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Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim Fox.

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Speaker 1: Along with my co host Lisa Brabowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you're at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg p m L

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Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. There's

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Speaker 1: been a lot of news about Michael Cohen, President Trump's

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Speaker 1: personal attorney. The latest is a report that A. T

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Speaker 1: and T was paying Cohen uh to get more insight

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Speaker 1: into the Trump administration as far back as the beginning

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Speaker 1: of twenty seventeen. To wait in on this, we want

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Speaker 1: to bring in Noah Feldman and Felix Frankfurter, professor of

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Speaker 1: laud Harvard University, also a Blue Amberg View columnists joining

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Speaker 1: us by phone. Noah, thank you so much for being here. Um,

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Speaker 1: is there any way to interpret this payment that A.

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Speaker 1: T and T made, or a series of payments to

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Speaker 1: Michael Cohen, other than simply trying to curry favor so

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Speaker 1: they can get their Time Warner deal through. It's hard

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Speaker 1: to see what else could have been going on. I mean,

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Speaker 1: they're the a T and T explanation, namely that they

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Speaker 1: just wanted to get some insight into Trump, doesn't seem

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Speaker 1: all that credible since it was already nine months into

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Speaker 1: the Trump administration when they suddenly made this payment to

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Speaker 1: Cohen himself. It looks as though at a crucial juncture

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Speaker 1: in their murder talks, they were seeing if there was

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Speaker 1: some way they could get closer to Trump, and Cohen

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Speaker 1: arguably presented himself to them as exactly such a such

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Speaker 1: a mechanism. If so, it didn't work, since the Department

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Speaker 1: of Justice blocked their merger. So one question that this

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Speaker 1: raised in my mind is is there a line between

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Speaker 1: pay to play types of performance and types of activities

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Speaker 1: versus lobbying. Well, legally speaking, if you're paying somebody for

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Speaker 1: the purpose of that person then going to the government

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Speaker 1: a government official and trying to convince them of your position,

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Speaker 1: that's lobbying. And lobbyists have to be registered, and Cohen

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Speaker 1: was not registered as a lobbyist, And that's one reason

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Speaker 1: that A. T and T immediately said as part of

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Speaker 1: their public statement, we did not hire Cohen as a

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Speaker 1: lawyer or as a lobbyist. They couldn't hire him a

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Speaker 1: lobbist because he wasn't registered as a lobbyist. That said,

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Speaker 1: there is of course implicit I think in the payment,

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Speaker 1: the suggestion that they were trying to hire him to

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Speaker 1: lobby and that means a serious that's a serious matter

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Speaker 1: for a T and D, and they'll have to do

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Speaker 1: an internal investigation to figure out exactly what they were

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Speaker 1: up to. So the answer is that legally there should

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Speaker 1: be a line, but in practice they are all what

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Speaker 1: there isn't always uh Noah. As a lawyer, what would

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Speaker 1: you want to know about not only this payment to

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Speaker 1: Michael Cohen and his law firm, but also other payments

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Speaker 1: to his law firm, and well to two things? First

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Speaker 1: of all, what services were rendered in exchange for these payments?

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Speaker 1: Did Cohen actually do anything for Korea aerospace industries, for

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Speaker 1: nov artists, um for a firm connected to a Russian oligarch.

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Speaker 1: These are all entities that made payments. The second of all,

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Speaker 1: where did the money go after Cohen got it? And

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Speaker 1: it's worth noting the payments were not made to his

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Speaker 1: law firm, although you think that would be true. They

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Speaker 1: were made to a shell company called Essential Consultants that

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Speaker 1: Cohen set up, and that Cohen actually used to make

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Speaker 1: payments to Storey Daniels. So there's something particularly fishy about

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Speaker 1: the idea that these were not payments made to Cohen's

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Speaker 1: law firm, but rather to a special purpose empty shell

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Speaker 1: that he created to disperse money in part on behalf

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Speaker 1: of the president. Okay, this sounds like a legal question.

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Speaker 1: But is this normal? No, I will answer that in

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Speaker 1: a real world sex it is not normal. Um, ordinary

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Speaker 1: law firms do not own or ordinary lawyers do not

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Speaker 1: own shell corporations through which they independent payments and then

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Speaker 1: disperse money to to others. That's not ordinary behavior. It's

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Speaker 1: certainly not what you do for any legal services, because

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Speaker 1: those would ordinarily go through your your law practice. And

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Speaker 1: so it's a it's a particularly unusual phenomena. Now, individual

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Speaker 1: attorneys who do other kinds of things, lecturing or consulting

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Speaker 1: might have an LC for those purposes. I even have

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Speaker 1: one for those purposes, but it doesn't make hundred dollar

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Speaker 1: expenditures on behalf of clients. No, what's the potential liability

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Speaker 1: for a T and T as it does an internal

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Speaker 1: review and as it faces quite a bit of blowback

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Speaker 1: as to these five hundred thousand dollars of payments that

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Speaker 1: it made. Michael Cohen, I should say first of all

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Speaker 1: that I'm not certain what the number was that A

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Speaker 1: T and T s payments, and I suppose that remains

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Speaker 1: to be to be determined into tail. But the answer

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Speaker 1: is that if you are a corporation and you hired

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Speaker 1: someone to lobby, knowing that that person was not registered

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Speaker 1: as a lobbyist, you could be implicated to ten really

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Speaker 1: in his criminal lobbying. Furthermore, if they were trying to

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Speaker 1: influence an ongoing government proceeding, like the Department of Justice

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Speaker 1: proceeding that was considering the possibility of their their merger

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Speaker 1: with Time Warner, that could be construed as seeking to

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Speaker 1: pervert the course of government practice, potentially even bribery. Now,

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Speaker 1: for bribery, there would have to be not just a quid,

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Speaker 1: not just a gift to someone connected to the government,

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Speaker 1: but but a quote some expectation of a response. But

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Speaker 1: that's something that they should be worried about it and

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Speaker 1: they should have lawyers working on this right now. That's

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Speaker 1: a serious matter for a corporation. Noah, wouldn't this be

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Speaker 1: relatively easy to figure out based on how a T

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Speaker 1: and T accounted for the payment. I mean, because if

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Speaker 1: you're paying it for business services, you deduct it. That

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Speaker 1: that's this good place to start. And I'm sure that

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Speaker 1: investigators both internally at A T and T and also

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Speaker 1: in the government will will look at that, um. But

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Speaker 1: I don't that's necessarily enough. A further investigation has to

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Speaker 1: be done with an A T and T to figure

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Speaker 1: out who authorized this payment, how did they account for

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Speaker 1: it internally? Um, you know, what was its actual purpose?

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Speaker 1: What did they think that they were buying. But this

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Speaker 1: shouldn't be like a very difficult thing to do, right,

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Speaker 1: I mean, if you're a major corporation, you have a

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Speaker 1: system and a process in place in order to you know,

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Speaker 1: there's a purchase order or there's a requisition for him,

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Speaker 1: I mean full disclosure. My husband's a lawyer. There's a

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Speaker 1: lot to do about the culture and who signed off

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Speaker 1: on it, and a lot more I imagine as well. No, noah, yeah,

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Speaker 1: I think that I think that's right. Of course, that

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Speaker 1: procedure absolutely should be in place. But you can in

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Speaker 1: a big corporation, you can sometimes sign off on something

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Speaker 1: without knowing exactly what it's for. Further down the line,

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Speaker 1: and the question here is who made the approval, What

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Speaker 1: did they think the approval was for? Whatever the line

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Speaker 1: item is said is important to know, but it's not

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Speaker 1: the whole story. We also need to know who was

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Speaker 1: the person who authorized this rather unusual expenditure. Thank you

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Speaker 1: very much for being with us. Noah Feldman, Harvard University

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Speaker 1: Professor of Law. You can follow him on Twitter at

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Speaker 1: Noah are Feldman. His latest book is The Three Lives

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Speaker 1: of James Madison, Genius Partisan President, and of course uh

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Speaker 1: Noah is a Bloomberg Opinion columnist. Well, with oil moving

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Speaker 1: past seventy barrel, we want to talk to an expert

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Speaker 1: to find out, well, what's next. John killed off as

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Speaker 1: an expert. He's a founding partner of Again Capital and

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Speaker 1: he joins us. Now, John, what's your take on what's

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Speaker 1: happening with oil prizes? Is it all related to the

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Speaker 1: US pulling out of the Iron nuclear deal that's primarily

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Speaker 1: at him, But um, there's really a witches brew of

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Speaker 1: of uh strong fundamentals in this market. Literally moments ago,

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Speaker 1: and I'm just calling to the data as I speak

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Speaker 1: to you. We got the weekly inventory report from the

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Speaker 1: Department of Energy, and there's draw downs in everything across

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Speaker 1: the board, crude oil, diesel fuels, gasoline, um, and this

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Speaker 1: is emblematic of what's happening. Diesel fuels in particular have

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Speaker 1: just plunged. They're really tight right now here in the US,

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Speaker 1: and because demand has been strong and exports of these

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Speaker 1: items have been strong. And I'm just checking here, crude

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Speaker 1: oil exports once again for the third week in about

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Speaker 1: or almost two million barrels a day. So the US

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Speaker 1: continues to be a major exporter of crude oil. So

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Speaker 1: there's a strong fundamental story outside of the Uran situation.

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Speaker 1: But of course the Uran situation is certainly now a

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Speaker 1: big part of the overall outlook for crude oil and

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Speaker 1: higher prices ahead. John, I want to give you kudos

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Speaker 1: because you've really gotten the direction of the price of

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Speaker 1: oil correct and you've been really accurate. So, given the

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Speaker 1: fact that you have access to the oil crystal ball,

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Speaker 1: we're looking at crude that just passes seventy one dollars

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Speaker 1: a barrel mark. Where are we headed right now in

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Speaker 1: the near term? Well, unfortunately, again, so we have these

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Speaker 1: geopolitical worries with the RAN. You know, you have to

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Speaker 1: worry about potential for military conflict so that pumps up

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Speaker 1: the security premium then as well as productions in free fall.

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Speaker 1: And our friends the Saudis are not going to move

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Speaker 1: with alacrity to put more oil on the market. The

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Speaker 1: way I see it, I think they're gonna tell us

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Speaker 1: that we should check back with them in about fifteen

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Speaker 1: dollars or so, and maybe then they'll help to stabilize

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Speaker 1: the price. So I think we're going considerably higher for

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Speaker 1: w t I upwards of five dollars a barrel of barrow.

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Speaker 1: What does that do to gasoline at the pump? How

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Speaker 1: much are we expecting to pay? Well, that's fifteen dollars.

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Speaker 1: You get two and a half cents for just on

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Speaker 1: the barrel pim um, So you're talking at least about

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Speaker 1: about forty five to fifty cents higher from here. We're

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Speaker 1: already at nearly three dollars, so you're talking around three

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Speaker 1: fifty a gallon national average higher in some spots California'll

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Speaker 1: be paying, you know, through the nose and another other

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Speaker 1: higher traditionally higher price zones like the Upper Midwest. Wow,

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Speaker 1: we're gonna be speaking more about the impact that that

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Speaker 1: could potentially have on the economy later in the program.

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Speaker 1: But I want to just get your thoughts further on

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Speaker 1: the implications of the US withdrawing from the Iran nuclear deal. Um,

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Speaker 1: what are your thoughts about what could transpire as a

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Speaker 1: result of this and were you surprised by anything that

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Speaker 1: President Trump said yesterday? Well, there were three scenarios in

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Speaker 1: my view, A he stayed in be he had a

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Speaker 1: hard exit, if you will, and or see that he

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Speaker 1: would sort of pull out in name only. And I

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Speaker 1: was really thinking that, just from a political angle, the

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Speaker 1: way the President seems to operate in these waters, that

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Speaker 1: c would be the choice. And it wasn't. Um, he

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Speaker 1: chose the hard path. He chose to re implement the sanctions. Uh,

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Speaker 1: part of them kicking in ninety days, the rest of

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Speaker 1: them kicking in a hundred and eighty days. And from

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Speaker 1: my math then, from what will be required of our

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Speaker 1: counterparties are allies, about five thousand barrels of Iranian CRUDEO

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Speaker 1: will be coming off the market at the very least,

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Speaker 1: And as a result of that, this is a market

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Speaker 1: that can't afford any lost barrels, particularly if the Saudi's

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Speaker 1: are going to be stingy with their production and exports,

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Speaker 1: which they are intimating as even as of this morning,

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Speaker 1: that that's their posture for now. So the other big

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Speaker 1: fear though here and I don't even like to really

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Speaker 1: speculate about this, but you saw how quickly the Israelis

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Speaker 1: and Staudis came out in support of President Trump's decision.

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Speaker 1: So the alliance, as I've been calling it, has been

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Speaker 1: laid bare. You have the US Shaddy in Israel aligned

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Speaker 1: against Iran UH and maybe to a degree Iraq. So UM,

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Speaker 1: the potential or a war premium in prices is something

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Speaker 1: you have to consider now as well, John, what's the

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Speaker 1: best way for investors to participate if they don't want

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Speaker 1: to go and play the oil futures market. Well, I

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Speaker 1: still see many of the pure play oil companies as

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Speaker 1: UM not reflective of the price environment that we're in

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Speaker 1: and that we're gonna look like we're gonna stay in.

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Speaker 1: I think part of the equity discount you're seeing and

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Speaker 1: most of the major oil companies is because of the

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Speaker 1: struct the term structure of the curve. The futures curve

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Speaker 1: prices out in December are operative ten dollars cheaper than

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Speaker 1: where we are trading in the front of the month,

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Speaker 1: but to the extent this persists month after month after month,

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Speaker 1: the earnings picture for these companies is going to be Uh.

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Speaker 1: I think big upside surprises. So I think that is

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Speaker 1: probably the safest way to play it. UH. Pure play

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Speaker 1: producers certainly are the Chesapeake Oil should be the beneficiaries

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Speaker 1: companies like that um, particularly since the global market has

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Speaker 1: now been thrown wide open to them as of last

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Speaker 1: year and the numbers are just growing them. John killed Off,

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Speaker 1: thank you so much for being with us and for

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Speaker 1: sharing your thoughts. Definitely oil on the top of the

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Speaker 1: minds of many, many traders, investors, and others today as

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Speaker 1: oil prices climbed to their highest system of ever of fourteen.

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Speaker 1: As oil prices climb, so to have expectations for inflation.

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Speaker 1: This in part is what is driving a ten year

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Speaker 1: treasury yields above three percent, just as the US government

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Speaker 1: plans to auction off twenty five billion dollars of the

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Speaker 1: debt later today. Joining us now to talk about what

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Speaker 1: to expect with all this is David Kotalk. He's chairman

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Speaker 1: and chief investment officer of Cumberland Advisors and comes to

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Speaker 1: us from the lovely Sara Sootta, Florida. David, thank you

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Speaker 1: so much for being with us. Um I want to

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Speaker 1: talk about inflation. There's been a conundrum of how much

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Speaker 1: it could potentially accelerate. How much do you view the

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Speaker 1: increase in oil prices as a huge draw or an

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Speaker 1: increasing inflation expectations and uh and sort of as a

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Speaker 1: corollary leading to substantially higher U S yields. Well, thank you, Lisa.

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Speaker 1: It's always a pleasure, and it's lovely in Sarasota where

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Speaker 1: the price of gasoline is rising like everywhere else. And

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Speaker 1: so the real question, I guess is how persistent will

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Speaker 1: we see the oil price above seventy dollars and will

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Speaker 1: it stick and pass through? And that remains to be

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Speaker 1: seen in our shop. We're not so sure it sticks.

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Speaker 1: And the reason is the ability of American producers to

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Speaker 1: turn on product production in a hurry to respond to

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Speaker 1: the higher price. So the higher price in essence cures

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Speaker 1: itself with more supply over time. It takes a little

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Speaker 1: time to come on stream. David Kotok, you spend time

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Speaker 1: at Lean's Lodge this summer in Maine. Do you believe

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Speaker 1: that inflation or the government's debt will be the greater

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Speaker 1: of the two conversations. Um at Lean's Lodge will have

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Speaker 1: conversation to which, by the way, you are always both

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Speaker 1: of you invited each and every time, and I'd love

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Speaker 1: to give you the fishing lesson too. I think inflation

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Speaker 1: will have some conversation because by the time we get there,

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Speaker 1: we'll see little signs of higher But I think the

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Speaker 1: debt issue is bigger, and the Federal Reserve bigger, and

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Speaker 1: the collision of rising debt issue and Silicia just talked

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Speaker 1: about the treasury auction size is growing at the same

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Speaker 1: time the Fed is shrinking its balance sheet is a

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Speaker 1: double whammy, and that's going to be a subject of

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Speaker 1: a lot of conversation by the end of this summer

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Speaker 1: when we're there. So talking about how much debt the

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Speaker 1: US is selling. So they are planning to sell billion

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Speaker 1: dollars of ten year treasuries today at one pm New

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Speaker 1: York time. I'm trying to understand the dynamic behind this

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Speaker 1: as people wonder whether whether we're actually going to see

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Speaker 1: a three percent coupon on these treasuries for the first

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Speaker 1: time in seven years. Do you think we're going to

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Speaker 1: get there? Yes, absolutely, which is quick before the whole

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Speaker 1: sequence is over but yes. So this is what's surprising

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Speaker 1: to me because you have so many investors who have

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Speaker 1: come out and said, you know, I would love to

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Speaker 1: own treasuries and earn a three percent yield. We haven't

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Speaker 1: earned that for seven years. This is real income at

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Speaker 1: a time when there's a lot of volatility. What happened

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Speaker 1: all them well, and they're going to have their opportunity,

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Speaker 1: and the question then becomes what do they do next?

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Speaker 1: I mean, the range of forecasts on the ten year

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Speaker 1: treasury yield, say one year forward run from the recession

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Speaker 1: coming slowed down. This coming policy is going to hurt us.

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Speaker 1: Trade war is going to hurt us, and that's going

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Speaker 1: to take the tenure yield back closer to two or

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Speaker 1: to an infraction. I think Barry Banister was out with

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Speaker 1: that just recently. And you can get to the other

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Speaker 1: side of the coin and you can get forecasts Jamie Diamond,

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Speaker 1: we're gonna have a four percent ten year treasury. Well

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Speaker 1: maybe they're both right, and the timing is the question.

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Speaker 1: But when you have a band that wide, it's impossible

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Speaker 1: to know what tenure treasure is going to yield a

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Speaker 1: year from now. All right, So if you're if it's

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Speaker 1: impossible to to know what the future brings. And gee,

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Speaker 1: that seems like an obvious statement, David, So congratulations for

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Speaker 1: being one of a few people to say it. Um,

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Speaker 1: what are you What are you telling people who are

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Speaker 1: looking to put money to work. Well, we have a

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Speaker 1: few billion that we manage in the bond market, and

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Speaker 1: we use a barbell, and we are increasing the size

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Speaker 1: of the safety side of the bar bell, which is

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Speaker 1: the shorter intermediate piece, especially as shorter intermediate rates have

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Speaker 1: now come up from away away from the zero bound

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Speaker 1: two more reflective of where they ought to be. At

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Speaker 1: least that's what we think. And so you protect your

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Speaker 1: capital with a barbell. You have some long end to

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Speaker 1: get yield and you have some shorter intermediate end to

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Speaker 1: protect capital, and you balance the two. And we are

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Speaker 1: increasing the safety side, all right, By increasing the safety side,

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Speaker 1: What does that technically mean you're doing? Is that money

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Speaker 1: market funds? Is that municipal debt? What does that mean? Well,

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Speaker 1: today we bought a block of the treasury two year floater.

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Speaker 1: That's an instrument in which the interest rate floats. Of course,

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Speaker 1: in rising interest rate environments, it floats up, and it's

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Speaker 1: a Treasury security. It's a substitute for cash. Money market

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Speaker 1: funds are an interesting question these is because there are

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Speaker 1: sweep vehicles in some brokerage firms where the brokerage firm

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Speaker 1: is trying to maintain the old twenty thirty basis point

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Speaker 1: yield and getting more and more pressure from clients and

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Speaker 1: forcing the client to have to go through a sequence

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Speaker 1: of orders to get to a money market vehicle instead

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Speaker 1: of a sweep vehicle. When the money market vehicles paying

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Speaker 1: one and a half or something like that. In time,

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Speaker 1: that will change because the customers will force the brokerage

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Speaker 1: firms to step up and pay what they should be

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Speaker 1: paying in this market environment. As far as stocks go,

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Speaker 1: um stocks are dependent on what these earnings are going

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Speaker 1: to be. Now that we've made an adjustment for the

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Speaker 1: tax code. Our own view is earnings and the trend

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Speaker 1: of earnings continues. We have a hundred and seventy on

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Speaker 1: the S and P as a guideline for that's got

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Speaker 1: a range of say one sixty five to one dollars

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Speaker 1: earnings for the companies in the sp Yeah, and if

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Speaker 1: you take that kind of a number, stock market at

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Speaker 1: the present level is reasonably priced and it has upside potential.

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Speaker 1: What price of oil makes you raise your eyebrows at

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Speaker 1: the pump ah if if if we trend up towards

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Speaker 1: eighty and it's sustained, that would become worrisome to us.

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Speaker 1: And our view is that the seventies something level is

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Speaker 1: near the peak. We have cut back on our energy

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Speaker 1: stock et F exposures. We were overweight. We took those

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Speaker 1: profits very recently and we actually now are going to

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Speaker 1: underwake the industry group because we think most of the

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Speaker 1: profit is already in the stocks. Thanks very much, David Kotaki.

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Speaker 1: Is that rman and the chief executive of Cumberland Advisors.

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Speaker 1: The business of veterinary science. It can be summed up

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Speaker 1: in an approval that was gained on Monday for Kindred

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Speaker 1: Biosciences for the first US approval for the treatment for

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Speaker 1: unintended weight loss in cats. The drug is mertazapine. And

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Speaker 1: here to tell us more about the business and the

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Speaker 1: drug is the chief executive of Kindred Biosciences are based

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Speaker 1: in Burlingame, California, and it is Dr Richard Chin. Dr Chin,

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Speaker 1: thank you very much for being with us. Tell us

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Speaker 1: about this drug and also about Kindred Biosciences. Well, thanks

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Speaker 1: Tim and Lisa. First, I want to thank you for

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Speaker 1: the opportunity to tell you about Kindred biosciencests. Meritaz was

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Speaker 1: approved just on Monday. Is a drug that helps cats

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Speaker 1: that have started losing too much weight. Um. Sometimes people

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Speaker 1: think this is a drug for cats that are too fat,

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Speaker 1: but it turns out people actually like fat cats. This

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Speaker 1: is for cats that are too thin, which is a

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Speaker 1: very serious condition because when cats get too thin, they

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Speaker 1: can go into liver failure, which can be fatal. Dr Yes,

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Speaker 1: go ahead. Well, I just you know, it's it's really

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Speaker 1: interesting to sort of view this product in light of

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Speaker 1: what we've been hearing about pet ownership and just how

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Speaker 1: many more people are adopting pets than they are even

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Speaker 1: having children at this point. How big is the market

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Speaker 1: for this type of drug, so he said, the Americans

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Speaker 1: spend sixty nine point four billion dollars a year on pets,

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Speaker 1: and of that, about seven million is on Valentine's Presence

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Speaker 1: for pets, and one point five billion is for knee

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Speaker 1: surgeries in pets. So pets have really become fast. I'm sorry,

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Speaker 1: I can't get beyond the Valentine's Presence Valentine. Okay, fine,

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Speaker 1: carry on. So you know pets have become family members.

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Speaker 1: It says, uh, this is not something, um, that was

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Speaker 1: a case thirty years ago. So people are really willing

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Speaker 1: to spend money when their pets get sick. It's not

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Speaker 1: a lot of money. Five thousand dollars is what it

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Speaker 1: costs the chemotherapy and their four hundred oncologists just for

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Speaker 1: dogs and cats in the United States. And as I said, um,

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Speaker 1: knee surgeries. Knee surgeries cost five thousand dollars per knee.

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Speaker 1: Usually they need both kneeds. So yeah, it's it's it's

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Speaker 1: a big market. Dr Chin. Can you explain kindred biosciences

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Speaker 1: in the context of working with molecules or potential treatments

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Speaker 1: that may have originally been developed for humans and using those,

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Speaker 1: maybe in a modified way, to treat a variety of

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Speaker 1: ailments in animals such as fever and horses. I know

396
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Speaker 1: you've got zametta and also equaline gastric ulcers and so on,

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Speaker 1: anemia and cats, among other things. Sure you know, our

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Speaker 1: strategy business strategy is to leverage the billions and billions

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Speaker 1: of dollars in research that's been invested on the human side,

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Speaker 1: and then we take drugs that have been shown to

401
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Speaker 1: work really well on the human side and we bring

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00:24:30,560 --> 00:24:35,160
Speaker 1: it over to the veterinary side. So um meriteth, which

403
00:24:35,160 --> 00:24:39,399
Speaker 1: is the first molecule, is originally approved for people for

404
00:24:39,560 --> 00:24:43,680
Speaker 1: a slightly um different indication, and the same thing with zametta.

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Speaker 1: This is available for humans in many countries. So what

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Speaker 1: we do is we reduce the risk, you know most

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Speaker 1: one of the biggest issues on the human pharmaceutical industry,

408
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Speaker 1: and the red part of the reason why it's so

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Speaker 1: expensive is that there's only five to time percent success rate.

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00:25:02,200 --> 00:25:05,840
Speaker 1: We are batting about six success rate and higher, so

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Speaker 1: the success rate is about ten times higher. So I

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Speaker 1: want to talk a little bit more about this treatment

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Speaker 1: UM for cats. It's administered by rubbing the gel onto

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Speaker 1: a cat's ears. Is that correct? Yes, So this is

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Speaker 1: a drug that UM is put on the inside of

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Speaker 1: the year. It's annointment and the advantage of this is

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Speaker 1: a following when you have to till a cat. It's

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Speaker 1: a major undertaking because cats UM do not like having

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Speaker 1: things stuff down their throat and it's very hard to

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Speaker 1: trick them into eating UM pills. Dogs are much more

421
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Speaker 1: UM easy to pill because you can hide it in

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Speaker 1: peanut butter. So you have to catch the cat. You

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Speaker 1: have to stuff the tail down the cat's throat told

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Speaker 1: the mouth closed until the cat swallows the pill. And

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Speaker 1: then you take out your back of the band aids

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Speaker 1: and you band aid up all the scratches. And then

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Speaker 1: the next day you try to do the same thing

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Speaker 1: and the cats running away from you. So instead of

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Speaker 1: doing that, you can just put this drug on the

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Speaker 1: inside of the year of the cat. And you know

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Speaker 1: this is a very common condition. By the way, there

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Speaker 1: are nine million cats that have this problem every year.

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Speaker 1: In appetence, Dr Chin, you're also working on some molecular

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Speaker 1: some biologic molecular candidates. I wonder if you could just

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Speaker 1: tell us about the pipeline some antibodies for US indications

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Speaker 1: such as dermatitis in dogs and canine. Absolutely, so we

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Speaker 1: have a broad pipeline of monoclonal antibodies, and monoclonal antibodies

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Speaker 1: are cutting edge medicine on the human side as well.

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Speaker 1: In fact, seven to eight out of the top ten

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Speaker 1: selling drugs on the human side are monocolon antibody scentive

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Speaker 1: transformed human medicine. What we try to do is we

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Speaker 1: try to bring not the sort of uh, mediocre drugs,

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Speaker 1: a throwaway drugs from the human side over to the

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Speaker 1: bedner side. We're trying to bring the best of the

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Speaker 1: best technology. So we have a broad pipeline of antibodies,

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Speaker 1: including antibodies for the topic dermatitis, which is exema in

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Speaker 1: allergic skin conditioning dogs. That's very common right now. It's

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Speaker 1: over a five million dollar a year market and growing

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Speaker 1: very rapidly. It only costs US about five to eight

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Speaker 1: million dollars to develop each one of our drugs, so

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Speaker 1: we'd like to compare it to the human side. On

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Speaker 1: the human side, it might cost the billion dollars a

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Speaker 1: drug to develop the drug, and a blockbuster might be

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Speaker 1: a billion dollars. We're going to have to leave it there.

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Speaker 1: Thank you so much for being with us. Dr Riggin,

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Speaker 1: President and chief executive officer of Kindred Biosciences in San Francisco.

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Speaker 1: Thanks for listening to the Bloomberg P and L podcast.

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Speaker 1: You can subscribe and listen to interviews that Apple Podcasts, SoundCloud,

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Speaker 1: or whatever podcast platform you prefer. I'm pim Fox. I'm

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Speaker 1: on Twitter at pim Fox. I'm on Twitter at Lisa

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Speaker 1: abramowits one before the podcast. You can always catch us

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Speaker 1: worldwide on Bluebirg Radio