... excited are you about this cancer medication?

I mean, Scarlet, the companies, um, and Stacy, companies, they constantly do these kind of deals, so why are we particularly talking about this one today? Well, the announcement came today that they signed $2 billion equity investment in Summit Therapeutics.

That's one angle that's a little bit different to the usual partnership deals that you see.

Second angle is that AstraZeneca had stayed away from this area where Summit is active.

It's, uh, let's do some jargon here, uh, excuse me, bispecific antibody that targets two different things, uh, et cetera, that a lot of people had been wringing their hands on until this deal's happened and some data's come out, and it's beginning to look really interesting.

And there is a very divided world out there on this particular drug, on this particular class of drugs, and that is some people believe that it's the biggest thing that's gonna happen since Merck brought this drug to market called Keytruda, now, uh, the largest, uh, anticancer drug around, and others think, "Well, we haven't seen enough data.

We don't believe in it." What Astra's done here is kind of hedged its bet to a degree, is that it's put this investment in.

Why do you think it's moving forward with an equity investment as opposed to a straight out, uh, takeover?

What's kind of the science behind it?

Yeah, I mean, Paul, just to say, these are the days that I live for, right? When something goes right, even though I was really worried about this trial reading out, which is what? This trial is taking...

Some mutations, identify mutations in the tumors of patients who've had them removed.

So you have melanoma, you're lucky enough to have been caught early, you do surgery, you debulk the tumor, you use that in their labs and their AI systems, et cetera, to identify what they call neoantigens, things that are more prominent in the tumor cells than not.

Put that in a vaccine, mRNA vaccine, give that back to the patients, and at the same time, administer the Merck immuno-oncology drug that unleashes T-cells if they find those mutations.

So why were we worried? It's a new technique.

It's really hard.

So availability, when do you think this new drug or this new application can be approved and get into the marketplace?

Is there anything on the horizon that you really have your eye on right now?

Yeah, I mean, in terms of drugs, there's always something exciting coming up.

And if we look at cancer specifically now, because the current conversation is cancer, we have a revolutionary drug coming from Revolution Medicines for pancreatic cancer, something that is going to at least open the fire their starting guns and actually on actually treating these patients giving them a chance of doubling their survival and of course in all these numbers there are ones who are much better treated in terms of the uh you know you go with the mean and median but there are people in there who get much better efficacy and it is the starting guns because we need to deal with side effect profile there so there's that that's coming and that's going to really accelerate efforts there there's a whole load of other stuff going on there's other versions of these glp ones coming up there are drugs for neuropsychiatric diseases that are making big waves there are drugs for reducing your cholesterol oral drug that recently approved there's a lot happening unfortunately ai is this subject and it will keep taking sucking the oxygen out of the room

How does AI apply to your business, Sam, in the biotech and the pharma space? I would think it would make the average scientist in the lab smarter, better?

How much time do you have, Paul? Three minutes, 12 seconds.

Oh, shoot.

The answer to that is actually exactly what you just said.

The point isn't to replace scientists.

What is the narrative here for these two big pharma companies?

Yeah, Scarlett, so the story here really is that you've got two companies both heading and facing some significant patent expiries, which means some of the big drugs are going to go generic.

And therefore, they're going to that's that's but things like any quest that Pfizer cells are going to fall off a cliff literally, and they do call it a patent cliff too.

So within six months, 80% 90% of the volume can be eroded depending on the way the generics come in.

If there's any ones I have six months exclusivity, then they don't drop the price that much.

But in the end, pretty much the business goes away, which is great because that's what pharma companies should do.

They get their phenomenal dollars behind the R&D, make a new drug, make a lot of profit for 10 years, 11 years, eight years, whatever the length of time is.

So, Sam, are we is the number of drugs and the amount of sales associated with those drugs potentially at risk or scheduled to come off patent? Is it more today than it's been in the past? It just seems like we hear about it more and more from these big companies.

But how did that direct listing in New York get people talking and thinking about what its ambitions could be?

I think there's a little bit of effort going on by all pharma companies to show how US friendly they are because of all the obvious conversations that have been going.

Some of it is sincere, some of it is not.

Also, I think it's a signal to the Europeans and the UK specifically saying your environment is not great for research.

The US is.

Some of that's going on.

But AstraZeneca is already an international company.

Why is it such a laggard? What is it having trouble doing right now? And does it need someone to buy it out?

Why for up to $3.8 billion? Are there incentives along the way here?

Absolutely right.

So when you look at the numbers, we've got $2.8 billion upfront cash and $1 billion in contingent value rights.

So that's CVRs tied to the lead assets, which are in two forms, one in internasal, the other one is under the tongue buckle, getting through phase three and also getting...

EEA approval because these are psychedelics.

They're drugs that are quite fashionable these days in terms of development because of the profound effects that we're seeing on treatment-resistant depression, on major depressive disorder, generalized anxiety disorder, that sort of thing.

So there's a resurgence of interest in these psychedelics, which are synthetic.

Is it a big part of it?

What are their strengths? Where do they need to get better? And what are they doing with this particular deal?

so paul uh first happy post fourth of july to you guys all uh for your independence from the british um all those years 250 years ago um and to the audience obviously so here here we have novartis buying a a cancer drug company novartis is already quite active in cancer in fact one of the areas that they are quite active in is getting radio um radioactive material to your tumor rather than you going to get radiation from an external beam or a machine.

This is things that are kind of trying to target the tumor, particularly prostate cancer in this case, that they've got a marker on prostate cancer cells, get radioactivity in there.

But one of the other things that has been evolving very rapidly recently is getting chemotherapy directly to the tumor rather than injecting it all over the body.

The hope being that you can reduce the side effect profile and increase the efficacy.

That's what this new deal is.

And this is something relatively new for them.

What's the call out there on Novartis stock these days, Sam? What do people have to kind of believe here to jump on this one?

What's the next thing that you think Global Wall Street should be looking at in your space?

Yeah, I mean, Paul, I keep talking about biology is evolving at a breakneck speed, and it's not just a cliche thing to say.

At the end of the day, science is really, really cracking into some of the minutiae of how these diseases are slightly different from each other.

So the next big thing is, are all obese patients suffering from the same reason or biology that's making them obese? Is there some subgroups that need to be treated differently? So that's one area.

neuroscience is one.

Can I plug a podcast that we have on VI? Absolutely.

Vanguards of healthcare, vanguards of healthcare, a couple, I think it's this week or no, it was last week that the conversation with, um, uh, the head of development at Bristol Myers, where we talked about this and neuroscience is a big one because the brain has been a black box until, I mean, it still is a bit of a black box compared to immunology, for instance.

That's in the U.S. What does it look like elsewhere in Europe, for instance, or in Asia?

a little health care here we do that with sam pazelli director of research for global industries and his senior pharmaceuticals analyst bloomberg intelligence uh he's based in london i have no idea where he is but he's based in london sam talk to us about eli lilly uh and their obesity uh products offerings where do they stand in this market where are they going to go going forward

yeah so paul they continue to lead in terms of efficacy so they're bound has the better efficacy proven in a head-to-head trial versus Regovi.

And they now have this drug called retratrutide or retatrutide, as I like to call it, which is a triple mechanisms of action.

And that has got blowout efficacy, particularly, obviously, they tried it in people with a very high level of obesity where you can lose 30 percent of your body weight and and not be uh seriously suffering so again they have this mechanism of action that that this the triple um product that seems to be doing very well a whole bunch of other companies have reported and they still lead in the oral space AstraZeneca has had some good data and that looks good.

That looks competitive and they're moving to phase three.

They have other plans for that space.

So Lilly still really is in the lead here in terms of efficacy, particularly.

How much do consumers, patients care about efficacy? I mean, all of these drug makers have treatments that are effective, but are they making the distinction between 27% versus 30%?

What is the issue specifically from where you see it?

Yeah, so Scarlett, I mean, the FDA since the change in administration, and they are obviously the appointment of Robert Kennedy Jr. to HHS, which overseas, because some of this has been in quite a bit of flux.

The Center for Drug Evaluation and Research, CEDA, which takes after drug approvals, looks after drug approvals, that has changed.

The Center for Biologics Evaluation and Research, which looks after vaccines and gene therapies, etc., got a new head, Vinay Prasad, that head left or was fired, I don't know which way it was, and then he came back again, and now he's going again.

So there's been a lot of flux.

And when you get flux and they fired, I don't know, 3,000, 3,500 individuals, maybe I don't have the exact number, but something in that sort of region, you know, this is a lot of old-time knowledge that's left the agency.

Some refresh is pretty good, but all of this has happened under the...

What has he done that will kind of serve as his legacy if he does end up leaving?

Remind me, does Merck have a weight loss drug on the market or is it developing a new weight loss drug?

They are developing.

They're developing one.

Yes, they're I think everybody is kind of they've got one that they've licensed.

Pretty much everybody's got their finger in that pie.

I can't say absolutely everybody.

Most people have got their finger in the pie trying to get a something on the market and rush AstraZeneca and time will tell whether they can compete in this Clearly, these guys are sewing up the market between themselves and Novo Nordisk.

So, Sam, for these oral obesity drugs, to what degree do you think that's going to expand the market?

were exiting the airport.

I'm special.

Oh, you're also special.

They rolled out a red carpet for you.

Special passport.

Special passport.

What's Gilead doing? This is the second deal they've done in the past few months, couple of months, I would say.

while.

Sam, when a drug goes off patent, what's the what's the timeframe for sales to fall into? What degree do they fall? Is there a predictable pattern?

Yes, there is.

And we have blueprints that we follow when we're doing all our modeling.

It depends on what sort of deals they might have done.

So as you know, Paul, we have a very strong patent team led by Ord Gerspacher in our group.

And they've done some work on some of these drugs, you know, where people expect Keytruda from Merck, for instance, to expire in 2029.

They're thinking 2033, right? So there's room for companies to push these things out a little bit, but eventually they happen.

If a Lilly acquisition for $7.8 billion is kind of a drop in the bucket for that company, how meaningful is this acquisition for Biogen?

So, Sam, what's going on with Pfizer? What's going on broadly with this little niche field of Lyme disease?

Lyme disease, Paul.

So all those farmers and folks who go out into fields have a risk of that.

Of course, anyone who goes out into a field into a green space i mean you know i've got a i've got a bit of a garden i'm sure you do and those ticks man they do like your legs and anything that's nice and hidden in there to go and have a uh have a bite at and all your animals suffer from it etc so Those animals can take drugs to prevent ticks, but there's really no such thing for humans.

And I mean, the vaccines have been around, but Lyme disease vaccine is something that would really be quite an attractive option for those who are at risk.

The question is, who would take a Lyme disease vaccine? But these guys had some data.

It's data from a vaccine that they're developing with a French partner called Valneva.

Has that, in fact, come to fruition? Are funds being withheld? Are funds being pulled? Is that impacting university research?

Is that an unqualified failure?

Well, the trial was set up, Scarlett, to test one drug against the other, and it failed, right? So when they start these trials, they have a hypothesis.

We think our drug is as good as this one.

And they set the hypothesis up.

They do the right number of patients to prove that Kagrisema is as good as Terzapatide.

It didn't prove that.

What it does, I mean, I don't really care about this 23%, 25%.

Why is it that Nova Nordisk has lost so much ground and its edge to Eli Lilly? Does it come down to the science of it, or is there something culturally at the company that's led to this underperformance?

What's the status there?

Yes.

So, Paul, thanks for having me back on.

Look, they have a trial coming up, which is a very innovative approach to trying to treat cancer, i.e. I'm going to take a drug that releases your immune system.

And at the same time, I'm going to give it stuff.

from your tumors so that you can recognize the tumors.

So you've got a vaccine, that's what a vaccine is, right? And the immunotherapy drug, Keytruda, that everybody's used to.

I mean, I think something like 22 million Americans have fallen ill to the flu.

Talk about what the common thread is between both of these acquisitions or these transactions.

Yeah, sure, Scarlett.

The common thread is I've got cash that is producing at a very rapid rate, and I need to make sure that I've got a pipeline the day that people are going to start worrying about my patents expiring.

So a long way off for these huge drugs.

So the more assets that these guys have, with their massive cash flow to invest in for R&D, the higher the probability that they'll be coming to that point where people start going just like they're doing with Merck.

Oh, gosh, your $35 billion drug is about to come off patent.

That's in Merck's scenario.

How do you view this knockoff market here for some of these drugs? Well, you shouldn't have a knockoff market for these drugs.

We began by asking Sam about how investors were impacted by this limited obesity data.

Yeah, yeah.

So look, they paid $10.1 billion for this.

And is it all to do with that? Or is it people being reminded again that the next three, four years, there's a major headwind from generic drugs coming for their, some of their key products on the market, eye brands.

extending etc so that's partly the issue and and you know in order to deal with that you need assets and drugs that are going to try and hopefully fill the gap and maybe this is the problem with the data the thing is we've looked at the data as you know we have very deep obesity analysis we've looked at the data and it's not terrible but as i said the other day when rosh reported some numbers i think folks are getting over this percentage here percentage there You can only disappoint going forward.

You can't, unless you give out somebody like 30, 40% weight loss, which of course nobody wants.

So this is getting to a point where now it comes to the nuance.

And is that just because they've got the right portfolio of drugs and the others don't?

Why is there such a stark difference between what Lilly is seeing and what Novo Nordisk is seeing?

Right, so Scarlett, I've always maintained, based on data and based on actual comparisons of the drugs that they have, that Eli Lilly's drug does better in terms of weight loss over a period of time than Rigobi.

They did a head-to-head trial.

So that, I think, is helping them.

They are both in the same camp in terms of price pressure.

As Lilly has said, they have several areas where there's price pressure on them, right? Nevertheless, they seem to be at this forecasting a meaningful volume gain in 2026, which you would want to see if you've got a price drop.

That's the whole idea.

sam you know lily novo they're kind of in strong positions in this weight loss area here talk to us about the competitive threat from some of these telehealth companies selling cheaper copycat versions where is that right now

It's all about, you know, the latest data on the obesity drug from Metzera, which Pfizer is purchasing.

Yeah.

Yeah.

So, look, they paid ten point one billion dollars for this and the share price is down three percent.

Is it all to do with that or is it people being reminded again that the next three, four years there's a major headwind from generation? drugs coming for some of their key products on the market, eye brands, Xtendi, et cetera.

So that's partly the issue.

And in order to deal with that, you need assets and drugs that are going to try and hopefully fill the gap.

Entirely

What did you see from the big some of those big pharma companies?

Yeah, thanks, Paul.

I think the most interesting of the company of everything so far that there are three companies, Sanofi, Roche and Johnson & Johnson, who've reported so far.

was the fact that nobody really seemed to be saying much about it.

I mean, people ask about MFN and the impact of MFN, but numbers were in line and growth is as expected.

So somehow these companies are managing it.

I mean, we're going to have to wait and see what happens to the European countries, drug sales, et cetera, as they come on, but nothing in there.

Walk us through the different things that Eli Lilly needs to contend with as it offers up guidance.

Sam, what's front of mind as you go into earnings season this season for investors in some of the biotech and big cap, big pharma companies?

Yeah, so, Paul, I think what people hope to hear and expect to hear is that all that MFN stuff is behind us.

All the negotiations have happened.

They're not worried about any talk of it anymore.

And of course, what people are also looking for is what pharma is doing, looking into 28, 29, 30, whether some patent expiries, how good is their pipeline looking? Are they still solidly behind it, et cetera? Do they have any negative things to say about any of their pipeline? And also listening out for M&A, right? M&A is what they're, The solution to some of these issues they might have with their patents are, and therefore, that's what biotech investors are looking for in terms of what are the kind of commentary.

Remember, Paul, we just had this up and down yo-yo with Revolution Medicine's share price, where there was a rumor that Merck might be wanting to buy them.

And at J.P. Morgan, they said, look, we got tens of billions of dollars to put to work.

In a way, they're kind of like tech companies, big pharma companies going to be at this stage of M&A.

We started off by asking Sam to break down the latest news at Eli Lilly.

Well, look, I think these are the billion dollar club getting together a billion dollars is probably a drop in the ocean for both of them it's over five years and what I think the aim of this at the end of the day is to try and automate and speed up as much of the partly the drudgery of doing lab work because lab work just like as if you were a doctor in a clinic clinical setting you need to take a lot of notes a lot of details but at the same time I think they're investing in what appears to be automating 24-7 experiments, things that human beings just can't do.

And I know, having been a scientist, that sometimes your life is on hold because you have to go back and deal with your experiments, your cells or whatever it is that you're running.

And so a lot of these things, I think, could speed up and also make the life of the scientist a little bit easier.

At the end of the day, though, I think the aim here is to try and get scientific discoveries translated to drugs quicker and get them to market quicker.

Is Moderna starting to stabilize?

Well, one would hope so.

They've stuck with their aim of growing 2026 by 10%.

i'm scarlett fu and we've got some news about the top ai company kind of the poster child for ai nvidia teaming up with the top pharma name eli lilly uh the two are going to work together with nvidia investing a billion dollars into an ai drug laboratory what does that mean what are they going to use it for let's bring in sam fazelli he is bloomberg intelligence's director of research for global industries and senior pharmaceuticals analyst he always gives us his read on the biotech sector sam good to speak with you How do you make sense of this headline, NVIDIA investing a billion dollars in an AI drug lab with Eli Lilly?

Garlit, very nice to talk to you again today.

Well, look, I think these are the trillion dollar club getting together.

A billion dollars is probably a drop in the ocean for both of them.

It's over five years.

And...

What I think the aim of this at the end of the day is to try and automate and speed up as much of the, partly the drudgery of doing lab work, because lab work, just like as if you were a doctor in a clinical setting, you need to take a lot of notes, a lot of details.

Is Moderna starting to stabilize?

We began by asking Sam where we are in terms of treating myeloma.

I've been telling you about these cancer therapy treatments and these cancer areas where the patient numbers in terms of those who live rather than those who die is fundamentally changing.

Breast cancer has been one of them.

Prostate cancer is another one.

Melanoma is another one, which of course people are familiar with.

And of course, myeloma has been one that we've also got there.

There are patients who are alive today who were diagnosed in 1996, 1998.

What is the treatment landscape then for myeloma?