First Manhattan Co., the owner of approximately 9.9% of the outstanding
shares of VIVUS, Inc. (Vivus) (NASDAQ: VVUS), today issued an open
letter to Vivus' shareholders.
The full text of the letter follows:
July 11, 2013
Dear Fellow Vivus Shareholders:
We are pleased to report that our discussions with Vivus shareholders
over these past several months have been very encouraging. We have
received support from large and small shareholders alike. Shareholders
have thanked us for our efforts to effect much needed change at Vivus.
We share your sense of urgency for turning around the company. We have
been planning for six months and are well prepared to catalyze this
desperately needed positive change.
The annual meeting is just a few days away and time is running short. We
encourage you to vote your shares today on the WHITE proxy card. If you
have already voted Vivus’ gold proxy card, you can change your mind and
vote the WHITE card. Every vote counts and your vote is important no
matter how many shares you own. Even if you do not vote for all of our
nominees, you should vote our WHITE proxy by mail, internet or phone.
Our nominees have constructed a clear and concise strategic plan for the
future of Vivus. It addresses the serious missteps of the sitting board
and lays out a path for the successful launch of Qsymia. It is a plan
that can only be executed by our nominees and Tony Zook, who has agreed
to serve as the next CEO of Vivus if our nominees are elected as a
majority of the board. We are confident this plan and this leadership
team will lead to the realization of the greatest value of your
investment.
You have a simple choice ahead of you.
You have a choice for CEO of Vivus: Either Tony Zook, a giant in
creating U.S. primary care blockbusters1 OR the founder CEO
who has no relevant experience in commercializing a primary care
blockbuster drug.
You can choose to support our independent shareholder slate, a highly
accomplished group of director nominees, each of whom has been
thoughtfully selected for their expertise in the critical areas that
urgently require fixing. The nominees as a group have the depth and
right balance of new product launch, partnering, financial, turnaround
and European regulatory experience that the Vivus’ board still lacks.
Most importantly, the nominees on the shareholder slate are truly
independent and fully aligned with shareholders' best interests.
Alternatively, you can choose to support Vivus’ sitting board, which has
not acted on behalf of shareholders even in the face of the Qsymia
launch failure, in our view. In fact, they are so lacking in new ideas
that they have lifted the plans from our playbook, reacting to our
critique, and just yesterday claimed to have adopted the strategy we
have been promulgating for several months—“executing a Euro-centric
strategy” to obtain European Qsymia approval. Since there are no
Europeans on their board they clearly do not understand what it requires
to implement a Euro-centric strategy. Herein lies the difference between
Vivus’ misleading public relations strategy versus our well-planned
business strategy.
We have been telling you for several months that our plan to build value
includes, among other elements, (i) finding the right pharmaceutical
partner on the right terms, (ii) optimizing the right pricing strategy
and (iii) executing a Eurocentric approach to obtaining E.U. approval
through the centralized procedure.
Suddenly, the Vivus board has changed its tune. Rather than following
the failed “go it alone” strategy, it is now talking about seeking a
commercial partner.
Despite their talk of progress, their actions display more of the
same ill-conceived strategies in mission critical areas. Their
recently announced fourth attempt at a pricing strategy fails once again
to appreciate that there is no precedent for a primary care blockbuster
based on a $75 per month out-of-pocket cost. And rather than correcting
its twice-failed centralized approach to the E.U. approval, they are now
advocating a decentralized approach, the procedure used for generic
drugs not branded European blockbusters.
As you make your decision, you need to consider whether the Vivus board
is truly thinking strategically or is it just following our lead and
attempting to copy our ideas. We think the answer is obvious.
It has been a long hard struggle for Vivus shareholders but we are
confident that we can achieve positive change. When shareholders
think like owners of the business, they are quick to realize that things
at Vivus are changing only in response to our pressure and our
ideas.
This is truly the last chance you have to save your company and your
investment. Vote now to support our nominees. The alternative is simply
a return to the status quo and a continued diminution of shareholder
value.
Now is the time to decide whether Tony Zook OR Leland Wilson has the
qualifications most likely to create a primary care blockbuster in
Qsymia.
Now is the time to decide between a truly independent shareholder
slate with the critical skill sets and plan to fix Vivus and 100%
alignment with shareholder interests OR the sitting board with its ties
to the founder CEO and a track record of value destruction that speaks
for itself.
Who do you believe is the most likely to get it right at this critical
moment?
Please vote, sign and return the WHITE proxy card today. You can also
vote by telephone or internet. Please disregard Vivus’ proxy materials.
If you have already voted Vivus’ gold proxy card, you can change your
mind and vote the WHITE card. Your vote, no matter how many shares, is
important to all of us.
You can find additional details regarding our nominees’ strategic plan
for value creation at http://www.ourmaterials.com/VVUS/.
The execution of any strategic plan, including the hiring of any
management personnel, will be subject to the fiduciary duties of the
directors, if elected.
If you have any questions, require assistance with voting your WHITE
proxy card, or need additional copies of the proxy materials, please
contact our proxy solicitor, Mackenzie Partners, Inc. at (212) 929-5500
or Toll-Free (800) 322-2885.
Thank you for your support.
Sincerely,
Sam Colin, M.D.
Senior Managing Director
First Manhattan Co.
About First Manhattan Co.
First Manhattan Co. (“FMC”) was founded in 1964 and remains an
owner-operated investment advisory firm. FMC is registered with the U.S.
Securities and Exchange Commission as an investment adviser and as a
broker-dealer, and is a member of the Financial Industry Regulatory
Authority (FINRA).
FMC provides professional investment management services primarily to
high net worth individuals as well as to partnerships, trusts,
retirement accounts, pension plans and institutional clients. The firm
currently manages in excess of $14 billion.
Additional Information and Where to Find It
FIRST MANHATTAN CO., FIRST HEALTH, L.P., FIRST HEALTH LIMITED, FIRST
HEALTH ASSOCIATES, L.P., FIRST BIOMED MANAGEMENT ASSOCIATES, LLC, FIRST
BIOMED, L.P. AND FIRST BIOMED PORTFOLIO, L.P. (COLLECTIVELY, “FIRST
MANHATTAN”) FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
“SEC”) ON JUNE 3, 2013, A DEFINITIVE PROXY STATEMENT AND ACCOMPANYING
PROXY CARD TO BE USED TO SOLICIT PROXIES FROM THE STOCKHOLDERS OF VIVUS,
INC. (THE "COMPANY") IN CONNECTION WITH THE COMPANY'S 2013 ANNUAL
MEETING OF STOCKHOLDERS. ALL STOCKHOLDERS OF THE COMPANY ARE ADVISED TO
READ THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE
SOLICITATION OF PROXIES BY FIRST MANHATTAN, SARISSA CAPITAL MANAGEMENT
LP, SARISSA CAPITAL OFFSHORE MASTER FUND LP, SARISSA CAPITAL DOMESTIC
FUND LP, MICHAEL JAMES ASTRUE, ROLF BASS, JON C. BIRO, SAMUEL F. COLIN,
ALEXANDER J. DENNER, JOHANNES J.P. KASTELEIN, MELVIN L. KEATING, DAVID
YORK NORTON AND HERMAN ROSENMAN (COLLECTIVELY, THE "PARTICIPANTS") FROM
THE STOCKHOLDERS OF THE COMPANY BECAUSE THEY CONTAIN IMPORTANT
INFORMATION, INCLUDING ADDITIONAL INFORMATION ABOUT THE PARTICIPANTS AND
A DESCRIPTION OF THEIR DIRECT OR INDIRECT INTERESTS BY SECURITY
HOLDINGS. THE DEFINITIVE PROXY STATEMENT AND FORM OF PROXY HAVE BEEN
FURNISHED TO SOME OR ALL OF THE STOCKHOLDERS OF THE COMPANY AND ARE,
ALONG WITH OTHER RELEVANT DOCUMENTS, AVAILABLE AT NO CHARGE ON THE SEC'S
WEB SITE AT HTTP:\\WWW.SEC.GOV.
IN ADDITION, COPIES OF THE DEFINITIVE PROXY STATEMENT AND ACCOMPANYING
PROXY CARD MAY BE OBTAINED WITHOUT CHARGE UPON REQUEST BY CONTACTING
MACKENZIE PARTNERS, INC. AT (800) 322-2885 (TOLL-FREE) OR (212) 929-5500
(COLLECT).
1 Other factors may have contributed to creating these
blockbusters. Past performance is not indicative of future results.
Copyright Business Wire 2013