Scott Winslow Legal Mysteries

Chapter 1-1

The executive conference room of Aligor Pharmaceuticals was filling with the eighteen people invited to attend the exclusive meeting. Security stood at the door to ensure that no one else appeared. Anticipation filled the air as the seats around the expansive marble conference table were filled by corporate power players; the people key to running a Fortune 500 Company and keeping its image polished and its income in the stratosphere.

President and Chief Executive Officer Roland Cook, a tall and commanding presence, was the last to enter the room and the first to speak. His thick white hair was perfectly coifed, and his poise and control were on clear display. Today, as always, he looked like he had just stepped from the cover of GQ.

He looked around at the familiar faces and spoke with confidence. “The response to Delexane has been phenomenal and our team is to be congratulated for getting through the trials so quickly. At the rate we are going, we will be ready for new product rollout in about four months. Word is out on the street and investment capital is rolling in faster than ever. The fact that we have a cancer d**g that gets results like no other is out there and hedge funds, stock funds and private investors all want a piece of the action. Just the anticipation has caused our stock to go from fifty-two dollars to eighty-eight dollars per share in the past sixty days.”

He beamed as he looked around the room at members of the Board of Directors and the principal players in the Delexane trials. With a smirk, he added, “This could be the best revenue generator since Viagra.”

There was a round of applause at the recognition of the importance of the product and the reminder that many people in this room would soon be multi-millionaires. Cook smiled and added, “As you know, there is massive interest in the product and the trials. You may be approached by reporters, bloggers or others hungry for information. You will smile enthusiastically and respond by stating that you are not at liberty to talk about the matter and direct the inquiry to corporate communications. They are set up to respond to all questions and the message will be consistent. We can"t have anyone going off message or getting into trouble for any alleged insider trading—got it?” After heads nodded understanding, he said, “There is an updated information package that you can pick up at the door on your way out. All departments are gearing up to be ready for a fast roll out as soon as we can get FDA approval. The accelerated approval we have been seeking is likely at this point because the FDA recognizes that a breakthrough d**g is critical in treating cancer, so we should plan to be on the market by the end of summer. At that point, our sales and distribution people will have a good deal of work to do in order keep up with the demand.” There was another round of applause and then Cook said, “Give it your all and let"s hit the ground running.”

As the executives began to depart the room, glad-handing with Cook on the way out, the Director of Product Testing and Marketing, Martin Cardenas, approached Cook. Marty Cardenas had black hair that fell over his forehead, dark eyes that conveyed intelligence and a confidence that said he was comfortable in his own skin. He asked, “We"re in your office in twenty minutes, right?”

Cook nodded but didn"t speak, and then refocused his attention on the other executives departing the room. Marty already knew that this was a meeting Cook would just as soon avoid.

* * *

Marty Cardenas walked into the CEO"s executive offices accompanied by his boss, Director of Product Development Arthur Underwood, a brilliant leader and a lanky, affable man who reminded many of Jimmy Stewart. Within a few minutes, they were escorted into an interior conference room.

Roland Cook walked into the room and took a seat at the head of the table. He looked around the room without speaking and then looked directly at Underwood. “Art, you have the floor. Tell me what was so urgent.”

Art Underwood was instantly nervous. “Well, sir, we wanted you to know the latest results from the trials. It"s like I mentioned a couple of weeks ago, phase three is not generating the same positive results as the first and second phases did. I"ll let Marty give you the specifics.”

As Marty Cardenas began, he could see that the CEO already looked annoyed. “As you know, Mr. Cook, in phase one and phase two trials we had sixty-five percent of the participants achieve great results with shrinkage of tumors and remission for some and extended life projections for others.”

“Right, I know that,” Cook replied.

“Yes, sir. This time the results are not what we expected. Phase one was one hundred and fifty patients and phase two was one thousand. Now that we have been measuring the results for fifteen thousand patients in phase three, the results are a long way from the results of the first two phases.” Cook looked at him intently but said nothing, so he added, “We will have final results in a few weeks, but we wanted to give you a heads up that the results are showing positive impact in about twelve percent of cases and there are some side effects that didn"t show in the smaller phases.”

Cook frowned. “You still have to get to final numbers on this trial, right?”

“Yes, sir, about thirty days.”

“So, let"s see what happens. This is probably just an anomaly. This d**g can make a big difference in many lives. It can revolutionize treatment and make cancer something that people can beat.”

Marty tried not to grimace. “Given the size of this sample, the results are statistically much more significant than the first two phases and the side effects that didn"t appear in the first two trials are also troubling.”

Ever the diplomat, Arthur Underwood jumped in to reduce the tension. “We thought you should be alerted to what"s coming, Mr. Cook, so that you are not blindsided by results that were not what you expected.”

Cook nodded. “I think it"s probably an aberration. Let"s wait and gauge the result when we are done. In the meantime, this is need to know only.”

“Yes, sir,” Underwood responded.

“All right, thank you all for coming,” Cook said, standing to make clear the meeting was over.

As Marty walked down the hall with Art Underwood, he said, “I don"t think he got it.”

“What?”

“I don"t think he understood that we were telling him this trial is not going to give us anything close to a result that demonstrates a viable product.”

“Let"s get a cup of coffee,” Art said, and they moved out of the building and to the coffee hut next door. After they ordered and stood outside looking at the afternoon sky and sipping coffee, Art continued the conversation. “He understands.”

“What do you mean?”

“Mr. Cook has a degree in chemistry and as well as a master"s degree in business. He has also been through this process associated with d**g testing and chasing FDA approval about a hundred times so far and he has a good track record in making it through the process. He knew exactly what we were telling him.” Marty stared at him questioningly, so Art added, “First, he really believes in the product. He has already decided that Delexane is going to help people and that this company will be heralded as the one that changed the way we deal with cancer. He believes that this company can change the whole culture surrounding cancer. No longer is it a death sentence for so many; now your chances of remission and survival go way up.” He took a breath and added, “Secondly, this product could mean about a billion dollars in new stock value and hundreds of millions each year in revenue. That hasn"t slipped his mind either.”

“But if it doesn"t do what everyone expects, then it isn"t going to be worth anywhere near that amount. It could be worth nothing.”

Art hesitated and then replied, “It would be a mistake to jump to that conclusion in front of Cook.”

Marty wore a look of disbelief. “Surely, he knows that the drugs we test don"t all work. You said he has the education and experience to know that.”

“He does, Marty. But this is the big one and it has to work. He has the company all in on revolutionizing cancer treatment and he made promises along the way. We also have two competitors close on our heels. It is not a very well-kept secret that that Sutton Pharma has seventy percent in phase two trials and are now underway on their phase three trials of Excerdes. They are thinking that our phase three results are hovering at sixty-five percent and they know that"s hard to match. If they knew about our twelve percent results accompanied by increased side effects, they"d already be celebrating. And Jardine Health Products is still in phase two, but they are closing the gap. If either gets better results in phase three…” he shook his head and let the words trail off, his message clear.

There was concern in Marty"s expression. “You"re saying that he knows the results are as good as we are representing and intends to do it anyway?”

“I"m saying that money is flowing in and he doesn"t want to shut off the spigot any sooner than he has to. He waits for final results so that the stock price continues its upward trend and investment dollars keeps flowing in at a record pace in the interim.”

“So, what happens when the study results are final, and we have to tell him that the results aren"t there?”

“I"m not sure. Let just hope he doesn"t plan to shoot the messenger.”

* * *

It was like having another private audience with the Pope. Roland Cook didn"t engage in meeting with employees. He met with industry captains and Senators who could affect legislation. He sometimes met with hedge fund administrators who could write a check for ten million dollars, but not employees delivering bad news.

Martin Cardenas had connected with National Sales Manager Justin Palmer seven years ago, when they were both new to Aligor. When Martin"s team completed testing and blessed a product, Justin Palmer and his salespeople could rely on the fact that they had a good product to market. But he knew that when Martin red-lighted a product, there was a reason, and his review of the data made it clear that Marty was right about Delexane. Palmer had brown hair and a face five years younger than his thirty-eight years. He was the friendly sort that everyone took to immediately, and he had an uncanny ability to get people talking to him like they had known him all of their lives. He was fully attentive when others spoke, and he made them feel heard and understood; the ideal persona to head a national sales and marketing force.

The two men sat quietly in the lavishly decorated waiting area of Cook"s suite, checking email messages on their phones. Arthur Underwood joined them in the lobby, with an expression that suggested his world was on fire. There was a thin film of sweat on his forehead and he looked older than he had when Marty saw him two hours ago.