Vivus offers a compromise to end the proxy contest

US drugmaker Vivus (Nasdaq: VVUS) said on Saturday (July 13) that it had communicated to Sam Colin and his hedge fund, First Manhattan (FMC), that its board of directors invites three of the FMC director nominees to join the Vivus board regardless of the outcome of the vote at the annual meeting of stockholders to be held on July 15, 2013.

First Manhattan has proposed appointing of nine directors, including Alex Denner, chief investment officer at Sarissa Capital Management, to replace Vivus’ entire board. With 9.9% of Vivus’ outstanding stock, the investor has criticized how the company brought its obesity drug Qsymia (phentermine and topiramate extended-release) to market and advocates replacing chief executive Leland Wilson. Vivus received US Food and Drug Administration approval to sell Qsymia last summer (The Pharma Letter July 18, 2012), but initial sales have disappointed investors, sending the firm’s shares 47% lower in the past 12 months.

Recognizes many shareholders favor a change in the board’s composition