<PAGE>

                     SECURITIES AND EXCHANGE COMMISSION
                     ----------------------------------
                           WASHINGTON, D.C. 20549

                                  FORM 10-Q

           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           -------------------------------------------------------
                       SECURITIES EXCHANGE ACT OF 1934
                       -------------------------------

                FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005
                                               -------------

                        COMMISSION FILE NUMBER 1-9601
                                               ------

                         K-V PHARMACEUTICAL COMPANY
------------------------------------------------------------------------------
           (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

              DELAWARE                                  43-0618919
   -------------------------------        ------------------------------------
   (STATE OR OTHER JURISDICTION OF        (I.R.S. EMPLOYER IDENTIFICATION NO.)
   INCORPORATION OR ORGANIZATION)

             2503 SOUTH HANLEY ROAD, ST. LOUIS, MISSOURI 63144
------------------------------------------------------------------------------
                  (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
                                 (ZIP CODE)

                               (314) 645-6600
------------------------------------------------------------------------------
            (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

      INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL
REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR SUCH SHORTER PERIOD
THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS) AND (2) HAS BEEN
SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES  X  NO
                                                              ---    ---

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN ACCELERATED FILER (AS
DEFINED IN EXCHANGE ACT RULE 12B-2).  YES  X  NO
                                          ---    ---

             TITLE OF CLASS OF                         NUMBER OF SHARES
               COMMON STOCK                    OUTSTANDING AS OF AUGUST 1, 2005
               ------------                    --------------------------------

CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE           36,170,170
CLASS B COMMON STOCK, PAR VALUE $.01 PER SHARE           13,128,424


<PAGE>
<PAGE>

PART I. - FINANCIAL INFORMATION
ITEM 1.   FINANCIAL STATEMENTS

<TABLE>
                          K-V PHARMACEUTICAL COMPANY AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF INCOME
                       (Unaudited; in thousands, except per share data)

<CAPTION>
                                                                       THREE MONTHS ENDED,
                                                                            JUNE 30,
                                                                 ------------------------------
                                                                   2005                   2004
                                                                 --------               -------

<S>                                                              <C>                    <C>
Net revenues...........................................          $ 85,475               $66,087
Cost of sales..........................................            26,202                23,734
                                                                 --------               -------
Gross profit...........................................            59,273                42,353
                                                                 --------               -------

Operating expenses:
  Research and development.............................             7,632                 4,624
  Purchased in-process research and development........            30,441                     -
  Selling and administrative...........................            37,360                24,131
  Amortization of intangible assets....................             1,180                 1,122
                                                                 --------               -------
Total operating expenses...............................            76,613                29,877
                                                                 --------               -------

Operating income (loss)................................           (17,340)               12,476
                                                                 --------               -------

Other expense (income):
  Interest expense.....................................             1,377                 1,446
  Interest and other income............................            (1,053)                 (513)
                                                                 --------               -------
Total other expense, net...............................               324                   933
                                                                 --------               -------

Income (loss) before income taxes......................           (17,664)               11,543
Provision for income taxes.............................             4,280                 3,982
                                                                 --------               -------

Net income (loss)......................................          $(21,944)              $ 7,561
                                                                 ========               =======

Earnings (loss) per common share:
  Basic Class A common.................................          $  (0.45)              $  0.16
  Basic Class B common.................................             (0.45)                 0.14

  Diluted..............................................          $  (0.45)              $  0.14


SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>


                                     2

<PAGE>
<PAGE>

<TABLE>
                                   K-V PHARMACEUTICAL COMPANY AND SUBSIDIARIES
                                           CONSOLIDATED BALANCE SHEETS
                                        (In thousands, except share data)

<CAPTION>
                                                                                         JUNE 30,        MARCH 31,
                                                                                           2005            2005
                                                                                           ----            ----
                                                                                        (unaudited)

<S>                                                                                      <C>             <C>
                                            ASSETS
                                            ------
CURRENT ASSETS:
Cash and cash equivalents............................................................    $ 96,944        $159,825
Marketable securities................................................................      55,929          45,694
Receivables, less allowance for doubtful accounts of $461 and $461
 at June 30, 2005 and March 31, 2005, respectively...................................      62,572          62,361
Inventories, net.....................................................................      59,766          53,945
Prepaid and other assets.............................................................       4,977           9,530
Deferred tax asset...................................................................       6,555           5,827
                                                                                         --------        --------
  Total Current Assets...............................................................     286,743         337,182
Property and equipment, less accumulated depreciation................................     151,612         131,624
Intangible assets and goodwill, net..................................................      76,099          76,430
Other assets.........................................................................      19,319          13,081
                                                                                         --------        --------
TOTAL ASSETS.........................................................................    $533,773        $558,317
                                                                                         ========        ========

                                         LIABILITIES
                                         -----------
CURRENT LIABILITIES:
Accounts payable.....................................................................    $ 14,313        $ 18,011
Accrued liabilities..................................................................      14,986          15,733
Current maturities of long-term debt.................................................         973             973
                                                                                         --------        --------
  Total Current Liabilities..........................................................      30,272          34,717
Long-term debt.......................................................................     209,524         209,767
Other long-term liabilities..........................................................       4,817           4,477
Deferred tax liability...............................................................      18,354          16,654
                                                                                         --------        --------
TOTAL LIABILITIES....................................................................     262,967         265,615
                                                                                         --------        --------

COMMITMENTS AND CONTINGENCIES
                                     SHAREHOLDERS' EQUITY
                                     --------------------

7% cumulative convertible Preferred Stock, $.01 par value; $25.00 stated and
 liquidation value; 840,000 shares authorized; issued and outstanding --
 40,000 shares at June 30, 2005 and March 31, 2005 (convertible into Class A
 shares at a ratio of  8.4375 to one)................................................          --              --
Class A and Class B Common Stock, $.01 par value;150,000,000 and
 75,000,000 shares authorized, respectively;
  Class A - issued 39,273,151 and 39,059,428 at June 30, 2005
   and March 31, 2005, respectively..................................................         393             391
  Class B - issued 13,231,326 and 13,422,101 at June 30, 2005 and March 31, 2005,
   respectively (convertible into Class A shares on a one-for-one basis).............         132             134
Additional paid-in capital...........................................................     128,280         128,182
Retained earnings....................................................................     195,818         217,779
Accumulated other comprehensive loss.................................................        (133)           (133)
Less: Treasury stock, 3,112,394 shares of Class A and 92,902 shares of Class B
 Common Stock at June 30, 2005, respectively, and 3,111,003 shares of Class A and
 92,902 shares of Class B Common Stock at March 31, 2005, respectively, at cost......     (53,684)        (53,651)
                                                                                         --------        --------
TOTAL SHAREHOLDERS' EQUITY...........................................................     270,806         292,702
                                                                                         --------        --------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...........................................    $533,773        $558,317
                                                                                         ========        ========

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>


                                     3

<PAGE>
<PAGE>

<TABLE>
                                  K-V PHARMACEUTICAL COMPANY AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                           (Unaudited; in thousands)

<CAPTION>
                                                                                        THREE MONTHS ENDED
                                                                                             JUNE 30,
                                                                                    --------------------------
                                                                                      2005              2004
                                                                                    --------          --------
<S>                                                                                 <C>               <C>
OPERATING ACTIVITIES:
Net income (loss)......................................................             $(21,944)         $  7,561
Adjustments to reconcile net income (loss) to net cash provided by
 operating activities:
  Acquired in-process research and development........................                29,570                 -
  Depreciation, amortization and other non-cash charges...............                 3,891             3,341
  Deferred income tax provision.......................................                   727             1,611
  Deferred compensation...............................................                   340                75
Changes in operating assets and liabilities:
  Increase in receivables, net........................................                  (211)           (2,063)
  Increase in inventories, net........................................                (5,821)           (2,520)
  Decrease (increase) in prepaid and other assets.....................                 4,777              (123)
  Decrease in accounts payable and accrued............................
   liabilities......................................................                  (4,869)           (2,279)
                                                                                    --------          --------
Net cash provided by operating activities..............................                6,460             5,603
                                                                                    --------          --------

INVESTING ACTIVITIES:
  Purchase of property and equipment, net.............................               (22,392)          (13,757)
  Purchase of marketable securities...................................               (10,235)          (10,097)
  Purchase of preferred stock.........................................               (11,300)                -
  Product acquisition.................................................               (25,219)                -
                                                                                    --------          --------
Net cash used in investing activities..................................              (69,146)          (23,854)
                                                                                    --------          --------

FINANCING ACTIVITIES:
  Principal payments on long-term debt................................                  (243)             (244)
  Dividends paid on preferred stock...................................                   (17)              (17)
  Purchase of common stock for treasury...............................                   (33)           (2,425)
  Proceeds from exercise of common stock options......................                    98             2,698
                                                                                    --------          --------
Net cash provided by (used in) financing activities....................                 (195)               12
                                                                                    --------          --------
Decrease in cash and cash equivalents..................................              (62,881)          (18,239)
Cash and cash equivalents:
  Beginning of year...................................................               159,825           191,581
                                                                                    --------          --------
  End of period.......................................................              $ 96,944          $173,342
                                                                                    ========          ========

SUPPLEMENTAL INFORMATION:
  Interest paid, net of capitalized interest..........................              $  2,194          $  2,464
  Income taxes paid...................................................                     -               663


SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>


                                     4

<PAGE>
<PAGE>

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                    (in thousands, except per share data)

1.  BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of K-V
Pharmaceutical Company ("KV" or the "Company") have been prepared in
accordance with U.S. generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by U.S. generally accepted accounting principles for
complete financial statements. However, in the opinion of management, all
adjustments (consisting of only normal recurring accruals) considered
necessary for a fair presentation have been included. The results of
operations and cash flows for the three month period ended June 30, 2005 is
not necessarily indicative of the results of operations and cash flows that
may be expected for the fiscal year ending March 31, 2006. The interim
consolidated financial statements should be read in conjunction with the
consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the fiscal year ended March 31,
2005. The balance sheet information as of March 31, 2005 has been derived
from the Company's audited consolidated balance sheet as of that date.

2.  ACQUISITION AND LICENSE AGREEMENTS

In May 2005, the Company and FemmePharma, Inc. ("FemmePharma") mutually
agreed to terminate the license agreement between them entered into in April
2002. As part of this transaction, the Company acquired all of the common
stock of FemmePharma for $25,000 after certain assets of the entity had been
distributed to FemmePharma's other shareholders. Under a separate agreement,
the Company had previously invested $5,000 in FemmePharma's convertible
preferred stock. Included in the Company's acquisition of FemmePharma are
the worldwide marketing rights to an endometriosis product that has
successfully completed Phase II clinical trials. This product was originally
part of the licensing arrangement with FemmePharma that provided the
Company, among other things, marketing rights for the product principally in
the United States. In accordance with the new agreement, the Company is
assuming responsibility for conducting the proposed Phase III clinical
study, has acquired worldwide licensing rights of the endometriosis product,
is no longer responsible for milestone payments and royalties specified in
the original licensing agreement, and has secured exclusive worldwide rights
for use of the FemmePharma technology for vaginal anti-infective products.
During the three months ended June 30, 2005, the Company recorded expense in
connection with the FemmePharma acquisition of $30,441 that consisted of
$29,570 for acquired in-process research and development and $871 in direct
expenses related to the transaction. The acquired in-process research and
development charge represented the estimated fair value of the endometriosis
product being developed that, at the time of the acquisition, had no
alternative future use and for which technological feasibility had not been
established. The Company also allocated $375 of the purchase price for a
non-compete agreement and $300 of the purchase price for the royalty-free
worldwide license to use FemmePharma's technology for vaginal anti-infective
products acquired in the transaction. The allocation of the purchase price
is preliminary.

In May 2005, the Company entered into a long-term product development and
marketing license agreement with Strides Arcolab, Ltd, (Strides) an Indian
generic pharmaceutical developer and manufacturer, for exclusive marketing
rights in the United States and Canada for 10 new generic drugs. Under the
agreement, Strides will be responsible for developing, submitting for
regulatory approval and manufacturing the 10 products and the Company will
be responsible for exclusively marketing the products in the territories
covered by the agreement. Under a separate agreement, the Company invested
$11,300 in Strides' redeemable preferred stock. The $11,300 investment has
been accounted for using the cost method and is included in "Other assets"
in the accompanying consolidated balance sheets.

                                     5

<PAGE>
<PAGE>

3.  STOCK-BASED COMPENSATION

The Company grants stock options for a fixed number of shares to employees
with an exercise price greater than or equal to the fair value of the shares
at the date of grant. As permissible under Statement of Financial Accounting
Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, the
Company elected to continue to account for stock option grants to employees
in accordance with Accounting Principles Board (APB) Opinion No. 25,
Accounting for Stock Issued to Employees and related interpretations. APB 25
requires that compensation cost related to fixed stock option plans be
recognized only to the extent that the fair value of the shares at the grant
date exceeds the exercise price. Accordingly, no compensation expense is
recognized for stock option awards granted to employees at or above fair
value. Had the Company determined compensation expense using the fair value
method prescribed by SFAS 123, the Company's net income (loss) and earnings
(loss) per share would have been as follows:

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED
                                                                       JUNE 30,
                                                                ----------------------
                                                                  2005           2004
                                                                  ----           ----

<S>                                                             <C>             <C>
         Net income (loss), as reported.................        $(21,944)       $7,561
         Stock based employee
          compensation expense,
          net of related tax effects...................             (131)         (157)
                                                                --------        ------
         Pro forma net income (loss)....................        $(22,075)       $7,404
                                                                ========        ======

         Earnings (loss) per share:
           Basic Class A common - as reported..........         $ (0.45)        $ 0.16
           Basic Class A common - pro forma............           (0.45)          0.16
           Basic Class B common - as reported..........           (0.45)          0.14
           Basic Class B common - pro forma............           (0.45)          0.13
           Diluted - as reported.......................           (0.45)          0.14
           Diluted - pro forma.........................           (0.45)          0.14
</TABLE>

The weighted average fair value of the options has been estimated on the
date of grant using the following weighted average assumptions for grants
during the three months ended June 30, 2005 and 2004, respectively: no
dividend yield; expected volatility of 34% and 41% for Class A common stock;
expected volatility of 31% and 38% for Class B common stock; risk-free
interest rate of 3.87% and 3.70% per annum; and expected option terms
ranging from 3 to 10 years for both periods. Weighted averages are used
because of varying assumed exercise dates.

                                     6

<PAGE>
<PAGE>

4.  EARNINGS PER SHARE

    The following table sets forth the computation of basic and diluted
earnings (loss) per share:

<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED
                                                                            JUNE 30,
                                                                     ----------------------
                                                                       2005          2004
                                                                       ----          ----
<S>                                                                  <C>            <C>
Undistributed earnings (loss):
  Net income (loss)........................................          $(21,944)      $ 7,561
  Less - preferred stock dividends.........................               (17)          (17)
                                                                     --------       -------
  Undistributed earnings (loss) - basic EPS................           (21,961)        7,544
  Add - preferred stock dividends..........................                 -            17
  Add - interest expense on convertible
   notes, net of tax.......................................                 -         1,009
                                                                     --------       -------
  Net income (loss) - diluted EPS..........................          $(21,961)      $ 8,570
                                                                     ========       =======
Allocation of undistributed earnings (loss) - basic EPS:
  Class A common stock.....................................          $(16,013)      $ 5,369
  Class B common stock.....................................            (5,948)        2,175
                                                                     --------       -------
    Total allocated earnings (loss) - basic EPS............          $(21,961)      $ 7,544
                                                                     ========       =======
Weighted average shares outstanding - basic:
  Class A common stock.....................................            35,961        33,048
  Class B common stock.....................................            13,359        16,068
                                                                     --------       -------
    Total weighted average shares
     outstanding - basic...................................            49,320        49,116
                                                                     --------       -------
Effect of dilutive securities:
  Employee stock options...................................                 -         1,476
  Convertible preferred stock..............................                 -           338
  Convertible notes........................................                 -         8,692
                                                                     --------       -------
    Dilutive potential common shares.......................                 -        10,506
                                                                     --------       -------
    Total weighted average shares
     outstanding - diluted.................................            49,320        59,622
                                                                     ========       =======
Basic earnings (loss) per share:
  Class A common stock.....................................          $  (0.45)      $  0.16
  Class B common stock.....................................             (0.45)         0.14
Diluted earnings (loss) per share(1) (2)...................          $  (0.45)      $  0.14

<FN>
     (1)  For the three months ended June 30, 2005, there were stock options
          to purchase 3,227 shares of Class A and Class B common stock,
          preferred shares convertible into 338 shares of Class A common
          stock and $200,000 principal amount of Convertible Subordinated
          Notes convertible into 8,692 shares of Class A common stock that
          were excluded from the computation of diluted loss per share
          because their effect would have been anti-dilutive.

     (2)  For the three months ended June 30, 2004, excluded from the
          computation of diluted earnings per share were options to purchase
          162 Class A and Class B common shares whose exercise prices were
          greater than the average market price of the common shares for the
          period reported.
</TABLE>


                                     7

<PAGE>
<PAGE>

5.  REVENUE RECOGNITION

Revenue is generally realized or realizable and earned when persuasive
evidence of an arrangement exists, delivery has occurred or services have
been rendered, the seller's price to the buyer is fixed or determinable, and
the customer's payment ability has been reasonably assured. Accordingly, the
Company records revenue from product sales when title and risk of ownership
have been transferred to the customer, which is typically upon shipment to
the customer. The Company also enters into long-term agreements under which
it assigns marketing rights for the products it has developed to
pharmaceutical marketers. Royalties under these arrangements are earned
based on the sale of products.

Concurrently with the recognition of revenue, the Company records estimated
sales provisions for product returns, sales rebates, payment discounts,
chargebacks, and other sales allowances. Sales provisions are established
based upon consideration of a variety of factors, including but not limited
to, historical relationship to revenues, historical payment and return
experience, estimated customer inventory levels, customer rebate
arrangements, and current contract sales terms with wholesale and indirect
customers.

Actual product returns, chargebacks and other sales allowances incurred are,
however, dependent upon future events and may be different than the
Company's estimates. The Company continually monitors the factors that
influence sales allowance estimates and makes adjustments to these
provisions when management believes that actual product returns, chargebacks
and other sales allowances may differ from established allowances.

Accruals for sales provisions are presented in the consolidated financial
statements as reductions to net revenues and accounts receivable. Sales
provisions totaled $37,061 and $24,988 for the three months ended June 30,
2005 and 2004, respectively. The reserve balances related to the sales
provisions totaled $24,886 and $21,056 at June 30, 2005 and March 31, 2005,
respectively, and are deducted from "Receivables, less allowance for
doubtful accounts" in the accompanying consolidated balance sheets.

6.  INVENTORIES

    Inventories consist of the following:

<TABLE>
<CAPTION>
                                                      JUNE 30, 2005     MARCH 31, 2005
                                                      -------------     --------------

<S>                                                      <C>               <C>
           Finished goods.....................           $32,238           $30,521
           Work-in-process....................             7,822             5,773
           Raw materials......................            19,706            17,651
                                                         -------           -------
                                                         $59,766           $53,945
                                                         =======           =======
</TABLE>

Management establishes reserves for potentially obsolete or slow-moving
inventory based on an evaluation of inventory levels, forecasted demand and
market conditions.

                                     8

<PAGE>
<PAGE>

7.  INTANGIBLE ASSETS AND GOODWILL

    Intangible assets and goodwill consist of the following:

<TABLE>
<CAPTION>
                                                         JUNE 30, 2005                    MARCH 31, 2005
                                                  --------------------------        -------------------------
                                                   GROSS                             GROSS
                                                  CARRYING      ACCUMULATED         CARRYING     ACCUMULATED
                                                   AMOUNT       AMORTIZATION         AMOUNT      AMORTIZATION
                                                  --------      ------------        --------     ------------

<S>                                                <C>            <C>               <C>            <C>
Product rights - Micro-K(R)..................      $36,140        $(11,355)         $36,140        $(10,904)
Product rights - PreCare(R)...............           8,433          (2,495)           8,433          (2,389)
Trademarks acquired:
  Niferex(R)..............................          14,834          (1,669)          14,834          (1,484)
  Chromagen(R)/StrongStart(R).............          27,642          (3,110)          27,642          (2,764)
License agreements........................           4,468            (165)           4,168            (120)
Covenant not to compete...................             375              (6)               -               -
Trademarks and patents....................           2,988            (538)           2,814            (497)
                                                   -------        --------          -------        --------
  Total intangible assets.................          94,880         (19,338)          94,031         (18,158)
Goodwill..................................             557               -              557               -
                                                   -------        --------          -------        --------
                                                   $95,437        $(19,338)         $94,588        $(18,158)
                                                   =======        ========          =======        ========
</TABLE>

As of June 30, 2005, the Company's intangible assets have a weighted average
useful life of approximately 19 years. Amortization expense for intangible
assets was $1,180 and $1,122 for the three months ended June 30, 2005 and
2004, respectively.

Assuming no additions, disposals or adjustments are made to the carrying
values and/or useful lives of the intangible assets, annual amortization
expense on product rights, trademarks acquired and other intangible assets
is estimated to be approximately $3,577 for the remainder of fiscal 2006 and
approximately $4,769 in each of the four succeeding fiscal years.

8.   REVOLVING CREDIT AGREEMENT

As of June 30, 2005, the Company has credit agreements with two banks that
provide for revolving lines of credit for borrowing up to $140,000. The
credit agreements provide for $80,000 in revolving lines of credit along
with supplemental credit lines of $60,000 for financing acquisitions. These
credit facilities expire in October 2006 and December 2005, respectively.
The revolving credit lines are unsecured and interest is charged at the
lower of the prime rate or the one-month LIBOR rate plus 175 basis points.
At June 30, 2005, the Company had no cash borrowings outstanding under
either credit facility. The credit agreements include covenants that impose
minimum levels of earnings before interest, taxes, depreciation and
amortization, a maximum funded debt ratio, a limit on capital expenditures
and dividend payments, a minimum fixed charge ratio and a maximum senior
leverage ratio.

                                     9

<PAGE>
<PAGE>

9.  LONG-TERM DEBT

    Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                 JUNE 30, 2005       MARCH 31, 2005
                                                                 -------------       --------------

<S>                                                                <C>                  <C>
             Building mortgages..........................          $ 10,497             $ 10,740
             Convertible notes...........................           200,000              200,000
                                                                   --------             --------
                                                                    210,497              210,740
             Less current portion........................              (973)                (973)
                                                                   --------             --------
                                                                   $209,524             $209,767
                                                                   ========             ========
</TABLE>

On May 16, 2003, the Company issued $200,000 principal amount of Convertible
Subordinated Notes (the "Notes") that are convertible, under certain
circumstances, into shares of Class A common stock at an initial conversion
price of $23.01 per share. The Notes, which are due May 16, 2033, bear
interest that is payable on May 16 and November 16 of each year at a rate of
2.50% per annum. The Company also is obligated to pay contingent interest at
a rate equal to 0.5% per annum during any six-month period from May 16 to
November 15 and from November 16 to May 15, with the initial six-month
period commencing May 16, 2006, if the average trading price of the Notes
per $1,000 principal amount for the five trading day period ending on the
third trading day immediately preceding the first day of the applicable
six-month period equals $1,200 or more.

The Company may redeem some or all of the Notes at any time on or after May
21, 2006, at a redemption price, payable in cash, of 100% of the principal
amount of the Notes, plus accrued and unpaid interest, including contingent
interest, if any. Holders may require the Company to repurchase all or a
portion of their Notes on May 16, 2008, 2013, 2018, 2023 and 2028 or upon a
change in control, as defined in the indenture governing the Notes, at a
purchase price, payable in cash, of 100% of the principal amount of the
Notes, plus accrued and unpaid interest, including contingent interest, if
any. The Notes are subordinate to all of our existing and future senior
obligations.

The Notes are convertible, at the holders' option, into shares of the
Company's Class A common stock prior to the maturity date under the
following circumstances:

     o    during any quarter commencing after June 30, 2003, if the closing
          sale price of the Company's Class A common stock over a specified
          number of trading days during the previous quarter is more than
          120% of the conversion price of the Notes on the last trading day
          of the previous quarter. The Notes are initially convertible at a
          conversion price of $23.01 per share, which is equal to a
          conversion rate of approximately 43.4594 shares per $1,000
          principal amount of Notes;

     o    if the Company has called the Notes for redemption;

     o    during the five trading day period immediately following any nine
          consecutive day trading period in which the trading price of the
          Notes per $1,000 principal amount for each day of such period was
          less than 95% of the product of the closing sale price of our
          Class A common stock on that day multiplied by the number of
          shares of our Class A common stock issuable upon conversion of
          $1,000 principal amount of the Notes; or

     o    upon the occurrence of specified corporate transactions.

The Company has reserved 8,692 shares of Class A common stock for issuance
in the event the Notes are converted into the Company's common shares.

Certain conversion features of the Notes and the contingent interest feature
meet the criteria of and qualify as embedded derivatives. Although these
features represent embedded derivative financial instruments, based on the
de minimis value of them at the time of issuance and at June 30, 2005, no
value has been assigned to these embedded derivatives.

                                     10

<PAGE>
<PAGE>

The Notes, which are unsecured, do not contain any restrictions on the
payment of dividends, the incurrence of additional indebtedness or the
repurchase of the Company's securities, and do not contain any financial
covenants.

10. COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) includes all changes in equity during a period
except those that resulted from investments by or distributions to the
Company's shareholders. Other comprehensive income refers to revenues,
expenses, gains and losses that, under generally accepted accounting
principles, are included in comprehensive income, but excluded from net
income (loss) as these amounts are recorded directly as an adjustment to
shareholders' equity. For the Company, comprehensive income (loss) is
comprised of net income (loss) and the net changes in unrealized gains and
losses on available for sale marketable securities, net of applicable income
taxes. Total comprehensive income (loss) totaled $(21,944) and $7,428 for
the three months ended June 30, 2005 and 2004, respectively.

11. SEGMENT REPORTING

The reportable operating segments of the Company are branded products,
specialty generics and specialty materials. The Company has aggregated its
branded product lines in a single segment because of similarities in
regulatory environment, manufacturing processes, methods of distribution and
types of customer. This segment includes patent-protected products and
certain trademarked off-patent products that the Company sells and markets
as brand pharmaceutical products. The specialty generics business segment
includes off-patent pharmaceutical products that are therapeutically
equivalent to proprietary products. The Company sells its brand and generic
products primarily to pharmaceutical wholesalers, drug distributors and
chain drug stores. The specialty materials segment is distinguished as a
single segment because of differences in products, marketing and regulatory
approval when compared to the other segments.

Accounting policies of the segments are the same as the Company's
consolidated accounting policies. Segment profits are measured based on
income before taxes and are determined based on each segment's direct
revenues and expenses. The majority of research and development expense,
corporate general and administrative expenses, amortization and interest
expense, as well as interest and other income, are not allocated to
segments, but included in the "all other" classification. Identifiable
assets for the three reportable operating segments primarily include
receivables, inventory, and property and equipment. For the "all other"
classification, identifiable assets consist of cash and cash equivalents,
corporate property and equipment, intangible and other assets and all income
tax related assets.

The following represents information for the Company's reportable operating
segments for the three months ended June 30, 2005 and 2004.

<TABLE>
<CAPTION>
                                THREE MONTHS
                                   ENDED          BRANDED     SPECIALTY      SPECIALTY      ALL
                                  JUNE 30,       PRODUCTS      GENERICS      MATERIALS     OTHER     ELIMINATIONS   CONSOLIDATED
                                  --------       --------      --------      ---------     -----     ------------   ------------
<S>                                 <C>           <C>          <C>            <C>        <C>           <C>            <C>
   Net revenues                     2005          $31,878      $47,398        $4,853     $  1,346      $     -        $ 85,475
                                    2004           15,919       45,455         4,131          582            -          66,087

   Segment profit (loss)            2005           11,646       24,521         1,180      (55,011)           -         (17,664)
                                    2004            1,651       25,627           472      (16,207)           -          11,543

   Identifiable assets              2005           24,636       69,214         9,000      432,081       (1,158)        533,773
                                    2004           20,394       76,430         7,667      430,835       (1,158)        534,168

   Property and                     2005              121            -           191       22,080            -          22,392
     equipment additions            2004                -            -             -       13,757            -          13,757

   Depreciation and                 2005              139           71            40        3,641            -           3,891
     Amortization                   2004              105           30            35        3,171            -           3,341
</TABLE>

                                     11

<PAGE>
<PAGE>

Consolidated revenues are principally derived from customers in North
America and substantially all property and equipment is located in the St.
Louis, Missouri metropolitan area.

12. CONTINGENCIES - LITIGATION

The Company and ETHEX are named as defendants in a case brought by CIMA
LABS, Inc. and Schwarz Pharma, Inc. and styled CIMA LABS, Inc. et. al. v. KV
Pharmaceutical Company et. al. filed in Federal District Court in Minnesota.
It is alleged that the Company and ETHEX infringed on a CIMA patent in
connection with the manufacture and sale of Hyoscyamine Sulfate Orally
Dissolvable Tablets, 0.125 mg. The court has denied the plaintiffs' motion
for a preliminary injunction, which allows ETHEX to continue marketing the
product during the pendancy of the subject lawsuit. The Company filed
several motions for summary judgment requesting that the Court rule that the
relevant patent is unenforceable, invalid or not infringed. These motions
were denied and the issues will be considered at trial. CIMA and Schwarz
filed a summary judgment motion seeking the court to rule that the patent is
valid in the face of some prior art references cited by the Company as
providing support for its invalidity defense. The Court granted the motion;
however, other bases for invalidity are being asserted. The Company intends
to vigorously defend its interests; however, it cannot give any assurance it
will prevail.

The Company and ETHEX are named as defendants in a case brought by Solvay
Pharmaceuticals, Inc. and styled Solvay Pharmaceuticals, Inc. v. ETHEX
Corporation, filed in Federal District Court in Minnesota. In general,
Solvay alleges that ETHEX's comparative promotion of its Pangestyme(TM) CN
10 and Pangestyme(TM) CN 20 products to Solvay's Creon(R) 10 and Creon(R) 20
products resulted in false advertising and misleading statements under
various federal and state laws, and constituted unfair and deceptive trade
practices. Discovery is active and the case is required to be trial ready by
February 1, 2006. The Company intends to vigorously defend its interests;
however, it cannot give any assurance it will prevail.

KV previously distributed several pharmaceutical products that contained
phenylpropanolamine, or PPA, and that were discontinued in 2000 and 2001.
The Company is presently named a defendant in a product liability lawsuit in
Federal District Court in Mississippi involving PPA. The suit originated out
of a case, Virginia Madison, et al. v. Bayer Corporation, et al. The
original suit was filed in December 2002, but was not served on KV until
February 2003. The case was originally filed in the Circuit Court of Hinds
County, Mississippi, and was removed to the Federal District Court for the
Southern District of Mississippi by then co-defendant Bayer Corporation. The
case has been transferred to a Judicial Panel on Multi-District Litigation
for PPA claims sitting in the Western District of Washington. The claims
against the Company have been segregated into a lawsuit brought by Johnny
Fulcher individually and on behalf of the wrongful death beneficiaries of
Linda Fulcher, deceased, against the Company. It alleges bodily injury,
wrongful death, economic injury, punitive damages, loss of consortium and/or
loss of services from the use of the Company's distributed pharmaceuticals
containing PPA that have since been discontinued and/or reformulated to
exclude PPA. In May 2004, the case was dismissed with prejudice by the
Federal District Court for the Western District of Washington for a failure
to timely file an individual complaint as required by certain court orders.
The plaintiff filed a request for reconsideration which was opposed and
subsequently denied by the Court in June 2004. In July 2004, the plaintiff
filed a notice of appeal of the dismissal. The Company has opposed this
appeal. The Company intends to vigorously defend its interests; however, it
cannot give any assurance it will prevail.

The Company has also been advised that one of its former distributor
customers is being sued in Florida state court in a case captioned Darrian
Kelly v. K-Mart et. al. for personal injury allegedly caused by ingestion of
K-Mart diet caplets that are alleged to have been manufactured by the
Company and to contain PPA. The distributor has tendered defense of the case
to the Company and has asserted a right to indemnification for any financial
judgment it must pay. The Company previously notified its product liability
insurer of this claim in 1999, and the Company has demanded that the insurer
assume the Company's defense. The insurer has stated that it has retained
counsel to secure additional factual information and will defer its coverage
decision until that information is received. The Company intends to
vigorously defend its interests; however, it cannot give any assurance that
it will not be impleaded into the action, or that, if it is impleaded, that
it would prevail.

KV's product liability coverage for PPA claims expired for claims made after
June 15, 2002. Although the Company renewed its product liability coverage
for coverage after June 15, 2002, that policy excludes future PPA claims in
accordance with the standard industry exclusion. Consequently, as of
June 15, 2002, the Company will


                                     12

<PAGE>
<PAGE>

provide for legal defense costs and indemnity payments involving PPA claims
on a going forward basis as incurred, including the Mississippi lawsuit that
was filed after June 15, 2002. Moreover, the Company may not be able to
obtain product liability insurance in the future for PPA claims with
adequate coverage limits at commercially reasonable prices for subsequent
periods. From time to time in the future, KV may be subject to further
litigation resulting from products containing PPA that it formerly
distributed. The Company intends to vigorously defend its interests;
however, it cannot give any assurance it will prevail.

After the Company filed ANDAs with the FDA seeking permission to market a
generic version of the 50 mg, 100 mg, and 200 mg strengths of Toprol(R) XL
in extended release capsule form, AstraZeneca filed lawsuits against KV for
patent infringement under the provisions of the Hatch-Waxman Act. In the
Company's Paragraph IV certification, KV contended that its proposed generic
versions do not infringe AstraZeneca's patents. Pursuant to the Hatch-Waxman
Act, the filing date of the suit against the Company instituted an automatic
stay of FDA approval of the Company's ANDA until the earlier of a judgment,
or 30 months from the date of the suit. The Company has filed motions for
summary judgment with the Federal District Court in Missouri alleging, among
other things, that AstraZeneca's patent is invalid and unenforceable. There
is no trial setting yet. The Company intends to vigorously defend its
interests; however, it cannot give any assurance it will prevail.

The Company and/or ETHEX have been named as defendants in certain
multi-defendant cases alleging that the defendants reported improper or
fraudulent pharmaceutical pricing information, i.e., Average Wholesale
Price, or AWP and/or Wholesale Acquisition Cost, or WAC, information, which
caused the governmental plaintiffs to incur excessive costs for
pharmaceutical products under the Medicaid program. Cases of this type have
been filed against the Company and/or ETHEX and other pharmaceutical
manufacturer defendants by the State of Massachusetts, the State of Alabama,
New York City, and approximately 29 counties in New York State (less than
ten of which have been formally served on the Company or ETHEX). The New
York City case and all New York County cases have been transferred to the
Federal District Court for the District of Massachusetts for coordinated or
consolidated pretrial proceedings under the Average Wholesale Price
Multidistrict Litigation (MDL No. 1456). One of the counties, Erie County,
is challenging the transfer. Each of these actions is in the early stages,
and fact discovery has not yet begun in any of the cases other than the
Alabama case, where the State's first discovery request has been filed. The
Company intends to vigorously defend its interests in the actions described
above; however, it cannot give any assurance it will prevail.

The Company believes that various other governmental entities have commenced
investigations into the generic and branded pharmaceutical industry at large
regarding pricing and price reporting practices. Although the Company
believes its pricing and reporting practices have complied in all material
respects with its legal obligations, it cannot give any assurance that it
would prevail if legal actions are instituted by these governmental
entities.

On May 20, 2005, the Company was notified by the SEC that a non-public
formal investigation was initiated that appears to relate to the Form 8-K
disclosures the Company made on July 13, 2004. The Company believes the
matter will be satisfactorily resolved.

From time to time, the Company is involved in various other legal
proceedings in the ordinary course of its business. While it is not feasible
to predict the ultimate outcome of such other proceedings, the Company
believes that the ultimate outcome of such other proceedings will not have a
material adverse effect on its results of operations or financial position.

There are uncertainties and risks associated with all litigation and there
can be no assurance that the Company will prevail in any particular
litigation.

                                     13

<PAGE>
<PAGE>

13. RECENTLY ISSUED ACCOUNTING STANDARDS

In September 2004, the EITF reached a consensus that contingently
convertible debt instruments should be included in diluted earnings per
share computations (if dilutive) regardless of whether the market price
trigger (or other contingent feature) has been met. Additionally, the EITF
stated that prior period earnings per share amounts presented for
comparative purposes should be restated to conform to this consensus, which
is effective for reporting periods ending after December 15, 2004. The
consensus adopted by the EITF required the addition of 8,692 shares
associated with the conversion of the Company's $200,000 principal amount
Convertible Subordinated Notes to the number of shares outstanding for the
calculation of diluted earnings per share for all reported periods since the
issuance of the Notes.

In November 2004, the FASB issued SFAS No. 151, Inventory Costs, an
Amendment to ARB No. 43, Chapter 4 which requires that abnormal amounts of
idle facility expense, freight, handling costs, and wasted material
(spoilage) costs be recognized as current period charges. In addition, this
statement requires that allocation of fixed production overheads to the
costs of conversion be based on the normal capacity of the production
facilities. This statement is effective for inventory costs incurred during
fiscal years beginning after June 15, 2005. The Company is currently
determining the impact, if any, the adoption of this statement will have on
its financial condition and results of operations.

In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based
Payment" (SFAS 123R), which replaces SFAS No. 123, "Accounting for
Stock-Based Compensation" (SFAS 123), and supercedes APB Opinion No. 25,
"Accounting for Stock Issued to Employees." SFAS 123R requires all
share-based payments to employees, including grants of employee stock
options, to be recognized in the financial statements based on their fair
values. The pro forma disclosures previously permitted under SFAS 123 no
longer will be an alternative to financial statement recognition. Under SFAS
123R, the Company must determine the appropriate fair value model to be used
for valuing share-based payments, the amortization method for compensation
cost and the transition method to be used at date of adoption. The
transition methods include modified prospective and modified retrospective
adoption options. Under the modified retrospective option, prior periods may
be restated either as of the beginning of the year of adoption or for all
periods presented. The modified prospective method requires that
compensation expense be recorded for all unvested stock options and
restricted stock at the beginning of the first quarter of adoption of SFAS
123R, while the modified retrospective method would record compensation
expense for all unvested stock options and restricted stock beginning with
the first period restated. The Company is evaluating the requirements of
SFAS 123R. The Company has not yet determined the method of adoption or the
effect of adopting SFAS 123R, and it has not determined whether the adoption
will result in amounts that are similar to the current pro forma disclosures
under SFAS 123.

In April 2005, the Securities and Exchange Commission announced an amendment
to Regulation S-X to amend the date for compliance with SFAS 123R. The
amendment requires each registrant that is not a small business issuer to
adopt SFAS 123R in the first fiscal year commencing after June 15, 2005. As
a result, the Company is required to adopt SFAS 123R beginning April 1,
2006. Adoption of SFAS 123R will have an impact on the Company's
consolidated financial statements, as it will be required to expense the
fair value of its employee stock option grants rather than disclose the pro
forma impact on its consolidated net income within the footnotes to the
Company's consolidated financial statements, as is its current practice.

                                     14

<PAGE>
<PAGE>

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This Form 10-Q, including the documents that we incorporate herein by
reference, contains various forward-looking statements within the meaning of
the United States Private Securities Litigation Reform Act of 1995
("PSLRA"), and which may be based on or include assumptions, concerning our
operations, future results and prospects. Such statements may be identified
by the use of words like "plans," "expect," "aim," "believe," "projects,"
"anticipate," "commit," "intend," "estimate," "will," "should," "could," and
other expressions that indicate future events and trends.

All statements that address expectations or projections about the future,
including without limitation, statements about our strategy for growth,
product development, regulatory approvals, market position, expenditures and
financial results, are forward-looking statements.

All forward-looking statements are based on current expectations and are
subject to risk and uncertainties. In connection with the "safe harbor"
provisions, we provide the following cautionary statements identifying
important economic, political and technology factors which, among others,
could cause actual results or events to differ materially from those set
forth or implied by the forward-looking statements and related assumptions.

Such factors include (but are not limited to) the following: (1) changes in
the current and future business environment, including interest rates and
capital and consumer spending; (2) the difficulty of predicting FDA
approvals, including the timing, and that any period of exclusivity may not
be realized; (3) acceptance and demand for new pharmaceutical products; (4)
the impact of competitive products and pricing; (5) new product development
and launch, including but not limited to the possibility that any product
launch may be delayed or that product acceptance may be less than
anticipated; (6) reliance on key strategic alliances; (7) the availability
of raw materials; (8) the regulatory environment; (9) fluctuations in
operating results; (10) the difficulty of predicting international
regulatory approval, including the timing; (11) the difficulty of predicting
the pattern of inventory movements by our customers; (12) the impact of
competitive response to our sales, marketing and strategic efforts; (13)
risks that we may not ultimately prevail in our litigation; and (14) the
risks detailed from time to time in our filings with the Securities and
Exchange Commission.

This discussion is by no means exhaustive, but is designed to highlight
important factors that may impact the Company's outlook. We are under no
obligation to update any of the forward-looking statements after the date of
this report.

                                     15

<PAGE>
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION

Except for the historical information contained herein, the following
discussion contains forward-looking statements that are subject to known and
unknown risks, uncertainties, and other factors that may cause our actual
results to differ materially from those expressed or implied by those
forward-looking statements. These risks, uncertainties and other factors are
discussed above under the caption "Cautionary Statement Regarding
Forward-Looking Information." In addition, the following discussion and
analysis of financial condition and results of operations should be read in
conjunction with the consolidated financial statements, the related notes to
consolidated financial statements and "Management's Discussion and Analysis
of Results of Operations and Financial Condition" included in our Annual
Report on Form 10-K for the fiscal year ended March 31, 2005, and the
unaudited interim consolidated financial statements and related notes to
unaudited interim consolidated financial statements included in Item 1 of
this Quarterly Report on Form 10-Q.

BACKGROUND

We are a fully integrated specialty pharmaceutical company that develops,
acquires, manufactures and markets technologically-distinguished branded and
generic/non-branded prescription pharmaceutical products. We have a broad
range of dosage form capabilities, including tablets, capsules, creams,
liquids and ointments. We conduct our branded pharmaceutical operations
through Ther-Rx Corporation and our generic/non-branded pharmaceutical
operations through ETHEX Corporation, which focuses principally on
technologically-distinguished generic products. Through Particle Dynamics,
Inc., we develop, manufacture and market technologically advanced,
value-added raw material products for the pharmaceutical, nutritional,
personal care, food and other markets.

We have a broad portfolio of drug delivery technologies which we leverage to
create technologically- distinguished brand name and specialty generic
products. We have developed and patented 15 drug delivery and formulation
technologies primarily in four principal areas: SITE RELEASE(R)
bioadhesives, oral controlled release, tastemasking and oral quick
dissolving tablets. We incorporate these technologies in the products we
market to control and improve the absorption and utilization of active
pharmaceutical compounds. These technologies provide a number of benefits,
including reduced frequency of administration, reduced side effects,
improved drug efficacy, enhanced patient compliance and improved taste.

Our drug delivery technologies allow us to differentiate our products in the
marketplace, both in the branded and non-branded/generic pharmaceutical
areas. We believe that this differentiation provides substantial competitive
advantages for our products, allowing us to establish a strong record of
growth and profitability and a leadership position in certain segments of
our industry.

RESULTS OF OPERATIONS

During the three months ended June 30, 2005, we recorded expense in
connection with the FemmePharma acquisition (see Note 2) of $30.4 million
that consisted of $29.6 million for acquired in-process research and
development and $0.9 million in direct expenses related to the transaction.
The valuation of acquired in-process research and development represented
the estimated fair value of the worldwide marketing rights to an
endometriosis product we acquired as part of the FemmePharma acquisition
that, at the time of the acquisition, had no alternative future use and for
which technological feasibility had not been established. As a result of the
FemmePharma acquisition expense of $30.4 million, which reduced our diluted
earnings per share for the quarter by $0.62, we incurred a net loss of $21.9
million, or $(0.45) per diluted share for the three months ended June 30,
2005.

Net revenues for the quarter increased $19.4 million, or 29.3%, as we
experienced sales growth of 100.3% in our


                                     16

<PAGE>
<PAGE>

branded products segment. The resultant $16.9 million increase in gross
profit was primarily offset by a $16.3 million increase in operating
expenses before consideration of the $30.4 million of expense associated
with the FemmePharma acquisition. This increase in operating expenses was
primarily due to an increase in personnel costs associated with expansion of
the branded sales force in fiscal 2005 and an increase in management and
other personnel, an increase in branded marketing and promotions expense to
continue promotion of our existing brands and to further promote the
introduction of Clindesse(TM), an increase in legal expenses and an increase
in research and development expense.

<TABLE>
NET REVENUES BY SEGMENT
-----------------------
<CAPTION>
                                                          THREE MONTHS ENDED JUNE 30,
                                                 ---------------------------------------------
                                                                                   CHANGE
                                                                              ----------------
                                                   2005          2004            $         %
    ($ IN THOUSANDS):                            -------       -------        -------    -----
<S>                                              <C>           <C>            <C>        <C>
    Branded products                             $31,878       $15,919        $15,959    100.3%
     as % of net revenues                           37.3%         24.1%
    Specialty generics                            47,398        45,455          1,943      4.3%
     as % of net revenues                           55.5%         68.8%
    Specialty materials                            4,853         4,131            722     17.5%
     as % of net revenues                            5.7%          6.3%
    Other                                          1,346           582            764    131.3%
                                                 -------       -------        -------
      Total net revenues                         $85,475       $66,087        $19,388     29.3%
</TABLE>

The increase in branded product sales was due primarily to increased sales
of our two anti-infective brands, Clindesse(TM) and Gynazole-1(R), and
continued sales growth from our two hematinic brands and our PreCare(R)
product line. Clindesse(TM), a single-dose prescription cream therapy
indicated to treat bacterial vaginosis, contributed $5.2 million of
incremental sales during the quarter. Since its launch in January 2005,
Clindesse(TM) has garnered 15.6% of the intravaginal bacterial vaginosis
market. Sales of Gynazole-1, our vaginal antifungal cream product, increased
$4.3 million, or 111.3%, to $8.1 million, which includes $3 million of sales
related to an anticipated July 2005 price increase. During the quarter, our
share of the prescription vaginal antifungal cream market increased to 31.0%
compared to 27.3% at the end of the first quarter of fiscal 2005. Sales from
our two hematinic product lines, Chromagen(R) and Niferex(R), increased
131.0% to $8.5 million during the quarter as both product lines experienced
significant growth in new prescriptions filled. During the quarter, new
prescription growth for Chromagen(R) and Niferex(R) on a combined basis was
24.8% when compared to the corresponding prior year quarter. The $4.3
million, or 193.1%, sales increase in Chromagen(R) was also reflective of
approximately one month of additional customer purchases during the quarter
in anticipation of a July 2005 price increase. Also included in branded
product sales is the PreCare(R) product line which contributed $8.1 million
of sales during the quarter. The 32.3% increase in sales of our PreCare(R)
product line was primarily due to sales growth experienced by PrimaCare(R)
ONE, our proprietary line extension to PrimaCare(R). The PreCare(R) family
of products continued to be the leading branded line of prescription
prenatal nutritional supplements in the United States.

The growth in specialty generic sales resulted from $5.8 million of
increased sales volume from existing products in our cough/cold, pain
management and digestive enzyme product lines, offset in part by $3.9
million of product price erosion on certain cardiovascular, pain management
and prenatal vitamin products. Although specialty generic sales had minimal
impact from new product introductions in the first quarter, we did receive
ANDA approval for Prednisolone Sodium Phosphate Liquid 15 mg (base)/5 ml in
June 2005. We anticipate additional approvals throughout the remainder of
fiscal 2006. In May 2005, we entered into a long-term product development
and marketing license agreement with Strides Arcolab, Ltd, (Strides) an
Indian generic pharmaceutical developer and manufacturer, for exclusive
marketing rights in the United States and Canada for 10 new generic drugs.
Under the agreement, Strides will be responsible for developing, submitting
for regulatory approval and manufacturing the 10 products and we will be
responsible for exclusively marketing the products in the territories
covered by the agreement. Initial products under the agreement could be
submitted for FDA approval later in fiscal 2006.

                                     17

<PAGE>
<PAGE>

The increase in specialty material product sales was primarily due to price
increases on existing products, an emphasis on higher margin business and
$0.6 million of incremental sales from a new product introduced late in the
fourth quarter of fiscal 2005.

<TABLE>
GROSS PROFIT BY SEGMENT
-----------------------
<CAPTION>
                                                          THREE MONTHS ENDED JUNE 30,
                                                 ---------------------------------------------
                                                                                  CHANGE
                                                                             -----------------
                                                   2005         2004            $          %
    ($ IN THOUSANDS):                            -------      -------        -------     -----
<S>                                              <C>          <C>            <C>         <C>
    Branded products                             $29,064      $13,983        $15,081     107.9%
     as % of net revenues                           91.2%        87.8%
    Specialty generics                            27,288       27,948           (660)     (2.4)%
     as % of net revenues                           57.6%        61.5%
    Specialty materials                            2,026        1,283            743      57.9%
     as % of net revenues                           41.7%        31.1%
    Other                                            895         (861)         1,756        NM
                                                 -------      -------        -------
      Total gross profit                         $59,273      $42,353        $16,920      40.0%
       as % of total net revenues                   69.3%        64.1%
</TABLE>

The increase in gross profit was primarily due to the sales growth
experienced by our branded products segment. The gross profit percentage
increase on a consolidated basis was principally attributable to our higher
margin branded products comprising a larger percentage of net revenues. The
higher gross profit percentage in branded products reflected a favorable
shift in the mix of product sales during the quarter toward higher margin
anti-infective products. The decrease in the gross profit percentage for
specialty generics was due to competitive price erosion for a number of
products in certain product segments. The gross profit percentage increase
experienced by specialty materials primarily resulted from a more favorable
mix of product sales during the quarter.

<TABLE>
RESEARCH AND DEVELOPMENT
------------------------
<CAPTION>
                                                         THREE MONTHS ENDED JUNE 30,
                                                 ------------------------------------------
                                                                                 CHANGE
                                                                             --------------
                                                  2005         2004           $         %
    ($ IN THOUSANDS):                            ------      -------        ------     ----
<S>                                              <C>         <C>            <C>        <C>
    Research and development                     $7,632      $4,624         $3,008     65.1%
     as % of net revenues                           8.9%        7.0%
</TABLE>

The increase in research and development expense primarily resulted from
increased spending on bioequivalency studies for products in our internal
development pipeline. The increase was also reflective of a reduced level of
expense in the prior year comparative quarter as certain clinical studies
were rescheduled for later in fiscal 2005. We anticipate that research and
development costs for fiscal 2006 will increase between 30% and 35% over
fiscal 2005 levels as we continue to move forward on approximately 50 brand
and generic/non-brand products currently in various stages of active
development from both our internal and external pipelines.

                                     18

<PAGE>
<PAGE>

<TABLE>
PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT
---------------------------------------------
<CAPTION>
                                                          THREE MONTHS ENDED JUNE 30,
                                                 ---------------------------------------------
                                                                                  CHANGE
                                                                             -----------------
                                                   2005         2004            $          %
    ($ IN THOUSANDS):                            -------      -------        -------     -----
<S>                                              <C>           <C>           <C>         <C>
    Purchased in-process research and
     development                                 $30,441       $    -        $30,441       NM
       as % of net revenues                         35.6%           -%
</TABLE>

During the three months ended June 30, 2005, we recorded expense in
connection with the FemmePharma acquisition (see Note 2) of $30.4 million
that consisted of $29.6 million for acquired in-process research and
development and $0.9 million in direct expenses related to the transaction.
The valuation of acquired in-process research and development represents the
estimated fair value of the worldwide marketing rights to an endometriosis
product we acquired as part of the FemmePharma, Inc. acquisition that, at
the time of the acquisition, had no alternative future use and for which
technological feasibility had not been established. The FemmePharma
acquisition expense of $30.4 million reduced our diluted earnings per share
for the three months ended June 30, 2005 by $0.62.

<TABLE>
SELLING AND ADMINISTRATIVE
--------------------------
<CAPTION>
                                                          THREE MONTHS ENDED JUNE 30,
                                                 ---------------------------------------------
                                                                                   CHANGE
                                                                             -----------------
                                                   2005         2004             $          %
    ($ IN THOUSANDS):                            -------       -------        -------     ----
<S>                                              <C>           <C>            <C>         <C>
    Selling and administrative                   $37,360       $24,131        $13,229     54.8%
     as % of net revenues                           43.7%         36.5%
</TABLE>

The increase in selling and administrative expense was due primarily to: a
$4.3 million increase in personnel costs associated with expansion of the
branded sales force in fiscal 2005 and an increase in management and other
personnel; a $2.7 million increase in branded marketing and promotions
expense to continue promotion of our existing brands and to further promote
the introduction of Clindesse(TM); and a $5.0 million increase in legal and
professional expense commensurate with an increase in litigation activity
and evaluation of potential acquisition opportunities. The increase in
litigation activity included ongoing costs associated with various patent
infringement actions brought by potential competitors with respect to
products we propose to market and for which we have submitted ANDA filings
and provided notice of certification required under the provisions of the
Hatch-Waxman Act.

We anticipate that selling and administrative expense for the remainder of
fiscal 2006 could continue at higher levels over fiscal 2005 due to a full
year of our most recent sales force expansion to more than 240 specialty
sales representatives, continued increase in promotional expenses for
existing branded products, and the planned introductory support for two new
branded products we expect to launch during fiscal 2006 in the iron
deficiency and women's health care therapeutic areas.

                                     19

<PAGE>
<PAGE>

<TABLE>
OPERATING INCOME (LOSS)
-----------------------
<CAPTION>
                                                          THREE MONTHS ENDED JUNE 30,
                                                 ---------------------------------------------
                                                                                   CHANGE
                                                                             -----------------
                                                   2005         2004              $        %
    ($ IN THOUSANDS):                            --------      -------        --------    ----
<S>                                              <C>           <C>            <C>         <C>
    Operating income (loss)                      $(17,340)     $12,476        $(29,816)    NM
</TABLE>

The operating loss for the quarter resulted from the $30.4 million of
expense we recorded in connection with the FemmePharma acquisition. The
expense amount consisted of $29.6 million for acquired in-process research
and development and $0.9 million in direct expenses related to the
transaction.

<TABLE>
INTEREST AND OTHER INCOME
-------------------------
<CAPTION>
                                                          THREE MONTHS ENDED JUNE 30,
                                                 ---------------------------------------------
                                                                                   CHANGE
                                                                             -----------------
                                                   2005         2004            $          %
    ($ IN THOUSANDS):                            -------        ----         -------     -----
<S>                                              <C>            <C>          <C>         <C>
Interest and other income                        $1,053         $513          $540       105.3%
</TABLE>

The increase in interest and other income was primarily due to an increase
in the weighted average interest rate earned on short-term investments,
offset in part by a decline in the average balance of short-term
investments.

<TABLE>
PROVISION FOR INCOME TAXES
--------------------------
<CAPTION>
                                                        THREE MONTHS ENDED JUNE 30,
                                                 ------------------------------------------
                                                                                 CHANGE
                                                                              -------------
                                                   2005         2004           $         %
    ($ IN THOUSANDS):                            -------        ----          ----      ---
<S>                                              <C>           <C>            <C>       <C>
Provision for income taxes                       $4,280        $3,982         $298      7.5%
  effective tax rate                               33.5%         34.5%
</TABLE>

Although the $30.4 million of expense we recorded for the FemmePharma
acquisition resulted in a loss before income taxes of $17.7 million, we
incurred tax expense during the quarter as the FemmePharma acquisition
expense was determined not to be deductible for tax purposes. The effective
tax rate of 33.5 % for the three months ended June 30, 2005 was applied to a
pre-tax income amount that excluded the FemmePharma acquisition expense of
$30.4 million.

<TABLE>
NET INCOME (LOSS) AND DILUTED EARNINGS (LOSS) PER SHARE
-------------------------------------------------------
<CAPTION>
                                                        THREE MONTHS ENDED JUNE 30,
                                                 ------------------------------------------
                                                                                 CHANGE
                                                                              -------------
                                                   2005         2004              $          %
    ($ IN THOUSANDS):                            --------      ------         --------      ---
<S>                                              <C>           <C>            <C>           <C>
Net income (loss)                                $(21,944)     $7,561         $(29,505)     NM
  Diluted earnings (loss) per share                 (0.45)       0.14
</TABLE>

                                     20

<PAGE>
<PAGE>

The net loss in the first quarter resulted from the $30.4 million of expense
we recorded in connection with the FemmePharma acquisition. The expense
amount consisted of $29.6 million for acquired in-process research and
development and $0.9 million in direct expenses related to the transaction.
The FemmePharma acquisition expense of $30.4 million reduced our diluted
earnings per share for the three months ended June 30, 2005 by $0.62.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents and working capital were $96.9 million and $256.5
million, respectively, at June 30, 2005, compared to $159.8 million and
$302.5 million, respectively, at March 31, 2005. Internally generated funds
from product sales continued to be the primary source of operating capital
used in the funding of our businesses. The net cash flow from operating
activities was $6.5 million for the first quarter of fiscal 2006 compared to
$5.6 million for the comparable prior quarter.

Net cash flow used in investing activities included capital expenditures of
$22.4 million for the three months ended June 30, 2005 compared to $13.8
million for the corresponding prior year period. In April 2005, the Company
completed the purchase of a 260,000 square foot building in the St. Louis
metropolitan area for $11.8 million. The property had been leased by the
Company since April 2000 and will continue to function as the Company's main
distribution facility. The purchase price was paid with cash on hand. The
remaining capital expenditures during the quarter were primarily for
building renovation projects and for purchasing machinery and equipment to
upgrade and expand our pharmaceutical manufacturing and distribution
capabilities. Other investing activities for the quarter included $10.2
million in purchases of marketable securities that are classified as
available for sale. Also, in May 2005, the Company and FemmePharma mutually
agreed to terminate the license agreement we entered into with them in April
2002. As part of this transaction, we acquired all of the common stock of
FemmePharma for a $25.0 million cash payment after certain assets of the
entity had been distributed to FemmePharma's other shareholders. In
connection with this transaction, we acquired the worldwide marketing rights
to an endometriosis product that has successfully completed Phase II
clinical trials.

Our debt balance was $210.5 million at June 30, 2005 compared to $210.7
million at March 31, 2005. In May 2003, we issued $200.0 million principal
amount of Convertible Subordinated Notes that are convertible, under certain
circumstances, into shares of our Class A Common Stock at an initial
conversion price of $23.01 per share. The Convertible Subordinated Notes
bear interest at a rate of 2.50% and mature on May 16, 2033. We are also
obligated to pay contingent interest at a rate equal to 0.5% per annum
during any six-month period commencing May 16, 2006, if the average trading
price of the Notes per $1,000 principal amount for the five trading day
period ending on the third trading day immediately preceding the first day
of the applicable six-month period equals $1,200 or more. We may redeem some
or all of the Convertible Subordinated Notes at any time on or after May 21,
2006, at a redemption price, payable in cash, of 100% of the principal
amount of the Convertible Subordinated Notes, plus accrued and unpaid
interest (including contingent interest, if any) to the date of redemption.
Holders may require us to repurchase all or a portion of their Convertible
Subordinated Notes on May 16, 2008, 2013, 2018, 2023 and 2028, or upon a
change in control, as defined in the indenture governing the Convertible
Subordinated Notes, at 100% of the principal amount of the Convertible
Subordinated Notes, plus accrued and unpaid interest (including contingent
interest, if any) to the date of repurchase, payable in cash. The
Convertible Subordinated Notes are subordinate to all of our existing and
future senior obligations.

We have credit agreements with two banks that provide revolving lines of
credit for borrowing up to $140.0 million. The credit agreements provide for
$80.0 million in revolving lines of credit along with supplemental credit
lines of $60.0 million that are available for financing acquisitions. These
credit facilities expire in October 2006 and December 2005, respectively.
The revolving and supplemental credit lines are unsecured and interest is
charged at the lower of the prime rate or the one-month LIBOR rate plus 175
basis points. At June 30, 2005, we had no cash borrowings under either
credit facility. The credit agreements contain financial covenants that
impose minimum levels of earnings before interest, taxes, depreciation and
amortization, a maximum funded debt ratio, a limit on capital expenditures
and dividend payments, a minimum fixed charge coverage ratio and a maximum

                                     21

<PAGE>
<PAGE>

senior leverage ratio. As of June 30, 2005, we were in compliance with all
of our covenants.

We believe our cash and cash equivalents balance, cash flows from operations
and funds available under our credit facilities, will be adequate to fund
operating activities for the presently foreseeable future, including the
payment of short-term and long-term debt obligations, capital improvements,
research and development expenditures, product development activities and
expansion of marketing capabilities for the branded pharmaceutical business.
In addition, we continue to examine opportunities to expand our business
through the acquisition of or investment in companies, technologies, product
rights, research and development and other investments that are compatible
with our existing businesses. We intend to use our available cash to help in
funding any acquisitions or investments. As such, cash has been invested in
short-term, highly liquid instruments. We also may use funds available under
our credit facilities, or financing sources that subsequently become
available, including the future issuances of additional debt or equity
securities, to fund these acquisitions or investments. If we were to fund
one or more such acquisitions or investments, our capital resources,
financial condition and results of operations could be materially impacted
in future periods.

INFLATION

Inflation may apply upward pressure on the cost of goods and services used
by us in the future. However, we believe that the net effect of inflation on
our operations during the past three years has been minimal. In addition,
changes in the mix of products sold and the effect of competition has made a
comparison of changes in selling prices less meaningful relative to changes
in the overall rate of inflation over the past three years.

CRITICAL ACCOUNTING ESTIMATES

Our consolidated financial statements are presented on the basis of U.S.
generally accepted accounting principles. Certain of our accounting policies
are particularly important to the portrayal of our financial position and
results of operations and require the application of significant judgment by
our management. As a result, these policies are subject to an inherent
degree of uncertainty. In applying these policies, we make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues
and expenses and related disclosures. We base our estimates and judgments on
historical experience, the terms of existing contracts, observance of trends
in the industry, information that is obtained from customers and outside
sources, and on various other assumptions that are believed to be reasonable
and appropriate under the circumstances, the results of which form the basis
for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Although we believe that
our estimates and assumptions are reasonable, actual results may differ
significantly from our estimates. Changes in estimates and assumptions based
upon actual results may have a material impact on our results of operations
and/or financial condition. Our critical accounting estimates are described
below.

REVENUE AND PROVISION FOR SALES RETURNS AND ALLOWANCES. Revenue is generally
------------------------------------------------------
realized or realizable and earned when persuasive evidence of an arrangement
exists, delivery has occurred or services have been rendered, the seller's
price to the buyer is fixed or determinable, and collectibility is
reasonably assured. Accordingly, we record revenue from product sales when
title and risk of ownership have been transferred to the customer, which is
typically upon shipment to the customer. We also enter into long-term
agreements under which we assign marketing rights for the products we have
developed to pharmaceutical marketers. Royalties under these arrangements
are earned based on the sale of products.

When we sell our products, we reduce the amount of revenue we recognize from
such sales by an estimate of future product returns and sales allowances.
Sales allowances include cash discounts, rebates, chargebacks, and other
similar expected future payments relating to products sold in the current
period. Factors that are considered in our estimates of future product
returns and sales allowances include historical payment experience in
relationship to revenues, estimated customer inventory levels, and current
contract prices and terms with both direct and indirect customers. If actual
future payments for product returns and sales allowances exceed the

                                     22

<PAGE>
<PAGE>

estimates we made at the time of sale, our financial position, results of
operations and cash flows would be negatively impacted.

The provision for chargebacks is the most significant and complex estimate
used in the recognition of revenue. We establish contract prices for
indirect customers who are supplied by our wholesale customers. A chargeback
represents the difference between our invoice price to the wholesaler and
the indirect customer's contract price, which is lower. We credit the
wholesaler for purchases by indirect customers at the lower price.
Accordingly, we record these chargebacks at the time we recognize revenue in
connection with our sales to wholesalers. Provisions for estimating
chargebacks are calculated primarily using historical chargeback experience,
actual contract pricing and estimated wholesaler inventory levels. We
continually monitor our assumptions, giving consideration to estimated
wholesaler inventory levels and current pricing trends, and make adjustments
to these estimates when we believe that the actual chargeback amounts
payable in the future will differ from our original estimates.

INVENTORY VALUATION. Inventories consist of finished goods held for
-------------------
distribution, raw materials and work in process. Our inventories are stated
at the lower of cost or market, with cost determined on the first-in,
first-out basis. In evaluating whether inventory is to be stated at the
lower of cost or market, we consider such factors as the amount of inventory
on hand and in the distribution channel, estimated time required to sell
existing inventory, remaining shelf life and current and expected market
conditions, including levels of competition. We establish reserves, when
necessary, for slow-moving and obsolete inventories based upon our
historical experience and management's assessment of current product demand.

INTANGIBLE ASSETS AND GOODWILL. Our intangible assets consist of product
------------------------------
rights, license agreements and trademarks resulting from product
acquisitions and legal fees and similar costs relating to the development of
patents and trademarks. Intangible assets that are acquired are stated at
cost, less accumulated amortization, and are amortized on a straight-line
basis over their estimated useful lives. Upon approval, costs associated
with the development of patents and trademarks are amortized on a
straight-line basis over estimated useful lives ranging from five to 17
years. We determine amortization periods for intangible assets that are
acquired based on our assessment of various factors impacting estimated
useful lives and cash flows of the acquired products. Such factors include
the product's position in its life cycle, the existence or absence of like
products in the market, various other competitive and regulatory issues, and
contractual terms. Significant changes to any of these factors may result in
a reduction in the intangible asset's useful life and an acceleration of
related amortization expense.

We assess the impairment of intangible assets whenever events or changes in
circumstances indicate that the carrying value may not be recoverable. Some
factors we consider important which could trigger an impairment review
include the following: (1) significant underperformance relative to expected
historical or projected future operating results; (2) significant changes in
the manner of our use of the acquired assets or the strategy for our overall
business; and (3) significant negative industry or economic trends.

When we determine that the carrying value of an intangible asset may not be
recoverable based upon the existence of one or more of the above indicators
of impairment, we first perform an assessment of the asset's recoverability.
Recoverability is determined by comparing the carrying amount of an
intangible asset against an estimate of the undiscounted future cash flows
expected to result from its use and eventual disposition. If the sum of the
expected future undiscounted cash flows is less than the carrying amount of
the intangible asset, an impairment loss is recognized based on the excess
of the carrying amount over the estimated fair value of the intangible
asset.

CONTINGENCIES. The Company is involved in various legal proceedings, some of
-------------
which involve claims for substantial amounts. An estimate is made to accrue
for a loss contingency relating to any of these legal proceedings if it is
probable that a liability was incurred as of the date of the financial
statements and the amount of loss can be reasonably estimated. Because of
the subjective nature inherent in assessing the outcome of litigation and
because of the potential that an adverse outcome in legal proceedings could
have a material impact on our financial position or results of operations,
such estimates are considered to be critical accounting estimates. After
review, it was determined at June 30, 2005 that for each of the various
legal proceedings in which we are involved, the conditions mentioned above
were not met. We will continue to evaluate all legal matters as additional
information becomes available.

                                     23

<PAGE>
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk is limited to fluctuating interest rates
associated with variable rate indebtedness that is subject to interest rate
changes.

Advances to us under our credit facilities bear interest at a rate that
varies consistent with increases or decreases in the publicly announced
prime rate and/or the LIBOR rate with respect to LIBOR-related loans, if
any. A material increase in such rates could significantly increase
borrowing expenses. We did not have any cash borrowings under our credit
facilities at June 30, 2005.

In May 2003, we issued $200.0 million principal amount of Convertible
Subordinated Notes. The interest rate on the Convertible Subordinated Notes
is fixed at 2.50% and therefore not subject to interest rate changes.
Beginning May 16, 2006, we will become obligated to pay contingent interest
at a rate equal to 0.5% per annum during any six-month period, if the
average trading price of the Convertible Subordinated Notes per $1,000
principal amount for the five-trading day period ending on the third trading
day immediately preceding the first day of the applicable six-month period
equals $1,200 or more.

In April 2003, we entered into an $8.8 million term loan secured by a
building under a floating rate loan with a bank. We also entered into an
interest rate swap agreement with the same bank, which fixed the interest
rate of the building mortgage at 5.31% for the term of the loan.

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed
to ensure that information required to be disclosed in our Exchange Act
reports is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms, and that such information is
accumulated and communicated to the Company's management, including our
principal executive officer and principal financial officer, as appropriate,
to allow timely decisions regarding required disclosure. In designing and
evaluating the disclosure controls and procedures, management recognized
that any controls and procedures, no matter how well designed and operated,
can provide only reasonable assurance of achieving the desired control
objectives, and management necessarily was required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and
procedures.

As of the end of the period covered by this report, we carried out an
evaluation, under the supervision and with the participation of our
management, including our principal executive officer and principal
financial officer, of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on the foregoing, our principal
executive officer and principal financial officer concluded that our
disclosure controls and procedures were effective as of the end of the
period covered by this report.

There have been no significant changes in our internal control over
financial reporting or in other factors that have materially affected, or
are reasonably likely to materially affect, our internal controls over
financial reporting in the first quarter of fiscal year 2006.

PART II. - OTHER INFORMATION
ITEM 1.    LEGAL PROCEEDINGS

The Company and ETHEX are named as defendants in a case brought by CIMA
LABS, Inc. and Schwarz Pharma, Inc. and styled CIMA LABS, Inc. et. al. v. KV
Pharmaceutical Company et. al. filed in Federal District Court in Minnesota.
It is alleged that the Company and ETHEX infringed on a CIMA patent in
connection with the manufacture and sale of Hyoscyamine Sulfate Orally
Dissolvable Tablets, 0.125 mg. The court has denied the plaintiffs' motion
for a preliminary injunction, which allows ETHEX to continue marketing the
product during the


                                     24

<PAGE>
<PAGE>

pendancy of the subject lawsuit. The Company filed several motions for
summary judgment requesting that the Court rule that the relevant patent is
unenforceable, invalid or not infringed. These motions were denied and the
issues will be considered at trial. CIMA and Schwarz filed a summary
judgment motion seeking the court to rule that the patent is valid in the
face of some prior art references cited by the Company as providing support
for its invalidity defense. The Court granted the motion; however, other
bases for invalidity are being asserted. The Company intends to vigorously
defend its interests; however, it cannot give any assurance it will prevail.

The Company and ETHEX are named as defendants in a case brought by Solvay
Pharmaceuticals, Inc. and styled Solvay Pharmaceuticals, Inc. v. ETHEX
Corporation, filed in Federal District Court in Minnesota. In general,
Solvay alleges that ETHEX's comparative promotion of its Pangestyme(TM) CN
10 and Pangestyme(TM) CN 20 products to Solvay's Creon(R) 10 and Creon(R) 20
products resulted in false advertising and misleading statements under
various federal and state laws, and constituted unfair and deceptive trade
practices. Discovery is active and the case is required to be trial ready by
February 1, 2006. The Company intends to vigorously defend its interests;
however, it cannot give any assurance it will prevail.

KV previously distributed several pharmaceutical products that contained
phenylpropanolamine, or PPA, and that were discontinued in 2000 and 2001.
The Company is presently named a defendant in a product liability lawsuit in
Federal District Court in Mississippi involving PPA. The suit originated out
of a case, Virginia Madison, et al. v. Bayer Corporation, et al. The
original suit was filed in December 2002, but was not served on KV until
February 2003. The case was originally filed in the Circuit Court of Hinds
County, Mississippi, and was removed to the Federal District Court for the
Southern District of Mississippi by then co-defendant Bayer Corporation. The
case has been transferred to a Judicial Panel on Multi-District Litigation
for PPA claims sitting in the Western District of Washington. The claims
against the Company have been segregated into a lawsuit brought by Johnny
Fulcher individually and on behalf of the wrongful death beneficiaries of
Linda Fulcher, deceased, against the Company. It alleges bodily injury,
wrongful death, economic injury, punitive damages, loss of consortium and/or
loss of services from the use of the Company's distributed pharmaceuticals
containing PPA that have since been discontinued and/or reformulated to
exclude PPA. In May 2004, the case was dismissed with prejudice by the
Federal District Court for the Western District of Washington for a failure
to timely file an individual complaint as required by certain court orders.
The plaintiff filed a request for reconsideration which was opposed and
subsequently denied by the Court in June 2004. In July 2004, the plaintiff
filed a notice of appeal of the dismissal. The Company has opposed this
appeal. The Company intends to vigorously defend its interests; however, it
cannot give any assurance it will prevail.

The Company has also been advised that one of its former distributor
customers is being sued in Florida state court in a case captioned Darrian
Kelly v. K-Mart et. al. for personal injury allegedly caused by ingestion of
K-Mart diet caplets that are alleged to have been manufactured by the
Company and to contain PPA. The distributor has tendered defense of the case
to the Company and has asserted a right to indemnification for any financial
judgment it must pay. The Company previously notified its product liability
insurer of this claim in 1999, and the Company has demanded that the insurer
assume the Company's defense. The insurer has stated that it has retained
counsel to secure additional factual information and will defer its coverage
decision until that information is received. The Company intends to
vigorously defend its interests; however, it cannot give any assurance that
it will not be impleaded into the action, or that, if it is impleaded, that
it would prevail.

KV's product liability coverage for PPA claims expired for claims made after
June 15, 2002. Although the Company renewed its product liability coverage
for coverage after June 15, 2002, that policy excludes future PPA claims in
accordance with the standard industry exclusion. Consequently, as of June
15, 2002, the Company will provide for legal defense costs and indemnity
payments involving PPA claims on a going forward basis as incurred,
including the Mississippi lawsuit that was filed after June 15, 2002.
Moreover, the Company may not be able to obtain product liability insurance
in the future for PPA claims with adequate coverage limits at commercially
reasonable prices for subsequent periods. From time to time in the future,
KV may be subject to further litigation resulting from products containing
PPA that it formerly distributed. The Company intends to vigorously defend
its interests; however, it cannot give any assurance it will prevail.

After the Company filed ANDAs with the FDA seeking permission to market a
generic version of the 50 mg, 100 mg, and 200 mg strengths of Toprol(R) XL
in extended release capsule form, AstraZeneca filed lawsuits against KV for
patent infringement under the provisions of the Hatch-Waxman Act. In the
Company's Paragraph IV


                                     25

<PAGE>
<PAGE>

certification, KV contended that its proposed generic versions do not
infringe AstraZeneca's patents. Pursuant to the Hatch-Waxman Act, the filing
date of the suit against the Company instituted an automatic stay of FDA
approval of the Company's ANDA until the earlier of a judgment, or 30 months
from the date of the suit. The Company has filed motions for summary
judgment with the Federal District Court in Missouri alleging, among other
things, that AstraZeneca's patent is invalid and unenforceable. There is no
trial setting yet. The Company intends to vigorously defend its interests;
however, it cannot give any assurance it will prevail.

The Company and/or ETHEX have been named as defendants in certain
multi-defendant cases alleging that the defendants reported improper or
fraudulent pharmaceutical pricing information, i.e., Average Wholesale
Price, or AWP and/or Wholesale Acquisition Cost, or WAC, information, which
caused the governmental plaintiffs to incur excessive costs for
pharmaceutical products under the Medicaid program. Cases of this type have
been filed against the Company and/or ETHEX and other pharmaceutical
manufacturer defendants by the State of Massachusetts, the State of Alabama,
New York City, and approximately 29 counties in New York State (less than
ten of which have been formally served on the Company or ETHEX). The New
York City case and all New York County cases have been transferred to the
Federal District Court for the District of Massachusetts for coordinated or
consolidated pretrial proceedings under the Average Wholesale Price
Multidistrict Litigation (MDL No. 1456). One of the counties, Erie County,
is challenging the transfer. Each of these actions is in the early stages,
and fact discovery has not yet begun in any of the cases other than the
Alabama case, where the State's first discovery request has been filed. The
Company intends to vigorously defend its interests in the actions described
above; however, it cannot give any assurance it will prevail.

The Company believes that various other governmental entities have commenced
investigations into the generic and branded pharmaceutical industry at large
regarding pricing and price reporting practices. Although the Company
believes its pricing and reporting practices have complied in all material
respects with its legal obligations, it cannot give any assurance that it
would prevail if legal actions are instituted by these governmental
entities.

On May 20, 2005, the Company was notified by the SEC that a non-public
formal investigation was initiated that appears to relate to the Form 8-K
disclosures the Company made on July 13, 2004. The Company believes the
matter will be satisfactorily resolved.

From time to time, the Company is involved in various other legal
proceedings in the ordinary course of its business. While it is not feasible
to predict the ultimate outcome of such other proceedings, the Company
believes that the ultimate outcome of such other proceedings will not have a
material adverse effect on its results of operations or financial position.

There are uncertainties and risks associated with all litigation and there
can be no assurance that the Company will prevail in any particular
litigation.

                                     26

<PAGE>
<PAGE>

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

        PURCHASE OF EQUITY SECURITIES BY THE COMPANY

        The following table provides information about purchases the
        Company made of its common stock during the quarter ended June 30,
        2005:

<TABLE>
<CAPTION>
                                                                                TOTAL NUMBER OF
                                     TOTAL NUMBER                               SHARES PURCHASED         MAXIMUM NUMBER
                                      OF SHARES                                   AS PART OF A         OF SHARES THAT MAY
                                      PURCHASED          AVERAGE PRICE         PUBLICLY ANNOUNCED       YET BE PURCHASED
      PERIOD                             (A)            PAID PER SHARE              PROGRAM             UNDER THE PROGRAM

<S>                                     <C>                 <C>                       <C>                    <C>
  April 1-30, 2005                         98               $23.18                     --                      --

  May 1-31, 2005                        1,293               $23.21                     --                      --

  June 1-30, 2005                          --                   --                     --                      --

                                        -----

              Total                     1,391               $23.21                     --                      --
                                        =====
</TABLE>

Shares were purchased from employees upon their termination pursuant to the
terms of the Company's stock option plan.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

             a)  Exhibits. See Exhibit Index.

             b)  Reports on Form 8-K.
                     None


                                     27

<PAGE>
<PAGE>

                                 SIGNATURES
                                 ----------

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                    K-V PHARMACEUTICAL COMPANY

Date: August 9, 2005            By  /s/ Marc S. Hermelin
                                    ------------------------------------------
                                    Marc S. Hermelin
                                    Vice Chairman of the Board and
                                    Chief Executive Officer
                                    (Principal Executive Officer)

Date: August 9, 2005            By  /s/ Gerald R. Mitchell
                                    ------------------------------------------
                                    Gerald R. Mitchell
                                    Vice President and Chief Financial Officer
                                    (Principal Financial Officer)

Date: August 9, 2005            By  /s/ Richard H. Chibnall
                                    ------------------------------------------
                                    Richard H. Chibnall
                                    Vice President, Finance
                                    (Principal Accounting Officer)


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<PAGE>
<PAGE>

                                EXHIBIT INDEX

Exhibit No.                            Description
-----------                            -----------

   31.1        Certification of Chief Executive Officer.

   31.2        Certification of Chief Financial Officer.

   32.1        Certification pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

   32.2        Certification pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


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