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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: or watch us live on YouTube.

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Speaker 2: Okay, so we have some big news. Echo Star Wars

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Speaker 2: agreed to sell spectrum licenses to AT and T for

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Speaker 2: about twenty three billion dollars. I'm looking at Echo Star

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Speaker 2: shares right now, they're up seventy seven percent. So we

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Speaker 2: wanted to talk about this right so our producers are scrambling.

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Speaker 2: It's a mad dash. Who are we gonna get. We're

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Speaker 2: gonna pull in someone who's hanging in Nantucket. That's right,

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Speaker 2: it's John Butler, Bloomberg Intelligence Senior telecom atalysts.

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Speaker 3: John.

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Speaker 2: We really appreciate you taking the tele for album.

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Speaker 4: Good morning guys.

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Speaker 2: Good morning. Yes, we pull on the big guns. So

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Speaker 2: explain to us right off the bat, what does this

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Speaker 2: deal mean.

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Speaker 4: So obviously, given the price action, it is huge for EchoStar,

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Speaker 4: and I think at issue for them is they've been

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Speaker 4: trying to build their own five G network to compete

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Speaker 4: with the big guys, and they have the spectrum to

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Speaker 4: do it, but they didn't have the capital to do it.

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Speaker 4: They really have an outsized debtload that they've really been

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Speaker 4: struggling to service. And the FCC intervened here and they've

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Speaker 4: been pressuring on the head of EchoStar, Charlie Urgan, to

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Speaker 4: either use the spectrum and start to fill those airwaves

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Speaker 4: or to sell it. And so I think this is

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Speaker 4: maybe the first of maybe even more moves to sell

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Speaker 4: more Spectrum on the part of the company. But given

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Speaker 4: the price tag, it alleviates that capital crunch, and so

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Speaker 4: any risk of default here I think is minimized now

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Speaker 4: in the wake of this deal, And so investors are

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Speaker 4: breathing a big sire Leave talk.

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Speaker 5: To me a little bit, John about this price. Twenty

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Speaker 5: three billion dollars, nine billion more than EchoStar paid for

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Speaker 5: the Spectrum, five billion more than the appraised value is

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Speaker 5: at and t getting value out out of this twenty

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Speaker 5: three billion dollar deal? Are they grossly overpaying?

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Speaker 4: So I'll say Spectrum is like houses on Nantucket, you know,

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Speaker 4: the price just continues to go up over the years,

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Speaker 4: you know, particularly with the advent of AI now and

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Speaker 4: the need for more capacity to carry that added traffic.

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Speaker 4: It's really not a concern on my part as to

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Speaker 4: whether or not AT and T is going to get

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Speaker 4: a good return on this investment. And again all kitting aside,

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Speaker 4: I go back to that analogy that really spectrum does increate,

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Speaker 4: It tends to increase in value over time. It's a

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Speaker 4: very ill liquid market, so it's hard to really get

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Speaker 4: a good feel for their fair value of different frequencies.

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Speaker 4: But I have no doubt that at the end of

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Speaker 4: the day, even expensive is going to prove cheap here

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Speaker 4: for them.

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Speaker 2: Hey, John, can you take a little bit into how

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Speaker 2: this is going to expand AT and T's network.

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Speaker 4: So if you look at the spectrum holdings of Verizon,

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Speaker 4: T Mobile and AT and T and spectrum, I'll just

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Speaker 4: take a step back for listeners that don't know, when

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Speaker 4: you're making a caller transmitting data over the area, you're

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Speaker 4: doing it using spectrum. And the more you have think

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Speaker 4: of it like the width of a pipe. The more

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Speaker 4: you have, the fatter the pipe, the faster the download speeds.

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Speaker 4: And so AT and T intends to put this spectrum

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Speaker 4: to use almost immediately to really enhance the download speeds

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Speaker 4: of the network. And so network quality gets better, word

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Speaker 4: gets around, people begin to say AT and T has

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Speaker 4: a better network. From a branding standpoint, there's a real

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Speaker 4: benefit here. And then longer term again, as AI continues

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Speaker 4: to scale up and ifrincing those queries that we make

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Speaker 4: and the answers we get back. Now, a lot of

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Speaker 4: that's going to be done at the edge of the

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Speaker 4: network where you need that big fat pipe to support

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Speaker 4: that traffic. So I think in their minds, those are

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Speaker 4: the two things there, after improving the network quality and

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Speaker 4: the brand image and having the pipes to move the

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Speaker 4: traffic that's coming down the road here and.

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Speaker 5: John yesterday, on a call with investors, AT and t's

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Speaker 5: CEO Stanky said that, you know, regulators shouldn't be concerned

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Speaker 5: that this transaction was going to put too much wireless spectrum,

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Speaker 5: I guess in the hands of one of the largest

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Speaker 5: telecom carriers. That's what he told investors. But do you

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Speaker 5: think regulators are going to bulk at this No.

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Speaker 4: I think regulators have been behind prompting the sale, if

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Speaker 4: that's the right way to put it. So again, the

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Speaker 4: FCC was really on Echo Star to sell some of

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Speaker 4: that spectrum. They're educated and well educated and wireless as

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Speaker 4: regulators to know that it was probably going to be

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Speaker 4: one of the big guys that would step up and

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Speaker 4: buy it. If I look at at and T spectrum

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Speaker 4: holdings the whole, they had a competitive disadvantage or less

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Speaker 4: holdings in the band or the frequencies that they purchased

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Speaker 4: from Echo Star here. So I don't think there's any

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Speaker 4: sort of regulatory argument against the deal here, but I

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Speaker 4: would defer to our legislative analysts in Washington to really

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Speaker 4: make the call there. But I'm not concerned.

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Speaker 2: Stay with us for more Bloomberg Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on album Barklay and Android

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Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: So a lot of headlines in the news. One of

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Speaker 2: them that caught my eye this was Eli Lilly. Okay,

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Speaker 2: so their weight loss pill. It's moving a little bit closer,

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Speaker 2: one step closer to this potential approval. This came after

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Speaker 2: results from its latest trial. So what we want to

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Speaker 2: do is get more details from that. Let's bring in

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Speaker 2: Sam Fazzelli. He is Bloomberg Intelligence Director of Research for

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Speaker 2: Global Industries and Senior Pharmaceuticals, joining us from London. Sam,

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Speaker 2: welcome back to the show. So this is the second

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Speaker 2: trial of the pill, I believe, So how is it

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Speaker 2: different this time around?

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Speaker 6: It is, Lisa, thank you for having me back.

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Speaker 7: And I'm sorry that Paul is in here for me

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Speaker 7: to give him grief because he always tells me off

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Speaker 7: the technia.

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Speaker 2: He always busts your.

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Speaker 6: Job next time.

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Speaker 7: And so look, this is a large trial in dibet

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Speaker 7: diabetic patients, but it will be diabetic patients, so they're

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Speaker 7: looking at the impact in that population. That population tends

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Speaker 7: to have less of a weight loss for our variety

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Speaker 7: of reasons. But it's come out exactly where we thought

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Speaker 7: it would come out, actually maybe a little bit better

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Speaker 7: than people's lowered expectations after that first trial read out

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Speaker 7: a couple of weeks ago, if you remember when the

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Speaker 7: stock got hit severely Lily stock, and so we're see

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Speaker 7: about ten percent weight loss and still the same high

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Speaker 7: levels of discontinuations. This is a long trial, so you

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Speaker 7: even find a whole bunch of people and place would

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Speaker 7: discontinue because they get bored, they want to go and

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Speaker 7: get wed loss from another drug. So it's actually pretty

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Speaker 7: decent data. And I think you can see that Nova

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Speaker 7: is sold off on the back of this because it's

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Speaker 7: a small molecular pill. It's a pilly can take, relatively

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Speaker 7: easily manufactured, and you can take without too much complications

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Speaker 7: in terms of don't eat to eat, take in the morning,

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Speaker 7: takeing the evening, that sort of stuff.

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Speaker 5: And that's the key, Sam. And I'm wondering how much

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Speaker 5: of a game changer this is because it's not an injection, right,

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Speaker 5: it's a pill. You're looking at an industry that by

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Speaker 5: twenty thirty is projected to be ninety five billion dollars.

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Speaker 5: So if this goes Eli Lilly's way, is it a

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Speaker 5: game changer for the company?

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Speaker 6: Yeah, I mean it has gone their way.

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Speaker 7: This is unless something shows up in the enormous number

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Speaker 7: of files that they file to the FDA, or side

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Speaker 7: effects or something.

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Speaker 6: This is a drug that's likely to get approved.

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Speaker 3: The question is how do you use it.

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Speaker 7: You've got the injectibles once a week, once a week,

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Speaker 7: not a big ask, very fine needle. People even tell

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Speaker 7: me they don't even notice the needle going in and out,

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Speaker 7: but still you don't see the needle. So what is

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Speaker 7: its it? Ten percent weight loss versus twenty percent weight loss?

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Speaker 7: So what is the right way forward here? Some people

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Speaker 7: are needlephobic, it's going to be helpful for those. Some

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Speaker 7: people can't get access to the drug because it's hard

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Speaker 7: to manufacture. The other ones that are injectibles sterile manufacturing.

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Speaker 7: So there's lots of room for this. And of course

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Speaker 7: there's this other thing that I think a lot of

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Speaker 7: people keep thinking about, is you've got your big weight

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Speaker 7: loss with your injectables six months, in nine months, in

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Speaker 7: twelve months, in switch to this and help you maintain

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Speaker 7: You might not even need the higher doses, which are

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Speaker 7: causing some side effects. Maybe you can get away with

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Speaker 7: a lower dose and maintain that weight loss.

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Speaker 6: They would have to do a trial to prove that though.

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Speaker 2: So, Sam, as you're talking, a question kind of popped

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Speaker 2: into my head. You're talking about all the different advantages

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Speaker 2: to it. What about has there been any talk about price,

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Speaker 2: like how much could this pill cost compare to an injection?

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Speaker 7: I mean, it would be an error for these companies

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Speaker 7: to start competing with themselves on price with their products.

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Speaker 7: If you find that actually you can go with the

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Speaker 7: lower dose of this. Your margins are a bit better,

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Speaker 7: definitely because there's no device involved. But I don't know

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Speaker 7: what the small molecule manufacturing because they're not all small

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Speaker 7: malley ques are easy to make, right, and it may

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Speaker 7: be small discount perhaps, I don't know, but but I

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Speaker 7: doubt that this will come out at a.

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Speaker 6: Level that's significantly lower.

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Speaker 7: On the other hand, it does have lower weight loss,

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Speaker 7: so maybe maybe there is an opportunity to kind of

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Speaker 7: I see pari pass whu if whatever, If that's the

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Speaker 7: right phrase, in line with its weight loss that you're getting.

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Speaker 5: I want to branch out and talk just biotech on

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Speaker 5: a bigger scale for a moment because M and A

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Speaker 5: hass you know, been pretty active right and in the

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Speaker 5: sector we had Merk buying Verona Pharma I think it

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Speaker 5: was for their respiratory treatment recently. What's the outlook for

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Speaker 5: M and A there? And I know one of the

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Speaker 5: hurdles for biotech, and it's sort of an ongoing hurdle

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Speaker 5: is changes to regulatory framework, So talk to us a

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Speaker 5: little bit about that.

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Speaker 7: Yeah, did that those changes if you're talking about perhaps

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Speaker 7: the from an FTC perspective, those those have not hindered

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Speaker 7: and ideals. When we counted a whole bunch of deals

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Speaker 7: in the first half of this year, and it looked

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Speaker 7: like a pretty strong year for deals, and that's not

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Speaker 7: even including.

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Speaker 6: The Verona one. The thing here is a lot of

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Speaker 6: executives in the biotech boord I'll still looking at their

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Speaker 6: share price charts thinking back to those beautiful days of

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Speaker 6: two or three years ago where the share prices were

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Speaker 6: seventy eighty percent higher and thinking is it the right

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Speaker 6: thing for them to do?

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Speaker 3: To sell?

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Speaker 7: Clearly some have got to the point of accepting that,

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Speaker 7: and some have done it from a position of strength.

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Speaker 7: Verona was rocketing up before they got taken out at whatever,

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Speaker 7: over one hundred dollars a share, so Farmer is definitely interested.

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Speaker 7: Maybe if the interest rate environment, going back to what

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Speaker 7: we were just hearing earlier, does go in favor of

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Speaker 7: cost of capital coming down, maybe you'll start seeing some

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Speaker 7: more deals, and of course that would also help biotech

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Speaker 7: valuations potentially in general. So maybe there would be an

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Speaker 7: interesting time to look out to in the next six

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Speaker 7: to twelve months.

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Speaker 6: All right, Sam, and.

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Speaker 2: The last minute, do you have here another article caught

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Speaker 2: my eye. President from Health and Human Services Secretary Robert

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Speaker 2: Kennedy Junior. There there are leslie funny to ban the

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Speaker 2: COVID vaccine within months. Did this surprise you at all?

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Speaker 6: Well, yes, no.

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Speaker 7: The thing is it's rumor, and I think the HS

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Speaker 7: has said, look, there's no nothing that we can tell

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Speaker 7: you today that we're back this. I think that would

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Speaker 7: be a mistake. And choice is what Americans have always

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Speaker 7: valued in the freedom that the US has.

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Speaker 6: Let's just leave the choice there, give.

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Speaker 7: People all the information, do the scientific work that the

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Speaker 7: HS wants to do, and just leave it open and

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Speaker 7: give it to the discussion between physicians and patients and

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Speaker 7: subjects and people.

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Speaker 6: I think that's the right way.

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Speaker 7: Whether that will happen or not, but if it does happen,

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Speaker 7: we've got a bad time for Biontic and Moderna because

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Speaker 7: that's the only source of revenue.

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Speaker 2: Stay with us for more Bloomberg Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg and Intelligence podcast. Catch us

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Speaker 1: live weekdays at ten am Eastern on Apple, Corplay and

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Speaker 1: Android Auto with the Blueberg Business app. Listen on demand

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Speaker 1: wherever you get your podcasts, or watch us live on YouTube.

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Speaker 2: What's also a piece of America are eyewear. Right, you

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Speaker 2: go out and it's like you're styling, You're wearing your

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Speaker 2: fancy sunglasses. It's a nice day out. You know, you

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Speaker 2: have to look good when you're going out. So this

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Speaker 2: is taking us to the competitive eyewear space.

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Speaker 5: We're saying.

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Speaker 2: Sources are saying that the maker of ray Band sunglasses,

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Speaker 2: I have my own pair, as the Lord looks out again,

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Speaker 2: they're considering increasing their steak in Nikon.

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Speaker 4: Now.

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Speaker 2: The company has really been pushing ahead with these smart

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Speaker 2: glasses initiative, so we want to find out more about it, right,

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Speaker 2: so let's go to Diana Gomez. She is Bloomberg Intelligence

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Speaker 2: senior equity research analyst. Diana, thanks for joining us up.

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Speaker 2: So how much they want to boost their steak? And

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Speaker 2: I kinda and what's the current holding at.

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Speaker 8: Hi, Yes, thank you for having me. So at the moment,

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Speaker 8: it's uh about a nine percent stake, and the reports

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Speaker 8: we are getting is that there is a potential interest

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Speaker 8: to increase that to about twenty percent, which would be

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Speaker 8: in the order working at the current market cap maybe

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Speaker 8: a three hundred million dollars or so, which given a

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Speaker 8: se or Euxotica's cash position would not be quite material,

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Speaker 8: but still quite a sizable stake in Nikon from a

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Speaker 8: few years of quite a long experience as in their

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Speaker 8: joint venture Connectending that.

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Speaker 5: Connect the dots for us though, because what does Nikon

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Speaker 5: have that Luxotica wants.

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Speaker 8: Besides the brand name that is quite well known to

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Speaker 8: even the consumer side outside the professional sector, there is

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Speaker 8: the technology and the know how that can be utilized

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Speaker 8: and leveraged by both companies. So we are talking about

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Speaker 8: the distribution of SLR combined with nohow and brand a

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Speaker 8: strong brand name of a company like Nikan. And they

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Speaker 8: have been partnering in different areas. One of them which

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Speaker 8: is quite an emerging ones is the myopia control which

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Speaker 8: is which are these lenses that are meant to solve

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Speaker 8: the progression of myopia in children, which is quite important

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Speaker 8: given that forecasts are that's by twenty fifty about half

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Speaker 8: of the world population could be suffering from myopia. So

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Speaker 8: it's it's quite an interesting area as an example of

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Speaker 8: those where they are collaborating, particularly in China where they

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Speaker 8: are selling already some of these myopia controllances. With the

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Speaker 8: FDA approval for the SEL or auxosticasles still being in

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Speaker 8: the pipeline as well.

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Speaker 2: And in quick thirty seconds, Diana, what are who are

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Speaker 2: some of Nikon's competitors in there in the space and

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Speaker 2: who does it supply.

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Speaker 8: So they would be competing with other wcees and also

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Speaker 8: even photographic kind of equipment, and the space is quite

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Speaker 8: diverse at the moment because even with so or Auxotic

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Speaker 8: at this partnership just potential extended partnership just shows how

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Speaker 8: the company is going more into the medical technology and

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Speaker 8: medical devices filled in terms of trying to also find

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Speaker 8: medical issues just looking at the eye. So that's a

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Speaker 8: new area where companies within the optomological and visual space

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Speaker 8: are looking at and WNCES companies that are potentially with

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Speaker 8: the consumer more known for the photo cameras also play

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Speaker 8: a role with So it's all quite well integrated and

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Speaker 8: in the world of smart classes.

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Speaker 2: Stay with us for more Bloomberg Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple Corplay and Android

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Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: All right, I want to move on to this story.

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Speaker 2: We heard it yesterday or Sted right the management now

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Speaker 2: they're trying to reassure their investors. This is after the

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Speaker 2: Trump administration while they block construction of its almost finished

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Speaker 2: Rhode Island wind farm. So we want to dig more

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Speaker 2: into this story. Let's bring in Patricio Alvarez, Bloomberg Intelligence,

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Speaker 2: equity research analysts, power and gas utilities. Who better to

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Speaker 2: talk to them than this. So what does this mean

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Speaker 2: for Orsad's plan share sale? That's what I wanted to

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Speaker 2: start right.

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Speaker 9: There, absolutely, So let's begin where Oristed's management NA went

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Speaker 9: ahead with a plan for inequity increase.

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Speaker 3: That's quite substantial.

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Speaker 9: So that's sixty billion kroner that they announced on August eleventh.

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Speaker 9: That was nearly forty six percent of their market cap

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Speaker 9: back then, So it is a significant size of an

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Speaker 9: equity increase. And that was mainly to cover the construction

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Speaker 9: of Revolution Wind and that was because the company was

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Speaker 9: not able to sell a stake in that project. That's

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Speaker 9: mainly like, that's really their their key funding strategy is

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Speaker 9: to sell stake selles in there in the projects that

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Speaker 9: they're building. They were not able to do so, so

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Speaker 9: they needed to go for this massive equity increase. Now

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Speaker 9: that the stop work order that you just mentioned, I

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Speaker 9: think most of the market did not see that coming,

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Speaker 9: given that the project was already eighty percent of the way.

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Speaker 9: Forty five out of sixty five wind blades were already

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Speaker 9: on the ground. So this is you know, this is unprecedented.

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Speaker 9: I think the Empire Wind stop work order and then

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Speaker 9: restart is different in the way that the project was

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Speaker 9: not as as far in advance as this one. So

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Speaker 9: it will dampen investor confidence ahead of the ahead of

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Speaker 9: the plan that could increase. But we do know that

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Speaker 9: the backing of the Danish government, which has committed a

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Speaker 9: fifty fifty percent pro rata share of that it could increase. Well,

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Speaker 9: we'll give some reassurance and will probably help secure those funds.

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Speaker 5: I know the stock took a big hit, fell to

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Speaker 5: a record low, but it bounced back again. I believe

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Speaker 5: it started trading again right overseas and rallied. And why

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Speaker 5: is that more? That was it over sold?

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Speaker 3: It?

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Speaker 5: Investors think it was over sold, you.

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Speaker 9: Think, I think I think there was a big mix

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Speaker 9: of boats. So the stop work order came came in

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Speaker 9: Friday after market and I think markets didn't have time

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Speaker 9: to digest the implications to the equity increase after you know,

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Speaker 9: we had a bank holiday in the UK, so markets

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Speaker 9: open up this morning and that was mainly because of

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Speaker 9: these reassurance of Oysted. So the company came out with

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Speaker 9: a statement saying that the Danish government has actually reached

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Speaker 9: rated or reaffirmed their intent to participate at least in

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Speaker 9: fifty point one percent of that equity increase, with the

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Speaker 9: remaining set to be underwritten. So the company, the company

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Speaker 9: tried to instill some confidence, you know, reta into the plan.

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Speaker 9: And as we know, we think that the backing of

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Speaker 9: the Danish government is a big endorsement for this equity increase.

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Speaker 9: So we do think it will go ahead, but perhaps

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Speaker 9: we will have to wait into early September where there

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Speaker 9: will be an a GM and see where the share

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Speaker 9: price is trading at them.

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Speaker 2: Can you walk us through the president's arguments against offshore

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Speaker 2: wind and then and then what supporters are saying, the

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Speaker 2: pros and the hans against it?

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Speaker 3: Sure?

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Speaker 9: So, yeah, the administration has flagged that there are several

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Speaker 9: issues with wind development in general. Firstly that it could

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Speaker 9: impact the environment for whales, so that it could actually

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Speaker 9: hurt whales, that birds could fly into the wind blades,

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Speaker 9: and and then on the other on the other side

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Speaker 9: of or on shore, there's also a community resistance. There's

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Speaker 9: been there's been a few protests actually saying that that

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Speaker 9: the offshore wind doesn't look good on the horizon. So

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Speaker 9: these are these are several things. But but again or

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Speaker 9: State actually had all the permits for for for this,

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Speaker 9: for this farm to go ahead, and several studies actually

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Speaker 9: you know, countering the impact of these of this offshore

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Speaker 9: wind farms versus their benefit. Offshore wind has been a

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Speaker 9: niche technology in in the US is still a nascent industry.

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Speaker 9: It's a bit more advanced in Europe, but in the

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Speaker 9: US we still have only a handful of megawats.

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Speaker 3: But still it's it's an important part of the energy mix.

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Speaker 9: It will help uh decarbonize the economy, will help add

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Speaker 9: more electrons into the grid and avoid using more expensive gas.

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Speaker 5: And in the time we have left, Patricio, can you

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Speaker 5: talk to us a little bit about Orsted's competition, their

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Speaker 5: rivals in this space and what this possible setback for

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Speaker 5: them might mean for the competition. Is this, you know,

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Speaker 5: actually an advantage does it give them an advantage in some.

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Speaker 9: Way, So perhaps outside of the US, I would say

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Speaker 9: there there will be you know, there's possibly some silver

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Speaker 9: linings for other competitors. We cover other companies like RWE,

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Speaker 9: which is heavily invested in European offshore wind. So the

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Speaker 9: company is still moving ahead with plans in Germany. That look,

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Speaker 9: you know, clear that there's more regulatory certain to hear

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Speaker 9: in Europe, but conditions are still I would say not

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Speaker 9: straightforward for offshore wind development in Europe. A few auctions

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Speaker 9: here have been unsuccessful. We've only tendered a handful of

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Speaker 9: megawatts in the past.

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Speaker 3: Two or three years. So that said, there is a silver.

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Speaker 9: Lining for them, but I wouldn't say that the outlook

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Speaker 9: changes materially.

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