Dive Brief:

• Sanofi on Thursday announced the ouster of CEO Paul Hudson after a six-year tenure that included a major transformation of the French drugmaker and the rise of Dupixent into one of the world’s best-selling medicines.
• Hudson will be replaced by current Merck KGaA CEO Belén Garijo, who is leaving her post at the German company at the end of April as part of a planned transition. Olivier Charmeil, executive vice president for general medicines, will serve as interim CEO after Hudson’s departure at the close of business on Feb. 17, Sanofi said.
• “Belén Garijo will bring an increased rigor to the implementation of Sanofi’s strategy and accelerate the preparation of the group’s future,” Sanofi said. “Her priority will be to strengthen the productivity, governance and innovation capacity of research & development.”

Dive Insight:

The initial reaction from investors doesn’t suggest much confidence in Sanofi’s decision. Shares of the Paris-based company took a sharp drop on the news, before paring losses. The stock was down about 3% in late trading in Europe.

Named to the Forbes list of the world’s most powerful women in 2025, Garijo is a 15-year veteran of Merck KGaA and has led the company as CEO since 2021. During that time, the company’s stock has dropped about 13% in U.S. trading even as European rivals such as Novartis and AstraZeneca have seen their shares or American depositary receipts almost double.

But Sanofi voiced complete faith in Garijo, 65, who worked at Sanofi and its predecessor companies for 15 years before joining Merck KGaA. “She is a well-recognized leader in our industry with an undisputable reputation,” Sanofi Chairman Frédéric Oudéa said in the company’s statement. In her previous stint at Sanofi, she “held important positions and achieved many successes,” he said.

It’s not surprising that the initial feedback on the ouster of Hudson in favor of Garijo was negative, Jefferies analyst Michael Leuchten wrote in a note to clients. “The conventional narrative is that the appointment of a CEO without [a] credible R&D track record at her prior position and an inability to drive growth into the Merck KGaA Pharma business reflects corporate governance failure and an implicit admission that required cultural change is impossible to come by,” he wrote.

Garijo probably wasn’t on many shortlists as a potential successor for Hudson, Leuchten added. Still, he argued that her efforts at Merck KGaA led the company to a “way better” performance than most expected. “The ability to prevent further pharma decline was quite impressive,” he wrote.

Hudson took over at Sanofi in September 2019 after the retirement of Oliver Brandicourt, who himself stepped in for an ousted CEO. Under Hudson’s watch, Sanofi wound down its diabetes and cardiovascular programs, shed a stake in a consumer health division, cut costs and shrunk its executive team. He focused the company on immunology and cancer and helped turn the anti-inflammatory drug Dupixent, developed with Regeneron Pharmaceuticals, into the world’s fourth-best seller.

But with Dupixent facing the loss of market exclusivity next decade, Hudson was under pressure to boost the company’s pipeline. And he faced setbacks. A multibillion-dollar deal for a multiple sclerosis drug yielded mixed results and recently an FDA rejection. An eczema drug touted as a Dupixent follower has also produced shaky data and has unclear prospects. Meanwhile, vaccine sales are slipping. Sanofi’s stock price was little changed over the course of Hudson’s tenure as European rivals soared.

Sanofi’s general shareholder meeting will take place on April 29, and Garijo’s appointment as a director will be submitted for a vote at that time, the company said. Sanofi is also seeking an amendment of its articles of association to raise the age limit for its CEO. Its current internal rule says the CEO must be the under the age of 65.