Vivus: Management’s Response And Updates

I contacted Vivus (VVUS) directly in an attempt to reach company management to ask them about 10% shareholder First Manhattan and 2% shareholder Alex Denner’s stance against their efforts to market QSYMIA for patients with a BMI of 30 or over (or 27 or over with the presence of at least one weight-related medical condition such as high blood pressure, type 2 diabetes, or high cholesterol. I also released an article earlier this morning detailing the company’s situation along with extra details on why First Manhattan and other activist shareholders could potentially fault the company for its management of the QSYMIA launch.

Company management was not able to respond to my request, although a spokesperson gave me what seems to be the same response that Bloomberg and other media entities received:

“The VIVUS Board of Directors is comprised of proven business leaders who possess a broad range of commercial, management, financial, clinical and operational experience, as well as expertise in the biopharmaceutical industry and other areas important to VIVUS. The VIVUS Board, which includes seven independent directors, four of whom have been added in the last 13 months, is committed to maximizing value for all shareholders and to considering a broad range of opportunities to achieve this objective.”

First Manhattan’s commentary, recently posted by Bloomberg, suggested that they are frustrated that the most efficacious obesity treatment of all time (based on clinical trial results) is doing poorly and even flatlining (as suggested by the last month of data from Symphony Health).

As mentioned earlier, it is very questionable whether Vivus will be able to justify its current valuation given the way things have gone with QSYMIA’s launch in September 2012, although management has been attempting to retain shareholder interest based on some upcoming changes to QSYMIA’s distribution and REMS strategy that could boost sales. From today’s article:

In the recent Q1 earnings conference call, Vivus management addressed the issue by discussing QSYMIA’s progress on the reimbursement front. In particular, the company is hopeful about recently instated Tier 3 coverage that limited patients’ copayments for 30-day prescriptions to $50. This, along with an amendment to the QSYMIA REMS which was submitted in October 2012 by the company which will bring the drug to “thousands of brick-and-mortar pharmacies in July 2013” according to the company’s statements, should begin to affect QSYMIA prescriptions dramatically. The problem is that we don’t know if this will be dramatic enough to multiple the drug’s sales enough times to justify the valuation of Vivus in the long run.

Particularly interesting is the involvement of Alex Denner (the former head of health-care investments for Carl Icahn and owner of the new fund Sarissa Capital Management), who seems to share the opinions held by First Manhattan. It remains to be seen what company management will do (and say) in reaction to a potential struggle for the ownership and control of Vivus, although more information will be provided when available.