Although father and son, the two sit at opposing ends of the pharmaceutical business in Canada.
Legendary drug executive Morris Goodman has been making and selling generic drugs since the early 1950s, most recently building closely held Pharmascience Inc. into a generic powerhouse with 700 employees, a research and development budget of $15-million and estimated sales of $250-million this year.
His son Jonathan Goodman is president and chief executive officer of fast-growing Paladin Labs Inc., a specialty pharmaceuticals distributor, and a board member of Rx&D, the trade group for big pharma in Canada.
But that's where the differences end.
While generic and brand-name drug companies treat each other as the enemy in dealing with patent protection, pricing and market access, such disputes are rare in the Goodman clan.
"We don't have a philosophical difference of opinion," Morris Goodman says of his relationship with his son.
"The argument could be over the length of a patent, but I've always recognized a need for both generic and brand-name businesses. And I've always tried to build my business through partnerships with the multinationals instead of being adversarial like some of my competitors."
That irks people like Jack Kay, who worked for Morris Goodman for 10 years and now is president of generic drug maker Apotex Inc. of Toronto.
"Pharmascience's strategy of licensing products coming off patent and then distributing them without much manufacturing doesn't contribute to growing an independent generic industry in this country," he said.
Using Pharmascience's strategy as a stepping stone, Jonathan Goodman, with his father's backing, launched Paladin in 1996 to distribute late-stage and already approved specialty drugs that the multinationals are reluctant to promote aggressively in Canada.
"Canada is a very complex pharmaceutical market," Jonathan Goodman said. "It's not one market but really 10 different markets because each province runs its own formulary" that qualifies drugs for reimbursement.
While the Pfizers and Mercks of the world thrive on selling billion-dollar blockbuster drugs, they have less interest supporting niche products with annual sales of about $10-million or less.
"That's where we come in," he said. "We offer a one-stop shop. We buy Canadian rights to specialty products from U.S. and European pharma and biotech companies, and then steer them through the regulatory process and launch them."
Today, Paladin represents 50 pharma products, with 35 on the market.
It has a sales force of 14 representatives that target 324 endocrinologists and 555 urologists in the country.
"It's a great little company that's good at hitting singles over and over and over," said Sprott Securities Inc. analyst David Dean. "Home runs aren't in their business model."
While Pharmascience owns 45 per cent of Paladin, it has no nominees in management or on the board.
Paladin, however, rents office space in Pharmascience's Montreal head office building.
Paladin expects sales to reach $23-million this year, with analysts forecasting a profit of $5.5-million. That's up from a profit of $3.7-million before certain writedowns on sales of $17.8-million in 2001.
Mr. Dean rates the stock a "speculative buy," with a 12-month target price of $10. It closed at $6.15 on the Toronto Stock Exchange Friday.
"I see short- to intermediate-term risks in the stock, specifically how much is revenue going to grow next year, but basically I like the fundamentals of the business," he added.
After signing 25 licensing agreements and raising $47-million in three equity issues in the past five years, Paladin is sitting on $43-million in cash, of which $19-million has been earmarked for product acquisitions.
Jonathan Goodman said the company remains committed to acquiring an additional $3-million in products with immediate sales before the end of 2002 in order to meet analysts' forecasts of sales in 2003 of $28-million to $32-million.
"The acquisition market has changed this year," Mr. Dean said, noting that while biotech products in the late-stage pipeline are readily available, they don't add immediate revenue.
"Pharma products are more difficult [to acquire]now because the industry is thinking about consolidation and not about divesting Canadian rights to drugs," he said.
Driving Paladin's revenue growth is Androderm, the only testosterone patch available in Canada; Dostinex, a new treatment to reduce secretions of the hormone prolactin, which can lead to infertility in men and women; and Muse for erectile dysfunction.
One of Paladin's biggest coups was acquiring Canadian rights to Plan B, the so-called morning-after pill, which can prevent pregnancies.
"Nobody in Canada wanted to handle it because they thought it was too controversial," said Jonathan Goodman, who teaches two classes in entrepreneurship at McGill and Concordia universities in Montreal.
"As a company, we have a responsibility to ensure that products like Plan B get launched in Canada," he said, adding that the company is still trying to convert Plan B to an over-the-counter product from prescription only.
"Clearly, Canadian women are better off with a safer and more efficacious emergency contraceptive," he said.