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Large Vivus Shareholder Seeks More Change

MOUNTAIN VIEW, Calif. ( TheStreet) -- Vivus (VVUS - Get Report) hopes to receive a decision soon from the FDA on a request to loosen restrictions on the dispensing of its weight-loss pill Qsymia. But even if FDA agrees, one of Vivus' largest shareholders is still pushing ahead with plans to remake the company's board of directors

First Manhattan, owners of 8.8% of Vivus' shares, called modification of the Qsymia risk management plan, "necessary but not sufficient for Qsymia's success."

The investment fund, which is run by David Gottesman, a Berkshire Hathaway director, still intends to nominate six new directors for Vivus' board.

The directors nominated by First Manhattan, "will provide objective stewardship of Qsymia's commercialization. They will seek out all the facts, not just the views favored by management" and are "committed to fixing the fundamental problems at Vivus, reversing the failed Qsymia launch and creating durable value for all Vivus shareholders," First Manhattan said in a statement.

When the FDA approved Qsymia last year, the agency restricted distribution to mail-order pharmacies only. One of Qsymia's active ingredient carries the risk of birth defects, so FDA wanted to ensure the drug would not be used by pregnant women.

Vivus blames Qsymia's disappointing commercial launch, in part, on the mail-order pharmacy restriction. Sales totaled $2 million in the fourth quarter, well below investor expectations. Vivus has submitted a revised distribution plan for Qsymia seeking permission to sell the drug through certified retail pharmacies. The company believes making Qsymia easier to prescribe will boost sales. The FDA is expected to make a decision on the request sometime this quarter.

First Manhattan's still wants Vivus to do more, including seeking a more experienced partner to sell Qsymia or putting the entire company up for sale.

Vivus has defended the qualifications and work of its existing directors but will present First Manhattan's proxy to shareholders at the company's annual meeting. A date for that meeting has not been scheduled.

Vivus shares were up 10 cents to $10.93 in Tuesday trading.

Arena Pharmaceuticals (ARNA - Get Report), which hopes to compete against Vivus with its own obesity pill Belviq, has been waiting nine and half months for DEA to finalize scheduling. -- Reported by Adam Feuerstein in Boston.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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