K-V Pharmaceutical Co. said Wednesday it is opening a new generic drug business to replace its Ethex unit, which is being closed after a series of product recalls that resulted in criminal charges.
K-V said the new division will be called Nesher Pharmaceuticals Inc. Nesher will be led by President Mark Hartman, a former executive for generic drugmakers including Dr. Reddy's Laboratories Inc. and Watson Pharmaceuticals Inc.
The company pulled all its drugs off the market in January 2009 after issuing several product recalls. Most of the recalled products were made by the Ethex generic drug business, which pleaded guilty to criminal charges that it did not tell regulators about its manufacturing problems. Ethex was assessed $27.6 million in fines and restitution, and K-V said it would close down the business.
The company received approval to start shipping one new generic product in September following an inspection by the Food and Drug Administration. The FDA is expected to conduct more inspections before K-V is allowed to start selling other products.
Class A shares of K-V Pharmaceutical slipped 5 cents to $2.63 in morning trading. The stock has ranged between 60 cents and $5.04 over the last year.