Shareholders of KV Pharmaceuticals (NYSE: KV-A) (NYSE: KV-B) have endured a truly epic rollercoaster ride in 2011. In the past three months, shares of the company have traded as low as $1.13, and as high as $13.55, as the soap-opera story of its potential blockbuster pre-term birth drug Makena unfolded.

Just six weeks ago, KV Pharmaceuticals made my weekly list of three companies near 52-week highs worth selling. At the time, the company traded at a market cap approaching $800 million, despite its inexperienced sales team. It had also recently announced the sale of $32 million in stock and repriced its exclusive drug Makena at $1,500 per dose, compared to the $15 per injection that other sources had previously charged for another formulation of the drug.

This move unleashed a backlash from doctors and even Congress, which accused the company of price-gouging. In the meantime, Makena's developer Hologix (Nasdaq: HOLX) escaped scot free, transferring all rights to the drug over to KV following FDA approval.

In the wake up the uproar, the FDA clarified its position that it would not prevent doctors from prescribing previously cheaper drug combinations, potentially crippling KV's near-monopoly on the pre-term birth market. KV responded to this disastrous PR nightmare by slashing the price of Makena by 55% to $690 per dose – but the damage had already been done. KV now sits up more than 250% from its February lows, but also down nearly 70% from its March highs.

Shockingly, though, there could still be a lot of value tied up in Makena. It may take some time and yet another price cut to unlock it, but the drug, generally administered over 20 weeks, could provide long-term KV shareholders a nice boost.

The pre-term birth market costs the U.S. about $26 billion annually, so even a small portion of that pie could mean big business for a small company like KV. The company's downfall was that it tried to recoup its $200 million in development costs too quickly. If the company sets reasonable expectations, and prices Makena even lower than its current levels, there's a good chance it can control a large enough chunk of that $26 billion market while still maintaining very high margins.

The next few quarters will be crucial to KV. Once this PR nightmare blows over -- and it eventually will -- investors will be looking for incremental quarterly jumps in Makena sales. Without exclusivity from the FDA, Makena won't be an overnight blockbuster, but the drug has a good chance to net high margins and significant profits for KV.

For now, we just sit on our hands and wait for the smoke the clear. It's amazing what a difference a month can make when formulating an opinion on a stock. Now it's time to see whether slow-but-steady will indeed win the race.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.