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First Manhattan Co. (FMC), an owner-managed and operated investment advisory
firm and the largest shareholder of VIVUS, Inc. (“Vivus” or the "Company")
VVUS with approximately 9.64 percent of the outstanding common stock
of the Company, today issued the following statement regarding Vivus'
announcement that it has added a director to its now seven person Board of
Directors.
“We are pleased that Vivus has chosen to add a new director with large pharma
experience and one who has been associated with a long-standing shareholder.
It is a sad statement that multiple failed attempts to launch Qsymia, an
obesity drug with blockbuster potential, were clearly not enough to prod this
Board into action. It was only in response to FMC's campaign to elect our six
highly qualified nominees that the current Board has chosen to act.
“The addition of a new director is a typical tactic taken from a defensive
playbook that is often used by entrenched Boards seeking to retain control at
all costs. Vivus' Board and its senior management have repeatedly failed in
multiple attempts to launch Qsymia. The result has been a significant
destruction of nearly $1.7 billion, or 60 percent, of shareholder value since
July 17, 2012, the date Qsymia was approved by the FDA.
“We believe that Vivus' shareholders deserve a new approach. The addition of
one retired large pharma director falls woefully short. A total Board overhaul
is necessary at Vivus. Our highly qualified nominees have the experience,
skills and independence necessary to attract the best talent, successfully
partner Qsymia, and execute on its U.S. commercialization and E.U. approval.
“Our nominees will examine all strategic options available to maximize value
for Vivus' shareholders, including a value-creating partnership for Qsymia,
and judiciously cutting the Company's SG&A expenses, which have grown to
roughly $50 million in the fourth quarter of 2012. Despite this profligate
spending, net product revenue was under $2 million in that same quarter.
Qsymia has great potential, but not under this Board. We intend to cut
wasteful spending in order to focus Vivus' financial and human capital on the
commercialization of Qsymia.
“Vivus' shareholders are currently represented by an insular board with
excessive management representation. This is the same board that has refused
numerous requests by First Manhattan to schedule its annual meeting by June
30, 2013, thereby delaying the right of Vivus' shareholders to have their
critical say in the future of their investment. Once again, First Manhattan
calls on Vivus to immediately set the record date and schedule its annual
meeting for no later than June 30, 2013, which would already be more than one
year since its last annual meeting in 2012. On behalf of all shareholders, we
demand that the Board let the owners of the Company know why it is delaying
their right to elect directors at an annual meeting.”
First Manhattan and its nominees believe that substantial value can be
unlocked at Vivus with the right strategy and leadership. First Manhattan has
proposed a slate of highly qualified nominees for election to Vivus' Board. At
the time we first nominated our candidates on March 7, 2013, Vivus had only
six directors on its Board. First Manhattan reserves the right to nominate
additional candidates depending on the number of Vivus' nominees. Biographies
of First Manhattan's nominees, including two alternate nominees, follow:
* Michael Astrue: Mr. Astrue most recently served as Commissioner of the
Social Security Administration from 2007 to 2013, and was one of six
Trustees of the Medicare & Social Security Trust Funds. He served as
Interim Chief Executive Officer at Epix Pharmaceuticals from 2005 to 2006,
during which time he successfully engineered the company's merger. Prior
to that, he served as President and Chief Executive Officer of
Transkaryotic Therapies where he executed one of the most successful
corporate turnarounds in the history of the biotechnology industry. Under
his stewardship, Transkaryotic Therapies' share price increased from $3.80
at the start of his tenure to $37.00 when the company was sold two years
later for $1.6 billion. He has served as Chairman of the Massachusetts
Biotechnology Council from 2000 to 2002 and on the public company boards
of Transkaryotic Therapies, ArQule Inc.
ARQL, CuraGen
Corporation and Tercica Inc. Other senior roles Mr. Astrue has held during
his distinguished 30 year career include serving as Vice President &
General Counsel at Biogen from 1993 to 1999, General Counsel for the U.S.
Department of Health & Human Services from 1989 to 1992, and Associate
Counsel to Presidents Ronald Reagan and George Bush from 1988 to 1989,
among other roles. Mr. Astrue received a J.D. from Harvard Law School and
B.A. in Philosophy & English from Yale University.
* Jon Biro: Mr. Biro currently serves as Executive Vice President and Chief
Financial Officer at Consolidated Graphics, Inc.
CGX, a leading
commercial printing services company. Prior to Consolidated Graphics, he
spent 14 years at ICO, Inc., a manufacturer of specialty resins and
provider of polymer processing services, including serving as Senior Vice
President, Chief Financial Officer, Treasurer, a director, and for a time
as interim Chief Executive Officer. At ICO, he helped manage an
operational turnaround, including the improvement of the balance sheet and
overall capital structure, which helped to increase the company's stock
price over six-fold. He also served as a director of Aspect Medical from
June to November 2009 during which the company's stock doubled and the
company was sold. He currently is a director at IBERIA Bank
IBKC
and Crown Crafts, Inc.
CRWS. Mr. Biro received an M.S. in
Accounting from the University of Houston and a B.A. in Psychology from
the University of Texas.
* Dr. Samuel Colin: Dr. Colin is a Senior Managing Director at First
Manhattan Co. (FMC), an investment firm founded in 1964 with more than $14
billion in assets currently under management. Dr. Colin joined the firm in
1994, and is the founding and sole portfolio manager of FMC's healthcare
funds, First Health and First BioMed with assets under management
exceeding $500 million. In addition, he advises the firm on healthcare
investments. He has invested in hundreds of small to large-cap healthcare
companies including biotechnology, pharmaceutical, and medical device
companies in the US, EU, and Japan. He has an extensive knowledge of the
clinical, commercial, and regulatory history of obesity therapeutics and
was a major participant in the recapitalization of Orexigen (OREX), an
obesity therapeutics company, at $1.45 per share in December 2011. He has
developed deep relationships with management teams across the biotech and
pharmaceutical industry. Prior to joining FMC, Dr. Colin served as a
resident at the Yale-New Haven Hospital from 1992-1994. He received his
M.D. from the Yale School of Medicine in 1992, and graduated from Brown
University, B.Sc. Human Biology, magna cum laude, in 1986.
* Dr. John Kastelein: Dr. Kastelein has spent his career of more than 30
years devoted to the study of medical genetics, lipidology and molecular
biology. He is Professor of Medicine at the Department of Vascular
Medicine at the Academic Medical Center of the University of Amsterdam,
where he also serves as Strategic Chair of Genetics of Cardiovascular
Disease. His research on metabolic disorders is internationally recognized
as the key paradigm for understanding the relationship between low density
lipoprotein cholesterol and heart disease. He also is an executive
consultant to the cardiovascular and metabolic franchises of many leading
biotechnology and pharmaceutical companies, including Amarin, Amgen,
Bristol-Myers Squibb, Genentech, Merck, Novartis, Pfizer, Regeneron and
Sanofi-Aventis. His advisory work has also included accompanying numerous
companies to meetings with the European Medicines Agency, including
Aegerion, CSL Behring, Eli Lilly, ISIS, The Medicines Company, and UniQure
(formerly Amsterdam Molecular Therapeutics). For UniQure, a company he
co-founded, he helped secure approval from the EMA's Committee for
Medicinal Products for Human Use (CHMP) for the first gene therapy ever
approved worldwide. The approval was granted after two previous
rejections. Dr. Kastelein has also served on Steering Committees of many
landmark cardiovascular trials, including for TNT, IDEAL, METEOR, JUPITER,
ACHIEVE, and the Sanofi PCSK9 Phase III (ODYSSEY) programme. Additionally,
he is currently a personal consultant to the Chief Executive Officers of
AstraZeneca and Cerenis Therapeutics and the heads of research at Roche
and TEVA. In addition to co-founding UniQure, he was also a founder of
Dezima Pharma, a biotechnology company focused on therapies for
dyslipidemia. His distinguished career has also included positions such as
President of the Dutch Atherosclerosis Society and Chair of the National
Scientific Committee on Familial Hypercholesterolemia. Dr. Kastelein
received his medical degree from the University of Amsterdam.
* David Norton: Mr. Norton served in a variety of senior leadership
positions during his more than 32-year career at Johnson & Johnson
JNJ, most recently as Company Group Chairman, Global Pharmaceuticals from
2009 until his retirement from the company in September 2011. As Company
Group Chairman, he was responsible for leading and developing the
strategic growth agenda, including the licensing, acquisitions and
divestment strategies, and ensuring alignment between global strategic
functions, research and development and the commercial organizations.
Under his stewardship, J&J successfully commercialized numerous
blockbuster products, including Prepulsid / Propulsid (Europe), Risperdal
(Australia, Europe), Aciphex (US), Risperdal Consta (US and Europe),
Durogesic / Duragesic (US and Europe), and Prezista (US and Europe). He
also negotiated a novel pricing and reimbursement program for Velcade with
the U.K. Department of Health, helping to drive increased sales. Also
under his supervision, J&J secured numerous acquisition, divestitures,
in-licensing and collaboration agreements, including acquiring Cougar
Biotechnology and Zytiga, in-licensing of Incivo (Hepatitis C compound for
Europe), and selling J&J's Animal Health business to Eli Lilly. J&J's
Pharmaceutical Group's revenues grew to $22 billion, 30% of the company's
total revenue, during his tenure. Previously, Mr. Norton served as U.S.
Domestic President for Janssen Pharmaceuticals (a J&J unit), Company Group
Chairman for Europe, Middle East and Africa, and Company Group Chairman of
Worldwide Commercial and Operations for J&J's CNS, Internal Medicine and
Virology franchise. He currently is a Director at Savient Pharmaceuticals
Inc.
SVNT. Mr. Norton has studied Computer Programming
Technology at the Control Data Institute in Sydney, Australia, as well as
Marketing at the College of Distributive Trades at London and Preston
Polytechnic in Preston, United Kingdom.
* Herman Rosenman: Mr. Rosenman was most recently at Gen-Probe Inc., a
medical diagnostics company, where starting in 2001 he held the role of
SVP of Finance and then Chief Financial Officer. At Gen-Probe, he led a
company spin-off and helped lead a significant turnaround at Gen-Probe
that resulted in a more than 1,200% increase in the company's stock price.
He also helped manage the process of selling the company in 2012 for $3.72
billion, generating significant value for shareholders. Prior to
Gen-Probe, Mr. Rosenman was President and Chief Executive Officer of Ultra
Acquisition Corp, where he re-engineered the manufacturing division, more
than tripling the company's revenue and quadrupling the size of its dealer
base. He is currently a Director and Chairman of the Audit and
Compensation Committees of BioFire Diagnostics, and a former Director and
Committee Chairman at ARYx Therapeutics, Inc., Infinity Pharmaceuticals,
Inc.
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, and Emphasys Medical, Inc. Mr. Rosenman holds an
M.B.A. in Finance from the Wharton School of the University of
Pennsylvania, and a B.B.A. in Accounting and Finance from Pace College.
* Dr. Rolf Bass, Alternative Nominee: Dr. Bass most notably served in the
distinguished role of Head of the Human Medicines Evaluation Unit at the
EMA in London from 1995 to 2000. There he oversaw medicines for human use
and supported designated Central and Eastern European Countries Drug
Regulatory Authorities in the accession of their countries to the European
Union. In 2000, he was appointed member to the CPMP (now CHMP), and set up
the new Department for European and International Business of the Federal
Institute for Drugs and Medical Devices. Most recently, Dr. Bass was
appointed Visiting Professor for Pharmaceutical Medicine at the University
of Basel, Switzerland in 2007. Previously, Dr. Bass joined the German
Health Authority as Head of the Pre- Clinical Department at its Drug
Institute. Dr. Bass holds a medical degree from Free University of Berlin.
* Melvin Keating, Alternative Nominee: Mr. Keating most recently served as
President and Chief Executive Officer of Alliance Semiconductor Corp. from
2005 to 2008. During that time, he transformed it from a distressed
company with a market capitalization of $80 million to one that generated
over $250 million of distributable cash and a 2.5x increase in the
company's stock price. Prior to his role at Alliance Semiconductor, Mr.
Keating served as Executive Vice President and Chief Financial Officer and
Treasurer of QUOVADX INC. from 2004 to 2005, and as a strategy consultant
at Warburg Pincus Equity Partners from 1997 to 2004. He currently serves a
Director of API Technologies Corp
ATNY, Red Lion Hotels Corp
RLH, Crown Crafts, Inc.
CRWS, BluePhoenix Solutions Ltd
BPHX, Marlborough Software Development Corp. He previously
served on the boards of White Electronic Designs and Integral Systems,
where he led strategic reviews of the businesses that resulted in sales of
each of the companies at approximately 2x the stock price when he joined
the boards. He also was previously a director of Aspect Medical Systems.
Mr. Keating received an M.B.A. in Finance and MS in Accounting from the
Wharton School of the University of Pennsylvania, and B.A. at Rutgers
University.
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