WEBVTT - Genetics Revolution in Healthcare 0:00:00.040 --> 0:00:03.600 You're listening to Bloomberg Business Week with Carol Messer and 0:00:03.680 --> 0:00:07.960 Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. There's a 0:00:07.960 --> 0:00:10.440 lot going on when it comes to in Vita. They 0:00:10.520 --> 0:00:13.320 just reported their quarterly update. It included a first quarter 0:00:13.360 --> 0:00:16.000 revenue beat, a smaller loss per share than analysts forecasts 0:00:16.040 --> 0:00:18.320 from the year UH and also from the year before 0:00:18.560 --> 0:00:21.000 and UH. On Monday, the company said it agreed to 0:00:21.000 --> 0:00:23.880 buy Genosity. It's a genomics company. I hope I'm saying 0:00:23.880 --> 0:00:28.320 it correct correctly, offering software and lab solutions to basically 0:00:28.440 --> 0:00:32.360 enable development and deployment of complex sequencing based tests. We're 0:00:32.400 --> 0:00:35.640 definitely talking about genomics. Uh. The company also got a 0:00:35.640 --> 0:00:38.159 big investment from a group led by soft Bank. So 0:00:38.440 --> 0:00:41.080 let's get into it and our investment management. We talked 0:00:41.080 --> 0:00:43.519 to Kathy Wood a lot. It is the largest shareholder 0:00:43.560 --> 0:00:45.880 in in Vita according to our Bloomberg data. So let's 0:00:45.880 --> 0:00:49.040 bring in in Vita CEO Shan Jar George on the 0:00:49.080 --> 0:00:51.919 phone in San Francisco, Sean, good to have you here. 0:00:51.920 --> 0:00:54.279 I'm scrambling, scrambling to get to you because I really 0:00:54.280 --> 0:00:59.080 want to talk about your company. Um, how are you good? Good? 0:00:59.480 --> 0:01:01.880 And really and shape being here. Thank you, well, you're welcome. 0:01:01.920 --> 0:01:03.680 You're welcome. And I have to say, you know, we 0:01:03.720 --> 0:01:05.840 do talk to Cathy Wood and the companies that she 0:01:05.920 --> 0:01:08.039 put on puts on her radar. We really like to 0:01:08.080 --> 0:01:10.280 dig a little bit deeper into them. So tell us 0:01:10.319 --> 0:01:13.040 for those not in the know and familiar with your company, 0:01:13.200 --> 0:01:17.040 tell us exactly what you are doing in the genomics space. Sure, 0:01:17.120 --> 0:01:19.119 so we our mission as a company. We've been at 0:01:19.120 --> 0:01:23.320 it for ten years now, investing heavily in bringing genetics 0:01:23.319 --> 0:01:26.440 and genomics squarely in the mainstream medical care for billions 0:01:26.480 --> 0:01:29.280 of people around the planet. We're absolutely confident that the 0:01:29.360 --> 0:01:33.360 fundamental personalized power of genetics can impact medicine to the 0:01:33.440 --> 0:01:36.080 to the better for all of them, uh, improving outcomes 0:01:36.120 --> 0:01:38.200 and lowering costs. And that's and that's what we've been 0:01:38.280 --> 0:01:40.480 up to. And I think now, uh now that it 0:01:40.520 --> 0:01:43.320 is becoming more apparent to a lot more people just 0:01:43.400 --> 0:01:48.240 how impactful genomics can be. We're really appreciative of investors 0:01:48.080 --> 0:01:50.920 like Kathy at ARC and others are the entire top 0:01:50.960 --> 0:01:55.280 of our capitalization. It's full of investors who really see 0:01:55.560 --> 0:01:59.200 a significant phase change coming in healthcare, largely fueled by 0:01:59.240 --> 0:02:01.200 genomics and we're we're really we're really proud to be 0:02:01.240 --> 0:02:04.560 a leader in it. So genomics testing, I mean, at 0:02:04.600 --> 0:02:07.680 one point I think it was expensive. Um, it took 0:02:07.680 --> 0:02:10.239 a while to get here. But tell us exactly what 0:02:10.400 --> 0:02:13.040 you do in the services you provide and who you 0:02:13.080 --> 0:02:16.880 provide them to. Absolutely so. And it's good to set 0:02:16.880 --> 0:02:19.560 a backdrop. You know, when we started the company, a 0:02:19.680 --> 0:02:21.680 single test which would look in the form of you 0:02:21.760 --> 0:02:24.919 and your doctor, whether it be for a disease or symptoms, 0:02:25.000 --> 0:02:28.040 or of yourself or your child, whether you're starting a family. 0:02:28.080 --> 0:02:31.360 You know, a single gene test to take a sample, 0:02:31.680 --> 0:02:33.840 run an analysis of a single gene and return the 0:02:33.840 --> 0:02:37.080 result costs four or five dollars a large number of 0:02:37.120 --> 0:02:41.840 genes upwards thirty dollars. We now, through our efforts and 0:02:41.880 --> 0:02:44.720 investing in reducing the cost of that and expanding the 0:02:44.760 --> 0:02:48.680 amount of information available to clinicians, indications that test now 0:02:48.720 --> 0:02:51.040 is two hundred and fifty dollars for a large number 0:02:51.080 --> 0:02:54.359 of genes to assess essential information that affects. Frankly it 0:02:54.400 --> 0:02:57.400 affects or truly it affects. One in six individuals have 0:02:57.639 --> 0:03:00.560 genetics at the core of their health condition and so 0:03:00.639 --> 0:03:03.680 We offer that service to people like I mentioned, who 0:03:03.680 --> 0:03:07.000 have a family history, whose child children have symptoms, they 0:03:07.040 --> 0:03:10.680 themselves have symptoms women starting I think of having a child. 0:03:10.840 --> 0:03:14.239 There's a variety genetic testing screens available UM to really 0:03:14.280 --> 0:03:19.160 give give the best best outcome, best outlook UM for 0:03:19.160 --> 0:03:21.760 for a healthy, long and healthy baby uh and and 0:03:21.720 --> 0:03:25.680 and increasingly now looking towards UH. You know, as as 0:03:25.680 --> 0:03:28.080 an individual ages, you know, there's an awful lot of 0:03:28.080 --> 0:03:33.040 technic goes on in oncology area cancer, both to assess 0:03:33.040 --> 0:03:36.160 an individual's risk as well as to use genomic tools 0:03:36.160 --> 0:03:40.200 to evaluate what therapy, what you know, very affected target 0:03:40.240 --> 0:03:43.400 therapies could be could be useful UM, perhaps much better 0:03:43.560 --> 0:03:46.480 than you know ten twenty years ago therapy uh and 0:03:46.480 --> 0:03:48.320 and and and now on the cutting edge of that 0:03:48.440 --> 0:03:51.280 is using the generic tools to detect whether or not 0:03:51.600 --> 0:03:53.600 that therapy is working and if not, to find that 0:03:53.640 --> 0:03:56.200 cancer coming back as early as possible and help the 0:03:56.280 --> 0:03:59.440 oncologists make the next best step they in the future. 0:03:59.440 --> 0:04:01.760 For sure, we've you know, on a to take cardio 0:04:01.840 --> 0:04:07.880 vascular cardiology of cardiovascular disease as genetics is a direct 0:04:07.920 --> 0:04:11.880 cause of it. Very little people, very little veronal number 0:04:11.880 --> 0:04:13.920 of individuals get that information today, that's going to change 0:04:13.920 --> 0:04:15.240 in the next few years. And we're really excited, like 0:04:15.280 --> 0:04:17.400 I said, excited to be leaving the charge. So right now, 0:04:17.440 --> 0:04:19.800 how much of your cost equation is just the build 0:04:19.800 --> 0:04:22.599 out new lab and production facilities? I know you, I 0:04:22.600 --> 0:04:25.600 think you did one some news in April in North Carolina. 0:04:25.680 --> 0:04:28.600 So how much of kind of you know, in terms 0:04:28.680 --> 0:04:31.760 of holding you back from profitability right right now? Is 0:04:31.800 --> 0:04:34.640 the build out? Yeah, you know, it's it's it's a 0:04:34.640 --> 0:04:38.080 little of both. There's the physical build out. Frankly, that's 0:04:38.160 --> 0:04:41.040 that's not that's not really the majority of it. Okay, 0:04:41.279 --> 0:04:43.880 we are expanding, we are expanding, rere bursting of the 0:04:43.880 --> 0:04:47.080 schemes here on the West coast in fr Francisco, we're expanding, 0:04:47.360 --> 0:04:51.320 putting in two hundred thousand square foot production facility in 0:04:51.360 --> 0:04:55.160 North Carolina and RTP. But the real cost of doing 0:04:55.240 --> 0:04:58.359 it kind of comes down to the sample collection and 0:04:58.400 --> 0:05:01.080 the targeting of the gene them that you're interested in. 0:05:01.680 --> 0:05:03.919 And then the major driver as more and more information 0:05:04.040 --> 0:05:07.359 is gathered over the years is in the interpretation of 0:05:07.360 --> 0:05:11.400 the genemic information and the delivery of actionable effective you know, 0:05:11.680 --> 0:05:14.520 next steps for patients in the clinician and that's a 0:05:14.600 --> 0:05:16.800 that's an immense effort and that's what we've invested the 0:05:16.880 --> 0:05:21.160 most in. It's a technology stack. It's an infrastructure, software 0:05:21.279 --> 0:05:24.720 and tools for experts, for our experts to medical genesis 0:05:24.800 --> 0:05:27.160 to deliver that information and work with the patient and 0:05:27.200 --> 0:05:31.080 their and their um and their clinician on what it means, 0:05:31.120 --> 0:05:33.120 what the implication is for them, their family, and what 0:05:33.160 --> 0:05:36.479 the best next steps are. Sean, So we're talking about 0:05:36.480 --> 0:05:38.560 what you guys are doing. You said the bulk of 0:05:39.040 --> 0:05:43.000 some of your costs have to do with the interpretation 0:05:43.080 --> 0:05:45.120 of the of the data and what an immense effort 0:05:45.160 --> 0:05:49.760 that is. So when does the equation kind of change 0:05:49.760 --> 0:05:52.480 in terms of lots of demand. You know, you guys 0:05:52.480 --> 0:05:56.320 are seeing pretty you know, pretty impressive top and bottom 0:05:56.360 --> 0:05:57.960 line growth, but when does it become a much more 0:05:58.000 --> 0:06:02.000 profitable business in your view? Yeah, it's a fantastic question. 0:06:02.040 --> 0:06:04.560 You know, when we we genuinely see this you know, 0:06:04.560 --> 0:06:08.600 phase transition that's coming here in healthcare with with genomics 0:06:08.680 --> 0:06:11.359 very much at the center of it as the catalyst 0:06:11.400 --> 0:06:16.320 that drives to you know, massive and defendable operating cash 0:06:16.360 --> 0:06:18.599 flows in the future. And the key to that is 0:06:18.680 --> 0:06:21.719 this technology infrastructure that we've been developing in a differential 0:06:21.760 --> 0:06:25.400 cost advantage to deliver a general's worth of information to 0:06:26.279 --> 0:06:30.119 patient and their caregivers across any disease, across any stage 0:06:30.160 --> 0:06:32.560 in life, and all the data that comes along with 0:06:32.560 --> 0:06:36.280 that and the relevant genomic information, then informing on next steps, 0:06:36.440 --> 0:06:39.760 and then subsequently tracking outcomes, feeding that back into the 0:06:39.760 --> 0:06:43.240 engine and coming up with um even even better utilization 0:06:43.320 --> 0:06:46.360 for genomic data and even better outcomes that even lower costs. 0:06:46.440 --> 0:06:49.200 And that is a virtual cycle that we are absolutely 0:06:49.800 --> 0:06:53.760 confident in creating a business that, you know, call it 0:06:54.240 --> 0:06:56.479 two to five years from now, will be able to generate, 0:06:56.839 --> 0:06:59.440 like I said, really begin generating massive operaty cash flows. 0:06:59.760 --> 0:07:01.960 It's a it's a it's a complete shift in the 0:07:02.000 --> 0:07:04.200 way that this information has been used today. And as 0:07:04.200 --> 0:07:06.839 a leader in it, we tend to be there, we 0:07:06.920 --> 0:07:09.479 tend to continue to be and we were certain that 0:07:09.520 --> 0:07:12.280 it's the industry dynamic will shift where it's a it's 0:07:12.280 --> 0:07:14.320 a winner. Take most well, and you're almost a five 0:07:14.320 --> 0:07:16.720 point nine billion dollar market cap company, give me an 0:07:16.760 --> 0:07:20.960 idea of how massive this industry potentially could be. And 0:07:21.000 --> 0:07:23.800 there's multiple players, to be fair, but you know, give 0:07:23.880 --> 0:07:26.560 us an idea of is this something that people are 0:07:26.600 --> 0:07:31.520 born are people multiple times will need to have genetic 0:07:31.560 --> 0:07:35.240 testing be done? Um? Yeah, so I mean this and 0:07:35.280 --> 0:07:36.680 this is the key to the whole is the key 0:07:36.680 --> 0:07:39.320 to the whole thing, the investment thesis, what we're currently doing, 0:07:39.360 --> 0:07:43.000 how we're executing in the future. One in six individuals 0:07:43.440 --> 0:07:47.440 has a genetic indication that drives there there in the 0:07:47.440 --> 0:07:51.040 majority of their healthcare outcomes. Um. That that is if 0:07:51.040 --> 0:07:53.000 you want to translate that to the market, you know again, 0:07:53.000 --> 0:07:56.640 they're there it pretty much we believe will be anybody 0:07:56.680 --> 0:07:59.120 born in a modern healthcare system. Uh you know, is 0:07:59.160 --> 0:08:00.960 it ten years from now, fifteen years or not, something 0:08:01.000 --> 0:08:03.640 like that. But that's where this is going about one 0:08:03.680 --> 0:08:06.480 to two billion people, uh, in those in those modern 0:08:06.520 --> 0:08:09.080 healthcare systems around the globe. And our feeling is that 0:08:09.120 --> 0:08:13.560 our services that we provide from from creator the grave, well, 0:08:13.840 --> 0:08:16.680 instead of being today what it is a relatively expensive 0:08:16.720 --> 0:08:19.600 single tests, one test at a time based on symptoms 0:08:19.600 --> 0:08:22.160 and and kind of clinician inquiry, will turn into something 0:08:22.200 --> 0:08:24.040 looks more like an information service for a few hundred 0:08:24.040 --> 0:08:27.560 dollars per year for those that number of people. This 0:08:27.720 --> 0:08:30.680 information will be on tap and available for people before 0:08:30.720 --> 0:08:33.320 they know they need it, two clinicians before they have 0:08:33.559 --> 0:08:37.240 clearly identified the cause of symptoms or family history, and 0:08:37.360 --> 0:08:42.120 certainly UH increasingly UH using that advanced genemic technology to 0:08:42.240 --> 0:08:45.240 be able to identify who's the highest risk and detect 0:08:45.280 --> 0:08:48.080 that onset of that disease far earlier than we are today, 0:08:48.440 --> 0:08:50.440 which in any one of these conditions we all know 0:08:50.640 --> 0:08:55.480 is the key. You're preventing delaying, lowering the cost of treating, 0:08:55.520 --> 0:08:59.120 and in many cases outright curing those disorders. And to 0:08:59.240 --> 0:09:01.240 be fair to make sure, like our audience is cleared, 0:09:01.240 --> 0:09:05.600 genomic is very different from genetic testing. Well, I'm really 0:09:05.600 --> 0:09:08.560 glad you brought it up. We don't see it any 0:09:08.600 --> 0:09:13.199 differently Historically, you know, yeah, historically genetic testing has kind of, 0:09:13.600 --> 0:09:14.760 you know, if you think about the roots of the 0:09:14.760 --> 0:09:18.679 industry has been very much a genetic tests have been 0:09:18.720 --> 0:09:21.240 relegated to kind of the measure of last resort when 0:09:21.280 --> 0:09:23.600 when nothing else could could sort out what was going on, 0:09:24.200 --> 0:09:27.360 an idea of an indication or a problem the patients 0:09:27.360 --> 0:09:29.280 spurred a clinician to think I'm gonna oder genic test 0:09:29.360 --> 0:09:32.439 or typically specialist and then it was typically a pretty 0:09:32.520 --> 0:09:36.920 narrow focus test and on one gene one sometimes even 0:09:37.000 --> 0:09:39.920 one marker once it's a marker. And now as as 0:09:39.920 --> 0:09:42.480 the technology is evolved, and certainly there's been technology involved 0:09:42.480 --> 0:09:45.160 in the generation of that information that's allowed it's very 0:09:45.240 --> 0:09:48.920 much like it's a technology called nextionary generation sequencing. It's 0:09:48.960 --> 0:09:52.120 kind of like Moore's Lalyan computing in the seventies and eighties. 0:09:52.520 --> 0:09:54.600 That's driven then the ability to look at more and 0:09:54.600 --> 0:09:57.319 more this information at once, which people tend to call genomics. 0:09:58.000 --> 0:10:00.520 In our view, it's it's all the same. What is 0:10:00.559 --> 0:10:02.560 the biggest risk for an individual and what do you 0:10:02.600 --> 0:10:04.360 do about it? And that is that is the use 0:10:04.360 --> 0:10:07.880 of this information and healthcare right listen, we just scratched 0:10:07.880 --> 0:10:10.320 the surface, and our producer Paul bred and I were 0:10:10.320 --> 0:10:11.760 talking about this and we knew we wanted to do 0:10:11.800 --> 0:10:13.360 two blocks with you. But we hope you will come 0:10:13.360 --> 0:10:15.400 back again in the future because I feel like we 0:10:15.440 --> 0:10:17.320 want to dig even deeper so that people kind of 0:10:17.400 --> 0:10:20.200 understand even more of what you are doing and love 0:10:20.240 --> 0:10:22.400 to get an update on the business down the road. 0:10:22.720 --> 0:10:25.640 Sean George, he is the CEO of and VT, joining 0:10:25.720 --> 0:10:28.319 us on the phone from San Francisco.