KV Pharmaceuticals net revenues up 13% for second quarter of fiscal 2007, spurred by Ther-Rx

By Jennifer Chiou

New York, Nov. 6 - KV Pharmaceutical Co. announced a net revenue increase of $108.8 million or 13% for the second quarter of fiscal 2007 ended Sept. 30, compared to $96.3 million for the second quarter of fiscal 2006.

KV noted that revenues for the fiscal 2007 six-month period improved 14% to $207.2 million, compared to $181.8 million for the first six months of fiscal 2006.

The St. Louis-based integrated specialty pharmaceutical company also reported 36% revenue growth for Ther-Rx, while gross profit for the second quarter increased to $69.4 million, up $7.1 million or 11% over the prior year's quarter, due primarily to higher Ther-Rx sales, which represented 42% of overall revenues versus 35% for the second quarter of fiscal 2006.

KV noted that net income for the September quarter was $12.4 million, or $0.22 per diluted share, up 7.4% or $0.8 million from the comparable period in the prior year.

For the six months ended Sept. 30, net income was $22.2 million, or $0.41 per diluted share, compared to a loss of $10.4 million, or $0.21 per diluted share for the comparable period of the prior year.

KV added that the net income and diluted earnings per share amounts are subject to adjustment based on the outcome of the audit committee's inquiry into the effect of certain stock option grants and the company's completion of the interim financial statements.

As previously reported, an independent committee of the audit committee of the company's board of directors is undertaking a review of claims contained in a derivative lawsuit alleging that certain stock option grants to six current or former directors and officers between 1995 and 2002 were backdated improperly.

While the committee members are working to complete their review, the company said that the timing of the independent review will delay the filing of the company's form 10-Q for the quarter ended Sept. 30.

"KV reported a strong second quarter, both in revenue and profits. Performance was led by 36% revenue growth at Ther-Rx Corp., which continues to build market leader positions in its key product categories," chairman of the board and chief executive officer Marc S. Hermelin said in a news release.

"At the same time, our Ethex generics unit has done an outstanding job protecting its solid gross margin in an otherwise difficult market environment. Ethex is and will continue to benefit from its ANDA pipeline."

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