Playing golf at Hilton Head, South Carolina, some years back, Frank Baldino Jr., founder and CEO of the biotech drugmaker Cephalon, whacked a drive well out of bounds, into the backyard of a home adjoining the course. To the surprise of his playing partners, Baldino didn't just take his penalty and tee up another ball but instead strode into the backyard.
"He's standing on somebody's pool cover, whaling at the ball, and got it up near the green," recalls Bruce Peacock, former chief operating officer at Cephalon. When out-of-bounds rules were politely mentioned, Peacock says, his boss replied: " 'If you can go get it, you ought to be able to hit it.' " In golf and other matters, Peacock says, Baldino "didn't see limits."
That helps explain his unusual business success. A hard-core scientist, Baldino founded Cephalon in 1987. In the years that followed, he built it into a company with a market capitalization of $4.5 billion, sales of more than $2 billion, and more than 3,000 employees. Also, to make the record complete, $425 million in fines and penalties. Baldino died December 16 of leukemia. He was 57.
With a Ph.D. in pharmacology and experience at DuPont, Baldino fit the profile of a start-up CEO. But most of those scientists end up being pushed aside by business people, while Baldino, square jawed and charismatic, turned himself into a dynamic salesman and manager.
The company's initial drug effort, to treat amyotrophic lateral sclerosis, or ALS, was struggling. Baldino spotted Provigil, made by a French company and mostly used to treat narcolepsy, and licensed it for less than $20 million, thinking it would produce modest sales and help see Cephalon through efforts to gain regulatory approval of its ALS drug. Instead, the ALS drug was rejected by the Food and Drug Administration, and Provigil became a blockbuster. Provigil is approved to combat narcolepsy, sleep apnea, and what is called shift-work sleep disorder. But its billion-dollar-a-year success is driven by off-label sales to truckers, students, soldiers, and other people who need to stay awake and sharp. It was for allegedly pushing off-label uses for Provigil and two other drugs that Cephalon was fined.
Founded to discover drugs—Cephalon, based near Philadelphia, spends almost $400 million a year on research and development—the company has instead become known for spotting underappreciated compounds at other companies, acquiring the rights to sell them, and then exceeding others' expectations for the drugs.
Baldino could be blunt and demanding, but he could also be a sweetheart, as when he intervened on behalf of Linda Morrison, a longtime Cephalon receptionist, when she had landlord troubles. "He was the most dynamic man I had ever met," Morrison says.
Decidedly Type A, Baldino looked for a touch of obsession in others. When seeing job interviewees to the exit, Baldino would press the Down elevator button and then watch. If the job seekers didn't repress the button, according to company lore, they weren't getting hired.