Drugmaker Sanofi Fired Its CEO And The Stock Is Tanking

Drugmaker Sanofi has suddenly fired its CEO, Chris Viehbacher. The board met early this morning.

The stock fell nearly 14% in premarket trading on NYSE, its down on the Paris exchange too.

Investors will be furious: Six years ago when he took over, SNY stock was dwelling at $25.62. Until a few days ago it peaked at $56.43.

Now it's in freefall on the news.

Just hours before, Veihbacher had dismissed the "rumors" that he was about to be fired.

It seems that the Sanofi board - which is mostly French - didn't like the fact that Viehbacher had moved to Boston, Bloomberg reports. Generally, in the pharma business, US sales make up around 50% of all global drug sales.

The move appears to come after a clash of styles, the Wall Street Journal says:

Sanofi Chairman Serge Weinberg said Mr. Viehbacher was ousted because of his management style and relationship with the company's board. Mr. Weinberg added that he would temporarily take over Mr. Viehbacher's responsibilities and that the company had no plans to change its strategy.

The Financial Times has the story:

Sanofi's directors have ousted chief executive Chris Viehbacher in a dramatic denouement to simmering tensions on the board of the Paris-based pharmaceuticals group.

The company, one of France's biggest by market capitalisation, confirmed the decision on Wednesday following a dawn board meeting.

"The board of directors held a meeting Wednesday October 29 at 8am and decided unanimously to remove Christopher A. Viehbacher," it said.

The board thanked Mr Viehbacher, the first non-French chief executive in Sanofi's history, for "all the hard work" during his six years at the head of the company.

The move comes after Viehbachher wrote the board a letter telling them why changing CEOs would be a bad idea, according to the Wall Street Journal:

In the letter, Viehbacher wrote that "it has come to my attention, first through rumor, that the chairman of the board is actively seeking a successor to me as chief executive officer …I, of course, respect the board's right to change the CEO. I would also like to draw to the board's attention my personal views about why changing the ceo now would be detrimental to the interests of shareholders and other stakeholders…"

Viehbacher cited the price of Sanofi stock, which was at an "historic high" at the time, recent results of clinical trial data for various medicines and the "value" of the product pipeline. And he argued that removing him would destabilize senior management; disrupt alliances with other companies, such as with Regeneron Pharmaceuticals, and alter relationships with regulators and industry trade groups.

"I have worked hard and traveled long distances over the past five years to rebuild a Sanofi that is financially successful, provided new hope to patients through innovative new medicines and built a strong leadership team," the 54-year-0ld Viehbacher wrote. "I ask you not to put this development at risk and that we have a dialogue about what the board would like to see going forward."

We're updating this post live so click here or refresh for further details.