WEBVTT - BI Weekend: Warner Discovery Splits, Walmart Credit Cards 0:00:02.759 --> 0:00:11.040 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Intelligence 0:00:11.160 --> 0:00:13.240 with Alex Steel and Paul Sweeney. 0:00:13.360 --> 0:00:16.560 The real our performance has been in US corporate high yield. 0:00:16.760 --> 0:00:19.120 Are the companies lean enough? Have they trimmed all the fats? 0:00:19.160 --> 0:00:22.320 The semiconductor business is a really cyclical. 0:00:21.920 --> 0:00:26.080 Business, breaking market headlines and corporate news from across the globe. 0:00:26.160 --> 0:00:28.640 Do investors like the M and A that we've seen? 0:00:28.840 --> 0:00:32.280 These are two big time blue chip companies. 0:00:32.040 --> 0:00:35.440 Window between the peak and cunt changing super fast. 0:00:35.680 --> 0:00:40.720 Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio. 0:00:42.159 --> 0:00:44.479 On Today's Bloomberg Intelligence Show, we dig inside the big 0:00:44.479 --> 0:00:46.839 business stories impacting Wall Street and the global markets. 0:00:46.960 --> 0:00:49.280 Each and every week we provide in depth research and 0:00:49.360 --> 0:00:51.239 data on some of the two thousand companies in one 0:00:51.280 --> 0:00:54.240 hundred and thirty industries our analysts cover worldwide. 0:00:54.320 --> 0:00:56.960 Today, we'll take a look at Moderna's new COVID shut 0:00:57.000 --> 0:00:57.840 and vaccine trial. 0:00:58.240 --> 0:01:00.360 Plus we'll take a look at how one university system 0:01:00.400 --> 0:01:02.920 is benefiting from AI, crypto and power. 0:01:03.120 --> 0:01:05.319 But first we moved to some news in the media space. 0:01:05.400 --> 0:01:07.639 This week, we heard that Warner Brothers Discovery is splitting 0:01:07.640 --> 0:01:11.039 into two independent companies, Global Networks and Streaming and Studios. 0:01:11.200 --> 0:01:14.640 Global Networks will include entertainment, sports, and cable television brands 0:01:14.640 --> 0:01:18.039 such as CNN, TNT, and TBS, and will hold a 0:01:18.080 --> 0:01:20.280 twenty percent stake in Streaming and Studios. 0:01:20.319 --> 0:01:23.160 Its separations expected to be completed by mid twenty twenty six, 0:01:23.200 --> 0:01:26.080 allowing each company to pursue deals and investment opportunities on 0:01:26.120 --> 0:01:26.559 their own. 0:01:26.920 --> 0:01:28.880 For more on this and the latest media news, we 0:01:28.880 --> 0:01:31.800 were joined by Githa Rang and Athan Bloomberg Intelligence, senior 0:01:31.840 --> 0:01:32.560 media analysts. 0:01:32.840 --> 0:01:35.560 We first asked Etha if she likes Warner's plan and 0:01:35.640 --> 0:01:37.560 if it's at all surprising and exciting. 0:01:38.080 --> 0:01:40.760 We like the plant. This has been many months in 0:01:40.800 --> 0:01:44.280 the making, so last December they had actually reorganized the 0:01:44.319 --> 0:01:47.360 existing business into these two separate units, the TV business 0:01:47.360 --> 0:01:49.840 and then the streaming of the studio business, kind of 0:01:49.880 --> 0:01:52.840 eventually paving the way for exactly the announcement. 0:01:53.480 --> 0:01:53.960 I think the. 0:01:53.920 --> 0:01:55.720 Surprising part and this is a little bit of a 0:01:55.880 --> 0:02:00.120 pleasant surprise for Warner Brothers. Discovery has really been on 0:02:00.160 --> 0:02:02.760 the debt side, so as you well know well the 0:02:02.840 --> 0:02:06.160 linear TV business is challenged, but the bigger problem for 0:02:06.440 --> 0:02:09.920 WBD has really been a huge amount of debt. And 0:02:10.000 --> 0:02:12.960 this debt was really as part of the combination of 0:02:13.000 --> 0:02:15.560 Warner Brothers and Discovery, which happened a few years ago. 0:02:15.880 --> 0:02:18.720 At that point, the company had over fifty five billion 0:02:18.800 --> 0:02:22.080 dollars in debt. They've paid about nineteen billion down, but 0:02:22.080 --> 0:02:24.560 they still have thirty five billion. But what they're doing 0:02:24.600 --> 0:02:26.600 now as part of this transaction is they have a 0:02:26.639 --> 0:02:29.639 tender offer out there, really kind of looking to streamline 0:02:29.639 --> 0:02:32.000 the capital structure. So when you have these two new 0:02:32.000 --> 0:02:34.960 public companies, there's going to be a much more manageable 0:02:35.000 --> 0:02:37.320 debt load at both of those companies. And I think 0:02:37.360 --> 0:02:40.640 investors are really reacting positively to that news. 0:02:40.960 --> 0:02:41.200 Keetha. 0:02:41.280 --> 0:02:43.359 When they put the companies together, one of the arguments 0:02:43.440 --> 0:02:47.440 was to create scale to compete against Netflix and Disney. 0:02:47.800 --> 0:02:48.520 What happened to that. 0:02:48.560 --> 0:02:54.360 Argument, Yeah, exactly, Paul. You know, yes, they did create 0:02:54.400 --> 0:02:57.080 scale as far as the TV networks part of the 0:02:57.120 --> 0:03:00.560 business was concerned. You know, you have Discuss, which is 0:03:00.600 --> 0:03:02.880 really the leader when it comes to nonfiction. You have 0:03:03.080 --> 0:03:05.799 you know, the Warner Networks and HBO, which is the 0:03:05.880 --> 0:03:08.840 leader when it comes to fiction and quality dramas and 0:03:08.840 --> 0:03:12.080 scripted series. And they thought that that would do well, 0:03:12.120 --> 0:03:15.799 but unfortunately what happened is, you know, and all media companies, 0:03:15.840 --> 0:03:18.000 as you will know Paul, have this conundrum because they 0:03:18.000 --> 0:03:20.040 have the TV business, which brings in a lot of 0:03:20.040 --> 0:03:23.480 the cash, but is literally a no growth business. In fact, 0:03:23.520 --> 0:03:26.160 it does in decline. Both advertising as well as affiliate 0:03:26.160 --> 0:03:29.120 fees are in decline. But then you had the streaming business, 0:03:29.120 --> 0:03:31.480 which initially kind of had a little bit of trouble 0:03:32.200 --> 0:03:35.920 because you know, in that whole game of subscribers and 0:03:35.960 --> 0:03:39.440 that land gradt for subscribers, they actually ended up incurring 0:03:39.440 --> 0:03:42.320 a huge amount of losses. But there is this whole 0:03:42.360 --> 0:03:46.000 wave of content cost rationalization. We've seen a turnaround and 0:03:46.040 --> 0:03:48.640 all of the streaming businesses and Warner Brothers Discovery actually 0:03:48.640 --> 0:03:50.920 has kind of led the charge there. So they were 0:03:50.960 --> 0:03:54.000 actually the first to get profitable in terms of streaming. 0:03:54.200 --> 0:03:56.960 And so now we're seeing this huge disconnect, or at 0:03:57.080 --> 0:03:59.320 least they are saying that there is this huge disconnect 0:03:59.320 --> 0:04:02.960 between TV network's business and the streaming of the studios businesses, 0:04:02.960 --> 0:04:06.600 which should arguably get a much higher multiple, and that's 0:04:06.640 --> 0:04:08.680 kind of the reason for this split. So we've we're 0:04:08.680 --> 0:04:11.280 seeing how multiple companies do this. Actually, so Comcast, which 0:04:11.280 --> 0:04:13.760 has the NBC division, they're splitting out their cable networks. 0:04:13.960 --> 0:04:16.320 We had Lions Skate and Stars, where you have Lions 0:04:16.320 --> 0:04:19.440 Skate as an independent movie studio, Stars as the media networks, 0:04:19.480 --> 0:04:21.480 and now you have Warner Brothers Discovery. So there's this 0:04:21.600 --> 0:04:25.280 whole big movement now towards you know, this vertical kind 0:04:25.279 --> 0:04:27.719 of separation if you will, I mean, do. 0:04:27.760 --> 0:04:30.280 They all come together then and create kind of one 0:04:30.560 --> 0:04:33.479 less great TV network thing? 0:04:34.720 --> 0:04:38.800 Yeah, that's kind of the plan. So the most logical combination, 0:04:39.080 --> 0:04:41.560 and this has been floated around for for months now, 0:04:41.680 --> 0:04:44.680 is that with this news of the Comcast, you know, 0:04:44.720 --> 0:04:47.599 the NBC cable network separation, who would have would that 0:04:47.680 --> 0:04:50.640 become like this kind of roll up vehicle. And that's 0:04:50.720 --> 0:04:53.120 kind of what you know, a lot of the industry 0:04:53.160 --> 0:04:55.320 experts are thinking, they're expecting now that you have this 0:04:55.440 --> 0:04:59.000 news with Warner Brothers Discovery, everybody's kind of expecting down 0:04:59.040 --> 0:05:02.240 the road some common nation of maybe that Warner Brothers 0:05:02.240 --> 0:05:05.640 Discovery TV assets along with the Comcast assets and who 0:05:05.680 --> 0:05:08.919 knows who else kind of spins off their networks and 0:05:08.920 --> 0:05:12.040 then that becomes this giant kind of TV network umbrella. 0:05:12.120 --> 0:05:15.200 Going back to Paul's point about scale, because scale really 0:05:15.240 --> 0:05:16.599 matters now at this business. 0:05:17.080 --> 0:05:21.359 All right, how about Paramount you other sick child in 0:05:21.400 --> 0:05:22.920 your coverage, what's going on there? 0:05:24.200 --> 0:05:26.720 Yeah, So we really don't know what's going on there. 0:05:26.760 --> 0:05:28.800 So there's been a lot of ups and downs, Paul, 0:05:28.920 --> 0:05:31.520 with the whole closing of the deal. So the Paramount 0:05:31.560 --> 0:05:36.320 sky Dance transaction, it was announced last year sometime in July. 0:05:36.960 --> 0:05:39.520 It was supposed to close by the first half, by 0:05:39.560 --> 0:05:41.600 the end of the first half of twenty twenty five, 0:05:42.000 --> 0:05:44.880 but there's just been so many different press reports. They've 0:05:44.920 --> 0:05:47.760 had to do different things to appease the current administration 0:05:47.960 --> 0:05:51.159 to a peace President Trump, I'm not sure he is 0:05:51.240 --> 0:05:53.800 yielding so easily. So we're actually it's still kind of 0:05:53.839 --> 0:05:59.040 fifty to fifty Paul, whether that transaction actually, yeah, actually closes. 0:05:59.080 --> 0:06:01.039 So there's just too many up in the air. And 0:06:01.040 --> 0:06:03.200 then again there is the lingering question because we know 0:06:03.240 --> 0:06:07.800 that Skydance was really only interested in the Paramount's studio business. 0:06:07.800 --> 0:06:10.039 So again what they kind of do with the TV 0:06:10.160 --> 0:06:12.880 networks business, what they do with the streaming business, that's 0:06:12.920 --> 0:06:16.880 all a huge question mark. So visibility very very limited 0:06:16.960 --> 0:06:18.040 right now for Paramount. 0:06:18.520 --> 0:06:20.960 I guess I just wonder if you stick all the 0:06:21.000 --> 0:06:25.359 cable networks together, how does that actually generate real income? 0:06:25.440 --> 0:06:27.400 I mean, I know that's a cash cow to some extent, right, 0:06:27.400 --> 0:06:28.680 but then you have a lot of debt and there's 0:06:28.720 --> 0:06:29.320 no growth. 0:06:29.440 --> 0:06:31.280 Like, what kind of asset is that? 0:06:32.839 --> 0:06:35.559 Yeah, it's definitely a melting ice cube kind of an asset, 0:06:35.560 --> 0:06:38.200 which is exactly what you know, the TV networks have been. 0:06:38.360 --> 0:06:41.320 The argument that all of these media companies are making 0:06:41.360 --> 0:06:45.680 alex is that somehow by kind of banding together, you know, 0:06:45.720 --> 0:06:47.680 because each one of them will have one or two 0:06:47.760 --> 0:06:49.720 networks that is kind of a must have networks. If 0:06:49.720 --> 0:06:53.160 you're looking at Warner, you have CNN, you know. If 0:06:53.200 --> 0:06:56.480 you're looking at again, if you're looking at the NBC networks, 0:06:56.520 --> 0:06:59.159 you have USA, you have MSNBC. So you know, there 0:06:59.200 --> 0:07:01.560 are definitely all going to be some must have networks 0:07:01.600 --> 0:07:04.920 in each portfolio, and kind of putting them all together 0:07:05.080 --> 0:07:07.400 will stem that rate of decliner. At least that is 0:07:07.440 --> 0:07:10.160 the argument that they're making. But again we've seen that 0:07:10.280 --> 0:07:14.280 court cutting has actually been far worse than what was 0:07:14.320 --> 0:07:17.800 initially projected, so again it remains to be seen. But 0:07:17.880 --> 0:07:19.760 the idea is they want to milk it till it 0:07:19.840 --> 0:07:20.680 kind of runs dry. 0:07:21.080 --> 0:07:24.200 Our thanks to get it Wrong Andathen Bloomberg Intelligence Senior media. 0:07:23.960 --> 0:07:27.680 Analyst, we moved to some news at the world's largest retailer, Walmart. 0:07:27.960 --> 0:07:30.560 This week we heard that Walmart's credit cards will once 0:07:30.560 --> 0:07:33.960 again be issued by the consumer financing company Synchrony Financial. 0:07:34.200 --> 0:07:37.400 Synchrony previously issued Walmart credit cards for nearly two decades 0:07:37.480 --> 0:07:38.400 until twenty eighteen. 0:07:38.680 --> 0:07:41.080 Walmart will now use its fintech startup One Paid a 0:07:41.120 --> 0:07:43.559 partner with Synchrony, and they'll offer co branded and private 0:07:43.600 --> 0:07:45.360 label cards in the US later this year. 0:07:45.640 --> 0:07:48.280 This comes as Walmart makes a renewed push into financial 0:07:48.280 --> 0:07:50.760 services and for more. We were joined by Ben Elliott, 0:07:50.760 --> 0:07:53.120 Bloomberg Intelligence consumer finance analyst. 0:07:53.240 --> 0:07:55.840 We first asked Ben for some background on Synchrony, which 0:07:55.960 --> 0:07:58.800 initially lost a partnership with Walmart to Capital One. 0:07:59.160 --> 0:08:01.800 Yes, so they had it for twenty years right up 0:08:01.880 --> 0:08:06.600 until twenty eighteen when the renewal sort of negotiations between 0:08:06.600 --> 0:08:10.120 the two companies got contentious. Walmart was demanding too much 0:08:10.200 --> 0:08:12.800 for Synchrony, and so Synchrony sort of sort of backed down. 0:08:12.800 --> 0:08:14.560 And at the time it was a really big deal, 0:08:15.400 --> 0:08:17.440 and so this is an equally large deal that they're 0:08:17.480 --> 0:08:18.000 coming back. 0:08:19.000 --> 0:08:19.800 Why did it go away? 0:08:20.520 --> 0:08:23.800 So the way Synchrony works is they have these large partners, 0:08:23.880 --> 0:08:26.119 right the top five partners are more than fifty percent 0:08:26.120 --> 0:08:29.040 of their net interest in fees. And what they do 0:08:29.080 --> 0:08:31.640 is they share the economics with the partner programs and 0:08:31.720 --> 0:08:35.120 something called a retailer share arrangement. So every couple of 0:08:35.240 --> 0:08:37.800 years the partnerships are up for renewal. And Walmart is 0:08:37.800 --> 0:08:40.520 a gigantic corporation. They have huge leverage and they were 0:08:40.520 --> 0:08:43.640 demanding essentially more of the economics than Synchrony could provide 0:08:43.679 --> 0:08:44.719 and still be profitable. 0:08:45.480 --> 0:08:49.040 Ben talk to us about these kind of branded credit 0:08:49.040 --> 0:08:50.960 cards if you will. I mean, my daughter is a 0:08:51.120 --> 0:08:54.840 master at managing points and managing points and doing all 0:08:54.880 --> 0:08:57.320 that kind of full time job it is, but it 0:08:57.320 --> 0:08:59.439 pays off every time she's traveling somewhere it's oh, it's 0:08:59.440 --> 0:09:03.200 on points points. Talk to us about that. The business 0:09:03.640 --> 0:09:05.800 of those kinds of cards and kind of the economics. 0:09:06.840 --> 0:09:09.360 Yeah, So Syncrety is not so much in that business. 0:09:09.800 --> 0:09:12.920 They're in the business of providing a credit option, usually 0:09:13.000 --> 0:09:17.120 to sort of a lower credit worthiness, lower income borrower 0:09:18.320 --> 0:09:21.240 that is really focused on a single retail partner. So 0:09:21.240 --> 0:09:23.600 this partnership is going to be there's gonna be two cards. 0:09:23.640 --> 0:09:25.520 One's a general purpose card that kind of does what 0:09:25.520 --> 0:09:28.840 you're talking about, but the rewards sort of value proposition 0:09:28.880 --> 0:09:30.959 will typically be a little bit lower. The card will 0:09:31.000 --> 0:09:33.560 be more accessible, and then the other card will be 0:09:33.679 --> 0:09:36.480 just used at Walmart. And details are still pretty light 0:09:36.520 --> 0:09:39.280 on what the reward structure might look like. But the 0:09:39.320 --> 0:09:43.200 goal is to drive through put at Walmart and not 0:09:43.240 --> 0:09:45.120 necessarily at sort of other retailers. 0:09:45.679 --> 0:09:48.360 So they also have cards with like JC penny Low's 0:09:48.440 --> 0:09:51.640 Amazon PayPal for example. And you mentioned sort of a 0:09:51.679 --> 0:09:55.080 different type of band of consumer. How is that band 0:09:55.120 --> 0:09:56.120 of consumer doing. 0:09:57.480 --> 0:10:00.959 So Synchrony likes to say that they're managing, they're not thriving, 0:10:01.000 --> 0:10:04.560 and they're not struggling. You know, this is a it's 0:10:04.800 --> 0:10:06.760 sort of like a subset of wallet share, all right. 0:10:06.760 --> 0:10:10.120 So the Syncrety is just seeing how these consumers are 0:10:10.120 --> 0:10:13.040 behaving at a single retailer for the most part. But 0:10:13.080 --> 0:10:14.880 there's not a lot of stress. But if you look 0:10:14.960 --> 0:10:18.400 back at twenty eighteen when they first decided not to 0:10:18.440 --> 0:10:21.560 renew the Walmart partnership, it's kind of overnight their charge 0:10:21.600 --> 0:10:25.640 offs went down like sixty seventy basis points, so presumably 0:10:26.240 --> 0:10:30.040 this particular customer set is charging off a little bit higher, 0:10:30.040 --> 0:10:33.360 like maybe one percentage point higher than your typical borrower. 0:10:33.440 --> 0:10:35.840 So there's going to be it's an interesting time for 0:10:35.920 --> 0:10:37.800 Syncrony to go out and look for these sort of 0:10:37.840 --> 0:10:40.880 more marginal buyers basically to get growth. 0:10:41.760 --> 0:10:44.680 Ben your coverage of consumer finance companies, you get a 0:10:44.679 --> 0:10:46.760 good view those companies, get a good view of how 0:10:46.800 --> 0:10:50.320 the consumer is doing, how they're spending their money. What 0:10:50.360 --> 0:10:52.079 are you hearing from these companies these days? 0:10:52.960 --> 0:10:55.360 So if you look across spending categories, everything is still 0:10:55.440 --> 0:11:00.320 typically growing a couple percentage points above GDP. There's one 0:11:00.360 --> 0:11:03.920 obvious standout, which is travel, which is basically people cutting 0:11:03.920 --> 0:11:06.720 back on their most incremental spend. But if you kind 0:11:06.720 --> 0:11:08.760 of think about travel, right, you're booking your flights a 0:11:08.760 --> 0:11:12.400 couple of months maybe a year in advance, and growth 0:11:12.400 --> 0:11:15.360 in that category is down double digits. So if you 0:11:15.400 --> 0:11:19.160 kind of extrapolate that forward, will we see similar shrinking 0:11:19.280 --> 0:11:23.280 in hotel spending, entertainment, leisure things like that? You know, 0:11:23.360 --> 0:11:24.559 could be a little bit of a canary in the 0:11:24.600 --> 0:11:25.640 coal mine. 0:11:26.160 --> 0:11:30.959 What is Synchrony's flexibility when dealing, when they're managing, when 0:11:30.960 --> 0:11:32.920 they're saying that their consumer isn't thriving and they're not 0:11:33.000 --> 0:11:36.199 dropping off, but they're managing. What does that translate for Synchrony. 0:11:37.200 --> 0:11:39.320 Well, so this goes back to what we talked about 0:11:39.360 --> 0:11:43.000 the retailer share arrangements. So you share both the profits 0:11:43.000 --> 0:11:46.600 and you share the costs, right, so you know, if 0:11:46.679 --> 0:11:48.680 charge offs were to rise, the retailer in this case, 0:11:48.720 --> 0:11:51.200 Walmart is going to pick up some of those charge offs. 0:11:51.840 --> 0:11:53.600 So that kind of like you know, softens the blow 0:11:53.640 --> 0:11:56.520 a little bit for Synchrony as a as an issuer. 0:11:57.440 --> 0:11:59.600 But they have other sort of tools in their toolbox. 0:11:59.640 --> 0:12:03.040 One big one was the late fee, which CFPB had 0:12:03.080 --> 0:12:06.120 been trying to cap at eight dollars instead of about 0:12:06.120 --> 0:12:08.800 thirty dollars. But they can use those things like that 0:12:08.840 --> 0:12:11.160 to incentivize borrowers to pay even when it gets to 0:12:11.160 --> 0:12:12.400 be more painful. 0:12:12.920 --> 0:12:15.320 Ben are your consumer finance companies? Are they talking about 0:12:15.360 --> 0:12:17.480 credit quality concerns at this point? 0:12:17.559 --> 0:12:17.760 Yet? 0:12:18.120 --> 0:12:22.720 Credit quality is still great for companies like Amex, it's pristine, unimpeachable. 0:12:23.600 --> 0:12:26.240 But the thing to look at is delinquency. Just the 0:12:26.280 --> 0:12:28.319 mechanics the way charge offs work. First, you have to 0:12:28.360 --> 0:12:32.000 go delinquent before you stop paying. And we're not really 0:12:32.040 --> 0:12:34.840 seeing any sort of increase beyond kind of like seasonal 0:12:34.840 --> 0:12:35.960 trends in delinquency. 0:12:36.640 --> 0:12:39.880 Our thanks to Ben Elliott, Bloomberg Intelligence consumer finance analyst. 0:12:40.000 --> 0:12:41.640 Coming up, we're going to break down the White House's 0:12:41.720 --> 0:12:43.360 plans for nuclear energy. 0:12:43.640 --> 0:12:46.480 You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 0:12:46.520 --> 0:12:48.760 depth research and data on two thousand companies and one 0:12:48.800 --> 0:12:51.679 hundred and thirty industries. You can access Bloomberg Intelligence via 0:12:51.720 --> 0:12:52.760 b I go on the terminal. 0:12:52.840 --> 0:12:55.520 I'm Paul Sweeney and a Malex Steel, and this is Bloomberg. 0:13:00.760 --> 0:13:04.480 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:13:04.559 --> 0:13:07.640 weekdays at ten am Eastern on Apple, Coarclay, and Android 0:13:07.679 --> 0:13:10.960 Auto with the Bloomberg Business App. Listen on demand wherever 0:13:11.040 --> 0:13:14.559 you get your podcasts, or watch us live on YouTube. 0:13:15.080 --> 0:13:17.320 We moved next to the biotech space this week. 0:13:17.360 --> 0:13:19.760 We were joined by Sam Fazzelli, Bloomberg Intelligence, Director of 0:13:19.800 --> 0:13:22.559 Research for Global Industries and senior pharmaceutical analyst. 0:13:22.720 --> 0:13:24.960 He joined to discuss the latest in the biotech space 0:13:25.000 --> 0:13:28.520 from Moderness recent COVID vaccine approval and placebo trial to 0:13:28.679 --> 0:13:32.160 new obesity drugs from the biotech company met Sarah. 0:13:32.320 --> 0:13:34.160 We first began with the money side of things and 0:13:34.160 --> 0:13:36.480 asked Sam for his take on why more biotech companies 0:13:36.480 --> 0:13:38.479 are returning cash back to their shareholders. 0:13:39.080 --> 0:13:42.680 So, I think companies are coming to a realization that 0:13:42.720 --> 0:13:46.800 they can't just sit on a large pilot cash. The 0:13:46.920 --> 0:13:52.640 latest one that just happened was seven hundred million dollars 0:13:52.640 --> 0:13:56.640 in the bank, and the assets weren't particularly going in 0:13:56.760 --> 0:13:59.719 the direction that athy shareholders were happy with, which is 0:13:59.720 --> 0:14:03.640 why the company was sitting at a negative enterprise value 0:14:03.720 --> 0:14:06.120 of like one hundred million or ninety million, depending on 0:14:06.160 --> 0:14:09.000 when you're looking at it. And I think they thought, well, no, 0:14:09.080 --> 0:14:11.959 actually two hundred eighty eight million. Sorry, they thought this 0:14:12.120 --> 0:14:14.400 time to return some of that cash to shareholders. And 0:14:14.480 --> 0:14:18.320 you're seeing more of this happening. Investors got tired of 0:14:18.360 --> 0:14:21.200 companies essentially constantly saying, we'll find a better thing to 0:14:21.240 --> 0:14:24.200 do with your cash, and they investors go, we know 0:14:24.240 --> 0:14:25.479 what to do with our cash. 0:14:25.600 --> 0:14:28.120 That is like a really weird thing for about tech company, right, 0:14:28.160 --> 0:14:30.960 because this isn't the whole value proposition. Eventually, is that 0:14:31.040 --> 0:14:32.600 you spend all this money on R ANDD to make 0:14:32.640 --> 0:14:35.359 that super cool thing that's going to make up bazillion dollars. 0:14:36.080 --> 0:14:38.960 Right, sure, Alex. But if you start off saying I 0:14:39.000 --> 0:14:40.760 am the expert in this area, and I'm going to 0:14:40.800 --> 0:14:44.320 take this expertise and translate this idea into a product, 0:14:44.800 --> 0:14:48.000 and that doesn't work out, then you say, actually, I 0:14:48.080 --> 0:14:51.440 have another idea that wasn't necessarily your expertise. That's where 0:14:51.520 --> 0:14:53.640 investors get a little bit edgy. 0:14:54.720 --> 0:14:58.440 Yeah, so, Sam, I know the FDA recently approved modarrens 0:14:58.600 --> 0:15:03.440 new COVID BAX seen what's new about it and is 0:15:03.480 --> 0:15:03.920 it better? 0:15:05.560 --> 0:15:10.960 Well, actually, they did a real trial of comparing this 0:15:11.080 --> 0:15:13.320 new version. I'll tell you what's new about it with 0:15:13.800 --> 0:15:17.800 the standard vaccine spike facts that we've been getting. I 0:15:17.840 --> 0:15:19.520 don't even know how to pronounce the new name m 0:15:19.560 --> 0:15:24.760 next via something like that. I could never It's not 0:15:24.800 --> 0:15:27.680 an easy roar rolling off the tongue. What they've done 0:15:27.720 --> 0:15:30.080 is that they've taken the dose from fifty micrograms to 0:15:30.120 --> 0:15:33.200 ten micrograms, and what that does is that it gives 0:15:33.240 --> 0:15:36.840 you less reactions, and in fact, in this particular trial, 0:15:37.320 --> 0:15:40.760 they showed even higher antibody responses compared to the old one. 0:15:40.840 --> 0:15:43.320 So there is a small possibility it was only a 0:15:43.320 --> 0:15:47.440 few ten percent or so higher. A small possibility you 0:15:47.480 --> 0:15:50.560 get a much better efficacy in a real world setting. 0:15:50.960 --> 0:15:52.840 But it seemed to go in that direction here, So 0:15:53.400 --> 0:15:55.920 and that now is going to become the base of 0:15:55.920 --> 0:15:57.160 all their vaccines going forward. 0:15:57.480 --> 0:15:59.680 Right, But that's a good news if you take the 0:15:59.720 --> 0:16:02.080 VACS scene. But then you're not allowed to get the 0:16:02.160 --> 0:16:05.600 vaccine unless you have underlying commorbidities, right. 0:16:06.320 --> 0:16:08.480 Yeah, alex is only you not allowed to get direction 0:16:10.200 --> 0:16:14.280 because you don't have a whole bunch of the qualifying factors. 0:16:14.280 --> 0:16:18.200 You're not old, you are, you're over sixty four, you're 0:16:18.240 --> 0:16:23.440 not you're not come morbidity. Except the one thing you have, 0:16:23.600 --> 0:16:27.120 which is something that doesn't show up in these conversations, 0:16:27.280 --> 0:16:30.680 is a risk of a really bad reaction to COVID, right, 0:16:30.720 --> 0:16:33.440 which is something that you've experienced. So what is going 0:16:33.480 --> 0:16:36.480 on though, is that the company has whatever specifically, has 0:16:36.480 --> 0:16:39.000 committed to the FDA to do a placebo control trial 0:16:39.560 --> 0:16:43.240 in a fifty to sixty four year or sixty five 0:16:43.320 --> 0:16:48.440 year group of individuals without come moobilities compared to a 0:16:48.440 --> 0:16:52.920 placebo I eat nothing so that will be where they 0:16:53.000 --> 0:16:55.440 will have to do this trial, and by committing to it, 0:16:55.440 --> 0:16:58.160 this trial needs to be large in order to show 0:16:58.160 --> 0:16:59.960 a difference. And I remember a whole bunch of people 0:17:00.160 --> 0:17:04.119 going into these trials now with previous immunity, which means 0:17:04.400 --> 0:17:06.280 the difference is going to be smaller, which means you're 0:17:06.280 --> 0:17:09.400 going to need larger trials. So I hope it works 0:17:09.440 --> 0:17:13.520 out and I hope the cost isn't punitive for modernaw. 0:17:13.880 --> 0:17:17.119 New obesity data from a Newish biotech met Sarah and 0:17:17.160 --> 0:17:20.320 their obesity issue. What's going on there? What do they 0:17:20.320 --> 0:17:21.000 have for the market. 0:17:21.720 --> 0:17:25.280 Yes, so they've got a new mechanism, which they're not 0:17:25.320 --> 0:17:27.920 the only people following it. Lily's doing it, and I 0:17:28.160 --> 0:17:31.960 was doing it Zealand and now in partnership with Rash 0:17:32.080 --> 0:17:35.320 are doing it. And it's targeting not jlp ones but 0:17:35.480 --> 0:17:39.320 amelin in the same sort of pathway of hormones that 0:17:41.200 --> 0:17:45.920 hunger and satiety, et cetera, but slightly different. And the 0:17:45.920 --> 0:17:47.879 theory is that you're going to get a drug that 0:17:48.480 --> 0:17:53.080 is less difficult to tolerate. Nausea and vomiting is the 0:17:53.080 --> 0:17:55.520 biggest one with these drugs because they impact the gut 0:17:55.880 --> 0:17:58.640 and so here they've presented data that shows pretty good 0:17:59.160 --> 0:18:03.399 weight loss the thirty six week readout, thirty six day readout, sorry, 0:18:03.440 --> 0:18:09.080 five weeks, and you've got unfortunately one hundred percent nausea rates, 0:18:09.119 --> 0:18:15.159 but they are at the very low grade. I is 0:18:15.400 --> 0:18:19.439 just feeling a little I'm assuming yuck. And then what 0:18:19.480 --> 0:18:22.399 you've got is that it only seems to majority of 0:18:22.400 --> 0:18:25.239 them seem to pass after the first week. So I 0:18:25.240 --> 0:18:26.200 think this is good. 0:18:26.359 --> 0:18:29.159 Our thanks to Sam Fazzelli, Bloomberg Intelligence, Director of Research 0:18:29.200 --> 0:18:31.760 for Global Industries and senior pharmaceuticals analysts. 0:18:31.800 --> 0:18:35.560 We move next to the energy sector, specifically nuclear energy. Recently, 0:18:35.600 --> 0:18:38.280 the White House announced it's gold a quadruple US nuclear 0:18:38.320 --> 0:18:40.159 generation capacity by twenty fifty. 0:18:40.640 --> 0:18:43.280 The goal is to have reliable energy supply to meet 0:18:43.280 --> 0:18:45.600 the growing demand for artificial intelligence from more. 0:18:45.600 --> 0:18:48.200 We were drawn by Scott Levine, Bloomberg Intelligence, senior Energy 0:18:48.240 --> 0:18:49.680 and Industrial Services analyst. 0:18:49.920 --> 0:18:52.720 We first asked Scott to explain the complicated relationship with 0:18:52.800 --> 0:18:55.720 nuclear energy and what the Trump administration would like to 0:18:55.760 --> 0:18:56.119 do with it. 0:18:56.760 --> 0:19:01.439 Nuclear has always kind of been a bit of a 0:19:01.520 --> 0:19:05.560 strange one for environmentalists and for the industry overall. You know, 0:19:05.600 --> 0:19:08.879 it's an emissions free power source, right, which would seem 0:19:08.960 --> 0:19:16.040 to align well with the goals of environmentalists. However, safety concerns, 0:19:16.160 --> 0:19:18.400 you know, end up being an issue three Mile Island, 0:19:18.800 --> 0:19:24.399 Fukushima and otherwise. And so you know, with the combination 0:19:24.560 --> 0:19:30.600 of demand from AI for power of all types, coupled 0:19:30.640 --> 0:19:32.719 with the fact that it is an emissions free power 0:19:32.760 --> 0:19:36.960 source has really brought it back into the forefront and 0:19:38.359 --> 0:19:42.680 supporting the AI demands story. So you have the demand 0:19:42.720 --> 0:19:46.919 picture has clearly strengthened as a result of that. The 0:19:46.960 --> 0:19:49.280 two things that really blew a hole in the story 0:19:49.320 --> 0:19:52.200 the last time it was in vogue and the Obama 0:19:52.200 --> 0:19:56.600 administration was really the shale revolution which made natural gas 0:19:56.640 --> 0:20:00.960 so cheap as an alternative, and then in twenty eleven 0:20:01.000 --> 0:20:04.760 Fukushima created all kinds of concerns there. So the two 0:20:05.280 --> 0:20:07.359 really blew a hole in the story then. And now, 0:20:07.400 --> 0:20:09.600 you know, in fifteen years has gone by since then, 0:20:10.080 --> 0:20:13.800 and the memory has faded, and now it's back in 0:20:13.880 --> 0:20:15.480 the forefront folks minds. 0:20:15.640 --> 0:20:20.119 So expanding or keeping alive or recommissioning a nuclear plant 0:20:20.160 --> 0:20:22.280 is one thing, and that's what we're doing three Mile Island. 0:20:22.400 --> 0:20:25.280