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KV Pharmaceutical Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of drugmaker KV Pharmaceutical (NYSE: KV-A  ) sank 15% in intraday trading Friday after a pair of U.S. senators called for a probe into the company regarding "potential anticompetitive conduct."

So what: KV has been criticized for its move to raise the price of Makena, an injection used to prevent premature births, from $10 to $1,500, but yesterday, U.S. Sens. Amy Klobuchar, D-Minn., and Sherrod Brown, D-Ohio, turned up the heat. In a letter Thursday to the Federal Trade Commission, the two urged an investigation into what they deemed price gouging from KV, concerned that the actions "will result in diminished access to appropriate health care for women and result in increased preterm births."

Now what: I'd be cautious about pouncing on today's pullback. Even with the recent wave of backlash, KV shares are still up a staggering 450% since receiving approval for Makena last month. With the negative sentiment toward KV -- whether justified or not -- only getting stronger, the downside seems just too big at this point.

Interested in more info on KV? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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