First Manhattan Sues Vivus

| About: Vivus, Inc. (VVUS)

The ongoing battle between Vivus (NASDAQ:VVUS) and activist shareholder First Manhattan has been getting more serious with each passing day. The latest news is that First Manhattan is now suing Vivus over the recently adjourned shareholder meeting.

The Timeline

Now we are at the point of the litigation that I had warned readers about. This is getting uglier by the day. With courts involved this will not be very clean. In addition there is a distinct possibility that class actions suits could ensue from any number of angles. One does not have to be a lawyer to see that potential.

Current investors pretty much have their hands tied. The anti-obesity sector has potential, but no one signed up for this type of mess. There are other plays that investors in Vivus can consider. Arena is already on the market with Belviq, and Orexigen (NASDAQ:OREX) is in FDA trials with an anti-obesity drug of its own called Contrave. No matter how you decide to invest in the sector, watch the insurance issue. Insurance coverage (or lack thereof) of anti-obesity drugs will be the driver in the near term.

Disclosure: I am long ARNA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I have no position in Vivus or Orexigen