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Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.

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Speaker 1: Along with my co host Lisa Bramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you're at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg p m L

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Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Perhaps

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Speaker 1: the Fed is going loco. That is what President Trump

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Speaker 1: has said, so that it is a mistake for the

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Speaker 1: Central Bank to raise rates as much as it has.

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Speaker 1: I also said that they are being too aggressive and

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Speaker 1: uh yeah, going loco, going crazy. These are the words

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Speaker 1: David Ko Talk joining us now chairman and chief investment

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Speaker 1: officer at Cumberland Advisors. David, how much do you care

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Speaker 1: about these comments that President Trump is making about the Fed? Hey, Lisa,

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Speaker 1: it's always a pleasure to be with you, to know.

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Speaker 1: There's a real question here. So who's loco? And I

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Speaker 1: think the markets are telling you who's loco? The tape

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Speaker 1: is read, the markets are telling you who has been

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Speaker 1: loco over a trade war fight? Well, hold on a second, Wait,

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Speaker 1: hold on a second. So you're basically saying that the

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Speaker 1: tape is read because of the trade war fight and

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Speaker 1: not because the FED raising rates. Is that correct? I

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Speaker 1: think the FED has been on a gradualist broadcast path,

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Speaker 1: taking a step at the time telling everybody who wants

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Speaker 1: to pay attention what they're gonna do, when they're going

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Speaker 1: to do it, and trying to communicate it clearly. So

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Speaker 1: to say they're crazy means I can't read, I don't

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Speaker 1: look at anything, and I get all my news at

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Speaker 1: late at night in a circular fashion from three journalists

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Speaker 1: whose names we know all right, well, But David, just

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Speaker 1: just to sort of push back a little bit here,

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Speaker 1: I mean, we've known about the trade war for a while.

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Speaker 1: We've known about the increasing trade tensions between China and

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Speaker 1: the US. We've also known about the tell of the

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Speaker 1: forecast four FED rate hikes. So we've known both of

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Speaker 1: these things for a while. How can you pin the

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Speaker 1: recent sell off on one or the other. I mean,

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Speaker 1: it seems like somewhat it it's a factor of both

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Speaker 1: of them joining up right, I mean, if nothing else,

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Speaker 1: But how do you tease this out? Well, you can

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Speaker 1: say the following trade war rhetoric, which started at the

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Speaker 1: beginning of this year, said we're going to become bellicos,

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Speaker 1: and the market said, Okay, this is a style of confrontation,

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Speaker 1: it's a style of negotiation. But in the end it'll

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Speaker 1: all work out and we'll get to the middle and compromise.

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Speaker 1: And that was a progression. Meanwhile, the rhetoric intensified. Then

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Speaker 1: we had some settlements. So we've seen Mexico, Canada, Korea,

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Speaker 1: we're seeing settlements. When you examine the result of all

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Speaker 1: the belligerency, there's not much in the way of change.

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Speaker 1: The big one is China, the second largest economy in

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Speaker 1: the world, four times our population, and a very active

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Speaker 1: participant in Asia, and that has been digging in deeper

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Speaker 1: and deeper and deeper. And now we're in a position

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Speaker 1: where if there's no truce, there's a tariff that's announced,

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Speaker 1: the US must follow through under Trump or Trump will

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Speaker 1: have said something and have to bring it back. That's

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Speaker 1: not his way. So that's where we are today. Noticed

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Speaker 1: today the market rallied four seconds on this meeting was

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Speaker 1: g and it's turning red again for good reason. When

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Speaker 1: you pick a fight as a bully in the schoolyard,

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Speaker 1: pick on somebody small, don't take on the guy who's

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Speaker 1: your size. All right, Well, you know, let's let's just

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Speaker 1: dig a little bit deeper though, because right now we're

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Speaker 1: still seeing fundamental strong we're still seeing profits rising at

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Speaker 1: US companies, So you know, would this be a buying

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Speaker 1: opportunity even given some of the outstanding concerns about trade tensions, uh,

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Speaker 1: let alone rate rises or anything else. Well, that's an

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Speaker 1: interesting question to evolve. I can't say what it is.

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Speaker 1: I can tell you what we're doing. We are focused

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Speaker 1: on the E t F portfolios, domestic centric as long

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Speaker 1: as we see risk in the international structure. The US

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Speaker 1: oriented portfolio is going to look at mid cap small cap.

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Speaker 1: Even though they've corrected domestic businesses and selected sectors like defense,

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Speaker 1: that one is not going to be touched. It's going

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Speaker 1: to do well. So that's the stock area. On the

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Speaker 1: bond area, we're doing a barbell. Interest rates are definitely

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Speaker 1: on a higher trajectory. How far when, what the influences are.

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Speaker 1: You're an expert that has followed the bond market for

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Speaker 1: years and look at credit spreads and suddenly they explode.

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Speaker 1: Italy is the latest example. They don't give you warning, Lisa.

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Speaker 1: You wake up on a Tuesday, turn on Bloomberg and

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Speaker 1: Lisa is saying, look what happened, and I'll last twenty

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Speaker 1: four hours. Well, one thing that I've been noticing, David,

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Speaker 1: is that there have been some bretty subsidantial outflows from

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Speaker 1: a number of credit ETFs. And thinking about h y

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Speaker 1: G for example, which is the biggest highle bondy TF

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Speaker 1: in the US, and it has seen nearly three billion

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Speaker 1: dollars of withdrawals in the past week alone. Investment grade

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Speaker 1: BONDI tfs also seeing some pretty substantial, unprecedented outflows. I'm

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Speaker 1: just wondering, I mean, do you think that this is

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Speaker 1: a harbinger of what's to come or do you think

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Speaker 1: that this is just sort of knee jerk positioning by

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Speaker 1: a number of big institutions. Well, I think it's a

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Speaker 1: harbinger of rising risk. When we had this discussion a

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Speaker 1: couple of years ago, the short term interest rate was

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Speaker 1: near zero. Now it's too. When we had this discussion

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Speaker 1: a couple of years ago, the tax free interest rate

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Speaker 1: was three high grade tax free trade today above four.

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Speaker 1: When we had this discussion, taxable mortgage backed securities were lower,

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Speaker 1: now they're above live. There is a competition coming off

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Speaker 1: the coupon for the first time in ten years, and

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Speaker 1: that's a big deal. And the direction of the competition

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Speaker 1: looks to be even more upwardly sloped in terms of yield.

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Speaker 1: Certainly the short term rate it will be a quarter

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Speaker 1: point higher before the end of this year. Yeah, David,

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Speaker 1: Before I let you go, we just have about thirty

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Speaker 1: seconds here. But where's your views on on the municipal

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Speaker 1: bond landscape, because I know you wrote Adventures in Muni

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Speaker 1: Land and we've seen some pretty big outflows from the

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Speaker 1: muni bond space as well. The intermediate section of the

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Speaker 1: curve in the muni space is dangerous. The long end,

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Speaker 1: where the highest grade yield um is above the thirty

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Speaker 1: year treasury yield by a wide margin, is desirable and

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Speaker 1: dry powder in the front end. That's why Barbell beats

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Speaker 1: a ladder hands down in this climate. You heard it here,

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Speaker 1: David Kottak always a pleasure. We love having you on

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Speaker 1: David ko talk as Chairman and Chief Investment off Sir

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Speaker 1: from Cumberland Advisors based in sarah Sota, Florida. I hope

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Speaker 1: you avoided some of the bad weather we've been getting

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Speaker 1: and their curricane. David Kotuk is also co author of

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Speaker 1: the book Adventures in Muni Land, advising a barbell approach,

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Speaker 1: keeping some dry powder in the short end in case

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Speaker 1: things really do blow up. More from where we are,

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Speaker 1: the price of oil has been very interesting to watch.

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Speaker 1: Usually when the dollar weakens, oil strengthen just because it

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Speaker 1: is priced in dollars. Uh, today not so much. You're

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Speaker 1: seeing the price of oil decline even as the dollar weekends,

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Speaker 1: and it's the biggest to day decline for crude going

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Speaker 1: back to July. Let's get a check on what's going

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Speaker 1: on here. Will Harris joins us now he's European energy

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Speaker 1: analyst for Bloomberg Intelligence. Will let's just start with what

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Speaker 1: OPEC came out with today. What do we hear from

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Speaker 1: them and how much is that what's affecting oil here?

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Speaker 1: So oil prices are are off a little bit, as

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Speaker 1: as you mentioned in the last couple of days, but

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Speaker 1: I don't think that's to be unexpected given the contagion

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Speaker 1: we are witnessing globally across equity markets. Um OPEC came

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Speaker 1: out um with their monthly oil market report and and

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Speaker 1: one of the headline numbers was that they had revised

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Speaker 1: their world oil demand growth forecast down marginally by fifty

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Speaker 1: thousand barrels a day. And what I think is really

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Speaker 1: important to note here is putting this number in context,

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Speaker 1: fifty thousand barrels a day compares to about a hundred

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Speaker 1: million barrels per day UM in total UM for globe

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Speaker 1: world oil demand next year. In so we are still

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Speaker 1: expected to grow by over one point three million barrels

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Speaker 1: a day next year. And and just to um add

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Speaker 1: on to that, just two weeks ago, OPEC published its

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Speaker 1: World Oil Outlook, whereby it raised its long term oil

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Speaker 1: demand growth forecast as well. So I think we can

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Speaker 1: look at at this number as as a UM as

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Speaker 1: a minor revision in the context of of a actually

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Speaker 1: very supportive fundamentals for the oil market UM through next

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Speaker 1: year and longer term. So you said that you think

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Speaker 1: that oil prices are off a little bit because of contagion.

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Speaker 1: Is that because when there is a sort of jittery

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Speaker 1: feeling in world equities, people expect global growth to slow

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Speaker 1: and thus oil demand to drop off. Is that sort

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Speaker 1: of the knee jerk response or is it something else? Yes,

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Speaker 1: that's precisely it. And the only other thing I would

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Speaker 1: add is that layering on that as oil prices do

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Speaker 1: increase um the demand for oil does begin to tail off.

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Speaker 1: As you can imagine people people would like to drive

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Speaker 1: a bit less um and and and more efficiency in

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Speaker 1: um in how people are using oil as it becomes

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Speaker 1: more expensive. So I guess I want to take a

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Speaker 1: step back, because we've been talking a lot about how

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Speaker 1: if there is ongoing conflict in Libya v A well

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Speaker 1: as a huge issue, if their production drops much further

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Speaker 1: it already has dropped tremendously. If we have the sanctions

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Speaker 1: that go into effect soon against Iran, all of these

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Speaker 1: things are going to pressure the oil supply dynamic to

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Speaker 1: such a degree that it won't take anything at all

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Speaker 1: or a very small disruption to really cause prices to

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Speaker 1: rise substantially. Do you adhere to that idea, Yes, precisely.

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Speaker 1: And and so just as a little side note, I

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Speaker 1: attended the Oil and Money conference in London this morning

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Speaker 1: and actually listened to Mohammed Barkindo, who is the opec

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Speaker 1: UH Secretary General speak this morning, and notably he didn't

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Speaker 1: mention this marginal decline in oil demand growth for next year.

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Speaker 1: But what he did do is he clearly laid out

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Speaker 1: the scenario that they see on the supply side, which

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Speaker 1: I view is consistent with the overwhelming consensus in the

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Speaker 1: market and is one that is a tightening market through

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Speaker 1: next year. And it's attributed to four main factors, a

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Speaker 1: couple of which you mentioned. Number one is these oil

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Speaker 1: Iran sanctions from from the US which are pending in November,

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Speaker 1: and they are starting to fight with about one million

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Speaker 1: barrels per day of oil exports removed from the market.

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Speaker 1: We have a second, we have a Venezuelan unprecedented production decline.

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Speaker 1: This country was producing two point four million barrels a

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Speaker 1: day in early sixteen. It's down to one point two

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Speaker 1: million barrels a day right now, so it's about half third.

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Speaker 1: We have a permian pipeline bottlenecks in the US. Given

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Speaker 1: the rapid growth in oil shale from the US, there's

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Speaker 1: been some infrastructure constraints which which are expected to be

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Speaker 1: resolved in the back half of next year, so so

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Speaker 1: this will cap US growth. And fourth, on top of that,

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Speaker 1: maybe the most important is that OPEC has declining spare capacity,

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Speaker 1: which is estimated at about one million barrels per day.

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Speaker 1: So I think these are the four key factors that

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Speaker 1: we're seeing on the supply side. So when you were

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Speaker 1: talking to people this morning, was the consensus that oil

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Speaker 1: prices are poised to rise substantially from here? Yes? Overwhelmingly, UM.

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Speaker 1: The executives from across the upstream downstreams sectors expect sustained

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Speaker 1: UH at stable oil prices UM eighty to ninety with

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Speaker 1: with maybe a couple of dissenters who UM, who were

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Speaker 1: outliers thinking that it would come back lower to sixty

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Speaker 1: or so. What's the concern that the demand side of

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Speaker 1: this equation would be permanently dampened if prices did remain

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Speaker 1: at that level. Well, I'm I'm not so sure about that.

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Speaker 1: I I think that that on the demand side, uh,

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Speaker 1: overwhelmingly we are seeing a continuing strong demand, although it's

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Speaker 1: slowing slightly UM. But I do think that there that

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Speaker 1: on the demand risk side, the UM we we we

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Speaker 1: do see potential black swan events which which we obviously

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Speaker 1: we can't UM can't forecast, but but they are like um,

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Speaker 1: massive economic contagion in the oil markets, UM, A credit crunch,

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Speaker 1: things like that. But but barring those, the demand side

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Speaker 1: still look relatively strong. Well, Harris, thank you so much,

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Speaker 1: really wonderful insights from this morning and opex announcement uh

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Speaker 1: there from London. Will Harris is European energy analyst for

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Speaker 1: Bloomberg Intelligence. Oil prices off a little bit after gaining

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Speaker 1: quite a bit there now currently if you look at

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Speaker 1: w t I trading at seventy one seventy one dollars

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Speaker 1: and ninety one cents uh and if you take a

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Speaker 1: look at Brent crude you can see that it is

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Speaker 1: also trading lower. It is actually now at eighty one

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Speaker 1: dollars and forty cents, so you are seeing a little

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Speaker 1: bit of a sell off, but still within that eighty

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Speaker 1: to nine dollar range that Will Harris was talking about

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Speaker 1: as a likely stable place that we're going to see

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Speaker 1: for a while. We have been talking about the sell

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Speaker 1: off that has been deepening today. Although off the earlier lows,

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Speaker 1: now the down Jones and decks just down by seven

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Speaker 1: tents of percents one naztac actually not losing as much,

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Speaker 1: which is kind of interesting. Let's bring Nickolas into the

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Speaker 1: conversation to find out why, just why our markets having

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Speaker 1: such a difficult time right now. Nicholas is co founder

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Speaker 1: of data Check Research in New York City. Nick, thank

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Speaker 1: you so much for being with us. You're also a

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Speaker 1: Bloomberg opinion columnist. Do you think that there are legs

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Speaker 1: to the recent sell off? You know, I think for

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Speaker 1: the moment we have to be pretty cautious. These kind

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Speaker 1: of high volatility days like what we got yesterday, they

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Speaker 1: come along once or twice a year, so not that unusual.

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Speaker 1: But over the next month they tend to show a

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Speaker 1: market that's basically unchanged. So as tempting as it is

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Speaker 1: trying to buy the dip, you have to be very careful.

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Speaker 1: It's going to have a little ways to go. For sure.

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Speaker 1: Of Altility doesn't just turn off like a light switch.

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Speaker 1: Nick Cholas, can you put this to some kind of

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Speaker 1: context for us. Sure. Let me just give you a

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Speaker 1: couple of his storical stats to frame the discussion. You know,

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Speaker 1: let's look at down four percent days on the SMP, which,

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Speaker 1: including after hours yesterday, we certainly hit. And if you

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Speaker 1: look at the history over time, a couple of things

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Speaker 1: are pretty clear. The first is that and traders know

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Speaker 1: all this math, so this is the playbook for what's

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Speaker 1: happening right now. The odd average of the day after

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Speaker 1: a big meltdown day is actually up about one point seven,

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Speaker 1: and then over the next month it's roughly flat, but

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Speaker 1: over the next year the average return is so the

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Speaker 1: short take on this is periods of stress and volatility

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Speaker 1: like this do create buying opportunities, but they don't immediately

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Speaker 1: pay off. You might have a bounce the next day,

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Speaker 1: but then you've been had to eat through some churn

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Speaker 1: and await a year, and you're generally better off. That's

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Speaker 1: the playbook traders understand, but it is kind of anchored

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Speaker 1: on the notion that we get an update to day

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Speaker 1: and so far that's not looking very good. Although it's

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Speaker 1: interesting the NASAC actually actually just turned slightly positive. It's

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Speaker 1: just kind of interesting to see the NASDAC text shares

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Speaker 1: leading the way down yesterday and today they're showing much

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Speaker 1: more resilience. Does this mean anything to you in terms

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Speaker 1: of a lot of investors still seeing value in the

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Speaker 1: apples and the Amazons and the facebooks of the world,

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Speaker 1: regardless of interest rate rises or even trade tensions. Yeah,

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Speaker 1: I know. It's a really important point because there is

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Speaker 1: a lot of talk about rotation into value and tech

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Speaker 1: being kind of yesterday's flavor and not tomorrow's. But we

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Speaker 1: do need tech to rally in order for this market

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Speaker 1: to rally, tech is still the SMP, the defensive sectors

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Speaker 1: or ten percent or less. There's just not enough juice

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Speaker 1: there in a rotation to get this market to turn.

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Speaker 1: You do need technically the way back up, Nick, I

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Speaker 1: know that you used to cover the automobile industry. If

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Speaker 1: you're looking to buy a car and it goes on

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Speaker 1: sale and it's three less expensive, is that considered a bargain.

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Speaker 1: It is not considered a bargain. What tends to happen

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Speaker 1: is one of two things. Either you were going to

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Speaker 1: buy anyway in the three percent of the gift, or

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Speaker 1: you think, wow, that dealer really is stressed. Let me

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Speaker 1: wait a week and see if that car goes down

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Speaker 1: ten percent in price, and then I'll step in. And

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Speaker 1: it's a wonderful analogy to what's going on in markets.

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Speaker 1: The people who are buying are going to buy, but

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Speaker 1: the people who are really value oriented they want to

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Speaker 1: see this market shake out, and that's a multi day process.

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Speaker 1: So let's talk about the why here, why markets are

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Speaker 1: feeling so jittery these days. Do you think this is

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Speaker 1: a trade story, do you think this is an interest

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Speaker 1: rate story, or do you think this is just a

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Speaker 1: natural people looking for data, not finding it and deciding

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Speaker 1: not to do anything and sit on their hands, and

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Speaker 1: a couple of sellers move the whole market. I think

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Speaker 1: it's three things. I think the first thing is rates absolutely.

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Speaker 1: I think Chair Pale's comments about not being anywhere near

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Speaker 1: close to neutral last week had spillover effects in the

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Speaker 1: long tremendo the bond market, and I think stocks took

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Speaker 1: their queue off of that. I think the second thing

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Speaker 1: is China trade that's not getting resolved and it's beginning

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Speaker 1: to be a kind of headwind to markets they realize

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Speaker 1: is going to get fixed easily as the new and

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Speaker 1: after deal got fixed. So that's the second thing. The

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Speaker 1: third thing is bond and stock correlations have flipped from

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Speaker 1: being wildly negative to modestly positive. And if you can't

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Speaker 1: hedge up a stock portfolio with bonds, you have to

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Speaker 1: lighten up on everything. And so investors are saying, okay,

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Speaker 1: at the very least, that can't be as exposed long

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Speaker 1: as I have been for the last many years, because

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Speaker 1: bonds aren't going to hedge me out the way it

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Speaker 1: used to be. So those are the three things I

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Speaker 1: think are driving it right now. All right, Nick, let

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Speaker 1: me try to play Devil's advocate here. Do you know

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Speaker 1: anybody that's selling shares of Apple, Microsoft, Alphabet, Facebook, even Adobe, PayPal.

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Speaker 1: These are the companies that are moving the NASDAC higher

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Speaker 1: right now? Do you know anybody selling those shares so

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Speaker 1: that they can run out and buy a two year

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Speaker 1: treasury at two point now? But you know, as you know,

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Speaker 1: the markets don't work you point to point. They work.

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Speaker 1: In the aggregate, you have what clearly was the margins

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Speaker 1: selling in the first say, ninety minutes of the trading day,

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Speaker 1: left over from the cell off yesterday. And on the

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Speaker 1: flip side, you have keep Well that had been shortening

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Speaker 1: duration and bond portfolios pretty consistently for the over the

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Speaker 1: course of the last three months, and we see that

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Speaker 1: very clearly in the t F flows. So in aggregate

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Speaker 1: the story hangs together, but the point to point obviously

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Speaker 1: never will. So I'd love to get your thoughts Nick

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Speaker 1: on earnings. We're going to get the big banks reporting tomorrow,

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Speaker 1: then we're going to get a whole host of others

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Speaker 1: following suit. What are you expecting and how important is

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Speaker 1: this earning season? Yeah, it's it's important because at the

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Speaker 1: very least will take market attention away from the macro

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Speaker 1: and kind of shift it back to micro and earnings,

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Speaker 1: which is a decent story. On the negative side, we

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Speaker 1: already saw peak earnings, you know for this year that

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Speaker 1: was in Q one and Q two. Earnings growth this quarter,

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Speaker 1: by estimates only be on the low end on the

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Speaker 1: high end, but not not as good as the first half.

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Speaker 1: And you have I think a lot of investor concerned

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Speaker 1: about what a company is going to say, particularly about

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Speaker 1: margin and about revenue growth going into the back half

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Speaker 1: of the year. And it's the next year, because it's

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Speaker 1: okay to have some declining on are still good. The

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Speaker 1: real worry now is what is next you're going to

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Speaker 1: look like? And can we really post ten percent revenue

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Speaker 1: growth on the back of a slower US economy, more

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Speaker 1: trade tensions, and can we really get operating margins to

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Speaker 1: show some leverage if labor costs arise? And that is

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Speaker 1: a big swirl of of of potential negatives that investors

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Speaker 1: will want to hear answers too before they step back in.

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Speaker 1: Nick taking a look at the trade in the energy

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Speaker 1: complex today, Crude oil on the NIMEX is down more

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Speaker 1: than two and a quarter percent. Gasoline traded on the

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Speaker 1: NIMEX down more than three and a quarter percent. Same

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Speaker 1: story for heating oil, same story for natural gas down

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Speaker 1: more than three and a half percent. If we get

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Speaker 1: lower energy prices, is that gonna be good for the economy? Um, yes,

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Speaker 1: it absolutely is. And you've seen you've seen the effect

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Speaker 1: of higher gas prices on even simple things like miles driven,

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Speaker 1: which are an important proxy for economic growth. They really

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Speaker 1: slowed over the course of the past couple of months

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Speaker 1: of energy his gas prices rose, So it definitely would

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Speaker 1: be a nice tail. When I'm reluctant to say that

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Speaker 1: energy prices have peaked only because we're still walking into

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Speaker 1: the November deadlines for the Iranian sanctions and that was

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Speaker 1: pushing oil prices up earlier, I'm not sure that it

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Speaker 1: is the oil move in the last couple of days.

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Speaker 1: Isn't just the leveraging of portfolios generally, and that we

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Speaker 1: don't have one last leg up on oil prices. I'm

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Speaker 1: not willing willing to declare victory there yet. I think

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Speaker 1: there's still some new term catalysts we have to focus on.

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Speaker 1: I want to thank you very much for being with us.

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Speaker 1: Nick cholis Is the co founder of Data Trek Research,

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Speaker 1: and he is a Bloomberg opinion columnist. Right now, I

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Speaker 1: want to turn our attention to something that we don't

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Speaker 1: talk that much about, and that is fertility. And joining

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Speaker 1: us now is Ernest Lumay, Doctor Ernest Loum, a co

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Speaker 1: founder and chief executive officer of obs Eva and that's

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Speaker 1: based in Neva, Switzerland, and it focuses on finding remedies

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Speaker 1: for fertility problems for women. Dr Luma, thank you so

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Speaker 1: much for being here. This is such a fascinating issue

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Speaker 1: at a time when so many women are waiting so

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Speaker 1: much longer to have children and that are having more

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Speaker 1: fertility problems. How does that factor into your business model? Yes,

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Speaker 1: that's very important because we are indeed focusing on condition

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Speaker 1: which are being more and more common, and as you mentioned, fertility,

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Speaker 1: it's really a condition where more and more patient have

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Speaker 1: to address. You know, the reason why is that women

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Speaker 1: have this desire of doing studies, going professionally and being active,

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Speaker 1: and as soon as you pass your thirty years old,

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Speaker 1: you start to have your fertility declining and there is

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Speaker 1: a conflict between maternity, having your baby and being very

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Speaker 1: active professionally. So we need to address that. So how

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Speaker 1: much have you seen fertility treatments increase is among the

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Speaker 1: developed world, it's keep growing every year and the main

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Speaker 1: treatment now is in vitral fertilization and embryo transfer, and

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Speaker 1: we see a number of cycles being increased every year.

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Speaker 1: About two hundred thousand cycles perform currently in United States,

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Speaker 1: but there are a limit in the United States, which

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Speaker 1: is the economical aspect, because it's expensive between twelve thousand

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Speaker 1: and twenty thousand for an IVF U S dollar for

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Speaker 1: an IVF cycle. In areas where it's reimbursed, for example,

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Speaker 1: in Europe we have eight hundred thousand cycles, and in

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Speaker 1: Japan for a third of the US population, we have

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Speaker 1: four hundred thou IVF cycle and now in China after

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Speaker 1: the relaxed to one child policy, it's eight hundred tho cycles.

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Speaker 1: So we will see that growing and continue to grow

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Speaker 1: in the future. Okay, so your company, what are you

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Speaker 1: working on in terms of new research to help women

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Speaker 1: have babies whatever their issues? Maybe I mean the IVF

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Speaker 1: field improved a lot in the laboratory and improved the

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Speaker 1: outcome the success, but there have been no drug really

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Speaker 1: to contribute to improving success for the last twenty thirty years,

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Speaker 1: and we have been focusing on embryo transfer because that's

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Speaker 1: the step where you have the highest fellowhead. That means

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Speaker 1: you put back an apparently healthy embryo in the futurus,

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Speaker 1: but only about one third of the woman will go

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Speaker 1: home with a baby following that. So we have been

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Speaker 1: focusing on this step. And the drug we are developing

433
00:24:28,960 --> 00:24:32,640
Speaker 1: is a drug which is preparing the futurus for being

434
00:24:33,280 --> 00:24:38,159
Speaker 1: quiescent and properly vascularized to help the embryo implanting. And

435
00:24:38,280 --> 00:24:42,399
Speaker 1: we recently report the outcome of a PHAST three trial,

436
00:24:42,520 --> 00:24:45,240
Speaker 1: which is a large trial where we see that our

437
00:24:45,359 --> 00:24:51,360
Speaker 1: treatment administered orally prior to embryo transfer increased take home

438
00:24:51,440 --> 00:24:55,880
Speaker 1: baby read compared to placible by thirty five percent. Wow.

439
00:24:55,960 --> 00:24:57,359
Speaker 1: And does it also means that you don't have to

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00:24:57,400 --> 00:25:01,560
Speaker 1: implant as many fertilized eggs exactly. That's a very important

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00:25:01,600 --> 00:25:05,000
Speaker 1: point because c DC is telling us the United States

442
00:25:05,240 --> 00:25:08,480
Speaker 1: that up to fifty percent of embryo transfer are done

443
00:25:08,560 --> 00:25:12,520
Speaker 1: with two embryos or more. Why to increase success rate?

444
00:25:12,960 --> 00:25:17,119
Speaker 1: But the price to pay is that and multiple gestation

445
00:25:17,720 --> 00:25:22,520
Speaker 1: many twins, but with the risk of premature delivery, the morbidity,

446
00:25:22,600 --> 00:25:25,560
Speaker 1: the mortality, and the cost of premature delivery. You get

447
00:25:25,600 --> 00:25:31,200
Speaker 1: the optimum exactly. So with our drug with single embryo transfer,

448
00:25:32,160 --> 00:25:35,920
Speaker 1: the data support the concept that we are doing better

449
00:25:36,600 --> 00:25:40,440
Speaker 1: that with double embryo transfer in terms of the convery

450
00:25:40,720 --> 00:25:43,280
Speaker 1: it and therefore not only we will reduce the number

451
00:25:43,359 --> 00:25:45,680
Speaker 1: of IVF to get a baby, but I think it

452
00:25:45,760 --> 00:25:50,320
Speaker 1: will support strongly single embryo transfer and therefore avoid all

453
00:25:50,400 --> 00:25:53,200
Speaker 1: these complication with multiple births. I want to talk about

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00:25:53,320 --> 00:25:56,600
Speaker 1: just the broader market for this type of drug, given

455
00:25:56,640 --> 00:25:59,639
Speaker 1: what we're seeing women waiting longer. Do you think that

456
00:25:59,720 --> 00:26:01,879
Speaker 1: we've reached the tipping point and that where people are

457
00:26:01,920 --> 00:26:04,119
Speaker 1: starting to go back and have babies younger or do

458
00:26:04,119 --> 00:26:06,760
Speaker 1: you think that's will only increase as there are more

459
00:26:06,800 --> 00:26:09,159
Speaker 1: women who enter the workforce and there's more equality in

460
00:26:09,200 --> 00:26:12,320
Speaker 1: the workplace. Yes, I don't see there is indication that

461
00:26:12,440 --> 00:26:17,720
Speaker 1: women are re addressing this aspect. We keep the seed

462
00:26:17,920 --> 00:26:21,560
Speaker 1: demands keep increasing, So I don't see. We see now

463
00:26:21,720 --> 00:26:25,720
Speaker 1: that women are deciding to have a baby earlier on

464
00:26:26,040 --> 00:26:30,399
Speaker 1: than in the in the in the past, So now

465
00:26:30,480 --> 00:26:34,119
Speaker 1: I don't see this trend actually, uh Now, obviously the

466
00:26:35,200 --> 00:26:38,760
Speaker 1: many center now addressing these needs and women are aware.

467
00:26:39,280 --> 00:26:42,200
Speaker 1: And one aspect is probably the fact that we start

468
00:26:42,320 --> 00:26:48,679
Speaker 1: to have cryo preservation freezing off eggs at the younger age,

469
00:26:49,520 --> 00:26:52,960
Speaker 1: just as an insurance by seeing maybe later on I

470
00:26:53,080 --> 00:26:56,240
Speaker 1: may have to face the fertility problem. We were just

471
00:26:56,359 --> 00:26:58,480
Speaker 1: talking about how there are a number of big technology

472
00:26:58,520 --> 00:27:01,920
Speaker 1: companies in the US that are for their women employees

473
00:27:02,280 --> 00:27:04,560
Speaker 1: to have their eggs fertilized just in case that they

474
00:27:04,560 --> 00:27:06,680
Speaker 1: can keep working and not have to worry about finding

475
00:27:06,720 --> 00:27:10,240
Speaker 1: somebody and going off and raising a baby. Yes, yes,

476
00:27:10,400 --> 00:27:14,640
Speaker 1: it's interesting. And companies like Apple and Google have proposed

477
00:27:14,680 --> 00:27:18,480
Speaker 1: to actually pay for freezing the eggs in their employees

478
00:27:18,560 --> 00:27:22,159
Speaker 1: so they can be more relaxed about their future of fertility.

479
00:27:22,320 --> 00:27:24,280
Speaker 1: There is a big debate around that, and there is

480
00:27:24,320 --> 00:27:28,920
Speaker 1: even a technical debate just coming back from the American

481
00:27:29,000 --> 00:27:32,639
Speaker 1: Society Reportive Medicine meeting, where the debate how many eggs

482
00:27:32,720 --> 00:27:36,400
Speaker 1: do you need to save to have ninety chance later

483
00:27:36,520 --> 00:27:39,000
Speaker 1: on to get a baby. It's about forty, so it's

484
00:27:39,000 --> 00:27:41,200
Speaker 1: a lot, and there is a debate now how many

485
00:27:41,240 --> 00:27:43,480
Speaker 1: eggs can you hire preserve and what would be the cost.

486
00:27:44,560 --> 00:27:49,200
Speaker 1: So Dr Domy, you were previously the founder of Preglam,

487
00:27:49,400 --> 00:27:52,640
Speaker 1: which was acquired for nearly a half a billion dollars.

488
00:27:52,880 --> 00:27:55,359
Speaker 1: And I'm just wondering what's your plan with this company

489
00:27:55,440 --> 00:27:58,080
Speaker 1: with Absiva, which trades as O B s V on

490
00:27:58,200 --> 00:28:01,840
Speaker 1: a n ASDAC. Yes, well, we have a large part

491
00:28:02,040 --> 00:28:06,119
Speaker 1: of folio of three drugs in lad clinical development and

492
00:28:07,040 --> 00:28:10,040
Speaker 1: the first drug that we will read your market um

493
00:28:10,560 --> 00:28:14,160
Speaker 1: is no LASSI band, the drug for IVF. The beauty

494
00:28:14,320 --> 00:28:16,720
Speaker 1: that we have with this program is that we have

495
00:28:16,840 --> 00:28:21,520
Speaker 1: no competition. We don't understand health care and we are

496
00:28:21,600 --> 00:28:25,480
Speaker 1: targeting a limited number of IVF centers five hundreds in

497
00:28:25,480 --> 00:28:29,080
Speaker 1: the United States for example. That means that commercialization is

498
00:28:29,200 --> 00:28:33,840
Speaker 1: at rich for us. So for our objective is to

499
00:28:34,000 --> 00:28:37,280
Speaker 1: bring the company to the commercial stage in the near future.

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Speaker 1: Dr Ernest Lumay, thank you so much for being with us.

501
00:28:40,400 --> 00:28:43,760
Speaker 1: Really a fascinating discussion. Thank you very much. Dr Ernest

502
00:28:43,800 --> 00:28:46,640
Speaker 1: lay as co founder and chief executive officer of Observa,

503
00:28:46,800 --> 00:28:50,080
Speaker 1: which is trades as O B s V on the

504
00:28:50,160 --> 00:28:53,120
Speaker 1: NASDAC based in GENEVAUS with the Liberty Joints US here

505
00:28:53,160 --> 00:28:55,720
Speaker 1: in our eleven three hour studios talking about some of

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00:28:55,760 --> 00:28:59,680
Speaker 1: the fertility issues that are increasing frankly, as women wait

507
00:28:59,720 --> 00:29:01,880
Speaker 1: longer have children, and some of the remedies his company

508
00:29:02,360 --> 00:29:07,960
Speaker 1: is coming up with to remedy that. Thanks for listening

509
00:29:08,000 --> 00:29:10,880
Speaker 1: to the Bloomberg P and L podcast. You can subscribe

510
00:29:10,920 --> 00:29:14,480
Speaker 1: and listen to interviews at Apple Podcasts, SoundCloud, or whatever

511
00:29:14,560 --> 00:29:18,000
Speaker 1: podcast platform you prefer. I'm pim Fox. I'm on Twitter

512
00:29:18,320 --> 00:29:21,840
Speaker 1: at pim Fox. I'm on Twitter at Lisa Abramo. It's

513
00:29:21,920 --> 00:29:24,880
Speaker 1: one before the podcast. You can always catch us worldwide

514
00:29:24,960 --> 00:29:25,880
Speaker 1: on Bloomberg Radio