by Guillaume Bietry
PARIS, Oct 30 (APM) - Sanofi will continue to study acquisition opportunities, even before the appointment of a successor to Christopher Viehbacher in the post of CEO, said Serge Weinberg, currently interim CEO, in a phone conference with analysts.
The conference was organised on Wednesday a few hours after the board had unanimously decided to sack its CEO, mentioning management problems, poor implementation of strategy and lack of confidence (APMMA 40252).
Weinberg said he wanted to reinforce the group’s growth platforms - namely, biotechnologies (Genzyme), emerging markets, vaccines, consumer healthcare, animal health, new products and diabetes - via acquisitions or partnerships.
“We have not been active on this front recently, but this does not mean we will not become active tomorrow,” he said, and adding he knows “enough” about the company to take “appropriate decisions” even though until now he had been non-executive president.
Nevertheless, he also said that Sanofi was satisfied with its current activities and would pursue the expansion at the international level that Viehbacher initiated.
He excluded the possibility of any major transactions, such as the $20.1 billion Genzyme acquisition of 2011 under Viehbacher’s leadership.
Weinberg - former boss of the PPR (now Kering) group of luxury products and former top civil servant - emphasised that Sanofi would take the time required to secure the “best successor possible” and “as soon as possible”.
Although contacts have already been made, Weinberg said the group is strongly in favour of external recruitment and that nationality would not be a selection criterion. The new CEO will sit on the board among the 15 members, a number Weinberg plans to reduce.
The removal of Viehbacher and appointment of Weinberg to the post of interim CEO were decided on Wednesday during a 30-minute extraordinary board meeting that did not “give rise to much discussion,” a union source reported to APM.
Although the board highlighted management problems, several sources assured that the departure of the man known internally as the “smiling killer” was the culmination of a gradual deterioration in his relations with Weinberg.
“Weinberg was appointed so that Viehbacher would not be alone at the controls. At the beginning things were fine, but the relationship then gradually deteriorated. At the beginning, they would sit next to each other in board meetings, by the end they were opposite each other,” one of the union sources said.
Rumours of the potential departure of Viehbacher materialised on Monday, after the economic daily Les Echos reported that Weinberg was looking for a successor and published a letter from the CEO dated September 4 in which he asked the board to “clarify his situation as soon as possible”.
According to several competent sources, Viehbacher called on the board to get a “clear opinion” on his future, on Monday during a regular board meeting, the day before the presentation of the third quarter results.
“He made his request several times. The only thing Weinberg would say was ‘it’s not on the agenda’. There was nothing else,” one of the sources reported.
Despite these uncertainties, Viehbacher had to present the quarterly results on Tuesday, without being able to assure the markets of the support of the board. His position was undermined a little more after Sanofi warned that sales in diabetes, its main activity, would be stable in 2015 owing to tough competition on prices in the U.S. (APMMA 40241).
The first Sanofi CEO who was not a French citizen, Viehbacher substantially transformed the group, reviewing R&D in-depth because he did not consider it productive enough, and restructuring the portfolio to manage patent expiries on its main drugs starting in the late 2000s.
He re-centred activity on “growth platforms” and guided the group to an open innovation model more in tune with the international market, and analysts and investors approved of this.
However, his Anglo-Saxon style and methods, “that did not function so well in France and Europe” upset shareholders and administrators, a source told APM.
Several shareholders and administrators did not appreciate learning, via the press in July, of the existence of the 'Phoenix project', a plan to sell off mature drugs in Europe valued at 6.3 billion euros (APMMA 40245).
Weinberg said on Wednesday that he discovered the project via the press and considered it was an “illustration” of relations with Viehbacher. He added that if the plan had been submitted to the board, it would have been rejected.
According to sources contacted by APM, Viehbacher’s decision to move to Boston for personal reasons in June, had been communicated to the board beforehand and was not the event that triggered tension, although it did not help improve relations.
Weinberg also said he had had regular contact with other main Sanofi shareholders, among which L’Oréal (9% of the capital) with which he shared his concern over the way strategy was being implemented.
As well as problems re-aligning stocks of generic drugs in Brazil and falling sales in China, he mentioned issues with diabetes marketing organisation in the U.S. mainly concerning Lantus (insulin glargine), the Sanofi flagship product.
According to him, management of the sales forces in the U.S. “could have been better”. One of the problems was apparently identified at the “start of the year” and concerned “relations with health professionals” and it seems this was behind a market share fall.
He said solutions had been implemented to remedy the situation and that he hoped to see improvements over the coming quarters.
He specified that the cost-reduction operations implemented in France that led to cutting 4,800 jobs between 2008 and 2014, according to the unionists, had not been a source of conflict with Viehbacher.
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