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Bloomberg's Koons on Pfizer, Again's Kilduff on Oil (Audio) · Bloomberg Intelligence

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  Speaker 1: today to get two three months with offer code broadcast again.
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  Speaker 1: The Dow up two hundred eleven points again there of
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  Speaker 1: one percent. I'm Charlie Pellets and that's a Bloomberg Business flash.
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  Speaker 1: This is taking stock with Pims Box and Kathleen Hayes
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  Speaker 1: on Bloomberg Radio. Fiser may have had to walk away
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  Speaker 1: from its one hundred sixty billion dollar takeover of Allergan
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  Speaker 1: last month, but that doesn't mean it's sitting back and
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  Speaker 1: resting on its laurels. Today it agreed by Annacre Pharmaceuticals
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  Speaker 1: for five point two billion dollars and in this step
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  Speaker 1: will gain control of an experimental treatment for eczema condition
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  Speaker 1: that affects about eighteen to twenty five million people in
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  Speaker 1: the United States. Joining US Now as Cynthia Coons of
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  Speaker 1: Bloomberg News, she wrote the lead story for the terminal
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  Speaker 1: today and she joined us now to tell us more
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  Speaker 1: about the deal and what it means for Freiser. So
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  Speaker 1: how did this come about? Well, its farther stand this
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  Speaker 1: deal only took about a month to come together, and
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  Speaker 1: Fisor can move quickly when they want to. Clearly, they
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  Speaker 1: had a lot of cash um and they're using cash
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  Speaker 1: they have within the US UM for this deal. So basically,
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  Speaker 1: ever since the Allergan deal came apart, they've been saying,
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  Speaker 1: you know, it's been saying the CEO Fiser that he's
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  Speaker 1: after going after late stage assets, assets that are going
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  Speaker 1: to bring revenue quicker instead of early stage, say scientific
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  Speaker 1: geared companies that are developing drugs, but there still might
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  Speaker 1: be years to prove whether or not they work. And
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  Speaker 1: so this is a perfect example of that. This is
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  Speaker 1: the kind of thing that he would have been eyeing,
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  Speaker 1: and they moved quickly so that they didn't end up
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  Speaker 1: in a competitive bidding process, which makes a lot of
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  Speaker 1: sense for them, Cynthia, this is what are all in
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  Speaker 1: five point two billion dollar deal, including the debt. What
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  Speaker 1: does this deal indicate about Fiser's plans for a split
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  Speaker 1: in their business of new drugs, new medicines, and then
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  Speaker 1: in another company, perhaps those medicines and drugs that have
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  Speaker 1: lost protection. If anything, it looks now like they're closer
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  Speaker 1: than ever to going down the road of a split.
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  Speaker 1: If they weren't thinking of doing that, there wouldn't be
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  Speaker 1: an urgency in deals. And it feels as though this deal,
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  Speaker 1: coming so quickly out of the gate after the Allergan
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  Speaker 1: deal fell apart, is an indication that they're going to
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  Speaker 1: move quickly. They're gonna do a lot of deals and
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  Speaker 1: they're going to get the company ready for a split.
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  Speaker 1: It would be pretty hard to shareholders aren't going to
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  Speaker 1: go ahead with a split, considering they spent hundreds of
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  Speaker 1: millions of dollars assessing this possibility already. But of course
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  Speaker 1: they're going to take certain things into consideration, and one
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  Speaker 1: of those is the tax implications of a split. One
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  Speaker 1: of the arguments that they've made is that their competitors
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  Speaker 1: in the space of Brandon Pharmaceuticals, a lot of them
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  Speaker 1: are DOMA filed overseas, and obviously fives I wasn't able
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  Speaker 1: to go ahead with that plan, So they're going to
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  Speaker 1: look at things like that when they decide whether or
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  Speaker 1: not a split is viable. But doing a deal like
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  Speaker 1: this just indicates that they're trying to bulk up the
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  Speaker 1: innovative side of the business so that they have the
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  Speaker 1: pipeline and the approval is coming down the track ticking
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  Speaker 1: over in the next couple of years, be a competitive
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  Speaker 1: company on their own as an independent innovative company. Fungus
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  Speaker 1: how how how important are these to FIS or how
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  Speaker 1: big are these markets potentially? Well, ex is a very
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  Speaker 1: large market. This is specifically a treatment for a topic dermatitis,
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  Speaker 1: and if it's improved, this is a very competitive segment.
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  Speaker 1: But if it's approved, it's going to be for the
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  Speaker 1: mild to moderate category, which is pretty niche, and that's
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  Speaker 1: where more Fiser could make a mark with it. Of course,
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  Speaker 1: they're going to have to prove a dermatologist that this
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  Speaker 1: is the drug they need to use for this. They're
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  Speaker 1: obviously using other things right now, and so this isn't
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  Speaker 1: This is kind of going to be carving out a
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  Speaker 1: new a new category there. And so to some extent
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  Speaker 1: some analysts have said, look, it's probably more like a
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  Speaker 1: one to two billion dollars in sales kind of target
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  Speaker 1: for this drug rather than two plus billion. But by
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  Speaker 1: there's a really strong company. They have a long history
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  Speaker 1: of trying out new drugs, and they can do this.
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  Speaker 1: They can just they just have to convince dermatologists that
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  Speaker 1: this has got to be the kind of standard of
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  Speaker 1: care for a new patient population. Thank you very much,
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  Speaker 1: Cynthia Coon's Bloomberg Healthcare of porter telling us about Fiser
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  Speaker 1: and their acquisition of Anacor shares A visor up about
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  Speaker 1: half a percent today. They're up about three percent so far.
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  Speaker 1: This year and it pays a dividend of three point
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  Speaker 1: six percent. All let's turn our attention now to the
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  Speaker 1: energy markets. With energy prices moving higher. Right now, the
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  Speaker 1: benchmark West Texas and some media contract taking a look
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  Speaker 1: at this month forward is up more than three and
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  Speaker 1: a quarter percent. Here to tell us more, John Killed
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  Speaker 1: a founding partner of Again Capital. John always a pleasure. UM.
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  Speaker 1: I wonder if you could comment on the report that
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  Speaker 1: Goldman Sachs has said that the global glut of crude
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  Speaker 1: has turned into a deficit? Do you buy that? Um,
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  Speaker 1: they're a little ahead of me on that conclusion. Tim,
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  Speaker 1: I'm always good to speak with you as well. By
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  Speaker 1: the way, UM, I don't the numbers don't quite add
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  Speaker 1: up that much. I think there was a little overshoot
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  Speaker 1: in terms of how much Nigerian oil production has been
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  Speaker 1: lost over the past a couple of weeks here now,
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  Speaker 1: the Nigerian oil Minister was on the wires today saying
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  Speaker 1: that they they're pumping one point four million and I
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  Speaker 1: had to say, it's not very precious oil either. This
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  Speaker 1: oil was sitting on tankers better part of this past
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  Speaker 1: year looking for a place to sell into. So you
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  Speaker 1: know it has spite the market, but you have to
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  Speaker 1: take a hard look as to how valuable this oil
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  Speaker 1: really is. So you have long been arguing that the
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  Speaker 1: bottom and oil had not been actually established. You still
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  Speaker 1: feel that way. You've been traded in the mid forty
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  Speaker 1: bucks a barrel for some time now in West Texas Intermediate. Yeah,
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  Speaker 1: I mean, we're obviously, you know, good ways away from
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  Speaker 1: where we were in terms of the bottom at this point.
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  Speaker 1: But when you when you look at these we've strung
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  Speaker 1: together some significant supply distruction events that were outliers are
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  Speaker 1: the Ka oil workers strike, as Tar Sanspire, this situation
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  Speaker 1: with Nigeria, and um. You know, I think part of
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  Speaker 1: what's propping prices of a bit is a strong demand
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  Speaker 1: out look that I don't see necessarily playing out, particularly
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  Speaker 1: as it relates to the energy intense Asian economies led
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  Speaker 1: by China. The data just it's being poor every time
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  Speaker 1: one of these countries like Japan, South Korea, or the
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  Speaker 1: Chinese report, So I think the demand side of this
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  Speaker 1: equation is not going to hold up. And then if
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  Speaker 1: the supply situation proves to be transitory through some of
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  Speaker 1: these instances that we're going through, uh, we'll be back
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  Speaker 1: in the soup again pretty easy. Can you can you
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  Speaker 1: make any comment on any production outages that may exist
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  Speaker 1: in places like Canada, but also across the ocean in Libya. Well,
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  Speaker 1: the Libyan situation is very interesting. It keeps evolving. I
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  Speaker 1: think the deal that's a secretary carry announced today is
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  Speaker 1: a big step. And actually there is going to be
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  Speaker 1: a loading now again to a cargo in East Libya,
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  Speaker 1: so they that is a switch that's just ready to
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  Speaker 1: be flipped. Now, the two sides there have been fighting,
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  Speaker 1: you know, intensely with each other, denying the export export
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  Speaker 1: of oil there. But if that ramps up, which it
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  Speaker 1: easily could, Uh, that's gonna be another factor for this
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  Speaker 1: market now that the one supportive outage him is down
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  Speaker 1: in Venezuela because they are on the precipice of an
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  Speaker 1: economic implosion, their chumber's days pulling out, so we could
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  Speaker 1: in fact lose their oil and that that could be
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  Speaker 1: a bit of a game changer for the market. More
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  Speaker 1: than anything else. Has China's economy, the slowdown there have
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  Speaker 1: been completely priced into the market now, the oil market, No,
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  Speaker 1: I don't believe it has actually as a matter of fact,
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  Speaker 1: you know, we know that they're they're scrambling to try
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  Speaker 1: to prop up as much growth as they can right now,
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  Speaker 1: and they haven't even started, um, you know, rationalizing their
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  Speaker 1: steel industry. The other thing, too, is that a lot
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  Speaker 1: of the quote unquote demand growth be seen out of
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  Speaker 1: China has really gone into stockpiling and be to supply.
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  Speaker 1: Uh these teapot refiners they're actually making a hundred and
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  Speaker 1: fifty of the refined product capacity. They have been exporting
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  Speaker 1: record amounts of diesel fuel, which is contributed to a
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  Speaker 1: glut there. So I think that there's a lot of
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  Speaker 1: dynamics there that I don't think had been priced into
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  Speaker 1: the market on the bare side of the equation. John,
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  Speaker 1: of course, you've taken note of Sandridge Energy and it's
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  Speaker 1: filing for bankruptcy protection. Are we're going to see more
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  Speaker 1: of these bankruptcies in the United States? We've had quite
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  Speaker 1: a few now, and a Sandwich is obviously pretty notable,
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  Speaker 1: But yes, I do. I think that there's still more
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  Speaker 1: to come. And um, I'm still waiting for some deals
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  Speaker 1: to be struck here because I know that the rich,
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  Speaker 1: I keep saying, throwing this whole thing, the rich are
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  Speaker 1: gonna get richer. Penn um, and then there's some good values.
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  Speaker 1: The one thing we can take hard in as Americans
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  Speaker 1: and consumers is that these assets are obviously through the
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  Speaker 1: bankruptcy process will be repriced. So it's not like they're
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  Speaker 1: going to vanish into pin air to be lost forever.
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  Speaker 1: The infrastructure and all that's still there. It's just that
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  Speaker 1: now hopefully they build these new companies that emerge will
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  Speaker 1: be able to produce oil at new lower prices, which
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  Speaker 1: should be good for everybody. Are you surprised that Goldman
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  Speaker 1: Sacks was surprised to buy the sudden oil market turn
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  Speaker 1: and the glut vanishing? Um? I guess you know these
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  Speaker 1: are in the energy market cap. You know, you know,
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  Speaker 1: I've talked about this space for over the years now.
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  Speaker 1: There's always something UM and always had to be kind
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  Speaker 1: of be on the lookout for stringing together these events
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  Speaker 1: when they start to occur there like celebrity debts, they
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  Speaker 1: seem to come in threes, if not more, and UM,
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  Speaker 1: you know, you gotta deal with it. So but I
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  Speaker 1: think that there may be an overreaction on their part
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  Speaker 1: at this point, and I would be careful because it's
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  Speaker 1: interesting that a lot of the they had record length
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  Speaker 1: in the market coming into this run up that's been
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  Speaker 1: shed with the deal of it, and we've also seen
• 10:30
  Speaker 1: the build up now of shorts in this market. We
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  Speaker 1: get to see all that data thanks to the CFCC
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  Speaker 1: every week, as you know, and that's been building up,
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  Speaker 1: so they they might have been a little late here
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  Speaker 1: if you asked me. All right, well, John Kilda, thank
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  Speaker 1: you so very much, right on time for us. He's
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  Speaker 1: founding partner at Again Capital. He's not entirely convinced at
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  Speaker 1: the bottom and oil prices has been set. The market
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  Speaker 1: has not priced in the slowdown in China, for example,
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  Speaker 1: John killed up joining us today to talk about the
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  Speaker 1: move up in oil. I'm Kathleen Hayes along with Pim
• 11:01
  Speaker 1: Fox taking stock on Bloomberg Radio. Dave Wilson will be
• 11:05
  Speaker 1: coming up with his chart of the day and the
• 11:07
  Speaker 1: economics Brief with carl Rick Odonna from Bloomberg Intelligence. Keep
• 11:11
  Speaker 1: it right here on Bloomberg Radio.