In August, 2011, Paladin Labs Inc. founder and CEO Jonathan Goodman was involved in a terrible bicycle accident and had to relinquish his job to recover. His position running the Montreal-based drug distributor was taken over by long-time colleague, vice-president Mark Beaudet, who has now been interim CEO for almost a year-and-a-half. Mr. Beaudet has maintained Paladin’s remarkable growth in Canada – where it markets prescription and over-the-counter products usually licensed from other companies – and kept up the pace of international expansion.
What is your role as interim CEO?
It is my responsibility to step up and drive the company forward, execute on our plan, and continue to do the business that we set out to do. Jonathan had been responsible for doing that for the first 16 years of our existence, and when his unfortunate accident occurred, I was the person tasked with continuing to take on that role.
Does it help that you have been with the firm since the start?
Jonathan and I co-founded the company in 1996, so in many respects I was particularly well-suited to take on the role.
Do clients or investors show any concern over dealing with an interim CEO?
None that I’ve felt. Right from the moment of the accident, the feedback from investors and people who know the company is that they recognize me as somebody who has been here [for a long time]. I have certainly felt supported. But it is not just me, it is our entire management team. If you look at our chief financial officer, our vice-president of business development, our VP of government affairs, and our scientific affairs VP, most of us have been working together for more than 10 years.
How is Jonathan doing?
He is a remarkable person and he is doing very well, but it was a very serious accident. He is still doing rehab. He is coming into the office and we are interacting with him regularly. His progress, in no small part, is due to his absolutely courageous determination. I think his stubbornness has been of great benefit to him, because he just won’t let anything get him down.
Will he come back as CEO eventually?
Jonathan has had an injury that is very unpredictable. He has progressed to the point where he has taken on the role of chairman, but it is still uncertain as to whether or not he will be able to resume the full-time duties as the CEO. There is the possibility that may happen, but there is no certainty. The positive thing is that everything is going in the right direction for him, but we still don’t know.
Is there any advice you’d give to others who might face a similar corporate crisis of an incapacitated CEO?
The thing that we focused on from the first moment of the accident was to keep doing business as usual. We were determined to move forward in the same manner with the same pace as we had since our founding. We knew that was expected of us, so we just concentrated on that.
Is it becoming more difficult to maintain Paladin’s record of consistent revenue growth as it gets bigger?
In the last 10 or 12 years we have grown at an average annual rate of 25 per cent. As you get bigger, in order to maintain those rates, you need to find bigger and bigger growth opportunities. One of the things we have done [is to focus on] international expansion. We think Canada is a fantastic market and we expect to continue to grow our business here, but we are opening up new international avenues to fuel our growth.
The other thing we have looked at is the over-the-counter drug business. In the last few years we have acquired brands and built a pretty decent-sized OTC portfolio of products. Right now we have nine products and they account for more than $20-million of sales.
You lost the battle to get the Cold-FX product, when Valeant Pharmaceuticals won the bidding war for its maker, Afexa. What did you learn from that fight?
We don’t consider it a loss. First of all, we made a fair amount of money on that transaction. And we were proud of ourselves in terms of having deal discipline, and knowing what our limits were.
In other words, you stopped bidding before you were tempted to pay too much?
Exactly. One of the risks when you get into these sorts of transactions is that you can get ahead of yourself. That is how bad decisions can get made. You may feel you have won in the short term, but you have to live with the business case for the long term.
How is your company different from other drug companies that focus on creating new products?
We have a diversity of products, so we are not dependent upon any one, big home run. Our business model doesn’t carry the same kind of research and development risk that a lot of biotech companies do.
What is your greatest success so far as interim CEO?
I am proud that we not only carried on business as usual, but we continued to expand and take the company in new directions. [The crisis] also came at a time that was transformational. The business we were in at the time of Jonathan’s accident is not the business we are today. We have transitioned from a primarily domestic operation, to an international business. Also, at the time of his accident we were in the process of two corporate acquisitions – the biggest that we had ever undertaken. One was the unsolicited offer for Afexa, while the other one was the acquisition of [Montreal drug maker] Labopharm, which we successfully completed and integrated.
Interim president and chief executive officer, Paladin Labs Inc., Montreal.
Born in Montreal; 45 years old.
Bachelor of commerce from McGill University, Montreal.
Held marketing management positions at Proctor & Gamble Canada and Pizza Hut Canada.
Worked as a marketing and sales executive at Montreal generic drug maker Pharmascience Inc.
Founded Paladin Labs with Jonathan Goodman in 1996.
Served as vice-president of sales and marketing at Paladin until August, 2011, when he was named interim president and CEO.