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Vivus (NASDAQ:VVUS) shares spiked as much as 3% on Wednesday sparked in part by the approval of the erectile dysfunction drug Spedra in Europe. The news comes amidst an ongoing battle for control of the company between Vivus and 10% stakeholder First Manhattan.

"SPEDRA represents another significant regulatory approval for VIVUS; it is a tremendous accomplishment both for the company and for our European team. The unique characteristics of SPEDRA will offer the estimated 20 million European ED patients an important treatment option," - Peter Tam, President of Vivus

While the market for ED drugs is a bit crowded, and generics are soon becoming available, the selling point of Spedra is that it is fast acting with many patients receiving the desired results in as little as 15 minutes. This compares with hours for the widely known Viagra, and a once daily route required by Cialis.

For investors this is certainly a positive development, but this news has some deeper ramifications than would normally meet the eye. As I mentioned earlier, Vivus control is being challenged by First Manhattan. Among the allegations leveled by First Manhattan is that the company fumbled the launch of the anti-obesity drug Qsymia, and did not have what it takes to navigate through the regulatory hurdles of Europe. With Spedra approved, it may take some wind out of the First Manhattan sails.

The annual Meeting for Vivus, and the fate of who will be at the helm of the ship, happens on July 15th. Vivus and First Manhattan have been trading jabs for quite some time now, and lately the fight has gotten a bit more heated. Vivus wants shareholders to vote the gold card at the meeting, while First Manhattan is asking investors to vote the white card.

In my opinion First Manhattan may not have the votes it needs to take over. If it had aligned with enough votes, the most recent press release battles would not have taken place. Make no mistake though, this vote could be close. Getting European approval on Spedra now is a feather in the cap of current management.

Earlier this week I noted that prescription levels of Qsymia in the United States are gaining traction. After a recent fall in share price it has been my opinion that the current board may deliver some positive news in the days prior to the meeting. While certainly Europe does not time approvals at the behest of a company, the positive news is sure to help current management.

The way I see things right now, Vivus is highly speculative until the Annual Meeting. There may be some trading opportunities, but you have to have a stomach for ups and downs, and you need to be able to pull a trigger fast. Many longer term investors are simply in a wait and see mode. Stay tuned.

Source: Shares Of Vivus Rally On European Drug Approval