Vivus investor plots board takeover to rally Qsymia sales

Vivus may rue the day that it decided to go solo on marketing its new obesity drug, Qsymia. Despite some fanfare around its U.S. approval, the drug's sales have foundered. Vivus ($VVUS) is trying to move Qsymia off the rocks, but so far, the market is unconvinced.

So, apparently, is Vivus shareholder First Manhattan Co. The firm, which owns about 8.8% of Vivus, is preparing to mount a proxy fight, not only for a few seats at the Vivus table, but for every seat on the board. Justification, according to a letter filed with the Securities and Exchange Commission: The "failed Qsymia launch" and an ensuing 65% drop in Vivus' stock price.

"Clearly the commercial planning and execution for Qsymia has proven to be deeply flawed," FMC senior managing director Sam Colin wrote to Vivus chief Leland Wilson. The firm is also none too happy that Qsymia, dubbed Qsiva in Europe, failed to win regulatory backing there.

But all is not lost. FMC figures Vivus still has the chance to set Qsymia sales on the right course. But that chance is passing. So, the company needs to move on, with the help of a new board that's more independent and better equipped to handle Vivus' transformation into a blockbuster-selling pharma company, the letter contends. Jobs One and Two: Find a strong marketing partner for Qsymia and put the drug back on track for European approval.

FMC is nominating 6 directors with experience at fixing broken companies, launching blockbuster drugs, selling companies at "favorable prices" and so on, the firm says. They include Colin himself; biotech executive and director Michael Astrue; prominent drug researcher and advisor John Kastelein; and former Johnson & Johnson executive David Norton. There's also former European regulator Rolf Bass, who would no doubt be tasked with guiding Qsiva toward an EU approval.

Analysts have been saying Vivus needs a Big Pharma marketing partner for some time. But the company chose to go it alone, and it now says it's making progress that way. "Vivus is ... successfully expanding the clinical awareness and acceptance of Qsymia as the [c]ompany pursues opportunities to expand patient access to this best-in-class therapeutic," Vivus said in a statement. The company "also continues to make meaningful progress in obtaining additional reimbursement coverage." We'll see what the shareholders say next.

- see First Manhattan's letter to Vivus
- read the Vivus release