ST. LOUIS (AP) -- Shares of KV Pharmaceutical plummeted to an all-time low Monday morning after the company said it would recall most of its products and halted its manufacturing and shipping operations.
The announcement followed two product recalls in November and December linked to oversize tablets, including painkillers and attention-deficit disorder drugs, which could deliver dangerously large doses.
The company said the exact terms of the latest voluntary recall are still in discussion with safety regulators at the Food and Drug Administration. The agency began investigating KV's manufacturing and quality control standards late last year.
In a regulatory filing Monday, the company warned investors that the FDA could pursue "judicial proceedings and criminal prosecution."
Shares of KV Pharmaceutical Co. plunged to a record low of 49 cents in morning trading, but recovered slightly to 58 cents, or down 74.1 percent, by early afternoon.
The company said the recall and suspension would have a significant impact on its financial position and warned that it could default on its credit agreement. At the end of 2008 the company owed $30 million on the agreement.
KV's board of directors also said it formed a special five-person committee to respond to charges that the company violated certain securities laws. The company faces class action lawsuits by investors as well as an informal inquiry by investigators at the Securities and Exchange Commission.
In an unrelated setback, the company said the FDA has delayed a decision on the company's experimental drug Gestiva, which is designed to prevent preterm birth. The company had previously told investors a decision would be issued by Jan. 25, but regulators have requested additional data on the drug.
As a result, KV said it does not expect to gain revenue from the product this fiscal year, which ends March 31.