1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Penl podcast. I'm Paul swing you. 2 00:00:05,360 --> 00:00:07,640 Speaker 1: Along with my co host Lisa Brahma Wicks. Each day 3 00:00:07,720 --> 00:00:10,240 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,280 --> 00:00:12,520 Speaker 1: you and your money, whether at the grocery store or 5 00:00:12,560 --> 00:00:15,480 Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple 6 00:00:15,520 --> 00:00:17,959 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:21,640 Speaker 1: at Bloomberg dot com. Let's turn our attention to the 8 00:00:21,720 --> 00:00:24,599 Speaker 1: oil markets. We started the week with a lot of uncertainty, 9 00:00:24,640 --> 00:00:28,160 Speaker 1: a lot of volatility about Mid East and geopolitical tensions. 10 00:00:28,440 --> 00:00:30,560 Speaker 1: Brent crude at one point over this week was at 11 00:00:30,560 --> 00:00:34,040 Speaker 1: seventy one and change. We've backed off pretty significantly from 12 00:00:34,080 --> 00:00:36,800 Speaker 1: there as tensions have ease. Looking at Brent crude right 13 00:00:36,800 --> 00:00:39,839 Speaker 1: now sixty five dollars thirty six cents per barrel, let's 14 00:00:39,880 --> 00:00:41,800 Speaker 1: get a sense of kind of what's going on in 15 00:00:41,840 --> 00:00:44,479 Speaker 1: the oil markets. We welcome John killed Off, founding partner 16 00:00:44,520 --> 00:00:47,280 Speaker 1: of Again Capital, based in New York. So, John, what 17 00:00:47,280 --> 00:00:50,199 Speaker 1: do you make of the volatility that we saw in 18 00:00:50,240 --> 00:00:54,600 Speaker 1: the energy markets this week. Well, things we're looking you know, 19 00:00:54,720 --> 00:00:58,800 Speaker 1: very bleak there. On I guess Wednesday night, uh with 20 00:00:58,840 --> 00:01:01,840 Speaker 1: the Uranian attack. Uh, you know, there was some misinformation 21 00:01:01,840 --> 00:01:05,200 Speaker 1: around the market about potential casualties, if not fatalities, and 22 00:01:05,240 --> 00:01:07,440 Speaker 1: of course you know none of that came to pass. 23 00:01:07,600 --> 00:01:09,800 Speaker 1: So that that's why you got the spike up, because 24 00:01:09,840 --> 00:01:13,360 Speaker 1: it was you get yourself long some oil for protection 25 00:01:13,400 --> 00:01:15,120 Speaker 1: as quickly as you can, and then it came off 26 00:01:15,160 --> 00:01:19,480 Speaker 1: when our worst fears weren't realized, thankfully. So Um, the 27 00:01:19,520 --> 00:01:22,559 Speaker 1: market has now shifted back to being more concerned about 28 00:01:22,560 --> 00:01:25,880 Speaker 1: the relative oversupply in the market and uh, pretty weak 29 00:01:26,120 --> 00:01:28,840 Speaker 1: guests lean demand figured out of the US in this 30 00:01:28,920 --> 00:01:31,960 Speaker 1: week's report from the government. So um, back to more 31 00:01:32,000 --> 00:01:35,560 Speaker 1: normal analysis for now. Yeah, for now being the key 32 00:01:35,760 --> 00:01:37,959 Speaker 1: word here, because I just should know. There was a 33 00:01:38,000 --> 00:01:41,240 Speaker 1: little uptick, a little pairing of losses in the price 34 00:01:41,240 --> 00:01:44,120 Speaker 1: of crewed after the press conference held by a Secretary 35 00:01:44,160 --> 00:01:47,199 Speaker 1: of State Mike Pompeo as well as Treasure Secretary step 36 00:01:47,240 --> 00:01:50,360 Speaker 1: minut To announced new sanctions on Iran, the possible re 37 00:01:50,600 --> 00:01:55,640 Speaker 1: escalation depending on how Iran responds. Is it telling that 38 00:01:55,720 --> 00:01:58,800 Speaker 1: there has not been a bigger move frankly in oil 39 00:01:58,960 --> 00:02:01,640 Speaker 1: throughout all of this, even the fact that there were 40 00:02:01,680 --> 00:02:04,400 Speaker 1: actual missiles flying, right, I mean, it wasn't necessarily just 41 00:02:04,440 --> 00:02:07,639 Speaker 1: as theoretical back and forth of words, things were getting heated. 42 00:02:07,760 --> 00:02:13,680 Speaker 1: In another way, things were getting very heated. And I 43 00:02:13,680 --> 00:02:16,760 Speaker 1: think the oil price at Lesa was off to the 44 00:02:16,840 --> 00:02:20,160 Speaker 1: races the other night, um to the upside, because it 45 00:02:20,240 --> 00:02:25,119 Speaker 1: looked like there was going to be a real escalation. Um. 46 00:02:25,120 --> 00:02:28,120 Speaker 1: And if Iran had gone further than it did, Uh, 47 00:02:28,960 --> 00:02:31,320 Speaker 1: you have to figure that most slightly they're most certainly 48 00:02:31,360 --> 00:02:34,320 Speaker 1: would have been. And finally, you know, real volumes of 49 00:02:34,360 --> 00:02:37,040 Speaker 1: oil would have come off the market, particularly out of 50 00:02:37,040 --> 00:02:40,519 Speaker 1: southern Iraq. That's uh, that's where my focus is. Iraq 51 00:02:40,639 --> 00:02:43,320 Speaker 1: is proving to be the battle ground in this whole thing. 52 00:02:43,360 --> 00:02:48,359 Speaker 1: Unfortunately for those poor people and the Iraqi crude oil 53 00:02:48,440 --> 00:02:51,080 Speaker 1: at a Bassora in the south, a couple of million 54 00:02:51,080 --> 00:02:54,720 Speaker 1: barrels a day is the key element here that gets affected. 55 00:02:54,880 --> 00:02:57,720 Speaker 1: Prices are going to go soaring higher. All right, John, 56 00:02:57,800 --> 00:02:59,919 Speaker 1: Let's assume, and this might not be a fair sumption. 57 00:03:00,040 --> 00:03:04,200 Speaker 1: Let's assume geopolitical tensions remain muted here in the near 58 00:03:04,320 --> 00:03:07,119 Speaker 1: term to intermediate term. Where do you think oil goes here? 59 00:03:07,120 --> 00:03:09,799 Speaker 1: Given a supply and the demand dynamics out there, it 60 00:03:09,880 --> 00:03:12,799 Speaker 1: just seems to be a lot of supply out there. Yeah, 61 00:03:12,800 --> 00:03:17,000 Speaker 1: I mean x RAN. You're looking at at a steady 62 00:03:17,000 --> 00:03:19,440 Speaker 1: sell off here now. Um, you know, we broke down 63 00:03:19,520 --> 00:03:22,799 Speaker 1: through some key levels. Sixty dollars was key support. We 64 00:03:22,840 --> 00:03:24,800 Speaker 1: went through that like a hot knife through butter. The 65 00:03:24,880 --> 00:03:29,320 Speaker 1: next key level is just under fifty eight dollars of barrel. 66 00:03:29,320 --> 00:03:32,040 Speaker 1: That's the two day moving average, and if we can 67 00:03:32,080 --> 00:03:34,480 Speaker 1: break through that, we we could easily then go back 68 00:03:35,040 --> 00:03:39,120 Speaker 1: to the October lows, potentially test fifty two a barrel. 69 00:03:39,640 --> 00:03:44,400 Speaker 1: Once again, the technical setup is such that the chart 70 00:03:44,520 --> 00:03:47,760 Speaker 1: is a message. It got pretty much wrecked by the 71 00:03:47,800 --> 00:03:51,320 Speaker 1: spike higher and then an immediate reversal. So there's a 72 00:03:51,320 --> 00:03:53,560 Speaker 1: lot going against the bowls in the market right now. 73 00:03:54,520 --> 00:03:57,240 Speaker 1: What about other possible disruptions forgetting we're on and I 74 00:03:57,240 --> 00:03:59,240 Speaker 1: remember when we were talking about Libya being a source 75 00:03:59,280 --> 00:04:03,040 Speaker 1: of concern. I remember Venezuela production was a concern for 76 00:04:03,080 --> 00:04:05,920 Speaker 1: a while, given the infrastructure in that country and what's 77 00:04:05,920 --> 00:04:12,120 Speaker 1: going on there. All those things not on the horizon anymore. Well, 78 00:04:12,440 --> 00:04:14,800 Speaker 1: the the issue we have, the market has is that 79 00:04:15,080 --> 00:04:19,080 Speaker 1: even with the Ran and Venezuela pretty much offline, Iran 80 00:04:19,200 --> 00:04:21,080 Speaker 1: is getting some crude oil app to China by the 81 00:04:21,080 --> 00:04:25,600 Speaker 1: way UM. There there's still relative oversupply. The position of 82 00:04:25,640 --> 00:04:28,159 Speaker 1: the United States, the ascendancyats to the number one oil 83 00:04:28,160 --> 00:04:31,080 Speaker 1: producer in the world, and now UH a soaring amount 84 00:04:31,120 --> 00:04:34,159 Speaker 1: of exports. We exported four point six million barrels a 85 00:04:34,240 --> 00:04:37,880 Speaker 1: day UH last two weeks ago during that week, just 86 00:04:37,920 --> 00:04:41,400 Speaker 1: an incredible figure. And UM as a result of that, 87 00:04:41,480 --> 00:04:44,640 Speaker 1: you know that the market keeps getting a sufficient amount 88 00:04:45,320 --> 00:04:47,800 Speaker 1: of supply to the market, if not more than it needs. 89 00:04:48,120 --> 00:04:51,040 Speaker 1: And there's still some cheating within the OPEC group, Nigeria 90 00:04:51,200 --> 00:04:54,440 Speaker 1: in particular, and even with all the strife in Libya, 91 00:04:54,720 --> 00:04:57,200 Speaker 1: their oil keeps getting out. So with all of these 92 00:04:57,240 --> 00:05:00,400 Speaker 1: serial issues UM in the Middle East, now with the 93 00:05:00,480 --> 00:05:03,479 Speaker 1: rack and Iran and the attack on Saudi Arabia in 94 00:05:03,520 --> 00:05:07,840 Speaker 1: the fall, the oil flows haven't been affected by any 95 00:05:07,839 --> 00:05:10,760 Speaker 1: of these things, and the market remains relatively well supplied. 96 00:05:10,800 --> 00:05:14,040 Speaker 1: So the market, the oil price UM is reflective of that. 97 00:05:14,080 --> 00:05:19,760 Speaker 1: There's no tightness, no constraints, UH, just relative oversupply. So 98 00:05:19,880 --> 00:05:22,520 Speaker 1: given that scenario, and given that, let's say you know, 99 00:05:22,680 --> 00:05:26,159 Speaker 1: a a two percent kind of global GDP type of growth, 100 00:05:26,240 --> 00:05:28,920 Speaker 1: where does w T I go? Does it drift down 101 00:05:28,960 --> 00:05:32,400 Speaker 1: close back to fifty that's what it's looking like that 102 00:05:32,480 --> 00:05:37,279 Speaker 1: the growth outlook for isn't really enough to UH to 103 00:05:37,360 --> 00:05:42,440 Speaker 1: support higher prices for sure. You know, maybe some stabilization 104 00:05:42,520 --> 00:05:44,760 Speaker 1: if the Sattie's were decided to cut back more, But 105 00:05:44,880 --> 00:05:49,360 Speaker 1: that is even in jeopardy, particularly because Russia is just 106 00:05:49,600 --> 00:05:53,279 Speaker 1: is about to bolt UH the agreement. It appears that 107 00:05:53,360 --> 00:05:56,799 Speaker 1: they want to be allowed to UH fight for market share, 108 00:05:56,960 --> 00:06:00,760 Speaker 1: continue with their investment capital plans that have been emplaced 109 00:06:00,800 --> 00:06:03,880 Speaker 1: by their by their various companies UM, and operate on 110 00:06:03,880 --> 00:06:07,359 Speaker 1: a more commercial basis. So um, Yes, short answer to 111 00:06:07,360 --> 00:06:10,599 Speaker 1: your question is that it's a downward bias again short 112 00:06:10,600 --> 00:06:13,240 Speaker 1: of a supply disruption that comes from an exogenous event, 113 00:06:13,920 --> 00:06:16,640 Speaker 1: I guess. Then the question becomes, John, how long before 114 00:06:16,640 --> 00:06:19,719 Speaker 1: we start worrying about the financial health of shale producers 115 00:06:19,720 --> 00:06:22,599 Speaker 1: which have been the swing players here. We've seen them 116 00:06:22,760 --> 00:06:25,520 Speaker 1: do really well in terms of bonds and stock prices 117 00:06:25,839 --> 00:06:28,320 Speaker 1: in the wake of the increase in oil prices. How 118 00:06:28,320 --> 00:06:29,880 Speaker 1: far do they have to drop before we have to 119 00:06:29,880 --> 00:06:33,960 Speaker 1: worry about their financial viability? Again, Well, they're definitely on 120 00:06:34,000 --> 00:06:36,640 Speaker 1: the ropes and this is the year to watch them um. 121 00:06:36,680 --> 00:06:40,720 Speaker 1: And it's also the year potentially where the shale miracle 122 00:06:41,360 --> 00:06:45,760 Speaker 1: UH drives up to a degree because as these weaker 123 00:06:45,800 --> 00:06:48,839 Speaker 1: companies either go out of business or merge or get 124 00:06:48,839 --> 00:06:51,440 Speaker 1: picked up by the stronger players, including these including the 125 00:06:51,480 --> 00:06:56,400 Speaker 1: majors like Exxon Mobile. UM, then a new round of 126 00:06:56,839 --> 00:07:02,040 Speaker 1: production discipline could befall the industry and that sector where 127 00:07:02,080 --> 00:07:06,080 Speaker 1: we would see a decline in US production uh instead 128 00:07:06,080 --> 00:07:10,640 Speaker 1: of the rampant and unbridled growth that has sort of 129 00:07:10,720 --> 00:07:14,480 Speaker 1: been the business model in that way, so UM. That 130 00:07:14,520 --> 00:07:17,600 Speaker 1: would also potentially help to stabilize prices down the road, 131 00:07:17,640 --> 00:07:20,040 Speaker 1: but it's not going to be really uh an impact 132 00:07:20,120 --> 00:07:23,000 Speaker 1: on prices to the upside this year. Thank you so 133 00:07:23,040 --> 00:07:25,480 Speaker 1: much for being with us. John Kilduff, founding partner of 134 00:07:25,560 --> 00:07:29,200 Speaker 1: Again Capital, based in New York, talking about the different 135 00:07:29,240 --> 00:07:31,920 Speaker 1: factors that are pushing and pulling on the price of oil. 136 00:07:41,960 --> 00:07:45,040 Speaker 1: Bart van Arc, chief economists at the Conference Board, joining 137 00:07:45,120 --> 00:07:48,520 Speaker 1: us now and you did this annual global CEO survey 138 00:07:48,640 --> 00:07:52,200 Speaker 1: and among the points made here, attracting and retaining talent 139 00:07:52,560 --> 00:07:57,000 Speaker 1: ranked as their top internal concern. If that's the case, 140 00:07:57,120 --> 00:08:00,840 Speaker 1: why our wages not going up more? Yes? Hi, good 141 00:08:00,840 --> 00:08:02,840 Speaker 1: morning these I H I mean that's uh, that's I 142 00:08:02,840 --> 00:08:05,240 Speaker 1: think the conundrum here, right, I mean, we see this 143 00:08:05,400 --> 00:08:07,720 Speaker 1: continuous slow age growth and at the same time we 144 00:08:07,800 --> 00:08:11,680 Speaker 1: see companies, uh, we all complain about talent. It's a 145 00:08:11,800 --> 00:08:14,440 Speaker 1: very highly bifurcated labor market, right, I Mean, on the 146 00:08:14,440 --> 00:08:17,680 Speaker 1: one hand, you know, we see CEOs and spee suite 147 00:08:17,760 --> 00:08:19,880 Speaker 1: leaders in our conference board see suite sure of a 148 00:08:20,400 --> 00:08:23,600 Speaker 1: really put these issues of attracting and retaining talent, how 149 00:08:23,640 --> 00:08:26,480 Speaker 1: to develop a next generation of leaders in order to 150 00:08:26,560 --> 00:08:29,960 Speaker 1: move innovation forward, in order to make that company's more productive, 151 00:08:30,000 --> 00:08:32,720 Speaker 1: improve their performance. And on the other hand, there's just 152 00:08:32,880 --> 00:08:36,520 Speaker 1: lots of junctions and occupations out there where there are 153 00:08:36,559 --> 00:08:39,320 Speaker 1: still plenty of supplying the labor market. See pretty strong 154 00:08:39,400 --> 00:08:43,520 Speaker 1: job growth throughout two thousand nineteen and in two thousand twenty, 155 00:08:43,920 --> 00:08:45,960 Speaker 1: and there are people. There's still plenty people being added 156 00:08:46,000 --> 00:08:48,480 Speaker 1: to the labor markets, so neat for companies to raise 157 00:08:48,520 --> 00:08:52,680 Speaker 1: wages there so part the labor market remains strong, which 158 00:08:52,720 --> 00:08:56,240 Speaker 1: can be a challenge for corporations. What is the number 159 00:08:56,240 --> 00:08:58,960 Speaker 1: one risk your survey came back with here in terms 160 00:08:58,960 --> 00:09:01,840 Speaker 1: of the CEO serving Yeah, so there's a s sweet 161 00:09:01,880 --> 00:09:05,719 Speaker 1: survey by the conference word was done in September October 162 00:09:05,800 --> 00:09:08,040 Speaker 1: last year, So at that time, I think there were 163 00:09:08,320 --> 00:09:11,080 Speaker 1: big concerns about where the economy was was heaving also 164 00:09:11,160 --> 00:09:12,920 Speaker 1: in the United States. Don't forget we were in the 165 00:09:12,960 --> 00:09:15,840 Speaker 1: middle of the trade disputes at that point in time 166 00:09:15,840 --> 00:09:19,720 Speaker 1: and potensial threats of raising tariffs. So recession risk came 167 00:09:19,800 --> 00:09:24,000 Speaker 1: up pretty consistently among the suit leaders as their biggest 168 00:09:24,040 --> 00:09:26,800 Speaker 1: concern going into two thousand and twenty. Now we're a 169 00:09:26,800 --> 00:09:29,480 Speaker 1: few more months down the road. You know, we we 170 00:09:29,559 --> 00:09:32,120 Speaker 1: have a trade phase one deal coming along we all 171 00:09:32,120 --> 00:09:35,680 Speaker 1: hope very very soon. So you can see that has 172 00:09:35,720 --> 00:09:39,839 Speaker 1: helped um businesses become a little bit more confidence. Earlier 173 00:09:39,880 --> 00:09:43,439 Speaker 1: this week, the word releases CEO Confidence indexis is a 174 00:09:43,559 --> 00:09:46,800 Speaker 1: quarterly index, and CEO confidence has been going down for 175 00:09:46,840 --> 00:09:49,320 Speaker 1: about six quarters in a row, but in the last 176 00:09:49,400 --> 00:09:51,160 Speaker 1: quarter it actually began to pick up a little bit, 177 00:09:51,240 --> 00:09:53,640 Speaker 1: still less than fifty, so we still have more negative 178 00:09:54,200 --> 00:09:56,680 Speaker 1: CEOs than positive CEOs, but we're beginning to see a 179 00:09:56,679 --> 00:10:00,000 Speaker 1: little bit of recovery of confidence. So in that sense, 180 00:10:00,040 --> 00:10:02,560 Speaker 1: I think they may be hoping going into a slightly 181 00:10:02,600 --> 00:10:05,720 Speaker 1: better two thousand twenty than two thousand nineties. So this 182 00:10:05,760 --> 00:10:09,280 Speaker 1: recession risk has received somewhat okay. So and this is important, 183 00:10:09,360 --> 00:10:11,520 Speaker 1: especially because as one of the points that that your 184 00:10:11,520 --> 00:10:14,760 Speaker 1: survey found U S C e O S said that 185 00:10:14,840 --> 00:10:19,480 Speaker 1: a recession was their number one concern in and that 186 00:10:19,600 --> 00:10:23,040 Speaker 1: had been their third biggest concern back in. I do 187 00:10:23,120 --> 00:10:25,520 Speaker 1: want to go back to the labor issue and this 188 00:10:25,600 --> 00:10:29,040 Speaker 1: idea of the bifurcation in the market where you have 189 00:10:29,200 --> 00:10:33,640 Speaker 1: skilled and sort of educated workers who are in you know, 190 00:10:34,000 --> 00:10:37,560 Speaker 1: in well demand and they're able to demand their their 191 00:10:37,559 --> 00:10:39,880 Speaker 1: salary as they as they will, or have more bargaining 192 00:10:39,880 --> 00:10:43,240 Speaker 1: power versus the lower end. Can you talk a little 193 00:10:43,240 --> 00:10:47,040 Speaker 1: bit more about what companies said the color they gave 194 00:10:47,120 --> 00:10:52,120 Speaker 1: around the talent shortage that they face. Yeah, it's interesting 195 00:10:52,160 --> 00:10:55,320 Speaker 1: to see where these shortages are, and we see a 196 00:10:55,320 --> 00:10:57,839 Speaker 1: lot of these shortages in sort of more blue color 197 00:10:57,920 --> 00:11:01,280 Speaker 1: type workers, so manufacturing workers and eng years. We of 198 00:11:01,320 --> 00:11:03,720 Speaker 1: course know a lot about the stories about truck drivers 199 00:11:03,760 --> 00:11:06,319 Speaker 1: and train drivers and so on, and these are all 200 00:11:06,400 --> 00:11:10,840 Speaker 1: kinds of jobs occupations where basically people were told at 201 00:11:10,840 --> 00:11:13,280 Speaker 1: the time, you know, don't even go there because you 202 00:11:13,280 --> 00:11:16,040 Speaker 1: know it will be all automated. And we have you know, 203 00:11:16,280 --> 00:11:19,880 Speaker 1: driverless trucks and everything else to all be robotized. And 204 00:11:19,920 --> 00:11:22,720 Speaker 1: now here we are in two thousand twenty, and we're 205 00:11:22,760 --> 00:11:24,920 Speaker 1: seeing that, you know, a lot of people in those 206 00:11:24,960 --> 00:11:27,720 Speaker 1: occupations are all the people are now beginning to massively 207 00:11:27,760 --> 00:11:31,920 Speaker 1: retire and the technology hasn't really proceeded as rapidly, so 208 00:11:31,960 --> 00:11:34,280 Speaker 1: now we suddenly have a shortage because there's too few 209 00:11:34,320 --> 00:11:37,400 Speaker 1: young people coming into those kinds of occupations. So what 210 00:11:37,480 --> 00:11:40,840 Speaker 1: you see in this CEO survey is that people that 211 00:11:40,840 --> 00:11:43,440 Speaker 1: that that SCRET leaders are saying that, you know, things 212 00:11:43,520 --> 00:11:47,640 Speaker 1: like an innovative culture in that company, you know, dealing 213 00:11:47,679 --> 00:11:50,320 Speaker 1: with these kind of disruptions of technology. They feature very 214 00:11:50,400 --> 00:11:52,560 Speaker 1: high on the list of their concerns, so so they 215 00:11:52,600 --> 00:11:54,439 Speaker 1: are more aware than effort that I need to deal 216 00:11:54,440 --> 00:11:57,079 Speaker 1: with this. I guess I'm really struggling with this, and 217 00:11:57,120 --> 00:11:59,560 Speaker 1: I'm sorry that I'm basically asking the same question again. 218 00:12:00,120 --> 00:12:03,439 Speaker 1: But if this is not a training issue, why can't 219 00:12:03,440 --> 00:12:07,720 Speaker 1: you find more people to hire by just offering more pay. Well, 220 00:12:07,760 --> 00:12:09,880 Speaker 1: in a way, it is a training issue in the 221 00:12:09,960 --> 00:12:12,720 Speaker 1: sense that you know, you get people out of school 222 00:12:12,760 --> 00:12:15,719 Speaker 1: who don't have these skills yet in order to deal 223 00:12:15,760 --> 00:12:18,440 Speaker 1: with those new technologies. So it's just very hard to 224 00:12:18,480 --> 00:12:21,719 Speaker 1: find people who companies are comfortable with that they can 225 00:12:21,760 --> 00:12:23,920 Speaker 1: really sort of get them up to speed. So a 226 00:12:23,960 --> 00:12:27,480 Speaker 1: lot of people with lower skills can easily find jobs 227 00:12:27,480 --> 00:12:29,800 Speaker 1: in the services sector of the economy, but these are 228 00:12:29,840 --> 00:12:32,520 Speaker 1: those specific skills that need to be trained within a 229 00:12:32,600 --> 00:12:36,040 Speaker 1: company environment where there's a huge shortage off. So so 230 00:12:36,160 --> 00:12:38,880 Speaker 1: creating an innovation culture and creating a culture in which 231 00:12:38,920 --> 00:12:41,280 Speaker 1: people can improve those skills I think is one of 232 00:12:41,320 --> 00:12:44,400 Speaker 1: the real shortcomings here. Bart van Arc, thanks so much 233 00:12:44,440 --> 00:12:46,960 Speaker 1: for joining us. Bart van Ark, chief ECONMIS for the 234 00:12:46,960 --> 00:12:49,000 Speaker 1: Conference Board, based in yr City, giving us his thoughts 235 00:12:49,000 --> 00:13:01,520 Speaker 1: on the global CEO survey. Following up on those jobs data, 236 00:13:02,120 --> 00:13:04,040 Speaker 1: time to check in with Bloomberg Opinion. We're joined by 237 00:13:04,120 --> 00:13:08,439 Speaker 1: Opinion Commerce Alex web covers our Things European Technology, joining 238 00:13:08,520 --> 00:13:11,160 Speaker 1: us from London. Alex thanks so much for joining us. 239 00:13:11,160 --> 00:13:15,679 Speaker 1: We're seeing in the home food delivery business some consolidation 240 00:13:15,760 --> 00:13:17,960 Speaker 1: going on across the globe. It's actually coming to the 241 00:13:18,040 --> 00:13:21,360 Speaker 1: U S as well. What's going on so in Europe 242 00:13:21,360 --> 00:13:23,840 Speaker 1: and in parts of Asia, we've really seen the number 243 00:13:24,040 --> 00:13:28,240 Speaker 1: of online food delivery platforms reduced. Has been a series 244 00:13:28,240 --> 00:13:31,040 Speaker 1: of mergers and in the UK we've basically got three now. 245 00:13:31,160 --> 00:13:33,760 Speaker 1: In South Korea they have two and likely to go 246 00:13:33,840 --> 00:13:37,640 Speaker 1: down essentially to one, and Germany already has just one. 247 00:13:37,679 --> 00:13:40,280 Speaker 1: Now in the US, you've got four. You've got um, 248 00:13:40,360 --> 00:13:44,360 Speaker 1: grub Hub, door Dash, Postmates, and uber eats, and frankly, 249 00:13:44,400 --> 00:13:46,880 Speaker 1: there is a lot of competition, which is making life 250 00:13:46,880 --> 00:13:50,360 Speaker 1: hard because they are all trying to out discount each other. 251 00:13:50,559 --> 00:13:54,240 Speaker 1: Now yesterday or day for yesterday, we had the Wall 252 00:13:54,280 --> 00:14:01,400 Speaker 1: Street Journal reporting that grub hub was evaluating it's um 253 00:14:01,760 --> 00:14:06,560 Speaker 1: uh strategic options, including a possible sale, and you know 254 00:14:06,640 --> 00:14:09,520 Speaker 1: that would really herald a big move that we've not 255 00:14:09,600 --> 00:14:11,480 Speaker 1: yet seen. In the States. We've seen a couple of 256 00:14:11,520 --> 00:14:15,000 Speaker 1: smaller acquisitions where you know, players with one to three 257 00:14:15,000 --> 00:14:17,040 Speaker 1: four percent market share have been gold up by one 258 00:14:17,080 --> 00:14:19,880 Speaker 1: of the bigger guys, But the bigger guys themselves have largely, 259 00:14:20,320 --> 00:14:23,320 Speaker 1: for the past to three years um stayed in the 260 00:14:23,360 --> 00:14:26,760 Speaker 1: situation they're in. I'm gonna ask a really crazy question, Alex. 261 00:14:26,800 --> 00:14:28,200 Speaker 1: I know this is going to be it's going to 262 00:14:28,240 --> 00:14:32,960 Speaker 1: be a little mind blowing. Can this business make money? Personally, 263 00:14:33,040 --> 00:14:35,800 Speaker 1: I think it's very hard to see how, at least 264 00:14:35,880 --> 00:14:39,240 Speaker 1: in the recent iterations of online food delivery. There are 265 00:14:39,240 --> 00:14:42,640 Speaker 1: two business models here. The first one is that you 266 00:14:42,720 --> 00:14:46,280 Speaker 1: are literally a platform in the truest sense. You you 267 00:14:46,360 --> 00:14:49,880 Speaker 1: are a website or an app which connects the person 268 00:14:49,920 --> 00:14:52,520 Speaker 1: trying the dinner with the restaurant. Now the restaurant then 269 00:14:52,560 --> 00:14:55,960 Speaker 1: takes responsibility for delivering the food with their own careers. 270 00:14:56,120 --> 00:14:58,480 Speaker 1: The second one is what we've seen with uber Eats 271 00:14:58,480 --> 00:15:00,920 Speaker 1: in the US and door d our and in Europe 272 00:15:00,960 --> 00:15:04,560 Speaker 1: in London with companies like deliver U. Those companies own 273 00:15:04,600 --> 00:15:07,600 Speaker 1: the networks of couriers, and the first model, where it's 274 00:15:07,640 --> 00:15:11,440 Speaker 1: purely a platform, is very profitable. They grub Hub was 275 00:15:11,440 --> 00:15:14,280 Speaker 1: built around that model and has existed like that fifteen years. 276 00:15:14,720 --> 00:15:18,920 Speaker 1: It had EBITDA margins of more than twenty the like 277 00:15:19,040 --> 00:15:21,160 Speaker 1: the other guys owning their network and careers, have never 278 00:15:21,200 --> 00:15:25,280 Speaker 1: been profitable, and the path to profitability isn't immediately clear. 279 00:15:25,960 --> 00:15:27,720 Speaker 1: It certainly isn't clear they gonna get there any time 280 00:15:27,760 --> 00:15:29,800 Speaker 1: inside the next two or three years. I really, I 281 00:15:29,840 --> 00:15:32,200 Speaker 1: just want to bring you some headlines just crossing with 282 00:15:32,240 --> 00:15:35,320 Speaker 1: The US is set to impose sanctions on Iran's metal 283 00:15:35,440 --> 00:15:39,560 Speaker 1: exports as well as the nation's leaders. They are expecting 284 00:15:39,600 --> 00:15:42,680 Speaker 1: to unveil these new sanctions today. We are expecting a 285 00:15:42,720 --> 00:15:46,480 Speaker 1: press conference with Mike Papeo and Stephen Manuchin. So they 286 00:15:46,480 --> 00:15:49,840 Speaker 1: will be I expect speaking more in detail about that, 287 00:15:49,960 --> 00:15:53,080 Speaker 1: and we will bring that to you live pol when 288 00:15:53,120 --> 00:15:56,240 Speaker 1: we get it exactly. Um Alex, you mentioned kind of 289 00:15:56,240 --> 00:15:58,880 Speaker 1: the Uber model, the Uber eats models. Even you know, 290 00:15:58,920 --> 00:16:01,480 Speaker 1: among Uber investors, there's a lot of pressure to get 291 00:16:01,520 --> 00:16:04,320 Speaker 1: out of that business. So boy and and they have 292 00:16:04,440 --> 00:16:07,960 Speaker 1: such huge scale, So that suggests that that model may 293 00:16:08,000 --> 00:16:11,320 Speaker 1: never be profitable. It's certainly hard to see how the 294 00:16:11,600 --> 00:16:13,880 Speaker 1: guys in the space tend to make the argument that 295 00:16:13,960 --> 00:16:17,080 Speaker 1: what is now a food delivery business becomes every delivery 296 00:16:17,080 --> 00:16:19,080 Speaker 1: of everything. You know that you are delivering to ues 297 00:16:19,120 --> 00:16:22,920 Speaker 1: with toothpaste and groceries and clothing. You know, Postmates has 298 00:16:22,960 --> 00:16:26,080 Speaker 1: an agreement with Old Navy to deliver a fashion But 299 00:16:26,520 --> 00:16:30,280 Speaker 1: you know, volume doesn't necessarily account for profit, unless, of course, 300 00:16:30,280 --> 00:16:32,520 Speaker 1: you get to the stage where you're ordering televisions and 301 00:16:32,560 --> 00:16:34,440 Speaker 1: you're you're taking a cut of that. Then it becomes 302 00:16:34,600 --> 00:16:37,120 Speaker 1: a little bit more easy to you know, to to 303 00:16:37,240 --> 00:16:39,160 Speaker 1: justify the expense. But you know, is a guy on 304 00:16:39,200 --> 00:16:41,960 Speaker 1: a scooter going to be delivering a television probably not? Um. 305 00:16:42,960 --> 00:16:45,600 Speaker 1: The thing the kind of sticking point with grub pub 306 00:16:45,600 --> 00:16:48,360 Speaker 1: potentially being up for sale. The most ideal or the 307 00:16:48,400 --> 00:16:50,920 Speaker 1: ideal combination would be with one of Uber Eats or 308 00:16:50,960 --> 00:16:53,360 Speaker 1: door Dash. And the problem with that is that the 309 00:16:53,440 --> 00:16:56,000 Speaker 1: biggest investor in both of those companies, Ubeats and door 310 00:16:56,040 --> 00:16:57,960 Speaker 1: Dash is soft Bank, and as we've seen with soft 311 00:16:58,000 --> 00:17:00,920 Speaker 1: Bank around the world, they prefer to have their portfolio 312 00:17:00,960 --> 00:17:03,480 Speaker 1: companies combined with each other. And I can imagine a 313 00:17:03,520 --> 00:17:07,560 Speaker 1: scenario where Um, door Dash, and Uber Eats. Perhaps Uber 314 00:17:07,640 --> 00:17:09,760 Speaker 1: carves out that eats business and lumps it in with 315 00:17:09,840 --> 00:17:12,200 Speaker 1: door Dash. Then you've got three competitors in the space. 316 00:17:12,240 --> 00:17:14,000 Speaker 1: Soft Bank is only back in one of them. So 317 00:17:14,320 --> 00:17:17,000 Speaker 1: Massas on the head of that business, is very happy 318 00:17:17,440 --> 00:17:20,240 Speaker 1: and it leaves door Dash. Sorry, it leaves grub hub 319 00:17:20,320 --> 00:17:23,520 Speaker 1: with a greater competitive threat. Just to be clearer of 320 00:17:23,560 --> 00:17:25,639 Speaker 1: what the news, as grub Hub was reported by the 321 00:17:25,640 --> 00:17:28,520 Speaker 1: Wall Street Journal in New York Post on Wednesday that 322 00:17:28,560 --> 00:17:31,240 Speaker 1: it was considering a potential sale, Grohub has come out 323 00:17:31,320 --> 00:17:34,560 Speaker 1: and said unequivocally it is not running a sale process, 324 00:17:34,600 --> 00:17:39,040 Speaker 1: so denying those allegations and those reports. Still though, there 325 00:17:39,119 --> 00:17:42,919 Speaker 1: is a question about profitability, and ultimately, you know, people 326 00:17:42,960 --> 00:17:45,639 Speaker 1: talk about the Ubers of the world and they say, well, 327 00:17:45,720 --> 00:17:49,280 Speaker 1: if there's enough consolidation amongst some of these rides sharing 328 00:17:49,440 --> 00:17:52,919 Speaker 1: and these is a driving services that they will be 329 00:17:52,960 --> 00:17:55,919 Speaker 1: able to jack up prices. And that's the big question 330 00:17:56,000 --> 00:17:58,639 Speaker 1: with these delivery services, right what kind of pricing power 331 00:17:58,680 --> 00:18:01,159 Speaker 1: do they have even if they have the entire market, 332 00:18:01,200 --> 00:18:04,240 Speaker 1: because people can do the alternative, which is go out 333 00:18:04,240 --> 00:18:06,920 Speaker 1: their front door and go get their food themselves exactly. 334 00:18:06,960 --> 00:18:10,119 Speaker 1: That that that's the huge question that you know, if um, 335 00:18:10,160 --> 00:18:12,159 Speaker 1: if the answer is you only have one competitor in 336 00:18:12,200 --> 00:18:14,080 Speaker 1: a given market and buy a market I mean the 337 00:18:14,119 --> 00:18:16,920 Speaker 1: city of New York or the city of Chicago or London, um, 338 00:18:17,040 --> 00:18:19,240 Speaker 1: and you can one up the prices. Well, I think 339 00:18:19,320 --> 00:18:21,760 Speaker 1: right now, you know, one of the reasons people use 340 00:18:21,760 --> 00:18:23,280 Speaker 1: this stuff is because it's cheap. And the reason it's 341 00:18:23,320 --> 00:18:25,119 Speaker 1: cheap is because they're competing against each other and so 342 00:18:25,359 --> 00:18:28,359 Speaker 1: therefore they're subsidizing the costs. And yet to your point, 343 00:18:28,359 --> 00:18:30,680 Speaker 1: the moment that it becomes less affordable than just cooking 344 00:18:30,680 --> 00:18:32,439 Speaker 1: at home, are people going to try to do it? 345 00:18:32,640 --> 00:18:34,679 Speaker 1: As we've sort of going to continue to do it. 346 00:18:34,800 --> 00:18:38,119 Speaker 1: And you know, people are pretty fickle, um. You know, 347 00:18:38,160 --> 00:18:41,400 Speaker 1: brand loyalty in things like ride hailing or food delivery 348 00:18:41,400 --> 00:18:45,320 Speaker 1: platforms isn't great and um, the moment that a cheaper 349 00:18:45,320 --> 00:18:48,479 Speaker 1: product comes along, they switched to it. The one caveat 350 00:18:48,480 --> 00:18:50,520 Speaker 1: I would also raised to that statement today from grub 351 00:18:50,600 --> 00:18:52,679 Speaker 1: hub the report on Whens. They didn't say they were 352 00:18:52,720 --> 00:18:56,200 Speaker 1: running a sales process. It said they were evaluating strategic options. 353 00:18:56,200 --> 00:18:58,600 Speaker 1: So I don't think it completely leaves them some wiggle room. 354 00:18:58,640 --> 00:19:01,280 Speaker 1: In some ways, it kind it looks like a non 355 00:19:01,320 --> 00:19:04,960 Speaker 1: denial denial. They're denying something which wasn't quite reported. There 356 00:19:05,000 --> 00:19:07,760 Speaker 1: isn't It wasn't reported there's a sales process. It was 357 00:19:07,760 --> 00:19:10,880 Speaker 1: reported that is something they might be considering. So are 358 00:19:10,920 --> 00:19:13,359 Speaker 1: there I know you've looked at this space holistically. Are 359 00:19:13,359 --> 00:19:16,680 Speaker 1: there any markets out there, any countries or any companies 360 00:19:16,720 --> 00:19:19,600 Speaker 1: that are doing kind of the platform where there actually 361 00:19:19,680 --> 00:19:22,960 Speaker 1: are delivering the food on a profitable basis. Yes, I 362 00:19:22,960 --> 00:19:25,440 Speaker 1: mean in Germany takeaway dot Com, which is in fact 363 00:19:25,480 --> 00:19:27,760 Speaker 1: a Dutch company. Um, take away dot Com essentially has 364 00:19:27,800 --> 00:19:32,920 Speaker 1: a monopoly there. Um they had market share, which prompted 365 00:19:32,920 --> 00:19:35,240 Speaker 1: the only other player in the space delivery to leave. 366 00:19:35,840 --> 00:19:38,159 Speaker 1: They have a sort of hybrid model where maybe twenty 367 00:19:38,560 --> 00:19:42,000 Speaker 1: of their deliveries, Um are you know, service by their 368 00:19:42,000 --> 00:19:46,200 Speaker 1: own careers UM and the rest the restaurants delivered themselves 369 00:19:46,240 --> 00:19:48,879 Speaker 1: and so they are able to be very profitable. They 370 00:19:48,920 --> 00:19:53,720 Speaker 1: have literally in the past hour secured um the shareholder 371 00:19:53,760 --> 00:19:57,159 Speaker 1: approval to buy Just Eat in the UK, which has 372 00:19:57,200 --> 00:20:01,040 Speaker 1: a similar business model for a figure about x billion pounds. 373 00:20:01,359 --> 00:20:02,840 Speaker 1: In the UK, it's a bit different because of course 374 00:20:02,840 --> 00:20:06,679 Speaker 1: there's also competition from um Uber Eats and Delivery. But 375 00:20:06,720 --> 00:20:09,720 Speaker 1: in Germany, you know, huge market, a lot of growth 376 00:20:09,760 --> 00:20:14,040 Speaker 1: potential still and they don't have that that competition from 377 00:20:14,200 --> 00:20:17,560 Speaker 1: the the owned courier model, so they have the ability 378 00:20:17,600 --> 00:20:20,680 Speaker 1: to jack up prices to the extent they think it's possible, 379 00:20:20,920 --> 00:20:23,640 Speaker 1: but also eke out some help some you know, generous 380 00:20:23,640 --> 00:20:26,320 Speaker 1: profit margins because they're not having to account for the 381 00:20:26,320 --> 00:20:28,639 Speaker 1: cost of the couriers. We're talking with Alex Weorb but 382 00:20:28,680 --> 00:20:32,359 Speaker 1: European technology calumnist over in London for a Bloomberg opinion. 383 00:20:32,480 --> 00:20:35,240 Speaker 1: And one of the reasons why this particular area, this 384 00:20:35,440 --> 00:20:38,760 Speaker 1: industry has been so interesting is because of heart it's 385 00:20:38,760 --> 00:20:41,600 Speaker 1: gotten in terms of the money poured into it. Door 386 00:20:41,640 --> 00:20:44,280 Speaker 1: Dash is planning an initial public offering for this year. 387 00:20:45,000 --> 00:20:47,000 Speaker 1: We shall see whether they will be able to pull 388 00:20:47,040 --> 00:20:52,040 Speaker 1: it off, especially without proven profitability or a path to profitability. Alex, 389 00:20:52,240 --> 00:20:54,000 Speaker 1: I just want to wrap this up and put it 390 00:20:54,040 --> 00:20:56,440 Speaker 1: a bow around it. You mentioned soft Bank and how 391 00:20:56,480 --> 00:20:59,360 Speaker 1: they own a bunch of these companies. How much has 392 00:20:59,440 --> 00:21:04,160 Speaker 1: soft Bank singleheadedly inflated the valuations of the entire business 393 00:21:04,200 --> 00:21:08,800 Speaker 1: model here of delivering food I mean significantly. So the 394 00:21:08,880 --> 00:21:13,919 Speaker 1: grubhub was the dominant player back in seventeen, had more 395 00:21:13,960 --> 00:21:18,280 Speaker 1: than market share um soft Bank started pouring money into 396 00:21:18,359 --> 00:21:21,200 Speaker 1: door Dash, and then Uber, which was soft Bank backed, 397 00:21:21,560 --> 00:21:25,800 Speaker 1: started expanding um It's Uber Eats offering, and needless to say, 398 00:21:25,960 --> 00:21:28,080 Speaker 1: now we see door dash is the biggest player in 399 00:21:28,080 --> 00:21:30,200 Speaker 1: the US with something like thirty seven per cent market 400 00:21:30,240 --> 00:21:33,600 Speaker 1: share compared to grub hubs, and that is all down 401 00:21:33,640 --> 00:21:36,240 Speaker 1: to the fact that um it is burning through cash 402 00:21:36,280 --> 00:21:39,639 Speaker 1: to provide food and affordable rate to end customers. The 403 00:21:39,720 --> 00:21:42,520 Speaker 1: best estimates from last year, I think the Information reported 404 00:21:42,600 --> 00:21:45,560 Speaker 1: that door dash was set to make a four hundred 405 00:21:45,560 --> 00:21:49,399 Speaker 1: and fifty million dollar loss on revenue of only about 406 00:21:49,440 --> 00:21:52,000 Speaker 1: a billion dollars. So you know, if it didn't have 407 00:21:52,720 --> 00:21:54,920 Speaker 1: cash from not just soft Bank in their case, there's 408 00:21:55,040 --> 00:21:57,959 Speaker 1: Sequoia capital in there as well, but certainly from venture 409 00:21:58,680 --> 00:22:01,199 Speaker 1: if they didn't have venture funds in there, then they 410 00:22:01,200 --> 00:22:04,359 Speaker 1: would not be gobbling up that market share and and reforming, 411 00:22:04,440 --> 00:22:07,360 Speaker 1: reshaping the landscape, gobbling up the market share. If you will, 412 00:22:07,400 --> 00:22:10,560 Speaker 1: Alex Webs, nicely done there. You're a Vian technology columnist 413 00:22:10,840 --> 00:22:13,200 Speaker 1: or Bloomberg opinion joining us from London. Thank you so much. 414 00:22:13,320 --> 00:22:15,480 Speaker 1: You can find all his columns and all Bloomberg opinion 415 00:22:15,480 --> 00:22:18,359 Speaker 1: columns at opi and go on the Bloomberg Bloomberg dot 416 00:22:18,440 --> 00:22:31,520 Speaker 1: com slash opinion. Well, there was another M and a 417 00:22:31,680 --> 00:22:36,280 Speaker 1: deal in the healthcare space today, Eli Lily buying dere Myra, 418 00:22:36,480 --> 00:22:38,879 Speaker 1: a maker of treatments for skin conditions, for one point 419 00:22:38,920 --> 00:22:42,679 Speaker 1: one billion dollars. Shares of Demira up five point eight percent. 420 00:22:42,800 --> 00:22:45,879 Speaker 1: Today stock is up one and sixty percent over the 421 00:22:45,920 --> 00:22:48,520 Speaker 1: trailing twelve months. Help us walk through the deal. We 422 00:22:48,520 --> 00:22:52,160 Speaker 1: welcome Patrick Johnson, Senior vice president and president of Lily 423 00:22:52,320 --> 00:22:55,560 Speaker 1: Bio Medicines UH. It's based in Indianapolis. Patrick, thanks so 424 00:22:55,640 --> 00:22:59,560 Speaker 1: much for joining us. A pretty interesting deal for Lily. 425 00:22:59,600 --> 00:23:02,840 Speaker 1: Tell us a out why you're buying Derra. Well, thank 426 00:23:02,880 --> 00:23:05,320 Speaker 1: you very much, and good morning. Yes, this is truly 427 00:23:05,320 --> 00:23:09,520 Speaker 1: an interesting day for both Lily Darbyra and for patients 428 00:23:09,520 --> 00:23:13,240 Speaker 1: suffering from a topic demmatitis. First and foremost, we believe 429 00:23:13,440 --> 00:23:16,560 Speaker 1: this is a very good fit with the commitment that 430 00:23:16,640 --> 00:23:20,679 Speaker 1: we have to immunology and particularly dermatology. As you know, 431 00:23:20,880 --> 00:23:24,840 Speaker 1: Armira is a biopharmaceusical company that is dedicated to a 432 00:23:25,320 --> 00:23:29,840 Speaker 1: chronic finely medicine to chronic skin conditions, and based upon 433 00:23:29,880 --> 00:23:32,960 Speaker 1: the Phase two data oblibric Ki is a mob We 434 00:23:33,119 --> 00:23:36,679 Speaker 1: really believe that this is potentially a best in class 435 00:23:36,760 --> 00:23:40,600 Speaker 1: medicine for treatment of a topic demmatitis. I have to 436 00:23:40,640 --> 00:23:45,480 Speaker 1: wonder how much this also emphasizes the role of aesthetic 437 00:23:46,359 --> 00:23:48,960 Speaker 1: treatments and sort of how popular they have been and 438 00:23:48,960 --> 00:23:51,320 Speaker 1: how much of the drivers they have been in profitability 439 00:23:51,400 --> 00:23:55,040 Speaker 1: for the pharmaceutical industry while other sort of drugs have 440 00:23:55,119 --> 00:23:57,520 Speaker 1: moved towards generics and sort of requirements have been more 441 00:23:57,560 --> 00:24:01,880 Speaker 1: regulated and less profitable. How much is that plan well, 442 00:24:01,920 --> 00:24:05,080 Speaker 1: I think, first and most importantly, this is an area 443 00:24:05,080 --> 00:24:08,600 Speaker 1: of huge unmet medical needs. Still, if we look upon 444 00:24:08,600 --> 00:24:12,600 Speaker 1: the field of atomic a topic dematitis, it's currently estimated 445 00:24:12,640 --> 00:24:16,840 Speaker 1: that eighteen million Americans are suffering from a topic dematitis. 446 00:24:17,160 --> 00:24:21,159 Speaker 1: Out of those, ten million or suffering from moderate to 447 00:24:21,240 --> 00:24:24,480 Speaker 1: severe a topic to amatitis, and many people say that 448 00:24:24,760 --> 00:24:29,000 Speaker 1: this field where has been not any significant development, and 449 00:24:29,080 --> 00:24:32,600 Speaker 1: we are today with a topic dematities where we were 450 00:24:32,640 --> 00:24:35,359 Speaker 1: in the field of soiasis fifteen years ago. So I 451 00:24:35,359 --> 00:24:38,520 Speaker 1: think my response would be we, as an research and 452 00:24:38,520 --> 00:24:42,120 Speaker 1: development based company with oven one hundred fifty years of independence, 453 00:24:42,359 --> 00:24:44,880 Speaker 1: whenever we do what's right for people, who will also 454 00:24:44,960 --> 00:24:48,600 Speaker 1: do right for business. So Patrick, I know that Sonopi 455 00:24:48,760 --> 00:24:51,680 Speaker 1: also has a product in the market to pix and 456 00:24:51,800 --> 00:24:53,280 Speaker 1: I think is the name of that. Is this a 457 00:24:53,320 --> 00:24:56,919 Speaker 1: head on competitor to that, Well, we are really really 458 00:24:59,600 --> 00:25:02,480 Speaker 1: excited it with the Phase two data from from libritism 459 00:25:02,760 --> 00:25:05,840 Speaker 1: and what we saw was a very good fication on skin, 460 00:25:06,240 --> 00:25:09,560 Speaker 1: but not only a fication on skin. Most importantly, we 461 00:25:09,600 --> 00:25:15,000 Speaker 1: saw an opportunity to differentiate positively also on itching. And 462 00:25:15,160 --> 00:25:17,600 Speaker 1: itching is for those who are suffering from a topic 463 00:25:17,640 --> 00:25:22,400 Speaker 1: talimatitis very above some symptoms. It has a significant impact 464 00:25:22,440 --> 00:25:25,199 Speaker 1: on sleep and a significant impact on quality of life. 465 00:25:25,640 --> 00:25:28,040 Speaker 1: So therefore we we believe that we might have a 466 00:25:28,080 --> 00:25:30,280 Speaker 1: medicine here that can bring a lot of hope to 467 00:25:30,359 --> 00:25:33,920 Speaker 1: those that are not fully fully getting the needs met 468 00:25:33,960 --> 00:25:37,199 Speaker 1: with the current available treatments. But Overall, I think in 469 00:25:37,240 --> 00:25:40,919 Speaker 1: this very important field, it's important to have many different 470 00:25:40,960 --> 00:25:44,159 Speaker 1: medicines available and for the healthcare providers and for the 471 00:25:44,240 --> 00:25:48,760 Speaker 1: patients to have several opportunities. Patrick, to your point about 472 00:25:48,760 --> 00:25:53,199 Speaker 1: several medications available. Certainly for the patients it's helpful to 473 00:25:53,200 --> 00:25:56,040 Speaker 1: figure out what works best for them. For the pharmaceutical 474 00:25:56,080 --> 00:25:59,040 Speaker 1: companies themselves, it's helpful to rely on a number of 475 00:25:59,080 --> 00:26:03,199 Speaker 1: different drugs in order to diversify income streams. Are you 476 00:26:03,440 --> 00:26:07,600 Speaker 1: hoping to develop more more drugs through R and D? 477 00:26:07,840 --> 00:26:10,320 Speaker 1: Are you looking toward more acquisitions? What's the game plan 478 00:26:10,400 --> 00:26:13,280 Speaker 1: going forward? Well, we have made it very clear that 479 00:26:13,359 --> 00:26:17,520 Speaker 1: we we believe in in organic development and research and 480 00:26:17,560 --> 00:26:21,320 Speaker 1: development based over of our own laboratories, but we will 481 00:26:21,359 --> 00:26:25,479 Speaker 1: also augment those efforts whenever we see any opportunities in 482 00:26:25,480 --> 00:26:28,760 Speaker 1: those cortices areas where we have made a commitment. And 483 00:26:28,960 --> 00:26:32,119 Speaker 1: Armida was such a perfect fit because they share the 484 00:26:32,160 --> 00:26:36,560 Speaker 1: commitment to immunology and particularly chronic skin conditions as we do. 485 00:26:36,760 --> 00:26:39,920 Speaker 1: So we will always look for opportunities to augment our 486 00:26:40,080 --> 00:26:44,680 Speaker 1: internal OR and D efforts with external business development. Patrick, 487 00:26:44,720 --> 00:26:48,119 Speaker 1: I see the Starck price above your offer price of 488 00:26:48,160 --> 00:26:50,960 Speaker 1: eighteen seventy five starts trading in nineteen forty cents, do 489 00:26:50,960 --> 00:26:54,919 Speaker 1: you expect a counterbid? We strongly, strongly believe that we 490 00:26:54,960 --> 00:26:58,000 Speaker 1: have been providing both a full and a fair value 491 00:26:58,119 --> 00:27:01,000 Speaker 1: of dar Mira, and we have thoroughly assessed this, and 492 00:27:01,040 --> 00:27:02,960 Speaker 1: I think it's important to go back and also look 493 00:27:02,960 --> 00:27:06,760 Speaker 1: at the sixty days volume weighted average stock price, and 494 00:27:06,960 --> 00:27:09,000 Speaker 1: you can see that very is a premium of close 495 00:27:09,080 --> 00:27:12,200 Speaker 1: to use of that price. So again, we really believe 496 00:27:12,200 --> 00:27:14,760 Speaker 1: that this represents the full and the value of the ARMERA. 497 00:27:15,280 --> 00:27:18,000 Speaker 1: Just looking forward to a lot of people talk about 498 00:27:18,040 --> 00:27:21,960 Speaker 1: biopharmaceutical industry as being very much in focus as we 499 00:27:22,040 --> 00:27:25,520 Speaker 1: head into the elections. How are you sort of prepared 500 00:27:25,560 --> 00:27:27,440 Speaker 1: to handle that? What kinds of questions have you gotten 501 00:27:27,440 --> 00:27:30,880 Speaker 1: from investors? But I think we have made it very 502 00:27:30,880 --> 00:27:34,480 Speaker 1: clear that we are focusing on on unmet medical needs, 503 00:27:34,560 --> 00:27:38,000 Speaker 1: and we made the commitment to bring twenty new innovative 504 00:27:38,040 --> 00:27:41,760 Speaker 1: medicines to two people across the globe starting in fourteen. 505 00:27:41,960 --> 00:27:44,560 Speaker 1: We are more than halfway through, and I think as 506 00:27:44,560 --> 00:27:47,080 Speaker 1: long as we're making that bet on innovation in areas 507 00:27:47,200 --> 00:27:50,639 Speaker 1: un met medical needs, the investors have been reacting very positively. 508 00:27:50,840 --> 00:27:53,520 Speaker 1: But most importantly it brings a lot of hope and 509 00:27:53,600 --> 00:27:56,040 Speaker 1: value to the patients we serve. Hey, Patrick, thanks so 510 00:27:56,119 --> 00:27:57,600 Speaker 1: much for joining us. I know it's a busy day 511 00:27:57,720 --> 00:28:00,879 Speaker 1: for you, given your acquisition today del Meira for one 512 00:28:00,920 --> 00:28:03,720 Speaker 1: point one billion dollars. Patrick Johnson, senior vice president and 513 00:28:03,720 --> 00:28:07,640 Speaker 1: the president of Lily Biomedicines for the Elily Company based 514 00:28:07,640 --> 00:28:10,359 Speaker 1: in Indianapolis. Thanks for listening to the Bloomberg P and 515 00:28:10,480 --> 00:28:13,000 Speaker 1: L podcast. You can subscribe and listen to interviews at 516 00:28:13,040 --> 00:28:16,679 Speaker 1: Apple Podcasts or whatever podcast platform you prefer. M Paul Sweeney, 517 00:28:16,760 --> 00:28:19,520 Speaker 1: I'm on Twitter at PT Sweeney. I'm Lisa abram Woit's 518 00:28:19,520 --> 00:28:22,000 Speaker 1: I'm on Twitter at Lisa A. Bram Woits one before 519 00:28:22,000 --> 00:28:25,200 Speaker 1: the podcast. You can always catch us worldwide on'm Bloomberg Radio.