First Manhattan Co. (FMC), an owner-operated investment advisory firm and the largest shareholder of VIVUS, Inc. (“Vivus” or the "Company") (NASDAQ: VVUS) with approximately 9.64 percent of the outstanding common stock of the Company, today announced that it has filed with the U.S. Securities and Exchange Commission (“SEC”) its preliminary proxy materials regarding the election of its independent director nominees. FMC seeks to elect its six highly qualified nominees to Vivus’ Board at the Company’s 2013 Annual Meeting of Stockholders (the "Annual Meeting"), which the current Board has thus far refused to schedule. First Manhattan reserves the right to nominate additional candidates depending on the number of Vivus’ nominees.
As a Vivus shareholder since 2008, FMC has urged the Company both privately and publicly to take steps that it believes would have resulted in an effective transition from a development stage company to a commercial stage company. The Board followed a different path and the result has been a significant destruction of shareholder value. Vivus’ stock price has declined approximately 60 percent since the FDA approval of Vivus’ obesity drug Qsymia in July 2012, destroying approximately $1.7 billion of shareholder value.
FMC believes that Vivus’ current Board of Directors is insular, over-compensated, underqualified and excessively represented by management. The confluence of these factors creates what FMC believes is an ineffective Board that is directly responsible for Vivus’ failure to transition into a successful commercial organization. FMC further believes that Vivus’ shareholders will realize greater value from their investment in the Company if the Board is reconstituted with FMC’s six nominees, each of whom brings urgently needed expertise.
FMC’s nominees believe that Qsymia has blockbuster potential. The FMC nominees’ plan includes examining all strategic options available to maximize value for Vivus’ shareholders, including a value-creating partnership for Qsymia, and judiciously cutting the Company’s SG&A expenses, which have grown to roughly $50 million in the fourth quarter of 2012. Despite this profligate spending, net product revenue was under $2 million in that same quarter. The nominees intend to cut wasteful spending in order to focus Vivus’ financial and human capital on the commercialization of Qsymia.
“The current Vivus Board has proven to be poor stewards of shareholder capital,” commented Sam Colin, M.D., Senior Managing Director at FMC and a Board nominee. “Qsymia’s potential is substantial. However, Vivus has badly mismanaged the Qsymia launch, and neither the recent REMS modification nor the addition of a new director will cure the root cause of the failure. Vivus and its shareholders deserve a Board worthy of Qsymia. Our slate of six highly qualified nominees has the independence, the experience, and the plan to fix the Company before time runs out.”
The FMC nominees include highly accomplished individuals who have held senior leadership positions at successful publicly traded biotechnology and pharmaceutical companies. These individuals possess deep regulatory experience with the Food and Drug Administration and with the European Medicines Agency, the EU equivalent of the FDA. They also have deep experience with payor stakeholders such as the U.S. Department of Health & Human Services, including the Centers for Medicare & Medicaid Services (CMS). They have fixed broken companies, refinanced distressed companies, successfully launched blockbuster drugs, and sold companies at high returns for shareholders.
Moreover, the nominees have significant credibility with the investment community. FMC believes an independent Board of this caliber is critical for Vivus to achieve its full potential. Each nominee qualifies as an independent director under the Nasdaq Listing Rules, and all but one are independent of FMC.
Biographies of First Manhattan’s nominees, including two alternate nominees, follow:
About First Manhattan Co.
First Manhattan Co. (“FMC”) was founded in 1964 and remains an owner-operated investment advisory firm. FMC is registered with the U.S. Securities and Exchange Commission as an investment adviser and as a broker-dealer, and is a member of the Financial Industry Regulatory Authority (FINRA).
FMC provides professional investment management services primarily to high net worth individuals as well as to partnerships, trusts, retirement accounts, pension plans and institutional clients. The firm currently manages in excess of $14 billion.
Important Additional Information
FIRST MANHATTAN CO., FIRST HEALTH, L.P., FIRST HEALTH LIMITED, FIRST HEALTH ASSOCIATES, L.P., FIRST BIOMED MANAGEMENT ASSOCIATES, LLC, FIRST BIOMED, L.P. AND FIRST BIOMED PORTFOLIO, L.P. (COLLECTIVELY, “FIRST MANHATTAN”) INTEND TO FILE WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) A DEFINITIVE PROXY STATEMENT AND ACCOMPANYING PROXY CARD TO BE USED TO SOLICIT PROXIES FROM THE STOCKHOLDERS OF VIVUS, INC. (THE "COMPANY") IN CONNECTION WITH THE COMPANY'S 2013 ANNUAL MEETING OF STOCKHOLDERS. ALL STOCKHOLDERS OF THE COMPANY ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY FIRST MANHATTAN, MICHAEL JAMES ASTRUE, JON C. BIRO, JOHANNES J.P. KASTELEIN, SAMUEL F. COLIN, DAVID YORK NORTON, HERMAN ROSENMAN, ROLF BASS AND MELVIN L. KEATING (COLLECTIVELY, THE "PARTICIPANTS") FROM THE STOCKHOLDERS OF THE COMPANY, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING ADDITIONAL INFORMATION RELATED TO THE PARTICIPANTS. WHEN COMPLETED, THE DEFINITIVE PROXY STATEMENT AND FORM OF PROXY WILL BE FURNISHED TO SOME OR ALL OF THE STOCKHOLDERS OF THE COMPANY AND WILL, ALONG WITH OTHER RELEVANT DOCUMENTS, BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, FIRST MANHATTAN WILL PROVIDE COPIES OF THE DEFINITIVE PROXY STATEMENT AND ACCOMPANYING PROXY CARD (WHEN AVAILABLE) WITHOUT CHARGE UPON REQUEST. INFORMATION ABOUT THE PARTICIPANTS AND A DESCRIPTION OF THEIR DIRECT OR INDIRECT INTERESTS BY SECURITY HOLDINGS IS CONTAINED IN THE PRELIMINARY PROXY STATEMENT ON SCHEDULE 14A FILED BY FIRST MANHATTAN WITH THE SEC ON MAY 1, 2013. THIS DOCUMENT CAN BE OBTAINED FREE OF CHARGE FROM THE SOURCES INDICATED ABOVE.