Sanofi recruits Novartis' top pharma exec Paul Hudson as its new CEO — so what happens now?
Sanofi’s board has turned to someone who’s not French to be its next CEO.
The Paris-based pharma giant named Novartis pharma chief Paul Hudson — a British pharma executive with an international pedigree — to the top post as current CEO Olivier Brandicourt heads off to an early “retirement.”
In a carefully orchestrated response, Novartis CEO Vas Narasimhan congratulated Hudson and named Marie-France Tschudin, a Swiss citizen who’s heading up the recently acquired cancer group Advanced Accelerator Applications, as Hudson’s replacement. In doing so, he immediately positioned Tschudin — who speaks 6 languages — as a top candidate for any future Big Pharma CEO opening.
Hudson joined Novartis and the executive committee just three years ago, after serving as the US pharma chief for AstraZeneca. He has a degree in economics from Manchester Metropolitan University in the UK.
Hudson will take the top slot on September 1, where he’ll be greeted by an extraordinary challenge. The company has an R&D group with a rep for slow motion movement and a marketing team that’s faced with some tough challenges on the diabetes front, among others.
Investors responded warmly to the action, bidding Sanofi’s shares up 5.5% on Friday.
Brandicourt came on board just 4 years ago, following in the wake of Chris Viehbacher, who was axed by the Gallic board and powerful chairman — Serge Weinberg — in charge of Sanofi after moving back home to the US. The French clearly wanted a native to run the company at the time, but apparently feel that professionalism trumps nationality as it works toward a turnaround.
One of Reuters sources, who tipped the wire services off early on the announcement, said that Hudson was picked because of his solid management experience and experience with digital technologies, where Novartis has been carefully focused.
So now the guessing games begin. What will Hudson do to shake things up at Sanofi, where its R&D organization has produced little of real value, with the possible exception of their late-stage cancer drug isatuximab?
Sanofi executed major alliances with Regeneron and Alnylam on groundbreaking drugs, but on its own the company is known as largely moribund and bureaucratic, taking a long stretch to finally execute on the M&A front under Brandicourt. And now they’ve backed away from those alliances to lean more heavily on the pipeline and R&D chief John Reed.
If Hudson’s background at Novartis is an indicator, he may turn to dealmaking to help enliven the late-stage pipeline, where all big pharmas are judged. An internal shakeup in key areas like oncology may also be in the offing, as new execs like Dietmar Berger join up. And just about every new CEO — Dave Ricks and Emma Walmsley, for example — like to bring out the axe to chop away at the dead wood before adding anything.
Reed has already revamped the pipeline. But look for an even greater reliance on the US research ops around Boston to carry the bulk of the weight.
Anyone looking for the next signal on Hudson’s status should look to his compensation package. Brandicourt took home a 2018 compensation package of $8.1 million — down $2.7 million, a painful 33% drop — compared to his allotment for 2017. European execs tend to be paid significantly less than their US counterparts, but a cut in compensation like that underscored the board’s feelings about Brandicourt’s lack of effectiveness as a manager.
How much did Hudson get in his negotiations?
Image: Paul Hudson (Novartis)