WEBVTT - Potential Shutdown and Drug Development 0:00:00.120 --> 0:00:04.360 Bloomberg is now on your dashboard with Apple CarPlay and 0:00:04.360 --> 0:00:08.160 Android Auto. It gives you access to every Bloomberg podcast, 0:00:08.280 --> 0:00:11.560 live audio feeds from Bloomberg Radio, print stories from Bloomberg 0:00:11.640 --> 0:00:14.920 News in audio form, and the latest headlines of the 0:00:14.920 --> 0:00:18.600 click of a button with Bloomberg News. Now it's free 0:00:18.680 --> 0:00:21.439 with the latest version of the Bloomberg Business App. That's 0:00:21.680 --> 0:00:24.400 the Bloomberg Business App. Get it on your phone in 0:00:24.440 --> 0:00:27.760 the Apple App Store or on Google Play. Just download 0:00:27.800 --> 0:00:30.560 the app, connect your phone to your car and get started. 0:00:30.960 --> 0:00:34.400 And it's all presented by our sponsor, Interactive Brokers. 0:00:35.400 --> 0:00:38.600 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:38.640 --> 0:00:39.800 my co host Matt Miller. 0:00:40.200 --> 0:00:44.279 Every business day we bring you interviews from CEOs, market pros, 0:00:44.320 --> 0:00:48.160 and Bloomberg experts, along with essential market moven News. 0:00:48.720 --> 0:00:51.839 Find the Bloomberg Markets podcast called Apple Podcasts or wherever 0:00:51.960 --> 0:00:54.560 you listen to podcasts, and at Bloomberg dot com slash 0:00:54.600 --> 0:00:58.120 podcast here. And you want to talk rates and fed 0:00:58.240 --> 0:01:01.360 and all those bankers stuff. You turn to Ira, Jersey. 0:01:01.680 --> 0:01:04.679 You know, you head down the turnpike, the Parkway Route one. 0:01:04.720 --> 0:01:07.480 You get to Princeton, New Jersey, and that's where Ira 0:01:07.640 --> 0:01:10.800 Jersey is with the Bloomberg Intelligence Strategy team. 0:01:10.880 --> 0:01:13.120 O way on your way there, you can stop for 0:01:13.280 --> 0:01:16.360 gas and fill up for what three dollars and thirteen cents? 0:01:16.640 --> 0:01:19.360 Yes on roote seventy one in Wall Township this weekend, 0:01:19.480 --> 0:01:20.679 which all. 0:01:20.640 --> 0:01:24.400 Time, you know, just a drop for the energy prices. 0:01:24.440 --> 0:01:26.840 And that's part of the reason, Ira, that we saw 0:01:26.880 --> 0:01:32.440 this inflation report come in light. It's good news obviously 0:01:32.760 --> 0:01:35.880 for the Fed if you buy it, it's good news 0:01:36.120 --> 0:01:37.440 for the country as well. 0:01:37.800 --> 0:01:41.400 Does this mean no more hikes are necessary? 0:01:41.520 --> 0:01:41.720 Yeah? 0:01:41.760 --> 0:01:44.400 I think you know, this number takes hikes off the table, 0:01:44.440 --> 0:01:46.679 I think at this point. And yeah, you know, like 0:01:46.760 --> 0:01:49.400 you mentioned the WORP function and just looking at what 0:01:49.760 --> 0:01:53.040 short term interest rate products are doing, we're now pricing 0:01:53.080 --> 0:01:57.040 in for even more cuts in twenty twenty four. I'm 0:01:57.040 --> 0:01:59.880 still skeptical that the Federal Reserve will actually cut, but 0:02:00.040 --> 0:02:02.920 certainly the market is thinking that there's a risk of that. 0:02:03.120 --> 0:02:05.440 And you know, this is what's been happening though, is 0:02:05.480 --> 0:02:09.240 that the market's been extrapolating these trends from single numbers, 0:02:09.400 --> 0:02:12.160 and you know, we have to think that, Okay, maybe 0:02:12.160 --> 0:02:15.280 we got a zero inflation this month, but next month. 0:02:15.280 --> 0:02:16.280 If we get a point. 0:02:16.000 --> 0:02:18.640 One or a point two, it's still slower inflation than 0:02:18.639 --> 0:02:21.120 we had earlier this year, but it's still, you know, 0:02:21.200 --> 0:02:24.200 not going to be necessarily near the Fed's comfort zone, 0:02:24.200 --> 0:02:25.000 at least not yet. 0:02:25.720 --> 0:02:28.280 So what other parts of the market do you look 0:02:28.280 --> 0:02:31.280 at to get a sense of kind of where you 0:02:31.280 --> 0:02:34.200 know future rates may go here? 0:02:35.919 --> 0:02:38.560 Yeah, so the big market now used to be the 0:02:38.639 --> 0:02:41.760 euro dollar market and not meeting the actual dollar, but 0:02:41.880 --> 0:02:46.640 meaning dollars in Europe and interest rates on short term 0:02:47.080 --> 0:02:48.760 on short term products. So if you look at the 0:02:48.880 --> 0:02:52.960 SOFUR futures now you've seen a big shift over. 0:02:52.800 --> 0:02:53.680 The last two weeks. 0:02:53.720 --> 0:02:57.079 Where SOFA was thinking at the end of twenty twenty 0:02:57.080 --> 0:03:01.160 five was going to be that we were going to 0:03:01.240 --> 0:03:04.440 have short term interest rates somewhere around three and a 0:03:04.480 --> 0:03:07.760 half percent. Now it's even lower than that. Right, So 0:03:08.360 --> 0:03:13.040 we're seeing some shifts in the market that like twenty 0:03:13.040 --> 0:03:15.520 five basis points over the last two weeks in the 0:03:15.560 --> 0:03:17.520 market's expectation for where rates are going to be in 0:03:17.520 --> 0:03:18.079 two years. 0:03:18.120 --> 0:03:20.079 So SOFA futures are a big one. 0:03:20.400 --> 0:03:23.560 Obviously Fed funds futures as well, but Fed funds futures 0:03:23.600 --> 0:03:26.120 most of the volume is really in the first six 0:03:26.240 --> 0:03:30.200 months of those contracts. So you looking at longer term 0:03:30.240 --> 0:03:33.160 and what the market's thinking for policy rates, SOFA is 0:03:33.160 --> 0:03:34.680 the much better product for that. 0:03:34.800 --> 0:03:37.280 By way, Paul, you have made a killing on your 0:03:37.280 --> 0:03:37.840 two years. 0:03:38.400 --> 0:03:38.720 Sure. 0:03:38.880 --> 0:03:41.640 You know, as the rate obviously comes down the price 0:03:41.680 --> 0:03:44.400 goes up. You don't need to worry about reinvestment risk. 0:03:44.440 --> 0:03:46.640 You can sell those things out of profit. Exactly right. 0:03:46.680 --> 0:03:48.960 I mean just today, I mean we had five spots 0:03:49.040 --> 0:03:51.320 zero four. Now we're four point eighty five percent of 0:03:51.440 --> 0:03:52.520 just a big move into short term. 0:03:52.640 --> 0:03:54.880 Yeah, these big moves keep happening. 0:03:55.120 --> 0:03:58.920 Is there any problem with this much volatility in the 0:03:58.960 --> 0:04:04.680 treasury market? I'm looking at twenty basis point drops on threes, fives, 0:04:04.720 --> 0:04:07.680 and sevens and almost that much eighteen and change on 0:04:08.000 --> 0:04:08.880 twos and tens. 0:04:09.200 --> 0:04:10.400 Is that a problem? 0:04:11.160 --> 0:04:12.240 I don't think it's a problem. 0:04:12.240 --> 0:04:14.520 I think it's a sign of the new environment that 0:04:14.560 --> 0:04:18.200 we're in with the amount of with the amount of 0:04:18.360 --> 0:04:22.200 bonds that are outstanding versus the capacity of dealers and 0:04:22.279 --> 0:04:26.200 other intermediaries to actually see all the flow and take 0:04:26.240 --> 0:04:29.240 on risks to redistribute that risk at some point is 0:04:29.320 --> 0:04:31.400 much lower today. And you know, part of this is 0:04:31.480 --> 0:04:34.760 electronification of the markets and the like, so you're. 0:04:34.680 --> 0:04:35.920 Likely to continue to see these. 0:04:36.200 --> 0:04:40.120 So actually, we were just looking this morning at comparing where, 0:04:40.600 --> 0:04:43.120 you know, the types of moves we're seeing now versus 0:04:43.400 --> 0:04:46.200 say nineteen ninety seven, when you had interest rates that 0:04:46.240 --> 0:04:47.680 were a little bit higher than they are now, but 0:04:47.800 --> 0:04:50.320 six seven percent on the ten year instead of you know, 0:04:50.320 --> 0:04:53.760 four and a half five, But you actually had regularly 0:04:54.200 --> 0:04:58.000 fifteen twenty basis point moves. So you know, given the 0:04:58.120 --> 0:05:00.400 level of rates, this is not that unusual. Well, I 0:05:00.400 --> 0:05:02.040 think the thing is that we were used to the 0:05:02.120 --> 0:05:05.320 last decade when interest rates were near zero and when 0:05:05.360 --> 0:05:07.960 you had tenure yields at two percent, you know, a 0:05:08.000 --> 0:05:11.200 five basis point move seemed really big. Now that you're 0:05:11.240 --> 0:05:14.080 at you know, five percent, then you know, maybe a 0:05:14.120 --> 0:05:16.520 ten basis point move or a fifteen basis point move 0:05:16.640 --> 0:05:18.960 is kind of you know, on the larger size, but 0:05:19.040 --> 0:05:20.719 also not particularly unusual. 0:05:20.800 --> 0:05:22.960 So so I think you'll see more of these. 0:05:23.240 --> 0:05:27.080 Partially doe to rate, partially due to shifts in the 0:05:27.080 --> 0:05:31.320 market structure that you know, just going to provide for more, 0:05:32.080 --> 0:05:34.280 you know, more jumps in the market when people are 0:05:34.400 --> 0:05:36.760 one way and you know, want to get want to 0:05:36.800 --> 0:05:40.000 get out of risk or into risk in because of 0:05:40.080 --> 0:05:42.360 data or because of some news out of the Fed, 0:05:42.400 --> 0:05:42.960 for example. 0:05:43.400 --> 0:05:46.200 So I when I first got the Salomon Brothers, the 0:05:46.440 --> 0:05:49.679 Salomon had like an army of government bond traders, no kidding, 0:05:49.720 --> 0:05:51.360 I mean just dozens of them, and they were all 0:05:51.360 --> 0:05:55.440 trading for their book, trading for clients, and they made 0:05:55.440 --> 0:05:57.480 a lot of money. I'm guessing they also lost money 0:05:57.760 --> 0:05:59.839 from time to time. Does that even exist on Wall Street? 0:05:59.880 --> 0:06:03.200 And more? Do government trading desks exists? And do they? 0:06:03.320 --> 0:06:04.640 Are they profit centers anymore? 0:06:05.920 --> 0:06:10.000 So there are government Yeah, there are clearly government bond traders. 0:06:10.040 --> 0:06:13.320 I think that the what what you've seen, and this started, 0:06:13.440 --> 0:06:16.080 you know, in the last twenty odd years, you know, 0:06:16.120 --> 0:06:19.320 and progressed while I was on the street myself, is 0:06:19.360 --> 0:06:22.600 that you went from having you know, five six people 0:06:22.800 --> 0:06:27.000 trading treasuries and just treasuries to having somewhat less than 0:06:27.040 --> 0:06:29.720 that because you have more automated pricing. 0:06:29.800 --> 0:06:31.680 So you get auto pricers. 0:06:31.200 --> 0:06:35.240 And electronic trading platforms that basically you know, look at 0:06:35.240 --> 0:06:38.279 supply and demand and and you know price smaller trades 0:06:39.240 --> 0:06:43.480 in in you know, just electronically without necessarily the dealer 0:06:43.560 --> 0:06:46.520 having to take much risk. But for those bigger trades, 0:06:46.560 --> 0:06:50.039 and for trades that you know of decent size, you 0:06:50.120 --> 0:06:52.360 still have a person who has to accept that trade 0:06:52.640 --> 0:06:54.919 because whether or not it fits their risk limits of 0:06:54.960 --> 0:06:55.719 their trading book. 0:06:56.200 --> 0:06:57.359 And banks make money on this. 0:06:57.480 --> 0:06:59.560 You know, you talk to you know, Alison Williams, who 0:06:59.560 --> 0:07:02.799 covers the lot of the dealers here at Bloomberg Intelligence, 0:07:02.839 --> 0:07:06.080 and you look and you know, sometimes fixed income trading. 0:07:07.360 --> 0:07:09.080 Is a big profit center and in other times. 0:07:09.080 --> 0:07:11.600 Obviously twenty twenty two, for example, was not a particularly 0:07:11.640 --> 0:07:15.440 good year for trading, primarily because you get stuck with risk, 0:07:15.760 --> 0:07:18.560 and because you get stuck with that risk, you wind 0:07:18.640 --> 0:07:20.960 up losing money when when bond prices go down and 0:07:21.000 --> 0:07:24.920 yields go up. So I think that that you know, 0:07:25.160 --> 0:07:29.640 the market's changed, and certainly the size of the market 0:07:29.680 --> 0:07:32.080 and the size of the dealer community has shrunk a 0:07:32.120 --> 0:07:35.000 little bit, right in terms of personnel and liquidity and 0:07:35.320 --> 0:07:38.360 also risk taking. Yeah, liquidity is definitely lower. So you 0:07:38.360 --> 0:07:41.440 look at the Bloomberg Liquidity Index, which basically shows you 0:07:41.520 --> 0:07:43.880 how much off the run bond. So these are aren't 0:07:43.960 --> 0:07:46.640 like the current tenure, but the tenure issued. 0:07:46.360 --> 0:07:47.280 Say six months ago. 0:07:47.880 --> 0:07:51.600 Liquidity in those securities in particular has gone way down, 0:07:52.400 --> 0:07:54.680 and that's really where I think you see some of 0:07:54.720 --> 0:07:58.200 the pain points and one reason why dealers, you know, 0:07:58.240 --> 0:08:00.360 aren't willing to take as much risk and some of 0:08:00.360 --> 0:08:03.160 those off the run security. So getting out of out 0:08:03.200 --> 0:08:05.360 of risk sometimes is going to be much more difficult 0:08:05.400 --> 0:08:08.160 today than it had been in past years. 0:08:08.480 --> 0:08:10.280 Yeah, I don't know. I'm sticking with my thought that 0:08:10.520 --> 0:08:12.560 we had way more funnel Wall Street than the kids 0:08:12.600 --> 0:08:15.280 do today. I'm sure you're sticking with that point. Well, 0:08:15.280 --> 0:08:17.720 it depends which kids, right, Yeah, I'm just you know, 0:08:17.720 --> 0:08:20.560 I walk on a desk today, I'm like, there's nobody there. 0:08:20.600 --> 0:08:22.880 I mean, you know, there's a relatively no. I don't know, 0:08:23.200 --> 0:08:25.280 but anyway, they're making tons of money over there, so 0:08:25.320 --> 0:08:28.240 good for them. Iver Jersey, chief US interust Rate Strategists 0:08:28.240 --> 0:08:29.440 for Bloomberg Intelligence. 0:08:30.600 --> 0:08:33.960 You're listening to the team Can's are live program Bloomberg 0:08:34.080 --> 0:08:37.440 Markets weekdays at ten am Eastern on Bloomberg dot com, 0:08:37.520 --> 0:08:40.640 the iHeartRadio app and the Bloomberg Business app, or listen 0:08:40.720 --> 0:08:42.840 on demand wherever you get your podcasts. 0:08:45.280 --> 0:08:47.880 Mikey Shaw he is one of our senior analysts over 0:08:47.880 --> 0:08:51.040 in London. Covering a farmer space. He's been doing it 0:08:51.080 --> 0:08:53.360 a long time along with that guy, Sam Fazzelli. Mike's 0:08:53.400 --> 0:08:55.920 got much better hair than Sam Fazelli. Will go there 0:08:56.000 --> 0:09:01.280 right away. I'm jealous exactly. It's over flowing. So Mike, 0:09:01.360 --> 0:09:03.200 you guys have done a ton of work on these 0:09:03.280 --> 0:09:06.320 g LP one drugs. Can you frame out We've had 0:09:06.360 --> 0:09:08.280 a little bit of time now to kind of think 0:09:08.320 --> 0:09:10.720 about this and look at the different products out there. 0:09:11.080 --> 0:09:15.240 But where are we in terms of developing that market, 0:09:15.320 --> 0:09:17.160 that part of the market. 0:09:16.840 --> 0:09:19.360 I mean, in terms of penetration rates with GLP one 0:09:19.400 --> 0:09:22.120 drugs for obesity, I think we're still in the very 0:09:22.120 --> 0:09:26.920 early stages. Excitement around the classes, you know, is constantly growing, 0:09:27.920 --> 0:09:31.200 even more so after this weekend where we saw the 0:09:30.559 --> 0:09:34.480 car the detailed cardiovascular outcomes data in the best patients 0:09:34.880 --> 0:09:38.720 forward go V. I think that was met very positively 0:09:39.440 --> 0:09:43.680 by the prescriber community in general. We saw kind of 0:09:43.720 --> 0:09:47.040 early benefits as early as day one in terms of 0:09:47.679 --> 0:09:52.240 you know, these drugs can reduce major adverse cardiovasco events 0:09:53.080 --> 0:09:57.120 in you in these heavy abest patients. I mean, but 0:09:57.160 --> 0:09:59.400 there's also still a lot to be kind of learnt 0:09:59.840 --> 0:10:03.720 in in terms of you know, the mechanism itself. When 0:10:03.720 --> 0:10:06.840 we look at the I mean, the two curves of 0:10:06.840 --> 0:10:10.720 interests are are the you know, the curve aster outcomes 0:10:10.760 --> 0:10:15.200 curve and then the body weight curve so well. 0:10:14.840 --> 0:10:18.880 And diabetes, right because if you're pre diabetic and you 0:10:18.920 --> 0:10:22.720 can't stop eating hagendas, this thing could be a lifesaver. 0:10:23.320 --> 0:10:24.280 Yeah. So, I mean. 0:10:25.800 --> 0:10:27.760 So, I mean when we look at obesity, it's obviously 0:10:27.800 --> 0:10:32.440 it's a risk factor for you know, diabetes, and in 0:10:32.480 --> 0:10:37.400 that data set, it showed that, you know, it definitely 0:10:37.440 --> 0:10:43.880 cut the move of pre diabetics to you know, developing diabetes. 0:10:45.320 --> 0:10:48.320 And I mean the key question though with with the 0:10:48.440 --> 0:10:52.280 data is, yes, body weight is a contributing factor, but 0:10:52.400 --> 0:10:55.400 given the disparities we saw in terms of maximum weight 0:10:55.440 --> 0:10:58.920 loss being achieved and that early separation of the core 0:10:59.320 --> 0:11:02.680 of the of the Calleavascar outcomes curve, it's not the 0:11:02.760 --> 0:11:06.000 soul you know driver, so that there's. 0:11:05.840 --> 0:11:07.880 A secret ingredient what's doing it? 0:11:08.280 --> 0:11:10.679 Yeah, I mean that's what Nave said. It's got an 0:11:10.800 --> 0:11:13.640 X factor which we you know, we need to find 0:11:13.679 --> 0:11:14.280 out more about. 0:11:14.440 --> 0:11:15.240 But that's what you did. 0:11:15.240 --> 0:11:18.200 Like this weekend, you're at a conference, right, Yeah, up 0:11:18.200 --> 0:11:19.200 in Boston. Where was it. 0:11:19.200 --> 0:11:20.040 It was in Philadelphia. 0:11:20.040 --> 0:11:20.559 Philadelphia. 0:11:20.800 --> 0:11:24.280 Oh so you saw the apparently multiple rounds of applause 0:11:24.520 --> 0:11:25.800 when the data were released. 0:11:25.920 --> 0:11:27.760 Yeah, so the room was full. 0:11:28.000 --> 0:11:29.680 It's like the sounding evasion. 0:11:29.800 --> 0:11:33.480 Okay, Okay. When I go to a conference, this is 0:11:33.480 --> 0:11:37.480 my schedule. Get up, have a little business breakfast, maybe 0:11:37.480 --> 0:11:39.600 a little business lunch, maybe meeting in afternoon, and then 0:11:39.640 --> 0:11:41.840 boom dinner. Then we go to the craps table in Vegas. 0:11:42.040 --> 0:11:45.040 That's how you do an investor conference. These guys healthcare. 0:11:45.200 --> 0:11:47.880 They go on the weekend and they go to these 0:11:47.880 --> 0:11:50.440 conference rooms for like ten hours and have to deal 0:11:50.480 --> 0:11:53.600 with all this medical scientific data. And you guys actually 0:11:53.640 --> 0:11:56.640 have to write research notes based upon this stuff on 0:11:56.720 --> 0:11:59.560 a weekend. By the way, that's what you guys do, right, 0:11:59.640 --> 0:12:01.960 Yeah about See, that's no way to give it. 0:12:02.000 --> 0:12:03.960 Your badge is worth two drinks at the meat and 0:12:04.000 --> 0:12:05.640 greet after exactly. 0:12:05.920 --> 0:12:09.240 All right, So but in reality, how have you guys 0:12:09.240 --> 0:12:10.080 sized out this market? 0:12:10.160 --> 0:12:13.480 Because listen, listen, I have some important questions, okay, because 0:12:13.520 --> 0:12:15.680 I want to get this. I've got a doctor's appointment 0:12:15.679 --> 0:12:18.200 on December seventh, and hopefully he's gonna hook me up. 0:12:18.240 --> 0:12:19.600 I need to lose twenty pounds. 0:12:19.880 --> 0:12:22.480 I want to avoid getting diabetes and I don't want 0:12:22.520 --> 0:12:25.959 to die of a heart attack. Then, you know, and 0:12:26.320 --> 0:12:28.760 I have very weak I have no willpower, right, so 0:12:28.920 --> 0:12:30.760 I'm hoping that this drug can do this for me 0:12:30.840 --> 0:12:31.319 and maybe do. 0:12:31.280 --> 0:12:32.240 My taxes as well. 0:12:33.400 --> 0:12:36.240 I don't want to lose muscle. I only I only 0:12:36.280 --> 0:12:37.240 want to lose fat. 0:12:37.440 --> 0:12:40.480 Is there a competitor to ozempic slash we goo v 0:12:41.120 --> 0:12:42.679 that is going to help with me with that? 0:12:43.160 --> 0:12:46.400 I mean in terms of the data with regardless to 0:12:46.480 --> 0:12:51.040 kind of lean the loss of lean muscle. It's limited 0:12:51.040 --> 0:12:53.440 at the moment, but you know, Lily has done a 0:12:53.480 --> 0:12:57.680 deal for a drug which potentially when you used in 0:12:57.720 --> 0:13:01.439 compination with the drug which is well just go to 0:13:01.440 --> 0:13:07.200 approve to z bound, that could potentially address that issue. 0:13:07.280 --> 0:13:08.720 Okay, so that's one question I have. 0:13:09.200 --> 0:13:13.120 The other one is do I go zepic because I 0:13:13.160 --> 0:13:15.720 really want to avoid diabetes and a heart attack. 0:13:15.800 --> 0:13:17.480 I mean, I need to lose twenty pounds. I don't 0:13:17.520 --> 0:13:20.400 have to write not morbidly obese? Or do I go 0:13:20.720 --> 0:13:21.080 we go. 0:13:21.200 --> 0:13:26.120 Vy because it's a stronger dose and actually has better 0:13:26.200 --> 0:13:27.960 results for hard issues. 0:13:28.920 --> 0:13:31.199 I mean, in order to get we'll gav as in 0:13:31.840 --> 0:13:35.280 because of the supply issues, it needs to be on label, right, 0:13:35.320 --> 0:13:39.120 So you need to be either overweight with a weight 0:13:39.160 --> 0:13:43.200 related to comobidity so that might be diabetes. Oh you 0:13:43.280 --> 0:13:46.319 need to be you know, clinically abese, so BMI have 0:13:46.440 --> 0:13:47.320 thirty or above. 0:13:48.040 --> 0:13:49.920 I don't check that box, but I feel like I 0:13:49.960 --> 0:13:52.040 know people. I can go to Canada, you know, I 0:13:52.040 --> 0:13:56.040 can get the drug elsewhere. So you're saying like, is 0:13:56.080 --> 0:13:58.160 we GOV the right choice but it's gonna be hard 0:13:58.240 --> 0:13:58.480 to get? 0:13:58.559 --> 0:13:59.960 Or should I just settle for ozempic. 0:14:00.520 --> 0:14:02.400 I mean, at the moment, there's a lot of off 0:14:02.480 --> 0:14:05.720 label use of a zempiic simply because of the supply 0:14:06.200 --> 0:14:12.080 supply situation with WEGOV. And in essence, you know, the 0:14:12.120 --> 0:14:14.920 active ingredient of these of these drugs are both sema 0:14:14.960 --> 0:14:18.600 glue tide, and in both cases you would start off 0:14:18.920 --> 0:14:21.600 at a lower dose and then start tie trading up. 0:14:21.640 --> 0:14:25.680 So the maximum dose for for a zempick is two milligrams, 0:14:26.280 --> 0:14:28.640 maximum days FORGOVY is two point four. 0:14:28.680 --> 0:14:31.120 All right, Amy from South Carolina rates in how long 0:14:31.160 --> 0:14:34.520 does someone have to stay on the weight loss drugs? Forever? 0:14:34.880 --> 0:14:37.000 A few weeks? And when you start taking it there's 0:14:37.000 --> 0:14:38.680 a weight cut back on what's the show there. 0:14:38.760 --> 0:14:42.480 Yeah, so there's clinical data from both Lily and Novos 0:14:42.480 --> 0:14:44.800 showing that you know, as soon as you stop these drugs, 0:14:45.560 --> 0:14:48.640 you eventually, you know, put on you put the weight 0:14:48.680 --> 0:14:53.320 back on. Prescribers we've spoken to as well, they're all 0:14:53.400 --> 0:14:56.960 kind of saying, you know, chronic dosing of these drugs 0:14:57.240 --> 0:15:00.320 are needed. But I mean there are you there are 0:15:00.440 --> 0:15:03.400 various kind of things that you could potentially do. You 0:15:03.440 --> 0:15:06.640 could potentially, you know, reach your targeted weight loss and 0:15:06.720 --> 0:15:08.560 then perhaps you lower the dose. 0:15:08.360 --> 0:15:08.880 Of the drug. 0:15:09.240 --> 0:15:10.320 Who pays for this stuff? 0:15:10.880 --> 0:15:13.080 So that's one of the main questions at the moment. 0:15:13.000 --> 0:15:13.960 So you got to go to the money. 0:15:14.000 --> 0:15:15.840 But Mikey, we have the same insurance provider. 0:15:17.760 --> 0:15:20.720 If I go in there and I test like positive 0:15:20.760 --> 0:15:23.400 for pre diabetes, or if I have a BMI of 0:15:23.440 --> 0:15:25.920 like twenty seven twenty eight, are they gonna is my 0:15:25.960 --> 0:15:26.600 insurance going. 0:15:26.560 --> 0:15:27.040 To pay for this? 0:15:27.720 --> 0:15:30.040 I think as we get more and more data, we're 0:15:30.080 --> 0:15:32.360 going to see kind of access and reinbursement for these 0:15:32.400 --> 0:15:36.560 drugs improve. I think the outcomes data for w GOOVI, 0:15:36.800 --> 0:15:38.600 you know, it's a big step in the right direction. 0:15:38.760 --> 0:15:39.000 There. 0:15:40.120 --> 0:15:43.400 The whole I mean what insurers need to do is 0:15:43.440 --> 0:15:47.880 you know, balance that the short term costs, which are 0:15:47.920 --> 0:15:50.440 going to be high of you know, jailping one therapy 0:15:50.560 --> 0:15:53.240 versus the long term benefits in terms of you know, 0:15:53.520 --> 0:15:58.640 saving cost savings through reducing kind of hospitalizations. 0:15:58.720 --> 0:16:04.120 And there's an actuary at Novo Nordisk and the boss 0:16:04.160 --> 0:16:07.760 comes into his office and says, how much does heart 0:16:07.800 --> 0:16:12.920 disease and diabetes and obesity cost the world? 0:16:13.040 --> 0:16:14.119 And he says brillions. 0:16:14.200 --> 0:16:16.560 Yeah, and then he says, Okay, let's price our drug 0:16:16.640 --> 0:16:19.440 for that price. Right, That's exactly what they want to do. 0:16:19.480 --> 0:16:20.200 They want to get it. 0:16:20.240 --> 0:16:22.880 So some studies say it saves some studies say it doesn't, 0:16:22.880 --> 0:16:24.200 but it's basically at the same level. 0:16:24.960 --> 0:16:27.880 Yeah, I mean, like the if you look at the 0:16:28.040 --> 0:16:32.800 direct and indirect costs of of of obesi and diabetes, 0:16:33.080 --> 0:16:36.600 it runs into the trillions, right. And you know, all 0:16:36.640 --> 0:16:39.640 the prescribers we spoke to at the conference, you know, 0:16:39.760 --> 0:16:43.000 they believe in these drugs. They believe that eventually they'll 0:16:43.040 --> 0:16:45.640 be cost effective in terms of as we get more 0:16:45.680 --> 0:16:49.040 competition coming into the market, that price point will come down. 0:16:49.200 --> 0:16:52.000 As we see orals which are cheaper to produce also 0:16:52.240 --> 0:16:54.080 to prove that going to come down to. 0:16:54.040 --> 0:16:56.080 What we need, all right. Mikey Shaw joins us. He's 0:16:56.080 --> 0:16:58.120 a senior industry anist Bloomberg Contology. Dude, you got to 0:16:58.120 --> 0:16:59.160 come here to New York more often. 0:16:59.200 --> 0:16:59.480 Stuff. 0:16:59.520 --> 0:17:02.040 I mean, we see Sam a lot who cares. We'd 0:17:02.120 --> 0:17:05.200 rather talk to the smart money behind the healthcare research 0:17:05.200 --> 0:17:07.760 of Bloomberg Intelligence. Mikey Shaw joining us here in our 0:17:07.760 --> 0:17:09.399 Bloomberg Interactive Brooker's Studio. 0:17:09.720 --> 0:17:12.840 You're listening to the tape cans Are live program Bloomberg 0:17:12.880 --> 0:17:16.480 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:17:16.520 --> 0:17:19.760 tune in app, Bloomberg dot Com, and the Bloomberg Business App. 0:17:19.800 --> 0:17:22.640 You can also listen live on Amazon Alexa from our 0:17:22.640 --> 0:17:27.040 flagship New York station Just say Alexa playing Bloomberg eleven thirty. 0:17:28.840 --> 0:17:30.600 Jake Saber knows is did I consent Rais? 0:17:30.600 --> 0:17:30.840 He did? 0:17:31.040 --> 0:17:35.000 Jake's Safer founder, general partner of Emergence Capital. He's out 0:17:35.000 --> 0:17:37.359 there in Silicon Valley. He does all that stuff. So 0:17:38.480 --> 0:17:40.880 when we talk about AI, Jake, I'd like to ask people, 0:17:41.080 --> 0:17:43.520 just say, from your perspective, what is AI? 0:17:44.240 --> 0:17:46.080 It's machines helping humans do their jobs. 0:17:46.280 --> 0:17:48.919 Machines helping humans do their jobs, right, I'm down with that. 0:17:49.359 --> 0:17:53.320 So how do you guys view that space and maybe 0:17:53.359 --> 0:17:56.600 how you view investment opportunities for your venture capital? 0:17:56.680 --> 0:17:58.600 Yeah, totally. Well, I'll start with some context on like 0:17:58.640 --> 0:18:01.000 where we think this fits in our software. More broadly, 0:18:01.200 --> 0:18:03.320 we're focused just on enterprise software B to B software, 0:18:03.480 --> 0:18:05.640 something that I near and dear the hearts of Bloomberg folks. 0:18:05.680 --> 0:18:08.720 Probably presumably our firm have started twenty years ago with 0:18:08.720 --> 0:18:10.760 the thesis that software would move from on premise to 0:18:10.800 --> 0:18:14.000 the cloud. That thesis largely worked, right, So the very 0:18:14.000 --> 0:18:16.760 first investment for US in four was in salesforce and 0:18:16.840 --> 0:18:19.400 investing in all sorts of enterprise software companies like Zoom 0:18:19.400 --> 0:18:22.639 ever since. And we think that this AI wave is 0:18:22.760 --> 0:18:25.159 very similar to the wave of on prem to the cloud. Okay, 0:18:25.240 --> 0:18:27.760 So just like that was transformational for tech, we think 0:18:27.760 --> 0:18:30.479 this will be transformational. We're very bullish and we're very 0:18:30.480 --> 0:18:32.040 focused on how we can help B to B software 0:18:32.040 --> 0:18:33.080 companies make that transition. 0:18:33.320 --> 0:18:35.240 But should we have a should we have a fast 0:18:35.280 --> 0:18:38.920 food company talking about AI on an earn quarterly earning 0:18:38.920 --> 0:18:39.560 conference call? 0:18:39.960 --> 0:18:42.760 I think it's real, right, Like, there's so much hysteria 0:18:42.880 --> 0:18:44.440 and so you have to cut through all the crap 0:18:44.480 --> 0:18:46.000 to figure out what's real. But like in the case 0:18:46.000 --> 0:18:48.400 of fast food, the idea of using this to help 0:18:48.440 --> 0:18:50.440 augment the people doing the drive throughs and make drives 0:18:50.520 --> 0:18:53.080 is more efficient. Like, that's very real. Voice recognition technology 0:18:53.160 --> 0:18:56.439 is real. So I think what may be in danger 0:18:56.520 --> 0:18:58.520 is I think a lot of tech companies public companies 0:18:58.560 --> 0:19:00.719 over the past six months have gotten so excited they 0:19:00.720 --> 0:19:02.560 may have over committed, over promised on what they can 0:19:02.560 --> 0:19:04.480 do with A in the near term. So we may 0:19:04.480 --> 0:19:07.159 be you know, near term negative, But I think over 0:19:07.200 --> 0:19:08.359