvement of $65MM

–

Coupled with the amendment we made to the DOJ payment

schedule that we announced in November, we have freed up

nearly $75MM of near term liquidity

•

The second key initiative has been  to complete a capital raise

through a PIPE transaction that was announced earlier this

morning

27

Other Items –

Financial Update

•

Additionally, we have been negotiating an amendment to the

loan arrangements with U.S. Healthcare I and II, funds owned

by Centerbridge, which will be completed by the end of this

week.

•

The financial areas upon which we will provide an update

today include:

–

Debt and liquidity overview

–

An update on our return to being a current and timely SEC filer

28

Financial Update –

Liquidity

•

We announced this morning the completion of a PIPE transaction

from which we generated gross proceeds of $32MM and issued

about 10 million shares. 

•

We will use $20MM to pay down the loan with US Healthcare I and

II, and the remaining net proceeds will be available for the operating

needs of the business, primarily targeted to the launch of Makena.

29

Financial Update –

Liquidity

•

We also announced that we are finalizing amendments to our

existing loan arrangements with US Healthcare I and II.  A high

level summary follows:

–

We received a funding commitment for $130MM

–

Covenants in the previous loan agreement are being amended so

that they are aligned with our current business strategy and

financial projections

–

KV will issue 7.5 million additional warrants to U.S. Healthcare

30

Financial Update –

Liquidity

•

With regards to our shares outstanding, after giving full pro

forma effect to the PIPE and the warrants, our total

outstanding share count will be approximately 83.5 million

shares, as follows:

–

50 million outstanding Class A & B shares

–

20 million of warrants for Class A shares to U.S. Healthcare

–

10 million Class A shares issued with the PIPE

–

3.5 million stock options

31

Financial Update –

Cash

•

With respect to cash and available loan proceeds, at December 31,

2010 we had approximately $31 million and as of today, we have

approximately $20 million, which gives pro forma effect to

approximately $10MM of proceeds from the PIPE, after using

$20MM to pay down the loan with U.S. Healthcare and fees

associated with the transaction 

•

Important to note is that today’s cash balance also reflects the $12.5

million payment to Hologic made last week in order to complete the

transfer of Makena to KV   

32

Financial Update –

Expenses

•

Our gross cash operating expenses over the past 4 or 5 months

have averaged $13 million per month and have fluctuated in a range

of $10 to $15 million per month

•

We expect that our total cash operating costs in the quarter ended

March 31, 2011 will be in the range of $50 to $60 million, which

includes the $12.5MM milestone payment to Hologic

•

As we look forward, it is important to note that these costs also

include our generics business, which we have previously announced

we are planning to divest 

•

While we are not providing an estimate of when that divestiture

might occur, the cash operating expenses associated with the

generics

business

is

in

the

range

of

25%

-

30%

of

our

total

monthly

costs

33

Financial Update –

Expenses

•

Our expense run rate over the past several months does not include

costs associated with Makena, most of which will be related to

adding approximately 95 people to our current sales force of

approximately 55 people, as well as other costs related to

advertising and promotions.

34

Financial Update –

Cash Inflows

•

We expect that our sources of cash in this quarter will come from

continued sales of Evamist, Micro K and KCL as well as the

monetization of certain assets and the collection of remaining tax

refunds.  As we announced, KCL was approved by the FDA last

fall and we began selling that product in late calendar 2010. 

•

We expect that cash collections from these sources will be in the

range of $10 to $15 million in the quarter ended March 31, 2011

•

Finally, we expect that we will have additional loan proceeds

available in March of $15MM from the amended loan facility

•

While we plan to launch Makena in March and generate

revenues, we will not collect cash from those sales until early next

quarter

35

Financial Update –

Liquidity

•

In summary, taking into account all of the items just discussed,

we expect cash at March 31, 2011 to be in the range of $10 to

$15 million.

•

Based upon a starting point of the cash balance at December 31,

2010 of $31 million, we expect:

–

Cash operating expenses of $50 to $60 million, which includes the

$12.5 million milestone payment to Hologic, offset by,

–

Net proceeds from the PIPE of approximately $10 million

–

A draw on the amended loan facility of $15 million, and,

–

Other cash inflows of $10 to $15 million which includes accounts

receivable collections and the monetization of certain other assets

and remaining tax refunds

36

Financial

Update

–

US

Healthcare

I

and

II

•

With respect to our loan arrangement with US Healthcare I and II,

here are the current facts:

–

In November 2010, we entered into a $60MM senior secured

facility and at the same time a commitment for a $120MM multi-

draw facility.  The multi-draw was designed to accomplish three

things:

•

First, create available cash to make the initial milestone payment to

Hologic, which we made last week

•

Second, retire the existing $60MM loan with US Healthcare I and II

and,

•

Third, provide working capital to ensure a successful commercial

launch of Makena

37

Financial

Update

–

US

Healthcare

I

and

II

•

This week, we are working on finalizing the terms of an amendment

to the multi-draw which, amongst other things:

–

Will result in a $130MM loan commitment;

–

Will defer the $60 million that was due March 20, 2011 to three

payments of $20 million each as follows:

•

The first payment this week when the PIPE is funded

•

$20 million in April 2011

•

$20 million in August 2011

–

Will amend existing covenants to be aligned with our business

strategy and projections

38

Financial

Update

–

US

Healthcare

I

and

II

•

Our ability to draw on the amended facility will be tied to

achievement of certain milestones, primarily related to the

performance of Makena.

•

Generally, the draws, all subject to achievement of milestones, will

flow as follows:

–

$15MM in March

–

$15MM in May

–

$10MM in each of July, August, September and October

39

Financial Update –

Debt

•

Finally,

to

sum

up

total

debt,

we

currently

have

,

after

giving

pro

forma effect to $20MM of cash from the PIPE to pay down the

existing loan with U.S. Healthcare, approximately $273 million

outstanding, broken down as follows:

–

$200 million outstanding in convertible notes

–

$40 million outstanding with a senior secured facility with U.S.

Healthcare after the pay down later this week of $20 million from the

announced PIPE.  This excludes additional loan availability from

amending the multi-draw facility I just described a minute ago, which

could add up to another $70 million of debt if we fully utilize the loan.

–

$32 million outstanding on our mortgages

40

Financial Update –

Liquidity

•

To sum up liquidity, we believe we have the cash available today

and on a go forward basis, to ensure a successful launch of

Makena as well as fund KV’s other operating expenses.  We are

well positioned to carry out our strategic plan, continue rebuilding

KV and return to sustainable and profitable operations.

•

Further, we believe that once we begin generating revenues from

Makena and achieve the return to market of other approved

products, that we will have sufficient cash resources for the on-

going support of our operations.

41

Financial Update –

SEC Filings

•

We filed our 10-K for FY 10 at the end of December and we are

rapidly working to get caught up on our delinquent quarterly filings

for FY11. 

•

We are already several weeks into the review of our quarter with

our external auditors and our expectation is that we will have the

three 10-Q’s filed within the next 60 days. 

•

Once we are caught up on the quarters, we will turn our full

attention to closing year end FY11 and a timely filing of our 10-K

in mid-June.

42

Other Items –

General Business Overview

•

Longer-term strategic decision to primarily focus and invest our

capital as a branded specialty pharmaceutical company

•

Committed to rebuilding our Company to sustainable success

through the development and commercialization of our branded

women’s health business

•

Working with third-party consultants and the FDA to obtain

approval to resume shipping key products, including our women’s

healthcare

branded

products,

Clindesse®

and

Gynazole-1®

•

Regarding

Clindesse®

and

Gynazole-1,

the

markets

in

which

these two products participate are largely unchanged since

January of 2009 when the products were removed from the

marketplace as part of the broader KV product withdrawals.  At

that time, Clindesse

and Gynazole-1 generated combined

annualized product revenues of approximately $60 million and

commanded the predominant share of promotional voice.

43

Other Items –

General Business Overview

•

We are currently promoting Evamist, which has remained on the

market

through

the

withdrawal

of

our

other

products.

Evamist

has

grown share, volume and dollars over the last 12 months, from

reported revenues of approximately $8 million, despite significant

company disruptions and major sales force reductions.

•

We are evaluating strategic alternatives for our generic business,

Nesher

Pharmaceuticals, Inc.

•

As previously reported the Company has pursued strategic

alternatives for its generics business.

We have received several

offers however these offers, to date, have been below the

Company’s expectations with regards to upfront value.

The

Company is continuing to work with Jefferies and all interested

parties to close a transaction.

44

Other Items –

General Business Overview

•

The

ANDA

assets

within

Nesher

have

significant

value,

and we

will continue on a parallel path to prepare the most commercially

attractive of those assets for approval and distribution.  This

approach allows us to capture the inherent value that exists in

Nesher

whether through our own marketing of products, or

ultimately through a divestiture of part or all of that business.

•

Nesher

has the rights to a portfolio of generic drugs and is

currently in the midst of launching its potassium chloride extended

release capsules, while additional products for which we have

prior market experience continue to advance through the re-

certification process with our third-party consultants, Lachman.

•

Going forward, we will continue to evaluate additional products to

expand our product portfolio through licensing arrangements,

acquisitions or internal development

45

KV Pharmaceutical Conference Call –

Closing Remarks

•

We continue to move forward as a compliant, quality-driven

organization.  Our commercial operations are backed by a

proven sales and marketing capability that we believe will return

our Company to revenue sustainability, profitability, and value to

our shareholders.

•

We have a diversified base of assets, coupled with a

passionately committed employee base who has worked very

hard to put us on this path back to success, and who are equally

committed to the patients we serve

•

We are proud and excited to be in the position of creating access

to Makena™, which has great potential to make a positive

difference for the thousands of moms who have experienced a

singleton spontaneous preterm birth

46

KV Pharmaceutical Conference Call –

Closing Remarks

•

This is an important time for the Company.  KV’s Board of

Directors, our management team, and our passionately

dedicated employees are working diligently to return our

Company to self-sustaining revenue performance as quickly as

possible

•

Makena™

is a truly compelling opportunity.  There are tens of

thousands of mothers each year who are eligible for Makena™,

and until now, they have not had an FDA-approved product

available to them

•

We expect that Makena will be available for prescribing before

the end of March

•

Our teams are committed to working in partnership with key

stakeholders to help ensure that all eligible mothers have

access to Makena

47

KV Pharmaceutical Conference Call –

Closing Remarks

•

With

the

approval

of

Makena™

we

believe

we

are

poised to

make good progress against our goal of returning to growth

by advancing our specialty products, both branded and

generic, through the steps required to regain FDA approval

to manufacture and distribute them

•

As we look forward to what we believe will be an exciting

phase in our return to sustainable and profitable operations,

we will communicate important developments regarding our

business and other materials events as they occur

Form –

8K

Makena™

Conference Call

February 14, 2011