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Sanofi Taps Novartis Executive as CEO in Race for New Drugs

June 7, 2019
The company is looking to speed up in cancer research, where innovative medicines command high prices, after missing out on the latest wave of cutting-edge drugs.

Sanofi poached a top manager from Novartis AG in a bid to accelerate delivery of new blockbuster drugs to the market and catch up with competitors in the lucrative cancer field.

Bringing in Paul Hudson as its next chief executive officer will help the French pharma giant bolster its pipeline of medicines and deal with growing U.S. pressure on drug prices. The 51-year-old British executive will take over in September from Olivier Brandicourt, 63, who’s retiring. The shares rose as much as 6% in Paris trading, the biggest intraday increase since October, 2016.

Hudson has led Novartis’s pharma unit since 2016 and is credited with launching key medicines such as psoriasis treatment Cosentyx, which may become its top product this year with a projected $3.5 billion in sales. The executive, who previously spent a decade at U.K. drugmaker AstraZeneca Plc, will turn his attention to Sanofi’s lineup of experimental therapies.

The company is looking to speed up in cancer research, where innovative medicines command high prices, after missing out on the latest wave of cutting-edge drugs. U.S. President Donald Trump and members of Congress have been calling for companies to rein in drug price increases, especially in diabetes, where Sanofi is one of the biggest players.

Diabetes Approach

Sanofi said in March that it had begun a search to replace Brandicourt, who joined from Bayer AG in April 2015. It had already begun shaking up its senior ranks last year, bringing in research chief John Reed from Roche Holding AG and Jean-Baptiste Chasseloup de Chatillon as chief financial officer.

Along with how to approach diabetes, one of the biggest questions for Sanofi’s new team is its strategy in the burgeoning gene-therapy realm. With Hudson as head of pharma, Novartis bought AveXis Inc. for $8.7 billion last year to gain Zolgensma, which just received approval from U.S. regulators.

Hudson’s strong track record at Novartis was a key part of investor confidence in the Swiss pharma giant’s ability to launch new drugs, according to a note from analysts at Credit Suisse. In hiring Hudson, Sanofi is giving the reins once again to a citizen from outside France. Four years ago, Brandicourt replaced Canadian-German national Chris Viehbacher.

Brandicourt has expand the company’s pipeline with the acquisitions of Bioverativ, a developer of hemophilia therapies, and Ablynx, maker of a treatment for a rare bleeding disorder. In 2021, he’ll turn 65, Sanofi’s age limit for its CEO.

Several other big drug companies have seen changes at the top in recent years, with Emma Walmsley taking charge of GlaxoSmithKline Plc, Vas Narasimhan now steering Novartis AG, Kare Schultz becoming CEO at Teva Pharmaceutical Industries Ltd. and Albert Bourla taking over at Pfizer Inc.

Novartis said Friday that Marie-France Tschudin will become the new leader of its pharmaceuticals business unit.

Novartis, which was little changed Friday in Zurich, is up about 18% since the beginning of this year.

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