When Jacqueline Shan, co-discoverer of Cold-fx and chief scientific officer of Afexa Life Sciences, was growing up, her dad would repeat to her this advice: “Just do the right thing, be honest and do something useful.”
Given that Afexa (formerly CV Technologies) has sold over a billion capsules of Cold-fx, amounting to more than $250 million since it entered the market in 1996, and has produced five other natural health products, Shan has probably exceeded her father’s definition of “useful.”
In September 2006, when her company was on the cusp of placing Cold-fx on the giant U.S. market, Shan, then also the company’s president and CEO, graced the cover of Avenue‘s premiere issue.
Less than a year later, investors named her in a class-action lawsuit against CV Technologies for financial misrepresentation.
The lawsuit surfaced after a substantial amount of unsold inventory was returned from U.S. stores, and the company failed to restate its 2006 revenue earnings in time for shareholders to make sound decisions about their investments. The $110 million lawsuit was settled out of court for $7.1 million.
Four years after the lawsuit, Shan says it was her new company’s growing pains, which made it, and her, stronger.
“There were certain areas that we weren’t experienced enough in. There were gaps where we needed certain expertise and people,” says Shan, who was recently named one of Canada’s 100 most powerful women by Women’s Executive Network. “If you look at any major business today, no matter how successful they are, they always have setbacks. But, our setbacks were transparent. People know about it.”
By relinquishing her presidential role, Shan has been able to spend more time on research and development. Afexa has since grown to have 40 full-time scientists, currently developing products meant to treat problems such as hypertension. Her team just finished a clinical trial with a medicine they hope will help leukemia patients manage and reduce acute respiratory infection.
“This dream and this vision are never going to change – which is using our talent and our scientific skill to make a better medicine.”
Now, Shan is facing her biggest challenge yet. On Aug. 10, Paladin Labs, owner of 15 per cent of Afexa’s shares, made a hostile bid on the company, offering shareholders a deal Afexa says undervalues the business, especially considering its recent growth. As of press time, the bid has been unsuccessful.
UPDATE: Valeant Pharmaceuticals International Inc. will acquire all outstanding Afexa common shares at $0.71 per share in a friendly takeover, besting a hostile takeover offer by Paladin Labs Inc. in August for $0.55 per common share. Afexa’s Board of Directors announced that current president and CEO Jack Moffat will step down when his contract expires at the end of September, and William B. White will step in as interim CEO.