Bernard Sherman

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Bernard C. Sherman (born 1942), Chairman and CEO of Apotex Inc., is a Canadian businessman and a billionaire. He has a self-made fortune of $US 3.3 billion dollars and is ranked 334 among the world's richest people in 2008 according to Forbes.^[1]

Generic Drugs vs. Brand-name Drugs

Apotex is estimated to be one of the largest Canadian-owned Pharmaceutical companies. Its main business is generic drugs, although the company has been actively working on getting into the brand-name drug markets. A publicly traded company called Cangene (TSX listed as CNJ) was established by Bernard (Barry) Sherman and the Apotex Group in 1984, with its head office in Winnipeg, Manitoba^[2]; it is one of Canada's largest and earliest biopharmaceutical companies. In January 2004, ApoPharma was founded.^[3]

For people not familiar with the pharmaceutical industry, here is a description of the difference between generic drug and brand-name drug development. To develop a brand-name drug in the USA, a company has to conduct phase I, II and III clinical trials, and has to prove to FDA, by two phase III clinical trials, which usually consist of thousands of patients, that the compound is efficacious and safe. The statistical analysis includes both efficacy analysis and safety analysis. The safety analysis includes AE analysis, Vital signs, drug exposure, compliance, ECG and Lab etc. To launch a generic drug, the process to manufacture the respective drug must be developed, but the efficacy and safety analysis is not required by the FDA regulatory authority. What is required is a bio-equivalence study, which is a study to show that the ratio of the pharmacokinetics parameter of the generic drug vs. the brand-name drug is within a certain interval range. The parameter usually analyzed is AUC, Cmax and Tmax. Generics also need to complete a stability study in accelerated conditions over a six month period on at least three batches. The innovative drug company (brand owner) will defend its right of patent, to insure that the generic competitors are not violating or using any of its patent rights to replicate the therapeutic value of the branded product. For a corporation to do well in the generic drug industry, they must possess a capable laboratory team that can effectively analyze the processes developed for generic drug's formulation and validate it for consistency using a different process that does not copy or infringe on the originator's patented approach. They must have a capable team of technicians to produce the pharmaceutical products that display properties and efficacies within the range of the innovators' branded products, execute the business acumen to assess and strategically launch the generic versions, and then have the financial resources to manage the litigation to prove that the technology used to produce the product does not infringe on their patented processes.

Business Experience

Barry Sherman entered the University of Toronto's Engineering Science program at age 16 and was the youngest to do so. He also graduated from Engineering Science with the highest honours in his class and received the university's Governor General's Award for his thesis. He then received a Doctoral degree from MIT. He is Jewish and has donated a recorded amount of 50 million dollars to the United Jewish Appeal. He is well-known throughout Toronto for his considerable charitable donations, having built a major addition to the geriatric Baycrest Centre, and to other Toronto-area community centers and hospitals. He is married to Honey Sherman, and they have four children.

While at Toronto's Forest Hill Collegiate and completing his university education at University of Toronto, Barry often worked for his uncle Louis Lloyd Winter, at his pharmaceutical company, Empire Laboratories. Empire was the largest Canadian wholly-owned pharmaceutical company at that time, and a pioneer in the generic drug industry (Parke Davis v. Empire Laboratories [1963], 41 C.P.R. 121; Parke, Davis & Co. v. Empire Laboratories Ltd., [1964] S.C.R. 351). When his uncle would travel, Barry often helped watch over the operations. Empire provided Sherman with the training and foundation for his development of Apotex Inc., one of Canada's leading generic pharmaceutical companies.

In the summer of 1967, directly after completing his Ph.D. in astrophysics at MIT, Barry Sherman pursued the purchase of Empire Laboratories from the executor of Louis and Beverley Winter's estate, as both his aunt and uncle had died in November 1965 leaving four orphaned children. Prior to the purchase, Empire Laboratories was the first to successfully secure the compulsory rights to manufacture Hoffman-La Roche's highly profitable Valium (diazepam), and was one of Canada's largest manufacturers of Pfizer's Vibramycin® (tetracycline), Upjohn Company's Orinase (tolbutamide), and the leading dietary sweetener Saccharin. To facilitate the corporate acquisition, Barry and Joel Ulster (Sherman and Ulster Limited), provided 5% equity options to each of the four children and a 15 year royalty on four of its patented products (Globe and Mail, November 24, 2007). Litigation is currently before the courts concerning the purchase of the corporate assets and brands from the Winter children's estate, as Sherman and his partner never paid the royalties or provided the promised equity in the business. ^[4].

Barry Sherman realized that the major market for his generic business's future growth lay in the United States. In 1970 he founded Barr Laboratories in New York with US-based partners, and he was its largest shareholder and served as Barr's president^[5]. Barry has been selling off his Barr shares recently, and as of 2000, he controlled about 33% Barr Laboratories' stock. Barr made headlines and massive share growth when it won the first rights to manufacture generic versions of Eli Lilly's Prozac. Today, Barr Laboratories' head office is in Montvale, New Jersey, and it is publicly traded on the NYSE using the symbol BRL. In 2004, the Company ranked sixth among the world's top ten independent companies in the $11 billion generic pharmaceutical business^[6]. Barr is Wal-Mart's leading pharmaceutical supplier according to Forbes, and its annual 2007 sales exceeded $2.5 billion US ^[7].

In January 1972, Sherman and Ulster Limited sold Empire Laboratories to the Quebec-based Canadian operations of publicly traded International Chemical and Nuclear (ICN) of California, for 57,000 shares (Valeant Pharmaceuticals). In 1973, Barry Sherman started Apotex with only a few key former Empire Laboratories' personnel and he incorporated it in 1974. This privately owned and Sherman controlled company is today in the top 15 of the world's largest generic pharmaceuticals with its head office in Toronto; it is Canada's largest Canadian-owned pharmaceutical^[8].

[edit] References

1. ^ About Bernard Sherman
2. ^ Microsoft Word - Q22008final.doc
3. ^ Generic Pharmaceutical Leader Strengthens Innovative Drug Research By Creating New Company Called “ApoPharma Inc.” (press release)
4. ^ In Pictures: 10 Billionaire Family Feuds - Forbes.com
5. ^ Bernard (Barry) Sherman, The World's Richest People - Forbes.com
6. ^ Barr Pharmaceuticals, Inc
7. ^ Barr Pharmaceuticals, Inc. Financials - Snapshot
8. ^ Welcome to Apotex