Saturday, July 1, 2017

Shkreli Trial Weekend One Ruminations... How "Fast" Fred Hassan And Mr. Shkreli Differ -- But Do "Echo" One Another...

[Forgive me, as this is a long read. So go grab a cuppa... and return. Note: oddly, I didn't need to photoshop Mr. Shkreli's face at all(!); but I did do so, in 2010, as to Mr. Hassan, at right.] Billy and I were discussing, at least a bit -- in comments yesterday how... ironic if you will -- it was that Mr. Hassan was testifying for the government, against Mr. Shkreli.

At the outset, let me be clear: I absolutely think Mr. Hassan told the truth, yesterday -- on the stand. Without exception. As Billy pointed out -- he has absolutely zero motive to lie: it gains him... nothing. He was simply backing up the truth of what his own daughter told him, and he saw, in some cases, first hand. [Mr. Brafman shouldn't have opened the door on Thursday, to his appearance, as a surprise rebuttal witness. But I digress.]

In any event, I surmise that in Mr. Hassan's eyes, Mr. Shkreli is an insignificant wanna-be -- who tried to "draft" -- and deceptively, so -- off of Mr. Hassan's Tour du France run, in and through pharma, and later, life sciences private equity.... [but Mr. Hassan has enough "London School" in him, to feign humility on the stand, and still destroy Mr. Shkreli -- in icily civil tones, anyway]. Pure upper crust.

As one final side note, before I get to my main narrative thrust -- it is interesting that the pool reporter, in court in Brooklyn, when Mr. Hassan took the stand didn't tweet any of his direct testimony -- only the cross, and redirect. It is interesting because Mr. Hassan works as a color analyst for that same reporter's network from time to time. [I still wonder -- what, exactly did he testify about, on direct? Besides saying his daughter told the truth on Thursday afternoon.]

Now -- to the main point: As Billy well knows, and anyone who followed my life sciences blog in the early days, now almost ten years ago, well-knows: Mr. Hassan is an ironic figure here, because according to hundreds of thousands of pages of federal court filed civil documents in the US District Courts, for the Districts of New Jersey and New York's Southern District (Manhattan) -- among others, he is a velvet gloved version of Mr. Shkreli's price gouging strategems.

But he is an Augusta National Golf Club (white gloved) version of Mr. Shkreli's street ball, at the public Rucker Park concrete courts -- in NYC. [See any old AndOne Rucker tournament (early 2000s) YouTube for the reference; not that Mr. Shkreli could ever hoop, mind you -- nor Mr. Hassan... golf, but you get the gist of the notion.] Mr. Hassan has had his own sketchy encounters... with securities fraud and drug price gouging allegations.

That is, in my opinion, Mr. Hassan (using white gloves, by having "his people" do the dirty work), effectively delayed releasing the ENHANCE clinical trial (null outcome) results on Vytorin®, all while Schering-Plough raked in billions -- literally billions of dollars (often at $320 per bottle, compared to about $32, for the generic statin) -- over five years, minimum (2003 to 2009), for a hideously expensive... placebo [that according to Senator Chuck Grassley, R, IA]. Of course, it is now generic. And in 2016, IMPROVE-IT saw a very modest CV improvement for the med-combo, though it would take seven years of drugging 1,000 people every day, to see one fewer CV event. Ahh... but that was the last war -- not this one.

Mr. Brafman did ask Mr. Hassan -- about the Vytorin affair, on cross -- but we do not know what he asked, or how Mr. Hassan answered. [Pool reporters were... silent, on the substance of those Q&As. We do know they grew "heated", according to pool reporters.] I can be certain that Mr. Hassan told the truth, on cross: as all those federal civil securities fraud class actions, and reimbursement fraud matters were... settled, long ago. But one (just one of many) settled for more than a half-billion dollar payout from Schering-Plough, and its D&O insurers. Mr. Hassan's insurer(s), to put a point on it.

Now -- Mr. Hassan did it (in my opinion), in the "polite" way. Politely, through clenched teeth, and steely smiles -- more like grimaces. That is, he never made an affirmatively boldly false statement -- other than that the Wall Street Journal and the FDA were both being unfair to him (and intentionally trying to keep his drugs off-market), of course (ironic, that, given yesterday's circus in the press room -- with Mr. Shkreli holding court, about the evil press)...

Mr. Shkreli on the other hand, openly told people he was jacking up the price of an old generic AIDS drug -- just because he could. To be clear, that is not what he's on trial for though. He's on trial for openly lying to investors, and committing fraud, in the manipulation of the public securities markets. And for "parking" shares. [Lots more on that, in the coming weeks -- as to Count Eight. Stay tuned.] But if Mr. Hassan were going to protect his own skin (on cross), he would have wanted to create cover for a fellow fraudster. But I honestly think Mr. Hassan thinks he is Mr. Shkreli's "better". He isn't -- not in any way that really matters.

I do think Mr. Shkreli is guilty, on all counts -- and I am entitled to air that bias, now that the jury has been ordered not to read any outside media. But I do not think what Mr. Hassan did in the early part of the 2000s -- at Schering-Plough, and then at Bausch + Lomb, is really different in kind. Only degree -- it is only a more finessed approach to the markets -- one his companies paid vast civil monetary damages for, but he personally did not ever face criminal charges.

Mr. Shkreli richly deserves his fate. But I did nearly gag, when the pool reporter called Mr. Hassan a "legend" [a reporter from the network where Mr. Hassan is a an occasional talking head] in the pharmaceutical world.... I suppose there are dark legends as well as light ones. And no person is all good -- or all evil. Each of these men is a oddly complex mix of... both. Mr. Shkreli the more brazen of them, to be sure -- but both have always been infected with a pathological level of greed, in my opinion. They are different by degree (and pedigree), not kind, in my view. [And candidly I too (to many may appear to be -- scratch that -- am) one of the guilty one percenters, so this all may seem rather hypocritical -- but I do try to add value to any situation I enter . Truly, I do mightily try to leave it better than I found it, for all.] But I do not always achieve that, in deal-craft. So it goes.

So I'll close thus -- maybe the assigned pool reporter for Friday morning didn't want (or was instructed by downtown not) to tweet out any of the above -- potentially tarnishing the network's vaunted color commentary analyst, on matters life sciences. That's just a guess. You decide for yourselves -- whatever it is you choose to believe.

Have a freedom-laced Fourth, one and all -- and do try to ignore Agent Orange, altogether. Likely silent here, until the Fifth, at 9 AM EDT when trial resumes.


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