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VIVUS Comments on Sam Colin's Questionable Claims


VIVUS, Inc. (Nasdaq: VVUS) (the "Company"), a pharmaceutical company commercializing and developing innovative, next-generation therapies to address unmet needs in obesity and sexual health, today announced that it believes First Manhattan Co.'s ("FMC") recent letter to stockholders contains several highly questionable claims and would like to set the record straight.

FMC's Incorrect Claim: Short sellers in VIVUS are "...betting against the sitting board and a management team..." and would "...promptly buy back most of the 30 million shares currently being shorted..." if the VIVUS Board is replaced.

The truth is: This outlandish claim would require the ability to read the minds of the traders who have sold VIVUS short. If Sam Colin can in fact read the minds of the short sellers, he should disclose it to VIVUS's stockholders. The truth is that VIVUS's main peer in the weight loss space, Arena Pharmaceuticals, has a comparable short interest of 26% relative to its shares outstanding1.

FMC's Incorrect Claim: Leland Wilson, VIVUS's CEO, "...has zero experience in launching blockbuster drugs into the US market..."

The truth is: Leland Wilson has extensive experience in new drug commercialization, including:

Top ranked Sales Director in the U.S. for Naprosyn® (Syntex Laboratories, Inc.), which was one of the largest selling drugs in the U.S. at the time; Director of Marketing at Lifescan® when OneTouch® became one of the largest selling blood glucose monitors in the U.S.; and CEO of VIVUS during the launch of MUSE® in 1997, which was then considered to be one of the most successful drug launches in the U.S, achieving $130M in first year sales. FMC's Incorrect Claim: The VIVUS Board has "destroyed" stockholder value.

The truth is: Sam Colin's chart showing the price per share of VIVUS stock from FDA approval of Qsymia to the present is misleading because it fails to show that the stock price saw a three-fold increase in the six months prior to FDA approval. His use of the expense chart demonstrates his lack of understanding that investment is needed for the commercial launch of Qsymia and the work necessary to build the market during the time when the restricted mail-order only REMS distribution was in place.

Sam Colin's various misleading claims ultimately demonstrate a fundamental lack of understanding of the financial, commercial, regulatory and political challenges to launching a drug in multiple jurisdictions in a therapeutic category that did not previously exist. Sam Colin's ignorance would not otherwise be troubling to us if his rhetoric were not, in our view, damaging to the Qsymia brand. Moreover, Sam Colin's trivialization of VIVUS's work to achieve FDA approval for the Qsymia REMS modification may have already harmed stockholder value. While Sam Colin criticizes Qsymia's commercial launch and VIVUS's EU strategy, he has offered NO suggestion. Sam Colin has NO plan. The Board and management team call on Sam Colin to refrain from continuing to make false and misleading claims in his "win at all costs" attempt to prevail in a proxy fight that we believe he is waging for personal reasons.

And finally, the truth is: In Sam Colin's latest letter, he makes multiple references to Warren Buffett. Warren Buffett is one of the country's most well regarded and legendary investors. Sam Colin is certainly NO Warren Buffett.

The VIVUS Board of Directors unanimously recommends that stockholders vote "FOR" all of the Company's experienced and highly qualified directors – Leland F. Wilson; Peter Y. Tam; Mark B. Logan; J. Martin Carroll; Charles J. Casamento; Ernest Mario, Ph.D.; Jorge Plutzky, M.D.; Linda M. Dairiki Shortliffe, M.D.; and Robert N. Wilson – on the GOLD proxy card. Stockholders are encouraged to vote today by Internet, by telephone or by signing, dating and returning the GOLD proxy card.


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