2 Biotech Stocks in Activist Investors' Crosshairs

Activist investors are no stranger to the health-care sector, an industry known for binary events and buyouts. In this video, health-care analyst David Williamson discusses two recent news items catching the attention of investors following the moves of these heavyweight activists.

The first is Forest Labs CEO Howard Solomon's announcement he will call it a career as the head of the company. Legendary investor Carl Icahn, who is a major Forest shareholder and has a board seat, has shown misgivings in the past toward management. He has no comment on this news, but he may use the opportunity to exert his influence on Forest's direction.

Obesity-drug maker VIVUS has found itself in the activist investor crosshairs as well. First Manhattan, which controls 9.9% of the company, has been critical of its unpartnered launch of Qsymia and has recruited Icahn disciple Alex Denner, nominating him for the board of directors along with eight others. If successful on July 15, expect First Manhattan to try to shake up VIVUS by aggressively pursuing a partnership or possibly even a sale.

Who will win the obesity-drug market?
Can VIVUS pick up its lagging sales and fend off the competition, or will Arena Pharmaceuticals reign supreme in the obesity space? If you're in the dark, grab copies of The Motley Fool's premium research reports on VIVUS and Arena Pharmaceuticals to stay up to date. Senior biotech analyst Brian Orelli gives investors the must-know information, including an in-depth look at the obesity market and reasons to buy and sell both stocks. Click now for an exclusive look at Arena and VIVUS -- complete with a full year of free updates -- today.

Follow David on Twitter: @MotleyDavid.

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  • Report this Comment On May 27, 2013, at 1:27 PM, kthor wrote:

    Vivus had many months in advanced to picked up sales ...but they crashed and burnt ...maybe they can give away more free trials !! lol

  • Report this Comment On May 27, 2013, at 1:48 PM, genesis667 wrote:

    VVUS has had a full year head start with the market all to themselves and so far have done nothing but a face plant into the pavement..

    Once ARNA launches, I fully expect that VVUS will roll over and die, as it deserves for doing nothing more than taking two age old products, mixing them together and acting like they created something magical--

    The only thing they created was riches for the insiders that all dumped shares like crazy at the top leaving the suckers holding the empty bag and wondering what went wrong..

  • Report this Comment On May 28, 2013, at 11:52 AM, Geezwad wrote:

    Arena knows fat.

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