Sanofi (SNY.US) suddenly changes its leader: research and development "mute fire" becomes a "life-saving talisman", Merck & Co., Inc. executive takes over urgently.

Sanofi (SNY.US) suddenly announced on February 12 that CEO Paul Hudson was dismissed, and was replaced by Merck & Co., Inc. (MRK.US) executive Belen Garijo. The French pharmaceutical giant had significantly increased its research and development investment, but had yet to see results, leading the board of directors to run out of patience. As of the time of writing, the stock fell more than 6% in pre-market trading. Paul Hudson has been in charge of Sanofi for over six years, and has been trying to find a successor for the blockbuster drug Dupixent - a drug for asthma and atopic dermatitis that is facing the patent cliff, with revenue expected to plummet after reaching its peak. However, crucial strategies repeatedly failed: last year three late-stage clinical trial results were mixed and even failed, leading to a concentrated outbreak of shareholder disappointment. "Investors have long lost patience with repeated failures in research and development." said AlphaValue analyst Abhishek Laval. Garijo: A 'paratrooper' familiar with Sanofi Garijo's tenure at Merck & Co., Inc. is coming to an end, and this Spanish executive had worked at Sanofi for 15 years, making her familiar with the company. Sanofi stated that she will "push forward Sanofi's strategy with stricter execution," and added that her top priority is to improve the output efficiency, governance level, and innovation capability of the research and development sector. In 2023, Paul Hudson had launched an aggressive new drug speed-up plan, but have yet to see substantial returns. Last year, the experimental multiple sclerosis drug tolebrutinib failed in a key phase III trial and was rejected by the US regulatory agency for another indication. The atopic dermatitis candidate drug amlitelimab, which was expected to replace Dupixent, also had mixed clinical trial data. "If you asked me in 2020, does Sanofi need five to seven years? I would definitely say no." said Paul Hudson at the end of January during an earnings call, "We are smarter, stronger, and can definitely be faster - unfortunately, things have not gone as planned." Last year, Sanofi divested its Consumer Health business stake, meaning the company will rely entirely on innovative prescription drugs in the future. Analysts John Murphy and Mila Bankovskaya commented that Paul Hudson had significantly reshaped the once criticized "French conservative" corporate culture, elevated its global position, and outlined a profit growth path until 2030. However, due to the inability to overcome the efficiency problem in research and development, as well as the failure to find a true successor for Dupixent, Sanofi's valuation multiples have consistently lagged behind its peers, and the stock price will continue to be under pressure until 2025. Jefferies analyst Michael Loewenstein pointed out in a report that Sanofi's management may still have further adjustments to make. "Merck & Co., Inc. was able to recruit reliable research talents from Astrazeneca PLC Sponsored ADR. Garijo, as we understand her - with the strategy set, will not leave any room for execution." During her tenure at Sanofi, Garijo was in charge of the European region's global operations and led the integration of the acquired company Genzyme. She later moved to the German Merck & Co., Inc. group, leading the industrial giant that spans the pharmaceutical and semiconductor industries, and was involved in several key transactions, helping with the supply of raw materials for COVID-19 vaccines. Her goal was to achieve 25 billion in revenue by 2025, but was hindered by the slowdown in demand after the pandemic, and then sought to offset the downturn with stricter cost controls and acquisitions. Paul Hudson's last day is set for February 17th.