WEBVTT - BI Weekend: Nvidia Earnings, Paramount Saga 0:00:02.920 --> 0:00:12.600 Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Intelligence 0:00:12.640 --> 0:00:14.400 with Alex Steinehl and Paul Sweeney. 0:00:14.520 --> 0:00:17.720 The real app performance has been in US corporate high yield. 0:00:17.880 --> 0:00:20.239 Are the companies lean enough? Have they trimmed all the fats? 0:00:20.320 --> 0:00:23.959 The semiconductor business is a really cyclical business. 0:00:23.600 --> 0:00:27.200 Breaking market headlines and corporate news from across the globe. 0:00:27.240 --> 0:00:29.880 Do investors like the M and A that we've seen? 0:00:30.080 --> 0:00:31.000 These are two. 0:00:31.040 --> 0:00:33.159 Big time blue chip companies. 0:00:33.320 --> 0:00:36.920 The window between the peak and cut changing super fast. 0:00:37.080 --> 0:00:41.680 Bloomberg Intelligence with Alex Steinehl and Paul Sweeney on Bloomberg Radio. 0:00:43.520 --> 0:00:46.080 I'm Paul Sweeney and I'm Emi Graffeo filling in for 0:00:46.120 --> 0:00:46.760 Alex Steele. 0:00:46.840 --> 0:00:49.080 On today's Bloomberg Intelligence Show. We dig inside the big 0:00:49.080 --> 0:00:51.360 business stories impacting Wall Street and the global markets. 0:00:51.479 --> 0:00:53.800 Each and every week, we provide in depth research and 0:00:53.880 --> 0:00:56.120 data on some of the two thousand companies and one 0:00:56.240 --> 0:00:58.920 hundred and thirty industries our analysts cover worldwide. 0:00:58.960 --> 0:01:02.320 Today, we'll discuss how patients can now get Eli Lilly's 0:01:02.360 --> 0:01:05.479 blockbuster weight loss rug at nearly fifty percent discount plus. 0:01:05.520 --> 0:01:07.640 We'll look at a slew of US retail earnings that 0:01:07.680 --> 0:01:09.960 are painting a mixed picture of the consumer. 0:01:10.120 --> 0:01:12.279 But first we dive into the earning from AI giant 0:01:12.480 --> 0:01:15.200 n Vidia. This week, the chipmaker gave a revenue forecast 0:01:15.240 --> 0:01:18.400 that fell short of some of the most optimistic analyst expectations. 0:01:18.560 --> 0:01:21.200 The outlook threatens to tamp down an AI frenzy that 0:01:21.240 --> 0:01:25.080 has transformed in Vidia into the world's second most valuable company. 0:01:25.240 --> 0:01:27.520 For more, Emily and I were joined by kun John Sobani, 0:01:27.520 --> 0:01:30.000 Bloomberg Intelligence senior semiconductor analysts. 0:01:30.080 --> 0:01:32.000 We first asked Koon John for his take on the 0:01:32.000 --> 0:01:32.880 company's results. 0:01:33.280 --> 0:01:35.440 Look, this not enough negatives. 0:01:35.480 --> 0:01:39.200 Fundamentally, they are a victim of their own recent success 0:01:39.240 --> 0:01:42.160 and strength and really unrealistic expectations. 0:01:42.560 --> 0:01:45.399 I'm wondering, this is a company where a lot of 0:01:45.440 --> 0:01:49.120 their their customers are highly concentrated. Something like forty percent 0:01:49.600 --> 0:01:53.160 of the customer base is just a few big tech companies. 0:01:53.680 --> 0:01:55.200 What are the risks associated with that? 0:01:55.520 --> 0:01:59.000 I mean, the concentration has been a significant risk. It's 0:01:59.000 --> 0:02:02.080 sort of a double eds. You know, by the function 0:02:02.200 --> 0:02:06.240 of spending. These customers are the ones who really spend 0:02:06.600 --> 0:02:09.880 major I app capex dollars, So you do want them 0:02:09.919 --> 0:02:12.040 to be your biggest customers. Because that's who are really 0:02:12.240 --> 0:02:14.720 creating the market. At the same time, we have seen 0:02:15.080 --> 0:02:18.359 signs like over the last two quarters, the cloud players 0:02:18.680 --> 0:02:22.079 make up about forty five percent of its data center revenue, 0:02:22.280 --> 0:02:24.919 which is down from its peak of mid fifty percent 0:02:24.960 --> 0:02:27.480 over last year, so that's a good sign. Over the 0:02:27.520 --> 0:02:30.880 last few quarters, we have seen enterprises and the consumer 0:02:30.919 --> 0:02:35.120 internet and vertical companies growing faster for NVDA data center 0:02:35.160 --> 0:02:38.560 revenues compared to the cloud revenues for NVDA data center, 0:02:38.639 --> 0:02:41.600 so that's again a good sign. Another third sign that 0:02:41.720 --> 0:02:45.200 shows that ditaversification is happening and that risk is easy 0:02:45.600 --> 0:02:48.960 is what we have seen in front of geographical demand perspective. 0:02:49.160 --> 0:02:51.919 So over the last few quarters, we have seen rest 0:02:51.960 --> 0:02:55.880 of the world outside of US continue to sustainably keep 0:02:55.919 --> 0:02:58.799 growing sequentially. In fact, this quarter was the first time 0:02:58.800 --> 0:03:01.840 we ever saw US decline slightly quarter work quarter. 0:03:02.080 --> 0:03:05.840 So Kunjan, can those new types, new verticals of customers, 0:03:05.840 --> 0:03:09.720 can they offset what might be slowing demand from the 0:03:09.760 --> 0:03:11.919 Amazons of the world, the Googles of the world who 0:03:12.040 --> 0:03:13.480 are developing their own chips. 0:03:13.919 --> 0:03:17.320 So we have not seen signs of slowing demand from 0:03:17.360 --> 0:03:19.760 the Amazons and Googles of the world. You know, when 0:03:19.760 --> 0:03:22.280 you look at quarter to quarter things can look lumpy, 0:03:22.639 --> 0:03:26.720 but from a year and perspective, annual perspective, we are 0:03:26.760 --> 0:03:28.840 not seeing slowing demand. In fact, when we look at 0:03:28.840 --> 0:03:32.360 these earning seasons, all of these customers beat their capex 0:03:32.440 --> 0:03:35.840 estimation and guided for more capex spending, most of it 0:03:35.920 --> 0:03:38.360 going to a Yeah, most of it going to in media. Yes, 0:03:38.400 --> 0:03:41.520 the risk is there of these customers using their own chips, 0:03:41.560 --> 0:03:44.680 but that's more of a out year risk. They still 0:03:44.760 --> 0:03:48.200 do are not slowing down or stopping purchasing in media chips. 0:03:48.880 --> 0:03:52.640 What do investors need to know about the Blackwell processor lineup? 0:03:52.760 --> 0:03:55.040 Ian King of Bloomberg News said this is in Nvidia's 0:03:55.120 --> 0:03:57.600 next big cash cow exactly. 0:03:57.640 --> 0:04:00.480 I mean, from our perspective, the biggest question or the 0:04:00.560 --> 0:04:03.120 risk going into the earnings was what's happening with the 0:04:03.160 --> 0:04:06.520 Blackwell delay? Is it going to ramp? And if so? 0:04:06.560 --> 0:04:09.800 When I think the comment that Jensen made about seven 0:04:09.840 --> 0:04:13.640 billion dollars shipment in their fiscal four Q should put 0:04:13.640 --> 0:04:17.240 a lid on these uncertainty around Blackwell. And yes, Blackwell 0:04:17.360 --> 0:04:21.080 is supposed to be the next growth driver. Specifically, most 0:04:21.120 --> 0:04:24.680 of the twenty twenty five growth is hinged on Blackwell's success. 0:04:24.520 --> 0:04:27.560 Layout for US kind of how the competitive environment looks 0:04:27.600 --> 0:04:30.719 at their Kunjan. I'm thinking about advanced micro devices, broad coom, 0:04:31.000 --> 0:04:34.120 maybe to Qualcom to less extent Intel. I guess where 0:04:34.160 --> 0:04:36.640 are all these competitors here? Why can't they do this stuff? 0:04:38.240 --> 0:04:41.360 I mean, and Media has almost more than a decade 0:04:41.360 --> 0:04:43.840 of R and D behind them in this arena. Right, 0:04:43.880 --> 0:04:47.600 they are the ones who, for the most part, invented GPUs. 0:04:48.560 --> 0:04:50.720 They have been working on GPUs for like I said, 0:04:50.760 --> 0:04:54.200 investing in it more than a decade. These other companies 0:04:54.200 --> 0:04:56.919 that we talked about I have not been investing in 0:04:56.920 --> 0:04:59.120 this area. So it's not as easy to come in 0:04:59.560 --> 0:05:03.000 and immediately replace someone who has been ahead of you 0:05:03.520 --> 0:05:07.440 by multi years. Second, there's a lot other entries to barrier. 0:05:07.480 --> 0:05:11.080 It's not just about creating comparable chips, their software, system 0:05:11.720 --> 0:05:15.040 their systems. They're not a chip solution provider anymore. They 0:05:15.040 --> 0:05:17.240 are a system solution provider. So you don't need a 0:05:17.240 --> 0:05:20.320 comparable chip. You also need the software, you need the ecosystem, 0:05:20.560 --> 0:05:23.960 you need the vertical integration and the system integration capabilities. 0:05:24.279 --> 0:05:27.279 At the same time, they are not just sitting right, 0:05:27.360 --> 0:05:29.799 they are running much faster than they have in the past. 0:05:29.800 --> 0:05:32.000 So it's not just about catching up to in Media, 0:05:32.000 --> 0:05:35.000 which is already two plus years ahead of its closest competitor. 0:05:35.320 --> 0:05:37.280 It's also trying to catch up when they are even 0:05:37.360 --> 0:05:40.160 running faster. One example of that is they are now 0:05:40.200 --> 0:05:43.240 launching new products at a cadence of twelve months. This 0:05:43.320 --> 0:05:46.919 is unprecedented in the semi conductor world for this complex technology. 0:05:47.000 --> 0:05:49.279 Usually you see eighteen to twenty four months of a 0:05:49.320 --> 0:05:50.280 product lon cycle. 0:05:50.760 --> 0:05:53.200 How about valuation here again, you know, you look at 0:05:53.200 --> 0:05:56.400 it and it's like seventy times trailing forty five times 0:05:56.400 --> 0:05:58.240 this year, is thirty times next year? Is this a 0:05:58.240 --> 0:06:01.640 stock that real, realistically with a straight face you can 0:06:01.680 --> 0:06:05.000 say to clients is earning its way into its multiple. 0:06:04.680 --> 0:06:07.720 Also, we look at forward looking multiples and when you 0:06:07.800 --> 0:06:11.200 still compare it today compared to most of its peers, right, 0:06:11.440 --> 0:06:15.000 it's still growing faster than most of its peers, even 0:06:15.040 --> 0:06:17.559 at this large scale, which is very important that people 0:06:17.600 --> 0:06:21.279 forget when you look at other fundamental metrics, the gross margin, 0:06:21.320 --> 0:06:24.840 the earnings growth, the free cashual generation still top of 0:06:25.600 --> 0:06:28.360 the list. So I mean that does demand a certain 0:06:28.400 --> 0:06:30.600 premium versus its peers, right, And when you look at 0:06:30.600 --> 0:06:33.760 the other air peers. It doesn't seem that expensive on 0:06:33.760 --> 0:06:34.719 a relative basis. 0:06:35.080 --> 0:06:38.560 Give us some final thoughts on is this a market 0:06:38.720 --> 0:06:40.400 that is only going to be powered by in video 0:06:40.520 --> 0:06:42.279 or are we going to see more trading days The tech 0:06:42.320 --> 0:06:45.680 trade is kind of you know, in the green without Invidia. 0:06:45.680 --> 0:06:46.479 I would say both. 0:06:46.520 --> 0:06:48.760 I mean you have to really separate out right. We 0:06:48.839 --> 0:06:52.560 think if if there is fundamental weakness or concern coming 0:06:52.600 --> 0:06:55.039 out of in media, which did not happen, by the way, 0:06:55.720 --> 0:06:58.120 we think there will be a broader impact to the market. 0:06:58.400 --> 0:07:00.680 But in the absence of that, right, there was no 0:07:00.880 --> 0:07:04.400 real concerns, There was no real flag risks that were 0:07:04.560 --> 0:07:07.120 macro risks outlined here that the demand is slowing, the 0:07:07.160 --> 0:07:10.280 spending is slowing. So I believe until and unless we 0:07:10.320 --> 0:07:13.080 don't see those risks come out, the impact should be 0:07:13.120 --> 0:07:15.880 limited to Invidia. But when, if, and when we do 0:07:16.000 --> 0:07:18.040 see those come out, it could spread across. 0:07:18.520 --> 0:07:22.880 Thanks to Kunjhan Sobani, Bloomberg Intelligence senior semiconductor analysts. 0:07:22.640 --> 0:07:24.120 We move now to the media space. 0:07:24.320 --> 0:07:26.960 Pretty sure, David Ellison Skydance Media looks set to become 0:07:27.000 --> 0:07:28.680 the new owner of Paramount Global. 0:07:28.880 --> 0:07:32.240 That's after seacrem air. Edgar Bronform Jr. Dropped his bid 0:07:32.280 --> 0:07:35.200 for Paramount this week. Paramount said it now expects to 0:07:35.240 --> 0:07:37.480 complete a deal with sky Dance in the first half 0:07:37.520 --> 0:07:38.440 of twenty twenty five. 0:07:38.680 --> 0:07:40.760 For More and All This, host Alex Steele and Bailly 0:07:40.840 --> 0:07:43.800 Lipschaltz were joined by Keitha rung Anathan Bloomberg intelligence analyst 0:07:43.880 --> 0:07:44.640 on US media. 0:07:44.840 --> 0:07:47.440 They first asked Etha for her take on the latest news. 0:07:48.000 --> 0:07:50.840 This one's been a tough one, right, It's not over 0:07:50.960 --> 0:07:54.800 until it's over. I think Skydance does seem to be, 0:07:55.560 --> 0:07:59.680 you know, the only bidding party here for Paramount, and 0:08:00.320 --> 0:08:02.560 you know, the Edgar Braffman bid, and you know, we 0:08:02.560 --> 0:08:05.240 were talking about this last week, Alex. It was really 0:08:05.280 --> 0:08:07.080 a little bit of a head scratcher because they made 0:08:07.080 --> 0:08:10.680 that eleventh hour move. He cobbled together something like twenty 0:08:10.800 --> 0:08:13.560 outside investors and then when you know, kind of push 0:08:13.600 --> 0:08:17.200 came to shove, he really couldn't find the equity financing 0:08:17.240 --> 0:08:20.240 required to back his six billion dollar offer. 0:08:21.080 --> 0:08:23.400 Am I reading too much into it to question why 0:08:23.680 --> 0:08:27.000 the eleventh hour offer, Like if if it seemed like 0:08:27.520 --> 0:08:29.880 there wasn't enough time early, enough time, and you're trying 0:08:29.920 --> 0:08:32.520 to find people and get funding. It kind of I. 0:08:32.480 --> 0:08:35.280 Don't know, Yeah, I think, you know, a couple of 0:08:35.280 --> 0:08:39.040 different things. Maybe he had difficulty kind of finding all 0:08:39.679 --> 0:08:43.240 the different parties interested. Obviously he didn't you know, there 0:08:43.360 --> 0:08:45.679 was a ghost shop period that was a forty five 0:08:45.720 --> 0:08:49.080 day period and he literally submitted it on August twentieth. 0:08:49.080 --> 0:08:51.240 Then August twenty first was the end of that forty 0:08:51.240 --> 0:08:53.520 five day go shop period. One could argue that maybe 0:08:53.559 --> 0:08:55.040 he didn't want to, you know, kind of show his 0:08:55.120 --> 0:08:57.960 hand too early so that there, you know, would be 0:08:58.000 --> 0:09:00.800 other parties kind of jumping in. But at the end 0:09:00.840 --> 0:09:03.120 of the day, you know, he obviously does not have 0:09:03.160 --> 0:09:07.720 the financial firepower of the Allison family, and that's something 0:09:07.760 --> 0:09:09.320 I think investors are going to have to come to 0:09:09.400 --> 0:09:09.760 terms with. 0:09:10.360 --> 0:09:12.959 So all right, let's just walk it forward. You get Skuidance, 0:09:13.040 --> 0:09:15.440 gets paramount, et cetera. There were some reports that maybe 0:09:15.440 --> 0:09:18.000 some of the TV networks I'm assuming Local would be 0:09:18.040 --> 0:09:20.560 spun off or sold, etc. What are we expecting of 0:09:20.600 --> 0:09:21.960 that sort to unfold? 0:09:22.240 --> 0:09:24.559 So they right now have three co CEOs and this 0:09:25.160 --> 0:09:27.960 kind of structure, this temporary structure, is going to continue 0:09:28.040 --> 0:09:31.560 till this Guy Dance deal closes, which might happen sometime 0:09:31.640 --> 0:09:35.319 towards the latter half of twenty twenty five. Until then, 0:09:35.400 --> 0:09:37.480 what they're really trying to do is number one is 0:09:37.520 --> 0:09:41.760 make streaming profitable. They already did do that in the 0:09:41.800 --> 0:09:44.400 second quarter. So they're really kind of cutting down on 0:09:44.440 --> 0:09:47.400 marketing spend, they're cutting down on content expenses, They're doing 0:09:47.480 --> 0:09:50.360 everything they can to write the ship. They're also kind 0:09:50.360 --> 0:09:53.880 of trying to undertake cost cuts across the whole enterprise 0:09:54.200 --> 0:09:57.000 and get rid of non core assets. So the news 0:09:57.040 --> 0:09:59.600 that we got about them looking to divest some of 0:09:59.600 --> 0:10:02.760 their low local TV stations exactly kind of goes to 0:10:02.840 --> 0:10:05.640 that strategy. You know, they could potentially end up with 0:10:05.679 --> 0:10:08.160 about five hundred million, I mean about half a billion 0:10:08.280 --> 0:10:11.880 or a billion dollars for those you know, TV stations. Again, 0:10:11.920 --> 0:10:14.800 that's going to help them pay down debt. And debt 0:10:14.800 --> 0:10:18.079 has been a huge problem for Paramount. They have almost 0:10:18.160 --> 0:10:21.480 about fourteen and a half billion dollars in debt, and 0:10:21.559 --> 0:10:24.520 that has really kind of complicated the whole story because 0:10:24.840 --> 0:10:28.080 it you know, they have low ebit, low free cash flow, 0:10:28.080 --> 0:10:30.079 and then very high debt. 0:10:29.600 --> 0:10:31.240 And what does the path forward look like. I'm just 0:10:31.240 --> 0:10:35.080 looking through your latest note kind of looking at strengthening 0:10:35.080 --> 0:10:36.760 the balance sheet. To your point, more than fourteen a 0:10:36.760 --> 0:10:38.960 half billion in debt. Market cap is seven point six 0:10:39.000 --> 0:10:40.880 billion dollars, so you never really want to see numbers 0:10:41.080 --> 0:10:44.720 that stretched. But what does Ellison's d pockets bring to 0:10:44.760 --> 0:10:48.719 the table, Like, how does this potentially revamp Paramount if 0:10:48.760 --> 0:10:49.040 at all? 0:10:50.280 --> 0:10:53.400 Absolutely, that's that's a great point, Bailey. So I think 0:10:53.520 --> 0:10:56.520 the main reason that Ellison has been chasing after Paramount 0:10:56.559 --> 0:10:58.679 for all these months is really his interest in kind 0:10:58.720 --> 0:11:01.240 of getting his hands on the studio. So he does 0:11:01.400 --> 0:11:04.160 have a long history with Paramount. They have, you know, 0:11:04.200 --> 0:11:06.920 the Ellisons have been a co financer on many of 0:11:07.400 --> 0:11:11.120 the Paramount TV and film projects, most notably a lot 0:11:11.160 --> 0:11:13.880 of the Tom Cruise movies. So they do kind of 0:11:14.000 --> 0:11:16.280 know how, you know, that business works. They have a 0:11:16.320 --> 0:11:18.960 lot of expertise, so they are going to kind of 0:11:19.000 --> 0:11:23.440 double down on the Paramount studio business. The theatrical business 0:11:23.600 --> 0:11:27.000 is rebounding nicely, so I think it does make sense 0:11:27.040 --> 0:11:29.240 for them. And historically, if you just look at Paramount, 0:11:29.480 --> 0:11:31.360 this is you know, the studio has always kind of 0:11:31.360 --> 0:11:33.480 been a step child. So it's nice that it's going 0:11:33.520 --> 0:11:36.080 to now come into focus, and then along with that, 0:11:36.280 --> 0:11:40.640 you have almost one thousand person animation team that Skuydance 0:11:40.720 --> 0:11:43.560 is going to bring to Paramount, so really kind of 0:11:43.600 --> 0:11:46.320 doubling down on the animation business. And this is important 0:11:46.360 --> 0:11:49.600 because we see studios kind of going deeper and deeper 0:11:49.600 --> 0:11:52.600 into animation. This is animation is one of the most 0:11:52.760 --> 0:11:56.440 profitable genres across the whole movie space, so it makes 0:11:56.480 --> 0:11:58.320 a lot of sense for them to get into that 0:11:58.360 --> 0:12:00.720 in a bigger way because they can really kind of 0:12:00.840 --> 0:12:03.880 enhance the profitability of the studio business as a whole. 0:12:04.160 --> 0:12:08.599 Our Thanks to Githa Ranganathan, Bloomberg Intelligence analyst on US Media. 0:12:08.160 --> 0:12:10.840 Coming up a conversation with the executive director of the 0:12:10.880 --> 0:12:14.840 Port of Los Angeles on cargo volumes and the shipping industry. 0:12:14.920 --> 0:12:17.600 You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 0:12:17.640 --> 0:12:19.920 depth research and data on two thousand companies and one 0:12:20.000 --> 0:12:22.920 hundred and thirty industries. You can access Bloomberg Intelligence via 0:12:22.960 --> 0:12:24.280 Bigo on the terminal. 0:12:24.400 --> 0:12:27.600 I'm Paul Sweeney and I'm Emily Graffeo. This is Bloomberg. 0:12:31.559 --> 0:12:35.439 You're listening to the Bloomberg Intelligence podcast. Catch us Live 0:12:35.520 --> 0:12:38.880 weekdays at ten am Eastern on Applecarplaying and broud Outo 0:12:38.960 --> 0:12:41.840 with the Bloomberg Business App. Listen on demand wherever you 0:12:41.920 --> 0:12:46.120 get your podcasts, or watch us live on YouTube. 0:12:46.840 --> 0:12:49.440 I'm Paul Sweeney and I'm Emily Graffeo filling in for 0:12:49.480 --> 0:12:50.120 Alex Steele. 0:12:50.400 --> 0:12:52.960 We move now to the biotech space. This week we 0:12:53.040 --> 0:12:55.880 heard the pharmaceutical company Eli Lilly is selling vials of 0:12:55.920 --> 0:12:58.320 its blockbuster weight loss drug to patients at a fifty 0:12:58.360 --> 0:12:59.800 percent discount to its shots. 0:13:00.120 --> 0:13:03.280 Patients with a prescription for Zetbound can now purchase a 0:13:03.400 --> 0:13:06.920 month's supply of single use vials through Lily's direct to 0:13:07.000 --> 0:13:07.920 consumer site. 0:13:08.040 --> 0:13:10.360 This is being done to help Eli Lily overcomes supply 0:13:10.440 --> 0:13:13.920 shortages of its widely popular shots. For more, hosts Alex 0:13:13.920 --> 0:13:16.880 Stale and Billy Lipschutz were joined by Michael Shaw, Bloomberg 0:13:16.920 --> 0:13:18.760 Intelligence Senior Pharma analyst. 0:13:19.040 --> 0:13:21.679 They first asked Michael why it's easier for Eli Lilly 0:13:21.760 --> 0:13:24.080 to produce vials than actual shots. 0:13:24.400 --> 0:13:26.640 They're providing a valve for relation. It's something that they've 0:13:26.640 --> 0:13:29.000 talked about, you know, for a while now on their calls. 0:13:29.480 --> 0:13:29.600 Now. 0:13:29.640 --> 0:13:31.960 The reason why these are easier to produce is, you know, 0:13:32.120 --> 0:13:34.920 the fill and finished capacity, so the capacity needed to 0:13:34.960 --> 0:13:37.400 actually put the drug in the pens and the capacity 0:13:37.440 --> 0:13:40.840 needed to manufacture at the pens of the subcutaneous ejection. 0:13:41.160 --> 0:13:42.880 So overall, I think, you know, the move is you 0:13:42.920 --> 0:13:48.480 know positive for Lily clearly broadens access or patients access 0:13:48.559 --> 0:13:52.480 you know, to zet bound and also from you know, 0:13:52.600 --> 0:13:57.439 compounding pharmacy standpoint. The fact that they improved supply means 0:13:57.440 --> 0:14:01.000 it could you know, possibly combat you know, competition from 0:14:01.120 --> 0:14:03.520 you know, companies such as him, Hymns and Hers. 0:14:04.000 --> 0:14:06.439 Yeah, Lily not so subtly saying that they want to 0:14:06.480 --> 0:14:09.679 aim to protect patients from quote counterfeit, fake unsafe for 0:14:09.840 --> 0:14:13.920 untested knockoffs. So how does that impact kind of the 0:14:14.000 --> 0:14:17.440 business and demand If we're seeing a cheaper version being 0:14:17.520 --> 0:14:20.320 sold and maybe trying to court some of those Hymns 0:14:20.320 --> 0:14:23.640 and Hers GLP one users, how does that impact kind 0:14:23.640 --> 0:14:26.480 of the total addressable market and expectations for sales of 0:14:26.560 --> 0:14:27.080 zepp out. 0:14:27.440 --> 0:14:29.480 Well, I think if there's you know, if there's a 0:14:29.600 --> 0:14:35.280 branded vowel formulation out there and there's obviously guarantees around 0:14:35.320 --> 0:14:37.280 kind of purity, et cetera, I think that's going to 0:14:37.280 --> 0:14:40.880 be the preferred choice. The fact that you're introducing these 0:14:41.360 --> 0:14:44.480 valves into the market, would suggest that, you know, some 0:14:44.560 --> 0:14:48.960 of that supply burden and supply shortage which is needed 0:14:49.000 --> 0:14:51.600 for a compounding pharmacy to produce a drug that is 0:14:51.640 --> 0:14:54.920 on pattern, you know, some of that will be alleviated there. 0:14:55.360 --> 0:14:57.480 So that's kind of why we think it's positive for Lily. 0:14:58.440 --> 0:15:00.600 As to whether you know, come to like him and 0:15:00.640 --> 0:15:04.960 hers will continue producing you know, their versions of the 0:15:05.000 --> 0:15:08.280 GEO beyond ones, I mean, that remains to be seen. 0:15:08.320 --> 0:15:11.600 But I imagine if they do, you know, Lily would 0:15:11.880 --> 0:15:13.280 you know, probably challenge. 0:15:12.960 --> 0:15:17.520 It when people then do their own shots, like administer it, 0:15:17.600 --> 0:15:19.600 Like is there a risk in that? Like, well, what 0:15:19.600 --> 0:15:21.440 what kind of uptake are we expecting from that? Because 0:15:21.440 --> 0:15:23.320 I would be scared to do it. But maybe that's 0:15:23.360 --> 0:15:23.560 just me. 0:15:24.600 --> 0:15:27.000 I mean, I think judging by you know, what we 0:15:27.080 --> 0:15:30.120 saw for uptake of these compounded drugs, there's clearly a 0:15:30.120 --> 0:15:34.560 appetite for injectable injections. Now, you know, we look to 0:15:34.600 --> 0:15:37.080 the diabetes market. You know, some of the incidents used 0:15:37.080 --> 0:15:40.760 to be injections, So I mean, I think it's not 0:15:41.280 --> 0:15:44.160 I mean, there's clearly kind of an increased kind of 0:15:44.240 --> 0:15:48.680 dosing burden associated within these injections, so they're probably not 0:15:48.720 --> 0:15:50.520 going to be suitable for all, but you know, I 0:15:50.560 --> 0:15:52.640 think there is going to be an appetite for it. 0:15:53.080 --> 0:15:56.560 What does this mean for the competitive landscape? So you 0:15:56.560 --> 0:15:58.920 have Lily, you have Novo. To your point, you have 0:15:59.000 --> 0:16:01.960 hymns and hers like, is this going to create a 0:16:02.040 --> 0:16:05.240 pricing war? Am I reading too much into that now? 0:16:05.320 --> 0:16:07.520 I mean when we look at the I mean, the 0:16:07.720 --> 0:16:11.320 headlines had fifty percent you know, discount, but we need 0:16:11.400 --> 0:16:14.280 to remember that, you know, on a net price basis, 0:16:14.880 --> 0:16:17.760 so you know, after taking account all the rebates and discounts, 0:16:17.800 --> 0:16:21.160 you know, the pricing is probably you know, fairly similar 0:16:21.360 --> 0:16:24.680 to the current net prices that we're seeing now at 0:16:24.720 --> 0:16:28.400 the moment. You know, it's an underpenetrated market. You know, 0:16:28.400 --> 0:16:32.080 there's massive demand out there, there's tight supply, So I 0:16:32.080 --> 0:16:34.160 don't think it's gonna you know, change too much in 0:16:34.240 --> 0:16:37.600 terms of the dynamics between you know, Novo and Lily. 0:16:37.680 --> 0:16:41.680 I think I think prescribing decisions are you know, less 0:16:41.720 --> 0:16:44.240 about kind of the profiles of the drug at the 0:16:44.240 --> 0:16:46.880 moment and more about you know, what is ensured, what 0:16:46.960 --> 0:16:49.320 can people get their hands on? So near term, I 0:16:49.360 --> 0:16:53.800 don't see you know that that changing from a lily perspective. 0:16:54.040 --> 0:16:56.480 You know, as they ramp up supply over the over 0:16:56.520 --> 0:16:59.720 the midterm of their you know, their pens. You could 0:16:59.760 --> 0:17:04.000 put GC patients switching from the injectable onto the pen 0:17:04.800 --> 0:17:06.679 as in when that supply comes on board. 0:17:06.960 --> 0:17:07.239 All right. 0:17:07.240 --> 0:17:11.240 Thanks to Michael Schap, Bloomberg Intelligence Senior Parma biotech analyst. 0:17:10.760 --> 0:17:13.400 We move next to one of the world's busiest seaports 0:17:13.640 --> 0:17:16.520 and a leading gateway for international trade in North America, 0:17:16.600 --> 0:17:18.080 the Port of Los Angeles. 0:17:18.320 --> 0:17:20.280 This week, co hosts Alex Steele and I were joined 0:17:20.280 --> 0:17:23.439 by Geen Soroka, Executive Director of the Port of Los Angeles. 0:17:23.560 --> 0:17:26.680 We discussed his forecast for cargo volumes, the shipping industry, 0:17:26.880 --> 0:17:29.760 and investing in ports moving forward, and we began by 0:17:29.800 --> 0:17:32.040 asking Gene what the traffic is at the Port of LA. 0:17:32.600 --> 0:17:35.200 We're up eighteen percent year on year off of very 0:17:35.200 --> 0:17:39.080 modest comps, but we just crossed the five hundred thousand 0:17:39.160 --> 0:17:42.760 container unit mark last month and it's only the fourth 0:17:42.760 --> 0:17:44.639 time in our history we've had more than half a 0:17:44.680 --> 0:17:49.080 million imports coming through Los Angeles. Big number for US, 0:17:49.119 --> 0:17:52.240 and it continues the trend that we've seen thus far 0:17:52.359 --> 0:17:56.560 this year. In addition, exports are now up fourteen consecutive 0:17:56.600 --> 0:17:59.520 months year on year, So the volume as a whole 0:17:59.800 --> 0:18:03.720 is really great, based mainly on a strong economy and 0:18:03.760 --> 0:18:07.120 then some geopolitical issues around around the world that I'm 0:18:07.119 --> 0:18:07.920 sure we'll talk about. 0:18:08.040 --> 0:18:11.840 Yeah, So, Gin, I'm curious how much are your customers 0:18:11.920 --> 0:18:15.800 talking about the geopolitics abroad but also here in the 0:18:15.960 --> 0:18:18.959 US Anecdotally, I keep hearing that certain companies are just 0:18:19.000 --> 0:18:22.240 holding back on investments until we get clarity on who's 0:18:22.280 --> 0:18:24.159 going to be in the White House. Are you seeing 0:18:24.200 --> 0:18:24.720 any of that. 0:18:26.240 --> 0:18:29.720 In just about every conversation, alex It is an election 0:18:29.880 --> 0:18:32.320 year and folks are looking to see and try to 0:18:32.359 --> 0:18:34.960 hedge as to what type of policies will be in 0:18:35.000 --> 0:18:36.360 place after inauguration. 0:18:36.840 --> 0:18:38.480 You've got a protracted labor. 0:18:38.240 --> 0:18:41.280 Negotiation on the East Coast with the Dock Workers and 0:18:41.280 --> 0:18:44.840 Employers Association that's coming up for expiry at the end 0:18:44.920 --> 0:18:48.000 of September. The Panama Canal drought issues have been in 0:18:48.040 --> 0:18:50.159 the news for well over a year and a half, 0:18:50.440 --> 0:18:53.760 and the ongoing security concerns in the Red Sea have 0:18:53.920 --> 0:18:57.800 stymied crossings at the Suez Canal for more than a 0:18:57.880 --> 0:19:01.040 year as well. All of that put together fractionally, you 0:19:01.160 --> 0:19:03.760 see cargo coming to the West coast of the United 0:19:03.760 --> 0:19:07.000 States and specifically Los Angeles in addition to the strength 0:19:07.000 --> 0:19:07.760 of that economy. 0:19:07.840 --> 0:19:09.280 That shows where the numbers are going. 0:19:09.680 --> 0:19:12.960 Heyjean, just last week Bloomberg News published a really in 0:19:13.040 --> 0:19:16.240 depth big Take story. Now look at your world ports 0:19:16.680 --> 0:19:19.560 around seaports around the world and how some governments are 0:19:19.600 --> 0:19:23.560 using them as really strategic tools here because they're becoming 0:19:23.640 --> 0:19:26.840 so important for global trade. Just for the US, do 0:19:26.880 --> 0:19:29.280 you feel like our ports are where they need to 0:19:29.320 --> 0:19:34.359 be in terms of investments capacity or does the US, 0:19:34.400 --> 0:19:37.840 whether it's a public private partnership, need to invest more. 0:19:39.359 --> 0:19:43.479 We absolutely need to invest more. But beginning with the 0:19:43.520 --> 0:19:47.320 Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and 0:19:47.400 --> 0:19:50.960 now applications that are in front of the Environmental Protection Agency, 0:19:51.359 --> 0:19:53.920 we've seen a focus on ports over the last three 0:19:53.960 --> 0:19:56.280 and a half years here in the United States we 0:19:56.320 --> 0:20:00.040 haven't seen in a generation. We'd like to have this 0:20:00.119 --> 0:20:04.119 type of federal investment budgeted annually. And I also know 0:20:04.160 --> 0:20:07.000