1 00:00:00,880 --> 00:00:04,200 Speaker 1: You're listening to Bloomberg Markets with Bonny Quinn and Paul 2 00:00:04,280 --> 00:00:08,319 Speaker 1: Sweeney on Bloomberg Radio. All Over the last twenty four hours, 3 00:00:08,360 --> 00:00:12,240 Speaker 1: Bloomberg News has been reporting about potential talks between astra 4 00:00:12,360 --> 00:00:18,000 Speaker 1: Zenica and Gile Lead, two huge pharmaceutical companies, Uh, maybe 5 00:00:18,000 --> 00:00:21,279 Speaker 1: getting together in what would be another healthcare m and 6 00:00:21,360 --> 00:00:24,360 Speaker 1: a trade. To dig a little bit deeper into that story, 7 00:00:24,360 --> 00:00:27,760 Speaker 1: we welcome Max Neeson, biotech, farm and healthcare columnists for 8 00:00:27,800 --> 00:00:30,880 Speaker 1: Bloomberg Opinion, as well as Chris Hughes. Chris Hughes, he's 9 00:00:30,880 --> 00:00:34,879 Speaker 1: a deal's columnist for Bloomberg Opinion. Guys, thanks so much 10 00:00:34,920 --> 00:00:38,479 Speaker 1: for joining us. UM, let's start with you, Chris. Just 11 00:00:38,520 --> 00:00:41,720 Speaker 1: get a sense of is this a deal that makes 12 00:00:42,000 --> 00:00:45,080 Speaker 1: sense strategically or is this more of a financially driven 13 00:00:45,120 --> 00:00:50,400 Speaker 1: deal should something occur. Yeah, it's not obvious. It makes 14 00:00:50,440 --> 00:00:53,840 Speaker 1: a lot of strategic sense. Uh, astrosenitor in the and 15 00:00:53,840 --> 00:00:57,040 Speaker 1: that's the conventional way you think about deals. Um that 16 00:00:57,120 --> 00:01:03,040 Speaker 1: both companies have got quite different um sort of emphases 17 00:01:03,160 --> 00:01:07,440 Speaker 1: in terms of the medicines say they make. And also 18 00:01:07,480 --> 00:01:12,040 Speaker 1: Astridenaka has got a really enviable pipeline of drugs already 19 00:01:12,080 --> 00:01:15,000 Speaker 1: it's got one of the most attractive drug pipelines in 20 00:01:15,040 --> 00:01:18,360 Speaker 1: the industry. You know, it's questionable why I would want 21 00:01:18,400 --> 00:01:21,959 Speaker 1: to do a deal that might actually dilute the quality 22 00:01:22,040 --> 00:01:25,800 Speaker 1: of that pipeline and upcoming drugs. But as you say, 23 00:01:25,959 --> 00:01:30,400 Speaker 1: from US financial perspectives, um, it starts to look more interesting. 24 00:01:30,440 --> 00:01:33,920 Speaker 1: Astrozennaca's had a really good run on its share price lately, 25 00:01:33,959 --> 00:01:37,960 Speaker 1: and that gives it a good strong currency to you know, 26 00:01:38,120 --> 00:01:41,640 Speaker 1: to pay for a deal like this. And actually, even 27 00:01:41,680 --> 00:01:44,640 Speaker 1: though it's got strong share price that an attractive pipeline 28 00:01:44,640 --> 00:01:48,480 Speaker 1: of drugs, Astrosennaka's cash generation at this point in time 29 00:01:48,520 --> 00:01:53,240 Speaker 1: actually isn't that great. Contrast that with Gilly. Gilly has 30 00:01:53,280 --> 00:01:55,560 Speaker 1: actually got some pretty good cash generations. So you can 31 00:01:55,640 --> 00:01:59,160 Speaker 1: put the two together, you actually have a business with 32 00:01:59,280 --> 00:02:05,200 Speaker 1: financially has a much more formid profile. Max. Would either 33 00:02:05,280 --> 00:02:07,640 Speaker 1: of the companies have been looking to team up and 34 00:02:07,840 --> 00:02:10,440 Speaker 1: is there a chance that this might turn hostile at 35 00:02:10,480 --> 00:02:15,239 Speaker 1: some point? Um? You know, I I would feel a 36 00:02:15,280 --> 00:02:19,360 Speaker 1: little bit surprised about that. Well, the likelihood of this 37 00:02:19,440 --> 00:02:24,160 Speaker 1: actually happening still seems relatively slim to me. Um. You know, 38 00:02:24,200 --> 00:02:27,080 Speaker 1: gill Yad in its own right has had something of 39 00:02:27,120 --> 00:02:30,600 Speaker 1: a pump up to its evaluation based on its work 40 00:02:30,800 --> 00:02:35,120 Speaker 1: term Desiviere. It might want to capitalize on that by 41 00:02:35,240 --> 00:02:40,160 Speaker 1: by you know, getting a return by by solidifying that increase. Um. 42 00:02:40,240 --> 00:02:42,200 Speaker 1: You know, the fact that the currency would be so 43 00:02:42,280 --> 00:02:45,760 Speaker 1: heavily made up of astro'slenic shares is something that would 44 00:02:45,800 --> 00:02:48,480 Speaker 1: make them quite resistant. And you know, given the fact 45 00:02:48,480 --> 00:02:52,280 Speaker 1: that both both companies are separately working on on different 46 00:02:52,320 --> 00:02:57,040 Speaker 1: pharmaceutical efforts against the pandemic, I think they might want 47 00:02:57,040 --> 00:03:02,200 Speaker 1: to avoid um, you know, making this into hostile fight. Yeah, 48 00:03:02,280 --> 00:03:04,800 Speaker 1: Max is following up on that. Is there a the 49 00:03:04,840 --> 00:03:07,160 Speaker 1: timing seems odd obviously given that we're in the middle 50 00:03:07,160 --> 00:03:10,200 Speaker 1: of a pandemic here, is any of this deal or 51 00:03:10,400 --> 00:03:14,760 Speaker 1: you know, centered around the science of somebody's got a 52 00:03:14,840 --> 00:03:16,680 Speaker 1: drug or maybe if we put a couple of drugs 53 00:03:16,680 --> 00:03:18,600 Speaker 1: together between these two companies, or if we put our 54 00:03:18,600 --> 00:03:23,080 Speaker 1: resources behind is anything driven by the COVID vaccine potential 55 00:03:23,240 --> 00:03:28,400 Speaker 1: or treatment potential. I don't think that's the case, because 56 00:03:28,440 --> 00:03:31,680 Speaker 1: these are two very different approaches. You have gil leads, 57 00:03:31,760 --> 00:03:34,000 Speaker 1: which is a treatment um you know, something for a 58 00:03:34,120 --> 00:03:37,320 Speaker 1: quel people, and an astros Nica working on on a 59 00:03:37,400 --> 00:03:41,920 Speaker 1: vaccine a prophylactic um, you know, scientifically, and and from 60 00:03:41,960 --> 00:03:45,880 Speaker 1: an manufacturing perspective to two kind of entirely different things, 61 00:03:45,920 --> 00:03:48,040 Speaker 1: and and one where there's not really likely to be 62 00:03:48,120 --> 00:03:51,880 Speaker 1: an additive effect. Um if anything trying to complete it 63 00:03:51,920 --> 00:03:56,000 Speaker 1: would be a very large and complicated transaction, might might 64 00:03:56,040 --> 00:04:00,720 Speaker 1: actually distract from those efforts. If Gilliard no, thanks, and 65 00:04:00,840 --> 00:04:03,520 Speaker 1: let's be clear, we're hearing that. You know, there's absolutely 66 00:04:03,560 --> 00:04:05,280 Speaker 1: not going to be a deal, of course, and you 67 00:04:05,320 --> 00:04:08,280 Speaker 1: always hear these kinds of rumors around deal, so everything 68 00:04:08,320 --> 00:04:09,440 Speaker 1: needs to be taken with a little bit of a 69 00:04:09,440 --> 00:04:12,760 Speaker 1: grain of salt. But if Gilliad says absolutely no, we 70 00:04:12,880 --> 00:04:15,840 Speaker 1: do not want a partner with a larger company at 71 00:04:15,840 --> 00:04:19,400 Speaker 1: the moment, is there another company that Astrison again might 72 00:04:19,440 --> 00:04:24,239 Speaker 1: be interested in. Chris Well, that's an interesting Christian because 73 00:04:24,680 --> 00:04:27,880 Speaker 1: the very fact that astroson Are is sort of knocking 74 00:04:27,960 --> 00:04:32,200 Speaker 1: on doors. Um uh. You know, even though it has 75 00:04:32,279 --> 00:04:36,800 Speaker 1: this extensively strong pipeline, does brave questions about kind of 76 00:04:36,920 --> 00:04:39,560 Speaker 1: how it sees its future at the moment, you know, 77 00:04:39,839 --> 00:04:44,520 Speaker 1: as a on a stand alone basis. Um. I mean, 78 00:04:44,640 --> 00:04:48,080 Speaker 1: it has got this strong, strong share price which does 79 00:04:48,120 --> 00:04:50,520 Speaker 1: provide this take out currency. If it if it could 80 00:04:50,520 --> 00:04:55,960 Speaker 1: persuade another company to accept that UM. But the real 81 00:04:56,000 --> 00:04:57,640 Speaker 1: question is kind of why does it Why would it 82 00:04:57,680 --> 00:05:02,520 Speaker 1: want to to direct other than finding another company I 83 00:05:02,520 --> 00:05:06,840 Speaker 1: guess which has similar a similar sort of cash generating 84 00:05:06,960 --> 00:05:11,359 Speaker 1: profile to Guilliad and also is sort of in the 85 00:05:11,440 --> 00:05:14,480 Speaker 1: zone to do a deal and also is willing to 86 00:05:14,560 --> 00:05:18,799 Speaker 1: take on UM, you know, as a risk of integration 87 00:05:19,720 --> 00:05:25,479 Speaker 1: discorl integration, and negotiates it in a very discount environment. 88 00:05:25,560 --> 00:05:29,279 Speaker 1: I mean, it's quite hard to that list of potential candidates. 89 00:05:29,320 --> 00:05:31,680 Speaker 1: It's probably not very high. It's very hard environment to 90 00:05:31,720 --> 00:05:34,080 Speaker 1: do deals in. Yeah, that's kind of where I wanted 91 00:05:34,120 --> 00:05:36,360 Speaker 1: to go, Chris, it seems like this is a really 92 00:05:36,360 --> 00:05:38,120 Speaker 1: odd time to do a deal again in the middle 93 00:05:38,120 --> 00:05:40,200 Speaker 1: of a pandemic. But I'm looking at the share prices 94 00:05:40,200 --> 00:05:43,320 Speaker 1: and neither companies moving that much. Does that kind of 95 00:05:43,320 --> 00:05:46,440 Speaker 1: suggest to you as a deal's reporter that you know, 96 00:05:46,520 --> 00:05:50,040 Speaker 1: the odds of this really being in the works are 97 00:05:50,040 --> 00:05:54,360 Speaker 1: pretty low. Well, Astrogenically was sort down a bit at 98 00:05:54,360 --> 00:05:57,800 Speaker 1: the open um in Europe this morning, which suggested that 99 00:05:57,880 --> 00:06:01,159 Speaker 1: investors were a bit concerned the out possibly the company 100 00:06:01,240 --> 00:06:04,279 Speaker 1: doing something that would take it in a different direction. Uh, 101 00:06:04,320 --> 00:06:07,080 Speaker 1: and involved by the stock issueance. And I think Gill 102 00:06:07,120 --> 00:06:10,040 Speaker 1: thead was called up to haven't seen merit is at 103 00:06:10,080 --> 00:06:13,159 Speaker 1: the moment, but UM investors are taking you know, they're 104 00:06:13,160 --> 00:06:17,160 Speaker 1: not they are taking seriously as a possibility that there's 105 00:06:17,200 --> 00:06:19,360 Speaker 1: something could happen. Now as you say, this is a 106 00:06:19,400 --> 00:06:23,360 Speaker 1: strange moment to be doing something like this. I mean 107 00:06:23,480 --> 00:06:27,240 Speaker 1: any deal that involves combining your company with another one 108 00:06:27,279 --> 00:06:29,960 Speaker 1: of selling it, you know, that's a critical moment in 109 00:06:30,000 --> 00:06:33,479 Speaker 1: your career history as a as a CEO, and it's 110 00:06:33,760 --> 00:06:38,240 Speaker 1: very it involves delicate negotiations. It's quite hard to do 111 00:06:38,320 --> 00:06:41,960 Speaker 1: all that over you over over over zoom or some 112 00:06:42,120 --> 00:06:46,080 Speaker 1: other video conference. It's it's it's a tricky one also 113 00:06:46,160 --> 00:06:49,919 Speaker 1: doing all the all the due diligence. So UM, I 114 00:06:49,960 --> 00:06:52,400 Speaker 1: think it's one thing to have the idea and make 115 00:06:52,440 --> 00:06:56,560 Speaker 1: the approach, but it actually nail down a deal and 116 00:06:57,440 --> 00:07:02,039 Speaker 1: virtually shake hands on it. M's difficult. Now, Christ is 117 00:07:02,080 --> 00:07:08,960 Speaker 1: what happens if the pandemic hopefully eases and conditions for 118 00:07:09,120 --> 00:07:12,720 Speaker 1: actually having face to face tours UM and doing more 119 00:07:12,760 --> 00:07:17,160 Speaker 1: substantial dutigence and it become much easier. And then then 120 00:07:17,720 --> 00:07:21,040 Speaker 1: at that point does this become much more real. All right, 121 00:07:21,040 --> 00:07:24,200 Speaker 1: we will continue to watch this space with acute interest 122 00:07:24,280 --> 00:07:26,000 Speaker 1: in our thanks to both of you, that is, Chris 123 00:07:26,200 --> 00:07:30,760 Speaker 1: Hughes and Max Nissan, both internally here at Bloomberg reporting 124 00:07:30,880 --> 00:07:34,280 Speaker 1: on pharma, and of course Max has being a phenomenal 125 00:07:34,320 --> 00:07:36,800 Speaker 1: job throughout the pandemic as well, just on the virology 126 00:07:36,800 --> 00:07:39,280 Speaker 1: and everything else. Paul, how's your first day, Vonnie on 127 00:07:39,280 --> 00:07:41,480 Speaker 1: Bloomberg Markets? Oh my gosh, I felt like I've never 128 00:07:41,600 --> 00:07:43,680 Speaker 1: jumped off the bicycle in the first place. Exactly. It's 129 00:07:43,680 --> 00:07:46,600 Speaker 1: great to have you on board. Well, do join us 130 00:07:46,600 --> 00:07:49,400 Speaker 1: tomorrow of another full slate and looking forward to being 131 00:07:49,400 --> 00:07:51,800 Speaker 1: back in the chair. From Paul Sweeney and myself, Bonny 132 00:07:51,840 --> 00:07:55,880 Speaker 1: Quinn and everybody else here. This is Bloomberg, delighted to 133 00:07:55,880 --> 00:07:59,120 Speaker 1: bring in our next guest, now a regular on the show. 134 00:07:59,480 --> 00:08:02,560 Speaker 1: Bill see joins us from Seattle. Bill. Great to have 135 00:08:02,600 --> 00:08:06,080 Speaker 1: you to discuss these markets. Thanks for having us so. 136 00:08:06,600 --> 00:08:09,760 Speaker 1: When the market hit lows back in March, your son 137 00:08:09,880 --> 00:08:11,120 Speaker 1: Cole was on he said it was one of the 138 00:08:11,160 --> 00:08:14,200 Speaker 1: great stock buying opportunities in history. It's clear that he 139 00:08:14,280 --> 00:08:16,280 Speaker 1: wasn't wrong. When you have the likes of Stanley Doucin 140 00:08:16,320 --> 00:08:19,280 Speaker 1: Miller saying he didn't take enough risk at the lows, 141 00:08:19,600 --> 00:08:21,800 Speaker 1: What did you do exactly and how has the trade 142 00:08:21,840 --> 00:08:27,400 Speaker 1: worked out? Well? We tacked towards the opportunities that were 143 00:08:27,440 --> 00:08:33,199 Speaker 1: created by the complete destruction of economic optimism, and we 144 00:08:33,320 --> 00:08:38,839 Speaker 1: operated under the theory that at major historical change points, 145 00:08:38,880 --> 00:08:43,120 Speaker 1: the existing trend gets exacerbated, the positive part of it 146 00:08:43,559 --> 00:08:47,520 Speaker 1: to the upside, and the existing trend gets exacerbated to 147 00:08:47,600 --> 00:08:50,520 Speaker 1: the downside. So what you had was a complete and 148 00:08:50,600 --> 00:08:56,160 Speaker 1: total capitulation on value and a complete Uh. You've you've 149 00:08:56,160 --> 00:09:00,280 Speaker 1: had the biggest growth orgy maybe ever in the last 150 00:09:00,720 --> 00:09:05,920 Speaker 1: uh four or five years, So that was exacerbated in March. 151 00:09:06,480 --> 00:09:11,040 Speaker 1: We could see that even though we were practically nauseous, 152 00:09:11,080 --> 00:09:13,680 Speaker 1: every time we put in a by order, we tacked 153 00:09:13,800 --> 00:09:17,880 Speaker 1: towards the deepest, most out of favorite things that people 154 00:09:17,960 --> 00:09:22,360 Speaker 1: thought wouldn't come back anytime soon. They thought it was 155 00:09:22,400 --> 00:09:25,360 Speaker 1: gonna be years before anybody wanted to go shopping. And 156 00:09:25,679 --> 00:09:28,560 Speaker 1: then now we found out that even looters nowhere to shop. 157 00:09:29,160 --> 00:09:33,640 Speaker 1: M So, Bill, give us some sectors where you think 158 00:09:33,960 --> 00:09:36,840 Speaker 1: there's there's some value, there's still some value. Again, we've 159 00:09:36,840 --> 00:09:40,600 Speaker 1: had this big, strong move off of the bottom. Here 160 00:09:41,200 --> 00:09:43,680 Speaker 1: has the low hanging fruit been had or where are 161 00:09:43,679 --> 00:09:47,560 Speaker 1: you guys still looking here? Well, certainly the most extreme 162 00:09:47,559 --> 00:09:51,839 Speaker 1: bargains have had a big mount, but this is a 163 00:09:51,960 --> 00:09:57,040 Speaker 1: historical change point, so where there's still lots of value. Uh. 164 00:09:57,080 --> 00:10:01,319 Speaker 1: You know, the banks were she as deep as they 165 00:10:01,360 --> 00:10:05,200 Speaker 1: were at the bottom in O nine, but yet on 166 00:10:05,240 --> 00:10:08,199 Speaker 1: a relative basis, Just think how cheap they were then 167 00:10:08,600 --> 00:10:12,000 Speaker 1: if if they matched price to book values similar to 168 00:10:12,080 --> 00:10:15,880 Speaker 1: back then. Uh So, Wells Fargo was all the way 169 00:10:15,960 --> 00:10:20,480 Speaker 1: up to thirty three down from what sixty or fifty five? 170 00:10:21,040 --> 00:10:24,960 Speaker 1: Right there, there's loads of room in the banks, There's 171 00:10:25,080 --> 00:10:30,160 Speaker 1: loads of room in the owners of the malls. Uh. 172 00:10:30,200 --> 00:10:32,599 Speaker 1: We have been doing a lot of channel checks. We 173 00:10:32,840 --> 00:10:35,880 Speaker 1: we are in Arizona, so we've been going to a 174 00:10:35,920 --> 00:10:40,560 Speaker 1: lot of of malls and outlet malls, and we're seeing Macy's, 175 00:10:40,559 --> 00:10:42,160 Speaker 1: which we don't own the stock, but we own the 176 00:10:42,200 --> 00:10:45,280 Speaker 1: malls where their stores are located. The parking lot on 177 00:10:45,360 --> 00:10:50,200 Speaker 1: both sides at Arrowhead Town Center was packed. So I 178 00:10:50,320 --> 00:10:54,240 Speaker 1: find it so fascinating. Everyone is thinking about how our 179 00:10:54,280 --> 00:10:57,800 Speaker 1: behavior is is changed by being imprisoned for two and 180 00:10:57,880 --> 00:11:00,720 Speaker 1: a half months, and I think they're are getting that 181 00:11:01,360 --> 00:11:03,640 Speaker 1: once we're not in prison We're not going to be 182 00:11:03,840 --> 00:11:06,280 Speaker 1: super attracted to things that we had to do when 183 00:11:06,320 --> 00:11:08,760 Speaker 1: we were in prison. They're going to be attractive to 184 00:11:08,840 --> 00:11:14,840 Speaker 1: things they weren't able to do while they were in prison. So, Bill, 185 00:11:14,880 --> 00:11:17,360 Speaker 1: it's interesting when I think about it. You know, some 186 00:11:17,440 --> 00:11:22,120 Speaker 1: of the the market bounce here and I'm not sure 187 00:11:22,160 --> 00:11:24,080 Speaker 1: the market or let's put it this way, how do 188 00:11:24,120 --> 00:11:27,400 Speaker 1: you feel about a potential second wave and how that 189 00:11:27,480 --> 00:11:30,000 Speaker 1: might impact the economy in the markets. It seems like 190 00:11:30,000 --> 00:11:32,160 Speaker 1: most people feel like there will be a second wave 191 00:11:32,240 --> 00:11:35,880 Speaker 1: of this virus. Is that something that you are thinking 192 00:11:35,880 --> 00:11:40,040 Speaker 1: about as you think about putting trades on. The biggest 193 00:11:40,200 --> 00:11:45,280 Speaker 1: risk in the stock market is that the market massively 194 00:11:45,480 --> 00:11:50,680 Speaker 1: over capitalized growth stocks. That's the biggest risk in the market. 195 00:11:51,280 --> 00:11:53,880 Speaker 1: When let me just give you one example, and not 196 00:11:53,960 --> 00:11:55,880 Speaker 1: to pick on them because they're a great company that 197 00:11:56,000 --> 00:11:57,840 Speaker 1: has nothing to do the things I'm going to say 198 00:11:57,880 --> 00:11:59,520 Speaker 1: now I have nothing to do with the quality of 199 00:11:59,559 --> 00:12:02,840 Speaker 1: the under company. But let's just take Costco for example. 200 00:12:03,880 --> 00:12:07,080 Speaker 1: Will business every be better for you than when the 201 00:12:07,120 --> 00:12:10,839 Speaker 1: government closes most of your competitors and forces people to 202 00:12:10,960 --> 00:12:13,880 Speaker 1: only come to your store. Does it ever get better 203 00:12:13,920 --> 00:12:17,080 Speaker 1: than that? Well, the answer is no. So Costco is 204 00:12:17,120 --> 00:12:23,000 Speaker 1: a relatively mature, large growth company and it's trading at 205 00:12:23,080 --> 00:12:25,920 Speaker 1: thirty five times and earnings. If you go back and 206 00:12:25,960 --> 00:12:30,040 Speaker 1: look at history, a mature, highly thought of growth company 207 00:12:30,200 --> 00:12:35,280 Speaker 1: would trade at twenty times earnings. So if the S 208 00:12:35,360 --> 00:12:39,679 Speaker 1: and P five topped out early this year, which by 209 00:12:39,720 --> 00:12:42,880 Speaker 1: the way, we're not convinced that the S and P 210 00:12:43,640 --> 00:12:48,240 Speaker 1: is not topping out here, uh, then those glamour growth 211 00:12:48,240 --> 00:12:52,240 Speaker 1: stocks have got huge pe reductions to go through. It's 212 00:12:52,280 --> 00:12:55,480 Speaker 1: like a weight loss program. Oh I need to lose 213 00:12:55,960 --> 00:12:59,440 Speaker 1: I need to lose of my price earnings ratio. Well 214 00:12:59,440 --> 00:13:01,640 Speaker 1: to do that, you more than likely have to lose 215 00:13:02,960 --> 00:13:06,000 Speaker 1: your stock market value. So that's where the risk is. 216 00:13:06,040 --> 00:13:08,760 Speaker 1: The risk is not that there's a correction in the 217 00:13:09,240 --> 00:13:13,800 Speaker 1: deeply oversold stuff that has bounced. The risk is, I mean, 218 00:13:13,880 --> 00:13:16,400 Speaker 1: look at today, somebody coming on puts a third three 219 00:13:16,559 --> 00:13:20,760 Speaker 1: thousand some odd price target on Amazon. Is there any 220 00:13:20,920 --> 00:13:25,760 Speaker 1: institutional investor on the planet that hasn't stocked up on Amazon? 221 00:13:26,040 --> 00:13:28,480 Speaker 1: Who's the who's the buyer? At the margin gonna be? 222 00:13:28,960 --> 00:13:31,840 Speaker 1: Where is the money going to come from? The the 223 00:13:31,840 --> 00:13:36,960 Speaker 1: the soul The situation is, it looks very attractive for 224 00:13:37,120 --> 00:13:40,520 Speaker 1: value investors. If they can, if they can keep from 225 00:13:40,520 --> 00:13:43,720 Speaker 1: getting hurt too much on holding winners from the growth 226 00:13:43,720 --> 00:13:46,880 Speaker 1: sectors that have performed so well. Oh right, Bill, we 227 00:13:46,880 --> 00:13:48,839 Speaker 1: have to leave it there, but thank you so much, 228 00:13:49,080 --> 00:13:50,960 Speaker 1: and it's always a pleasure to speak to you. That 229 00:13:51,080 --> 00:13:54,800 Speaker 1: is Bill Snead there of Sad Capital. Yeah, they were 230 00:13:54,840 --> 00:13:57,439 Speaker 1: going in, uh you know, buying some things at the 231 00:13:57,440 --> 00:13:59,720 Speaker 1: bottom there. So he's obviously had some nice trades there there. 232 00:13:59,760 --> 00:14:03,240 Speaker 1: The value stocks are even more value back in March. 233 00:14:03,320 --> 00:14:05,640 Speaker 1: But the value stocks, as you know, Vanni, have kind 234 00:14:05,640 --> 00:14:10,600 Speaker 1: of you know, always been a tough trade for investors. Well. 235 00:14:10,640 --> 00:14:13,800 Speaker 1: As the pandemic finds its way through to some of 236 00:14:13,840 --> 00:14:18,040 Speaker 1: the emerging markets, the impact on not just the humanitarian 237 00:14:18,080 --> 00:14:21,160 Speaker 1: impact on the populace, but also the economic impact is 238 00:14:21,200 --> 00:14:23,840 Speaker 1: going to be pronounced. To get a sense of kind 239 00:14:23,840 --> 00:14:26,440 Speaker 1: of how this might play out. Glad to welcome back 240 00:14:26,520 --> 00:14:30,160 Speaker 1: Bill Rhodes, Bill joining us once again President CEO William R. Rhodes, 241 00:14:30,160 --> 00:14:33,080 Speaker 1: Global Advisor's former City Bank chairman. Bill, thanks so much 242 00:14:33,480 --> 00:14:36,280 Speaker 1: for staying with us here this morning. You know, we 243 00:14:36,320 --> 00:14:39,120 Speaker 1: think about China here. Give us a sense of how 244 00:14:39,280 --> 00:14:42,200 Speaker 1: China is gonna play here because China, as I think 245 00:14:42,200 --> 00:14:44,720 Speaker 1: about the financial crisis, they were actually one of the economies, 246 00:14:44,840 --> 00:14:47,960 Speaker 1: as you mentioned earlier, that actually lifted up the global 247 00:14:48,000 --> 00:14:52,080 Speaker 1: economy out of kind of the recession. Right now, that 248 00:14:52,120 --> 00:14:55,120 Speaker 1: doesn't appear to be the case. Plus, they're also a 249 00:14:55,160 --> 00:14:58,240 Speaker 1: big creditor here. What role do you expect China to 250 00:14:58,360 --> 00:15:01,200 Speaker 1: play here over the next several months and perhaps years. 251 00:15:02,080 --> 00:15:05,280 Speaker 1: I think that's a really important question, Paul, and I 252 00:15:05,320 --> 00:15:07,880 Speaker 1: think that when we take a look at the One Belt, 253 00:15:07,920 --> 00:15:11,720 Speaker 1: One Road, which is a program that China began a 254 00:15:11,760 --> 00:15:14,800 Speaker 1: few years ago to lend money to emerging market countries 255 00:15:14,840 --> 00:15:20,800 Speaker 1: to improve infrastructure, UH and other supposedly health systems. They 256 00:15:20,840 --> 00:15:24,600 Speaker 1: have outstanding, according to the Key Institute of World Economy 257 00:15:24,640 --> 00:15:28,520 Speaker 1: in Germany, over five billion dollars. Some people think it 258 00:15:28,560 --> 00:15:31,120 Speaker 1: could even be higher than that, seven or eight hundred billion. 259 00:15:31,800 --> 00:15:35,520 Speaker 1: And it's not clear that the Chinese are prepared to 260 00:15:36,520 --> 00:15:41,760 Speaker 1: write off or extend restructure these loans, and this is key. 261 00:15:41,880 --> 00:15:44,520 Speaker 1: They are also not a member of the Paris Club, 262 00:15:44,560 --> 00:15:49,080 Speaker 1: which is the is the entity which manages and coordinates 263 00:15:49,400 --> 00:15:53,280 Speaker 1: the restructuring of sovereign debt by the developed countries. They 264 00:15:53,600 --> 00:15:57,880 Speaker 1: are only an observer, and so their attitude I think 265 00:15:58,040 --> 00:16:02,600 Speaker 1: unwilling to look at things like debt forgiveness and restructuring. UH. 266 00:16:02,640 --> 00:16:05,800 Speaker 1: These loans are really key. This is why I think 267 00:16:05,840 --> 00:16:08,880 Speaker 1: all of this has come together to make it the 268 00:16:08,920 --> 00:16:12,880 Speaker 1: worst emerging market debt crisis in the in the last 269 00:16:12,960 --> 00:16:15,840 Speaker 1: half century, certainly since World War Two. You'd have to 270 00:16:15,840 --> 00:16:18,680 Speaker 1: go back to a situation to the Great Depression to 271 00:16:18,800 --> 00:16:21,960 Speaker 1: find anything as serious as we're facing today in the 272 00:16:22,000 --> 00:16:27,000 Speaker 1: emerging market. So China is really the unknown quantity here 273 00:16:27,120 --> 00:16:30,440 Speaker 1: as to what they will do and how they'll cooperate. Yeah, 274 00:16:30,440 --> 00:16:32,600 Speaker 1: and it's not just that, it's that capital is also 275 00:16:32,640 --> 00:16:35,520 Speaker 1: getting sucked out of these market spill as investors decided 276 00:16:35,560 --> 00:16:37,640 Speaker 1: to head for the hills and go somewhere a bit 277 00:16:37,640 --> 00:16:41,480 Speaker 1: more favorable. What can these emerging markets do to attract 278 00:16:41,560 --> 00:16:44,560 Speaker 1: capital back. Well, I think one of the things they 279 00:16:44,600 --> 00:16:48,160 Speaker 1: have to do is they have to go to international 280 00:16:48,200 --> 00:16:50,800 Speaker 1: financial institutions like the I m F, the World Bank 281 00:16:51,280 --> 00:16:54,480 Speaker 1: and try and gets as much as possible get aid 282 00:16:54,600 --> 00:16:57,480 Speaker 1: in this particular moment. Also, the G twenty is key here. 283 00:16:58,040 --> 00:17:00,800 Speaker 1: On the last G twenty meeting, they agree UH to 284 00:17:00,920 --> 00:17:05,520 Speaker 1: postpone debt UH sort of a form of temporary tetric 285 00:17:05,560 --> 00:17:08,240 Speaker 1: giveness to a debt forgiveness to the end of the year. 286 00:17:08,640 --> 00:17:11,040 Speaker 1: The question is what are they going to do afterwards? 287 00:17:11,200 --> 00:17:14,520 Speaker 1: And UH, I think getting control of COVID is very 288 00:17:14,640 --> 00:17:18,359 Speaker 1: very important. One country that goes unnoticed here in the 289 00:17:18,400 --> 00:17:22,800 Speaker 1: emerging markets that actually has the best record of of 290 00:17:22,880 --> 00:17:27,560 Speaker 1: all of them, uh, perhaps equal to Taiwan, but Taiwan 291 00:17:27,680 --> 00:17:31,880 Speaker 1: is not really an emerging market country is Vietnam. It's 292 00:17:31,920 --> 00:17:35,000 Speaker 1: amazing they have had no deaths and they have done 293 00:17:35,040 --> 00:17:39,240 Speaker 1: the best work in this area. UH. And it's it's 294 00:17:39,280 --> 00:17:42,960 Speaker 1: really almost unknown. UH. And so what it shows is 295 00:17:43,000 --> 00:17:47,119 Speaker 1: a country can take the proper steps if it recognizes 296 00:17:47,560 --> 00:17:50,840 Speaker 1: that it has this problem with the pandemic UH, and 297 00:17:50,920 --> 00:17:54,439 Speaker 1: then try and reopen once they see that they have 298 00:17:54,520 --> 00:17:57,119 Speaker 1: it under control. So the question here is you have 299 00:17:57,160 --> 00:17:59,600 Speaker 1: to get it under control and then open up in 300 00:17:59,600 --> 00:18:04,320 Speaker 1: an orderly fashion. UH. So I think then capital could 301 00:18:04,520 --> 00:18:08,040 Speaker 1: eventually flow back, But right now it's what they can 302 00:18:08,080 --> 00:18:11,520 Speaker 1: do on restructuring their debt UH and getting support from 303 00:18:11,560 --> 00:18:16,560 Speaker 1: international financial institutions. And very importantly, the private sector is 304 00:18:16,640 --> 00:18:19,840 Speaker 1: deeper in the debt UH than we've seen, as I said, 305 00:18:19,840 --> 00:18:21,760 Speaker 1: in the last half century, and that's going to be 306 00:18:21,800 --> 00:18:25,479 Speaker 1: even more difficult to deal with than the sovereign all 307 00:18:25,560 --> 00:18:28,280 Speaker 1: right bill. So you know, back in the day in 308 00:18:28,359 --> 00:18:31,880 Speaker 1: the Latin American debt crisis, the various countries would come 309 00:18:31,920 --> 00:18:34,600 Speaker 1: to you at City Bank or the good folks that 310 00:18:34,720 --> 00:18:37,400 Speaker 1: even you know, the old Chemical Bank or the Chase 311 00:18:37,400 --> 00:18:39,879 Speaker 1: Manhattan Bank and say, listen, we need to kind of 312 00:18:39,880 --> 00:18:43,040 Speaker 1: sit down and rework this. Now the debt is not 313 00:18:43,080 --> 00:18:46,960 Speaker 1: necessarily owned by big financial institutions per se in New York, 314 00:18:46,960 --> 00:18:50,160 Speaker 1: the big banks, but by hedge funds and others. How 315 00:18:50,200 --> 00:18:53,560 Speaker 1: can this play out in any timely fashion. Well, I 316 00:18:53,560 --> 00:18:56,760 Speaker 1: think that's a key question because when we did the 317 00:18:56,800 --> 00:19:00,639 Speaker 1: restructurings UH at the time of Latin American crisis, and 318 00:19:00,680 --> 00:19:04,040 Speaker 1: even in the beginning of the Asian financial crisis, most 319 00:19:04,080 --> 00:19:07,800 Speaker 1: of the UH, most of the indebtedness was was on 320 00:19:07,840 --> 00:19:10,520 Speaker 1: the paper was held by banks. But since the Brady 321 00:19:10,600 --> 00:19:14,760 Speaker 1: Plan UH, it's been securitized and as you say, it's 322 00:19:14,800 --> 00:19:18,440 Speaker 1: hedge funds, money market funds, you name it hold most 323 00:19:18,520 --> 00:19:22,919 Speaker 1: of this paper. So it's not like getting banks around 324 00:19:22,920 --> 00:19:25,320 Speaker 1: the table and cutting a deal. It's much more difficult 325 00:19:26,640 --> 00:19:29,440 Speaker 1: to do. So this is why you need a more 326 00:19:29,520 --> 00:19:33,920 Speaker 1: orderly process working with the I m F, the World Bank, 327 00:19:34,600 --> 00:19:38,480 Speaker 1: and the Paris Club as soon as you can. And 328 00:19:38,560 --> 00:19:44,560 Speaker 1: Africa particularly has a very difficult situation, and UH you 329 00:19:44,640 --> 00:19:47,560 Speaker 1: have so many countries that are highly indebted there and 330 00:19:48,280 --> 00:19:50,280 Speaker 1: when you take a look at the outstanding there's no 331 00:19:50,320 --> 00:19:53,160 Speaker 1: way that they can pay back this debt anytime soon. 332 00:19:53,600 --> 00:19:55,960 Speaker 1: So you need a major effort by the G twenty, 333 00:19:56,000 --> 00:19:59,800 Speaker 1: which includes China UH to put a program forth to 334 00:20:00,000 --> 00:20:05,159 Speaker 1: help these countries regain market access, and the financial sector 335 00:20:05,240 --> 00:20:08,399 Speaker 1: on the private sector side has got to be able 336 00:20:08,440 --> 00:20:12,000 Speaker 1: to participate in this. Also, Yeah, bill doesn't matter if 337 00:20:12,000 --> 00:20:14,840 Speaker 1: the US doesn't recognize some of these institutions. I mean, 338 00:20:14,960 --> 00:20:17,439 Speaker 1: right now that's not the case, but you just never know. 339 00:20:17,560 --> 00:20:19,800 Speaker 1: And you know, I'm just looking at w c rs 340 00:20:19,840 --> 00:20:22,560 Speaker 1: on the Bloomberg. The rand is down seventeen versus the 341 00:20:22,600 --> 00:20:25,240 Speaker 1: dollar year today, the lira down twelve and a half percent, 342 00:20:25,320 --> 00:20:27,720 Speaker 1: the ruble down ten percent. I mean, there's a serious 343 00:20:27,720 --> 00:20:30,719 Speaker 1: deficit here. Well, I think one of the problems is 344 00:20:30,720 --> 00:20:33,600 Speaker 1: that when you take a look at the currency markets, 345 00:20:33,680 --> 00:20:37,639 Speaker 1: although the dollar has been under under attack recently, basically 346 00:20:37,760 --> 00:20:41,480 Speaker 1: these countries borrowed UH in foreign currency, mostly in dollars 347 00:20:41,480 --> 00:20:44,119 Speaker 1: but also euros, and they're gonna have a real difficult 348 00:20:44,160 --> 00:20:47,399 Speaker 1: time in UH in in paying back, which exacerbates the 349 00:20:47,440 --> 00:20:51,040 Speaker 1: situation even more. So what you have to do is 350 00:20:51,080 --> 00:20:55,880 Speaker 1: to is to basically get the international financial institutions working 351 00:20:55,920 --> 00:21:00,880 Speaker 1: with UH these bondholders and by time so these countries 352 00:21:00,920 --> 00:21:04,959 Speaker 1: can get over this pandemic and start, you know, getting 353 00:21:04,960 --> 00:21:07,240 Speaker 1: people back to work. It's a tough process and I 354 00:21:07,280 --> 00:21:12,840 Speaker 1: really think the most difficult economic problem that we will 355 00:21:12,880 --> 00:21:16,080 Speaker 1: face getting the world back to growth is in the 356 00:21:16,119 --> 00:21:19,600 Speaker 1: emerging markets. It's not in Europe, it's not in the 357 00:21:19,680 --> 00:21:22,159 Speaker 1: United States or China, it's not in the developed world. 358 00:21:22,480 --> 00:21:25,680 Speaker 1: It's in the developing world. And we've never seen anything 359 00:21:25,960 --> 00:21:29,679 Speaker 1: quite like this UH since all the bond defaults of 360 00:21:29,720 --> 00:21:33,520 Speaker 1: the emerging market countries in a great depression. Bill, it 361 00:21:33,600 --> 00:21:36,920 Speaker 1: is always great to get your perspective, particularly on topics 362 00:21:36,960 --> 00:21:39,399 Speaker 1: like this, and it seems, unfortunately like there is never 363 00:21:39,440 --> 00:21:42,080 Speaker 1: any shortage. So Bill, thanks for joining us today. That 364 00:21:42,200 --> 00:21:46,600 Speaker 1: is William R. Roads of William or Roads Global Advisors, 365 00:21:46,680 --> 00:21:48,760 Speaker 1: And I'm just getting an email from one of our 366 00:21:48,800 --> 00:21:52,640 Speaker 1: e M experts in house, Paul Damiens. We're talking about right, 367 00:21:52,720 --> 00:21:56,200 Speaker 1: it's a good timing talking about how actually it's shifting 368 00:21:56,200 --> 00:21:58,359 Speaker 1: the sentiment across major E M E. T F s 369 00:21:58,840 --> 00:22:02,520 Speaker 1: seems to be getting better flows or accelerating sharply. So 370 00:22:02,600 --> 00:22:05,640 Speaker 1: that's something I suppose some kind of a signal anyway, 371 00:22:05,800 --> 00:22:07,439 Speaker 1: because it's the way back in March it was just, 372 00:22:07,640 --> 00:22:11,720 Speaker 1: you know, nobody had any appetite for anything emerging market. Yeah, exactly. 373 00:22:13,560 --> 00:22:17,119 Speaker 1: This is Bloomberg Markets with Paul Sweeney and Bunny Quinn 374 00:22:17,320 --> 00:22:22,399 Speaker 1: on Bloomberg Radio. Welcome to Bloomberg Markets, as the man said, 375 00:22:22,560 --> 00:22:26,359 Speaker 1: so let's get to our next conversation now with virologists 376 00:22:26,400 --> 00:22:30,320 Speaker 1: from Harvard University. Dr Peter Kolchinsky, actually extremely excited to 377 00:22:30,359 --> 00:22:32,399 Speaker 1: speak with you. You're the author of the Great American 378 00:22:32,480 --> 00:22:35,480 Speaker 1: Drug deal in new prescription for innovative and Affordable medicines. 379 00:22:36,160 --> 00:22:40,240 Speaker 1: So Dr Kolchinsky, will it be the great American drug 380 00:22:40,480 --> 00:22:42,840 Speaker 1: that provides us with our vaccinations or will it be 381 00:22:42,880 --> 00:22:47,399 Speaker 1: the great Chinese drug? I thank you very much for 382 00:22:47,400 --> 00:22:49,679 Speaker 1: having me on the show. I should point out I 383 00:22:49,760 --> 00:22:53,600 Speaker 1: am a scientist by training. I did my biology training 384 00:22:53,600 --> 00:22:56,480 Speaker 1: at Harvard, but for my whole career I've been a 385 00:22:56,520 --> 00:23:00,119 Speaker 1: biotechnology investor of venture capitalists. So I look at this 386 00:23:00,200 --> 00:23:03,920 Speaker 1: industry from the standpoint of an investor evaluating a lot 387 00:23:03,920 --> 00:23:08,119 Speaker 1: of different companies, and I think that, um, while China 388 00:23:08,359 --> 00:23:12,000 Speaker 1: has been a larger player in the drug development UM 389 00:23:12,200 --> 00:23:16,680 Speaker 1: industry over the last ten fifteen years, UM, I think that, uh, 390 00:23:16,760 --> 00:23:20,359 Speaker 1: the COVID response globally has been somewhat nationalistic. And my 391 00:23:20,440 --> 00:23:24,040 Speaker 1: guess is that China is gonna conserve its vaccine doses 392 00:23:24,080 --> 00:23:27,280 Speaker 1: for its own people, and you know, Europe is looking 393 00:23:27,280 --> 00:23:30,119 Speaker 1: to lock down doses, and so the US is going 394 00:23:30,160 --> 00:23:33,240 Speaker 1: to be getting doses from companies that it's contracted with. 395 00:23:34,440 --> 00:23:37,280 Speaker 1: So Peter, I mean, you know, some people have been 396 00:23:37,320 --> 00:23:40,840 Speaker 1: talking about, you know, whoever gets it first maybe should 397 00:23:40,880 --> 00:23:44,159 Speaker 1: just license it to everybody else for the common good? 398 00:23:44,760 --> 00:23:47,040 Speaker 1: Is that a is that something you think could happen 399 00:23:47,160 --> 00:23:49,719 Speaker 1: here or is this something that maybe some of these 400 00:23:49,720 --> 00:23:52,919 Speaker 1: companies are going to look to profit off of. You know, 401 00:23:53,200 --> 00:23:54,960 Speaker 1: if only it worked that way. But you know, the 402 00:23:55,720 --> 00:23:57,960 Speaker 1: getting there first, it's not like writing a book and 403 00:23:58,000 --> 00:24:02,119 Speaker 1: being able to just hit published and then there's infinite downloads. Uh, 404 00:24:02,160 --> 00:24:03,840 Speaker 1: you know, you can get there first and then you 405 00:24:03,880 --> 00:24:07,560 Speaker 1: have to actually scale up manufacturing. And so the first 406 00:24:07,640 --> 00:24:12,560 Speaker 1: vaccines that are likely to prove out maybe later this fall, UM, 407 00:24:12,640 --> 00:24:14,680 Speaker 1: they're still going to be constrained by the fact that 408 00:24:14,760 --> 00:24:17,320 Speaker 1: you know, companies are going to be uh scaling up 409 00:24:17,359 --> 00:24:20,080 Speaker 1: manufacturing and maybe getting to the point of tens of 410 00:24:20,200 --> 00:24:21,960 Speaker 1: millions of doses. You know, if we get to a 411 00:24:22,040 --> 00:24:24,520 Speaker 1: hundred million doses by the end of this year collectively 412 00:24:24,560 --> 00:24:27,000 Speaker 1: across the few vaccines, that will be amazing. But that's 413 00:24:27,000 --> 00:24:30,640 Speaker 1: not enough to vaccinate you know, even the US, let 414 00:24:30,640 --> 00:24:32,840 Speaker 1: alone US and Europe and you know all the other 415 00:24:32,840 --> 00:24:35,920 Speaker 1: countries that are out there. So as an investor who 416 00:24:36,000 --> 00:24:39,000 Speaker 1: is very familiar with how these drugs are developed and 417 00:24:39,000 --> 00:24:42,840 Speaker 1: these vaccines are developed, where have you been investing? Dr 418 00:24:42,880 --> 00:24:47,520 Speaker 1: clsn Ski you can call me Peter, uh and uh, 419 00:24:48,080 --> 00:24:50,600 Speaker 1: we don't we don't talk about where we specifically have 420 00:24:50,680 --> 00:24:52,840 Speaker 1: been invested with regulated entity, but you know people can 421 00:24:52,840 --> 00:24:56,200 Speaker 1: look up our public filings, UM, but we we've been 422 00:24:56,600 --> 00:24:59,760 Speaker 1: uh certainly looking and to support companies that are working 423 00:24:59,760 --> 00:25:04,479 Speaker 1: on a range of products from vaccines to small molecule drugs, 424 00:25:04,520 --> 00:25:07,040 Speaker 1: Like wouldn't it be great to have an oral version 425 00:25:07,119 --> 00:25:10,000 Speaker 1: of remdessevere so that a person can just show up 426 00:25:10,000 --> 00:25:11,879 Speaker 1: at the hospital, be diagnosed, to be sent home with 427 00:25:11,920 --> 00:25:14,040 Speaker 1: the prescription um and not have to stay in the 428 00:25:14,080 --> 00:25:18,359 Speaker 1: hospital getting I D infusions. So, Peter, what do you 429 00:25:18,440 --> 00:25:22,000 Speaker 1: make of the uh Blueberg News has been reporting over 430 00:25:22,040 --> 00:25:24,600 Speaker 1: the last day or so about a potential deal between 431 00:25:24,640 --> 00:25:27,760 Speaker 1: Astra Zeneca and Gilead. Is that something that you think 432 00:25:27,800 --> 00:25:29,720 Speaker 1: if there is some talks going on, would that be 433 00:25:29,760 --> 00:25:33,400 Speaker 1: something driven by the coronavirus maybe a need to get 434 00:25:33,480 --> 00:25:36,680 Speaker 1: scale in production or what do you make of that? 435 00:25:37,200 --> 00:25:39,359 Speaker 1: I think I think it's totally unrelated. You've got a 436 00:25:39,400 --> 00:25:42,800 Speaker 1: hundred forty billion market cab company in nineties something billion 437 00:25:42,840 --> 00:25:46,760 Speaker 1: market cap company. Their valuations are not tied to, you know, 438 00:25:47,080 --> 00:25:50,840 Speaker 1: anything to do with coronavirus. Uh, And you know these 439 00:25:50,880 --> 00:25:54,720 Speaker 1: are if these discussions are even real, they're uh, you know, 440 00:25:54,760 --> 00:25:59,040 Speaker 1: related to other things more like oncology. Probably on that 441 00:25:59,200 --> 00:26:03,320 Speaker 1: the scaling problem. I mean obviously almost any company, probably 442 00:26:03,440 --> 00:26:05,360 Speaker 1: every company that does come up with a vaccine will 443 00:26:05,400 --> 00:26:07,240 Speaker 1: have this problem. It would seem to me like that 444 00:26:07,240 --> 00:26:10,119 Speaker 1: that might be the profit center. So if you're an 445 00:26:10,160 --> 00:26:13,560 Speaker 1: investor looking at various areas, do you avoid you know, 446 00:26:13,600 --> 00:26:16,640 Speaker 1: the drug companies that are engaging in research and development 447 00:26:16,640 --> 00:26:19,200 Speaker 1: and you just go straight for the smaller companies. Potentially 448 00:26:19,240 --> 00:26:25,000 Speaker 1: that will provide the ability to these winners to scale. Um. Well, 449 00:26:25,320 --> 00:26:28,840 Speaker 1: they they're quite a sizeable companies that are enabling others 450 00:26:28,960 --> 00:26:32,520 Speaker 1: to scale UH. And I think right now you're absolutely right. 451 00:26:32,520 --> 00:26:35,480 Speaker 1: It's actually unclear where the profits are going to be 452 00:26:35,720 --> 00:26:38,119 Speaker 1: in the drugs and vaccines. You know, there are some 453 00:26:38,160 --> 00:26:40,679 Speaker 1: well meaning people who say that all these products you 454 00:26:40,720 --> 00:26:43,480 Speaker 1: just be given away at cost. I think that's probably 455 00:26:43,520 --> 00:26:47,639 Speaker 1: a terrible way to inspire the private sector to risk 456 00:26:47,680 --> 00:26:50,520 Speaker 1: capital to help save the world. I think that it 457 00:26:50,560 --> 00:26:53,160 Speaker 1: makes sense for there to be some reward for that, UM. 458 00:26:53,320 --> 00:26:55,480 Speaker 1: But we already have a mechanism for that. We've got 459 00:26:55,560 --> 00:26:59,680 Speaker 1: bar to, for example, a government agency getting out massive 460 00:26:59,760 --> 00:27:04,119 Speaker 1: con tracks to companies that have promising vaccines UH in 461 00:27:04,240 --> 00:27:07,800 Speaker 1: order to help them scale up their manufacturing even before 462 00:27:07,840 --> 00:27:11,560 Speaker 1: they've proven that their vaccine works. You know, funding manufacturing 463 00:27:11,600 --> 00:27:16,040 Speaker 1: at risk, as they say, and in exchange UH securing 464 00:27:16,080 --> 00:27:19,760 Speaker 1: doses for Americans. And Bobard has given something now to 465 00:27:20,400 --> 00:27:24,200 Speaker 1: Jane j and metal Vas and then you know companies 466 00:27:24,440 --> 00:27:27,840 Speaker 1: UH that are taking all kinds of different approaches in 467 00:27:27,920 --> 00:27:30,800 Speaker 1: order to hedge our bets. Peter, thanks so much for 468 00:27:30,880 --> 00:27:34,040 Speaker 1: joining us. We really appreciate your thoughts and insight. Dr 469 00:27:34,080 --> 00:27:38,359 Speaker 1: Peter Kolchinski, Managing Director of r a capital management based 470 00:27:38,400 --> 00:27:40,960 Speaker 1: in Boston, also the author of the book entitled The 471 00:27:41,000 --> 00:27:44,840 Speaker 1: Great American Drug Deal, A New Prescription for Innovation and 472 00:27:44,960 --> 00:27:48,159 Speaker 1: Affordable Medicines. And Vanni, I think you know, Peter hit 473 00:27:48,200 --> 00:27:50,720 Speaker 1: on one of the big issues here. It's let's assume 474 00:27:50,760 --> 00:27:53,520 Speaker 1: that somebody comes up with the with the VA vaccine. Uh, 475 00:27:53,680 --> 00:27:55,320 Speaker 1: certainly people are working on it, but how do you 476 00:27:55,560 --> 00:27:59,119 Speaker 1: scale manufacturing and scale distribution exactly? And you definitely have 477 00:27:59,119 --> 00:28:02,119 Speaker 1: seen some some small deals and acknowledge said that, you know, 478 00:28:02,119 --> 00:28:05,200 Speaker 1: obviously it's the bigger companies that can help companies scale better, 479 00:28:05,200 --> 00:28:08,840 Speaker 1: but you have seen small deals go down with with 480 00:28:08,920 --> 00:28:11,600 Speaker 1: some of the companies that are looking to manufacture vaccines, 481 00:28:11,640 --> 00:28:14,720 Speaker 1: buying you know, other manufacturers so that they could potentially 482 00:28:14,760 --> 00:28:16,880 Speaker 1: scale up quickly. But it will be interesting to see 483 00:28:16,920 --> 00:28:20,240 Speaker 1: because you know, it isn't clear that these vaccines, if 484 00:28:20,280 --> 00:28:23,280 Speaker 1: they do indeed emerge, will make money for their for 485 00:28:23,359 --> 00:28:26,160 Speaker 1: their for their companies. And if they do, it will 486 00:28:26,160 --> 00:28:28,160 Speaker 1: be a long time. It will be and and then 487 00:28:28,240 --> 00:28:31,000 Speaker 1: obviously the question everybody wants answered right now is when 488 00:28:31,160 --> 00:28:35,119 Speaker 1: when will vaccines be ready so that we can presumably 489 00:28:35,200 --> 00:28:38,400 Speaker 1: get back to a more uh normal life. If you will, 490 00:28:38,440 --> 00:28:39,960 Speaker 1: so that's the big issue for big farmer