K-V Pharmaceutical has said that it plans to focus on developing branded speciality medications, and will consider strategic options for its generic drug unit.

The company will retain Jefferies & Co in order to evaluate options for its Nesher Pharmaceuticals unit.

Nesher was created in October as a replacement for its previous generic company, Ethex, which was hit my multiple product recalls.

K-V now plans to focus on developing costly medications that require special handling, and announced that it will not be excluded from selling products to federal health programmes.

As part of an agreement with the US Department of Health and Human Services, the company will dissolve Ethex and dispose of its assets, while former CEO Marc Hermelin has resigned from the board.

The company hopes to secure a loan of up to $120m if it can receive US approval for its GestivaT medication, designed to help prevent premature births.

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The US Food and Drug Administration scheduled to make a decision in January 2011.