The film was/is deep into preproduction when Derrickson and the studio parted ways. There are rumors flying about that the director was having issues over Marvel Studios president Kevin Feige’s alleged insistence that the character of Wanda Maximoff/Scarlet Witch have a huge part in the movie.
The Dr. Strange sequel is said to be heavily connected to Marvel Studios WandaVision tv series (starring Elizabeth Olson and Paul Bettany), with the Scarlet Witch apparently creating/opening a Lovecraftian (and somewhat horrific) Multiverse that some sources are saying may feature “alternate reality” versions of established MCU characters (Marvel Zombies are being heavily hinted at).
The search is now on for a new director, with one of the top names surfacing being horrormeister Darren Lynn Bousman (director of Saw ll, lll, and lV).
Whoever the studio might pick, time is running out and an announcement should be expected within the next couple of weeks.
WandaVision premieres on Disney+ later this year while Dr. Strange in the Multiverse of Madness sees theatrical release May 7, 2021.