This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Vivus Insiders Sell Stock Ahead of Crucial FDA Approval Decision

MOUNTAIN VIEW, Calif. ( TheStreet) --Three Vivus (VVUS - Get Report) executives sold company stock valued at $12.5 million since the start of June even though U.S. regulators are expected to make an approval decision on weight-loss pill Qnexa next week.

Insider sales ahead of major FDA drug approvals decisions should always trigger alarm bells. For Vivus, the worry is that insiders -- CEO Leland Wilson, President Peter Tam and Chief Commercial Officer Michael Miller -- are selling stock now because they know or suspect Qnexa isn't going to be approved on July 17, as most investors expect it to be. This is the doomsday scenario being spread by shareholders of Arena Pharmaceuticals (ARNA - Get Report), Vivus' rival in the ever-expanding weight-loss pill stock bubble. What's bad for Vivus is good for Arena, naturally.

The truth is likely less sinister. The Vivus executives have been selling stock under so-called 10b5-1 trading plans that are supposed to provide legal cover from allegations of insider trading. Unless someone at Vivus has a kamikaze-like death wish, it's more than likely that these recent stock sales are unrelated to any material, non-public knowledge about FDA's handling of the Qnexa review.

Still, it's totally legitimate for Vivus investors lacking "insider status" to look at the prices at which executives sold their shares and question whether that should set a price ceiling, even if Qnexa is approved next week.

Wilson, Tam and Miller were perfectly content to sell millions of dollars in company stock at prices ranging from $25 per share to $28 per share, according to regulatory filings. Stocks sale under 10b5-1 plans are scheduled in advance but then, many of these plans allow executives to cancel stock sales under certain conditions. Wilson, Tam and Miller apparently believed that Vivus at $25-28 per share was a good time to sell, so isn't that a signal for outside investors to also unload some stock at these same prices?

Vivus shares are up 2 cents to $28.53 in early Monday trading.

Here's a breakdown of the recent Vivus insider sales, most of which involved the exercising of options followed by immediate stock sales:
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ARNA $1.75 -1.10%
VVUS $1.67 0.00%
AAPL $93.59 -1.30%
FB $117.09 0.31%
GOOG $694.65 0.53%


Chart of I:DJI
DOW 17,709.85 -120.91 -0.68%
S&P 500 2,064.99 -10.82 -0.52%
NASDAQ 4,777.2430 -28.0480 -0.58%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs