WEBVTT - Chipotle Since Most Since 2012, Signals Trouble for Fast-Casual

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<v Speaker 2>Chipotle Mexican Grill. I was just there yesterday. Love it.

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<v Speaker 2>It's my kind of my once a week thing. Was

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<v Speaker 2>it crowded?

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<v Speaker 3>Uh?

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<v Speaker 4>Yeah, yeah, It's always crowded when the schools get out

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<v Speaker 4>because all the kids come in there and then that's

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<v Speaker 4>Itay're big fans.

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<v Speaker 2>Yeah.

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<v Speaker 4>Anyway, it was good, but apparently not so good in

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<v Speaker 4>the quarter. They had some disappointing results of their guidance.

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<v Speaker 4>Was a little cautious here, and the stock is down

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<v Speaker 4>fifteen point seven percent today, down about forty percent year

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<v Speaker 4>to date. Michael Hanlin joins a senior restaurant and food

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<v Speaker 4>service analysts for Bloomberg Intelligence.

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<v Speaker 2>Mike, is this a Chipotle thing?

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<v Speaker 4>Is this a fast service quick service restaurant thing?

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<v Speaker 2>What is this going on there? Now? Listen there there is.

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<v Speaker 5>You know, some other companies are talking about a little

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<v Speaker 5>bit of a pullback here in October. I think a

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<v Speaker 5>big part of it is really around the DC metropolitan

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<v Speaker 5>area and has to do with the government shut down.

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<v Speaker 5>But this is you know, Chipoti is trying to blame

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<v Speaker 5>the macro but you know, this is largely self inflicted

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<v Speaker 5>in our view. I mean, if you look at the

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<v Speaker 5>other earnings that have been released, Shake Shack this morning

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<v Speaker 5>had a great print. Restaurant brands which owns, you know,

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<v Speaker 5>Burger King, Tim Horton's, Popeyes had a very good print.

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<v Speaker 5>Domino's Chili's are crushing it right now. So you know,

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<v Speaker 5>for them to come out and blame low income consumers.

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<v Speaker 2>Which they have a very low exposure to.

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<v Speaker 5>As well as gen Z, which you know, there's some

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<v Speaker 5>anecdotal stuff out there about how gen Z employment isn't great,

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<v Speaker 5>but you know, the survey data that we see is

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<v Speaker 5>showing that gen Z is spending spending more than other

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<v Speaker 5>age cohorts and expect to spend more next year. So

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<v Speaker 5>it's really, I think, largely self inflicted.

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<v Speaker 6>I love the pushback against the narrative that Chipotle is

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<v Speaker 6>peddling here. Having said that, you're seeing shares of Sweet

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<v Speaker 6>Green and Comma Group decline in tandem and sympathy with Chipotle.

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<v Speaker 6>What does this mean whether it's a macro backdrop story

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<v Speaker 6>that Chipotle is, you know, putting the blame on, or

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<v Speaker 6>a Chipotle specific problem. What does this mean for how

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<v Speaker 6>it prices its food? Up until now, it's been moving

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<v Speaker 6>forward with price increases.

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<v Speaker 5>Yeah, so this is this is one of the things

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<v Speaker 5>that kind of really got me going on this call yesterday,

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<v Speaker 5>and then calls in the past as well.

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<v Speaker 2>So you know, last year.

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<v Speaker 5>I would say about fifteen months ago, a little more

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<v Speaker 5>sixteen months ago, there was it went viral that their

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<v Speaker 5>portion sizes were getting smaller, right, and they made an

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<v Speaker 5>investment to increase the portion sizes, which they've done, right,

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<v Speaker 5>So there was a problem last year.

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<v Speaker 7>Then on a.

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<v Speaker 5>Fall earlier this year, they were talking about how much

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<v Speaker 5>value they have and we think we're still a great value.

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<v Speaker 2>Values not our issue.

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<v Speaker 5>Then they came back on this call and they spoke

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<v Speaker 5>out of both sides of their mouth. They said, we're

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<v Speaker 5>priced twenty to thirty percent below our peers. And at

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<v Speaker 5>the same time they said their survey data was showing

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<v Speaker 5>that some people thought their food was way too expensive.

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<v Speaker 2>So which one is it?

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<v Speaker 3>Right?

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<v Speaker 5>Like, if you don't even know what your problem is,

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<v Speaker 5>how are you supposed to fix it.

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<v Speaker 4>Interesting, So what are some of the competitors doing in

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<v Speaker 4>terms of price increases to I don't know, cover the

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<v Speaker 4>cost of tariffs or as general rising costs of bee

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<v Speaker 4>for what are some of the competitors doing in the industry.

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<v Speaker 5>I think the biggest problem here is that they don't

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<v Speaker 5>have any everyday value on their menu. And I understand

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<v Speaker 5>their reluctance to go there, but I mean customers want

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<v Speaker 5>to see it. And I think Shakeshack today, which has

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<v Speaker 5>been one of our favorite names this year, talked about

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<v Speaker 5>how they they have this new one three five dollars offer, right,

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<v Speaker 5>so one dollar drinks, three dollars, fries five dollars, shakes. Right,

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<v Speaker 5>It's not like a crazy discount, and it's it's items

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<v Speaker 5>that are typically pretty good margin, right.

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<v Speaker 2>But they talked about how.

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<v Speaker 7>They switched the focus to that and value and it

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<v Speaker 7>boosted traffic four hundred basis points and this week over

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<v Speaker 7>the week prior. So customers right now do want value

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<v Speaker 7>and Chapotle doesn't really have it on its menu.

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<v Speaker 2>All right, God's you know, lips in your ears or

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<v Speaker 2>whatever that thing is.

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<v Speaker 6>And we have the anecdotal evidence that you just provided

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<v Speaker 6>my Anecdotal evidence is when they started giving you more

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<v Speaker 6>stuff in my taco I didn't need three.

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<v Speaker 2>I only order two now because they overflow it. They

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<v Speaker 2>don't like that.

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<v Speaker 4>Michael Halen, Senior restaurant analyst Bloomberg Intelligence, pulling no punches

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<v Speaker 4>on the folks that told he had the alternate take exactly,

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<v Speaker 4>and he often has that take. Any often is contentious

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<v Speaker 4>on earnings conference calls. I've heard this lot of self

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<v Speaker 4>back in the day. Still listen in on some of those.

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<v Speaker 2>Stay with us. More from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

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<v Speaker 4>Comcast reported some earnings here, stocks down three percent, down

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<v Speaker 4>twenty six percent year to date.

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<v Speaker 2>Tough tough sledding for these cable companies. Here.

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<v Speaker 4>Let's go to Keitha rong Anathan. She covers all the

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<v Speaker 4>media stuff for Bloomberg Intelligence. Etha, what's the takeaway from

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<v Speaker 4>the Comcast earnings here? Another tough quarter.

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<v Speaker 3>Yes, Paul, another tough quarter. For Comcasts, and we suspect

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<v Speaker 3>it's going to beat that a way for a while.

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<v Speaker 3>For these cable companies, they've been having a lot of

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<v Speaker 3>competition in their broadband business, remember broadband. Comcast is the

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<v Speaker 3>largest broadband provider in the United States, has over thirty

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<v Speaker 3>million subscribers, but they've been losing customers at an increasing pace.

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<v Speaker 3>Even though this quarter actually subscriber losses came in slightly

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<v Speaker 3>better than what we had feared. Comcast is doing everything

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<v Speaker 3>that they can do to get subscribers to stay on

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<v Speaker 3>their platforms, just given the very, very intense competition from

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<v Speaker 3>the telcos. That's working, but you know, it's come at

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<v Speaker 3>a cost. So they you know, we're seeing quite a

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<v Speaker 3>bit of pressure on the RPU side as well, as

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<v Speaker 3>we saw a decline in their ebidof almost four percent,

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<v Speaker 3>and they warned that we're going to continue to see

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<v Speaker 3>ABADA declines for many more quarters to come.

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<v Speaker 6>So this idea of using price lock guarantees and bundled

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<v Speaker 6>plans to slow down to stem the bleeding of folks

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<v Speaker 6>who are cutting the cord. Now that it started this,

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<v Speaker 6>it has to kind of stay with it, right. You

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<v Speaker 6>can't stop that promotional activity.

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<v Speaker 3>You cannot Scarlet. You're right, and you know these price

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<v Speaker 3>locks are five year price logs. They're giving away more

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<v Speaker 3>the lines for free. I mean, that's definitely having some impact.

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<v Speaker 3>So we did see, you know, the subscriber numbers come

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<v Speaker 3>out much better. In fact, the mobile the number of

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<v Speaker 3>wireless customers that they added was a record, the highest

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<v Speaker 3>ever that they've had. But obviously it is going to

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<v Speaker 3>continue to put a lot of pressure on the top

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<v Speaker 3>line as well as on the bottom line, and there's

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<v Speaker 3>no way they can stop it. They have to keep

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<v Speaker 3>going with it, which means that the Ibadah pressure is

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<v Speaker 3>going to be sustained.

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<v Speaker 6>So that's a reminder to me, Paul, that I have

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<v Speaker 6>to call Verizon and some of the other providers to

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<v Speaker 6>argue down whatever package I have right now.

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<v Speaker 2>Absolutely it works, Githa.

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<v Speaker 4>The fundamentals are one thing, but probably the big big

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<v Speaker 4>thing overhanging this story right now the Comcast is what

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<v Speaker 4>are they going to do as it relates to the

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<v Speaker 4>M and A front and Warner Brothers Discovery. Here, where's

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<v Speaker 4>the narrative there right now?

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<v Speaker 3>They need to do something, Paul. And I mean you

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<v Speaker 3>just said this stock is down twenty six percent year

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<v Speaker 3>to date, it's down over thirty percent for the past year.

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<v Speaker 3>And they have some great media assets. They have NBC Universal,

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<v Speaker 3>but it's just not enough. They're getting punished both sides.

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<v Speaker 3>So they own cable broadband assets, which makes up about

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<v Speaker 3>eighty eighty five percent of EBITDA. Again, cable is under

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<v Speaker 3>tremendous pressure because of this telecom competition. You know, those

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<v Speaker 3>multiples are at around five to six x media, which

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<v Speaker 3>is you know, the NBC assets brings in about fifteen

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<v Speaker 3>percent of their EBITDA. They have some great assets, but

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<v Speaker 3>again they have this funny thing going on with the

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<v Speaker 3>conglomerate discounts. So they're not able to catch a break

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<v Speaker 3>either on the media side or on the cable side.

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<v Speaker 3>They need to do something transformative. I think Warner Brothers

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<v Speaker 3>is definitely the solution. The question is can they afford

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<v Speaker 3>to get into a bidding war with paramount And I'm

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<v Speaker 3>not sure if they can afford it.

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<v Speaker 4>All Right, Keith is my favorite Wall Street cable analys

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<v Speaker 4>out there. My number two is Craig Moffitt of Moffitt Nathan.

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<v Speaker 4>So he's out with a note today saying and he's

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<v Speaker 4>covered the stock forever and one of the big bear

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<v Speaker 4>cases for Comcast is that they are a serial acquirer.

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<v Speaker 4>Every five years, the feel they need to go out

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<v Speaker 4>and buy something big. And the problem is Iskeetha well

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<v Speaker 4>knows being a buyer of media assets is generally not

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<v Speaker 4>a good allocation of capital. It's not good here, Sokeitha,

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<v Speaker 4>there's a a concern here that, you know, maybe it's

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<v Speaker 4>just not going to be worth it. If they go

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<v Speaker 4>out and do another big deal, they're going to lever

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<v Speaker 4>up their balance sheet. They can have years and years

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<v Speaker 4>of integration risk and that could be a big long

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<v Speaker 4>term drag on the stock.

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<v Speaker 2>How do you counter that.

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<v Speaker 3>Or Yeah, that's always kind of been the you know,

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<v Speaker 3>that's always pooked investors. Paul. I mean, you know very

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<v Speaker 3>well what they did a few years ago. They overpaid

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<v Speaker 3>for Sky a fifteen x multiple and they should have

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<v Speaker 3>probably paid like six or seven. So they do have

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<v Speaker 3>this kind of propensity to go out pay the big dollars.

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<v Speaker 3>Warner Brothers, I think there was a little bit of

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<v Speaker 3>a different story for them. They have they can extract

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<v Speaker 3>tremendous synergies. I think from the asset. There's a really

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<v Speaker 3>good fit in terms of IP. We know that they

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<v Speaker 3>already license, you know, Harry Potter and a lot of

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<v Speaker 3>those other you know, Warner Brothers ip into their parks.

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<v Speaker 3>So there is a good fit. You know, there's a

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<v Speaker 3>lot that can be done on this sheet side. Again,

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<v Speaker 3>you look at Peacock, very heavy on sports, HBO, very

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<v Speaker 3>heavy on scripted originals. I think it's really a nice

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<v Speaker 3>complementary portfolio. I think this time it could be a

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<v Speaker 3>little bit different. But again who knows.

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<v Speaker 6>Yeah, some big questions and of course they need to

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<v Speaker 6>figure out their strategy on this. You mentioned Peacock. What

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<v Speaker 6>is the latest with Peacock? Because subscriber growth when we

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<v Speaker 6>cared about it, and you know that was a while ago,

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<v Speaker 6>because now we care about profitability rose fourteen percent that

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<v Speaker 6>Miss danalyssesstimates even after raising prices, that Missanael assessments. And

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<v Speaker 6>it's not making money, is it.

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<v Speaker 3>It's not. It's not scartant, and it's not going to

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<v Speaker 3>for you know, for the foreseeable future. So they are

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<v Speaker 3>definitely a subscale service. They have just about you know,

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<v Speaker 3>forty two forty three million subscribers. Again, you're comparing that

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<v Speaker 3>to Netflix, which has about three hundred and ten, three

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<v Speaker 3>hundred and fifteen million, So just a huge catch up

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<v Speaker 3>game that that peacock has to play. They do have

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<v Speaker 3>some really good programming though, you know, especially when you

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<v Speaker 3>look at sports. They just recently acquired the rights to NBA,

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<v Speaker 3>so we do have that now you know they have

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<v Speaker 3>the NFL, so there is quite a bit of good

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<v Speaker 3>sports property. I just don't know what they can do

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<v Speaker 3>to necessarily up those subscriber numbers, which is why they

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<v Speaker 3>absolutely need something transformative from an M and a.

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<v Speaker 6>Perspective, Gita, before we let you go, what about the

0:11:16.480 --> 0:11:21.120
<v Speaker 6>theme park business? Universal obviously a huge attraction in California

0:11:21.200 --> 0:11:24.880
<v Speaker 6>and in Orlando. The revenue rose nineteen percent. Is that

0:11:25.640 --> 0:11:27.959
<v Speaker 6>in good shape? And what might that tell us about

0:11:27.960 --> 0:11:29.000
<v Speaker 6>what Disney tells us.

0:11:30.200 --> 0:11:33.000
<v Speaker 3>It's in very good shape, and which is why we're

0:11:33.040 --> 0:11:34.640
<v Speaker 3>you know, we have more and more confidence in the

0:11:34.640 --> 0:11:37.640
<v Speaker 3>theme park business. Comcast saw this coming. They knew that

0:11:37.720 --> 0:11:39.440
<v Speaker 3>this was, you know, the next big thing, you know,

0:11:39.520 --> 0:11:42.040
<v Speaker 3>this whole thing with the experience economy, and they're riding

0:11:42.080 --> 0:11:44.080
<v Speaker 3>that wave in a big way. We saw them open

0:11:44.120 --> 0:11:47.079
<v Speaker 3>Epic Universe earlier this year. They've opened some other new

0:11:47.320 --> 0:11:50.560
<v Speaker 3>attractions in Texas in Las Vegas, so there and there's

0:11:50.600 --> 0:11:52.920
<v Speaker 3>a big park that's coming near London in about four

0:11:52.960 --> 0:11:55.960
<v Speaker 3>or five years. So they're making big investments. It's paying

0:11:56.040 --> 0:11:59.520
<v Speaker 3>off and you know, just like a Comcast, we're pretty

0:11:59.520 --> 0:12:01.480
<v Speaker 3>bullish on on the Disney business as well.

0:12:01.640 --> 0:12:03.160
<v Speaker 2>Yeah, theme park business. Who would have thunk it.

0:12:03.520 --> 0:12:05.400
<v Speaker 4>Githa Ronganatha, and thank you so much for joining us.

0:12:05.440 --> 0:12:08.160
<v Speaker 4>Githa is the media analyst at Bloomberg Intelligence.

0:12:08.400 --> 0:12:11.520
<v Speaker 2>Stay with us. More from Bloomberg Intelligence coming up after this.

0:12:15.440 --> 0:12:19.160
<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

0:12:19.240 --> 0:12:22.319
<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

0:12:22.320 --> 0:12:25.640
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0:12:25.679 --> 0:12:29.280
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0:12:29.840 --> 0:12:32.680
<v Speaker 6>The frenzied m and A taking place in the pharmaceutical sector.

0:12:32.880 --> 0:12:35.520
<v Speaker 6>Let's dig into that right now, because Novo Nordisk, who

0:12:35.600 --> 0:12:37.960
<v Speaker 6>is kind of the OG when it comes to weight

0:12:38.000 --> 0:12:43.000
<v Speaker 6>loss drugs, is now making an aggressive, unsolicited bid for Metserah,

0:12:43.720 --> 0:12:46.840
<v Speaker 6>which had already agreed to a deal with Pfizer. Let's

0:12:46.840 --> 0:12:50.320
<v Speaker 6>bring in Robert Langworth, Bloomberg News healthcare reporter on the

0:12:50.440 --> 0:12:52.679
<v Speaker 6>latest here, and I mean, this is kind of the

0:12:52.760 --> 0:12:55.679
<v Speaker 6>highest level of corporate drama given that Novo Nordisk is

0:12:55.720 --> 0:12:58.840
<v Speaker 6>moving very aggressively. Just step back for a moment here,

0:12:59.080 --> 0:13:01.040
<v Speaker 6>who is scrambling more?

0:13:01.120 --> 0:13:02.040
<v Speaker 2>Right now? Who is more?

0:13:02.960 --> 0:13:04.920
<v Speaker 6>You know, I don't want to say desperate, but you know,

0:13:05.040 --> 0:13:06.400
<v Speaker 6>kind of desperate here to do something.

0:13:06.520 --> 0:13:08.840
<v Speaker 8>Yeah, right now, Eli Lilly is dominant in the weight

0:13:08.880 --> 0:13:11.600
<v Speaker 8>loss area. It just reported great sales. So it's weight

0:13:11.640 --> 0:13:14.880
<v Speaker 8>loss and diabetes drugs. And Nova was you know, was

0:13:14.920 --> 0:13:16.959
<v Speaker 8>the first move originally, but it's been falling behind. It

0:13:17.080 --> 0:13:19.560
<v Speaker 8>is a new ceo. You know, some of their drugs

0:13:19.559 --> 0:13:22.360
<v Speaker 8>had less than stellar trial results. It's really trying to

0:13:22.559 --> 0:13:25.400
<v Speaker 8>get back into the area. And Piser too. Pfizer has

0:13:25.400 --> 0:13:27.200
<v Speaker 8>been trying to doesn't have anything weight loss. I've been

0:13:27.200 --> 0:13:30.200
<v Speaker 8>trying to break in, had some trials of pills, it

0:13:30.200 --> 0:13:31.839
<v Speaker 8>didn't work out so well. And this was like and

0:13:32.200 --> 0:13:34.400
<v Speaker 8>so now this was their deal to try to like

0:13:34.440 --> 0:13:36.559
<v Speaker 8>get back in with a new thing that was injectable

0:13:36.559 --> 0:13:39.680
<v Speaker 8>but had less nausea and vomiting. But now you know,

0:13:39.760 --> 0:13:42.680
<v Speaker 8>Nova's coming in over the top suddenly with this super aggressive,

0:13:42.760 --> 0:13:45.920
<v Speaker 8>hyper aggressive deal, you know, and that Pfizer is calling

0:13:45.960 --> 0:13:48.880
<v Speaker 8>reckless and illusory, and you know it's gonna be very dramatic.

0:13:48.920 --> 0:13:50.400
<v Speaker 8>The next few days to see what happens.

0:13:50.600 --> 0:13:51.240
<v Speaker 2>This is cool.

0:13:51.320 --> 0:13:53.160
<v Speaker 4>I mean, it's just like barbarians at the Gate kind

0:13:53.160 --> 0:13:57.640
<v Speaker 4>of thing. People fighting over it. So tell us about Metzerah.

0:13:57.800 --> 0:14:00.959
<v Speaker 4>I mean, what have they got that these people are Yeah.

0:14:00.840 --> 0:14:03.080
<v Speaker 8>So they have a new you know, the existing drugs

0:14:03.160 --> 0:14:05.560
<v Speaker 8>they target things like GLP one, which you've heard of,

0:14:05.559 --> 0:14:08.760
<v Speaker 8>and also zep bound Eli's drug also targets another related

0:14:08.760 --> 0:14:13.000
<v Speaker 8>hormone called jip uh vip and uh met Sarah is

0:14:13.000 --> 0:14:15.720
<v Speaker 8>something targeting something called amulan. It's kind of another related

0:14:15.720 --> 0:14:18.400
<v Speaker 8>hormone and it's had some early trial results were good

0:14:18.440 --> 0:14:20.680
<v Speaker 8>and hope is that this one, it's also an injectable,

0:14:21.280 --> 0:14:23.720
<v Speaker 8>will have less of kind of the nausea involving it's

0:14:23.720 --> 0:14:26.600
<v Speaker 8>a very kind of common side effect of the existing drugs.

0:14:26.640 --> 0:14:29.080
<v Speaker 8>And that's so that's gotten people excited. It's only earlier

0:14:29.120 --> 0:14:29.920
<v Speaker 8>stage results.

0:14:30.520 --> 0:14:30.760
<v Speaker 3>Uh.

0:14:30.840 --> 0:14:33.120
<v Speaker 8>But you know, if Pfizer really doesn't have anything, the

0:14:33.160 --> 0:14:35.800
<v Speaker 8>BC do they really want something? And so this was

0:14:36.080 --> 0:14:38.360
<v Speaker 8>something that by all accounts, they are very excited about.

0:14:38.400 --> 0:14:40.400
<v Speaker 8>And now they're going to be under great pressure to

0:14:40.560 --> 0:14:42.400
<v Speaker 8>you know, either try to come in over the top

0:14:42.440 --> 0:14:45.280
<v Speaker 8>of something or maybe like work their angles in the

0:14:45.280 --> 0:14:48.840
<v Speaker 8>Trump administration to try to see if, like NOV, some

0:14:49.040 --> 0:14:49.720
<v Speaker 8>could be blocked.

0:14:50.320 --> 0:14:52.840
<v Speaker 6>But it's going to be super dramatic, right because regulators

0:14:52.840 --> 0:14:55.280
<v Speaker 6>would need to approve whatever happens. But before we even

0:14:55.400 --> 0:14:58.560
<v Speaker 6>get there, met Sarah has to decide which offer it's

0:14:58.600 --> 0:15:01.400
<v Speaker 6>going to accept. Did it or accept Pfizer's bid, which

0:15:01.440 --> 0:15:03.960
<v Speaker 6>I believe max is out at seventy dollars a share.

0:15:04.280 --> 0:15:06.680
<v Speaker 8>Yees, so Pfizer, you know that's a Pfizer deal. I

0:15:06.680 --> 0:15:09.800
<v Speaker 8>think this was last month, and uh, you know, now

0:15:09.880 --> 0:15:12.960
<v Speaker 8>there's Nova's coming over the top of this bid, and

0:15:13.000 --> 0:15:15.080
<v Speaker 8>you know, Metsaria has already said like, hey, this is

0:15:15.120 --> 0:15:18.760
<v Speaker 8>this new one is superior, and apparently Pfizer has four days,

0:15:18.880 --> 0:15:21.160
<v Speaker 8>you know, to come up with a better offer. Now,

0:15:21.720 --> 0:15:23.160
<v Speaker 8>you know, we'll have to see what's going to happen.

0:15:23.200 --> 0:15:25.400
<v Speaker 8>Could there be legal action, Fizer could pursue legal action.

0:15:25.480 --> 0:15:28.480
<v Speaker 8>They're already selling grounds well, they're already saying this is reckless,

0:15:28.480 --> 0:15:31.480
<v Speaker 8>an illusory. There's some very complicated conditions to the NOVE offer,

0:15:31.600 --> 0:15:35.040
<v Speaker 8>and that someone at Sarah's shareholders will get the money

0:15:35.120 --> 0:15:37.920
<v Speaker 8>before the anti trust approval happens, as I understand it.

0:15:38.000 --> 0:15:41.240
<v Speaker 8>So it's a very kind of complicated structure that you know,

0:15:41.320 --> 0:15:44.440
<v Speaker 8>Pfiser is claiming that's engineered this way to try to

0:15:44.480 --> 0:15:47.480
<v Speaker 8>avoid anti trust scrutiny, and you know, saying that this

0:15:47.560 --> 0:15:50.400
<v Speaker 8>isn't this isn't right. But you know, Metsiah meanwhile saying, hey,

0:15:50.400 --> 0:15:51.960
<v Speaker 8>we've got a superior deal. What are you going to

0:15:52.040 --> 0:15:52.400
<v Speaker 8>do for us?

0:15:52.400 --> 0:15:52.800
<v Speaker 3>Pfizer.

0:15:53.240 --> 0:15:58.920
<v Speaker 4>So Pfizer is a US company, right, Novo Nordisk is

0:15:58.960 --> 0:16:00.000
<v Speaker 4>a Danish company.

0:16:00.160 --> 0:16:01.400
<v Speaker 2>Does that be playing to it at all?

0:16:01.440 --> 0:16:03.360
<v Speaker 8>I mean, well, you know that's you know, some of

0:16:03.360 --> 0:16:06.080
<v Speaker 8>the people I was talking to said, you know, Pfizer

0:16:06.200 --> 0:16:07.520
<v Speaker 8>is one of the companies, you know, come up with

0:16:07.560 --> 0:16:09.800
<v Speaker 8>the big, big companies on a handful of big companies

0:16:09.840 --> 0:16:12.200
<v Speaker 8>have made kind of pricing deals with the Trumpet administration

0:16:12.360 --> 0:16:15.480
<v Speaker 8>already to avoid tariffs. Right, so it seemed, you know,

0:16:15.520 --> 0:16:17.800
<v Speaker 8>seems to have good relations there. So you know it,

0:16:17.840 --> 0:16:19.920
<v Speaker 8>could you know, could it work its contacts in the

0:16:19.960 --> 0:16:22.800
<v Speaker 8>Trump administration, you know, to get them to you know,

0:16:24.160 --> 0:16:26.320
<v Speaker 8>give indications that this deal is going to have a

0:16:26.360 --> 0:16:28.440
<v Speaker 8>hard time going through. And I trust grounds if Novo

0:16:28.480 --> 0:16:30.400
<v Speaker 8>does it, because Nova's already took the number two weight

0:16:30.440 --> 0:16:31.440
<v Speaker 8>loss company right now.

0:16:31.720 --> 0:16:35.400
<v Speaker 6>Uh Noah is being led by a new CEO he's

0:16:35.440 --> 0:16:38.080
<v Speaker 6>a lifer from the company, but he's trying to make

0:16:38.120 --> 0:16:40.400
<v Speaker 6>some big changes, put his own stamp on the company,

0:16:40.680 --> 0:16:43.600
<v Speaker 6>and he's moving very aggressively. What has he been doing lately?

0:16:43.640 --> 0:16:47.160
<v Speaker 6>What is his mandate? What is his philosophy here?

0:16:47.400 --> 0:16:49.120
<v Speaker 8>Yeah, I don't know a lot about him, you know,

0:16:49.720 --> 0:16:53.080
<v Speaker 8>he's really new. But clearly what I can say, uh,

0:16:53.600 --> 0:16:56.400
<v Speaker 8>is that you know, this is a sign that they're

0:16:56.440 --> 0:16:59.360
<v Speaker 8>not confident, you know, and what they have internally, Okay,

0:16:59.360 --> 0:17:01.400
<v Speaker 8>they have to come in this hyper aggressive deal. This

0:17:01.440 --> 0:17:02.960
<v Speaker 8>is a sign that they kind of it's kind of

0:17:03.000 --> 0:17:05.119
<v Speaker 8>acknowledgement they're falling behind you, like Lily, and they need

0:17:05.200 --> 0:17:07.159
<v Speaker 8>to come up with the new and better drugs and

0:17:07.359 --> 0:17:09.439
<v Speaker 8>have to get that externally. Mean drug companies do that

0:17:09.440 --> 0:17:11.000
<v Speaker 8>when they don't have the internal goods.

0:17:11.520 --> 0:17:14.280
<v Speaker 4>So Lily, just to wrap it up here, Lily had

0:17:14.280 --> 0:17:15.719
<v Speaker 4>some pretty darn good numbers, right.

0:17:16.160 --> 0:17:16.520
<v Speaker 2>Yeah.

0:17:16.560 --> 0:17:18.480
<v Speaker 8>So they have two drugs to zepp It's tied. It's

0:17:18.520 --> 0:17:21.320
<v Speaker 8>the same drug. The diabetes version is called Munjaro and

0:17:21.359 --> 0:17:25.000
<v Speaker 8>the obesity is one is called zep Bound. Together this

0:17:25.080 --> 0:17:27.320
<v Speaker 8>quarter they eight over ten billion in sales. It's crazy.

0:17:27.359 --> 0:17:29.000
<v Speaker 8>This is going to be like together, this is going

0:17:29.040 --> 0:17:32.400
<v Speaker 8>to be the best selling drug in the world next year.

0:17:33.760 --> 0:17:35.920
<v Speaker 8>Both ones are up over one hundred percent, and that's

0:17:36.040 --> 0:17:38.639
<v Speaker 8>with you know, with increasing pricing discounts. It still is

0:17:38.680 --> 0:17:41.080
<v Speaker 8>up over one hundred percent. So they are becoming just

0:17:41.119 --> 0:17:41.840
<v Speaker 8>totally dominant.

0:17:42.080 --> 0:17:44.480
<v Speaker 6>They keep talking about this being one hundred billion dollars

0:17:44.480 --> 0:17:45.640
<v Speaker 6>a year industry, right.

0:17:45.800 --> 0:17:48.199
<v Speaker 8>Yeah, there's like huge potential numbers out there. You know,

0:17:48.560 --> 0:17:50.399
<v Speaker 8>we'll see whether they achieve that. Oh and Lily is

0:17:50.480 --> 0:17:52.800
<v Speaker 8>also ahead and coming on with the weight loss pill.

0:17:54.160 --> 0:17:54.720
<v Speaker 2>Game game changer.

0:17:54.800 --> 0:17:57.160
<v Speaker 4>Yeah, you know it's gonna be another one, a pill

0:17:57.200 --> 0:18:00.199
<v Speaker 4>that grows hair, are right?

0:18:00.280 --> 0:18:02.040
<v Speaker 2>You figure that out, Lily, get to work on that one.

0:18:02.760 --> 0:18:06.040
<v Speaker 6>Robert Langrett, the Bloomberg News healthcare reporter, on the drama

0:18:06.080 --> 0:18:08.240
<v Speaker 6>that we're seeing in the healthcare series The Pharmaceutical Space,

0:18:08.280 --> 0:18:09.720
<v Speaker 6>as well as Eli Lilly's earnings.

0:18:10.280 --> 0:18:14.960
<v Speaker 1>This is the Bloomberg Intelligence podcast, available on Apple, Spotify,

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