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wscs 2015: Understanding the Risks and Rewards Investing in the RegMed Sector

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wscs 2015: Understanding the Risks and Rewards Investing in the RegMed Sector

Understanding the Risks and Rewards Investing in the RegMed Sector.

Video Transcript


Steve Brozak, Mba, Wbb Securities

Henry Mccusker, Regmedinvestors

Alright so I don't get an opportunity to introduce all the panels obviously we have something like ninety panels that the world stem cell summit and including the regiment capital conference but I just had to step into this particular room where we had Steve break and Henry McCusker because one of the great pleasures and putting together this meeting and having worked in this field for eleven years.

I know a lot of the players the speakers and the characters and it's sort of like a fish tank right so that is a community fish tank he'll be careful which fishy put together in the same tank with this particular panel that you know where you can you have a couple of I won't call them were honest but very colourful fish and the investor feel which is Henry and Steve I like the call Henry one of the great curmudgeons of our field and I don't know what's Donna actually happened where be said in this channel just remember fellows that it's being reported in and some others might listen to it and certainly the jacks' policy institute does one get sued for anything that you say now Henry by the way doesn't necessarily win popularity contest among st all industry I just lead to know you do that but the insights.

I think you'll get as a potential investor or a savvy investor in this field are unsurpassed by the two gentlemen we're Donna be here presenting to you now so I'm introduced burst my friend Henry McCuskerabout today understand the risks and rewards in the red sector but part of understanding the sort of risk and reward is you need to sort of break down the court of boat wreckage mid sector or the moniker that is associated with it to a couple of different subsets in my book and Stephen go through this quite a bit there is a stem cell component ok of what's then you need to differentiate into the sort of self therapy sort of companies and you have the immune oncology companies and you have the gene therapy companies ok then you had to regenerative medicine of where you have to regeneration of the development of organs and substitutes on that site so basically red meat can be a misnomer on that side of one of the things I constantly say I write a lot of things every morning and evening as well as some pieces during the day of who what happening what is the pricing mechanism.

I know don't always make a lot of friends but actually lately have been quite right on a number of where things are sent to where they are that's something I think people should have knowledge but again in my book investors signed up for a better world we looked at these companies we started pretty high everything was hot full of hope everything else we've sort of pardon the expression so degenerated into a sort of morass of companies that are just going where from the financial side you might be doing well on the technical in the development side but many times that message is not specifically coming across vast is a perception problem is a reality to what is happening to development platforms when you see in the event I call them in Advent orientation of a company that has a great platform next thing you know they're partnered with a major farmer there then that goes away their partnered with another major company and suddenly that goes away and then there's a condition.

We will hope to be partnering soon with another company yet that has not appeared to any of us quite yet so we have this sort of issues and then we have the secondary but these declining share prices how many of these companies within the 43 that I look at within that component regimen ok trading under $1 45funds cannot invest in that side of it is going to be about you know at least$5 for credible invest in our institution so many times these are just these companies are relegated to the day traders to the speculators those who played back and forth they drive up the ball you drive down the value of a drive up the price they drive down the prize then the ultimate issue comes in the algorithmic programs and then next thing they're all in the toilet somebody's matters but those are the things I tend to look at and people do call me at this centre who might predict the worst.

I also am a firm believer I consider it a universe where we want to be where the hole is to the future of a lot of these companies and Stephen do everyday look great but again there are conditions flavours to the support that companies need and the whole issue in many cases' comes down to it and I'm doing a live stream of consciousness here is the fact that you as companies are you as individuals who need to understand the issue of clarity what is needed yeah there is a presumption of his presumption of guilt having been trained by other people.

I work for the government brought here's a real job but there is also always lead to one thing that backs there were a lawyer kinda boring but what are the facts in evidence out there right now and that contributes to the issues of press the wrong perception of the wrong people ok don't communicate effectively there are times don't depend on some of these firms I mean this junk it rights I don't depend on the lawyers told me.

I can't say this in this sort of bed well who's running the ship ok not to lawyers and I issued a press release and they just did a partnership or collaboration with in English from what I read through the preview and said research on my own because I wrote an article about it that morning and said this is what's really happening in why this deal was done it was about expand the gene expression but how many other people are done the research before I just put out this crap and it was explained the stock dropped a dollar fifteen I get a few phone calls later tonight I'm headed down he refunds managers do with money think they got it wrong but the next thing I knew the stock was up 48 cents ok so by communicating effectively in providing clarity by the contrarianget that sort of thing he the price so not always in my centre who predicts the worst of it Stevens also always tempering me some things I have to say on its side of it but too much as.

I said earlier too much has been lumped are dumped into the sort of moniker of rage and I firmly believe that some of us need to have the courage as to go against what some companies are saying if we're looking at the pricing metric ok and against consensus when you listen to some of these analysts I read the report is trading at $1 to as a price target of six dollars in which sent trees that basis and they don't have elevated justify their roles on my blog my brother but is the question of how one can justify the analysis and that's why I had to write what I write 30 days I've put out of every ten things that people say what could have sort of looking at the European markets are still in those guys who gets up at 4:30 in the morning.

I had this thing goes I was 635every morning and sort of happened been grossly wrong I've actually been pretty bright which is good denied or wrap up at the end of the day well you know who did well who played musical chairs of pricing and what's really been going on in it and it seems to resonate from a lot of people I think I was sort of funny justify my existence of Stephen but which are constantly trying to do as a friend but you know I've 11,000 people ok which says something that people want to know something there are a lot of us who have been in this market and yes it is a great thing to look at the law position days of my old even the funds are beginning to recognise more specifically that short-term opportunity is to where you can make the money unfortunately you have to put a lot of time and effort into understanding what's going on the volume and volatility and the trading range and who has said or what like we might criticise a have to sort of individual of the street dot com or something but everyone has the advantage of viewpoint in again if you listen to the purity and you drop it down into a smaller partition as I might call it you will understand that there are fundamentals in play when one of the things.

I do believe in having been trained for certain things is pattern analysis not always with a pattern give you a full picture but those give you a beginning to understand what is happening is it that there's a probability of you understand the pattern is a probability of which way the stock price which is what I like to play in little pieces is a predictable that next year you can throw it and understand so I've looked lately to say that short-term in the market is more opportunistic individual portfolios which is what I write about and invest in on that basis but as I hear from the different funds that read in contact me and used me and whatever value to deal with the crazy things I might have to say even they are now looking at the issues of a sudden sort of evaluating or re-evaluate doing their law standing a virgin to short-term ok.

I mean they are trading in their moving more in there sort of participating on that side of it and then we have the issues I be scared the hell is an individual investor to buy 2buy into south exit team where the Raiders are playing for a publishers and then try to pop up in the next thing you know the algorithmic programs jump in and Treasury but the thing is we don't understand what you do something I tried to write about and to look at things but you know the hedge funds are getting ok just saying I don't know what to do and I hear from quite a few of them just gotta but about six minutes into the conversation you have a critical question of what they really think you have to pick your words I believe correctly and some of these companies.

I look at their friends in the audience I look at some of these companies is real hope there but in sometimes their expression every qualifying their position the reconditioning there's development and that's what the company validating what they thought was their original value those individuals will step up and say let me just clear the deck and say what do I really have what we want to do with it what are how can I make itself how can I make it better on that side of it does do things.

I probably too much whatever but it's better to speak your mind Donna do something basically will introduce them are joining us know your audience you're Donna show of hands how many folks are running companies or with by the company's fund managers or anybody ok why are you here look at the new member all right down here with StarMine it is a rating system that basically goes overall the analyst and cut to the chase a business or just plain vanilla former pharmaceutical industry index which are about 50 ranked analyst that means that you know for me to see all the analyst put in their recommendations their earnings and everything else and at the end of the day December 31st they give you already have one through let's say 5000 5500 use number one because obviously I'm trying to get there but I can tell you that if you go down past number 12 its negative returns so as fund managers.

I talked to throughout my career said I don't need you to lose me money I can do it all by myself ok to favour the extra fees you know I'm not I'm not a really personal kind of person so it's like you know they really enjoyed picking up the phone so at the end of the day you have to see yourself okay for the last five years for the purposes of the pharmaceutical bio tech have been indexers and what they've been looking at or things like Puffer Merck Lily James General Motors is basically right what do they have 3 45 percent interest dividends that pretty much have made investors look at them and say well let me get this straight everyone's getting older sicker and the whole nine garden so let me just investing this field at the end of the day instead of getting a negative rate on my T-bill or my note about I'm Donna get a dividend.

I'm Donna get capital appreciation so what we've started to see as we're seeing people that have no business investing in health care going to this field as a surrogate not for another type of investment but candidly as the yield circuit which I don't know if you guys are Donna see this film. The Big Short but it describes pretty much what happens when people start to go after figure old try to say you know it's been issued by somebody in watch it on TV but on a positive note I can tell you that you know it's unusual not to see something that's kind of interesting Donna go back thirty three years how many do you remember a company called son of course they had products and toxin1234 products and talks in which was used for sepsis back then they would go abroad and the individual researchers would pretty much publish whatever they were going to publish with no constraints by the sponsor in this case the court and I remember getting a publication for some French doctors that pretty much said that sucks dick in me.

I was better than some toxin and someone at least the data to the pricing data to the French researchers and they basically said it's all so outrageous that they're going to come up with a price that is ridiculous33 years we're still talking about both light so that gun wasn't of analysts butt did manage money and we're saying my god this is like black and white they're saying it doesn't work and it's egregious in terms of price ex-wife a doctor or father trust me some fun so was my father-in-law I'm saying you know i really wanna not fall out of the park with this investment so I bought some put options.

I expected the markets to react the way they were supposed to react right I'm looking at a position that expiring Friday where I will have lost him back there was a lot of money 25 grams ok I'm getting myself like you believe it how can I be so wrong all of a sudden this was back in the old days when CNBC I only had this broadcaster and he went out there and he's trying to say how failure I'm going you know it's like holy macro and all of a sudden they're closing with stock and all of a sudden you know it's a race how quickly closed down this position and back then you know they didn't have all of this they did have some trading faculties but in this case it was the old ticket and I literally put in the ticket thinking you know stupid me I get a market order well never works out like that you never by the lower salt high but sure enough a hundred grand and one trade which back then again with a lot of money.

I'm looking into going ok things take time now let's see five years later of course still with my buddies and what's going on the industry's looking for things they're looking for things to shut down mechanisms specifically entity enough to me there's two researchers are actually one clinician researcher at Imperial College in London and they'renegotiating with a company called soul talk now you may want to get some of their map to basically stopped the influence of arthritis so they negotiate business about what people waste their time literally they burn a year and a half ok so there's a man named Woody Johnson over a set of core it happens to be that these folks around and Rimini mark Feldman durable Thursday they won the last couple years back soon forget that they lived long enough to win a Nobel and they can you ship us at the end of the day what happens they always start to see results that are spectacular literally joints that are literally going back to use they start to see things that they would never have expected always go back to what he had no Johnson and Johnson has bought or is in the process of buying said of course.

They can't do any bootleg operations at the end of the day they say we would like to have you know more than we think there's a product here will be encouraged to change a visibly understand p values many patients do you need to know north of a hundred so my words here by the end of the day they go back to the UK and a hundred patients ok now this is what they find you have people that are in wheelchairs for 10 years walking it literally is like my god this is it and they're slapping each other on the back as a flying you know economy back from London to New York expecting these people are really going to be great you know it's like a disaster so marketing people all 20 of them on the other side of the changing table because changing also court and they said well we happen to think you're probably right this is a product however we've done a global analysis of all the arthritis products out there and the total sum total in the gold car sales is four hundred million dollars.

We don't believe there's a market there and they're looking at each other going well that's pretty much because you've just created a sperm cells and the stubble burn a hole in your stomach so doesn't work well alright you know we may be wrong go figure but you know there's probably per million dollars worth of some costs in here so if you want to pay a million all the right to this entity in a package in its entirety so you know basically ever Donna sell but you know for all to the purposes we have other interesting things and ok you guys just don't get it finally changes a cut a deal here conceal their what is the yearly anti-tnf market sales today they are drivers for information by billion dollars in growing annually yeah.

I want to do things that story I remember these guys are just bored millionaires you know but they didn't do it for the money we do because they really wanted to go out there to achieve something from India and he's often commented how the price of the product or where it came from too hard for the patients in need so we're not you're looking at ok it's like that broken watch right twice a day and I continuously feed as I can tell you example after example on the flight deck you and I couldn't help resist when they were coming to the LAN I figured I'd put Atlanta burning flight deck afterwards though there's a picture of modern day later and obviously it was built up from the ashes of during the Civil War and I'm looking at it now you know for all intents and purposes I can listen to and I have to listen to 50 presentations and you wasn't 50 presentations pretty damn circle feel like I've got that landed on just looking but I hear somebody say something and then all of a sudden ok same way to any government went up and said if we use this product in this way what will happen and today.

I can tell you that I actually did see one company can tell you which but I did see one company that I said ok there is a power to discovering something but also tell you this be not going to be cheap anybody that thinks to get to FDA and just go out there and say ok we'll take a meeting and will do this and it's like yeah right I covered heron into the initial public offering and their first buying the stem cell space was 20,000pages twenty thousand pages literally when they got the documents back it was like you know where else is there to make copies there to do everything else seems like you know of course all this stuff has been transferred over to bio time and they pay anything for it other than the fact that they had put in capital continued prosecution I believe that there are some companies that are legitimate that do have programs out there but typically you'll find some kind of cruel trick you know the people that are running it or like they don't always get it and/or you know it's one of those situations where they run out of money or people just flew straight and at the end of the day they just have to stop for those of you they're running the company's frankly as my economics professor at the School of me.

You know the quick buck goes to the person that's really the less ethical but he did a wonderful Austrian accent so to me it felt like he knew what he was talking about but anybody that can basically going understanding living in New York City you know there are tons of quick buck artists there the idea though is this that it has been since we're talking about twenty years since the Gerald filing jointly with the five so we're talking about a quarter century where people have started to get their heads around this technology I'm starting to finally see some things that may not be seismic in their individual application however in the aggregate they open the door for a lot of other things the greatest difficulty though is this you know when you talk about $1 dog I would call up any opinions that I know portfolio managers I know until.

I wanted to buy dollars dog they basically said in my private in my IRA these people can buy sell the hero they can't buy in the index so at the time when they need the funds the most their access to the public workers in that fashion is the hardest but it leaves you with this that someone will make a lot of money in this space will be in the next few years that will start to see a delineation of products delineation of approaches I just don't know what it's going to be but it'll probably be experiences any teacher someone that goes up their phones the result that is counter intuitive but has the intellectual curiosity to pursue that result to find out why it was counter intuitive and then go down that path and say what we need this drug to reduce male pattern baldness erectile dysfunction we now see something that goes out there and deals with some kind of cardiac an indication the lower hanging fruit is probably the one that's easier because obviously when you talk cardiac when you talk anything in the major fields its prohibitive in terms of the Ramp;D drive against terms of the filings required by FBI but it doesn't mean that you should not maintain no questions well you know has his old car piled jan was once upon a time a dollar stock so you know what those times are long gone.

I would probably say is that an individual that isn't trained to really do mean train and not just the science side of it but also the capital markets that it would probably be reckless for an individual like that to directly invest in any type of program like this is just no way you can go out there and be in a position to say okay I know more than the capital markets just what I do think now is that we're trying this East sovereign investments i.e the Japanese coming in the Japanese coming in before the Fuji film speaker know all the different level of investor ironies there they got too much money they can't go out there and really invest in what needs to be invested cuz you know if you have a billion dollars and they all the company only needs a million doesn't even move the needle a little bit so at the end of the day you have this dichotomy that is playing the system and don't forget to tell you that we're talking about drug price controls were talking about orphan indications were talking about all of this stuff there basically is muddying the waters. I like to think I'm good at least doesn't think.

I'm that good at picking things up but after a while look at for the long term and say you know five years thirty years right about what would happen with the fact that the USA with no coming back and starting to do unfettered done some research to be problematic as you can't go from thirty miles an hour 200 250 overnight I thought it would take about five years ago I wrote a piece talking about how we're going to get left behind never written a piece that I thought was so accurate where I had no idea what the hotel was writing at the time was right well things reason is that ok I think this is probably not going to happen within five years if I write a piece again for nature you know and unlike a lot of other publications these people want something in 24 hours 25 hours after that you better deliver it.

I'm not going to be more than Henry because frankly it's just about impossible if there are any questions you want is to see you happy to talk about the few comments just open it up a bit more I also believe our do believe there is value our ok many cases is not as realised what are the issues go back to mention before his perception ok so what is transpiring in companies have not done a good job and as far as clarifying where they stand what they're doing why they're doing it and what is the end result so to me this is an issue of clarity ok there are a lot of all kinds of sub-issues at my contribute to that but essentially investors need better sense to consider those are the people who will buy since we've talked about the funds can't just one can but can't hedge funds are getting hammered so they're not all doing is dumping but again he comes down to whoever they might be need a better sense of where you are going well i just ending in y you are doing I was going through some things with a company he said how did the slide slow and I said actually there a helluva lot better than they were but I said you one little thing.

I really like that a lot of people have come into our sort of define what is the occurrence of this issue how many people are affected by this issue is that number of growing ok what how do you intend to participate in that market over time which is again it lends another element of credibility to what you're trying to do hoping to do in the end will potentially accomplish we're going to open up to some questions like I said we were talking about this stream of consciousness side of it so even Donna gets a SIP now so whatever you guys like to participate in our ask for open book control and raised almost sure short-term profit for the investors to the question to you guys is why would an investor invest in our universe you will rather than the profit of cornering a terrible room or anti-federal antibody market and raising the price doubling the price of just one factor.

I use a lot of Puffier products that you mentioned them they won't come after I watch these prices go from $1.0038 or certain medicines like written twice and work out by a devout patient didn't have to pay $50 co-pays for their dollar 38 medicine and the price of that stuff is now a hundred and twenty some odd dollars for the little to both the year old medical hasn't this been on the front page of the paper most recently with a number of surreptitious characters or fighters uncle Novartis and yes the same time they haven't brought up to Puffier's as a time many others you know what I mean c'mom you go where the money is whether its banks or pharmaceuticals it's funny you mentioned you know what we're talking about here last week was that conference you know you had the course yet more squarely in his foodie tables available I'm glad you brought it up you know what kind of what do you think it was a good price high enough shock value there but give him 10 Fraser head of basically said repeatedly and having breakfast that morning he understands that the Business School economics said work is to read short-term and long-term greed is gone out there and you make a regional of money for the rest of your life build something and you have a legacy short term is you do whatever the heck you what they throw your drama pavement and that's the end of it but at some point the only question.

I really have is when do you start to see that outraged when do you start to see the restraining steps being put in well here's what I'm thinking you know everybody heater remembers the outrage the hostility and anger around HIV drugs it was one of those things where if it hadn't been literally or people protesting in front of DA we wouldn't have seen a lot of these expedited changes when it happened and at the end of the day it succeeded not just for HIV drugs but for other meds as well gorgeous drugs came in because he was willing to go out there and take unusual steps and I was first day and watching how that went through and frankly nobody could have predicted that at all so you look at that news today you know where is the sense of outrage where is the sense of that this must be changed and I don't want to hear about you know free-market capitalism free market capitalism or friends and they don't exist right now okay that's really not what we're looking at what.

We're looking at are in a lot of cases monopolistic behaviour where it's being left unchecked and that candidly by some bankers and hedge funds hedge fund investors that really had better start to think about what they want to do in the long term because as I told one hedge fund investor erythromycin you know how cold is a drug and those things do we do next generation antibiotic is that while I'm a JohnDeere kind of guy revenues so let me get this straight you're immune to bacteria that would you tell me if you don't get something new by the time this decade is out well we're going to be talking about going back to the battle days that when you said alright how much it would cost me that's the kind of approach you know again common sense is always there but it simply isn't education to change this sometimes work but let me just go back to another analogy comparable-storeStephen said I worked on an HIV drug in 1991 and NYU ok and we work has serious issues will work with Burroughs welcome became to sort of combinatorial cocktail approach but if they had some flat on West 75th Street.

I the people from act up outside the house carrying small the flat the fifth floor no carrying signs they would check into dumpers and they were just I could get a hundred pages of faxes a day that outrage forced a lot of people to do something in their time as you need that outraged me not against the individuals that we have mentioned are against me these large firms but they make a profit ok whatever level of private they're not Donna do something and you're in business to make a profit your business to advance the science but you need to make a buck to keep it going to keep somebody invests they keep its little like a rolling ball downhill many cases they want to make a profit oriented much easier double the price of the mice in the risk there is minimal control that marketplace then to invest in the stem cell in my 25 years to find out whether and so how do we get the investor to invest in their website here the burning's interpretation of your ads about coming back to the way they need a profit so where should we ok I'm Donna go out there and do you know who the single worst fund managers are or advisors are in terms of tell me about drugs development of drugs and such doctors practising MD's also well you know this is good enough and you know.

We've been using this you can tell exactly how old someone is by you know specifically what was commonplace in the residence he's so you know the older you get no there's of course I'm generalising but there are some ghetto unusual characters brought to the purposes I can pretty much figure out you know what is going to happen far as the representative something unless they're out there are exceptions of course you know you had I D Dr warehousing patients waiting for a curso in that particular case that's the exception but for audit purposes they don't want to change them even broke don't fix which is problematic the other parties when doctors don't tell me you know well the rate of return on this investment is going to be like that's what I really put my hand on my wall and say ok I didn't ask you about you know right to return that's my job in theory.

I asked you about what the receptivity would be the efficacy of this particular drug is going to be so the end of the day I'm very leery and other stuff really good hearted physicians and all basically come out and say this is my best opinion of altered the purposes they're usually pretty right however there's this book should always this way guarantees called the remedy by a guy named get the west coast you wrote about the work that Coke or other kind of Doyle and they're all contemporaries they were all looking for cures and they were all battling about Phoebe and what the essence of it wasn it would take a roughly eleven years the time something is accepted as a standard of care by thought leaders to actually become standard of care and then one of the guys that rather than Again to me yet but it takes twice as long to get something out of the system that basically a standard of care that doesn't work so you go figure you know it's like one of these film again one of these really dichotomy that ok I you know I could suck up the lawyers to go from there slammed the lawyers' ok tell you the law firms.

We use frankly they work on the weekends and you know they also say you know what is going to be a form a foreign beer forms D or is this like really were you know heavy lifting and you know the form be you know don't don't kill yourself and we'll just do it this way and then others will say you better read every single and I don't wanna see double negatives left and right the other thing for all your small bio tech companies is there I have never seen the term she's being proffered today with you know that spiral packages that are on there at like I've seen in some cases I've seen this stuff individual I've never seen a one contract ok it's like you know I told you signed this might as well just give me keys it'll cut down the time you're wasting no matter who make more money if you go out of business and if you actually succeed but it's hard to explain that to people they think.

Ok I live to fight another day but if you don't have a good grasp of the capital markets and understand who actually forget about investing in your cuz it's more of a push but if you don't understand what they can do to your stock well then you should not be in this business not at all because you're Donna make it ten times more difficult with the person is following you after you and that's that's a reality and I'd say that the cousin to the people that are pushing you know these off-label uses r r1 that these jurors they're just people go out there and they can actually qualify returns done to minimise investments where they're guaranteed to be made whole thing moving really does so a little bit about talking about reading books I read a lot of books as well but it's interesting leading going back to something called the billion dollar molecule about JohnBowker and vertex actually charged with a friend of mine but reading the subsequent book by the same author whose name.

I truly forget I'm getting old but called the antidote which goes to the next iteration of a generation of good but it shows the lengths that people went to the trials and tribulations in the issues to get all this sort of things improve it just it's again something you should know I read through because history has been written you just revisiting it at this point anyway so I'm really enjoying this I can't sit through many sessions but this when I'm really enjoying so as Stevens employees here with me but you made a comment that really surprised me that related advocacy you were talking about the act-up HIV AIDS movement which is something I talked about a lot different movements and tactics that can move the regulatory middle but how you were using I'm surprised it came from this session is it your ring to it and it made it may be the bottleneck that you're talking about what's in a regulatory bottleneck it's actually a bottleneck from our funders are hedge funds the financier's of this moving toward.

I guess i m a little confused you're not advertise I'll give you the first time are we ok I we should actually really should LG many people don't know Ito I took them public back in 1986 when I was doing whether they didn't do anything until when they were the 13th company lucky 13 you know this little bit of budget plus minus that was approached with thalidomide why cause the aids community basically said that they wanted to struck it was had the potential to shut down ataxia but it was like FDA was terrified that stuff bootleg was being brought up from Brazil so former chairman CEO joked around with me about how the minute he announced that they went from having to analyst covering them to having one then I cameo board and they had two again so I increased them again in about a hundred percent in terms of coverage but it was one of those things where anybody remembers that time for the first five years.

The only indication the little my soul mate was approved for Hansen's disease wasn't approved for multiple heloma but they made extraordinary step to ensuring that we couldn't get out of that community sort of the steps program and unlike a lot of other companies that will just keep making this they went into effect in the third generation product right from the get-go second generation product into the work that well but the third one was rubble and they actually understood that was terribly important to go out there and make changes I mean in this industry if you have a blockbuster until there is a patent issues helping you Donna change it if you basically by a car next year's models Donna 15 you bell and whistles you know it's not health care's problem it's the mentality that you're seeing a lot of these developers are saying don't touch it if you touch it you may put our franchise party and that's why you know why were one of these folks you know they're basically was faced with possible decision between you know myself or my family kids.

I probably would start to go out there and you know what are we building here what kind of at those are we going out there in advocating for me now no need to understand that again I believe in revenue absolutely I believe in funding I believe in all that but at the same time pundits have to understand that you know one of them said to me something to your great game in mutant money here were swimming in it but I need three things one need to be able to invest fifty million dollars to get texts on my return well you know it's not guarantee but OK and three they have to be either a break even or positive cash flow next year well at the University 2011 I think walked out the door somebody's on drugs so you know I'll leave it you tell me I'd love to be able to see an activist model it goes up there and says to hedge fund to private equity shop to a VC we're doing this because not after someone in that hedge funds private equity for a worthy has already been stricken by something that you know there was in the last 15 month.

I think that's going to be the only thing that would register with them everyone has what does everyone have a certain amount of revenue they bring in now do you think you could next year will bring some of those hedge funds and somehow bring them into a meeting for that type of communication seriously don't know I don't think they would be attentive to that what does it take maybe it makes the agitation or I shouldn't say agitation but advocacy to the strike at their market cap somehow or at least in the better if you Donna out there better headline you've gotta get out there and dries that headline again so that people might recognise the potential that there is nobody could be money into something.

I mean I've got a couple of inches whose son is good doctors and we you know just put in thirty five thousand foot addition of this house ok he's looking for something in the area is this kid can see group he said just don't god damn get it quotes unquote but the whole thing is I think efficacy is important I saw it's just a question where is the headline what will drive it and the people that could drive HIV drug which was approved for HIV so are you suggesting that the many men are behind that could you elaborate originally we talk about the current HIV situation the one that happened years I believe you're talking about a litter of the time.

I rode by was not in custody for multiple heloma it was serendipity pure and simple that created that at the time people were desperate they were literally dying you know within 12 months of diagnosis so what they did notice was that for wasting it takes place for the buyers and also came before cancer exit they notice that patients were wasting as quickly as they were without the drug so they noticed there was something important in there they just don't know what was then the company went out there and said okay we don't know what we're going to market the store but we know it's got strong drug it's got the ability to do things with the end of the day the matter of public record research about the barber Logic out of the University Arkansas happening jet shipment of drug based on Judah Folkman up in Boston where the theory of Indian Genesis we tried our first patient unfortunately that didn't survive is refractory multiple heloma patient.

You know two children didn't work but the second patient went into remission and that's when they understood that they had something and candidly that's the way you really typically do find scientific breakthrough you know if you look at all the recreational brought not that the drugs from Iraq recreational use but your quality of life improvement you look at them no one came up with this stuff that really works based on that indication you know they were cardiac drugs you know for hypertension they were all different kinds of drugs then all of a sudden they notice that it had some unintended positive consequence and that's when the community came back and fell by the way yours you know here's what we're looking at you know those are the two more approaches you have the greater the chance for serendipity take place and the ideas that I don't want to see companies spend five billion dollars on one product.

I want to see them spend 25 million dollars on his many products as they can watch it at the end of the day will come up with not just a blockbuster but a change in therapeutic application just to get back to little bit of the HIV side as sort of funny story but a crazy story was I was the original investor in Gallic ok and I kept putting successively more money it's at what point I was told that to chairman is in the office your job is on the line because you put so much money it to give but my job was on the line in ninety five and look at Gilead now again I had that I believe I really believed to what john was saying in looking at now so there are times goes back to that advocacy work fired any ways what the heck but again there are times if you have an advocate it can work everything but it's something nobody else thanks you all for coming thank you for participating.

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