November 12, 2014
By Mark Terry, BioSpace.com Breaking News Staff
When Paris-based Sanofi’s Chief Executive Officer Christopher Viehbacher was recently ousted by the company’s board, changes rippled throughout the company—including thefate of New York-based Regeneron Pharmaceuticals Inc .
The two companies have a strong and growing partnership. Since June Sanofi has acquired $700 million of Regeneron stock. The most recent acquisition was in October, when Sanofi purchased $112 million of the company’s shares. Sanofi currently owns almost 23 percent of Regeneron’s stock.
Yesterday the two companies announced positive results from a Phase 2b study of dupilumab for the treatment of asthma.
Regeneron, located in Tarrytown, NY, employs about 900 people. Over the last two years the company hit it big with Eylea, a treatment for macular degeneration. In 2012 alone the compound racked up $838 million in sales.
No specific news has indicated that Regeneron’s fortunes are going to hit the skids. The primary concern among investors and U.S.-based workers are reports that the French board sacked Viehbacher in part because he was not French and because he had moved earlier in the year to the Boston area.
The Sanofi board has stated that the reason for Viehbacher’s dismissal was primarily over different approaches to executing the company’s strategy. In particular, Viehbacher’s plan to sell off the company’s portfolio of mature drugs for an estimated $7.9 billion, largely without consulting the board. The portfolio included about 200 drugs, many of whose patents will expire soon. The portfolio included blood thinner Plavix, antibiotic Pyostacine and Dapekine, an epilepsy medication.
Despite internal tensions, Viehbacher was liked by shareholders. In his eight years helming the company he doubled the stock price. However, in attempts to make the company more international in scope, he shifted some of the French operations to the U.S. and other countries, irritating French unions, the government and the board.
“Chris did a great job in terms of deals and efficiencies,” said David Munno, head of pharmaceutical research at Tel Aviv-based Sphera Global Healthcare in a statement. “When he moved away from France, though, he probably disenfranchised the local board and politicians.”
Viehbacher never indicated intentions to acquire Regeneron, something echoed by Regeneron’s leadership. Some analysts have suggested that Sanofi invested enough money in Regeneron to back off any other companies from contemplating acquisition. Both Viehbacher and Regeneron Chief Strategy Officer Michael Aberman have insisted that the independence helps keep Regeneron creative and independent.
“You buy an innovative company,” said Aberman in a statement, “and you lose that spark and the entrepreneurial culture and end up having those large company bureaucracies.”
