Proxy challenger scoffs at Vivus as annual meeting nears

Vivus' weight-loss drug Qsymia--courtesy of Vivus.

Vivus' annual meeting is fast approaching, so it's no surprise that First Manhattan has issued another missive to its fellow shareholders. In the sarcastic, scoffing style of many proxy letters, the message employs the usual mix of bold type, all caps, underlining and combinations thereof. And it quotes Warren Buffett.

Entertaining reading, to say the least. But First Manhattan's intent isn't so entertaining to Vivus' ($VVUS) management. As the company's largest shareholder, First Manhattan wants to replace the company's entire board with its own slate of nominees that includes former public company CFOs, turnaround veterans, scientists and so on.

Among First Manhattan's claims: Vivus management flubbed its launch of the obesity drug Qsymia, which had the market all to itself for months, until rival Arena Pharmaceuticals ($ARNA) could roll out its own fat-fighter, Belviq. Vivus chose to go solo on the launch, despite widespread belief that it should partner up with a Big Pharma company. And its bid for European approval fell flat--and so did its appeal of that decision. "It is difficult for all of us to understand how Vivus could have executed such a poor commercial launch for the best obesity drug ever developed," First Manhattan's letter states.

And few dispute the fact that Qsymia has fallen short of expectations, at least so far. In fact, as First Manhattan notes in its letter, FierceBiotech recently passed along an assessment of Qsymia as one of the biggest blockbuster launch duds in recent memory. Plus, Vivus still has yet to launch its erectile dysfunction drug Stendra despite the fact that it's been approved by FDA for more than a year.

The company says it's negotiating with marketing partners for Stendra, hoping to launch by year's end. And it's been delivering a steady stream of encouraging news about Qsymia--reimbursement improvements, sales upticks and so on. Meanwhile, at least one other shareholder, Dan Szemis of Chilton Investment, doesn't see First Manhattan's slate as an improvement over the current Vivus board.

But Szemis also figures that if Vivus can't turn Qsymia around double-quick--over the next 6 months--then Vivus will have to pursue a sale, Reuters reports. 

- read the First Manhattan letter
- see the Reuters news

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