Last shot

Chapter 16

Maintaining a disciplined stillness at the head of a preposterously long conference table, Dean Kagan held his executives' pained attention a moment longer. The tip of his tongue poked into view, wetting his lips. "Permit me to list the excuses so we can skip the whining phase this morning. Consumers are pissed off about climbing prices. The AARP is on the warpath and has allies on the Hill. Canada's undercutting our supply and pricing. The pipeline's not what it was. Twenty-eight states and counting have passed legislation to regulate drug pricing. I know. Your job is not to reiterate the obvious but to come up with creative solutions. I'd like each and every one of you to hear me on this point." A creaky shift forward and then a firm finger jabbed across the grain of the mahogany. "I'll be pushing up daisies before I permit this company to backslide on its P amp;E multiple. I want blood from a stone. And I want it staining our next quarterly sales estimate. Booked sales will be up before the shareholders' confab in November. I am not having another week's golf at Wailea rained on by those Wharton clones from the pension funds."

Twenty faces stared back at him, male and female, black and white, doughy and chiseled, but attentive to a one. Dean scrutinized them, amused by himself, the market challenges, the tension in the room. His hair, silvered but as yet unthinned by age, was short and expertly styled. A forty-five-hundred-dollar suit disguised his softening athlete's build, enhancing his shoulders, firming his posture, creating a more tapered waist. Dean Kagan had never been forthcoming about his age, but an average of the conflicting public-record accounts put him at seventy-three.

The air smelled of linseed oil and leather, still new-car strong though twenty-seven years of weekly 6:30 A.M. "stratcom" meetings had passed through the war room since it was constructed. The impressive plane of wood on which rested elbows, reports, and various mugs of designer coffee was Bolivian mahogany, acquired for a pretty penny before the import laws clamped down. The brass fittings of the cabinets were polished to a boot-camp gleam, and the window that stretched the length of the north wall, providing a twenty-six-story view of Westwood and the smog-shrouded Santa Monicas beyond, was spotless.

The solid-core oak door had been calibrated to bulletproof, as had been the door leading into the anteroom, one of many details put into effect by the same overpriced Beverly Hills firm that had sent contractors to secure the oil fields of Kirkuk. Stem-cell research that Beacon-Kagan sponsored on three continents had led to increased threats, but there'd be no shoot-em-ups here, nor at the Kagan estate, where the windows were tactical glass and Dean's security adviser-who lived full-time in a guesthouse-was always within handgun range. The master suite even had a walk-in closet that converted to a safe room in case of burglary or attack. Dean had cut a swath through the world of international commerce over the past half century, and he wasn't going down because some mouth-breathing crusader with a hair-trigger twitch couldn't shake a fit of empathy over the treatment of his primate brethren.

Beacon-Kagan had sprung up fast and hard in the late seventies, stealing talent from the universities and competing corporations and developing a slate of solid but unexceptional meds that kept the company reasonably profitable from the start. As it grew more innovative and reactive, it began to reap higher dividends. Beacon-Kagan had added its name to the roll of the Pharmaceutical Research and Manufacturers of America, at last muscling up to the table with Merck, Bristol-Myers Squibb, Pfizer, and its other better-regarded, higher-market-cap competitors. Over the past several decades, Dean had driven the company-and its stock-north with relentless focus and vigor, Beacon having long fallen out of the picture, slumped into his potatoes au gratin at a corporate luncheon in his fifty-ninth year with a blown aorta. Today Beacon-Kagan was poised not only to compete but to trailblaze.

Dean punched an intercom button built into the desk. The door creaked open, and a nervous assistant stood in the gap, her hands clenched before a tasteful charcoal skirt.

"My coffee," Dean said.

The assistant relayed the message to someone out of sight, and a demitasse, gold rimmed, appeared almost instantly through the gap. She delivered it to Dean and backed away, ready to respond if he chose to make eye contact.

The leather chair cocked under his weight. "Now," he said, with the relish of a football coach assigning a particularly grueling hitting drill, "let's trot out the workhorses."

The senior VP of Sales and Marketing ruffled her notepad, then pulled off a stylish pair of glasses and set them on the table. Jane Bernard was a tenacious, steely woman with handsome features and a shell of coiffed gray hair. "Why don't we begin with Midachol?"

Dean tipped his head in a nod.

They'd added their own statin to the cluster behind the counters and, with aggressive promotion, managed to squeak out an 11 percent market share to the tune of a billion and a half a year. To approve a new drug, the FDA demanded only that it be shown superior to a placebo, not to other drugs. In Beacon-Kagan-conducted trials, Midachol had beat a sugar pill at lowering cholesterol nine times out of ten.

The young man across from her looked up from his BlackBerry and shot Jane a wink. In an approximation of an arranged marriage, he was engaged to her daughter, currently back east finishing a clinical social work degree at Smith. Chase Kagan returned to his e-mail, holding the wireless device in both hands like a GameBoy. His navy jacket hung over the back of his chair, freeing him to display the rich colors of his madras shirt. A knee, clad in artfully rumpled linen, was propped against the table's lip. His eyes were small and pale, set in pouches of loose skin accented by lashes so light they disappeared unless the sun hit them. He carried an air of uninterest-not apathy but boredom, as if he knew all the answers before the questions had been asked. A precocious but well-earned affectation for a twenty-eight-year-old a few promotions out of B-school.

Jane offered her future son-in-law a terse smile, folded her arms, and said, "We've stayed horizontal for June and July-"

Dean said, "Lobby the panel, get them to change the parameters of high blood pressure. We already got one-forty over ninety moved to one-twenty over eighty, see if they'll give us another adjustment. It'll open up the market for everyone. Two of the panel members are our consultants-I'm sure the other fine M.D.'s are living subsidized lifestyles on someone else's dime. Sandeep, put out a pigeon to our brothers-in-arms. We can play well with others at this stage, fight it out over market share later. What else?"

"We need a more aggressive ad campaign," Jane said. "We have to go up against the competition directly."

"Who's stopping you?" Dean said. "Here's what we do: Pick off the top dog. We run a quick trial comparing Midachol to Lipitor-twenty mgs of ours against ten mgs of theirs. We don't have to disclose dosage-"

"Better yet"-all heads swiveled to Diane Little, head of Legal-"nor do the guidelines specify how we need to administer. So for the Lipitor sample group, we can give the drugs other than as recommended-say, topically instead of orally."

Dean's head panned the table. "What else? I want to hear those gears clanking, hamsters running on their wheels. Earn those stock options."

Jenner, Research, cleared his throat. "If we're moving toward comparative branding, how about an obscure safety test? We'll stress that Midachol usage doesn't cause testicular cancer. Since the other companies haven't tested for it, it buys us a 'proven safer than' tag in the commercial."

"We do, however, have some FDA complaints about the incomplete list of side effects on the current commercials. That we might need to address," Little said. "We capped them at five seconds for a thirty-second spot, but we need at least ten."

"No," Dean said. "I'm not paying two-fifty K per prime-time hit to air voice-over about burning urination and flatulence. Refer viewers to a Web site."

"We'll hear about it from the FDA, Mr. Kagan."

"I've been hearing from the FDA for twenty years. What do we care about fines? We negotiate the levels of the fines every lobbying season. Now-do you know how many people the FDA employs to review industry ads for accuracy and balance, Ms. Little? Thirty. Thirty people for thirty-four thousand ads annually. They're slow. By the time they send us a warning letter, the campaign's run its course and the ads are off the air."

"And if we're nailed?"

"Our bottom line can handle a few nickels out and a page-twenty-seven mention in the Journal better than explosive diarrhea as declaimed by Mr. Moviephone. Next."

"We think you at least want to consider-"

"Next. How are we looking in the ambulatory-suicide department?"

"Strong," said Patrick White, VP of Product Management. "We gained two on Prozac, nearly as much on Zoloft. But we're losing the patent on Pastol next year, so we need some strategies for extending-"

"Make it a weekly drug instead of a daily. Or change a molecule, have P amp;A pick a new name and color, and ram it through. There's an idea-make it a suppository. Whatever. Pick us up a fresh twenty years on the patent. We'll market it as improved, phase our users over to the new product, and discontinue the old model."

"We'll also have to smear the old model before the generics get their hands on it," Chase offered, his eyes still on the LED screen of his BlackBerry. "A few well-timed press releases about this side effect or that."

"There you go. I thought I was gonna have to send all you people to the remedial group." Dean burned with pride, his mind feasting on the possibilities. "Thanks, Chase. Everybody: Ours is a highly creative business. Don't come here needing to be reminded of that."

"If we start the process now," White jumped in, "we'll be in good position for the big holiday push. Advertise hard on Christmas depression-"

"Make generalized depression a bit more generalized," Jane interjected playfully.

"— push the docs to prescribe away the blues. We do a mass sample mailing in November to get patients habituated, then we send the doctors free Christmas trees."

"You jackass." A good-natured smile graced Dean's lips. "These are doctors. Send dreidels." He didn't wait for the scattered laughter to die down. "I want a clean entry to prescribers. The repackaged Pastol has to be the New Best Thing for depression, and our data's gotta support that."

Dean Kagan was in his element now. As the best and brightest argued over placebo bumps and cherry-picking test subjects, he leaned imperceptibly back and quit listening. The meeting had done what he loved-taken on a life of its own.

"How's Boneral?" he half heard someone ask. A fresh wave of laughter, though the quip had long worn thin.

"Well," Jane began, "our head-to-head campaign didn't fare well. You'll remember we had banners at NASCAR-'Viterol: What Viagra Wants to Be When It Grows Up,' 'Viagra on Steroids'-that stuff, but it didn't take. We need a face for the product."

Jenner again: "How about A-Rod?"

"Too expensive, overrated, and can't hit postseason," Dean said. "I want an extreme athlete. How about that rock-climber kid who sawed off his own arm a few years back? I doubt he's wading through offers. Plus, I want to buy soft mentions-pardon the pun. How much would it cost to get Sean Connery to shill Viterol in a Matt Lauer interview? Get me numbers."

The director of Sales pitched in: "We can't get around the fact that Pfizer's outpricing us."

Now Bernie, Accounting: "We can't price down any further. Our profit margin's too tight."

"Then inflate the wholesale and sell it to doctors for cheaper," Chase said. "Let them keep the spread."

"Temporary fixes," Dean said, with a flick of his hand.

The dismissal brought a few moments of reflection.

"To boost earnings in a way that's significant," White ventured, "we need to widen out its applications, push doctors to prescribe off-label."

They went in various directions at once. Dean tuned out. Taking potshots at Viagra. Christ, what pikers.

Eighteen pens were scribbling on eighteen pads in sixty-five hundred dollars' worth of Coach and Gucci notebooks.

Little again: "Come on, we've got Viterol covered from every angle, from the shape of the pill to the coating-"

"Can we patent taste?"

"Bad taste, sure. Would Beverly Hills exist otherwise?"

Dean cut in on the yuk yuk yuk. "Remember, all of you"-he cast a hawkish gaze around the table-"examiners in the FDA receive bonuses based on how many applications they handle, and a patent app is easier to approve than deny. It just comes back the next year anyway, adds to the pile."

Jane watched Chase mouth the final clause as Dean spoke it.

Dean went on. "What's next?"

Chase said, "Vector."

A deep inhalation brought Dean upright in his chair. For the first time, his expression brightened.

Biogenics was the future of the big drug companies, and Dean had sensed it in his brittle bones. As the progenitor of a $40 billion pharmaceutical company, he was no fool; he'd long anticipated the need for fresh technologies to replenish the drying pipeline of conventional meds. The major PhRMA companies had spent the past twenty years chasing one another with me-too drugs, creating ever paler imitations of meds already in profitable existence. Me-too drugs targeted common, lifelong conditions-arthritis, depression, high blood pressure. Antibiotics were seldom blockbusters because infections don't last long enough for repeat sales. People with rare diseases formed a limited market, and thus their conditions were of little economic interest. Meds geared toward lethal diseases were a losing bet because the consumer didn't stick around long enough to rack up substantial expenses. So Big Pharma had focused on picking off the low-hanging fruit, letting their development wells run dry. Except Beacon-Kagan, which had implemented an aggressive biogenics strategy early on. Beating the competition into the field, Dean had supported Vector to a tune of $80 million, an amount expressly chosen to shatter the start-up biotech funding record. He'd since poured in tens of millions more.

The others' focus remained on the head of the table, so Dean made a show of deferring to his son, whom he'd installed as Vector's CEO at the outset.

Chase nodded his thanks, glad to assume brief command. "Do you want the good news or the good news?" Polite chuckles. "Since with Xedral there's no need to moderate dosage levels or study metabolism effects, and because kids are dying from AAT deficiency every day, the FDA approved our request for a combined Phase I and II. Three months long, randomized, double blind, placebo controlled, starting next week as planned. Once the Xedral injection is shown to take, and if the kids don't combust"-a current of polite laughter generally reserved for Dean-"we roll out wide before the new year."

"Any trouble securing subjects?" Jenner asked.

"We've been beating off a virtual stampede."

Various impressed nods and noises from the others. Scarcity of human subjects usually caused the biggest delay in getting a new drug to market.

"Families are desperate," Chase continued. "They have kids languishing on the liver waiting list. No need to pay bounties to doctors for enrollees-these parents just want our help."

Bernie said, "Let's have those numbers again."

"There look to be about a hundred thousand people in the U.S. with AAT deficiency and an equivalent number in Europe. Calculating in other moneyed populations-Australia, Japan, what-have-you-brings us to at least three hundred thousand. But. Most estimates show that less than ten percent of people with AAT deficiency have been diagnosed, even though it can be determined by a simple blood test. So we can push for more screening as a public health measure, which will allow doctors to identify the disorder early, save lives, and raise our consumer population. To that end we're rolling out a preceptorship program for pediatricians, hepatologists, pulmonologists, and geneticists. We'll get young, attractive drug reps-"

"New blood," Dean said. "Redheads seem smarter. Troll the campuses."

"— to shadow doctors, educate them about Xedral, even get in the room with patients. For their troubles the sponsoring docs will receive three hundred dollars a day. Going off the most conservative numbers-the three hundred thousand diagnosed patients-an annual treatment cost of twenty thousand dollars grosses us over six billion dollars our first year."

Bernie again: "Isn't that treatment cost too ambitious?"

"Yes. It is." Chase drew out the silence an extra few seconds, a trick, Dean noted with satisfaction, he'd appropriated from his old man. "Of course, for people with resources it isn't. Is your child's life worth twenty thousand dollars a year? Absolutely. But for middle- and lower-class patients, we have a few hurdles. However, Vector has invested a sizable sum of money in an AAT deficiency public health rationing study, the results of which will post the week after the IPO. Our argument is simple: This is a lifesaving treatment, and poor patients shouldn't be deprived of it because of cost. Frankly put, it's unethical, akin to class genocide. We'll capitalize on the momentum from the study with continued aggressive lobbying in Washington. We have word from inside that if we bring the heat, Medicaid will widen eligibility and reimburse for half cost."

A literal gasp went up from around the table.

"We've been upping our sponsorship of AAT deficiency patient-advocacy groups over the past year to ensure they have a voice, which we'll continue to make use of. In a few months, we'll do a big fat airlift to a few poor countries. That'll make 'em teary even in the red states, gets us a hundred million bucks in publicity for a million in cost. In the meantime, we'll keep booking local network and nationals and continue to spin marketing off the advertising to pick up extra mileage. Our polling showed that the KCOM news segment last month made a favorable market impression."

"The story about the kid?" Jenner asked. "That was great. Really moving."

"And we found our new mascot." Chase held up a design layout of the corporate brochure. The boy's picture on the cover had been replaced by a doe-eyed girl, strawberry blond pigtails, lopsided smile, smear of chocolate artfully positioned on her chin. "Cute as hell, and they don't break the bank."

Dean punched the button on the table, the door clicked, and the assistant again slid into view. "Summon Dolan from the Ivory Tower."

"I'm here already, sir." The door creaked open another fifteen degrees, and Dolan stepped into the boardroom, a spray of Coomassie blue staining his lab coat from pocket to hem.

"Glad you dressed for the occasion." A few laughs, and then Dean added, with manufactured pride, "The absentminded professor."

"Sorry I'm late."

"You're not late. You were joining us at seven-thirty. It's seven-ten. But have a seat. We're always eager to talk Vector."

All the plush leather chairs around the table were occupied. Dolan tugged over the stool from the telephone nook. Jenner and Bernie made a show of shifting their chairs to make space, but there was nowhere for them to go.

Dolan folded his hands over a knee and stared down the spit-shined length of mahogany.

"I have good news," Dean said. "The business and legal counterparts have reached an equitable and mutually beneficial arrangement. Beacon-Kagan will pay Vector a licensing fee-a significant licensing fee-to become the exclusive worldwide manufacturer for Xedral. Your first eight-figure deal. Nine by this time next year. How does it feel?"

"Great." Dolan mustered a smile. "What are the terms?"

Chase slipped his BlackBerry into a pocket and tapped the circle of his fingertips on the three-inch-thick document before him. "Sucker boilerplate."

"Vector obviously doesn't have the infrastructure to manufacture big numbers," Dean added, "and big numbers we'll be doing. This is a fine deal, and you're to be congratulated."

"We can't put it out until after the IPO of course," Chase said, "which brings us to our big news. We got approval for the S-1. Vector goes public a week from Wednesday."

A round of congratulations. Dean was smiling now, a genuine grin. "Vector will be upping laboratory tours for patients and key investors as a ramp-up to Friday's pre-IPO presentation." His eyes found Dolan. "Be cordial. And dress. But remember, you're in the quiet period until the stock's been trading twenty-five days. No leaks, no asides, no press releases." Chase rolled his eyes at Jane-like Dolan's plugged in tight at CNBC. "For the next month, accessible but low-profile is the rule. We'll celebrate tonight at the house." His head cocked, his grin fading. "You're not jumping up and down?"

The other eighteen sets of eyes shifted to Dolan. "I think we have a window to bring Lentidra through another stage, see if we can attain permanent transgene integration."

"Chase says the numbers-"

"He's not a scientist, sir," Dolan said.

Chase's posture firmed, bringing him out of his slump. Jane coughed into a curl of manicured fingers. The other execs got busy examining papers and PalmPilots.

Dean glowered at Dolan. "There is more than one kind of numbers."

The fair skin of Chase's face had colored. "While you're busy stamping out disease, we're building an infrastructure around you and other researchers so we can effectively deliver your theragenes to patients in need."

"They're actually called transgenes," Dolan said.

"Not anymore. Show some appreciation for the work the rest of us do. Without us you're a guy with an idea and a university stipend."

Dean watched Dolan squirming in his chair. Dolan's birthright and duty as the elder Kagan offspring should have been to inherit one day the helm of the vast family-run corporation, but he'd eschewed business for science. As a sacrifice of sorts, on the eve of acquiring his doctorate and a humble NIH STTR grant, Dolan had offered up his gene-therapy research to his father in the form of an amateurish business pitch. After a consult with the director of UCLA's Office for Technology and Trademark Licensing, a gray old friend, Dean had taken over Vector Biogenics as he took over most matters, funding it in return for owning it lock, (especially) stock, and barrel.

Dean had raised two sons, one in his mold, the other who still required molding. But it was the latter who'd come up with the winning lottery ticket.

Dolan lifted his hands, palms out. "I guess I'm just disappointed in myself. For Lentidra's failure. For Vector's."

Winifred said, "You've done top-notch work, Dolan, on a remarkable timeline."

"We have an eager market and dying kids," Chase added. "Plus. We're on a clock with the IPO. That is gonna give you and Vector the longevity to pursue twenty-five times what your present resources would."

"Let's get to new business." Dean's festive mood had dissipated. He waved a pale, smooth hand at his younger son. "Chase, please?"

This was also Dolan's exit cue.

Offering a curt nod, Dolan withdrew. Dean waited impatiently for the door to close behind him.

It was early, and there was much work to be done.