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Biotech / Medical : VVUS: VIVUS INC. (NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: Afaq Sarwar who wrote (4458)	1/11/1998 4:05:00 PM
From: Mark A. Stang	Read Replies (2) \| Respond to of 23519

Enough Sarwar Grapes: Haven't posted here for awhile because of lengthy trial end of December. I learned of HVSF dec. action on this thread. Not sure how the initial poster learned of it. I've never heard of any corporate defendant in a lawsuit taking the initiative to publicize the fact with a press release, as opposed to responding to inquiries. I'm sure the lawsuit will be discussed in the 10-K. While the lawsuit certanly bears watching, Sarwar's suggestion that VVUS somehow failed to disclose the lawsuit (which is a matter of public record) merits no further response.

To: Afaq Sarwar who wrote (4458)	1/12/1998 12:45:00 AM
From: Tunica Albuginea	Respond to of 23519

+Afaq Sarwar Re HVSF Vivus lawsuit. "Do you know why VVUS has not disclosed the lawsuit filed by HVSF regarding the patent issue? " ************************************** I don't know Afaq. I wiil pass that on to our patent expert Gene. At present I think HVSF better keep their eyes on the checkbook being passed around in caffetteria, gg. TA

To: Afaq Sarwar who wrote (4458)	1/12/1998 12:22:00 PM
From: LoLoLoLita	Read Replies (1) \| Respond to of 23519

Afaq-- Civil suits are a matter of public record. If VVUS is a defendant and is making counter-claims agains HVSF, such circumstances will need to be noted (per SEC regulations) in the next 10-Q for the quarter ended 12/31/97. I have rarely seen a defendant company go out of its way to publicize the fact that it is being sued, unless in the form of a statement that the charges are baseless, ... will vigorously defend, etc. VVUS has apparently not made such a statement to the newswire services that I can access. If this is an area of concern to you, I suggest you call Nina Ferrari at IR and ask if you can participate in Thursday's CC, and then you may have a chance to ask Leland about it directly. David P.S. there is no mention of a HVSF lawsuit in the following section of the Vivus 9/30/97 10-Q (but who is that Consultant?): --------- PROPRIETARY RIGHTS AND RISK OF LITIGATION The Company's success will depend, in large part, on the strength of its current and future patent position relating to the transurethral delivery of pharmacologic agents for the treatment of erectile dysfunction. The Company's patent position, like that of other pharmaceutical companies, is highly uncertain and involves complex legal and factual questions. Claims made under patent applications may be denied or significantly narrowed and issued patents may not provide significant commercial protection to the Company. The Company could incur substantial costs in proceedings before the United States Patent Office, including interference proceedings. These proceedings could also result in adverse decisions as to the priority of the Company's licensed or assigned inventions. There is no assurance that the Company's patents will not be successfully challenged or designed around by others. The Company is presently involved in an opposition proceeding that was instigated by the Pharmedic Company against a European patent that is exclusively licensed to VIVUS. As a result of the opposition proceedings, certain claims in the European patent were held to be unpatentable by the Opposition Division of the European Patent Office (EPO). These claims related to all pharmaceutical compositions that included prostaglandin E(1). The patentability of other claims in the patent was confirmed. These claims included the use of active agents in the treatment of erectile dysfunction by administration via the urethra to the corpora cavernosa, and a pharmaceutical composition claim for prazosin. The Company appealed the EPO's decision with respect to the pharmaceutical composition claims that were held unpatentable. The Pharmedic Company appealed the EPO's decision with respect to the claims that were held patentable, but has since withdrawn. Despite the withdrawal of the Pharmedic Company from the appeals process, the Company has continued with its own appeal in an attempt to reinstate the composition claims. The EPO Appeals Board must make its own finding whether the claims that were deemed unpatentable by the Opposition Division are indeed patentable before it can reverse the Opposition Division's decision. There can be no assurance that the appeal will be successful or that further challenges to the Company's European patent will not occur should the Company try to enforce the patent in the various European courts. There can be no assurance that the Company's products do not or will not infringe on the patent or proprietary rights of others. The Company may be required to obtain additional licenses to the patents, patent applications or other proprietary rights of others. There can be no assurance that any such licenses would be 10 made available on terms acceptable to the Company, if at all. If the Company does not obtain such licenses, it could encounter delays in product introductions while attempts to design around such patents, or, the development, manufacture or sale of products requiring such licenses could be precluded. The Company believes there will continue to be significant litigation in the pharmaceutical industry regarding patent or other intellectual property rights. A former consultant to the Company has claimed that he is the inventor of certain technology disclosed in two of the Company's patents. The former consultant further claims that the Company and certain of its officers and directors defrauded him by allegedly failing to inform him that they intended to use and patent this technology and by failing to compensate him in the manner allegedly promised. On May 28, 1996, the Company filed a complaint for declaratory judgment against the former consultant in the United States District Court for the Northern District of California, which seeks a declaration from the court that the former consultant is not an inventor of any of the technology. On July 17, 1996, the former consultant filed a lawsuit that sought to have two of the Company's patents corrected to name him as an inventor, or in the alternative, declared invalid on the grounds that they fail to list him as an inventor. The former consultant also sought damages for alleged fraud. On September 16, 1996, the Court dismissed the consultant's lawsuit, and ordered him to refile his claims as counterclaims in the action initiated by the Company on May 28, 1996. The consultant filed his counterclaim on September 26, 1996. On July 25, 1997, the Company filed motions for summary judgment, which request that the Court enter judgment against the former consultant on all of his claims. The Company's motions were heard by the Court on September 8, 1997. By orders dated September 9, 1997, the Court denied one of the Company's motions which related to the inventorship issues and granted in part and denied in part the Company's other motion, which was related to the fraud issues. This case is set for trial on December 9, 1997. The Company has conducted a review of the circumstances surrounding this matter and believes that the allegations are without merit. Although the Company believes that it should prevail in the litigation, the uncertainties inherent in litigation, and in particular, jury trials, prevent the Company from giving any assurances about the outcome of such litigation. A judgment in favor of the consultant on some or all of his claims would have a material adverse effect on the Company.