Paris - Sanofi fired chief executive Chris Viehbacher, ending a six-year tenure in which he caused tension with board members and French politicians by shifting the drugmaker’s focus to the US and overhauling its struggling research operation.
Sanofi’s board voted unanimously to remove Viehbacher at a meeting yesterday, it said in a statement.
Relations between him and the board weren’t close enough and Viehbacher had failed to sufficiently execute the company’s strategy, said chairman Serge Weinberg, who will replace Viehbacher until a successor is found.
He declined to comment on potential candidates for the job, but said nationality would not be a factor.
“There were numerous issues,” Weinberg said.
“Management problems, problems of co-operation with the board and execution problems.”
He cited inventory mismanagement in Brazil last year and the fact that Viehbacher hadn’t briefed the board in advance of his efforts to sell an $8 billion (R87bn) portfolio of mature products as examples of his failings.
The stock plunged 11 percent on Tuesday, the most in almost 16 years, after Sanofi surprised investors by saying sales in its key diabetes division would be flat next year, and investors speculated that the chief would be ousted.
The decline has wiped about e17.3bn (R240.1bn) off the value of Sanofi, France’s second-biggest company by market value.
“I’m flabbergasted,” Fabian Wenner at Kepler Cheuvreux said yesterday.
“Just firing him without having a replacement only makes things worse. I’d be slightly scared of how things progress from here.”
Viehbacher’s departure may disappoint some investors who have applauded his overhaul of the drugmaker.
During his tenure, Sanofi ended some unpromising research projects, cut jobs and shut plants in France, and made acquisitions in the US, notably the $20.1bn purchase of biotechnology company Genzyme in 2011.
“The ups have… exceeded the downs,” Tim Anderson at Sanford C Bernstein wrote in a note.
“Our perception is that Viehbacher has had the support of the investment community more often than not.”
Viehbacher wrote to the board in September to ask about rumours that Weinberg was seeking a new chief executive, people with knowledge of the matter said.
Viehbacher relocated this year, joining some other members of the 12-person executive committee who have their primary residence in the US.
The move came after French government officials said they were concerned that corporate decision-making was leaving the country.
Viehbacher’s plan to cut research jobs in Toulouse and Montpellier in 2012 drew condemnation from then-industry minister Arnaud Montebourg, who said it was “abusive” because Sanofi earned e8.8bn in profit the previous year.
The government had no role in Viehbacher’s ouster, and any investor speculation that it did was “total fantasy”, Economy Minister Emmanuel Macron said yesterday. – Albertina Torsoli and Simeon Bennett for Bloomberg