K-V sells assets of Nesher to Zydus and Zynesher Pharmaceuticals

Aug 9 2011

K-V Pharmaceutical Company ("the Company," "K-V") (NYSE: KVa/KVb) today announced the completion and closing of the previously announced sale of assets of Nesher Pharmaceuticals, Inc. ("Nesher"), the Company's wholly-owned generic subsidiary, and the Company's generic business and assets to Zydus Pharmaceuticals (USA), Inc and Zynesher Pharmaceuticals (USA) LLC (together, the "Buyer").

The aggregate sales price for the transaction is $60 million (subject to possible adjustment to reflect the working capital of the business unit at closing) of which $7.5 million will be held in an escrow arrangement for post-closing indemnification purposes.  The purchase includes the physical assets associated with the Company's generic business, including certain manufacturing, packaging and laboratory facilities, certain intellectual property, existing and future product opportunities, as well as equipment specific to the generic business.  

Separately, the Company has entered into a supply agreement with Zydus Pharmaceuticals, Inc. to provide third-party manufacturing services for Clindesse® and Gynazole-1®.

Greg Divis, the Company's Chief Executive Officer and President of Ther-Rx Corporation, stated, "This divestiture is in-line with our announced efforts to focus our future product roadmap in the specialty branded pharmaceutical sector.  The net proceeds from the transaction will strengthen our financial position and liquidity, while exiting the generics business will immediately reduce our quarterly cash outlays.  Moving forward, we will continue working towards making important progress with Makena™, returning our branded anti-infective products back to market and supporting additional growth potential for Evamist™."