Vivus shareholder calls for sale of company

Thu Nov 15, 2012 8:10pm EST

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(Reuters) - One of Vivus Inc's (VVUS.O) largest shareholders has called for a sale of the company, saying that would better serve the drugmaker which has struggled to capitalize off the recent launch of a major product.

The shareholder, QVT Financial LP, said it proposed the sale in a meeting with Vivus Chief Executive Leland Wilson earlier on Thursday.

QVT, which owns an 8.3 percent equity stake in Vivus, said after the meeting, in which it also proposed getting a board representation, Wilson agreed to facilitate further discussions with Vivus board.

Vivus had launched its weight-loss pill Qsymia on September 17, which was just the second weight-loss drug to get U.S. regulatory approval after more than a decade.

However, earlier this month, Vivus announced $41,000 worth of Qsymia sales between the launch through end September, well below analysts' expectations of about $310,000 in sales.

Ashley Buford, a spokesperson for Vivus declined to comment.

Vivus had earlier cited higher costs to patients due to lack of reimbursements for the drug for the low sales. Analysts also said it was too early to judge the launch and that sales would eventually pick up.

"(Vivus) is hampered by the restrictions to non-retail channels and they have already applied for loosening of those restrictions," Mcnicoll, Lewis, & Vlak analyst Ed Arce said.

Vivus is distributing Qsymia through the home delivery networks of two retail pharmacies, CVS Caremark Corp (CVS.N) and Walgreen Co (WAG.N).

Earlier on Thursday, Cowen and Co analyst Simos Simeonidis said in a note that CEO Wilson took blame for disappointing sales of Qsymia in a meeting with the analyst.

"(Wilson) said it was his mistake, he shouldn't have let it happen, and that he plans to do a much better job at outlining for investors what the company believes the continuation of the launch will look like," Simeonidis said.

Moreover, European health regulators denied approval to the drug in October, citing the potential for heart risks and birth defects related to its long-term use.

Shares of the company, which has a market value of $1.07 billion, are down 55 percent from Qsymia's launch to date.

The stock edged up more than 2 percent to $10.50 in after-market trade on Thursday.

(Reporting By Pallavi Ail and Zeba Siddiqui in Bangalore; Editing by Maju Samuel, Bernard Orr)

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