July 2, 2013 / 10:01 PM / 5 years ago

UPDATE 1-Top Vivus holder proposes ex AstraZeneca exec as CEO

By Bill Berkrot

NEW YORK, July 2 (Reuters) - Vivus Inc’s largest shareholder on Tuesday took the unusual step of naming the man it would install as the drugmaker’s chief executive should it prevail in its battle to gain control of the board of directors this month.

First Manhattan Co (FMC), which owns 9.9 percent of Vivus shares and has proposed a full slate of nine directors in a proxy fight, said former AstraZeneca Plc senior executive Anthony Zook was the right man to replace longtime Vivus CEO Leland Wilson. The move could help swing support for the activist investor ahead of Vivus’s July 15 meeting of shareholders.

First Manhattan, an investment advisory firm, has repeatedly criticized Vivus saying it badly mishandled the launch of its obesity drug Qsymia and for failing to land a large company partner with deep pockets and a big enough sales force to help the drug reach its blockbuster potential.

Zook, who was executive vice-president for global commercial operations at AstraZeneca until February, helped launch some of the British drugmaker’s biggest products, including the multibillion-dollar cholesterol medicine Crestor. He also oversaw Astra’s successful sales transition when multibillion-dollar heartburn drug Prilosec lost patent protection and the company then launched Nexium, its next blockbuster for the same condition.

“It’s been the view of our director nominees that our degree of success will be proportional to the quality of the CEO that we bring on board. To be able to attract this kind of all star-talent is phenomenal for shareholders,” Sam Colin, senior managing director at FMC and a Vivus board nominee, said in a telephone interview.

Colin called Zook “a giant of U.S. primary care blockbusters. His mastery of the U.S. primary care markets was incredibly important to us,” he said of the market for drugs that are prescribed by general physicians rather than by specialists.

Qsymia, the first new diet drug to reach the U.S. market in over a decade, has so far had minuscule sales since its September launch. Vivus shares, which traded at $29 when the drug received a green light from regulators last July, closed at $12.58 on Tuesday.

Vivus declined to comment on the Zook announcement. But in a letter to shareholders sent on Tuesday urging them to back the company’s board nominees, it stressed that there were “no shortcuts to unlocking the value represented by Qsymia.”

“We believe that the election of the FMC slate will result in FMC’s nominees spending an unnecessary six months to a year studying what to do, before concluding that Vivus is already on the right path to maximize stockholder value,” the letter said.

Vivus has repeatedly pointed out that Colin has never run a drug company.

“Their argument is that Sam Colin has never run a pharma company. Well, I have no intention to,” Colin said.

Colin said Zook was chosen from 15 highly qualified CEO candidates. “Any one of them would have been in a different league than Leland (Wilson),” he said.

Colin said the July 15 vote will be as much a referendum on whether Wilson or Zook should be running Vivus as it is a choice of director candidates.

“The market takes good news and bad news, but uncertainty they don’t like,” he said. “This should provide certainty.”

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