The US Food and Drug Administration (FDA) has been inspecting KV’s operations and inventory since December following a challenging year for the company.

KV is now attempting to rectify the problems that resulted in multiple recalls last year by hiring Lachman Consultant Services to review its manufacturing and packaging processes.

David Van Vliet, interim president and CEO, said: “The new leadership team at KV realises that we are in a very challenging time for the company. We are committed, however, to resolving these issues and resuming production as soon as possible by working closely with the FDA and the independent experts from Lachman Consultant Services.”

KV’s Evamist, ketorolac tromethamine tablets and enteric coated naproxen sodium tablets are not affected by the suspension of manufacture as they are produced by another company.

However, these products generate little revenue for KV and the company has acknowledged in a filing with the US Securities and Exchange Commission (SEC) that its troubles are hurting it financially.

KV predicts its actions will damage its revenues, liquidity, assets and capital resources. Further financial pain will be caused by the nationwide recall of products, the scope and depth of which KV is discussing with the FDA, and reentering the market after resuming manufacturing.

In addition KV suspects that on December 31 it was not in compliance with financial covenants included in its credit agreement, which could lead to the company having to repay its $30m debts immediately.