As an MNC, Sanofi is making itself "biotech-like."

 

In September, according to disclosed announcements, Sanofi reached an agreement with German company Cheplapharm, planning to hand over a package of 20 mature medicines along with three manufacturing sites spanning Hungary, Singapore, and France.

 

This is not the first time the two parties have dealt with each other, but it is undoubtedly the most closely watched collaboration — especially for Sanofi. Why, despite having stable cash flow, does it not operate these assets itself? Moreover, in an era where supply chains are particularly emphasized, holding manufacturing plants would seem to be the wise choice — so why is Sanofi divesting them?

 

The key to understanding this deal can be traced back to Belén Garijo, who took over as CEO from Paul Hudson only in April.

 

The situation Garijo faces could be described as sitting on a hot frying pan. The patent for blockbuster Dupixent will expire in 2031. In 2025, this product contributed approximately 36% of Sanofi's revenue, with sales of €15.7 billion. And looking at the follow-on pipeline, project after project that could succeed it has fallen by the wayside.

 

There is no shortage of controversy surrounding Garijo's takeover of Sanofi. After all, during her tenure at another MNC, Merck, she failed to deliver on revenue promises to investors, and the problem was largely attributed to R&D missteps.

 

But regardless, this 66-year-old Spaniard is trying to pull Sanofi out of its past troubles — not just how to handle mature products and factories, but also a series of pipeline streamlining arrangements — as if only by becoming light enough can it run toward more innovation.

 

Chapter 1: Trading Assets for Equity

 

What makes the Sanofi-Cheplapharm deal particularly noteworthy is its structure.

 

According to the announcement, Sanofi did not receive cash directly, but instead obtained a 26.4% stake in Cheplapharm. This means Sanofi has handed over operating control, transforming from a hands-on owner into a shareholder waiting for dividends.

 

Although similar cases are still rare, the trend of asset divestiture has already become established. Companies with large R&D pipelines are increasingly separating traditional, off-patent products from innovation-oriented product portfolios that drive future growth, because the former's manufacturing economics, regulatory maintenance plans, and commercial support structures typically differ from those of newly launched therapies.

 

Commentators believe that consolidating these mature assets into the hands of specialized teams better equipped to manage them can extend product lifecycles while freeing up capital and technical resources for the seller to invest in pipelines.

 

Cheplapharm is renowned for specializing in acquiring off-patent original drugs, currently with approximately 800 employees. After this deal closes, its workforce will increase by more than 550 people.

 

The three manufacturing sites Sanofi is transferring: the Csanyikvölgy plant in Hungary with approximately 400 employees, the Jurong plant in Singapore with approximately 100 employees, and the Ploërmel plant in France with approximately 65 employees — totaling 565 people.

 

Among these, news of the French Ploërmel plant caused a stir locally. This plant specializes in producing the anticoagulant Lovenox (Clexane), and employees only learned the news after the deal announcement was published. French media described the local reaction as "a shock." Although Lovenox is among the transferred assets, its U.S. rights were excluded from the transaction.

 

Sanofi's collaboration with Cheplapharm first occurred in 2014. In 2020, Cheplapharm purchased a cardiology product portfolio from Sanofi, plus 10 branded medicines. In October 2021, the two parties reached another deal involving 10 mature products, closing in the first quarter of 2022.

 

From scattered products to 20 medicines plus three sites plus equity exchange, over more than a decade, the relationship has escalated step by step. Unlike Cheplapharm, which is bulking up, Sanofi is slimming down further — this time handing over the manufacturing side as well.

 

Thomas Grenier, Sanofi's Executive Vice President of General Medicines, said the company has been simplifying its mature product portfolio for years, enabling it to focus on innovation while ensuring mature medicines continue to benefit patients who need them. Cheplapharm Co-CEOs Edeltraud Lafer and Sebastian Braun said the deal is "a long-term pharmaceutical and industrial commitment."

 

But freeing up space does not equal automatic growth — sold assets do not turn into new drugs on their own. Sanofi urgently needs to find the next Dupixent, and that is the real challenge.

 

Chapter 2: The Dupixent Bell Tolls

 

Sanofi's anxiety is concentrated on Dupixent. This drug, developed jointly with Regeneron, is widely used to treat atopic dermatitis, asthma, COPD, and more.

 

In 2025, Dupixent brought Sanofi €15.7 billion in revenue, up 25.2% year-over-year. By the second quarter of 2026, the drug's single-quarter sales exceeded €5 billion for the first time, reaching €5.2 billion, up 37.6% year-over-year. Sanofi projects Dupixent sales will reach approximately €25 billion by 2030.

 

But when a single product accounts for more than one-third of a company's revenue, that is a danger signal for any large pharmaceutical company. Reuters stated bluntly that "replacing Dupixent is the key strategic challenge facing Sanofi."

 

Dupixent's compound patent is expected to expire in March 2031, and generics may enter around 2031. As BioSpace's report put it, Garijo faces an "$18 billion problem."

 

Sanofi hopes to extend this countdown. In April, Sanofi executives said on an investor call that the company has a "vigorous defense plan," with more than 50 patents that could extend protection to 2045. "We will vigorously defend Dupixent's patent rights."

 

Another response involves developing new formulations. Sanofi is developing a new formulation codenamed Q4, extending the dosing interval from two weeks to four weeks. R&D head Houman Ashrafian said Q4 research is progressing on schedule.

 

The problem is that defense can only delay, not solve the fundamental issue. After Dupixent, what will Sanofi use to hold up its facade?

 

Over the past few years, Sanofi has invested heavily in immunology. In 2021, Amlitelimab, obtained through the $1.4 billion acquisition of Kymab, was once seen as Dupixent's "successor." But in July, Sanofi announced the termination of most of its clinical trials in atopic dermatitis, retaining only one study on celiac disease, and also abandoned global regulatory filings.

 

The failure of Amlitelimab led Sanofi to record a €952 million impairment loss.

 

To make matters worse, on the same day, the IL-33 blocker itepekimab and the oral TNFR inhibitor balinatunfib were also halted. The former had mixed data in Phase III COPD studies, while the latter failed to significantly improve psoriasis in Phase II trials.

 

It can be said that Sanofi's billions of dollars in investment in follow-on immunology pipeline has encountered systematic setbacks.

 

Sanofi once believed that a rational, risk-acceptable approach could be taken in immunology. Jefferies Managing Director Michael Leuchten pointed out that this field is "far more complex than we imagined," and that "placebo effect rates fluctuate greatly, and there is heterogeneity within trials, so the rational approach does not work as well as people expect."

 

In 2019, Paul Hudson became Sanofi CEO and listed six projects as priority development directions. Subsequently, Sanofi exited diabetes and cardiovascular drug R&D, including discontinuing joint development with Hanmi of the long-acting GLP-1 receptor agonist efpeglenatide. Although there is no guarantee the project would ultimately have succeeded, in hindsight, the players still at the table today at least have a good story to tell.

 

Among the six projects Hudson championed, only Qfitlia and Beyfortus ultimately reached the market. As for the others, they either disappointed or failed completely.

 

Capital market patience is wearing thin. Sanofi's stock has fallen approximately 25% over the past year. In February, when the company announced Garijo would succeed as CEO, Sanofi's stock fell 3.5%.

 

 

Markus Manns, a fund manager at Sanofi investor Union Investment, stated bluntly: "The CEO change at Sanofi is a signal that the R&D transformation has failed, or is progressing too slowly."

 

Chapter 3: Fewer "Dreams"

 

Garijo has decided to talk less about dreams.

 

During her tenure as CEO of Merck, in early 2022, this captain set a goal for the company called "25 by 25" — achieving total sales of €25 billion ($27 billion) by 2025. But the reality is that in 2025, the company's revenue was only €21.1 billion.

 

Part of the reason for sluggish growth was that Merck's R&D work fell short.

 

At the end of 2023, the evobrutinib trial for multiple sclerosis failed; in June 2024, the pivotal trial for the head and neck cancer drug xevinapant was also cancelled, after an interim analysis concluded the study was doomed to fail.

 

Investors interviewed by Reuters said Garijo is "bold, detail-oriented, and gets things done," but her R&D track record is "mixed."

 

After taking over at Sanofi, Garijo seems to have recognized her shortcomings. Shortly after taking office, she launched a pipeline review, internally called a "very strict portfolio prioritization assessment." On the July earnings call, she responded that she wants to ensure Sanofi gets data from Phase II or Phase Ib sufficient to justify the significant capital investment required to enter Phase III.

 

"We don't have a target number for how many products to cut," she added. "But we will look very deeply at the current late-stage pipeline and make decisions based on scientific value, long-term value creation potential, and risk profile."

 

Under Garijo's leadership, Sanofi has terminated 13 clinical trials, 6 of which are Phase III studies. This reduction involves amlitelimab, itepekimab, balinatunfib, and other projects that Sanofi's previous management regarded as core assets. In August, she also paused an interim lung disease study, citing the need to reassess pipeline priorities through internal portfolio review.

 

On the other hand, Garijo is also reshaping the organizational structure, adjusting the executive team, and appointing a new R&D head.

 

Currently, Sanofi's strategic focus is further concentrated in four areas: immunology, vaccines, neuroscience, and rare diseases. In the second-quarter 2026 earnings report, Garijo said her first few months as CEO were mainly devoted to assessing the challenges facing the company and formulating a roadmap to accelerate transformation.

 

The Cheplapharm deal is an extension of this logic. Twenty mature medicines and three manufacturing sites handed over in exchange for a 26.4% equity stake. Resources are freed from sluggish mature assets and directed toward areas of greater strategic value.

 

 

But after freeing up resources, what will fill the revenue gap left by Dupixent?

 

M&A may be the most thirst-quenching approach. The uncertainty lies in whether investors have confidence in Garijo's ability to handle multi-billion-dollar deals.

 

At Merck, she pursued a "pearl necklace" strategy of small-to-mid-sized M&A — not pursuing single large deals, but using a string of small and medium acquisitions to enrich the pipeline. The largest acquisition was only $3.9 billion for SpringWorks Therapeutics. She needs to find a balance between "buying too much and causing indigestion" and "buying too little to fill the gap."

 

Chapter 4: At the M&A Table

 

At the M&A table of multinational pharmaceutical companies, Sanofi still has substantial unplayed chips.

 

BioSpace reported that Sanofi currently has M&A funds sufficient to support up to $30 billion in acquisitions. Other analyses suggest the company's available M&A budget ranges from approximately €15 billion to €25 billion. Either way, this is a scale sufficient to change Sanofi's fate.

 

In 2025, Sanofi was active in M&A, but not particularly aggressive.

 

Among these, the largest was the acquisition of U.S. rare disease company Blueprint Medicines for up to $9.5 billion; followed by the $1.5 billion acquisition of UK vaccine developer Vicebio; and at the end of the year, the $2.2 billion acquisition of hepatitis B vaccine manufacturer Dynavax.

 

These deals covered immunology, vaccines, and rare diseases, mostly small-to-mid-sized bolt-ons, still some distance from a large acquisition that could truly change the company's fate. Sanofi faces a flagship product with annual sales exceeding $18 billion about to lose patent protection, with its follow-on pipeline nearly depleted — which may force Garijo to adopt more forceful strategies.

 

Just look at Sanofi's peers. Over the past six months, Eli Lilly completed 12 deals, while Novo Nordisk, Merck, and Pfizer are all seeking their next growth engines.

 

Leuchten noted when the new CEO first took office that Sanofi might extend Dupixent's commercial lifecycle by acquiring assets and injecting them into its joint venture with Regeneron.

 

"One possible scenario is that Sanofi acquires assets entirely with its own funding and then places these assets into the joint venture," Leuchten said. This means Sanofi's M&A strategy may no longer be limited to directly acquiring companies. Joint ventures, asset injections, and patent settlements could all be part of the toolkit.

 

In July, Garijo said Sanofi's strategic priorities remain unchanged, still focusing on immunology, rare diseases, and vaccines, "while also seeking potential new opportunities that could bring additional growth." She hopes to enhance innovation capability through "rigorous management, business development and M&A," and by building "strategic partnerships."

 

Sanofi CFO François-Xavier Roger revealed that the company has the capacity to spend up to €15 billion on deals while maintaining its credit rating. If Sanofi acquires a commercialized company, this ceiling could rise to €25 billion, which would mark the company's largest acquisition since 2004.

 

Undoubtedly, this M&A firepower is crucial for Sanofi to acquire new assets, revitalize its product line, and reduce dependence on Dupixent.

 

The latest Sanofi-Cheplapharm deal has shown the outside world this MNC's determination to turn the blade inward. However, Sanofi may still have to return to the game of competing for large assets.

 

References:

• Sanofi Divests Older Medicines as New CEO Pushes for Innovation

• Mature Medicines Divestment Signals Shift in Manufacturing Strategy

• Sanofi's new CEO Belén Garijo gets frosty reception as Dupixent challenge awaits

• Sanofi's New CEO Belén Garijo Tackles Post-Dupixent Strategy

• Sanofi's new CEO wants more 'realistic view' of Phase 3 go/no-go decisions

• With Dupixent driving growth, Sanofi touts 'vigorous defense' to extend US exclusivity

• Garijo starts as Sanofi CEO with window to ease reliance on Dupixent

• Sanofi defends Dupixent patents, but execs insist it has nothing to do with CEO change