(Reuters) - Obesity drugmaker Vivus Inc and its top investor, which has been seeking a shakeup of the company’s board, both claimed support from proxy advisory firms ahead of a shareholder vote later this month.
Vivus said Glass Lewis rejected First Manhattan’s slate of directors, while the investor said Institutional Shareholder Services (ISS) backed three of its nine nominees.
Vivus shares were down 2 percent at $12.07 in afternoon trading on the Nasdaq.
First Manhattan’s main point of criticism has been the foundering sales of Vivus’s diet drug Qsymia. The activist investor, which owns about 9.9 percent of the company’s shares, has also proposed a new chief executive.
The investor has said that Vivus’s board and management have mishandled the launch of “the best obesity drug ever developed” by not seeking the commercial muscle of a bigger pharmaceutical company to address the large U.S. weight-loss market.
ISS said most of the changes needed at Vivus were “narrow enough in scope that a minority change in the board should be sufficient.”
Glass Lewis advised shareholders not to vote for any of First Manhattan’s nominees as they were unlikely to bring about a more favorable regulatory outcome, Vivus said in a statement on Friday.
Egan Jones, another proxy advisory firm, backed all of its nominees, First Manhattan said.
In a report dated July 3, ISS backed First Manhattan nominee David Norton, former chairman of the global pharmaceuticals division at Johnson & Johnson Inc, Michael Astrue, a Medicare Trust Fund trustee, and Alex Denner, an industry veteran and Vivus shareholder.
First Manhattan on Friday responded saying it believed ISS’s recommendations fell short of what Vivus stockholders needed to do to “fix the company.”
Vivus, in its defense, has maintained that a full overhaul of its board and a new management would delay or jeopardize discussions with potential commercial partners for Qsymia, hindering the drug’s success.
ISS called this a valid concern, saying that a full change in control could raise the risk of unintended consequences and operational disruptions.
The proxy firm said First Manhattan made a compelling case in pushing for a change at Vivus, but remained tight-lipped about the investor’s proposed CEO candidate, former AstraZeneca Plc senior executive Anthony Zook.
Egan Jones and Glass Lewis were not immediately available for comment.
Shareholders are slated to vote on First Manhattan’s proposals at Vivus’s annual general meeting on July 15.
Reporting by Zeba Siddiqui in Bangalore; Editing by Saumyadeb Chakrabarty