WEBVTT - Bloomberg's Krutoholow on Valeant, Halperin on Election (Audio)

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<v Speaker 1>Global business news twenty four hours a day at Bloomberg

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<v Speaker 1>This is a Bloomberg Business flag from Bloomberg World Handquarters.

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<v Speaker 1>I'm Charlie Pellett. Now a down day for both the

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<v Speaker 1>down Jones Industrial Average and the SMP five hundred index.

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<v Speaker 1>The SMP hovering out a record now at twenty one

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<v Speaker 1>seventy nine, down a point and a half. That's drop

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<v Speaker 1>of about point one percent. Down. Industrial is also down

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<v Speaker 1>by point one percent, falling sixteen points to eighteen thousand,

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<v Speaker 1>five hundred twelve. Naz Dak holding onto a game, up

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<v Speaker 1>eight points to fifty two twenty one. If you're keeping

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<v Speaker 1>track record on naz danc fifty two twenty eight point

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<v Speaker 1>seventy one, a gain right now with two tens of

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<v Speaker 1>one percent, ten year up fifteen thirty seconds, had healed

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<v Speaker 1>one point five four percent, and gold hired by six

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<v Speaker 1>forty the ounce of five tens of one percent to

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<v Speaker 1>thirteen forty two. I'm Charlie Pellett, and that's a Bloomberg

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<v Speaker 1>Business flash. This is taking stock with pin Box and

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<v Speaker 1>Kathleen Hayes on Bloomberg Radio. The shares of Valiant of

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<v Speaker 1>Pharmaceuticals hired right Now by more than twenty percent, even

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<v Speaker 1>though it posted a wider loss in its latest quarter.

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<v Speaker 1>But the company says it's going to reorganize and continuing

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<v Speaker 1>to remake itself as a conventional pharmaceutical firm. Here to

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<v Speaker 1>tell us more is Liz Kruda Hollow, Specialty Pharma and

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<v Speaker 1>Biotech analyst for Bloomberg Intelligence, and you can follow Liz

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<v Speaker 1>on Twitter at Liz Underscore Kruda Hollow. Liz, thanks very

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<v Speaker 1>much for joining us. Tell us about Valiant Pharmaceuticals and

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<v Speaker 1>why is the stock surging. Yeah, so most people were

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<v Speaker 1>pretty happy to see that guidance have been maintained for

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<v Speaker 1>the year. We were expecting to see potentially some color

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<v Speaker 1>around whether or not they expect that they could still

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<v Speaker 1>meet their guidance on revenue and EPs and ITTA, which

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<v Speaker 1>they do say that they can do, despite the fact

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<v Speaker 1>that to did not look all that promising on those metrics.

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<v Speaker 1>Now that they have to reaffirm their guidance in order

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<v Speaker 1>to manage the debt covenants that they have with their lenders. Yeah,

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<v Speaker 1>so that's certainly part of it. So most of their

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<v Speaker 1>debt covenants are tied to their EBITA ratios, and so

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<v Speaker 1>that's something that we need to watch very carefully and

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<v Speaker 1>make sure that they are maintained, otherwise the debt repayments

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<v Speaker 1>could accelerate. So one of the interesting things that came

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<v Speaker 1>up in the fault today was they have divested several

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<v Speaker 1>small assets, nothing too large, but they did indicate that

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<v Speaker 1>they've received interest on what could potentially be a larger deal,

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<v Speaker 1>and that could be something that would be about two

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<v Speaker 1>billion dollars in revenue but could get them an additional

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<v Speaker 1>eight billion dollars for debt repayments. So that may be

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<v Speaker 1>something that they look to to maintain that guidance, to

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<v Speaker 1>make sure that they do actually meet the EBATA guidance

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<v Speaker 1>and repay their debts for the year. The chief executive

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<v Speaker 1>of Valiant, Joe Papa, is he going to remake this

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<v Speaker 1>company me so that it looks nothing like the Valiant

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<v Speaker 1>of big acquisitions and big price increases. So that's the

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<v Speaker 1>goal here and that's certainly what we would like to

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<v Speaker 1>see on That's what most investors are really looking for

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<v Speaker 1>a complete turnaround in strategy, as it's clear that the

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<v Speaker 1>strategy of growing simply through M and A and price

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<v Speaker 1>increases really is no longer sustainable. So Papa comes from Parago,

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<v Speaker 1>which is mostly age generic and consumer health company, so

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<v Speaker 1>there are some synergies with the Valiant portfolio, and I

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<v Speaker 1>think on the consumer health side he can do a

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<v Speaker 1>really nice job with that. And he's done a pretty

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<v Speaker 1>good job of leading a turnaround at Parago, So we're

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<v Speaker 1>expecting that, you know, that's essentially why the board brought

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<v Speaker 1>him on to take over from Pearson. Now, another stock

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<v Speaker 1>in the pharmaceutical industry that is surging today is Endo

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<v Speaker 1>International shares. They are higher by more than twenty one

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<v Speaker 1>percent right now. Tell us about Endo. So Endo is

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<v Speaker 1>an interesting company. Day are sort of on the fence

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<v Speaker 1>in terms of whether or not they are generics company

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<v Speaker 1>or a specialty company. They're quite divided. However, they made

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<v Speaker 1>an acquisition of par Pharmaceuticals last year in September that

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<v Speaker 1>puts them much more focused on the generic side. So

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<v Speaker 1>basically in one queue we saw a huge impact on

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<v Speaker 1>pricing and it was very detrimental to their earnings. They

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<v Speaker 1>basically expect to see continuation of that erosion throughout the year.

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<v Speaker 1>So we're expecting a bigger hit into q than we

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<v Speaker 1>actually saw. So about some renewed enthusiasm there and that

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<v Speaker 1>perhaps that one que was a one time effect and

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<v Speaker 1>that it should moderate through the rest of the year.

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<v Speaker 1>The company is still guiding tours that by percent decline

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<v Speaker 1>each quarter, so that's something we need to keep an

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<v Speaker 1>eye on and make sure that people don't get a

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<v Speaker 1>little too enthusiastic about the surprise in two Q. Thank

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<v Speaker 1>you very much for spending time with us. Liz Kruda

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<v Speaker 1>Hollow is our specialty format and biotech analysts for blue

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<v Speaker 1>Berg Intelligence. Of course, Bloomberg Intelligence providing unique and real

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<v Speaker 1>time research and context in a variety of industries as

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<v Speaker 1>well as markets and government factors that affect business. Our

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<v Speaker 1>terminal customers can access this function at b I Go.

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<v Speaker 1>We turn now to politics, and I'd like to bring

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<v Speaker 1>in Mark Halpern. He is, of course the co author

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<v Speaker 1>of the book Game Change and host of Bloomberg TVs

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<v Speaker 1>with all due respect and it can be seen weekdays

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<v Speaker 1>at five pm Eastern as well as week nights at

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<v Speaker 1>five pm on Bloomberg in Washington, d C. Mark Halprin,

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<v Speaker 1>thank you very much for being here. Let's begin by

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<v Speaker 1>just reviewing the speech that Donald Trump made yesterday at

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<v Speaker 1>the Detroit Economic Club. What has been the reaction to

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<v Speaker 1>his economic proposals? Very favorable reaction from the Wall Street

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<v Speaker 1>Journal editorial page, which is a pretty good arbiter of

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<v Speaker 1>where it sort its mainstream center right thinking is they

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<v Speaker 1>criticize his Paul sees on trade, which they disagree with,

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<v Speaker 1>but they liked much of the rest of what he did.

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<v Speaker 1>I don't think you saw very much what we call

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<v Speaker 1>man by dog reaction, which is to say Democrats criticized

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<v Speaker 1>the plan in seventeen different ways. I think Republicans were

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<v Speaker 1>generally supportive, and a lot of Republicans pleased to see

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<v Speaker 1>Trump talking about some of the orthodox positions the Republican Party,

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<v Speaker 1>like tax cutting, less regulation, changing the Affordable Care Act.

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<v Speaker 1>But some Republican senators not swayed by his speech on economics. Indeed,

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<v Speaker 1>the GOP senator Susan Collins says she's not gonna be

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<v Speaker 1>supporting Donald Trump. Can we expect more of this pretty

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<v Speaker 1>big defection? And I do think it will lead to more.

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<v Speaker 1>You know, Donald Trump will say, and I think he's

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<v Speaker 1>quite right that you'd rather have Republican voters than Republican

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<v Speaker 1>politicians at a time when Washington and political figures are

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<v Speaker 1>not in particularly high regard. At the same time, Susan

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<v Speaker 1>Collins is a very respected figure. She made her announcement

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<v Speaker 1>that she wasn't going to vote for Trump in an

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<v Speaker 1>opinion piece in The Washington Post in which he basically

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<v Speaker 1>laid most of it off the questions about his temperament

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<v Speaker 1>and judgment, particularly his conflict of recent conflict with the

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<v Speaker 1>con Family. This is the exact argument that Hillary Clinton

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<v Speaker 1>is making against Donald Trump is senator. Her argument is

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<v Speaker 1>to have a respected figure in the Republican Party basically say,

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<v Speaker 1>I agree with Hillary Clinton. Donald Trump doesn't have the

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<v Speaker 1>right temperament to be president. It's pretty damning thing. And

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<v Speaker 1>I do think Trump will almost certainly see more defections

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<v Speaker 1>and some perhaps is a direct result of what Susan

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<v Speaker 1>Collins has done. Alright, Susan Collins a Republican Senator from Maine.

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<v Speaker 1>Third party candidates Mark Halprin Uh, whether it is the

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<v Speaker 1>Libertarian Party, the Green Party, or a new entrant an

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<v Speaker 1>independent candidate, Evan McMullen. It's going to be a guest

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<v Speaker 1>on with all due respect today tell us about third

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<v Speaker 1>party candidates, Well, it's very hard in this country that

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<v Speaker 1>so favors the two major parties to break through at

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<v Speaker 1>any level, particularly the presidential level, without fame and vast

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<v Speaker 1>fortune or some pretty clear issue differences with the two

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<v Speaker 1>major party candidates. You've now got a Green candidate, a

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<v Speaker 1>Libertarian Candida, and now this independent candidate or Republican who's

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<v Speaker 1>running after a day and make it pretty clear that

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<v Speaker 1>he's opposed to both Hillary Clinton and Donald Trump. I

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<v Speaker 1>think the the issue for all of them is can

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<v Speaker 1>they get that virtuous cycle going in politics? You want

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<v Speaker 1>to raise money, have people here about your raising money?

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<v Speaker 1>Take you seriously. Your poll numbers go up, you get

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<v Speaker 1>more media attention because people see the rising and the

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<v Speaker 1>polls and raising money, and then off that media attention

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<v Speaker 1>you raise more money and your poll numbers continue to

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<v Speaker 1>go up. So can he get that virtuous cycle going?

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<v Speaker 1>Can the Libertarians? Can the Green ideas matter? For sure?

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<v Speaker 1>And all three of the all three of those parties

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<v Speaker 1>are have fielded candidates who are clearly are looking to

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<v Speaker 1>expand their uh their reach based on ideas, But but

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<v Speaker 1>they need money, they need access to the media, they

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<v Speaker 1>need to have the polls go up, and obviously all

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<v Speaker 1>three of them would like to see their poll numbers

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<v Speaker 1>go up high enough that they can get into the

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<v Speaker 1>presidential debates. Does Evan McMullen have what it takes to

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<v Speaker 1>get on the ballot in Utah to the point where

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<v Speaker 1>he denies Donald Trump what has typically voted as a

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<v Speaker 1>Republican state. Well, he's from Utah, he is a Mormon,

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<v Speaker 1>and and and certainly as he looks at the states

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<v Speaker 1>where he can do well, that'd be near at or

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<v Speaker 1>near the top of the list. He says he's running

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<v Speaker 1>to win and needs a lot more than just not

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<v Speaker 1>just Utah, but perhaps other Western states with large Mormon populations.

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<v Speaker 1>And he does have to solve the puzzle of how

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<v Speaker 1>to get on the ballot. Even in states where the

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<v Speaker 1>deadlines haven't passed, it's still a difficult task to gather

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<v Speaker 1>the signatures and fulfill the other requirements. So Utah is

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<v Speaker 1>certainly in intriguing possibility, but it's not the only state

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<v Speaker 1>he plans to compete in. Just to pick up on

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<v Speaker 1>what you just mentioned a moment ago about the presidential debates,

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<v Speaker 1>what would it take for the libertarian candidate, let's say

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<v Speaker 1>Gary Johnson or Green Party nominee Jill Stein, or indeed

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<v Speaker 1>Evan McMullan to actually be at one of those lecterns

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<v Speaker 1>in one of the three presidential debates, well the Commission

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<v Speaker 1>Presidential Debates that said you need to be at fifteen

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<v Speaker 1>percent in a series of national polls in order to qualify.

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<v Speaker 1>Donald Trump has said has said again as recently It's

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<v Speaker 1>Today to Time Magazine, that he wants to say in

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<v Speaker 1>some of the dimensions of this of how the debates work,

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<v Speaker 1>the anothering magic about the fifteen percent threshold. Trump has

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<v Speaker 1>also said that he'd like one on one with Hillary Clint.

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<v Speaker 1>He doesn't want other candidates on the stage, and I

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<v Speaker 1>suspect that he will try to use his leverage, uh

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<v Speaker 1>to extent he has any to make sure that other

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<v Speaker 1>candidates aren't on the stage, assuming that he really does

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<v Speaker 1>want that one on one that he says he does,

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<v Speaker 1>if one of those third part of candidates does get

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<v Speaker 1>on the stage, who does that help? Who does that hurt? Now?

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<v Speaker 1>I've asked a lot of my best sources about that,

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<v Speaker 1>and there's mixed feelings about it. I don't think there's

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<v Speaker 1>any clear answer to it at this point. My guess

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<v Speaker 1>is Trump probably is right that he's better off one

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<v Speaker 1>on one simply because as he's behind and he needs

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<v Speaker 1>to try to kind of get a clean shot at

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<v Speaker 1>the person who's ahead of him. Now, thank you very much.

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<v Speaker 1>Mark Halpern. He is, of course, co host of With

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<v Speaker 1>All Due Respect, co managing editor of Bloomberg Politics, With

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<v Speaker 1>all due Respect, weeknights five pm on Bloomberg Television and

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<v Speaker 1>Bloomberg One in Washington, d C. This is Bloomberg