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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: This is a Bloomberg Business Flash Strom, Bloomberg World Headquarters.

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Speaker 1: I'm Charlie Pelota. A mixed picture for stocks. The SMP

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Speaker 1: five hundred index is fluctuating right now. It is up

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Speaker 1: got the Dow Jones Industrial Average up forty seven points,

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Speaker 1: around the world. I see d R dot org. Right now,

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Speaker 1: the tenure up three thirty seconds, the old one point

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Speaker 1: five six percent, gold of a dollar sixty the ounce

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Speaker 1: to twelve ninety a gain of point one percent, and

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Speaker 1: rude oil declining one point seven percent, down three and

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Speaker 1: a half percent now to forty six dollars twenty nine

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Speaker 1: cents for barrel of West Texas Intermediate crude. I'm Charlie

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Speaker 1: Palett and that's a Bloomberg Business Flash. You're listening to

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Speaker 1: Taking Stock with Kathleen and pin Box on Bloomberg Radio.

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Speaker 1: Dr Philip Frost is a physician a dermatologist who has

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Speaker 1: become a billionaire investor as the chairman and CEO of

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Speaker 1: UPco Health, one of the most respected entrepreneurs in healthcare.

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Speaker 1: He sat down with taking Stock to discuss his company's

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Speaker 1: product pipeline, his views on drug pricing, and what his

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Speaker 1: current outlook is for the pharmaceutical industry. I think we're

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Speaker 1: living in a very special time in the history of

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Speaker 1: the pharmaceutical industry and then the history of man for

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Speaker 1: that matter. For the less one years, we've been accumulating

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Speaker 1: the technological infrastructure that has permitted the stepwise the helpment

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Speaker 1: of more and more specific, more and more effective drugs.

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Speaker 1: And we're at the point now where there's enough critical

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Speaker 1: mass of technology with enough people working in the field

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Speaker 1: so that they can bring together these new resources to

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Speaker 1: create all kinds of therapy. So within the next ten

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Speaker 1: twenty years, I imagine that a lot of the conditions

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Speaker 1: that were not approachable will all of a sudden be

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Speaker 1: treatable and curable. We see little by little that happening.

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Speaker 1: So from our point of view, we are very excited

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Speaker 1: to be able to participate that in whatever way we can,

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Speaker 1: even if it's a small part, but there is a

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Speaker 1: lot to be done and we're excited. Well, give us

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Speaker 1: an update on some of the drugs that you have developed,

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Speaker 1: and I'd like to start with four key score because

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Speaker 1: is potentially a game changer for anyone who is unfortunate

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Speaker 1: to come down with aggressive prostate cancer. You're absolutely right.

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Speaker 1: The four case square was developed in large measure right

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Speaker 1: here in New York at Memorial Slumpcuttering Hospital by Peter

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Speaker 1: Scardino and his team. Peter was at the time the

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Speaker 1: head of the urology section. Now he's the head of surgery,

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Speaker 1: but he, working with a team in Finland who had

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Speaker 1: been added for at least a dozen years, perfected the test,

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Speaker 1: which involves using four different enzymes that a man produces

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Speaker 1: in his g US system, one of which is the

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Speaker 1: p s A, a test that has been maligned recently,

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Speaker 1: but the other three are in the same category called

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Speaker 1: calicrons as the p s A. Two of them are

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Speaker 1: proprietary to OpCo and occur in the blood primarily when

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Speaker 1: there is a serious prostate cancer present, unlike the p

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Speaker 1: s A, which is more associated with a benign conditions.

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Speaker 1: So the bottom line is that the four case score,

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Speaker 1: a simple blood test that we can perform in our laboratories,

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Speaker 1: will permit you to identify a man who has a

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Speaker 1: serious cancer in the making, a serious press cancer, and

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Speaker 1: so that that's the man that you want to watch

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Speaker 1: carefully and possibly treat. And the problem, of course is

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Speaker 1: that the p s A results in over seventy false

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Speaker 1: positives in the sense that they either have no disease

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Speaker 1: on biopsy or a benign indolent form that doesn't need

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Speaker 1: to be treated. So this net effective. This is that

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Speaker 1: we can avoid more than fifty of the biopsies that

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Speaker 1: are now done. And I'm told that this is one

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Speaker 1: of the most unpleasant experiences a man will ever go through,

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Speaker 1: and at the same time pick up the important cancers

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Speaker 1: if they're present, and at the same time save the

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Speaker 1: health system a lot of money from the needless biopsies

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Speaker 1: and the consequences of bleeding and infection and so forth.

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Speaker 1: So there's the physician talking, the scientists talking. What about

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Speaker 1: the businessman. Because you can have the best drug, the

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Speaker 1: best test in the world, and if you can't get

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Speaker 1: something like a local coverage determination, if you can't get

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Speaker 1: Medicare to say we'll pay for this so that other

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Speaker 1: physicians and hospitals will pay for it, it's tough to

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Speaker 1: get it to the people who need it, and it's

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Speaker 1: tough to make money. So that's very, very true. But

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Speaker 1: we're extremely confident because the data is so compelling. There

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Speaker 1: are over a dozen UH publications in peer review journals

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Speaker 1: from all over the world. It's been given the stamp

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Speaker 1: of approval by the A m A, by the NCC

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Speaker 1: and the National Cancer Board that determines these matyrs and

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Speaker 1: other prestigious groups. The data is so overwhelming that we've

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Speaker 1: think that the re that the payers will up for reapprosement,

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Speaker 1: and we are already getting payment for many of the

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Speaker 1: important payers. Just recently, there were a few missteps one

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Speaker 1: of the so called max of which there is more.

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Speaker 1: There are perhapsimately a dozen around the country. These are

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Speaker 1: the agents that are contracted by Medicare to evaluate new tests.

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Speaker 1: One of them came up with a positive opinion A

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Speaker 1: AN L C D, and the next day another one

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Speaker 1: came with a negative, after which the first positive one

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Speaker 1: was withdrawn. This is what I consider a misstep or

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Speaker 1: not necessarily in our part, because we never really submitted

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Speaker 1: the data for them to consider. So everyone is aware

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Speaker 1: of this and we're in the process of dealing with that. Eventually,

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Speaker 1: it has the opportunity, I think, to become, from an

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Speaker 1: economic point of view, one of the more important tests

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Speaker 1: in the history of the diagnostics business. So what does

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Speaker 1: it do for your bottom line? Eventually? I think it

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Speaker 1: will be a very important contributor, a very important acquisition

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Speaker 1: for you. Last year, bio Reference the third largest full

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Speaker 1: service reference laboratory in the United States. How it's doing

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Speaker 1: since you acquired it, and how it fits into the

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Speaker 1: overall strategy and growth plan for OpCo Health. Well, this

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Speaker 1: is a perfect example of the type of acquisition that

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Speaker 1: we're interested in doing any day of the week. It

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Speaker 1: added over a billion dollars of annual sales and it's

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Speaker 1: going to add a lot of profit. But even more important,

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Speaker 1: from a strategic point of view, it's going to permit

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Speaker 1: the more rapid marketing and sales and uptake of the

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Speaker 1: four case score, which, as I had mentioned, has the

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Speaker 1: opportunity for being one of the most important tests in

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Speaker 1: the history of the industry. And it will become an

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Speaker 1: outlet for many of the new diagnostic products that we have.

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Speaker 1: While on its own, it's growing with their normal business,

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Speaker 1: one part of which is particularly exciting, and that's genomic testing.

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Speaker 1: They are probably doing more gene sequencing than any company

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Speaker 1: in the industry right now, and that part of the

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Speaker 1: business is growing more quickly, and it's a more profitable

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Speaker 1: part of the business than the rest of it. In retrospect,

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Speaker 1: was a tremendous acquisition, both from a straight economic point

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Speaker 1: of view as well as a long term strategic point

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Speaker 1: of view. Revenue of two fifty million dollars in the

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Speaker 1: first quarter of this year, you say, if you get

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Speaker 1: much bigger, well we're going hours. We anticipate that it

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Speaker 1: will be well over a billion dollars for the calendar year.

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Speaker 1: Just switching gears a bit, but certainly pricing, selling, marketing.

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Speaker 1: Valiant Pharmaceuticals a poster child now for a predatory pricing

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Speaker 1: model using that to boost growth. Has that hurt the industry?

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Speaker 1: Has it? How does it affect what you do or

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Speaker 1: don't do? You know, I've been giving that a lot

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Speaker 1: of thought lately because there's so much discussion about pricing

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Speaker 1: in the industry, and you know that there are always

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Speaker 1: opportunities to exploit a given a situation to the disadvantage

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Speaker 1: of the patient and and payers. My experience and observation

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Speaker 1: is that in general the industry is highly ethical and

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Speaker 1: very very much sensitive to the needs of patients and

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Speaker 1: the players and the health system in general. But my

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Speaker 1: thought was that looking at our product, for example, it

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Speaker 1: costs a hell of a lot to develop a drug,

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Speaker 1: both in human terms the time and energy of a

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Speaker 1: large number of people and a lot of money, and

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Speaker 1: there's a lot of risk associated with it. We all

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Speaker 1: know that of the drugs that are started in development,

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Speaker 1: a tiny percentage point up coming to market. So taking

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Speaker 1: all that into account, if the companies are to be

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Speaker 1: profitable so that they can continue to do the research

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Speaker 1: and turn out these good products that are going to

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Speaker 1: be breakthroughs in medicine and future, they need to make

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Speaker 1: a profit. So the prices that I'll admit seemed very

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Speaker 1: high for many products most often have a tremendous justification

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Speaker 1: behind him. That was Dr Philip Frosty is the chairman

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Speaker 1: and the chief executive of up Go Health. Up Go

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Speaker 1: Health that shares down a little bit more than seven

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Speaker 1: and a half percent so far this year. And Kathleen,

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Speaker 1: I know in speaking with the Dr Frost, he's got,

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Speaker 1: of course, of major interest in the success of the

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Speaker 1: company because he owns nearly thirty percent of the stock

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Speaker 1: of UPco Health. You know him. He is such an

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Speaker 1: impressive man, uh well along in life and so focused

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Speaker 1: and so innovative and and looking for the next successful,

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Speaker 1: profitable and very helpful to mankind treatment and drug whatever

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Speaker 1: it is. He's well, very interesting conversation about the new

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Speaker 1: test for prostate cancer and his thoughts on drug some issues.

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Speaker 1: You're listening to taking Stock. I'm Pim Fox my co

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Speaker 1: host Kathleen Hayes, and you're listening to Bloomberg Radio.