Less than a fortnight before what should be a lively annual meeting, Vivus management and its leading shareholder (and most vocal critic) First Manhattan Co have been making their appeals to voters over the future direction of the company.
First up and FMC has again blasted Vivus for the disappointing launch of the obesity drug Qsymia (phentermine/topiramate) and urged stockholders to vote for its nine board nominees. Indeed it rolled out a pharmaceutical heavyweight as its proposed chief executive, Tony Zook, former head of commercial operations at AstraZeneca.
Mr Zook left the Anglo-Swedish drugmaker in January, having been "responsible for the market delivery of several blockbuster products", FMC senior managing director Sam Colin said. He also claimed that "the contrast between Tony’s experience and Vivus’ current CEO [Leland Wilson] ’s experience is striking", saying that according to a recent Vivus press release, the latter's "last US primary care blockbuster experience was with the anti-inflammatory Naprosyn (naproxen), a drug launched in 1976".
Mr Colin went on to say "we believe that Qsymia is the most effective obesity drug ever developed. The initial launch opportunity failed under the current management team and the sitting board. This is the last chance to get it right". FMC says its nominees "have a plan to carefully select a partner with a large sales force that can sell Qsymia in the primary detail position, not in a secondary position as planned by Vivus", and are concerned about the company's "unsustainable expense structure".
Mr Colin concludes by claiming that Vivus’ commercial strategy "has included a succession of confusing discount and rebate plans. None of them has worked". He added that the present management has "a simplistic and inadequate plan for Medicare reimbursement", while "a seriously flawed approach to EU approval for Qsymia has impaired the company’s credibility with European regulators".
In response, the Vivus board has asked shareholders to reject FMC's overtures, saying that the latter appears to claim that if its director nominees get elected, "the obesity drug "will be an instant success. In our view, there are no shortcuts to unlocking the value represented by Qsymia", it adds, claiming that "FMC's 'plan' is woefully short on details and contains ideas no different from what the Vivus board and management team are already implementing or executing".
Noting that Mr Colin "is an investor who has never run a pharmaceutical company and his hand-picked slate of director nominees lack executive experience in pharmaceutical commercialisation", Vivus says that the election of the FMC slate will result in nominees "spending an unnecessary six months to a year studying what to do, before concluding that Vivus is already on the right path to maximise stockholder value".
In the meantime, "competing drugs will have been launched into the marketplace and commercialised, and will perhaps have gained an insurmountable advantage", the board states.