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Biotech / Medical : VVUS - share holder movement thread

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To: DaiS who wrote (8)	1/31/1999 4:44:00 PM
From: VLAD	Read Replies (1) of 21

<<..and I feel that you who started the thread should clarify where Leland is at fault.>> I know this isn't necessary but for the new comers the bottom line is piss poor management. As CEO the buck stops on Lelands desk. He has shown a total lack of fore sight. Until just recently he has run a "sloppy" ship. I am sure that in the fall of 1997 he could have cut a sweet heart deal for a domestic partner soon after Pfizer announced their NDA submission on Viagra but he did not. Instead he believed that a tiny biotech company could compete with the 800 pound gorilla. In Q1 1998, he spent over $5M on a "direct to consumer campaign" that did absolutely nothing to improve the MUSE script count. The FDA even forced Vivus to pull its TV commercial for having a women's voice in the add. I don't think an ED treatment is something that can really be effectively promote on television due to the sensitivity of the issue. The money IMO could have been much more effectively spent on internet, print and radio and could have lasted much longer had Vivus not thought otherwise. Then there was the stock buy back which was a total disaster. What was it? Over 30 million spent to buy back shares since 1997 for an average of about $15.00/share. this part pisses me off the most especially the way Invamed supported the price buying up stock for Vivus holding up the price at 15 until they burned through all the alloted cash. The idea behind an effective stock buy back is to remove as many shares from the float at the lowest possible prices and not to artificially support the stock price at much higher values. I believe this part was the doings of the ex-CFO. You know the one who sold 61% of his shares for a total of $1.8M only a month before the December crash. This IMO was nothing short of criminal and I believe that this move along with the stock buy back fiasco is what finally inspired LW and the Vivus board to show him the door. Moving right along then we see probably the biggest waste of money when Vivus believed that MUSE would "ride the coat tails of Viagra" after its spring launch and decided to spend millions training an ineffective rental sales force which proved to be another management nightmare. For all the money spent, Vivus wasn't able to afford to have them detailing the PCPs for more than 2 months and in the end they had to even give up their "core" sales people who were focusing on the urologists. I can understand if Vivus made one or two major management mistakes but instead it seems like everything they decided to do in terms of spending money in dealing with the Viagra launch was a mistake. Certainly hindsight is 20/20 but a good CEO needs to have foresight. Wilson demonstrated no foresight in dealing with the effects of Viagra on MUSE product sales. He should have kept his powder dry and approached Viagra with a "wait and see" attitude but instead he gambled most of Vivus' cash on his coat tail theory and almost completely destroyed the company. I don't think it takes a rocket scientist to figure that Vivus' stock price would be seeing its greatest selling pressure about one quarter into the Viagra launch and that is where share should have been accumulated to reduce the float. In fact Vivus could have save 1/2 its cash and removed 2 1/2 times the number of shares at todays prices had they been a little more wise in their stock buy back. So in summary the major mistakes Vivus management made were: 1)Not signing a domestic partner over one year ago when the going was good and a very favorable deal could have been negotiated. 2)Totally miscalculating the effects of Viagra on MUSE sales. 3)Totally mismanaging precious company cash via their direct to consumer campaign, the ineffective renta-rep sales force, and a stock buy back that seemed to be designed more to support the stock price than to accumulate as many shares as possible for as low of a price as possible. In fact Vivus should have put out some bad news that was just temporary so that they could artificially lower the stock price allowing them to remove more shares sooner at a lower price. Well David, I hope I didn't miss a whole lot and I hope this summarizes the most important mistakes that occurred over the past 14 months which in the final analysis are the responsibility of the company leader ie Vivus CEO-Leland Wilson!

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