PARIS - The managing director of Transgene, Bernard Gilly, has been forced out by chairman Alain Mirieux, who has a controlling shareholding in the Strasbourg-based gene therapy company through his family firm, BioMirieux Alliance. After eight years running Transgene, Gilly was replaced by Gilles Bilanger, who has spent his entire career at BioMirieux.

To strengthen his personal control over the business, Mirieux also brought in Margaret Liu, senior adviser in vaccinology to the Bill & Melinda Gates Foundation, as vice chairman of Transgene and member of the board, while Jacques-Frangois Martin, president of the Global Fund for Children's Vaccines, has been co-opted onto the Transgene board.

Bilanger is a more traditional type of manager than the effervescent Gilly, and was formerly vice president of international development at Silliker BioMirieux. Liu, who has a degree in medicine from Harvard University, was previously vice president of vaccines research and gene therapy at Chiron Corp., and before that was senior director, virus and cell biology, at Merck & Co.

Gilly's departure comes only a few weeks after that of Transgene's former finance director, Bernard Davitian, who left in September. He and Gilly were the architects of Transgene's initial public offering on the Nasdaq and the French Nouveau Marchi in 1998.

The boardroom split was sparked by a struggle for control over Transgene. As one source contacted by BioWorld International said, Gilly's eviction was the result of a "clash of personalities" rather than differences over corporate strategy. Mirieux now has secured managerial control over Transgene and confirmed his financial commitment to the business at a time when his own company is in the process of merging with another privately owned French pharmaceutical company, Groupe Fabre, to form BioMirieux Alliance-Fabre. Mirieux himself said that all was not well in the Transgene boardroom. "Bernard Gilly decided to leave the company for family reasons, but also because his temperament does not fit in with Transgene's increased integration in the new group spawned by the Fabre-BioMirieux merger," he said.

At the same time as approving the management reshuffle, the Transgene board gave its agreement to a planned capital increase through a public share offering expected to raise at least EUR60 million (US$52 million). An extraordinary shareholders' meeting is to be convened in February to approve the operation. BioMirieux will participate fully in the funding operation, as Mirieux explained: "After considerable thought about the role of immunotherapy within the new entity, we decided to retain a controlling interest of 54 percent in Transgene." BioMirieux Alliance-Fabre, as lead shareholder, will contribute to the capital increase in January and is prepared to put up the whole EUR60 million, he said, although its actual contribution will depend on stock market sentiment.

Relations between Mirieux and Transgene's management team started to go sour after a planned public share offering had to be aborted in March this year because the French stock market suddenly nose-dived. At the time, Alain Mirieux had been prepared to see his stake in the company fall below 50 percent. The company then sought to raise additional capital through a private share placement, and had all but closed the deal when the BioMirieux-Fabre merger deal was announced in September, resulting in the termination of that funding operation as well.

Transgene's share price has fallen back to around its early 2000 level year of EUR35 to EUR40, after soaring to almost EUR110 during the high-tech share rush that swept the French market in February and the first half of March.