The incoming Chief Executive Officer of French pharmaceutical giant Sanofi SA (SNY.US), 65-year-old Belén Garijo, faces a critical mission: securing investor confidence, accelerating the company's stalled drug development pipeline, and navigating vaccine skepticism during a potential new term for US President Donald Trump. Sanofi unexpectedly announced on February 12 that CEO Paul Hudson would step down this month, with Merck KGaA executive Belén Garijo set to assume the role in April. The French drugmaker had significantly increased research and development spending, yet tangible results have been slow to materialize, leading to dwindling patience from the board. The company's stock has declined 25% over the past year, closing down an additional 4.51% on Thursday.
According to investors, analysts, and others familiar with Garijo, she is known for her decisiveness, attention to detail, and strong execution skills. However, her track record on R&D outcomes has been mixed, and the company's share price experienced a notable decline during her tenure. Notably, Garijo has served as CEO of Germany's Merck KGaA since 2021. "The CEO change at Sanofi signals that the R&D transformation has either failed or is progressing too slowly," said Markus Manns, a portfolio manager at Union Investment, a Sanofi investor. "Belén's primary task at Sanofi will be to enhance the efficiency of R&D output." Manns praised Garijo for successfully managing Merck KGaA, a conglomerate with interests in both healthcare and technology, and specifically commended her for securing a crucial pricing agreement with US President Donald Trump last year. However, he also noted that following several R&D setbacks at Merck, the CEO needs to accelerate innovation to meet challenges. "She needs to improve her R&D track record."
Developing new drugs remains Sanofi's most significant challenge. Dupixent accounts for over 30% of the company's revenue, and Sanofi has yet to identify a drug capable of replacing it when its patent expires in the early 2030s, placing pressure on the stock. "Replacing Dupixent is a key strategic challenge for Sanofi," said Nicolas Dumas, a partner at consultancy Roland Berger, who worked at Sanofi until 2018. The vaccines division, which contributes nearly one-fifth of revenue, presents another major issue as its sales have declined in recent years. Former CEO Hudson had pointed to weaknesses in this segment, linking them to a less favorable attitude towards vaccines from US health authorities.
Sanofi stated that Garijo, who worked at the company for many years until her departure in 2011, will bring "greater rigor" to the implementation of the company's strategy. Garijo did not immediately respond to a request for comment.
Garijo will become Sanofi's first female CEO and, following Emma Walmsley's planned departure from GlaxoSmithKline (GSK.US) this year, will be the sole female CEO among major global pharmaceutical firms. She was previously the first woman to lead a company listed on Germany's DAX index during her time as CEO of Merck KGaA. While heading Merck's healthcare business, Garijo guided the group's supply chain through the COVID-19 pandemic. She oversaw several transactions, including the group's acquisition of SpringWorks Therapeutics for $3.9 billion last year.
However, during her leadership, Merck KGaA encountered setbacks in drug development, with only three new medicines successfully launched. An investor who worked with Garijo but requested anonymity stated that externally visible results—specifically in R&D and business development—progressed poorly, although she improved Merck's internal structures and protected its profit margins. Roel Bulthuis, Managing Partner at London-based life sciences investment firm Syncona Limited, said Garijo transformed a company "bound by rules and hierarchy" into a more decisive and efficient entity. Bulthuis, who was responsible for Merck's corporate venture fund, M-Ventures, during Garijo's tenure, stated, "She... encouraged executives to have the courage to stand by their decisions and really get things done." Another investor who previously worked with Garijo described her as energetic, dynamic, and adept at handling pressure, with a deep understanding of Sanofi. "She knows the ins and outs of this company; don't underestimate the importance of that," the person said.
Garijo is a specialist in clinical pharmacology who began her career as a physician in internal medicine at Madrid's La Paz Hospital. She is recognized for her strong operational execution and meticulous attention to detail. "Garijo has more operational experience than a scientific background, so it will be interesting to see how she can revitalize Sanofi's R&D division," said Claus Henrik Johansen, CEO of Danish healthcare investment fund Global Health Invest, which holds shares in Sanofi. Some analysts and investors noted that Garijo was not on most people's radar for the role, which came as a surprise to the market. They also speculated about the potential length of her tenure in the new position. "I see her as a transitional CEO. Her strength lies in being able to apply pressure to the organization to drive change," said consultant Dumas. "She won't be in the role forever."
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