A scant six weeks after a proxy fight with the company’s largest stockholder resulted in a a complete overturning of Vivus Inc.'s (VVUS) board and led to the installation of Tony Zook as the new CEO, on Sept 3 Zook abruptly resigned, citing health reasons.
The Mountain, Ca.-based pharma company has had a tumultuous summer. On June 20 the American Medical Association classified obesity as a disease, a decision which opened up the possibility for the company’s anti-obesity drug Qsymia to be covered under patients' insurance plans. Qsymia has previously disappointed in sales, due largely to the drug’s myriad harsh side effects, which were far more severe than rival Arena Pharamceutical’s (ARNA) anti-obesity drug Belviq.
Qsymia has long been touted as a blockbuster, and along with Belviq and Eisia, it is one of only three FDA-approved anti-obesity drugs on the market. Prior to launch, Reuters pegged Qsymia to tally $1.3 billion a year in sales by 2017. However, Qsymia has had an incredibly disappointing start, logging only $4.1 million in sales in the second quarter of 2013, signaling actual demand for the drug is a fraction of what was expected.
Though the AMA decision gave hope for more robust Qsymia sales going forward, it wasn’t enough to stave off a shareholder revolt over the perceived failure of the drug. The proxy fight in July, spurred on by disgruntled shareholders, ousted former CEO and installed Zook, whose success at Astrazenca plc ($AZN) have investors confidence that Qsymia could finally see through its multi-billion dollar potential.
But on Sept. 3 Zook unexpectedly resigned effective immediately, leaving the fate of the company once again uncertain. The board acted quickly to diffuse another proxy fight, and installed former Johnson and Johnson (JNJ) executive Seth Fischer as CEO.
While investors initially seemed to support the move, on the day following the installation of Fischer, Vivus’ shares tanked. The stock tumbled 7.75 percent on Sept 4, ending the day at $11.90 a share.
Though Vivus is only down 3.87 percent on the year, the company has lost a whopping 41.26 percent of its value since Sept. 2012. The stock reached a high of around $29 a share following Qsymia's FDA approval in July 2012.
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