Ipsen CEO Leaves...Coz of Too Many Deals?

It's always fun to read between the lines--and put in a few calls--when CEOs depart over 'strategic differences' with their boards. Such was the wording in a release issued by mid-sized Ipsen yesterday, announcing the departure of CEO and Chairman Jean-Luc Belingard.

After nine years at the helm, during which he oversaw the group's IPO in December 2005 and undertook some bold and interesting transactions including a cross-licensing and step-wise acquisition of Tercica beginning in July 2006 and a similar tie-up earlier this year with hemophilia-focused Inspiration, Belingard apparently agreed to step aside to make way for Amgen veteran Marc de Garidel.

We don't know precisely what the 'strategic differences' were, but they were almost certainly something do to with the speed and nature of Ipsen's internationalization. Garidel takes over "to lead the group's strategy in this new [deeply changing] market environment, in particular to strengthen its US and emerging markets operations," says the PR.

Belingard can't be accused of sitting still and doing nothing, though. As well as steering the group away from primary care drugs towards specialist, biotech products, he enlarged its footprint beyond France's borders: in 2002 almost half of Ipsen's sales came from France, now that figure's less than a third. Nor did he ignore the US: Tercica provided the first foothold, the 2008 acquisition of Vernalis' US operations another, and, although the US still accounted for less than 5% of Ipsen's overall sales in 2009, the Inspiration tie-up will increase that.

No, deals (or lack of) aren't the problem. Indeed, if our well-placed source is anything to go by, it's the opposite: too many deals, too little post-deal integration, not enough organic growth. (After all, Amgen's hardly the dealmaker of the century, is it?)"It was a divergence over the frequency of dealmaking," the source revealed.

Belingard, it seems, was poised for his next move, but the Board decided it was time to digest what had already been swallowed before forking out some more millions (albeit, usually these days, risk- and cost-mitigated millions). With less room to maneuver, Belingard decided it was time to go--apparently with no hard feelings. Indeed, he was involved in choosing his successor.

Garidel--another Frenchman, was this a criterion for this 68% family-owned, Paris-based group?--joins Ipsen from his position as VP International for Amgen's South region, which includes Southern Europe plus MEA and Latin America. So he ticks the emerging market box, and having spent about a third of his career in the US (first at Lilly, then at Amgen's HQ as chief accounting officer), he ticks the US box, too. (And the very fact that Garidel's Amgen background is considered so relevant must, at least, validate Ipsen's transformation biotech-wards.)

Now Garidel is hardly going to come in and tread water, either. (And anyway, imagine luring an upwardly-mobile executive into a job, even one based in Paris, where you want to slow things down.) He was apparently involved in Amgen's significant growth in Europe and beyond--though, perhaps tellingly, this has mostly been organic, rather than deal-driven. We likely won't know what he'll do--or be told to do--until the group's annual results announcement next Spring.

Our reading between the lines suggests that we may not be seeing any more Inspiration-al deals for a while (even though Ipsen's BD head Sean McKercher said last week in London that "many companies are now approaching Ipsen, wanting an Inspiration-like deal"...perhaps that's the problem? They're too sweet?). Chances are, if the source is to be trusted, that Garidel's tenure, at least initially, will be more about building on what's there than buying more.




image by flickr user oncle tom used under a creative commons license