ISS Supports Majority of VIVUS's Directors Retaining Control
We are pleased that ISS and Glass Lewis support the election of the majority of VIVUS's director nominees and recommend that stockholders reject First Manhattan Co.'s ("FMC") attempt to take control of VIVUS. In its July 3, 2013 report, ISS recognized VIVUS's successful execution and stated that "Vivus' management team has made progress over the past year in spite of the unexpectedly severe impact of the REMS restrictions on Qsymia's product launch last July. The company was able to get the REMS restriction lifted this year, as well as successfully raise additional capital and negotiate reimbursements with private insurers to increase coverage to 36% of the target population. It also made some less quantifiable but nonetheless significant and notable strides in establishing the medical obesity market for Qsymia in the US." 1 Glass Lewis shares our strong belief that FMC is creating unnecessary risk for our stockholders, and, in its July 2, 2013 report, said that it believes that it is "unlikely that adding Dissident Nominees to the Company's board would lead to a more favorable regulatory outcome. " 1 Furthermore, Glass Lewis recommends that stockholders do not vote for all nine of the nominees proposed by FMC. As recognized by both Glass Lewis and ISS, the VIVUS Board and management team have made substantial progress in laying the foundation for Qsymia and have a clear plan to build a successful brand. VIVUS's progress has not gone without notice. Glass Lewis stated that VIVUS is " making encouraging progress to improve reimbursement, distribution and awareness of [Qsymia], factors that are likely to have a material impact on sales." 1 In its report, Glass Lewis also highlighted that " Given the Company's success in achieving regulatory approval for Qsymia in the U.S. and for Stendra in the E.U., we believe the existing board and management have established a credible track record with the approvals process. Further, the Company states that it regularly consults with a range of advisors including former members of the European Medicines Agency and, in this case, we find it unlikely that adding Dissident Nominees to the Company's board would lead to a more favorable regulatory outcome." 1 VIVUS firmly believes that FMC's nominees, if elected, would jeopardize the progress the Company is making to position Qsymia as the leading drug for medical obesity. In its July 3, 2013 report, ISS stated that FMC's nominees have "minimal relevant experience. Most of the nominees do not have any experience in obesity drugs or pharmaceutical commercialization, and this lack of skills would create an unnecessary risk for Vivus' other shareholders." 1
In contrast, the VIVUS Board is comprised of proven leaders in the healthcare industry with invaluable experience in pharmaceutical drug development, operations and commercialization. FMC has no plan and is advocating ideas no different from what the VIVUS Board and management team are already doing. VIVUS believes that supporting FMC would throw the Company into turmoil at a critical juncture, derail the Company's recent progress and put stockholders' investment in VIVUS at risk.