Sanofi’s CEO Search Will Proceed Deliberately, Weinberg Tells Investors

During a late-stage pipeline overview at Genzyme’s headquarters, Sanofi’s chairman and acting CEO laid out the criteria for a new top exec and said reports of a focus on French candidates stem from someone’s imagination.

The forced departure of CEO Chris Viehbacher does not augur significant changes in strategy at Sanofi, Chairman and interim CEO Serge Weinberg told an investor gathering Nov. 20, as he and other execs highlighted the potential of two drugs from the Genzyme Corp. pipeline as well as cholesterol drug alirocumab.

Weinberg did not get into specifics about the CEO search during a four-and-a-half-hour presentation at Genzyme’s headquarters in Cambridge, Mass., but reiterated the French pharma’s criteria for a new chief and said the search would be a deliberate one. He added that although Viehbacher’s ouster on Oct. 29 created some uncertainty, there is “a driver” at Sanofi’s helm and the company will continue with a strategy unveiled in 2008 (pre-Viehbacher, in other words) that has served it well to date (Also see "Sanofi Board Forces CEO Chris Viehbacher to Resign Amid Lantus Woes" - Pink Sheet, 29 Oct, 2014.).

Sanofi’s search criteria include “a very strong background in pharma, an ability to integrate knowledge and launch execution, a strong knowledge of the U.S. market, initially a strong ability to communicate with the teams, analysts, investors, journalists and, sometimes, with the board,” Weinberg, whose relationship with Viehbacher reportedly was tense, said to some laughter. “In terms of timing, it is probably the most important decision of the board, so we will take our time. We will, of course, try to do it as fast as possible but the key here is to find the right person.”

“I will also stress that we have been very engaged over the past three weeks [since Viehbacher was let go] with our largest investors and we have received positive feedback from the action of the board,” he continued. “As you know, the board wasn’t happy with the multiple operational missteps [under Viehbacher], lack of response, or surprises that we experienced. We fully understand that investors do not like surprises, but the board doesn’t like surprises either.”

During a Q&A session with the media, Weinberg was asked about reports that Sanofi might be focusing on French candidates for its next chief executive.

“The fact [is] that those names were given by the press … we have not given any names, so I’m not going to comment on this,” the chairman replied. “This is pure speculation. What I can say is that [someone’s] imagination is limited to French names, obviously.”

AstraZeneca PLC CEO and French national Pascal Soriot has been the subject of rumors, though he shrugged off the question during AstraZeneca’s Nov. 6 earnings call (Also see "AstraZeneca’s Soriot Keeps His Options Open When It Comes To Sanofi" - Pink Sheet, 6 Nov, 2014.).

Weinberg also was asked, given Sanofi’s intent to proceed deliberately with its search, whether he might entertain the possibility of serving as CEO for more than just an interim period. He quickly scuttled any possibility of that, however.

“I’ve said since day one that we have an outside search because we think … we need to move in that direction,” he said. “And that includes myself. I have absolutely no plan to stay in more than an interim role and I hope that this role is going to last as short as possible because I think the simple fact that there isn’t a permanent CEO creates a degree of uncertainty.”

External Innovation Driving Growth

The focus of the firm’s “New Medicines Day” was to detail the pharma’s late-stage pipeline, with presentations on two drugs from Genzyme, which was acquired in a $20 billion buyout in 2011, the LDL cholesterol-lowering agent Praluent (alirocumab), Toujeo (insulin glargine [rDNA origin]) and the rest of Sanofi’s diabetes portfolio, a vaccine candidate for Dengue fever, and a pair of monoclonal antibodies, sarilumab for rheumatoid arthritis and dupilumab for Th2-mediated allergic inflammatory diseases. Before the event, Sanofi announced that FDA had conferred “breakthrough therapy” designation on dupilumab as a therapy for atopic dermatitis.

R&D Global President Elias Zerhouni said Sanofi is now realizing the fruits of an R&D re-organization dating back to 2007. While the pharma produced 10 product launches in the 2007-2013 timeframe, it anticipates 18 new product introductions between 2014 and 2020, he said.

Exemplifying that pipeline production is the August FDA approval of Cerdelga (eliglustat), the initial first-line oral therapy for the rare metabolic disorder Gaucher disease (Also see "Cerdelga Becomes First Oral First-Line Therapy For Gaucher Disease" - Pink Sheet, 20 Aug, 2014.). A product of the Genzyme R&D engine, Cerdelga will complement the enzyme replacement therapy Cerezyme (imiglucerase) as a Gaucher franchise that Genzyme CEO David Meeker predicted eventually could yield $1 billion or more in annual sales revenues.

Cerdelga will enable Sanofi/Genzyme to provide a treatment option for Gaucher patients who would prefer an oral therapy, Meeker said. In the pivotal ENCORE study, eliglustat brought 85% of patients to stability after 12 months of therapy, compared with 94% for Cerezyme. Meeker noted that Cerdelga won’t be appropriate for all Gaucher patients, but pointed to survey data showing that specialists would consider the drug for 38% of their existing patients and for 42% of those newly diagnosed with Gaucher.

On Nov. 14, Sanofi obtained FDA approval for the other late-stage candidate from Genzyme’s pipeline, Lemtrada (alemtuzumab) for relapsing/remitting multiple sclerosis, after a long regulatory slog (Also see "Genzyme Nabs Elusive Lemtrada Approval, But As Third-Line MS Therapy" - Pink Sheet, 17 Nov, 2014.). Meeker said Sanofi/Genzyme is ready for a quick launch, with a sales force already in place and being trained currently about the details of the drug’s Risk Evaluation and Mitigation Strategy.

The initial strategy is a limited launch to specialists to ensure appropriate education, leading physicians to be confident in prescribing Lemtrada, Meeker explained. A full launch is planned for 2015.

Another key to near-term sales growth will be the PCSK9 inhibitor Praluent (alirocumab), partnered with Regeneron Pharmaceuticals Inc. (Also see "Regeneron Confident In Relationship With Sanofi After Viehbacher’s Departure" - Pink Sheet, 4 Nov, 2014.). Weinberg and others pointed out that the Regeneron partnership and the integration of Genzyme’s patient-centric business model exemplify Sanofi’s ongoing emphasis on external innovation, a strategy that will be continued.

The two companies will submit an NDA for the potential cholesterol blockbuster before the end of the year and anticipate a six-month review due to the priority review voucher the companies purchased from BioMarin Pharmaceutical Inc. for $67.5 million (Also see "How Much Is A Priority Review Worth? $67.5 Million, Sanofi/Regeneron Say" - Pink Sheet, 11 Aug, 2014.). Rival Amgen Inc.’s evolocumab is already under review at FDA, but with a standard review its user fee deadline is Aug. 27, 2015. Sanofi/Regeneron also plan to submit an EU regulatory submission before year-end.

The alirocumab filings will be backed by a significant database from 10 trials that demonstrated alirocumab’s ability to reduce LDL cholesterol by rates ranging from 36% to 61% depending on the patient cohort. Sanofi and Regeneron also have produced data showing a duration of therapeutic effect over 52 weeks, noted Harold Bays, president of the Louisville Metabolic and Atherosclerosis Research Center, during the alirocumab presentation.