Latest / Bloomberg Intelligence / Facebook Tries to Curb Fake News, Abuse with New Guidelines

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Facebook Tries to Curb Fake News, Abuse with New Guidelines · Bloomberg Intelligence

• 0:05
  Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.
• 0:08
  Speaker 1: Along with my co host Lisa Abramowitz. Each day we
• 0:11
  Speaker 1: bring you the most important, noteworthy, and useful interviews for
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  Speaker 1: or the trading floor. Find the Bloomberg p m L
• 0:20
  Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Facebook
• 0:33
  Speaker 1: and data privacy. One of the things the company has
• 0:37
  Speaker 1: most recently done is to issue it's twenty seven page
• 0:40
  Speaker 1: document that governs the behavior of it's more than two
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  Speaker 1: billion users. This offers Facebook's definitions for hate speech, violent threats,
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  Speaker 1: sexual exploitation, and more. Here to tell us about the
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  Speaker 1: efforts of the company and the issues that it faces
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  Speaker 1: is Monica Bickert, vice president of Product Policy and counter
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  Speaker 1: Terrorism four Facebook, joining us from Menlo Park, California. Monica
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  Speaker 1: bicker thank you very much for being with us. Tell
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  Speaker 1: us about this, uh, this twenty seven page document and
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  Speaker 1: what you would like people that may not read all
• 1:13
  Speaker 1: twenty seven pages, but what would you like them to
• 1:15
  Speaker 1: take away from it and know that you're trying to
• 1:17
  Speaker 1: convey and communicate. Well, the top line here is that
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  Speaker 1: we really want to have a safe community, and that
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  Speaker 1: means having rules in place that say, we don't allow
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  Speaker 1: hate speech, we don't allow harassment. If you come across
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  Speaker 1: something like that on Facebook, please tell us about it
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  Speaker 1: so we can remove it quickly. Imagine when I was
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  Speaker 1: reading over some of these sort of guidelines, their subjective,
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  Speaker 1: and you know, how are you going to deal with
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  Speaker 1: this sort of subjective nature of this? Will it be
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  Speaker 1: from hiring more people to actually oversee these and make
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  Speaker 1: a judgment calls on the complaints. We have hired more
• 1:55
  Speaker 1: reviewers in the past year. We now have more than
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  Speaker 1: ball who are reviewing content that possibly violates our standards.
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  Speaker 1: This would be content that people have reported to us
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  Speaker 1: through the site, or content that our technical tools have
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  Speaker 1: flagged as possibly violating our standards. When that content comes
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  Speaker 1: into our reviewers, they apply our policies. If the content
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  Speaker 1: violates our standards, they'll remove it, and in those cases
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  Speaker 1: we're able to make these decisions within twenty four hours
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  Speaker 1: of getting the report. Now, you have background as a
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  Speaker 1: former federal prosecutor, and I'm wondering, based on that experience,
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  Speaker 1: whether doing this for a private organization like Facebook that
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  Speaker 1: has such a public uh a public face and has
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  Speaker 1: In a sense, the public has almost as much control
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  Speaker 1: over what goes on on Facebook than Face as Facebook itself.
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  Speaker 1: Does That sort of offer a particular challenge and one
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  Speaker 1: that you've never seen before. Well, one challenge is that
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  Speaker 1: this community, the is not only large, it's more than
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  Speaker 1: two billion people, but it's also very global. More than
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  Speaker 1: of people who are on Facebook are outside the United States.
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  Speaker 1: So when we think about where to draw the line
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  Speaker 1: on speech, it can't just be based on how one
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  Speaker 1: group of people feels. We really have to think about everybody.
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  Speaker 1: And that's why we constantly talk to safety organizations and
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  Speaker 1: experts around the world so that we can make sure
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  Speaker 1: we're learning about new trends, uh, new safety topics, and
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  Speaker 1: making sure that we're keeping our standards current. One thing
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  Speaker 1: I was looking at in one of the sections at
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  Speaker 1: Facebook outlines how they're attempting to fight fake news. Among
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  Speaker 1: the ways includes disrupting economic incentives for people, pages and
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  Speaker 1: domains that propagate misinformation. What are the economic incentives currently
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  Speaker 1: in place for some of these venues that do propagate
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  Speaker 1: fake fake news quote unquote, well, most most commonly when
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  Speaker 1: people try to share fake news, they're doing it for
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  Speaker 1: financial reasons. In other words, they're sharing something that looks
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  Speaker 1: like a news story, you click on that and it
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  Speaker 1: actually takes you to some ad farm or some spammy
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  Speaker 1: page that's off of Facebook. That is has gotten easier
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  Speaker 1: for us to detect, and we've removed that wherever we
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  Speaker 1: find it. We also remove any fake accounts, and we
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  Speaker 1: find that they are often the source of fake news.
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  Speaker 1: So overall, we're hoping that the situation is getting better
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  Speaker 1: and that people will also have more context when they're
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  Speaker 1: deciding the news that they're seeing, when they're deciding whether
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  Speaker 1: or not that news is something they should rely upon.
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  Speaker 1: We're helping with that by providing information to people whenever
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  Speaker 1: they see a story on Facebook that might be fake.
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  Speaker 1: We are trying to share related articles from around the
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  Speaker 1: internet and also information about who exactly has published this
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  Speaker 1: story and what does the internet say about that publisher?
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  Speaker 1: UH Monica, as the vice president of Product Policy and
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  Speaker 1: counter Terrorism, UH, do you see a time when you
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  Speaker 1: will have more concerted effort on the part of other
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  Speaker 1: technology companies in the same context, and is there any
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  Speaker 1: reason why they wouldn't sign up for the same twenty
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  Speaker 1: seven page document While all of these social media companies,
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  Speaker 1: they work a little bit differently. Most of them have policies,
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  Speaker 1: and most of the policies cover the same topics, and
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  Speaker 1: we do work together closely on things like child safety
• 5:30
  Speaker 1: or combating terrorism propaganda. Uh, those relationships are very strong,
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  Speaker 1: but I think you can expect in a year ahead
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  Speaker 1: to see those relationships get even stronger. You know, one
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  Speaker 1: thing that I'm struck by, Monica, is an apparent attempt
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  Speaker 1: by the company to put all of the users of
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  Speaker 1: Facebook under its US based rules and policies. And I'm wondering,
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  Speaker 1: you know, is that a deliberate decision based on some
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  Speaker 1: of the European privacy laws. I know that our legal
• 6:01
  Speaker 1: team is making decisions based on the new regulations in
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  Speaker 1: Europe that are in place, as well as regulations that
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  Speaker 1: we have in the United States, But I want to
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  Speaker 1: be clear that the standards that we have released are
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  Speaker 1: something different. These are not based on laws. These are
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  Speaker 1: based on what we think it takes to keep this
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  Speaker 1: community safe. Is there something that you wish that the
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  Speaker 1: community would do to get out ahead of this conversation
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  Speaker 1: rather than having to face questions from either the US
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  Speaker 1: Congress or indeed react to situations that become public, such
• 6:37
  Speaker 1: as the Cambridge Analytica cases. There's something that you can
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  Speaker 1: do to be in front of all this, rather than
• 6:42
  Speaker 1: in a sense being reactive. As a company, we try
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  Speaker 1: to stay ahead of issues by talking to safety experts
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  Speaker 1: and organizations worldwide who have the latest information on potential threats.
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  Speaker 1: As a community, and thinking about all the people who
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  Speaker 1: are using Facebook, we think the best thing is to
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  Speaker 1: share exactly what the rules are and make it easy
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  Speaker 1: for people to tell us if there's something on the
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  Speaker 1: site that really doesn't belong there. Is it tough Monica
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  Speaker 1: to preserve humor while trying to crack down on some
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  Speaker 1: of the issues that people have had with the platform. Yes,
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  Speaker 1: it is. There's a real challenge, for instance, when you
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  Speaker 1: think about something like hate speech or threats. Obviously we
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  Speaker 1: don't want either of those on the site, but you
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  Speaker 1: also can envision saying to a friend, if you come
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  Speaker 1: late to my party tomorrow night, I'm going to kill you.
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  Speaker 1: I really want you there at the beginning. Um, And
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  Speaker 1: that's the sort of content that people share without meaning
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  Speaker 1: any harm at all. So our reviewers have to try
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  Speaker 1: to make those decisions every day, and they don't always
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  Speaker 1: have all the context. Well, but one question that I
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  Speaker 1: have is if there is a human being making these decisions,
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  Speaker 1: does that put the liability, the legal liability on you, say,
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  Speaker 1: if if there is a threat like that, I'm going
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  Speaker 1: to kill you? And you know, the reviewers decided sugest,
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  Speaker 1: but it turns out to be real. What's important to
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  Speaker 1: us is making sure that if we become aware of
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  Speaker 1: an actual credible threat imminent violence, that we do send
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  Speaker 1: up to law enforcement. Our terms made clear that we
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  Speaker 1: will do that and that's also consistent with the law.
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  Speaker 1: Just quickly, based on your experience with the Mark Zuckerberg
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  Speaker 1: has this incident, has this issue changed him over the
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  Speaker 1: last couple of months. Well, Look, the company and our
• 8:22
  Speaker 1: senior leadership, including Mark has also has always cared about
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  Speaker 1: making sure that our community is safe. People are going
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  Speaker 1: to come to Facebook if it's not a safe place,
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  Speaker 1: and that's really what we want to do is give
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  Speaker 1: people a place to come and share and connect. So
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  Speaker 1: that's really priority number one for us. All Right, we're
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  Speaker 1: gonna leave it there. I want to thank you very much.
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  Speaker 1: Monica Bickers is the vice president Product Policy and counter
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  Speaker 1: terrorism for Facebook, speaking to us from Menlo Park, California.
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  Speaker 1: This on the occasion of the release of a twenty
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  Speaker 1: seven page document that governs the behavior of users of
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  Speaker 1: Facebook more than two billion users on Facebook. So excited,
• 9:15
  Speaker 1: I want to get to our next guest, all about
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  Speaker 1: E t f S and Exponential E t S. Phil Box,
• 9:21
  Speaker 1: chief executive of Exponential E t f S, are based
• 9:24
  Speaker 1: in an arbor, Michigan, but he joins us here in
• 9:26
  Speaker 1: our eleven three oh studios and uh feel great to
• 9:30
  Speaker 1: have you with us. We talk about the topic of,
• 9:32
  Speaker 1: you know, the overexposure that many investors may have even
• 9:37
  Speaker 1: though they do not know it to certain types of stocks,
• 9:41
  Speaker 1: for example, Facebook, Alphabet, Amazon, Netflix, Google, and so on. Uh,
• 9:48
  Speaker 1: what exactly do you believe that people really think they
• 9:52
  Speaker 1: own versus what they really do own. Well, thank you
• 9:55
  Speaker 1: for having me on. And you know, when you take
• 9:57
  Speaker 1: a look at the sp F or really any mark
• 10:00
  Speaker 1: a cap weighted index fund, a lot of people assume that, well,
• 10:03
  Speaker 1: you know what, I bought the SMP five hundred fund.
• 10:05
  Speaker 1: Now I'm in a broadly diversified representation of the U
• 10:07
  Speaker 1: S economy. In reality, because of the nature of market
• 10:11
  Speaker 1: cap waiting, where you keep putting more and more money
• 10:13
  Speaker 1: into the highest capitalization stocks, you get a very high concentration.
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  Speaker 1: And right now, if you look at the fang trade, Facebook, Amazon, Apple, Netflix, Google,
• 10:21
  Speaker 1: will throw Microsoft into it. They those five stocks have
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  Speaker 1: contributed thirty of the market return since the beginning of
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  Speaker 1: two thousand and uh and seventeen UM. The waiting of
• 10:32
  Speaker 1: those companies within UM within the SMP five hundred is
• 10:35
  Speaker 1: now higher than the bottom two hundred and sixty stocks combined.
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  Speaker 1: So there's a tremendous concentration risk within those market cap
• 10:43
  Speaker 1: weighted indexes. And each of those names has a lot
• 10:46
  Speaker 1: of risk that I think a lot of people are
• 10:48
  Speaker 1: first now starting to talk about starting to think about
• 10:50
  Speaker 1: what we're talking about. Stocks that have run up to
• 10:53
  Speaker 1: an unprecedented level, have extremely high valuations, yet they have
• 10:57
  Speaker 1: major major anti trust and regulator a risk that could
• 11:01
  Speaker 1: very quickly reverse their fortunes. Well, Phil, just to push
• 11:04
  Speaker 1: back a little bit, they also are cash printing machines
• 11:06
  Speaker 1: and you're seeing, you know, incredible balance sheets at the
• 11:09
  Speaker 1: likes of Alphabet, Google's parent company, or Amazon dot. Well,
• 11:13
  Speaker 1: Amazon to com is sort of a separate story. Uh,
• 11:15
  Speaker 1: but certainly Google and certainly even Facebook. So what do
• 11:19
  Speaker 1: you say to that, Well, Facebook is right now earning
• 11:22
  Speaker 1: of their revenue from marketing and selling targeted advertisements to
• 11:27
  Speaker 1: a user base, you know, can be extremely profitable. They've
• 11:30
  Speaker 1: they've turned that into an efficient machine and they do
• 11:32
  Speaker 1: it better than anybody. But in order to keep their
• 11:34
  Speaker 1: advertisers coming back and paying, the ads have to work,
• 11:37
  Speaker 1: and for the ads to work, the users have to
• 11:39
  Speaker 1: be engaged. And we're seeing more and more that users
• 11:42
  Speaker 1: are becoming disengaged from Facebook. They're becoming unhappy with the
• 11:45
  Speaker 1: overall experience that they're getting on Facebook. Um and you know,
• 11:49
  Speaker 1: it's a very tricky thing. I mean, the value that
• 11:51
  Speaker 1: Facebook has is being able to target advertising specifically to
• 11:54
  Speaker 1: specific users based on all the data that they generate
• 11:57
  Speaker 1: on those users. But the users don't want that data
• 12:00
  Speaker 1: being used and and somewhere in there is a fine
• 12:02
  Speaker 1: line that Facebook has to walk. The valuation right now
• 12:05
  Speaker 1: for Facebook assumes that the growth is going to continue
• 12:08
  Speaker 1: indefinitely exponentially for their revenue line. We think that that
• 12:12
  Speaker 1: a peak is is, you know, very closely around the corner,
• 12:15
  Speaker 1: you know, Phil, Just to sort of uh push that forward,
• 12:18
  Speaker 1: Facebook is set to report their earnings after the bell today.
• 12:22
  Speaker 1: I'm just wondering, are you seeing investors start to realize
• 12:26
  Speaker 1: there perhaps over exposure to the fang names, including Facebook,
• 12:29
  Speaker 1: and start to demonstrate some concern pull back anything of
• 12:33
  Speaker 1: the like. Slowly, slowly, we're starting to see it. Um.
• 12:37
  Speaker 1: Jeff Gundac was talking about it yesterday at the own conference. Um.
• 12:40
  Speaker 1: You know, we we are et f F shoers and
• 12:43
  Speaker 1: we deal all of our products are systematic process based funds.
• 12:47
  Speaker 1: And I think there's an assumption in the e t
• 12:49
  Speaker 1: F world and in the index investing world that the
• 12:51
  Speaker 1: products that market capuited, you know, broad index products are
• 12:54
  Speaker 1: broadly diversified, and it's really the concentration within those indexes
• 12:58
  Speaker 1: that we think is a huge risk to investors, and
• 13:00
  Speaker 1: that's really where we are focused on on, you know,
• 13:03
  Speaker 1: trying to bring some light into it. Has the creation
• 13:07
  Speaker 1: of e t f s gotten away from the creators
• 13:09
  Speaker 1: of e t s very possibly, very possibly. I mean
• 13:14
  Speaker 1: there's really two different things. There's e t f s
• 13:16
  Speaker 1: and there's index investing. And without the invention of the
• 13:18
  Speaker 1: e t F we think index investing would still be
• 13:21
  Speaker 1: growing tremendously through you know, futures and options and just
• 13:24
  Speaker 1: index mutual funds and you can buy share of every
• 13:27
  Speaker 1: one of the SMP if you want, and that becomes
• 13:30
  Speaker 1: the index, and and trading has become more and more
• 13:32
  Speaker 1: efficient and cheap now, so institutions can do that, and
• 13:35
  Speaker 1: we're starting to see that happen. The e t F
• 13:37
  Speaker 1: is simply a vehicle, it's a wrapper, and it's you know,
• 13:39
  Speaker 1: for a bunch of geeky reasons that would take a
• 13:41
  Speaker 1: while to get into. It's just a little bit more efficient,
• 13:43
  Speaker 1: especially from a tax perspective, than mutual funds, certainly than
• 13:46
  Speaker 1: hedge funds. So, you know, there's kind of two different
• 13:48
  Speaker 1: things with the vehicle and the index investing, but there
• 13:51
  Speaker 1: is no doubt that the proliferation of index investing and
• 13:54
  Speaker 1: e t F simultaneously have contributed to the run up
• 13:57
  Speaker 1: in these you know, it's market cap waiting is really
• 14:00
  Speaker 1: a momentum strategy. You're at every rebounds, you're taking money,
• 14:03
  Speaker 1: you're putting it into the biggest names. We've launched a
• 14:06
  Speaker 1: uh we have a strategy that reverse cap weights, and
• 14:09
  Speaker 1: what we're trying to do is take money out of
• 14:11
  Speaker 1: the winners and put it into the losers. And at
• 14:13
  Speaker 1: the same time, we're getting a little bit of what
• 14:15
  Speaker 1: we call the size premier, the small money's big factor
• 14:18
  Speaker 1: in the strategy. So, um, you know we've seen over
• 14:21
  Speaker 1: time based on you know, SMP back tested data, to
• 14:24
  Speaker 1: take it with a grain of salt, but you know,
• 14:25
  Speaker 1: over a twenty year period it has consistently provided alpha
• 14:28
  Speaker 1: over both equal waiting and market cap waiting. But really,
• 14:31
  Speaker 1: what we're seeing now that's different, that's unprecedented is the
• 14:34
  Speaker 1: run up in these top tier names by market cap
• 14:36
  Speaker 1: in the SMP five hundred. We've never seen anything like
• 14:39
  Speaker 1: it before where such a small group of stocks have
• 14:41
  Speaker 1: such a large waiting and we think it's a very
• 14:43
  Speaker 1: big risk right now for investors. Phil What kind of
• 14:46
  Speaker 1: fees do you charge on these funds? So we have
• 14:48
  Speaker 1: an E t F that charges twenty nine basis points
• 14:50
  Speaker 1: to takers r vrs. It's a reverse cap way to DTF,
• 14:53
  Speaker 1: and we have a sixty five basis point E t
• 14:55
  Speaker 1: F that is UH the A C S. I and
• 14:57
  Speaker 1: I would just ask everyone to speak to a financial
• 14:59
  Speaker 1: professional to see if investment is appropriate. Well, the reason
• 15:02
  Speaker 1: why I ask I know that you have a long
• 15:04
  Speaker 1: history at ETFs working with the New York Stock Exchange
• 15:07
  Speaker 1: as well as Google, have investments where you developed alternative
• 15:11
  Speaker 1: mutual funds. What type of tolerance to investors have to fees,
• 15:14
  Speaker 1: given the fact that we've seen the rush of money
• 15:17
  Speaker 1: into e t f s disproportionately go to the lowest
• 15:19
  Speaker 1: fee funds. When you look at a new strategy, or
• 15:22
  Speaker 1: you look at any investment, the return is very uncertain,
• 15:25
  Speaker 1: and even if you're in a you know, the safest investment,
• 15:28
  Speaker 1: you don't know what your return is going to be.
• 15:29
  Speaker 1: The only certainty is the fees. So investors have been
• 15:32
  Speaker 1: focusing more and more on fees, and I think they should. UM.
• 15:35
  Speaker 1: You know, we're unable to compete with the likes of
• 15:37
  Speaker 1: Vanguard and Schwab and have absolutely dirt you know, dirty ETFs,
• 15:40
  Speaker 1: you know, as a startup company, but we are trying
• 15:43
  Speaker 1: to offer everything as as cheaply as we possibly can
• 15:46
  Speaker 1: because it's tremendously important to the after tax returns, to
• 15:50
  Speaker 1: the you know, to the net that investors receive. UM.
• 15:52
  Speaker 1: I think it's a very healthy thing for investors to
• 15:54
  Speaker 1: focus on FEZA and you know, quite frankly, even though
• 15:57
  Speaker 1: it talks against our book, we hope that continues. One
• 15:59
  Speaker 1: of the things that just want to note is that
• 16:01
  Speaker 1: while you talk about the dominance of these few stocks Facebook, Amazon,
• 16:08
  Speaker 1: and Netflix and so on. There's a huge divergence in
• 16:12
  Speaker 1: their performance this year, so you might own them in
• 16:15
  Speaker 1: a concentrated way, but then when you combine their performance,
• 16:20
  Speaker 1: it may not actually give you the results that you
• 16:23
  Speaker 1: thought you were going to receive. And give you an example,
• 16:25
  Speaker 1: Microsoft is up seven percent so far this year, Netflix
• 16:28
  Speaker 1: is up. But then if you look at companies like
• 16:31
  Speaker 1: Apple down three percent, Facebook down ten percent, Alphabet Google
• 16:35
  Speaker 1: down two percent, Amazon no up, So you have a
• 16:39
  Speaker 1: huge divergence of performance, and so you're not really even
• 16:42
  Speaker 1: selecting for performance. You're just selecting based on inclusion in
• 16:46
  Speaker 1: an index that you have no idea the relative waitings
• 16:51
  Speaker 1: of these stocks because they're cap weighted. Is that right?
• 16:55
  Speaker 1: Is that an accurate description? Ye? I mean, ultimately, when
• 17:00
  Speaker 1: you look at index investing, I think, you know, we're
• 17:02
  Speaker 1: reaching a point where index investing is really becoming process
• 17:06
  Speaker 1: driven investing or rules based investing. So market cap waiting,
• 17:10
  Speaker 1: you know what was really it came to prominence back
• 17:13
  Speaker 1: when there was a very high cost to execute trades.
• 17:16
  Speaker 1: And what market cap waiting does more than anything, is
• 17:18
  Speaker 1: it manages the liquidity of the holdings. The most liquid
• 17:21
  Speaker 1: names get the biggest allocations, and it was a way
• 17:23
  Speaker 1: for for you know fund companies or you know Vanguard
• 17:26
  Speaker 1: in particular, to manage the expenses of the trading in
• 17:28
  Speaker 1: the fund. But it was never optimized for returns. And
• 17:32
  Speaker 1: we think there are more optimal ways, and that's where
• 17:33
  Speaker 1: we get to the reverse cap waiting. We think it's
• 17:35
  Speaker 1: exactly that. It's the it's the other side of the
• 17:37
  Speaker 1: trade and that is where we think we can really
• 17:39
  Speaker 1: optimize you performance returns. Phil Back, thank you so much
• 17:43
  Speaker 1: for being with us. Phil Back is chief executive officer
• 17:46
  Speaker 1: of Exponential ETFs, which is based in an arbor, Michigan,
• 17:50
  Speaker 1: but he joins us here in our live in three studios. Well,
• 18:06
  Speaker 1: we talk a lot about tariffs and the increasing trade
• 18:10
  Speaker 1: tensions between the US, China, and Europe. Here to talk
• 18:14
  Speaker 1: about this all from a first hand perspective. From the
• 18:17
  Speaker 1: CEO seat is Eric Fearwald. He is chief executive officer
• 18:21
  Speaker 1: of Senta based in Basel, Switzerland, but is a broad
• 18:27
  Speaker 1: company that was acquired by Kim China. Acquisition was completed
• 18:31
  Speaker 1: last year and does business across the world. Eric, thank
• 18:35
  Speaker 1: you so much for being here. So let's start there.
• 18:38
  Speaker 1: How have you already seen some of these trade tensions
• 18:42
  Speaker 1: trickle into your every day. Well, so far there has
• 18:45
  Speaker 1: not been significant impact. Um. There obviously is a lot
• 18:49
  Speaker 1: of concern about tariffs being being levied by China for
• 18:53
  Speaker 1: soybean imports from the US, which would be a significant
• 18:59
  Speaker 1: impact because then then likely China would end up buying
• 19:03
  Speaker 1: more soybeans from other markets. The U s farmer is
• 19:06
  Speaker 1: the most productive in the world. It's our most important market.
• 19:10
  Speaker 1: We bring out new technology and United States first. We
• 19:12
  Speaker 1: do most of our research here. Our global seed businesses
• 19:16
  Speaker 1: located here, headquartered here, so that's really important market for US.
• 19:20
  Speaker 1: So we would hate to see that happen. On the
• 19:23
  Speaker 1: flip side, Lisa, we see this as a huge opportunity
• 19:26
  Speaker 1: for US agriculture to be part of the solution instead
• 19:29
  Speaker 1: of part of the problem. There's a great opportunity for
• 19:33
  Speaker 1: US agriculture to export more grain, more soybeans and other grains,
• 19:37
  Speaker 1: as well as ethanol because China is going to an
• 19:40
  Speaker 1: E ten policy temper cent ethanol to to help their environment,
• 19:45
  Speaker 1: as well as more meat exports. There's today significant amount
• 19:48
  Speaker 1: of poultry. There could be more meat exports, so we
• 19:51
  Speaker 1: could be a big part of the solution instead of
• 19:53
  Speaker 1: the part of the problem. Speak if you can a
• 19:56
  Speaker 1: little bit about the context in which you operate, because
• 19:58
  Speaker 1: I know that you've done some and acquisitions. One is, uh,
• 20:01
  Speaker 1: what is it Abbott and Cobb cut right? And um right, Abbot,
• 20:07
  Speaker 1: Abbot and Cobb. And I'm tell us about the acquisitions.
• 20:11
  Speaker 1: Did I'll get to the China question. Yeah, so we were.
• 20:14
  Speaker 1: We were acquired June of last year by KEM China
• 20:18
  Speaker 1: forty four billion, by far, the biggest deal that China's
• 20:21
  Speaker 1: ever done overseas. And since then they've been very supportive
• 20:24
  Speaker 1: of more investment in the base business. We've invested in
• 20:27
  Speaker 1: more commercial people, more research, um, more breeding for our
• 20:31
  Speaker 1: seed business around the world, and we've done a number
• 20:34
  Speaker 1: of acquisitions four and out so far. But I can
• 20:36
  Speaker 1: tell you there's a number of others in the pipeline.
• 20:39
  Speaker 1: And of those four that have done so far, two
• 20:41
  Speaker 1: are in seeds, one large corn and soy bean business
• 20:44
  Speaker 1: seed company in South America, Brazil and Argentina called ne
• 20:48
  Speaker 1: Dara Seeds. And then one vegetable seed company Abbott and
• 20:52
  Speaker 1: Cobb here in the US that it's a leader in
• 20:55
  Speaker 1: sweet corn for for food consumption and we're going to
• 20:59
  Speaker 1: globalize that two of them are in the digital space,
• 21:02
  Speaker 1: which is a hot area in agriculture. One is a
• 21:05
  Speaker 1: farm management system digital system for for farmers in Brazil,
• 21:09
  Speaker 1: which has had a lot of progress in Brazil. And
• 21:11
  Speaker 1: another is called farm Shots, which is which is a
• 21:14
  Speaker 1: digital imaging company, a satellite digital imaging company that has
• 21:18
  Speaker 1: applicability all over the world. So very exciting support that
• 21:22
  Speaker 1: we've been getting from cam China already, and we see
• 21:25
  Speaker 1: more both in strengthening our base business and the biggest
• 21:29
  Speaker 1: opportunity for that in China because the China market is
• 21:33
  Speaker 1: ripe for it. There's no company with significant market share
• 21:36
  Speaker 1: and either seeds or crop protection. We see that as
• 21:38
  Speaker 1: an opportunity but also in in in further acquisitions. All right,
• 21:42
  Speaker 1: then to follow up on the China context, and uh,
• 21:46
  Speaker 1: can you describe if someone just say to you, what's
• 21:48
  Speaker 1: the economic health of the U. S. Farmer right now?
• 21:52
  Speaker 1: It's the U. S. Farmer is really challenged by the
• 21:57
  Speaker 1: global commodity low prices in Agrican culture um and the
• 22:03
  Speaker 1: US farmer gets the lowest subsidy of any farmer in
• 22:06
  Speaker 1: the world except for Australia. Every other farmer gets more
• 22:09
  Speaker 1: subsidy as a percentage of of their their price selling price.
• 22:13
  Speaker 1: But the good news is the U. S. Farmer is
• 22:16
  Speaker 1: by far the most productive and for those concerned about
• 22:21
  Speaker 1: climate change, has the least impact on the climate. Because
• 22:25
  Speaker 1: of the productivity, there's less greenhouse gas emissions, there's less
• 22:29
  Speaker 1: water consumption. UH. An environmentally sustainable way the U. S.
• 22:33
  Speaker 1: Farmer is it has the highest yields, the lowest cost,
• 22:37
  Speaker 1: and and the most environmentally sustainable. So I think the
• 22:42
  Speaker 1: farmer in the US that owns their farm, owns their
• 22:45
  Speaker 1: land is still very healthy. Those that rent are are challenged.
• 22:50
  Speaker 1: But I think the future is still bright because the
• 22:53
  Speaker 1: demand for agricultural products continues to grow with population and
• 22:57
  Speaker 1: poor people getting wealthier and starting to eat meat. So
• 23:00
  Speaker 1: so there's still great opportunity for the American farmer. So
• 23:03
  Speaker 1: I I want to ask, I want to shift our
• 23:05
  Speaker 1: focus to Europe from the U as the European Union
• 23:08
  Speaker 1: is expected to vote this week and whether to ban
• 23:10
  Speaker 1: a certain pesticide that is associated with b deaths. UH.
• 23:14
  Speaker 1: This could potentially harm your business. No, well, Europe. Europe
• 23:20
  Speaker 1: has had now a history of a number of years
• 23:23
  Speaker 1: of of of going away from agriculture. Technology and the
• 23:27
  Speaker 1: European farmer productivity declines. Why the rest of the world
• 23:31
  Speaker 1: gets better as as as the rest of the world
• 23:33
  Speaker 1: uses modern agricultural technology tools. So to us, the U
• 23:38
  Speaker 1: s farmer just gets more productive relative to Europe, the
• 23:41
  Speaker 1: Brazilian farmer, the Argentina that the demand will be met
• 23:44
  Speaker 1: by someplace in the world, and we supply everywhere in
• 23:46
  Speaker 1: the world. So for us it's neutral, but unfortunately for
• 23:49
  Speaker 1: the European farmer it's it's it's a big negative. I
• 23:53
  Speaker 1: want to thank you very much for coming in and
• 23:54
  Speaker 1: spending time with us. Erica Fearwald is the chief executive
• 23:58
  Speaker 1: of cent Genta. They are a global seed and agriculture company.
• 24:03
  Speaker 1: They are based in Bosel, Switzerland and once again the
• 24:06
  Speaker 1: completed deal to takeover by KEM China in Juno last
• 24:09
  Speaker 1: year for forty four billion dollars. One holy grail in
• 24:28
  Speaker 1: the pharmaceutical industry is a cure for cancer. Pair that
• 24:32
  Speaker 1: with an answer to the opioid epidemic, and you have
• 24:35
  Speaker 1: something quite interesting joining us now to talk about some
• 24:39
  Speaker 1: new cancer treatments as Dr Silvieu Tescu, his chief executive
• 24:43
  Speaker 1: officer of meso Blast, which is based in Melbourne, Australia,
• 24:46
  Speaker 1: but he joins us here in our eleven three oh studios.
• 24:49
  Speaker 1: So Dr Tescu, can you just start with what is
• 24:51
  Speaker 1: meso Blast? Can you talk a little bit about the
• 24:54
  Speaker 1: stem cell drug treatments that are all in late stage
• 24:57
  Speaker 1: phase three clinical trials? Sure, thanks for having me as a.
• 25:01
  Speaker 1: Blast is a public listed company both here on NASDAC
• 25:05
  Speaker 1: as well as on the Australian Stock Exchange. We're developing
• 25:08
  Speaker 1: late phace therapy is based on a common platform technology
• 25:13
  Speaker 1: called Misenkamal lineage cells. These cells are able to respond
• 25:17
  Speaker 1: to inflammation by releasing factors that switch off damaging inflammation
• 25:23
  Speaker 1: and at the same time help rebuild damaged tissues. Um
• 25:26
  Speaker 1: The cells themselves are highly scalable. We industrially manufacture them,
• 25:31
  Speaker 1: We understand the mechanisms of action, and we are able
• 25:34
  Speaker 1: to generate off the shelf therapeutics that targets some very
• 25:37
  Speaker 1: large unmet diseases and unmet needs in terms of cancer.
• 25:42
  Speaker 1: You're you're you're doing about our recently completed face free
• 25:45
  Speaker 1: program in children with graph versus host disease, which is
• 25:48
  Speaker 1: a devastating complication of a bomarrow transplant for children who
• 25:52
  Speaker 1: otherwise have been cleared of their underlying cancer. Fifty of
• 25:57
  Speaker 1: children who and and adults who undergo BOMAT transplants from
• 26:00
  Speaker 1: an unrelated donor developed graphers host disease, which in severe stages,
• 26:06
  Speaker 1: particularly children, has as high as seventy percent mortality rate
• 26:09
  Speaker 1: in a In a fifty patient face retrial, we demonstrated
• 26:14
  Speaker 1: that over seventy percent of children treated with ourselves responded
• 26:19
  Speaker 1: UH and and had had clear improvement in outcomes, and
• 26:24
  Speaker 1: we met the pre specified primary endpoint of the FDA
• 26:27
  Speaker 1: put in place for us to move forward with a
• 26:30
  Speaker 1: new treatment paradigm to treat this devastating condition UM. We
• 26:34
  Speaker 1: expect to be reporting in the next over the next
• 26:38
  Speaker 1: couple of months. This quarter really on on the overall
• 26:41
  Speaker 1: survival of these children at a hundred days UM and
• 26:44
  Speaker 1: then subsequently a day one eight and on the basis
• 26:47
  Speaker 1: of of those results, we expect to be to get
• 26:50
  Speaker 1: in front of the FDA towards the end of this
• 26:52
  Speaker 1: year and talk about what what filing for approval looks like.
• 26:56
  Speaker 1: As a cellular medicine company, where did the cells originally
• 27:02
  Speaker 1: come from? We have a very very well established program
• 27:05
  Speaker 1: to obtain the cells from healthy donors. We have a
• 27:08
  Speaker 1: donor program that's here in the United States. UM. We
• 27:12
  Speaker 1: obtain the cells from healthy young donors of the ages
• 27:17
  Speaker 1: of eighteen four roughly and and these unique cells are
• 27:22
  Speaker 1: then extracted and they're able to be expanded in very
• 27:26
  Speaker 1: large numbers, so they can be ultimately put put into
• 27:30
  Speaker 1: vials and shipped and they generated really an off the
• 27:34
  Speaker 1: shelf product for various indications. Our whole manufacturing process is
• 27:38
  Speaker 1: industrial and we're able to delineate each product based on
• 27:42
  Speaker 1: our manufacturing capability. So our product for graphers host disease
• 27:47
  Speaker 1: is distinct from our product that's currently in phase three
• 27:49
  Speaker 1: for chronic heart failure, from our product that's currently in
• 27:52
  Speaker 1: phase three for chronic low back pain. From severe the
• 27:56
  Speaker 1: generation of the disks. What's common to these various disparate
• 27:59
  Speaker 1: can auditions is that they're all they're all derived from
• 28:03
  Speaker 1: severe inflammation, and ourselves are very very potent eveno modulatory
• 28:08
  Speaker 1: agents that can switch off damaging inflammation in a way
• 28:12
  Speaker 1: that you just cannot get with other small molecules or
• 28:14
  Speaker 1: monoclon on anybody's So this is a whole new way
• 28:17
  Speaker 1: of treating the most severe forms of inflammatory conditions. Dr
• 28:21
  Speaker 1: at TUSCU I'm just curious. What you're talking about sounds
• 28:24
  Speaker 1: incredibly promising, especially the idea of it being uh, you know,
• 28:27
  Speaker 1: marketable in a quick sort of trial to shelf type
• 28:31
  Speaker 1: of transition. Why are the shares down seven in the US? Well? Yeah, Look,
• 28:37
  Speaker 1: I think there's there's a general perception that that we
• 28:42
  Speaker 1: we need to have sufficient capital to bring these products
• 28:45
  Speaker 1: to market. And I think what we're able to demonstrate,
• 28:49
  Speaker 1: and we have recently through a through a a partnership
• 28:54
  Speaker 1: with UM with Hercules with up to seventy five million
• 28:58
  Speaker 1: dollar draw down facility, is that we're able to raise
• 29:02
  Speaker 1: substantial amounts of capital when we need it in order
• 29:05
  Speaker 1: to support the launch capabilities and plans that we have
• 29:09
  Speaker 1: in place. What about the public debt markets or other
• 29:12
  Speaker 1: types of ways to get financing given how low interest
• 29:15
  Speaker 1: rates are at this point, That's exactly what we're addressing
• 29:18
  Speaker 1: in the Hercules UH program is, in fact, is a
• 29:23
  Speaker 1: debt structured outcome, which I think speaks strongly to the
• 29:27
  Speaker 1: the the opportunities in front of us, the fact that
• 29:31
  Speaker 1: we're able to back ourselves and that that folks like
• 29:34
  Speaker 1: Hercules have backed us um through through debt repayable on
• 29:38
  Speaker 1: future sales. I think it speaks to how mature the
• 29:41
  Speaker 1: pipeline is. Can you give us an update on the
• 29:44
  Speaker 1: treatment for chronic low back pain because of disc degeneration,
• 29:50
  Speaker 1: because that's about pain management, isn't it? Absolutely the the
• 29:56
  Speaker 1: the number one cause of opiate prescriptions today is in
• 30:00
  Speaker 1: chronic glow back paint. In fact, of opiate prescriptions are
• 30:04
  Speaker 1: written for patients with chronic unremitting back pain, predominantly from
• 30:09
  Speaker 1: degeneration of the intovertible discs. Most of these people are
• 30:12
  Speaker 1: relatively young, uh and and and have have a robust
• 30:17
  Speaker 1: working careers that are being you know, significantly impacted by
• 30:21
  Speaker 1: the chronic pain. And central to that is the inflammation
• 30:25
  Speaker 1: that goes on in this degeneration. So we've completed initially
• 30:29
  Speaker 1: a two D one patient phase two trial which demonstrated
• 30:33
  Speaker 1: that a single injection of our specially manufactured cells into
• 30:37
  Speaker 1: the disc alleviated pain in patients for at least two years,
• 30:42
  Speaker 1: quite a dramatic pain reduction associated with also improvement in function.
• 30:48
  Speaker 1: We've then gone on to phase three and have just
• 30:51
  Speaker 1: completed enrollment of a four hundred patient randomized, place ever
• 30:55
  Speaker 1: controlled Phase three trial. That's literally complete enrollment over the
• 31:00
  Speaker 1: last month or so, and we hope that that over
• 31:04
  Speaker 1: the over the next period, the release of data from
• 31:07
  Speaker 1: that trial will will confirm the initial observations that we
• 31:11
  Speaker 1: saw in Phase two. I think given the current crisis
• 31:14
  Speaker 1: in the opioid abuse area, I think we we potentially
• 31:20
  Speaker 1: have a treatment that could in the in the in
• 31:23
  Speaker 1: the treatment of patients with severe disease, be an alternative
• 31:27
  Speaker 1: and be used well in advance of anybody considering opiates.
• 31:30
  Speaker 1: So we're pretty excited about it. Just real quick. Has
• 31:33
  Speaker 1: the government expressed interest in this at all, So we're
• 31:37
  Speaker 1: certainly talking to the FDA around how best to progress
• 31:41
  Speaker 1: this product under Under the new guidelines of the FDA,
• 31:44
  Speaker 1: there's an accelerated pathway called regenerative medicine Advanced therapies for
• 31:49
  Speaker 1: disease that have high unmet needs, and in fact we've
• 31:51
  Speaker 1: already obtained one of these are met designations for chronic
• 31:54
  Speaker 1: heart failure in patients with end stage heart failure who
• 31:58
  Speaker 1: are so sick that they require ELEFF and we Gord
• 32:00
  Speaker 1: devising plant. Those patients have have a mortality that is
• 32:03
  Speaker 1: as high as most cancers. Thank you very much for
• 32:06
  Speaker 1: being with us and sharing this information and giving us
• 32:09
  Speaker 1: an update on the company. Dr Silvio Tescu is the
• 32:12
  Speaker 1: chief executive of Meso Blast. Thanks for listening to the
• 32:19
  Speaker 1: Bloomberg P and L podcast. You can subscribe and listen
• 32:22
  Speaker 1: to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform
• 32:26
  Speaker 1: you prefer. I'm Pim Fox. I'm on Twitter at pim Fox.
• 32:30
  Speaker 1: I'm on Twitter at Lisa Abramo. It's one before the podcast.
• 32:34
  Speaker 1: You can always catch us worldwide on Bloomberg Radio.