Paris: French drugmaker Sanofi, one of the country`s largest companies, fired its chief executive on Wednesday after a row over his management style, sending the pharmaceutical giant`s shares sharply lower.
Sanofi stock dropped more than five percent on the opening bell of the Paris stock market after losing more than 10 percent the day before over disappointing earnings.
The 54-year-old Christopher Viehbacher, who holds dual Canadian and German nationality, had been chief executive since December 2008 but had recently become embroiled in a boardroom row.
He piloted the group through a period when it lost its exclusive rights to several important drugs and refocused the business on activities with strong potential, and notably the acquisition of US biotechnology group Genzyme.
A matter-of-fact company statement hinted at boardroom battles. The firm needs a manager committed to "focusing on execution with a close and confident cooperation with the board," Sanofi said.
The firm appointed chairman Serge Weinberg as a temporary replacement.
Weinberg told reporters the decision to sack Viehbacher was taken "unanimously" due to the chief executive`s "management style", denying however that it was a personal issue.
He cited as an example of poor management-board relations the case of a project last year to sell old Sanofi drugs that the board found out about only through the media.
The slide in stock pushed Sanofi`s market capitalisation below that of Total, which also lost its chief executive earlier this month when Christophe de Margerie died in a plane crash in Moscow.
The chairman of BNP Paribas stepped down last month and the heads of energy giants EDF and Areva have all recently left, marking a major shake-up of the French corporate landscape.Viehbacher had come under fire for choosing to base himself in Boston in the United States to run the group.
Media reports suggested the board was also concerned that the group`s core activities were shifting away from France towards the United States.
Weinberg said this "was not the reason" for his ousting and also denied Viehbacher`s nationality had anything to do with the decision, saying it was "completely non-sensical" to suggest there was a problem with a foreigner running a top French company.
"Nationality was not a factor," insisted Weinberg.
In his six years at the helm of the pharmaceutical giant, Viehbacher embarked on a severe cost-cutting drive and in September 2012 launched a plan to slash 900 jobs by the end of next year, putting him on a collision course with unions.
And Weinberg said Viehbacher`s departure did not herald a "change in strategy" for the group, recalling that the firm`s direction had been set before Viehbacher even arrived at Sanofi.
The new CEO also said there was "no particular concern" about the group`s finances.
Nevertheless, on Tuesday, the group said that net profits had slipped in the third quarter but that its main treatments were doing well and research for new drugs including a dengue fever vaccine looked promising.
Net profit fell by 2.4 percent from the equivalent figure last year to 1.19 billion euros ($1.51 billion).
The company blamed this on the costs of restructuring and on tax charges, but held to its forecasts for the year, and nine-month figures showed a sharp profit rise.
Viehbacher professed himself "pleased" with the firm`s third-quarter performance and pointed to what he called the firm`s key strategic activities which grew by 10 percent.
These activities cover treatments such as drugs for diabetes, vaccines, as well as products for the general healthcare of people and animals.
However, Viehbacher warned of a "more challenging" environment for diabetes treatments in the United States.
