This sounded weird to Leo, like Indians offering a peace pipe, or college students passing around a bong, but Bannet didnt blink; a PIPE was one of their mechanisms for investment, as Leo quickly learned. Private Investment in Public Equity. And for once it was a pretty good acronym, because it meant creating a pipeline for money to run directly from their cash-flush fund to Dereks penniless company.
But Bannet was a veteran of all this, alert to all the little strategic opacities that were built into Dereks typical talk to stockholders or potential investors. Something like sixty percent of biotech start-ups failed, so the danger of losing some or all of an investment to bankruptcy was very real. No way Derek could finesse him. They would have to come clean and hope he liked what he saw.
Derek finished leading Bannet through a series of financial spreadsheets on his laptop, unable to disguise their tale of woe. Bad profit and loss; layoffs; sale of some subsidiary contracts, even some patents, their crown jewels; empty coffers.
Weve had to focus on the things that we think are really the most important, Derek admitted. Its made us more efficient, thats for sure. But it means there really isnt any fat anywhere, no resources we can put to the task, even though its got such incredible potential. So, it seemed like it was time to ask for some outside funding help, with the idea that the financing now would be so crucial that the returns to the investor could and should be really significant.
Uh-huh, Bannet said, though it wasnt clear what he was agreeing with. He made thoughtful clucking sounds as he scanned the spreadsheets, murmuring, Um hmmm, um hmmm, in a sociable way, but now that he was thinking about the information in the spreadsheets, his face betrayed an almost burning intensity. This guy was definitely one of the passionate ones.
Tell me about this algorithm, he said finally.
Derek looked to Leo, who said, Well, the mathematician developing it is a recent hire at Torrey Pines, and hes been collaborating with our lab to test a set of operations hes developed, to see how well they can predict the proteins associated with any given gene, and as you can see, clicking his own laptop screen to the first of the project report slides, its been really good at predicting them in certain situations, pointing to them on the screens first slide.
How would this affect the targeted delivery system youre working on?
Well, right now its helping us to find proteins with ligands that bind better to their receptor ligands in target organ cells. Its also helping us test for proteins that we can more successfully shove across cell walls, using the hydrodynamic methods weve been investigating for the past few months. He clicked ahead to the slide that displayed this works results, trying to banish Brians and Martas names from his mind; he definitely did not want to call it the Popping Eyeball Method, the Exploding Mouse Method. As you can see, pointing to the relevant results, saturation has been good in certain conditions. This seemed a little weak, and so he added, The algorithm is also proving to be very successful in guiding work weve been doing with botanists on campus, on algal designs.
How does that connect with this?
Well, its for plant engineering.
Bannet looked at Derek.
Derek said, We at TPG plan to use it to pursue the improvement of targeted delivery. Clearly the method is robust, and people can use it in a wide variety of applications.
But there was no hiding it, really. Their best results so far were in an area that would not necessarily ever become useful to human medicine. And yet human medicine was what Torrey Pines Generique was organized to do.
It looks really promising, eh? Derek said. It could be that its an algorithm that is like a law of nature. The grammar of how genes express themselves. It could mean a whole suite of patents.
Mm hmmm, Bannet said, looking down again at Dereks laptop, which was still at the financial page. Almost pathetic, really; except it must have been a fairly common story, so that Bannet would not necessarily be shocked or put off. He would simply be considering the investment on a risk-adjusted basis, which would take the present situation into account.
Finally he said, It looks very interesting. Of course its always a bit of a sketchy feeling, when youve gotten to the point of having all your eggs in one basket like this. But sometimes one is all you need. The truth is, I dont really know yet.
Derek nodded in reluctant agreement. Well, you know. We believe very strongly in the importance of therapies for the most serious diseases, and so we concentrated on that, and now we kind of have to, you know, go on from there with our best ideas. Thats why weve focused on the HDL upgrade. With this targeted delivery, it could be worth billions.
And the HDL upgrade
We havent published those results yet. Were still looking into the patent situation.
Leos stomach tightened, but he kept his face blank.
Bannet was even blanker; still friendly and sympathetic enough, but with that piercing eye. Send me the rest of your business plan, and all the scientific publications that relate to this. All the data. Ill discuss it with some of my partners here. It seems like the kind of thing that Id like to get my partners inputs on. Thats not unusual, its just that its bigger than what I usually do on my own. And some of my colleagues are into agropharmacy stuff.
Sure, Derek said, handing over a glossy folder of material he had already prepared. I understand. We can come back and talk to them too if you like, answer any questions.
Thats good, thanks. Bannet put the folder on the table. With a few more pleasantries and a round of hand-shaking, Derek and Leo were ushered out.
Leo found he had no idea whether the meeting had gone well or poorly.
CHAPTER 7
TIT FOR TAT
Money is the mothers milk of politics, said Jesse Unruh long ago, but he might have been quoting something tapped in cuneiform on the tablets of Ur. Money is power; politics is the fight for power; politicians need money to stay in office; and so they all congeal together. Influence is the sour milk of politics.
Spending money on political campaigns is legal as part of the First Amendments right to free speech, or so it has been asserted, most notably by the Roberts Supreme Court. So rich people are very loud speakers. This was something Phil Chase noticed every time he attended a fund-raiser, which happened on average twice a day. Some days his staff gave him a pass or failed to find suitable events, but other days were packed with half a dozen events, sequenced meticulously and carried out like commando operations. Cutting cash out of the heart of capital. Phil called it charm piracy, but only in conversation with his most trusted staffers. They laughed and told him to do his job.
Phil was one of the least wealthy senators, and had famously funded one of his earliest campaigns by asking supporters to send him all the change on their dressers and elsewhere in the house. Youll be glad to get rid of it, he said. Just be sure to pay the shipping costs too, or else Ill pay more in mail costs than I take in. Which was true; but mostly people paid for the postage, and he took in many tons of cash. Photos of him standing chest-deep in coins were popular.
Phil was one of the least wealthy senators, and had famously funded one of his earliest campaigns by asking supporters to send him all the change on their dressers and elsewhere in the house. Youll be glad to get rid of it, he said. Just be sure to pay the shipping costs too, or else Ill pay more in mail costs than I take in. Which was true; but mostly people paid for the postage, and he took in many tons of cash. Photos of him standing chest-deep in coins were popular.
Now it wasnt like that anymore. Breakfasts, lunches, dinners, cocktail parties, mixers, seminars, meetings, soirées: each was important to the people there, so Phil had to gear up and perform, be there, be on. Luckily he enjoyed it. This was what made him good; he liked talking to people, he liked to perform. He thought if you gave him a chance, he could persuade you. Most people get over that, after experience teaches them otherwise, but Phil had the pigheadedness of his convictions.
Teachers union, Chamber of Commerce, environmental NGO, liberal think tank, a pod of whales (he was friends with many big donors); this was just one day. The science of any given Wednesday. So look, he would say, looking the donors in the eye, anything you give the campaign will get well spent. You know my beliefs, and Ill never deviate from pursuing those beliefs, thats my promise. He thought it helped that he himself made the ask. His development people (i.e., his fund-raisers) werent so sure, but he was the boss. And money kept coming in. Two fund-raisers a day, every day; thus seven hundred a year; thus 4,200 events in each term as senator. Money is speech; people like to talk; and loud people have things to say. Getting rich gave them lots of opinions. Phil was happy to let them speak through him.
Although sometimes, late at night, being driven back through the great dark capital, he would lean back in his seat and murmur, Campaign finance reform. Roy, look into that again, will you?
Sure thing boss.
What have we got tomorrow?
Breakfast with the Finance Reform Investment Group.
Really? Breakfast?
Phil, youll eat those guys for breakfast.
True. But I hate the taste they leave in my mouth. Campaign finance reform, Roy. Write me up a bill about that. Pull out the file.
Sure thing boss.
Then whos for lunch?
You dont want to know.
Anna flew through the blur of a midweek day. Up and off, Metro to the office; pound the keys, the spreadsheet work eating up hours like minutes. Stop to pump, then to eat at her desk (it felt a little too weird to eat and pump at the same time), all the while data wrangling. Then a look at an e-mail from Drepung and Sucandra about their grant proposals.
Anna had helped them to write several proposals, and that had been fine, as they did all the real work, while she just added her expertise in grant writing, honed through some tens of thousands of grant evaluations. She definitely knew how to sequence the information, what to emphasize, what language to use, what supporting documents, what arguments. Every word and punctuation mark of a grant proposal she had a feel for, one way or the other. It had been a pleasure to apply that expertise to help the Khembalis.
Now she was pleased again to find that they had heard back from three of them, two positively. NSF had awarded them a starter grant in the Tropical Oceans, Global Atmosphere effort; and the INDOEX countries had agreed to include a big new monitoring facility on Khembalung. Altogether it meant funding streams for several years to come, tens of millions of dollars all told, with infrastructure built, and relationships with neighboring countries established.
Very nice, Anna said, and ccd the news to Charlie, sent congratulations to Drepung, and then got back to work on her spreadsheet.
After a while she remembered about some sheets she had printed up, and went around the corner to the Department of Unfortunate Statistics. She found Frank inside, shaking his head over the latest.
Have you seen this one? he said, gesturing with his nose at a taped-up printout of yet another spreadsheet.
No, I dont think so.
Its the latest Gini figures, do you know those?
No?
Theyre a measurement of income distribution in a population, so an index of the gap between rich and poor. Most industrialized democracies rate at between 25 and 35, thats where we were in the 1950s, see, but our numbers started to shoot up in the 1980s, and now were worse than the worst third-world countries. Forty or greater is considered to be very inequitable, and were at 52 and rising.
Anna looked briefly at the graph, interested in the statistical method. A Lorenz curve, plotting the distance away from perfect equalitys straight line, which would tilt at forty-five degrees.
Interesting So this is for annual incomes?
Thats right.
So if it were for capital assets
It would be worse. Frank shook his head, disgusted. He had come back from San Diego in a foul mood. No doubt anxious to finish and go home.
Well, Anna said, the Khembalis have gotten a couple of grants.
Very nice, did you do it?
I just pointed them at things. Theyre turning out to be good at following through. And I helped Drepung rewrite their grant proposals. You know how it is, after doing this for a few years, you do know how to write a grant proposal.
No lie. Nice job. Good to see someone doing something.
Anna returned to her desk, glancing after him. He was definitely edgy these days. He had always been that way, of course. Dissatisfied, cynical, sharp-tongued; it was hard not to contrast him to the Khembalis. Here he was, about to go home to one of the best departments in one of the best universities in one of the nicest cities in the worlds richest country, and he was unhappy. Meanwhile the Khembalis were essentially multigenerational exiles, occupying a tidal sandbar in near poverty, and they were happy.
Or at least cheerful. She did not mean to downplay their situation, but these days she never saw that unhappy look that had so struck her the first time she had seen Drepung. No, they were cheerful, which was different than happy; a policy, rather than a feeling. But that only made it more admirable.
Well, everyone was different. She got back to the tedious grind of wrangling data. Then Drepung called, and they shared the pleasure of the good news about the grant proposals. They discussed the details, and then Drepung said, We have you to thank for this, Anna. So thank you.
Youre welcome, but it wasnt really me, its NSF.
But you piloted us through the maze. We owe you big-time.
Anna laughed despite herself.
What?
Nothing, its just that you sound like Charlie. You sound like youve been watching sports on TV.
I do like watching basketball.
Thats fine. Just dont start listening to rap, okay?
You know me, I like Bollywood. Anyway, you must let us thank you for this. We will have you to dinner.
That would be nice.
And maybe you can join us at the zoo when our tigers arrive. Recently a pair of Bengal tigers were rescued off Khembalung after a flood. The papers in India call them the Swimming Tigers, and they are coming for a stay at the National Zoo here, and we will have a small ceremony when they arrive.