Denner added as nominee to Vivus board by activist investor
May 23 (Reuters) - First Manhattan Company (FMC) added some heavyweight muscle on Thursday to its bid to shake up the board of drugmaker Vivus Inc by naming former Carl Icahn top lieutenant Alex Denner and two others to its slate of proposed nominees.
Vivus shares rose as much as 11 percent after First Manhattan, which has nearly a 10 percent stake in Vivus, expanded its slate of proposed directors from six to nine, including Denner.
Denner, chief investment officer Sarissa Capital Management, has served on boards of biotechnology and other healthcare companies such as Biogen Idec and ImClone Systems, later bought by Eli Lilly and Co. Denner also is a founding partner of Sarissa, which owns about 2 percent of outstanding Vivus shares. Jumping into the Vivus proxy fight is one of his first public forays since starting his own fund.
"In every area that needs to be fixed we want to attract the highest quality human capital," Sam Colin, senior managing director at FMC and a board nominee, said in a telephone interview.
The other two nominees added to the FMC slate are Rolf Bass, who has an extensive European pharmaceutical regulatory background, and Mel Keating, who has expertise in corporate turnarounds.
Asked about the choice of Denner, Colin said, "What we wanted first and foremost was someone with Alex's track record."
"There is no one else like Alex Denner. He's not only incredibly intelligent, incredibly experienced, very thoughtful, he's easy to get along with and very helpful in contentious situations where people's emotions can get the better of them," Colin said.
Denner had been head of healthcare investments for billionaire investor Icahn, and a regular on many of Icahn's proposed director slates.
FMC, in a statement, called its slate of nominees a "clearly superior alternative to Vivus' current board of directors," adding that its nominees offer independence from management.
It has been agitating for change at Vivus since March over the company's disappointing handling of the launch of its diet drug Qsymia, which won U.S. approval in September. Even with Thursday's share gains, Vivus' stock is worth half of what it was last July.
Another top investor, QVT Financial LP, had previously publicly said that Vivus should be sold. Analysts and other investors have been calling on Vivus to find a pharmaceutical company partner with deep pockets and a large sales force to help get Qsymia off the ground.
Vivus reported Qsymia sales of only about $4 million in the first quarter.
"They've got the right asset and the fix is having the right people behind the asset," Colin said of Qsymia. "It should be a huge drug."
Vivus' board of directors is scheduled to be chosen at its annual shareholders meeting on July 15. Its shares closed up 7.2 percent at $14.50 and had climbed as high as $15.04 earlier.
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