On Friday, K-V Pharmaceutical (UNKNOWN:KVPHQ.DL) announced that the U.S. Bankruptcy Court for the Southern District of New York has approved the company's settlement agreement with Hologic (NASDAQ:HOLX), resolving the company's dispute over the Makena drug for mitigating the risk of premature delivery. The court has also permitted K-V to enter into a debtor-in-possession financing arrangement that will be used, in part, to fund the settlement.

K-V noted that the settlement with Hologic resolves all disputes between the two parties, confirms K-V's ownership of the drug, and is a key step in K-V's progress toward emerging from Chapter 11 bankruptcy.

Shares of K-V, now trading on the over-the-counter market, dropped one penny (17.5%) on the news to $0.07. Shares of Hologic declined 0.7% to $19.98.