Vivus (VVUS) Plunges After Another CEO Resigns
Shares of Vivus (VVUS) plunged last week, after the company's new CEO, Anthony Zook, resigned only after a month on the job. Zook was appointed after activist shareholder First Manhattan won a battle proxy battle to take control of the company. First Manhattan believed Zook to be a good fit for the company, due to his prior industry experience. Zook's departure was reportedly due to recurring issues from a previously diagnosed medical condition.
In Zook's place, Vivus has appointed Seth Fischer, a former executive from Johnson & Johnson (JNJ
) as the new CEO. Fischer is also on the board of Trius Therapeutics and BioSig Technologies, and has worked in the pharmaceuticals industry for three decades. Fischer is Vivus' third CEO in less than two months. Daily Chart
Vivus investors have already been concerned about an increasing amount of executive departures with "golden parachute" deals, exacerbated by weak sales of its anti-obesity drug Qsymia. The weight control medication market is getting increasingly crowded, with competitors such as Arena (ARNA
) and Orexigen (OREX
) also entering the market. Arena's Belviq had a moderately more successful launch than Qsymia, but neither drug came anywhere near the "blockbuster" levels that investors had hoped for. Orexigen's Contrave, which is still pending FDA approval, targets the brain to suppress the appetite, and could become another major competitor in a crowded market. Zook had previously intended to boost sales of Qsymia by finding a major pharma partner to sell the drug and pursue market approval in Europe, where it had previously been rejected. Unfortunately, Orexigen's Contrave is currently closer to approval in the European market. Weight loss medications have been under the microscope over the past decade, after the previous generation of treatments, most notably fenfluramine, seriously damaged heart valves. Fenfluramine, which was combined with phentermine in the popular drug combination fen-phen, was banned in 1997. Meanwhile, Qsymia sales have dwindled to a mere 10,000 per week. Those are anemic sales considering that the company announced that Qsymia was available at approximately 10,000 retail locations nationwide -- including leading retailers Walgreens, Costco, and Duane Reade. Other critics claim that cheaper generic appetite suppressants are equally effective as Qsymia. Shares of Vivus have fallen nearly 50% over the past twelve months, and the company is currently unprofitable. The company has $358 million in cash and equivalents, but reported a negative operating cash flow of $205 million last quarter. Other News About VVUS Vivus CEO Steps Down Citing Health Reasons
Vivus CEO leaves after only a month on the job. Vivus Gets 3 CEOs in Less Than 2 Months
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Published on Sep 13, 2013
By Leo Sun