Thursday, April 14, 2011

Makena Controversy Didn't Hurt KV -- Pharma Co.'s Stock Soared

Posted By on Thu, Apr 14, 2011 at 1:06 PM


There is no such thing as bad publicity.

That's the only conclusion we can reach upon hearing that even after getting pilloried in the national press for its attempt to charge pregnant women as much as $1,500 for a drug designed to prevent preterm labor, the stock at KV Pharmaceutical soared 130 percent last quarter.

Now, the stock surely rose during that time in part because the Bridgeton, Missouri, company had received FDA approval for exclusive rights to the drug, called Makena, on February 4. But it's worth nothing that KV announced its subsequent 100 percent mark-up in early March. The quarter ended March 31 -- which is right when the company was scrambling to handle widespread outrage over its ham-fisted money grab. If there was ever a time that principled investors might want to unload, or newbies might be worried about KV's judgment, you'd think that the last few weeks of March would be that time.

You'd be wrong.

On March 31, shares were trading at $5.94, up from $2.58 on December 31, 2010, according to the St. Louis Business Journal.

But here's what's really sad.

Just after the quarter ended, on April 1, KV announced that it was giving in (a bit), and reducing the price of Makena to the oh-so-affordable price of $690 per injection. While still ridiculously costly, that's a reduction of more than 50 percent from its originally announced price-point.

And so what happened April 1?

The company's stock plummeted, with shares falling as much as 11 percent that day, reports the financial web site The company's shares were trading at just around $4 per share at press time.

So what can we learn from this story? Apparently, America's investors are a lot more concerned about a company that bows to public pressure and tries to help women with high-risk pregnancies -- and a lot less concerned about big-pharm pirates trying to gouge the hell out of them. Comforting notion, that.

Tags: ,

Best Things to Do In St. Louis


Never miss a beat

Sign Up Now

Subscribe now to get the latest news delivered right to your inbox.

© 2019 Riverfront Times

Website powered by Foundation