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) --Three



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 Free 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:

CEO Wilson sold 100,000 Vivus shares in two tranches for total proceeds of $2.7 million. Wilson still owns more than 4.3 million shares of Vivus stock and options.

President Tam sold a total of 336,350 shares of Vivus stock in June, grossing $8.6 million. Tam's sales are the most noteworthy of the three executives because he sold 30% of his total Vivus stock holdings.

Chief Commercial Officer Miller sold 50,000 shares of Vivus stock for gross proceeds of $1.3 million.

--Written by Adam Feuerstein in Boston.

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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;

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