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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along

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Speaker 1: with my co host of Bonnie Quinn. Every business day

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Speaker 1: we bring you interviews from CEO, market pros, and Bloomberg experts,

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Speaker 1: along with essential market moving news. Find the Bloomberg Markets

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Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts,

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Speaker 1: and on Bloomberg dot com. What's been quite the two

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Speaker 1: days for Tesla. It had its worst one day loss

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Speaker 1: ever yesterday just on the SMP five hundred snubs, so

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Speaker 1: it's not in the SMP five Also GM backing Nicolo,

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Speaker 1: which is a little bit of a rival in some senses.

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Speaker 1: Our next guests say, is that, you know, maybe that

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Speaker 1: down draft was not completely unexpected, nor was it, you know, unreasonable.

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Speaker 1: We are up eight percent today, but let's bring in

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Speaker 1: our next guest now to tell us exactly why he

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Speaker 1: believes that Tesla may have some room to go below

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Speaker 1: where it is right now. Gordon Johnson is CEO and

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Speaker 1: founder of g LJ Research. So, Gordon, yesterday you know

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Speaker 1: we were blaming sort of the lack of inclusion in

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Speaker 1: the s and P five hundred for the sell off.

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Speaker 1: There was also the Nastack sell off. More generally, would

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Speaker 1: you say Tesla deserves to be valued much lower than

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Speaker 1: it is right now? And there are several reasons behind that.

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Speaker 1: Take us through some of them. Right, So we have

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Speaker 1: a nineteen dollar price target on Tesla more than downside.

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Speaker 1: That's the one year and price started right Tesla's around,

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Speaker 1: you know, just under four hundred dollars. Keep in mind,

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Speaker 1: till right stock went from two hundred to five first

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Speaker 1: solar stock went a while ago from two hundred to twelve,

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Speaker 1: so you can see moves like this. Listen, Tesla is

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Speaker 1: a busted growth story. UM. Their US revenues peaked in

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Speaker 1: the fourth quarter of eighteen, their global revenues peaked essentially

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Speaker 1: in the fourth quarter of eighteen. Um they're global, I'm sorry,

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Speaker 1: they're auto. Growth margins peaked in the third quarter of eighteen.

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Speaker 1: And listen, even if Tesla hit their guidance for five

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Speaker 1: five hundred thousand cars delivered this year, that's only sixty

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Speaker 1: of their capacity. They're expected capacity exiting this year before

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Speaker 1: they build two more plans in Germany and the United States.

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Speaker 1: So they're only selling of their existing capacity. Uh, that's

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Speaker 1: a very negative dynamic. It's just no one talks about.

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Speaker 1: So we think that Tesla. I'm sorry, go ahead, Well,

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Speaker 1: I was just going to point out that till Ray,

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Speaker 1: which he referenced as a cannabis company, they make medicines

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Speaker 1: and drugs and drops and so on, and for a

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Speaker 1: solar is obviously a solar module company. Very different stories though,

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Speaker 1: albeit you know that the same type of company in

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Speaker 1: terms of what people invest in. I suppose if if

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Speaker 1: you want to talk about growth companies, but but so

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Speaker 1: is Amazon, and you know you wouldn't fold Amazon for

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Speaker 1: having a capacity greater than what it's delivering upon, So

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Speaker 1: wife all Tesla. Right, So Amazon is a very different company, right,

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Speaker 1: people who often make that comparison, but we think Tesla

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Speaker 1: is more like a O L or BlackBerry. Right. They're

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Speaker 1: the first stout with evs and now everybody's coming with competition.

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Speaker 1: Um So, I think there's big misconceptions out there. Tesla

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Speaker 1: does not make their own batteries. I think a lot

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Speaker 1: of your listeners think they do. They buy batteries from Panasonic,

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Speaker 1: C A, T L and LG Kim. LG Kim just

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Speaker 1: signed a deal with GM. Anybody can buy those batteries

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Speaker 1: that Tesla buys Panasonic. Anybody can buy the batteries that

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Speaker 1: Tesla buys, and the same with with C A t

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Speaker 1: L and T A p L has a million mile battery. Listen,

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Speaker 1: people talk about, you know, evs being disruptive, electric vehicles

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Speaker 1: being disruptive. Here's the reality. In the United States twenty

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Speaker 1: eleven and nine uh total evs, not just Tesla's. Here,

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Speaker 1: Tesla total electric vehicles have went from point three percent

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Speaker 1: of the market to one point four percent, right, you know,

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Speaker 1: that's not disruption. And globally e vs twenty nineteen have

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Speaker 1: went from point three percent of the market to one

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Speaker 1: point seven percent one point seven percent. So both in

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Speaker 1: the in the world and the US, despite billions of

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Speaker 1: dollars of government and centims you know, basically handed out

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Speaker 1: to people buying vise, people just don't want to buy them,

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Speaker 1: so they're not disruptive. And with respect to Tesla, listen,

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Speaker 1: Tesla is not a technology leader. Right. People talk about

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Speaker 1: full self drive. They have this thing called full self drive.

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Speaker 1: If they sell for eight thousand dollars a pop. We

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Speaker 1: think it's vapor ware. We think it doesn't exist. Consumer

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Speaker 1: Reports just did a review of it. It was a

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Speaker 1: scathingly negative review, and Elon Musk is on record in

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Speaker 1: teams and consumer report reports. Is always um always fair,

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Speaker 1: they said, it's not when it's cracked up to being

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Speaker 1: it's dangerous for the driver and other people on the road.

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Speaker 1: And Navigant ranks Tesla dead last and full self drive.

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Speaker 1: My point is, I think that a lot of your

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Speaker 1: listeners will probably think their ranked first, given where the

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Speaker 1: stock price did and how people say they're a tech

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Speaker 1: leader and disruptive. But the reality is just so much

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Speaker 1: different um than um. You know what people think and

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Speaker 1: we think. As numbers come out, you know things are

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Speaker 1: gonna look bad. One other thing, if you take away

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Speaker 1: the one time credit revenues, right, Tesla basically gets taxpayer

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Speaker 1: and sentiff to sell credits to other automakers who previously

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Speaker 1: weren't selling, weren't making evs. Now every automaker's a making evy.

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Speaker 1: But if you take away those one time credit sells

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Speaker 1: over the past twenty four quarters and only four of

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Speaker 1: those quarters has has has Tesla been profitable? The most

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Speaker 1: recent which was Reach You nine three Q three Q nineteen.

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Speaker 1: The point is, um even in two cute this most

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Speaker 1: recent quarter, taking away those one time sales, they lost

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Speaker 1: three hundred million on the night income line. This company

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Speaker 1: is a perpetual loss making company excluding those excluding those

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Speaker 1: credit cells. And those credit cells they're guiding down in

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Speaker 1: the back half and they're gonna basically go away next year.

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Speaker 1: So it sounds like you have secular arguments based on

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Speaker 1: you know, people's preferences free easse and do you have

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Speaker 1: sort of individual problems with Tesla itself? Almost out of time,

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Speaker 1: but I do want to ask you what you think

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Speaker 1: of Nicola. Do you think Nikola is also you know,

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Speaker 1: smoking mirrors as you seem to think Tessa is. Well,

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Speaker 1: one other thing I want to highlight on Tessa. Right,

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Speaker 1: if you go to one La must said they were

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Speaker 1: gonna be profitable going forward forever and they never need

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Speaker 1: to raise money again. A month later, they lost seven

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Speaker 1: hundred million dollars, and since then they've raised ten billion dollars.

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Speaker 1: Right when he said they're never gonna need to raise

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Speaker 1: money again. Just last year, right, they said they were

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Speaker 1: gonna have a million robo taxes on the road. This

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Speaker 1: year they use that promise to raise a billion dollars.

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Speaker 1: There's not one robot taxi on the road. So again people,

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Speaker 1: you know, people talk about these promises that Elon musk

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Speaker 1: makes and I you know, I highlight this. You know,

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Speaker 1: given the battery days coming up. Keep in mind it's

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Speaker 1: fifteen Elon must sit in a year to two years,

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Speaker 1: your testa will be able to do over SIS on

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Speaker 1: one charge. They're still not They're still not there. So

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Speaker 1: he makes these promises he doesn't meet. With respect to Nicola,

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Speaker 1: listen the GM investment yesterday, no cash was changed the

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Speaker 1: hands right. GM took an ownership interest in Nicola, and

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Speaker 1: Nicola gave GM shares um. With respect to Nicolas technology,

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Speaker 1: you know, we're going to actually have to get that

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Speaker 1: Nicola thought from you another time. We are out of time. Gordon,

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Speaker 1: thank you so much for joining us today, though much

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Speaker 1: appreciated from g l J researcher at Gordon Johnson. The

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Speaker 1: ten year yield at sixty seven basis points, the two

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Speaker 1: stands spread at nearly fifty four basis points. What exactly

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Speaker 1: is the focus for the treasury market liston right now? Well,

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Speaker 1: let's bring in Jim Vogel of f h N Financial.

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Speaker 1: Following all of the data and interest rates and rates

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Speaker 1: mark it's for the last X number of years. Jim.

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Speaker 1: It is great to have you on. It's been a

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Speaker 1: really interesting right, and equities, but rates have been sort

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Speaker 1: of like the cows watching equities passed by quite happily.

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Speaker 1: Oh yes, And what they're really focused on right now

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Speaker 1: is the supply this week, uh CPI on Friday, and

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Speaker 1: then the Fed next week. You're absolutely right, equities for

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Speaker 1: the moment as far as rates are concerned, or aside

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Speaker 1: to right. So what is this calm in the treasury market?

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Speaker 1: Is it just the absolute conviction that central banks are

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Speaker 1: going to you know, keep underpinning the fundamentals of the

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Speaker 1: economy and that central banks will also save us should

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Speaker 1: inflation get out of control, like stan Rock and Miller

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Speaker 1: is telling c NBC, or should we see deflation, which

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Speaker 1: sand Rock and Miller is also telling CNBC. Well, Um,

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Speaker 1: the couple of things. The main one is that right

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Speaker 1: now the bond market is more uncertain than many of

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Speaker 1: the pundits and the people that appear on the media

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Speaker 1: on a regular basis, and so they're waiting to see

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Speaker 1: what happens and develops. Because we do have the election,

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Speaker 1: we've got the what the Congress is going to consider

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Speaker 1: with fiscal stimulus, and then we have the next steps

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Speaker 1: that the Fed is going to employ Meanwhile, many of

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Speaker 1: the people that sat on liquidity during the early part

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Speaker 1: of the third quarter are continuing to put that money

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Speaker 1: to work. So you have the tension of uncertainty against

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Speaker 1: the need for people to continue to spend cash. That's

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Speaker 1: so interesting. So there's an underlying tension there that may

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Speaker 1: not be obvious if you just look at the actual levels.

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Speaker 1: So when do we get a change in that gym?

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Speaker 1: Does does something happen? You know, does does the dam break?

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Speaker 1: At some point? It does? There are two things to watch.

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Speaker 1: One is the actual credit experience that will start to

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Speaker 1: see from households and small businesses in terms of delinquencies

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Speaker 1: and unfortunately the possibility of defaults and charge offs in

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Speaker 1: the fourth quarter. And then the second is the progress

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Speaker 1: that we make on the twin of vaccine development and

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Speaker 1: then how the US continues to try to adapt to

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Speaker 1: the pandemic without a vaccine today. Yeah, do you have

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Speaker 1: a base case at f H engine or just yourself,

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Speaker 1: what is your base case for how the economy reacts?

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Speaker 1: You know that we're in the W camp, so that

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Speaker 1: the fourth quarters um disappoints relative to current expectations. Uh,

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Speaker 1: and that creates the opportunity for people to rethink the

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Speaker 1: idea that inflation is going to run out of control

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Speaker 1: simply because the FED has changed uh its approach to

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Speaker 1: managing um their policy for the next four to five years.

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Speaker 1: What did you make of that is something that you're anticipating,

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Speaker 1: and what does it change practically for traitors of rates

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Speaker 1: or those trying to conserve some cash. For the most part,

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Speaker 1: the FED changes reflect things that are going to happen

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Speaker 1: maybe in the next two to three years. It's unlikely

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Speaker 1: that they come into play at any point in in

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Speaker 1: so there's time to consider what the Fit's going to do.

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Speaker 1: The big reason for the change was is that the

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Speaker 1: old policy just simply was not working and it needed

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Speaker 1: to change. It's not a revolution, it's an education process

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Speaker 1: for everyone, Jim. Outside of the obvious, you know unemployment,

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Speaker 1: under employment, you know social inequality, all of the things

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Speaker 1: that are troubling the US at the moment and that

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Speaker 1: have potential implications for the bond market. Do you look

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Speaker 1: outside the US for other challenges, obviously China being one.

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Speaker 1: So you have to constantly watch the combination of the

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Speaker 1: demographics of an aging population in Europe and the dependence

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Speaker 1: of the European economy on emerging market growth. So there's

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Speaker 1: stories that started literally five or six years ago that

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Speaker 1: are still going to be with us when we come

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Speaker 1: out on the other side from the pandemic. Yeah, that's

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Speaker 1: for sure. You talk about Europe there, and we did

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Speaker 1: see a move in yields yesterday. But essentially, as you're

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Speaker 1: talking about negative yields and Europe, you know, how much

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Speaker 1: does it matter whether we have a five or six

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Speaker 1: basis point move and say a French bond or a

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Speaker 1: German bond, Right, we need something like a thirty to

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Speaker 1: forty basis point change in terms of the outlook and

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Speaker 1: the landscape for European interest rates, and that is perhaps

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Speaker 1: possible by two, but it's not a near term event either.

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Speaker 1: Do you see inflation becoming a problem, you know, in

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Speaker 1: the next decade, Jim. If it becomes a problem, it's

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Speaker 1: going to be because the spending patterns and the consumption

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Speaker 1: patterns of the next generation that's coming behind the Boomers

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Speaker 1: fundamentally changes their attitude toward um spending and the mount

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Speaker 1: they borrow. So inflation comes from uh in effect, credit

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Speaker 1: fueled spending that was the hallmark of the Boomer generation

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Speaker 1: so far that has not been absorbed by the cohort

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Speaker 1: coming up that that has already past the boomers in

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Speaker 1: terms of its total size in the US. That is

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Speaker 1: so fascinating. And Jim, before we let you go out

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Speaker 1: of time, really, but how is Memphis, Tennessee? These days open?

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Speaker 1: Not open? Uh? Schools are virtual for public schools. We

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Speaker 1: have still a good number of rules in place. But

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Speaker 1: thankfully the COVID infections are falling all right. That is

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Speaker 1: Jim Vogel. Always love chatting with Jim, who is of

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Speaker 1: course based in Memphis, Tennessee. He's interest rate strategist for

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Speaker 1: f h N Financial, FED Water, ECB Water and much

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Speaker 1: much more are thanks to Jim Vogel. Well Sweeney is

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Speaker 1: off today. Let's get now to our next to guess.

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Speaker 1: Gina Martin Adams is chief equity strategist for Bloomberg Intelligence

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Speaker 1: and has been watching, I'm sure the last few days

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Speaker 1: moves with extreme interest, so extreme in fact that she

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Speaker 1: talks about momentum extremes and how they're easing and that

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Speaker 1: means that new equities leadership should emerge. Gina, thanks for

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Speaker 1: joining so so are we definitely saying that these are

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Speaker 1: extremes or have we decided. Yet, Yeah, we definitely did

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Speaker 1: get to a momentum extreme. We saw by the end

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Speaker 1: of August, three of the biggest sectors in the SP

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Speaker 1: tech communications as well as consumer discretionary reaching multi year

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Speaker 1: extremes on momentum. At the same time, we saw index

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Speaker 1: valuations rise almost exclusively due to text docs and mega

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Speaker 1: cab text docs, and the gap between broad index valuations

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Speaker 1: as well as UH and index valuations excluding those text

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Speaker 1: docs reached the multi decade high. So we certainly did

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Speaker 1: reach an extreme point in time. Now the question is

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Speaker 1: where do we go from here? What does extreme really mean?

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Speaker 1: Because I think that your natural reaction maybe oh quite

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Speaker 1: fearful on the other side of an extreme. But what

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Speaker 1: you can see and what you know, our view is

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Speaker 1: we'll actually see pe s normalize, will most likely see

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Speaker 1: leadership shift to other cyclical sectors um and it We

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Speaker 1: could be in for a choppy period in the interim

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Speaker 1: as we see that leadership shift, But there's still very

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Speaker 1: little evidence that the broader ball market is coming to

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Speaker 1: an end or anything like that. It's really just an

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Speaker 1: adjustment from extreme levels. Sometimes those adjustments take you from

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Speaker 1: you know, upside extremes to downside extremes, but so far

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Speaker 1: it looks like more of a normalization from what we're

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Speaker 1: pretty out of balance conditions by the end of August.

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Speaker 1: So talk to us a little bit about the new

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Speaker 1: leadership that you say will emerge. You give us some

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Speaker 1: details there, But are we talking about a post pandemic

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Speaker 1: world in which investor is just value stay at home

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Speaker 1: stocks and real performer like Amazon that can just get

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Speaker 1: consumers what they want to their doorsteps immediately, much richer

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Speaker 1: than other companies. Yeah, I think that we'll see some

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Speaker 1: normalization of that. I mean, we certainly have seen valuations

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Speaker 1: expand enormously for some of the COVID nineteen winners or

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Speaker 1: some of the more sort of persistent earners over the

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Speaker 1: course of the last six months. What we're expecting to

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Speaker 1: see into one is more normalized conditions emerge where some

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Speaker 1: of the most beaten down cyclical care groups like industrials

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Speaker 1: and materials, some of the consumer discretionary names outside of

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Speaker 1: Amazon are expected to lead in earnings recovery, and in

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Speaker 1: an environment where they lead in earnings recovery off of

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Speaker 1: a very low base or not, you should see some

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Speaker 1: leadership migrate to those names to take advantage of that

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Speaker 1: earnings recovery. So a lot of this depends upon what

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Speaker 1: the outlook looks like. How much do economies improve, how

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Speaker 1: much do we see humors sort of go outside of

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Speaker 1: their homes, visit restaurants, you know, resume pre COVID type

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Speaker 1: of activities over the course of the next six to

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Speaker 1: twelve months. But if you look at the consensus forecast

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Speaker 1: very differently than the environment we've been in for the

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Speaker 1: last six months, where tech and healthcare have taken a

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Speaker 1: very very strong and consistent earnings lead, we should see

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Speaker 1: earnings distribute, earnings growth distribute to more secular sectors and

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Speaker 1: importantly too different sectors over the course of one and

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Speaker 1: that should create a migration two groups outside of of

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Speaker 1: tech and healthcare to some degree. So does the pe

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Speaker 1: gap between tech and then by tech I suppose, I

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Speaker 1: mean the biggest five tech companies and some of the

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Speaker 1: rest even in tech. Will that tolls Gina? I think

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Speaker 1: it should. I mean, there's some argument to be made

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Speaker 1: that it doesn't necessarily need to close by valuations falling

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Speaker 1: for tech stocks, who could see valuations for the rest

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Speaker 1: of the market starts to catch up to tech. When

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Speaker 1: we look at the broad market, and we try to

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Speaker 1: determine what a fair value multiple for the index is.

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Speaker 1: We find the result of extremely low interest rates in

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Speaker 1: combination with a likely double digit earnings recovery into supports

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Speaker 1: the fair value pe for the broad market of well

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Speaker 1: north of twenty times earnings. Currently, the market is trading

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Speaker 1: at about twenty times earnings, even including those big Tex docs,

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Speaker 1: so there is room for some reratings still in the

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Speaker 1: non tech areas of the market. It's difficult to argue

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Speaker 1: that you would need to see tech valuations move higher

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Speaker 1: in an environment where their earnings dominance is starting to

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Speaker 1: fade a little bit, So it's unlikely that tech multiples

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Speaker 1: continue to expand they may even normalize by coming down

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Speaker 1: a little bit, meeting somewhere in the middle the rest

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Speaker 1: of the market as the rest of the market starts

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Speaker 1: to catch up. Fascinating and give us a time frame

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Speaker 1: for this, You know, when when is the latest that

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Speaker 1: this might happen? Yeah, So our sector scorecard actually started

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Speaker 1: to signal as of September one, we put out the

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Speaker 1: scorecard and it's the first time that we saw tech

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Speaker 1: fall out of the top three sectors on the scorecard

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Speaker 1: since um we saw materials, industrials and discretionary stocks already

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Speaker 1: starting to rise. There is some evidence even as of

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Speaker 1: August that value um, the value factor in the SMP

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Speaker 1: five hundred anyway, was starting to outperform. If you look

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Speaker 1: at the long short value factor, uh, it performed better

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Speaker 1: than quality or volatility or momentum in the month of

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Speaker 1: August for the first time and sometimes. So we're already

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Speaker 1: starting to see some evidence of this rotation. If you

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Speaker 1: look at the last five days, even material stocks are

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Speaker 1: up while the rest of the index is down. Industrial

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Speaker 1: stocks have fallen half as much as the index. So

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Speaker 1: I think we're starting to see a little bit of

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Speaker 1: this rotation. Now will it continue really depends on some

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Speaker 1: solidification of that earnings outlook. I do think we need

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Speaker 1: to go into third quarter earning season and see companies

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Speaker 1: start to confirm that they do see a better environment

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Speaker 1: emerging into one. They do see order flow improving, they

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Speaker 1: do see manufacturing activity starting to pick up around the world. Um,

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Speaker 1: maybe even some references to the week dollar as a

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Speaker 1: support to their multinational operations, and multinational economic activity starting

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Speaker 1: to improve. So I do think, well, we'll go through

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Speaker 1: a period of of you know, really assessing, reassessing. You know,

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Speaker 1: probably see a chopping market as we go through this transition,

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Speaker 1: but ultimately it will depend upon earnings really proving the

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Speaker 1: case to broaden out exposure in the SMP five beyond

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Speaker 1: these COVID winners. Yeah, it really is fascinating if you

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Speaker 1: look at the value index versus the growth index and

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Speaker 1: how they've performed. The value index is down twelve sance

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Speaker 1: the beginning of the year. The growth index is up

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Speaker 1: twenty since the beginning of the year. Very briefly, we're

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Speaker 1: out of time, but I did want to ask you,

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Speaker 1: you know, doesn't matter who are the players here, whether

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Speaker 1: they're you know, big hedge funds or big pension funds

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Speaker 1: or robin Hood investors. Yeah, I think it matters to

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Speaker 1: some degree. Um, you're certainly seeing a heightened amount of

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Speaker 1: interest in specialty packaged products like epf UM. You know,

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Speaker 1: obviously the Triple Q products have driven a lot of

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Speaker 1: slow over the course of the last couple of months.

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Speaker 1: That does indicate that this sort of um presence of

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Speaker 1: the retail investor is significant. Our work says the retail

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Speaker 1: investor flows the market. They've historically averaged about fift for

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Speaker 1: the last five years, so there is more retail participation

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Speaker 1: in this to the extent that some of that gets

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Speaker 1: washed out through this um this tech sort of adjustment.

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Speaker 1: I would suggest that somewhat healthy. We want to have

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Speaker 1: less speculation and more investing. Gina Martin Adams, always eliminating

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Speaker 1: speaking with you, Sank huge if equity strategist for Bloomberg Intelligence.

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Speaker 1: Gina Martin Adams, there alright. Astros Zeneca in the news today.

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Speaker 1: One of the candidates for a vaccine, of course, is

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Speaker 1: astro zenecas, and we got to report yesterday that there

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Speaker 1: was some adverse reaction in one patient or perhaps more.

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Speaker 1: Today the ft is saying that trials may resume next week.

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Speaker 1: To make sense of it all, let's bring in Sam Fazally,

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Speaker 1: senior pharmaceutical analyst and head of E M e A

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Speaker 1: Research for Bloomberg Intelligence. Sam, what exactly is going on

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Speaker 1: at astro Zeneca h Q? On Twitter yesterday, for example,

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Speaker 1: there was a lot of discussion about the difference between

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Speaker 1: saying the word adverse effect and side effect and so on.

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Speaker 1: Just bring us up to speed with the story. Yeah, Hi, BONI,

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Speaker 1: So I mean advertifact, side effect, toxicity, safety signal, They're

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Speaker 1: all the same kind of things. So um I would

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Speaker 1: just see this as obviously sufficiently big enough safety signal

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Speaker 1: for the company to have decided to voluntarily hold the trial.

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Speaker 1: Once they've done that, though it's necessarily up to them

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Speaker 1: to restart it. They would have to satisfy their data

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Speaker 1: safety monitoring board, which every trial has, and the regulators

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Speaker 1: that it is safe to restart the trial and continue

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Speaker 1: dosing patients. So whether the company thinks that it would

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Speaker 1: be over or not must be something to do with

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Speaker 1: what they're talking about with regulators. But at the end

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Speaker 1: of the day, it is them who are going to

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Speaker 1: decide to allow the trial to restart. Yes, the f

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Speaker 1: T I should explain is reporting that sources to the

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Speaker 1: FT are saying that the trial could resume early next week.

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Speaker 1: And this is a trial, of course in conjunction with

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Speaker 1: Oxford University. Now, is this a large trial? Explained to us?

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Speaker 1: Where it sits in the universe of trials right now? Yes.

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Speaker 1: So the biggest trial which hasn't or maybe just has

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Speaker 1: started recruiting, is one from Johnson and Johnson, which would

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Speaker 1: be sixty individuals, and that's international arranges from Philippe Means

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Speaker 1: to Brazil to Chile to many centers in the United

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Speaker 1: States sixty. Then you have the thirty thousand trials in

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Speaker 1: the US, mostly by moderna finds a rayontic and astro

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Speaker 1: itself that was just beginning to start dosing. And then

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Speaker 1: you've got asterro itself, which has got the biggest trial

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Speaker 1: that's already been running is the UK trial where this

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Speaker 1: adverse event was recorded, which is twelve thousands, three and

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Speaker 1: thirty four as of the latest update in terms of subjects.

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Speaker 1: So there's are big trials. You know, if you had

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Speaker 1: that that that you you you surpass hundred fifty thousand subjects.

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Speaker 1: So j J leads on that one exactly. Now we

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Speaker 1: should mention that obviously placebos are involved here as well,

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Speaker 1: and that's what makes it a trial and and and

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Speaker 1: that's how we get vaccines eventually. So not all hundred

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Speaker 1: and fifty thousand or doosed with the drug that the

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Speaker 1: drug maker is making. Explain to us whether the astro

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Speaker 1: Zenica trial in the UK is the same as the

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Speaker 1: Astrosonica trial in the United States. You know, so at

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Speaker 1: the after trial in the United States when it starts

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Speaker 1: is a standard one dose and then a booster. The

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Speaker 1: one in SA booster being twenty, say, about four weeks

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Speaker 1: after the first dose. The one in the UK started

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Speaker 1: off as a single dose vaccine trial, and then at

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Speaker 1: some point and I think the first injection I can't

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Speaker 1: remember exactly, was sometime in early June, for the first

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Speaker 1: half of June um and then at some point the

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Speaker 1: company decided to move this to a to dose trial.

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Speaker 1: So there are individuals in there who had a second dose,

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00:24:36,480 --> 00:24:39,800
Speaker 1: not necessarily four weeks after, but six weeks after or

434
00:24:39,800 --> 00:24:42,560
Speaker 1: eight weeks after, which, of course, in a trial that

435
00:24:42,640 --> 00:24:45,520
Speaker 1: already has many arms in it if you count it,

436
00:24:45,520 --> 00:24:47,600
Speaker 1: depending on how you county, it could be up more

437
00:24:47,640 --> 00:24:52,159
Speaker 1: than ten arms, ten different groups of tests being conducted.

438
00:24:52,880 --> 00:24:56,000
Speaker 1: Is it really makes it difficult to figure out what

439
00:24:56,080 --> 00:24:57,520
Speaker 1: kind of days that you're going to get out of that,

440
00:24:57,640 --> 00:25:00,840
Speaker 1: especially when you've kind of to all up a little

441
00:25:00,880 --> 00:25:03,000
Speaker 1: bit with deciding in the middle of the trial to

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00:25:03,040 --> 00:25:07,040
Speaker 1: give two doses. Yeah, exactly. I also want to just

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Speaker 1: clarify that the suspected serious adverse reaction was suffered by

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00:25:12,359 --> 00:25:14,879
Speaker 1: one participant in the UK as far as we know,

445
00:25:15,080 --> 00:25:18,440
Speaker 1: and that participant fell ill with a rare inflammatory condition

446
00:25:18,600 --> 00:25:22,679
Speaker 1: called transverse myelitis. According to two people familiar with the

447
00:25:22,680 --> 00:25:25,760
Speaker 1: trial who spoke to the f T. So we really

448
00:25:25,800 --> 00:25:29,200
Speaker 1: don't know exactly what this individual came down with. We

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00:25:29,200 --> 00:25:30,840
Speaker 1: don't know if it was one individual, and we really

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00:25:30,880 --> 00:25:34,480
Speaker 1: don't know if it was because of the astrosenega injection, right,

451
00:25:34,560 --> 00:25:36,960
Speaker 1: but we can sort of assume that it had something

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00:25:37,000 --> 00:25:38,679
Speaker 1: to do with it. But we also don't know if

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00:25:38,680 --> 00:25:41,200
Speaker 1: that individual was given a real injection or a placebo.

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00:25:41,240 --> 00:25:43,400
Speaker 1: So there are many questions to be asked and answered.

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00:25:43,920 --> 00:25:48,800
Speaker 1: What's the normal, you know, adverse reaction that's allowable for

456
00:25:49,480 --> 00:25:52,760
Speaker 1: a vaccine. Presumably some people in every trial have some

457
00:25:52,840 --> 00:25:57,000
Speaker 1: kind of an adverse reaction. Sure, sure, And I would suspect,

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00:25:57,240 --> 00:26:00,359
Speaker 1: just to a point that you made, that the Data

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Speaker 1: Safety Monitoring Committee knew that this is a vaccinated individual

460
00:26:05,160 --> 00:26:08,200
Speaker 1: because they are unblinded to the data that comes through.

461
00:26:08,240 --> 00:26:11,280
Speaker 1: They can see everything that's coming through, and I suspect

462
00:26:11,320 --> 00:26:14,800
Speaker 1: they wouldn't have stopped it if it was just a placebo.

463
00:26:15,119 --> 00:26:19,800
Speaker 1: But the sorts of um adverse events. Remember, in these trials,

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00:26:20,080 --> 00:26:23,200
Speaker 1: people are told anything that goes wrong or anything that's

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00:26:23,200 --> 00:26:25,960
Speaker 1: out of the ordinary recorded, So even if they have

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Speaker 1: food poisoning, they have to record it, which is then

467
00:26:28,040 --> 00:26:31,080
Speaker 1: afterwards when you do the data triage, you try and

468
00:26:31,119 --> 00:26:33,119
Speaker 1: figure out what's related to the vaccine and what's not.

469
00:26:33,960 --> 00:26:37,840
Speaker 1: UM but you know, high temperatures, UM, chills and eggs

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00:26:37,840 --> 00:26:41,280
Speaker 1: and fever and fever has as just said, UM some

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00:26:41,400 --> 00:26:43,960
Speaker 1: perhaps fatigue. Those are the sorts of things that are

472
00:26:44,119 --> 00:26:47,560
Speaker 1: very normal with their vaccination and and similar to what

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Speaker 1: you yet when you're when you've got a virus that's

474
00:26:51,080 --> 00:26:55,000
Speaker 1: infected you because you're basically activating the immune system, and

475
00:26:55,040 --> 00:26:58,520
Speaker 1: those are related to the activation of the immune system.

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Speaker 1: So it's always so fascinating taking with you very clear

477
00:27:01,480 --> 00:27:04,439
Speaker 1: explanations for what's going on and what most of us

478
00:27:04,560 --> 00:27:07,600
Speaker 1: don't typically know, even though these trials go on all

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00:27:07,600 --> 00:27:09,959
Speaker 1: the time for all sorts of drugs and treatments are

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Speaker 1: Thanks to you, Sam Fazali, Senior pharmaceutical analyst and head

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00:27:12,880 --> 00:27:17,960
Speaker 1: of e MU Research for Bloomberg Intelligence. Thanks for listening

482
00:27:18,000 --> 00:27:21,359
Speaker 1: to Bloomberg Markets podcast. You can subscribe and listen to

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00:27:21,440 --> 00:27:25,240
Speaker 1: interviews at Apple Podcasts or whatever podcast platform you prefer.

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00:27:25,440 --> 00:27:28,480
Speaker 1: I'm Bonnie Quinn. I'm on Twitter at Bonny Quinn, and

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00:27:28,480 --> 00:27:31,080
Speaker 1: I'm Paul Sweeney. I'm on Twitter at pt Sweeney. Before

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00:27:31,119 --> 00:27:34,280
Speaker 1: the podcast You can always catch us worldwide at Bloomberg Radio.