Sanofi's CEO Swap Defines the New Playbook for Big Pharma
- Sophie Johnston
- 2 days ago
- 5 min read
The removal of Paul Hudson and appointment of Garijo marks the beginning of a period of disciplined operational compression across Sanofi.
PARIS, FRANCE - On paper, replacing a chief executive is a matter of corporate governance. The board makes adjustments and appoints an interim leader. Markets fluctuate. Everyone moves on.
But it’s rarely that simple.
On Feb. 12, 2026, Sanofi took its most important governance call in years: the removal of CEO Paul Hudson after six years in the job and the appointment of the former head of Merck KGaA’s health business, Belén Garijo, in his place.
Hudson’s tenure was defined by transformation. He focused Sanofi's industrial scope, exited the diabetes and cardiovascular therapeutic areas, simplified the management team, and made immunology and oncology front and center in the company’s DNA. Under his leadership, Dupixent became the world’s fourth-best-selling medicine, the foundation of Sanofi’s profits.
The removal of Paul Hudson and appointment of Garijo marks the end of Sanofi's era of portfolio realignment and the beginning of a period of disciplined operational compression.
The board’s decision signals that incremental improvements to the pipeline are insufficient to prepare the firm for the inevitable loss of exclusivity for Dupixent. The transition to Garijo, the former head of Merck KGaA, reflects a shift in governance priorities from "visionary transformation" to "rigorous execution."
The Dupixent Dependency Problem
Dupixent’s unprecedented ascent created a dangerous concentration risk within Sanofi’s revenue base. Hudson faced mounting pressure to de-risk the coming decade, yet recent research failures have eroded investor confidence:
Pipeline Atrophy: The multibillion-dollar multiple sclerosis deal ended in a significant FDA rejection, while data from a high-profile eczema treatment failed to meet primary endpoints.
Vaccine Stagnation: Declining sales in the traditional vaccine business removed a critical hedge against immunology volatility.
Market Performance: The persistent gap between Sanofi’s valuation and that of its large-cap peers suggests that the market viewed the existing R&D roadmap as a "valuation ceiling" rather than a growth engine.
The board viewed this combination of concentration and stagnation as a structural threat that could be addressed only by a change in management.
Defining "Rigor" as a Strategic Mandate
Sanofi’s choice of Belén Garijo is a specific endorsement of "increased rigor." In the context of Big Pharma, this term translates to sharpened capital discipline and a more aggressive internal audit of R&D productivity. Pipeline failures are frequently the result of poor governance and organizational inertia rather than scientific inadequacy.
Garijo is tasked with transforming Sanofi’s scientific expertise into a high-velocity innovation engine. Her record at Merck KGaA suggests a capability for managing declining legacy portfolios while sustaining high-margin pharmaceutical operations—a skill set directly applicable to the post-Dupixent landscape.
'The days of board-level tolerance for underperforming pipelines are ending as global patent cliffs loom.'
Investor Friction and the Transition Vote
The market response to Garijo's appointment was marked by initial skepticism. Two primary factors drive this doubt:
The "Outsider" Status: Garijo was not a predicted front-runner, leading to concerns regarding the board's internal succession planning and the perceived rejection of internal candidates.
The Age Limit Hurdle: At 65, Garijo’s appointment requires a formal vote to amend the company's internal age-limit rules. This governance maneuver underscores the board's desperation to secure her specific brand of discipline, even at the risk of appearing administratively inconsistent.
The market’s response was swift. Shares of the company dropped considerably on the news before regrouping somewhat, falling about 3% at the end of the day’s trading in Europe.
Sanofi’s attempt to change the company’s internal rule on the age limit for CEOs also backs the notion of a strategic change. Garijo’s age of 65 will require a vote at the company’s April 29 meeting.
But markets can misinterpret transition risks. The board, on the other hand, is incentivized to get the structural risks right. To them, Dupixent’s concentration, the vulnerability of the company’s pipeline, and the weakness of the vaccines business create a structural problem.
The Platform Imperative & Signal to Big Pharma
The leadership shift coincides with Sanofi's recent acquisition of Dynavax, a move that reinforces the need for platform control in immunology. These platform-heavy strategies require ruthless prioritization across research, regulatory, and commercial silos.
If Hudson’s tenure focused on "what" Sanofi should be, Garijo’s mandate focuses on "how fast" it can get there. This is operational compression: the systematic removal of organizational friction to accelerate late-stage development and secure the "second act" before the Dupixent patent cliff arrives.
And Sanofi’s decision has implications beyond its Paris headquarters.
The Sanofi transition is a warning to the broader pharmaceutical sector. The days of board-level tolerance for underperforming pipelines are ending as global patent cliffs loom. Biotech disruptors, characterized by leaner governance and native platform focus, have created a structural advantage in execution that legacy firms are now forced to emulate.
Sanofi has demonstrated that even visionary leaders are subject to removal when innovation delivery fails to match market expectations. The litmus test for Garijo will be her ability to equate "rigor" with "velocity," ensuring that the immunology franchise is supported by a revolving door of approved, high-growth therapies.
The Long Audit
Molecular clocks govern the pharmaceutical industry, but capital markets operate on quarterly ones.
By replacing Hudson now, the Sanofi board is attempting a proactive reset rather than a reactive crisis response. Success depends on Garijo’s ability to implement a culture of disciplined capital allocation and succession planning. In the current biopharmaceutical landscape, scale is a liability without the governance to enable it. Sanofi has reset the clock; the rest of the industry is now forced to check theirs.
Sanofi has reset the clock, and the rest of pharma is watching.
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