Vivus Inc. (VVUS) said it would postpone its annual shareholder
meeting until Thursday, delaying a crucial vote that could shuffle
its management team and replace its board with a slate of nominees
proposed by an activist investor.
Vivus, the maker of a new treatment for obesity, has for months
been locked in a battle with its largest independent shareholder,
First Manhattan Co. The investment firm has criticized Vivus'
launch of the drug and blamed it for disappointing sales of Qsymia,
the first federally-approved weight-loss drug in more than a
decade. First Manhattan owns about a 9.9% stake in Vivus.
The meeting, which had been scheduled for Monday, will decide
whether Vivus management is permitted to continue running the
pharmaceutical drug company. The company has defended its sales
approach, saying the obesity drug market would have to be built
gradually to avoid mistakes that have derailed older obesity
drugs.
First Manhattan, based in New York, has proposed replacing
Vivus's nine-member board with its own slate of directors and
having its hand-picked chief executive candidate, former
AstraZeneca PLC (AZN) executive Tony Zook, take over Vivus.
Vivus appeared to offer an olive branch Saturday when it issued
a press release inviting three of First Manhattan's nominees to
join its board regardless of the vote Monday, citing conversations
with investors in which it had "become clear to the Vivus board
that many stockholders favor some change." The move was interpreted
by some as a sign that Vivus management expected at least a partial
defeat.
The peace offering was short-lived. On Sunday, Vivus said First
Manhattan advisers had made "false and misleading statements" to
Vivus investors and that it had adjourned its annual meeting until
Thursday as it allowed investors time to consider accurate
information.
First Manhattan criticized what it called Vivus' delay tactics,
saying in a statement that it had been negotiating with Vivus to
reach a settlement in the proxy fight. The negotiations occurred
over several days and as late as Sunday evening.
"Instead of continuing these negotiations, Vivus' board and CEO
have resorted to tactics that we believe are simply aimed at
preserving their entrenched position," First Manhattan said.
"Vivus' stated reason to adjourn the vote is just a pretense to buy
time in an attempt to improperly influence the election, in our
view."
Vivus said First Manhattan's false statements pertained to the
recommendations of the proxy advisory firm Institutional
Shareholder Services Inc., which had recommended investors vote for
three of the dissident shareholder's nominees. Another proxy
advisory firm, Egan-Jones Proxy Services, recommended investors
vote for all nine.
Vivus did not specify the alleged misleading statements but said
it had informed the U.S. Securities and Exchange Commission of its
claims and provided supporting documentation. Vivus also claimed
that First Manhattan had failed to make necessary disclosures to
the SEC.
First Manhattan denied the allegations, saying "nothing that is
required to be filed with the U.S. Securities and Exchange
Commission has not already been filed."
Write to Joseph Walker at Joseph.Walker@dowjones.com
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