Leading in the global pharmaceutical industry means mastering a hugely expensive game of trial and error. A company might discover a winning protein that could someday deliver a blockbuster drug but face expenditures of as much as $500 million for testing and trials before it could do any good. For the biggest companies, annual R&D budgets can run to more than $5 billion, a sum that has fueled an ongoing process of mergers, many of which have done little to boost long-term growth. Scientific and technological breakthroughs continually stoke investors’ expectations.

This is the demanding environment in which Pharmacia’s chief executive, Fred Hassan, has made his name by pulling off a series of unlikely turnarounds. Hassan, a 56-year-old chemical engineer born in Pakistan, took the reins of Pharmacia & Upjohn in 1997, two years after the merger of Sweden’s Pharmacia AB and Michigan’s Upjohn created the company (then headquartered in England), which was plagued by declining sales, profit warnings, and raging turf battles. Hassan restructured operations, moved the headquarters across the Atlantic to New Jersey, installed a new management team, and generated several promising new drugs.

Two years later, he engineered a merger with Monsanto when the St. Louis-based...