Death Benefit (16 page)

“Hold on, hold on, wait a second,” Jerry said. “LifeDeals is being shorted because of some work being done in a lab at Columbia?”

“I’m afraid so, Jerry.”

Higgins went on, “Am I to assume that some numbers have been run looking at cash projections based on a potential breakthrough in diabetes treatment? And that the projections don’t look so good?”

“Is he right?” Trotter asked. Higgins had got right to the heart of the matter in seconds.

“Broadly, but look—”

“So he is?” Trotter questioned.

“As I said, it’s early in the—”

“Would you mind telling me how this . . . this fucking
disaster
is what you would describe as a public relations issue?” Jerry was hissing, using his soup spoon to point first at Edmund, then at Russell. The table was silent until Max Higgins spoke up again.

“The science may fail eventually, but with Gloria Croft taking a position, investors are going to be alarmed when they find out. Then it becomes as much about Gloria as about the science. She’s a barometer. So from that perspective, they’re right, Jerry, it’s a PR problem first.”

“And if the science succeeds?” Jerry said.

“Then we have a bigger problem,” said Edmund.

Jerry put down his soup spoon and took a large drag on his $30-a-glass Barolo.

“You guys didn’t see this coming?”

“Obviously not,” Edmund said. “It’s a once-in-a-century breakthrough if it happens. You can’t do projections for being hit by an asteroid.”

No one was eating now. The waiter, coming by for a second time, asked if anyone was still working on their soup and no one was. Yes, the soup was fine, but everyone was preoccupied. The uneaten soup disappeared.

At Jerry’s insistence, Russell walked him through what they knew of the research. He made a point of saying that there was no guarantee it would succeed; the odds had to be that it wouldn’t because in the vast majority of research projects there was always some major unanticipated obstacle that would arise to thwart the hoped-for result.

“So what are the chances it will succeed?” Trotter questioned.

Edmund said there was no way to know. He then had Russell talk about the effects such an eventuality would have on LifeDeals’ cash flow. As Edmund and Russell had agreed before meeting with Trotter, Russell erred on the conservative side.

“What’s our position vis-à-vis the public offering?” Jerry directed his question at Max, his partner. He didn’t care that he might offend his lunch hosts.

“The lockup period expires May thirty-first,” Max said.

When an investor takes part in an initial public offering, they can’t sell their shares for a certain amount of time, in this case 180 days. Trotter Holdings was halfway through the mandated blackout period, meaning that Jerry Trotter and his fund were stuck with his shares for another three months.

“Shit. What are the chances of Gloria Croft keeping her mouth shut for three months?”

“Listen, Jerry, life insurance is still a twenty-six-trillion-dollar business,” Edmund said. “There’s plenty of money to be made. These diabetes policies are basically a drop in the bucket. It’s not a question of dumping LifeDeals shares, it’s a problem that needs a solution. That’s why we came to you, you’re the man who deals with problems, everyone knows that.” Edmund was being purposefully flattering and Trotter wasn’t unhappy about it. It’s true, he was a guy who could solve a problem, but this was a big problem and a new problem.

“Gloria Croft is so full of it you wouldn’t believe,” Edmund continued. “She was carrying on, telling us that our life settlement bonds were a bad product. Blah, blah, blah. She even told us that we should have been prosecuted over subprime.”

“She is one sanctimonious bitch, I know that for sure,” Jerry agreed.

“She was enjoying telling us about the research, twisting the knife.”

The pasta was set at each man’s place. There was slightly less tension around the table now—the problem had been identified, there was a common enemy, and the four of them were on the same side. Soup could be resisted, but the pasta was a different proposition, and each of the four men ate.

“Of course, there is a medical angle here, Jerry, that we think you can help us with. And Statistical Solutions is drawing up projections of the effect on revenue if we have to pull the diabetics’ policies. We’re going to need more capital. We can see if we can fill in these capital shortfalls with different initiatives. We’ve already directed our sales teams to go back and beat the bushes for metastatic cancer patients with big policies. It costs more money to buy those policies, but it’s completely risk-free.”

“More money, how so?” Higgins said.

“We’ve authorized the salesmen to offer more than the standard fifteen percent. Metastatic cancer patients are not going to cause us any problem about dying on time. It’s just that we have to be more aggressive to find them.”

“Okay, Edmund, I’m hearing you. Needless to say, Max and I will have to put our heads together and talk about this research issue. We want to see that Statistical Solutions data as soon as you have it, of course. And we have a bunch of meetings this afternoon, so I’m sorry but we have to eat and run.”

Jerry downed another forkful of his lunch and chased it with the remnants of his third glass of wine. The leave-takings were quick and less effusive than the greetings had been when the four men met. Trotter and Higgins left Edmund and Russell behind, picked up their coats and got into their waiting town car on Fifty-fourth Street.

 

 

S
o?” Trotter asked when he was settled in his seat. They were heading south on Park Avenue.

“Gloria Croft,” Higgins said. “She’s a pit bull.”

“I sense there’s history there with Edmund—perhaps it’s more about that than about the product.”

“Maybe it’s both. She’s found a flaw in the model, and it just happens to be Edmund Mathews, so it’s a bonus.”

“Be that as it may, we have to do something,” Jerry said. “And we can’t leave it to those two. They’re floundering, you can tell. There’s too much time till we can sell the stock.”

“I agree. But Edmund has a point: it’s still a good business even if there is a bump in the road with the current model. It will just take some juggling and deep breaths on our part. It’s not a time to panic. Besides, since we can’t sell the LifeDeals stock, we can’t panic even if we wanted to. I also agree that in an ideal world, he should have seen this coming. But our due diligence didn’t pick it up either. It’s a function of the times. Technology’s changing too fast just like markets are changing too fast. It’s getting harder and harder to factor this kind of thing in.”

“Well, I think we need to do some of our own research. A little more street-level. We can’t rely on Edmund et al. for that, clearly. Let’s get an investigator up to Columbia, sniff around a little. And someone can do some digging on Gloria Croft. A woman like that doesn’t get where she is without pissing a lot of people off. And maybe cutting some corners. We need to get some angles to work with, get some leverage.”

“Okay, I’ll get right on it. This is a new one on me—shorting stocks because of a medical breakthrough.”

“It’s new all-round. We may have to get creative,” Trotter said, watching the Park Avenue traffic move slowly in a steady afternoon drizzle.

 

 

J
erry Trotter knew how to make an entrance into a room, and he also knew how to make an exit. Edmund didn’t know what to make of what had just happened. Sure, Jerry was royally pissed when he first heard about the problem, but he seemed calmer when he left. The problem was that the departure had been so sudden.

“What do you think?” Edmund asked Russell. They had ordered cappuccinos.

“For me, Higgins is the brains of that operation, he sees the bigger picture,” said Russell. “It didn’t take him long to zero in on the heart of the problem. They definitely got the message.”

“Do you think they’ll come up with some suggestions?” Edmund asked.

“I do,” Russell said. “I think it was right to tell them early in the game. It feels good to have Jerry Trotter and his team working on this with us. I just hope they get back to us soon.”

“My guess is that he will,” Edmund said. “Jerry isn’t the kind of guy who’s going to watch while his sixty million dollars turns into pocket change. But I do have one reservation.”

“What’s that?”

“I never can be a hundred percent confident Jerry’s working
with
us.”

 

 

P
ia glanced up from her reading to see that it was almost six-thirty, and she wondered how long she was going to have to wait. She was sitting in the deserted lab outside her office, which continued to be off-limits. She was waiting for Rothman, who was still in the biosafety unit trying to finish up the data for the
Lancet
article. Yamamoto had told her to wait because Rothman wanted to speak with her. What about, she had no idea. Whatever it was, it made her feel uneasy.

The day had been interesting in some regards although it had not been one of her best. She had spent the morning doing the lab equivalent of KP duty, washing and rewashing glassware. For the second day in a row Pia had been actually late, not just late by the secretary Marsha Langman’s standards. For the second day in a row George had failed to appear at her door, and she wondered why. It irked her to a degree because she’d come to count on it, even though she was the first to agree that he wasn’t obliged to come and wake her. She’d slept badly again, as she’d been doing for a week or more. As per usual it was nightmares involving childhood memories she’d battled to suppress and which surprised her in their lucidity. Even after years, they still possessed ample power to shock and disturb her.

The head technician, Arthur Spaulding, had seemed amused by Pia’s punishment. He had made a point of detouring when in the lab to pass by Pia, saying nothing. He didn’t have to, his smirk was enough. Spaulding had been at the research center for years, and he liked things done just so. He’d started working for Rothman only in the last eighteen months, and Spaulding got on with him about as well as his predecessor had before he was fired. Spaulding seemed to take exception to any irregular request from Rothman, and Rothman being Rothman, most of his requests were irregular.

“Do you need something, Mr. Spaulding?” Pia said finally on about his fifth pass. “You seem to go out of your way to come over here.”

Spaulding said nothing and left, as Yamamoto had suddenly appeared and come over.

“Miss Grazdani, we would like to see you in the organ bath lab.”

Dr. Yamamoto hadn’t directly said anything about Pia being late, and he didn’t need to; Pia had gotten the message. She suited up quickly and went in the lab to join Lesley and Will, who had been in there all morning. They were standing in a side room with Rothman, who was holding a thick paperback book in one hand and pressing impatiently at the display of a newly installed machine that looked like a large inkjet printer.

“Dr. Yamamoto, it appears we have bought a lemon,” Rothman said.

Will gestured down to the power strip in the wall, and Yamamoto bent down and flicked on the surge protector. The machine wheezed and babbled into life.

“Anyone know what this piece of machinery is?” Rothman said, not missing a beat and bending forward to stare into the innards of the device. As she moved closer, Pia could see how intricate the engineering on the device was, with tracking bars and a large array like the inkjet of a printer. Pia opened her mouth, but Lesley beat her to it. “An organ printer?” She had seen the cover of the book Rothman was holding.

“Yes, for three-D bioprinting. We have an older machine, but this one is new. Someone from the manufacturer is coming tomorrow to show us how to use it.”

“Perhaps we should wait till then to turn it on, Doctor,” Yamamoto said.

“No harm in warming it up. Mr. McKinley, what do you know about three-D bioprinting?”

“I think it works like a regular printer, spraying living cells onto a sheet of . . . a sheet of something. It goes back and forth building up the layers into a three-dimensional structure. The cells can often organize themselves to function collectively. So far it has applications making skin and cartilage.”

“Indeed. You can print a spinal disk. Which I may need to try by tomorrow,” said Rothman, straightening up and rubbing the small of his back.

“We’re all going to get up to speed on this machine together. As this engineering matures it might be quicker than growing organs. At this stage I’m thinking of using it to fix defects in the organs that we’re growing. But who knows? The value of this technology is that an organ would be fashioned as the mirror image of the patient’s by using data from MRI studies. As is often the case with organogenesis, the hardest part is not in replicating the function of the organ, or gland, but in connecting it to the rest of the body—veins, arteries, ducts, and so on have to be oriented appropriately to make the surgery feasible.”

Rothman had found a switch and he toggled it on and off. He then reopened the instruction book and immediately became engrossed.

Yamamoto ushered the students away. Will looked back at Rothman.

“I hope that thing’s still working when the guy comes tomorrow.”

 

 

T
he students spent the rest of the day monitoring the organ baths. They’d found that some did experience small changes in temperature or pH spontaneously, and the three talked with Yamamoto about designing an alarm system even for those minor fluctuations. It seemed to them that even such small changes might impact the results. It was real science, demanding and exciting for each student. Will and Lesley worked closely, keeping a respectful distance from Pia, who was in her own world.