More turmoil in top ranks of Sanofi's diabetes business

Weakening sales in Sanofi's ($SNY) U.S. diabetes franchise are not only hammering its top line, they're roughing up its executives ranks. Shortly after former CEO Chris Viehbacher got canned, in part, for an unexpected announcement about how diabetes drug sales would be soft next year, a vice president of sales in the U.S. left Sanofi.

The French drugmaker, which started shaking up the diabetes franchise sales operation as soon as Viehbacher was gone, has confirmed to Bloomberg that Bob Rossilli left Nov. 17. That was a couple of weeks after Viehbacher's warning to investors and his firing the next day. A former GlaxoSmithKline ($GSK) exec like Viehbacher, Rossilli joined Sanofi after Viehbacher became CEO in 2008. Rossilli directed sales of diabetes medicines to doctors in the eastern U.S., Bloomberg reports, an area of the business that Chairman Serge Weinberg had disparaged in a call with analysts after the CEO's departure.

Sanofi chairman Serge Weinberg

Weinberg said work in selling to doctors was inadequate. "It appears that our sales force management on Lantus in the U.S. could have been better," Weinberg said. Rossilli's exit came after Sanofi put Andrew Purcell in to head up the U.S. diabetes business. Purcell spent time at Novo Nordisk ($NVO) and then between 2012 and his hiring several months ago at Sanofi, spent very short stints at Becton Dickinson, Bristol-Myers Squibb ($BMS) and AstraZeneca ($AZN).

In the Q3 earnings call Oct. 28, Viehbacher, said pressure from payers had forced Sanofi to offer discounts on its top selling drug, long-acting insulin Lantus, which in turn would pressure revenues for the company next year. Lantus is Sanofi's top revenue producer and was the fifth best-selling drug globally last year, according to the FiercePharma list of top selling drugs. Analysts had been expecting growth in that area in 2015 and the news gut-kicked Sanofi share prices, sucking €9.2 billion ($11.7 billion) in value out of its market cap that day.

It was already rumored that Viehbacher's candid style had gotten him into trouble with the board and the next day, the board turned those rumors into action and fired him. The company reaffirmed shortly after Viehbacher was out the door that sales of diabetes drugs in the U.S. would be flat in 2015.

The executive revamping in North America had started even before Viebacher's departure when Anne Whitaker, who headed North America Pharmaceuticals, bailed out earlier this summer to take the CEO spot at a small biotech. Sanofi replaced her with Jez Moulding, who previously headed up its operations in Japan.

In a side note to the executive suite drama, a former Sanofi employee in the contracts department has accused Viehbacher and the company in a whistleblower lawsuit of boosting sales of diabetes drugs through a kickback scheme. The former CEO denied the allegations, as did the company, which called the accuser a "disgruntled former employee who is opportunistically attacking our company."

- read the Bloomberg story

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