Early Wednesday, Sanofi SA's board of directors made the move that most observers had expected in recent days, unanimously unseating Chris Viehbacher as CEO after failing to express confidence in him earlier in the week when the big pharma reported third quarter earnings. Viehbacher subsequently resigned as a director of the Paris-based company. The board appointed its chairman, Serge Weinberg, as temporary CEO while Sanofi conducts a global search for a successor.

Despite the writing on the wall after Viehbacher's plea for mercy from the Sanofi board was published online by a French newspaper, investors were stung by the CEO's abrupt termination after six years at the helm. Sanofi's shares (NYSE:SNY) slid as much as 7 percent early before regaining some ground to close at $45.22, off $2.85, or nearly 6 percent. Shares are down more than 16 percent since Friday, before rumors of Viehbacher's demise became public and the company reported lackluster third quarter financials.

While investors, analysts and pundits weighed in on whether the French connection undermined the German-Canadian Viehbacher – a notion that Weinberg insisted on a Wednesday morning analyst call was "absolutely without basis" – the practical implications of a rudderless Sanofi had more direct bearing on some biotech partners. Chief among those is Regeneron Pharmaceuticals Inc., which just last week began dosing patients in the first of several jointly run phase III studies of the potential blockbuster dupilumab (REGN668/SAR231893). (See BioWorld Today, Oct. 1, 2014.)

Sanofi and Regeneron also face what could be a fierce battle with Amgen Inc. over high cholesterol drug alirocumab. Amgen is seeking an injunction to block the manufacture and sale of the proprotein convertase subtilisin/kexin type 9 (PCSK9) inhibitor over alleged infringement on patents protecting Amgen's own anti-PCSK9 therapy, evolocumab, now under regulatory review. (See BioWorld Today, Oct. 20, 2014.)

"While surprised, we do not think patent litigation, based on real infringement or for strategic reasons, should have been totally unexpected," RBC Capital Markets LLC analyst Adnan Butt wrote in a note after the Amgen lawsuit was filed. He gave Regeneron, of Tarrytown, N.Y., and Sanofi "the benefit of the doubt in having done foundational, freedom to operate work prior to embarking on an expensive development program" and said that while litigation is "invariably an overhang," he sees the situation as a buying opportunity, given the promise of other therapies in Regeneron's pipeline, including sarilumab for rheumatoid arthritis and dupilumab for atopic dermatitis, asthma and other indications.

Although officials from Amgen, of Thousand Oaks, Calif., did not comment on the filing during the company's third quarter earnings call Monday, ISI Group analyst Mark Schoenebaum reported in an email following the company's Tuesday morning business review that Amgen is "confident" it will prevail on the evolocumab intellectual property in the case.

At a minimum, the litigation could threaten the momentum of alirocumab, which became a bigger blip on investor radar screens in July, when Sanofi and Regeneron split the cost of a priority review voucher, acquired for $67.5 million from Biomarin Pharmaceutical Inc., to expedite FDA consideration of the drug. (See BioWorld Today, Aug. 1, 2014.)

Together with other preparations, Amgen predicted the partners will seek to launch alirocumab in the U.S. by the second half of next year, a move that Amgen said in its complaint would "substantially and irreparably" harm its business.

On Wednesday, Regeneron's shares (NASDAQ:REGN) slid $10.19, or 2.6 percent, to close at $387.70, while Amgen (NASDAQ:AMGN) gained $1.69 to close at $158.88.

BUSINESS AS USUAL?

Sanofi has inked additional partnerships in recent weeks. Last month, the pharma forged a potential $200 million collaboration with Third Rock Ventures-backed Myokardia Inc., of South San Francisco, that both partners likened to Sanofi's early interest in Genzyme Corp. The Myokardia deal covers three discovery-stage assets – two from the company's work in hypertrophic cardiomyopathy (HCM) and the other in dilated cardiomyopathy (DCM) – targeting the most common forms of heart muscle disease.

Despite overtures from "a number of potential parties," Myokardia selected Sanofi as the best fit, CEO Tassos Gianakakos told BioWorld Today at the time, citing the pharma's shared passion for the indication. The arrangement is structured for Myokardia to lead global R&D activities through early human efficacy studies and continue to direct global development and U.S. commercial activities for the two HCM programs, where it retained product rights, with Sanofi leading global development and commercial activities for DCM, where it obtained worldwide rights, and ex-U.S. regulatory and commercial activities to the two HCM programs. (See BioWorld Today, Sept. 18, 2014.)

There's also Sanofi's deal with Mannkind Corp., of Valencia, Calif. Sanofi paid $150 million up front and as much as $775 million in regulatory, development and sales milestone payments for the second-generation inhaled insulin product, Afrezza (insulin human [rDNA origin]). The companies plan to launch the product, which gained FDA approval in June, in the U.S. in the first quarter of 2015, with Sanofi handling the global commercial, regulatory and development of the rapid-acting therapy for adults with type 1 and type 2 diabetes. (See BioWorld Today, June 30, 2014, and Aug. 12, 2014.)

Although analyst reviews of the deal have been mixed, Afrezza could breathe new life into Sanofi's flagging diabetes franchise. Sanofi has the top-selling basal insulin in Lantus (insulin glargine), but disclosed in its third-quarter results that 2015 global diabetes sales likely will be "broadly flat" as "the level of rebates required to maintain these positions has increased significantly due to aggressive discounting by competitors."

Leerink Partners LLC analyst Seamus Fernandez concluded in a flash note that "Sanofi clearly has the most to lose near-term" in an insulin price war, "with its dominant position with Lantus in the U.S. basal insulin market."

The product is under heavy fire, Sanofi's Weinberg admitted repeatedly on the analyst call. The pharma's growing displeasure with the Lantus sales trajectory following three of four missed quarters in 2013 was clearly a major factor in Viehbacher's dismissal.

'WE HAVE A LOT TO DO IN FRONT OF US'

Also in August, Sanofi signed an exclusive discovery, development and commercialization license with Immune Design Corp., of Seattle, valued at up to $168 million plus an undisclosed up-front payment for therapeutic agents targeting an unspecified food allergy. The partnership strengthened the bonds between the two companies, initially forged in 2011 with an early stage collaborative research agreement, giving Sanofi use of Immune Design's GLAAS (glucopyranosyl lipid A adjuvant system) discovery platform, which involves an in vivo approach based on GLA, a small synthetic molecule that selectively binds to the Toll-like receptor 4 receptor to activate dendritic cells, leading to the production of cytokines and chemokines that drive a TH1-type immune response. (See BioWorld Today, Aug. 8, 2014.)

Steve Brady, Immune Design's chief business officer, said he was confident no disruptions will occur in that partnership during Sanofi's management transition.

"We have multiple touch points between the two companies" that encompass "significant, ongoing communications" around both contracts, Brady told BioWorld Today, adding that Immune Design received a head's up about the Viehbacher announcement during a regularly scheduled call with its Sanofi counterparts Wednesday morning. Despite the drama in Paris, he characterized his company's working relationship with the pharma as "business as usual."

Indeed, Weinberg emphasized during the call that Sanofi is focused on plowing forward, with "everyone at work. We have a lot to do in front of us. We have a lot of launches to prepare." With no issues beyond the management change, "there is no reason to have any sort of speculation about hidden subjects," Weinberg added.

Sanofi has no plan to move on a major acquisition, according to Weinberg, and he hinted at the management angst surrounding Viehbacher's execution of the $20.1 billion Genzyme Corp. buy in 2011. (See BioWorld Today, Feb. 17, 2011.)

He called the Genzyme acquisition "not an easy decision to take," with a price that was "perceived as pretty strong." Nevertheless, "the board accepted to take the risk of launching an offer on the company," Weinberg said, and "we've been supportive of a number of initiatives."

Sanofi fully intends to fulfill its existing partnerships and will seek to continue expanding its global footprint through smaller M&As, Weinberg insisted.

"What will foster the growth of the group and the improvement of its profitability is innovation," he said. "We have no evidence that mega-mergers solve, or improve, the size of innovation or the ability to foster innovation – sometimes, on the contrary."

On the short-term outlook for Sanofi investors, Fernandez observed that "Boardroom drama will likely leave SNY as dead money during a crucial transition period."

The outlook for business transactions is murkier. Weinberg insisted the company – 110,000 employees strong and with many capable executives – will continue to execute its agenda. Collaborators will be watching to see how that assertion translates into the next CEO hire.