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the lunch

After brain injury, tenacious CEO builds new drug company Add to ...

Indeed, it was his need to run his own show that got him started in the drug distribution business in the first place. Mr. Goodman, who earned an MBA and a law degree after his undergraduate B.A., realized that he wouldn’t fit in as a manager at his father’s company, a maker of generic pharmaceuticals. (That firm, Pharmascience, is still in business. His father Morris is now chairman and his brother David is CEO).

Pharmascience had a small arm that sold specialty drugs, so Mr. Goodman decided to spin that off and run it himself.

“I couldn’t work with my father and brother. I said, ‘I am a control freak and so are you. It is a recipe for disaster.’”

The spinoff, Paladin Labs, was anything but a disaster. Founded in 1995 and publicly traded from the start, it began on an uninterrupted upward trajectory. By selling drugs it bought or licensed from other companies, it had no development risk.

The portfolio eventually included everything from birth control pills to allergy treatments to pain medications. Sales blossomed in Canada, and beyond, to Israel, South Africa, and Latin America.

Revenue rose for 19 consecutive years, and profits followed.

At the time of Mr. Goodman’s accident, Paladin had sales of around $150-million, and a market cap of almost $1-billion. It had just bought Montreal drug firm Labopharm Inc., and was trying to take over Afexa Life Sciences Inc., the maker of Cold-FX. (It eventually lost a bidding war for Afexa to giant rival Valeant Pharmaceuticals International Inc.)

The day he addressed Labopharm employees as their new CEO, Mr. Goodman headed off for that fateful bike ride.

After he was rushed to hospital “it was just touch and go, trying to keep him alive,” Ms. Caplan-Goodman tells me.

While in the coma “he looked so peaceful and so healthy and strong,” she said, but it was terrifying to deal with, especially with three small children at home.

“I told them their dad had an accident and banged his head and is sleeping in the hospital. I didn’t bring them to see him until he was able to talk … I had to tell [Jonathan] what to say to them. He still couldn’t function normally.”

While he recovered, his colleague and Paladin co-founder Mark Beaudet held the reins at the company. In May, 2012, nine months after the accident, Mr. Goodman returned to the firm as chairman, but mainly focused on small deals and loans from the company coffers.

The transition was tough for someone who was used to being in charge. “I like to describe myself as a benevolent dictator, [but when] I came back it was a democracy, and it was hard to deal with,” he says. “I put myself in my office and did deals, where I could do them by myself.”

At that point, he decided to put the company up for sale. “When I came back I realized I couldn’t run this business any more. And if I couldn’t run it, I didn’t want it. So I ran a process to sell it.”

But by the time Credit Suisse, who he had hired to find a buyer, came back with some not-great offers, Mr. Goodman’s cognition had improved and he decided not to sell after all.

Ironically, after making that about face, U.S. drug giant Endo Health Solutions Inc. showed up at his door and made him an offer he couldn’t refuse.

Endo’s $1.6-billion cash and share merger proposal last November was at “an amazing price,” Mr. Goodman said, but it immediately got even better. Endo’s shareholders were extraordinarily enthusiastic about the plans to shift the merged organization’s registration to Ireland to save tax dollars, and the stock price leaped.

Because Paladin’s shareholders were to be paid partly in Endo shares, their holdings also skyrocketed. Paladin’s shares almost doubled in price by the time the deal closed at the end of February, surpassing $140. That valued the company at more than $3-billion.

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