Amid Corporate Restructuring, 4 Sanofi Executives Depart

Compiled by Keke

In December 2019, Sanofi CEO Paul Hudson unveiled an ambitious plan to reshape the company, while also stating his intention to streamline its management structure. Recently, he took a significant step toward fulfilling this promise by removing four members from the executive team.

Bloomberg reported on February 12 that Hudson announced a restructuring of its management team, with four executives departing: Ameet Nathwani, Chief Medical and Digital Officer; Dieter Weinand, Head of Primary Care Business; Dominique Carouge, Head of Business Transformation; and Kathleen Tregoning, Head of External Affairs. It remains unclear whether the “departures” are effective immediately or will occur over a period of time.

A female spokesperson for Sanofi confirmed in an email response to the FiercePharma website that four executives will be leaving.

Among them, Ameet Nathwani was appointed Chief Medical Officer in 2016 and later named Chief Digital Officer in 2019. One of his major initiatives was establishing a partnership with Google, focusing on developing new technologies such as digital therapeutics and helping Sanofi integrate AI into its operations.

Executive departures may come as no surprise. A few days ago, during Sanofi’s fourth-quarter 2019 earnings conference call, Hudson stated his intention to reduce the size of the Executive Committee from 14 to 10 members, followed by a restructuring aimed at allocating more central expertise to its business units and strengthening accountability. As reported by Bloomberg, the move is intended to accelerate Sanofi’s decision-making process.

Moreover, Hudson clearly considered enhancing Sanofi’s digital capabilities as part of the strategic adjustment. In a previous conference call, he stated that this move was driven by the belief that the company had lagged somewhat in its agenda for internal digital literacy and competency. Furthermore, the company will not opt to combine the roles of Chief Medical Officer and Chief Digital Officer, placing greater emphasis on the latter. In the short to medium term, this role will focus on helping the company improve user experience and data science management internally.

△ Paul Hudson

Hudson has long been an advocate for leveraging technology to accelerate drug discovery and development. During his tenure at Novartis, he was a key leader in implementing AI initiatives for the sales force. Since taking the helm at Sanofi last autumn, he has been outspoken about his expectation that every employee master data- and analytics-driven decision-making skills.

Moreover, Hudson does not believe that pharmaceutical companies necessarily need to collaborate with tech giants to accomplish this task. This is indeed the case: in December 2019, Sanofi ended its partnership with Verily, a sister company of Google. The two companies had established Onduo, a diabetes-focused joint venture, in 2016, with each investing $500 million. Now, as Sanofi scales back its diabetes R&D efforts, it will restructure the joint venture to continue providing financial support but will no longer be involved in its operations.

In December 2019, Hudson announced that the company would concentrate its efforts on six key therapeutic areas, including hemophilia, oncology, hematology, rare diseases, and neurology, while excluding diabetes and cardiovascular diseases. This strategic realignment is expected to save the company approximately $2 billion. Undoubtedly, these measures by Hudson are pivotal to achieving a broader objective: refocusing the company on high-growth sectors. Sanofi currently places significant emphasis on Dupixent, an anti-inflammatory drug developed in collaboration with Regeneron, which is indicated for the treatment of asthma, eczema, and nasal polyps. Hudson projects that sales of Dupixent will rise from €2.07 billion in 2019 to €10 billion in 2020.

Sanofi will also no longer focus heavily on the businesses that made the company famous. Its diabetes and cardiovascular divisions have struggled for years, but the latest data from fiscal year 2019 shows that the diabetes business accounted for approximately 13% of its total revenue, a decline of nearly 10% compared to 2018.

Investors are also looking forward to Hudson’s innovations. In a report released in January, Vantage analysts pointed out that in 2019, 78% of the company’s sales came from products that had been on the market for more than ten years. If Hudson’s reforms fail, Sanofi will be almost equally dependent on “older drugs” within five years. This comprehensive strategic adjustment marks Sanofi’s pivot.

Hudson stated that Sanofi’s new strategy would enable the company to achieve breakthroughs with its most promising drug candidates, as it commits to cutting-edge science and focuses on delivering results.

In addition to placing new emphasis on oncology, Sanofi has been divesting certain assets. In November 2019, Sanofi first announced its plan to spin off its consumer health division. Hudson stated that the aim of this business is to accelerate growth by becoming an independent entity.

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