First Manhattan Company has made its aims well known. It wants a leadership shakeup at Vivus ($VVUS)--and it wants it bad. Up through Tuesday, First Manhattan had gone so far as to submit a slate of 6 candidates to replace the pharma company's current board. But now, First Manhattan has taken a more dramatic step, sending another message loud and clear: If it gains control of the board, the leadership shakeup won't end there.
First Manhattan is recruiting a new CEO for Vivus. And the annual meeting where its proxy challenge comes to a head is still weeks away.
As has been its tack throughout the unfolding conflict, First Manhattan left no room for interpretation in a new SEC filing, saying it is in "advanced discussions" with potential CEO replacements. The firm has even hired executive recruiters to net top candidates for the position. The potential replacement, the company said, would be ready to step in "on Day One."
"We are encouraged by the quality of those candidates and their level of interest," First Manhattan's filing said. "We believe a new board independent of an entrenched CEO will attract the best talent to Vivus to lead the company forward."
Problems between Vivus and First Manhattan sprouted from Vivus' mismanagement of the Qsymia launch. The much-anticipated weight-loss drug has not come anywhere close to realizing its blockbuster potential since it hit the market last September. Qsymia was one of the first new diet drugs to score approval in years, and it got an extra leg up when its only new-generation rival, Arena Pharmaceuticals' ($ARNA) Belviq, snagged on regulatory delays. But In the face of heavy criticism, Vivus elected to forego a Big Pharma sales partnership that would have lent it commercial experience and a heftier primary care sales force--a move that sparked serious unrest among investors.
Vivus has since made attempts to remedy the situation, including a May message from CEO Leland Wilson that the Mountain View, CA-based company was finally ready to consider accepting marketing help. But in the eyes of First Manhattan, it's been too little too late. "We are confident that change is the ONLY way for Vivus shareholders to realize value on their investment in the stock," wrote Sam Colin, First Manhattan's senior managing director, in a letter to shareholders Monday.
In contrast, Tuesday First Manhattan put forth its own plans to turn the company around, outlining a path that includes executing a "Euro-centric approach to obtaining E.U. approval" for Qsymia and fixing Vivus' U.S. commercial strategy and "unsustainable expense structure."
Your move, Vivus.
- read the release on the First Manhattan filing
- get more from Reuters
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