Departure debacle: Hermelin and KV part company
A press statement by Hermelin maintains that he resigned as CEO on Monday, December 1 but will stay on as a KV board member. Additionally, a spokesperson for the Hermelin family told the Associated Press that “he had been planning to retire since he turned 65 in January 2007 and decided this was the right time to do so.”
However, while the firm has yet to issue a statement, a number of media reports suggest that KV has terminated Hermelin’s contract in a move that will also see him relinquish his chairmanship.
While neither KV nor Hermelin have provided a reason for his sudden departure, the news comes after a series of problems for the Missouri headquartered drugmaker that include last week's filing of a class action suit by disgruntled shareholders.
The suit alleges that KV “made false and misleading statements about…compliance with federal regulations and its financial prospects,” and that the firm’s failure to recall unsafe drug products made by Ethex constitutes misconduct under US Securities and Exchange Commission (SEC) rules.
Dyer & Berens, lawyers representing one of the shareholder groups, also said that KV, which delayed the filing of its financial results for the quarter ended September 30, failed to write-off around $24m in product inventories seized by the US Food and Drug Administration (FDA) in July.
The FDA’s move was part of a clampdown on unapproved uses of the muscle relaxant guaifenesin, which was being employed as an expectorant in prescription and over-the-counter (OTC) cough remedies.
News of Hermelin’s departure saw KV’s share price climb 17 per cent to $4.50 in trading on the New York Stock Exchange when the story broke late last week.
