February 7, 2025 • 38 mins
Pfizer chairman and CEO Albert Bourla sees cancer as the pharmaceutical company's next frontier. Meanwhile, funding and research in finding a cure for Alzheimer's might have crowded out more effective approaches. And, Bridgewater Associates founder Ray Dalio tells us how countries go broke.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. This is Wall Street Week.
(00:24):
I'm David Weston bringing you stories of capitalism this week.
As President Trump takes drastic action to curtail federal spending,
Ray Dallio of Bridgewater lays out his plan for what
needs to be done. Plus, Pfizer CEO Albert Borla announces
earnings that include his huge investment in tackling cancer. But
(00:47):
we start with a story about lost opportunity, the opportunity
to make real progress fighting one of the most devastating
diseases we know, Alzheimer's, with questions now being raised about
much of the work that's gone into finding a cure.
Speaker 2 (01:06):
Alzheimer's disease effects millions and millions of Americans, but not
just millions and millions of individual patients, but also orders
of magnitude larger than that because of the effects on
their families and their effects on larger society. This is
a massive problem.
Speaker 1 (01:21):
Nearly seven million Americans over sixty five, about one inh nine,
suffer from Alzheimer's. Costs of care are soaring three hundred
and sixty billion dollars in twenty twenty four, projected to
hit one trillion dollars by twenty fifty, four hundred thousand
dollars per person, with seventy percent born by the family.
(01:43):
The race for a cure is on, but not without
its setbacks. As Vanderbilt neurologist Matthew Shragg explains, so in
recent years we've had some candidates for treatment to come up,
even been approved to the FDA and been sold ultimately,
although with some controversy.
Speaker 2 (02:00):
This family of drugs that we're talking about are a
group of antibodies, and antibodies are a molecule that your
body produces naturally. These ones are synthetic ones that have
been engineered, and they're designed to bind up a little
tiny protein called beta amyloid, and we think that it's
poisonous to the brain, and that's thought to be the
fundamental driver of Alzheimer's disease. The antibodies administered to patients
(02:24):
bind up to that beta amyloid and help to remove
it from the brain, and the idea is hopefully that
will interfere with the progression of Alzheimer's disease.
Speaker 3 (02:33):
Hopefully it will.
Speaker 1 (02:34):
But in fact, there have been some treatments that appear
to make some progress on the science but don't have
clinical results.
Speaker 2 (02:40):
Well, so fundamentally what patients care about is not is
to beta amyloid removed from the brain right. Patients are
concerned about can they think clearly? Can they remember things?
And these drugs didn't robustly show in effect, you had
a reasonably good biochemical outcome, but that really didn't help people.
Speaker 4 (03:00):
The problem I think that we've seen over thirty years
of study of the amyloid hypothesis and the development of
dozens of anti amyloid drugs and vaccines, is that it
hasn't panned out.
Speaker 1 (03:16):
Charles Pillar is an investigative reporter for Science magazine.
Speaker 4 (03:20):
Many many neurologists and other doctors whose patients have asked
about these drugs have the opinion that this statistical effect
is not really a clinical effect. In other words, the
impact is so subtle as to be imperceptible to patients
of their families. However, these drugs also come with great risks,
(03:44):
including the risk of death or brain damage associated with
brain swelling or bleeding that they can cause.
Speaker 1 (03:51):
Biogen received FDA approval for the first anti amyloid drug
in twenty twenty one, leading to hope for Alzheimer's patients.
This and other similar approvals, Pillar says ignited a market frenzy,
but Shrag calls it a dead end, a view echoed
in Pillar's new book Doctored Fraud, Arrogance, and Tragedy In
(04:13):
the Quest to cure Alzheimer's. There's been a fair amount
of research work, money put into it. Why is it
that we haven't made more progress?
Speaker 2 (04:22):
The simplest answer is that it's a complicated disease. I've
become more concerned as time has gone on that research
integrity may be part of that equation.
Speaker 1 (04:32):
After Shreg criticized the FDA's approval of the biogen drug,
two physicians skeptical of another Alzheimer's treatment, this one from Cassava,
hired him to do an independent investigation. Cassava stock had
soared nine hundred percent, leading to a five point four
billion dollar valuation, and the physicians ended up shortening the
(04:53):
stock and filing a whistleblower complaint with the SEC.
Speaker 2 (04:57):
A number of individuals were concerned that something fishy might
be going on and started to examine the basic science
and some of the other supporting information around this drug
and started to develop concerns and their attorney reached out
to me to be part of the process to evaluate
the science behind this drug, Sima Philem and Cassava sciences.
Speaker 1 (05:17):
What did you find when you started looking into it?
Speaker 2 (05:19):
So a lot of the basic science that supported the
use of this drug came from a single laboratory, a
laboratory run by a gentleman named how Yangwong that city,
University of New York. When we looked at his work,
we found an extended pattern of alterations in the data
coming out of this laboratory. A lot of the data,
(05:41):
a lot of these sorts of experiments, often the output
is an image, and sometimes you can see when you
look at an image things that make you think it's
been altered in the same way you could walk through
a magazine island, look at a photo and say, maybe
that's been touched up. Something strikes you as something unnatural
about that image. Went through his work, we found lots
of that sort of problems.
Speaker 1 (06:04):
But just getting it wrong is something different that can
put into any scientist.
Speaker 2 (06:08):
We all get it wrong. Yeah, absolutely, this is not
about making mistakes. We're looking at a very coherent pattern
of altering data to fit certain hypotheses. When you collect
your data right, there should be very little reason to
make cut and pace type changes within an image. You know,
(06:29):
I think there are things that you can see that
are universally inappropriate.
Speaker 1 (06:35):
Shrag's findings supported a citizens petition urging the FDA to
halt clinical trials.
Speaker 5 (06:41):
I was tagged on Twitter in a post where somebody said, hey, Elizabeth,
you need to look at this, and it was a
link to a citizen petition.
Speaker 1 (06:52):
Dutch microbiologist Elizabeth Bick is a forensic image expert and
pioneer of crowdsourcing to uncover flawed studies. Using such platforms
as pub Peer, she and other sleuths publicly share evidence
of apparent data manipulation.
Speaker 5 (07:08):
These were photos of these scientific papers that looked at
Western blots, which are protein blots, and it showed all
kinds of problems in these scientific papers, and it looked
like a lot of that body of work contained potential
fraudulent results. And so I completely agree that it would
make sense to ask the FDA to hold the trials
(07:32):
on humans, because if the work done on animals already
looks fraudulent, it's very unlikely that a book work.
Speaker 1 (07:39):
Do you know what ultimately happened the Cassava and its medication.
Speaker 2 (07:42):
There have been a number of investigations. The Department of
Justice appears to have pursued a case against how Yongwang.
He was actually arrested for this type of data manipulation,
accusations of data manipulation and fraud, and so I know
that case is proceeding.
Speaker 4 (07:58):
The stock plummeted eighty five percent in a matter of
basically minutes when it was announced that the drug had failed,
and so what happened is a lot of people in
the market lost money on this drug, enormous amounts of money.
The question I have is why the FDA, which is
the agency that had the power to intervene, didn't do
anything for literally years knowing what they knew.
Speaker 1 (08:22):
Cassava says it is cooperating with the DOJ and has
made changes to the leadership team. Wang pleaded not guilty,
But what Pillar and Shrag had found led them to
look beyond Cassava, enlisting a team of private citizens, including Bick,
to investigate whether there might be other problems with Alzheimer's research.
They say they uncovered numerous instances of data manipulation going
(08:45):
all the way back to one particularly influential paper published
nearly twenty years ago.
Speaker 4 (08:51):
We were both kind of stunned when we together discussed
this experiment by Karen Ashen Sylvan Lesnay that was so
instrumental to the field and yet seemed to be very suspect.
Speaker 1 (09:05):
Ash and Lesnie's two thousand and six Nature publication shaped
the field's understanding of Alzheimer's.
Speaker 2 (09:11):
The anilinkistgate hypothesis took a bit of a stumble in
the early two thousands, and this group of investigators Karen
ash and Sylvain Lesnie were one of those who came
in and said, Aha, we think we've identified the silver bullet.
Speaker 4 (09:25):
And so what you had is, for the first time,
ostensibly an experiment that showed a kind of cause and effect,
direct cause and effect of a substance that seemed to
be causing Almozheimer's disease. And lo and behold, it was
an amyloid beta protein.
Speaker 2 (09:40):
And it sort of rescued the amyloid hypothesis. It was
cited thousands and thousands of times, and variations of this
theme were developed. But what we found in the course
of doing this research integrity work, I bumped into a
number of papers from Sylvain Leslie, the first author, and
we found that there seemed to be artifact vitual changes
(10:01):
in his work as well, including in this famous Nature paper.
And as we analyze that paper, we found that the
majority of the figures seemed to have evidence of tampering
in them.
Speaker 1 (10:12):
And I understand doctor Ash actually has withdrawn the paper
now she has.
Speaker 2 (10:16):
It was retracted in the last six months or so.
Speaker 1 (10:19):
The University of Minnesota conducted an investigation and found no
research misconduct, but the authors, with the exception of Lesnie,
agreed to retract the paper, and Ash took responsibility, though
she said she had no knowledge of any image manipulations
until it was brought to my attention. She continues to
back the amyloid hypothesis and her conclusions. Lesnie has not
(10:43):
commented and remains in good standing with the NIH. According
to Ash, Lesnie denies fabricating the data. How did NIH react?
Speaker 2 (10:53):
What I can tell you is that we saw very
slow progress in dealing with these things. We saw Sylvane
Lesni continue to get funding, even new funding after these
reports came out and were widely accepted that these were
serious problems, And initially you wonder how could that be
(11:15):
until you take a larger look at the field and
you realize that the leadership of the NIH has not
been completely immune to these types of problems.
Speaker 1 (11:24):
The administrator overseeing Leslie's NIH grant co authored the now
retracted Nature paper. The team also found issues with the
work of the man who led the division at the
NIH National Institute on Aging.
Speaker 2 (11:38):
A gentleman named Eliashemus Leah, who was the neuroscience director
at the NIA. And this was probably one of the
most prolific cases of apparently doctor data that I'd ever seen.
We stopped analyzing when we got to something like one
hundred and thirty papers and just said that's enough. We
(11:59):
can't spend the rest of our lives looking at this.
But this is somebody who has been able to ascend
to the very highest echelons at the NIAH.
Speaker 1 (12:08):
The day Pillars Report in Science was published, Masleah was
removed from his post. So it appears that there is
a broader problem than you first understood. I wonder what
thoughts you have about where it comes from.
Speaker 2 (12:20):
Science is a human endeavor, right, Scientists are people. The
Garden of Eden happened to all of us, Right, we
are all flawed people, and scientists are going to be
subject to the same temptations as everybody else, and so
I think part of what needs to happen as a
discipline is that we need to be a little bit
less naive.
Speaker 1 (12:40):
What advice do you have for an investor, given what
you've said about some of the problems with science, It
really is quite unsettling if we think the science we
think we know, we don't know.
Speaker 2 (12:50):
If you're going to make an investment of not only
millions or tens of millions or sometimes hundreds of millions
of dollars in clinical trials, but also ask hundreds or
thousands of patients to accept the risk of exposing themselves
to experimental drugs, we should start with do we think
we're starting from a trustworthy foundation. That's a fair question,
and it should be asked consistently. And I think that
(13:12):
sometimes it's time to ask the field to move on, right.
I think that even a non scientist can listen to
Alzheimer's research over the last thirty years and say, I've
been hearing.
Speaker 3 (13:24):
Ameloid and ameloid and ameloid.
Speaker 2 (13:27):
But what's not changing is what's happening for our family members, Right,
And then it's time for something else before we do
this again. Tell me why it's going to be different
this time, and I think that the investors can motivate.
Speaker 1 (13:41):
Change coming up. When Pfizer announced its earnings, many were
focused on its huge commitments to finding a cure for
another dread of disease, the disease of cancer. We hear
from Pfizer's CEO, Albert Borla about his plans to do
do for cancer what Pfizer did for COVID. That's next
(14:03):
on Wall Street Week. This is a story about hope,
hope for those who need it desperately when they learn
they have that disease. All of us dread the diagnosis
(14:24):
of cancer. The surgery was successful. However, tests after the
operation un cancer had been present.
Speaker 6 (14:34):
I know a little bit more people who've been told
they have cancer know a little bit more on other people.
Speaker 3 (14:38):
That's steering you right in the face, and it may
actually happen.
Speaker 1 (14:41):
In twenty twenty four, the United States hit a new milestone,
estimated to pass two million newly diagnosed cases of cancer.
Speaker 3 (14:50):
One it is that the cancer incidence is increasing. Right now.
Speaker 7 (14:53):
We have fifteen million approximately in the world people that
they are suffering from cancer every year. Probably the number
will go to thirty plus in twenty fifty. And that
is happening because first of all, people live longer lives,
and that's the AIDS favors unfortunately cancer, but also there
are risk fock stores and who have better ways of
(15:14):
detecting now guns.
Speaker 3 (15:15):
So that's one they're living longer.
Speaker 1 (15:17):
But actually we're seeing more instance, are we not in
younger people, which is surprising.
Speaker 7 (15:21):
We are, and this is kind of emerging right now.
And there are risk factors starting from environment, starting from
multiple alcohol smoking, but also it is the fact that
we can detect cancers way more efficiently today than we
(15:42):
could do it years back.
Speaker 1 (15:45):
Doctor Albert Borla is the chairman and CEO of Vizer.
Under his leadership, the pharmaceutical company partnered with BioNTech during
the COVID nineteen pandemic to roll out life saving mRNA vaccines.
Speaker 7 (16:00):
How to operate with speed. The vaccine or the operational
war speed that the President Traub actually had initiated was
an operation that removed obstacles, but also within the companies
was an operation that we were suiting for the impossible,
and we came with the mindset nothing is impossible. We
(16:21):
can make it possible. That's a mindset that we can
use again, not to find the solution for COVID, but
to find the solution for cancer or for Alzheimers.
Speaker 1 (16:34):
Cancer is doctor world's next big challenge. At Pfizer. In
twenty twenty three, Pfizer completed it's forty three billion dollar
acquisition of Siegen, a company basing a particular cancer treatment
on monoclonal antibodies. Just this week, Peizer reported earnings that
included an increase in spending on oncology to about twenty
five percent of its revenue. You have made cancer a
(16:57):
real priority for Pfizer, in your investments, in your R
and D, in your development, even your acquisitions.
Speaker 7 (17:04):
Why because we think that we are ready to provide
a solution. We want to save the world again, and
I think our best chance this time it is with cancer.
Speaker 3 (17:15):
The science is there.
Speaker 7 (17:17):
We invest probably double then all the profits that we
made with COVID to acquire a new technology which is
promising a lot.
Speaker 1 (17:27):
The number of US cancer cases may be going up,
but the mortality rate is actually going down. It's fallen
thirty four percent in the last thirty years, and the
national Institutes of Health project that if this trend continues,
the United States will have twenty six million cancer survivors
by twenty forty, a forty four percent increase over twenty
(17:50):
twenty two. Adfiser hopes to keep this trend going through
one particular oncology treatment turbocharged by its acquisition of Cgen.
Speaker 7 (18:00):
It's called Antibody drug conjugate or ADC technology, and this
is like a missile that it is GPS guided, so
it doesn't go anywhere in the body, is going straight
to the target, which is the cancer cell. And what
is on top of this missile warhead, which we call payload,
(18:23):
a chemotherapy that is going to be targeting those cells.
We know that some cancer cells express some proteins. Then
we create an antibody, but it is attracted by these proteins.
The antibody is the GPS system. Then you have a payload,
which is the warkhead. It can be chemical or nuclear
(18:44):
or tactical, depends on what you want to attack. And
then you need to link the two together and that
is called the conjugation. That means that we believe that
in the next ten years, most of the general chemotherapies
could be replaced with targeted therapies like that that have
way less side effects because the chemotherapy attacks also the
(19:06):
healthy cells. Right now we can minimize the impact on
the healthy cells and maximize the impact on the cancer cells.
Speaker 1 (19:14):
How far along are we in the process with this
new technology of really having something that will start curing people.
Speaker 7 (19:20):
I think already we start having traumatic results results that,
for example, they can triple the life expectancy of the
current standards of care. But I don't think it will
be a miracle that will come from one day to another.
It will be though constant improvement. Every quarter. We will
(19:41):
have not only us, but the others as well, releases
of new data of new medicines.
Speaker 3 (19:48):
Eventually, some of these cancers will.
Speaker 7 (19:50):
Be cured, which means that they will disappear and will
not come back back again.
Speaker 3 (19:54):
But many of them will become chronic disease.
Speaker 7 (19:57):
You can learn to leave with your concert with medicines
that are not affecting the quality of your life.
Speaker 1 (20:04):
The Pfizer is not alone in looking for ways to
make cancer more manageable. Research has a key ally in
artificial intelligence.
Speaker 8 (20:13):
I think allows several things. First is it makes diagnosis
and treatment planning more accurate. You know, we're moving away
from one size fits all in terms of treatment of
cancer or many other conditions. We know that each of
us has different manifestations of the way a tumor is
going to grow or spread, or and also how it's
(20:36):
going to respond to treatment, and we need to be
able to bring the best treatment to each patient at
that particular moment in time, and AI is enabling us.
Speaker 5 (20:44):
To do that.
Speaker 1 (20:47):
Doctor Lloyd Minor is the dean of the Stanford University's
School of Medicine, where he has pushed the institution to
focus on precision health, intended to tailor care to patient's
individual needs.
Speaker 8 (21:00):
I think, really we're finding things otherwise we would have
not found because the human brain can only store so
much information and traditional analytic methods have their limitations. Generative
AI is bringing out relationships that we would have perhaps
never been able to garner without the advent of foundation
(21:21):
models and their application to the interpretation of medical data.
I think the deployment of generative AI, the pace of
that deployment and its impact is greater and faster than
any the pace of any technological innovation that I've seen
in my life. And I think we're still at the
relatively early stages.
Speaker 1 (21:40):
Deep minds Alpha fold is proof of how much AI
can do in the medical field. It uses its vast
computational power, trained by one hundred and seventy thousand proteins,
to predict protein structures.
Speaker 9 (21:54):
I remember when I was when I was starting in college,
I joined this lab and were crystallizing proteins and putting
the coordinates of their atoms into a database along with
many others, And I remember Professor Steve Harrison, who was
the leader of our lab, telling us it might take
fifty years before we're able to predict how a protein
(22:18):
folds given its amino acid sequence.
Speaker 1 (22:21):
Marty Chavez has been a fixture on Wall Street since
nineteen ninety three, when he joined Golden Sachs, but his
biochemistry roots go back to his undergraduate days at Harvard University.
Today he serves as a board member of Alphabet, whose
subsidiary Deep Mind won the Nobel Prize in Chemistry for
Alpha fold last year.
Speaker 9 (22:43):
They gave it the fifty thousand amino acid sequences for
proteins that had been sequencedruck and the structure was known
through crystallography. They trained the neural network on that database,
the Protein Data Bank, and then they did something kind
of amazing, which is they then guessed seventy five thousand
(23:05):
protein sequences for which the structure was not known. So
here's the amino acid sequence, guessed the structure. They fed
those guesses back into the model, and then I'm oversimplifying,
of course, but now the model seems to predict with
uncanny accuracy the shape in space of proteins that have
(23:29):
never been crystallized. It seems that the model discovered some
deep patterns in the way proteins fold in space, and
somehow compressed and captured that knowledge into the model.
Speaker 1 (23:45):
We hear a lot about general of AI, and there
were just a Nobel Prize given out for the alpha
fold technology. What does that mean, if anything, for cancer?
How does those two fit together?
Speaker 7 (23:56):
Well, it's a I believe not only for cancer, but
also for cancer is going to propel the biological research.
Speaker 3 (24:02):
AI in unprecedented ways.
Speaker 7 (24:05):
We are going to sort them the time that we
need to be able to develop molecules.
Speaker 1 (24:12):
What's the time horizon as far as you understand it
for generally AI really making a big difference.
Speaker 7 (24:18):
I think quick, I think already we are deploying it.
So it made very big difference in the example of
what I gave you. But as we are deploying any
different aspects of the process from discovery to development, I
think with the next two three years will have phenomenal results.
Speaker 1 (24:36):
Borler points out that Pfizer is investing twice what it
made off of COVID treatments to address the scourge of cancer,
and it will need to replicate some version of that
COVID success in redirecting its efforts. After its stock price
surged from that success, shares are down nearly fifty percent
since December twenty twenty one, leading activist investor Starboard to
(24:56):
take a one billion dollar stake, Advisor turning up pre
I'm suround the company to prove the value of its
cgen acquisition and investment in its drug line. I know
that you're committed to this fight against cancer as an
ad vizor to save lives first and foremost, but it's
also a business. How big a business opportunity is it? Potentially,
if you really have breakthroughs, it.
Speaker 7 (25:18):
Is very big business opportunity. I will tell you something.
There is a myth about the pharmaceutical business model and
the myth says that whatever is good for patients and
whatever is good for storeholders fundamentally at odds.
Speaker 3 (25:32):
In fact, the reverse is true. You can't make any money.
Speaker 7 (25:36):
Actually, you're going to lose all your money in this
business unless you are able to discover very meaningful, not
meet too solutions, very meaningful solutions for the patients. So
if we discover medicines that really double and triple the survival,
then is very good business. If we fail because we
take a lot of risk, is not good business.
Speaker 1 (25:58):
You always have new drugs in the pipeline. Where are
you on cancer drugs in the pipeline right now?
Speaker 3 (26:05):
It is the crowns.
Speaker 7 (26:06):
We are having most of our pipeline drugs and the
most important are coming from cancer. Of course, we have vaccines,
we have internal medicines, we have work in obesity, we
have work in authrieties and the inflammation.
Speaker 3 (26:20):
But cancer is where we have most of them.
Speaker 7 (26:22):
And I would say that three of the most prominent
candidates are entering, or have entered, or are about to enter,
face three studies.
Speaker 1 (26:33):
For doctor Borla, the mission to make life more livable
with cancer is worthwhile because it is a disease that
affects us all, no matter where we come from or
who we are.
Speaker 3 (26:44):
It is a global problem and affects all of us.
Speaker 7 (26:47):
Maybe not all of us as patients, thankfully, but all
of us as sons and daughters, as fathers and mothers, unfortunately,
as friends, as neighbors. There is something that is scaring
people right now, and it is not only in the US,
or in Europe or in the most advanced economic recounts.
Speaker 3 (27:10):
Coming up.
Speaker 1 (27:11):
President Trump says he wants to get federal spending down.
Bridgewater founder Ray Dalio gives us his diagnosis for what
could turn into a debt crisis and what the President
and Congress need to do to avoid it. This is
(27:41):
a story about going broke. Whether you're a person, a company,
or an entire nation. It all comes down to the
same thing, not being able to pay your debts as
they come do.
Speaker 6 (27:53):
The US fiscal federal government's fiscal path fiscal policy is
on an unsustainable path. The level of our debt relativity
economy is not unsustainable. The path is unsustainable.
Speaker 1 (28:06):
The United States has been running up a large tab
for years now, going from a debt of five point
seven trillion dollars in two thousand to over thirty five
trillion dollars in twenty twenty four, and so far it
doesn't show any signs of slowing down, with the Congressional
Budget Office projecting that at the rate it's going, the
(28:26):
US will owe over fifty trillion dollars by twenty thirty five,
or about one hundred and eighteen percent of its annual GDP.
Speaker 3 (28:34):
The debt ceiling was the Trump.
Speaker 1 (28:36):
Administration comes to office aware of the challenge posed by
the federal debt and is taking steps it says will
help address the problem. Bridgewater founder Ray Daalio has written
a new book available at no charge online, addressing the
US debt problem. It's called How Countries Go Broke, and
he starts with how much the US is going to
(28:57):
have to borrow and who will lend it the money
money it needs.
Speaker 10 (29:01):
The difference is they can print money, and that's basically it.
Speaker 11 (29:06):
So what you have is a situation where there's a
supply and a demand for debt. As we have a
new supply that will equal in the United States.
Speaker 10 (29:17):
Now, by the way, this is a problem.
Speaker 11 (29:18):
Elsewhere too, but it's about seven and a half percent
of GDP.
Speaker 10 (29:23):
So the supply of debt is going to be large.
That's new debt.
Speaker 11 (29:27):
If I calculate also who are the buyers of that debt,
and that there's not going to be enough demand for
that debt doesn't look like there'll be enough demand. And
the way that it works, so there's two things to
keep in mind. There's supply and demand, and then what
do central banks do or what do the governments do
when they don't have enough demand. Central banks come in
(29:50):
and make up that demand. They essentially print money, and
then they buy that and then that has a consequence.
And so just like in two thousand, twenty twenty one
we went through they needed to give money away and
the government needed to borrow, and the central bank produced
(30:11):
the money and bought that. That devalues money, raises inflation,
and so on.
Speaker 1 (30:17):
Thus far, the United States has been able to support
ever growing debt and deficits because of that ability to
print money. But Dahlio warns that throughout history countries have
run up against the demand of creditors sooner or later
to get paid.
Speaker 11 (30:32):
It is when the owners of that debt we have
over thirty six probian dollars essentially of government debt, when
they start to also fear that it may be monetized
like the Japanese. Japanese is a very good example Japanese.
If you have terrible investment to own bonds, they didn't
(30:54):
go down in value, but you got an interest rate
that was three percent below another interest rate US interest
rate by way example, and the currency depreciated by three
and a half percent. They were losing six and a
half percent a year for many, many years.
Speaker 10 (31:09):
That's what it can be like.
Speaker 11 (31:10):
Of course, there's an inflation component that enters into the depreciation.
One of the things I also want to emphasize is
people pay too much attention to depreciation against another exchange rate.
Normally at such times, many countries have this issue and
they don't want their currency to depreciate. So what you
(31:31):
see is the depreciation of all currencies in relationship to
things like gold or other assets.
Speaker 10 (31:39):
And that's where you have to pay attention to it.
Speaker 1 (31:42):
So if there is a debt wall out there somewhere
that we will run into, how close are we to
it and how can we tell? As with our personal finances,
Daliu says, it's when we end up borrowing not to
invest in our future, but to pay the interests on
what we've already borrowed.
Speaker 11 (32:00):
Debt isn't the problem. If the debt is used to
produce an income that is large enough or larger than
enough to service the debt. It's like a company if
you more like your finances. But what happens is it accumulates,
tends to accumulate. Think of it like a disease that
has a progression, and it goes through these various stages,
(32:24):
and so you can kind of see where the stages are.
We're relatively late in the cycle because we're also having
central banks lose money. That's a marker when they're balance
sheet deteriorates, when they have a negative networth. For example,
in the UK, can the central bank have a negative
net worth according to their laws, the central government has
(32:46):
got to recapitalize the bank. That becomes a budget item.
So there are certain red flags. There are a bunch
in this study that I've put out so that you
could see them debt service payments, borrowing to borrow. So
we are in the later stages of this. This is
something that will be I think the most important issue
(33:08):
that we'll be talking about. We're not talking about it now,
but we will be talking about it. Over the next
few months.
Speaker 1 (33:14):
Because the budget is the issue, Dio sees signs in
the market that now point toward the end of the cycle.
Speaker 11 (33:23):
What happens is that you see interest rates rise, led
by the long end when there's an easing of monetary
policy and the currency depreciating. Well, you think, wait, isn't
Fed lowering interest rates. Isn't the Bank of England lowering
interest rates? Why are long term interest rates going up? Okay,
(33:47):
they're not intervening. There must be something with the supply
demand of those bonds, because it's not their transactions that
are driving those interest rates up.
Speaker 10 (33:56):
And the currency is falling at the same time.
Speaker 11 (34:01):
Okay, that is reflecting leaving, in other words, selling the
bonds and leaving that instrument.
Speaker 10 (34:07):
So when you have that dynamic, it's a red flag.
Speaker 11 (34:11):
So we're having elements of that dynamic. So not only
is the supply demand operating that way, but the market
action is operating that way.
Speaker 1 (34:21):
If Dalio is right, if the United States is approaching
the end of what he calls the long debt cycle,
what should it do to make sure it doesn't hit
that wall.
Speaker 11 (34:31):
There are three factors that drive the budget deficit, spending, cut, spending,
it'll be reduced taxes. Race tax is not tax rates
but tax. Sometimes you can cut tag race and raised
get that more tax revenue. So I just want to
say taxes, tax revenue, but interest. If the government was
(34:56):
operating as a unit with the central bank, and there
was a coordination, if there was a fiscal tightening coordinated
with monetary easing, both of those things reduce the problem.
And so an action of getting it a three percent
of GDP stream out of number the three percent solution.
(35:17):
I think that the policymakers have to start from the
top and say three percent of GDP, we can do this,
We will do this in one way or another. They
can't let their pet programs. I think they don't have
that mantra. They don't have what is the amount? And
then they have to agree at least if we can't agree,
(35:38):
what do we do?
Speaker 10 (35:39):
Do it proportionately?
Speaker 11 (35:41):
Whatever you do, you must do this because if you don't,
you are risking what I would call you this, this
heart attack due to that constriction of debt service payments
and or a piece of that plaque breaking off sort
of the sale of those bonds. Your risking that needlessly,
and so many things are so beautiful you don't need
(36:04):
to do that.
Speaker 1 (36:05):
In the end, Dahlio's how Countries Go broke isn't simply
a Jeremiah. It does warrn of some pretty dire consequences
if we don't act and don't act soon, But he
also sees a path forward toward what he calls a
beautiful deleveraging.
Speaker 11 (36:20):
A beautiful deleveraging one way or another is there's ways
of reducing your debt and debt burdens, some of which
are deflationary and some of which are inflationary, and if
you balance those, you will reduce it in a balanced way.
Speaker 10 (36:36):
That's what I mean by beautiful deleveraging.
Speaker 11 (36:39):
So, for example, fiscal spending cuts or tightening raising taxes
will reduce the debt burden, but it's a deflationary influence.
There is interest rates, and reducing interest rates is a
stimulative way because it reduces debts servius payments directly for
(37:02):
the government, so they have a lower debt bill, and
it also is stimulative to the economy at the same time,
which can raise tax revenues and also raise asset prices.
If we think beyond what our usual constraints are about
dealing with the budget. In other words, don't just think
about spending and taxes as vehicles, but also think about
(37:27):
interest rates and the interest rate component that could be
a balance dealing with that reduction that can accomplish the
goal without being depressing and gets it on a better
physical track.
Speaker 1 (37:43):
That does it for us. Here at Wall Street Week,
I'm David Weston. This is Bloomberg. See you next week
for more stories of capitalism.
Bloomberg Audio Studios, podcasts, radio news. This is Wall Street Week.
(00:24):
I'm David Weston bringing you stories of capitalism this week.
As President Trump takes drastic action to curtail federal spending,
Ray Dallio of Bridgewater lays out his plan for what
needs to be done. Plus, Pfizer CEO Albert Borla announces
earnings that include his huge investment in tackling cancer. But
(00:47):
we start with a story about lost opportunity, the opportunity
to make real progress fighting one of the most devastating
diseases we know, Alzheimer's, with questions now being raised about
much of the work that's gone into finding a cure.
Speaker 2 (01:06):
Alzheimer's disease effects millions and millions of Americans, but not
just millions and millions of individual patients, but also orders
of magnitude larger than that because of the effects on
their families and their effects on larger society. This is
a massive problem.
Speaker 1 (01:21):
Nearly seven million Americans over sixty five, about one inh nine,
suffer from Alzheimer's. Costs of care are soaring three hundred
and sixty billion dollars in twenty twenty four, projected to
hit one trillion dollars by twenty fifty, four hundred thousand
dollars per person, with seventy percent born by the family.
(01:43):
The race for a cure is on, but not without
its setbacks. As Vanderbilt neurologist Matthew Shragg explains, so in
recent years we've had some candidates for treatment to come up,
even been approved to the FDA and been sold ultimately,
although with some controversy.
Speaker 2 (02:00):
This family of drugs that we're talking about are a
group of antibodies, and antibodies are a molecule that your
body produces naturally. These ones are synthetic ones that have
been engineered, and they're designed to bind up a little
tiny protein called beta amyloid, and we think that it's
poisonous to the brain, and that's thought to be the
fundamental driver of Alzheimer's disease. The antibodies administered to patients
(02:24):
bind up to that beta amyloid and help to remove
it from the brain, and the idea is hopefully that
will interfere with the progression of Alzheimer's disease.
Speaker 3 (02:33):
Hopefully it will.
Speaker 1 (02:34):
But in fact, there have been some treatments that appear
to make some progress on the science but don't have
clinical results.
Speaker 2 (02:40):
Well, so fundamentally what patients care about is not is
to beta amyloid removed from the brain right. Patients are
concerned about can they think clearly? Can they remember things?
And these drugs didn't robustly show in effect, you had
a reasonably good biochemical outcome, but that really didn't help people.
Speaker 4 (03:00):
The problem I think that we've seen over thirty years
of study of the amyloid hypothesis and the development of
dozens of anti amyloid drugs and vaccines, is that it
hasn't panned out.
Speaker 1 (03:16):
Charles Pillar is an investigative reporter for Science magazine.
Speaker 4 (03:20):
Many many neurologists and other doctors whose patients have asked
about these drugs have the opinion that this statistical effect
is not really a clinical effect. In other words, the
impact is so subtle as to be imperceptible to patients
of their families. However, these drugs also come with great risks,
(03:44):
including the risk of death or brain damage associated with
brain swelling or bleeding that they can cause.
Speaker 1 (03:51):
Biogen received FDA approval for the first anti amyloid drug
in twenty twenty one, leading to hope for Alzheimer's patients.
This and other similar approvals, Pillar says ignited a market frenzy,
but Shrag calls it a dead end, a view echoed
in Pillar's new book Doctored Fraud, Arrogance, and Tragedy In
(04:13):
the Quest to cure Alzheimer's. There's been a fair amount
of research work, money put into it. Why is it
that we haven't made more progress?
Speaker 2 (04:22):
The simplest answer is that it's a complicated disease. I've
become more concerned as time has gone on that research
integrity may be part of that equation.
Speaker 1 (04:32):
After Shreg criticized the FDA's approval of the biogen drug,
two physicians skeptical of another Alzheimer's treatment, this one from Cassava,
hired him to do an independent investigation. Cassava stock had
soared nine hundred percent, leading to a five point four
billion dollar valuation, and the physicians ended up shortening the
(04:53):
stock and filing a whistleblower complaint with the SEC.
Speaker 2 (04:57):
A number of individuals were concerned that something fishy might
be going on and started to examine the basic science
and some of the other supporting information around this drug
and started to develop concerns and their attorney reached out
to me to be part of the process to evaluate
the science behind this drug, Sima Philem and Cassava sciences.
Speaker 1 (05:17):
What did you find when you started looking into it?
Speaker 2 (05:19):
So a lot of the basic science that supported the
use of this drug came from a single laboratory, a
laboratory run by a gentleman named how Yangwong that city,
University of New York. When we looked at his work,
we found an extended pattern of alterations in the data
coming out of this laboratory. A lot of the data,
(05:41):
a lot of these sorts of experiments, often the output
is an image, and sometimes you can see when you
look at an image things that make you think it's
been altered in the same way you could walk through
a magazine island, look at a photo and say, maybe
that's been touched up. Something strikes you as something unnatural
about that image. Went through his work, we found lots
of that sort of problems.
Speaker 1 (06:04):
But just getting it wrong is something different that can
put into any scientist.
Speaker 2 (06:08):
We all get it wrong. Yeah, absolutely, this is not
about making mistakes. We're looking at a very coherent pattern
of altering data to fit certain hypotheses. When you collect
your data right, there should be very little reason to
make cut and pace type changes within an image. You know,
(06:29):
I think there are things that you can see that
are universally inappropriate.
Speaker 1 (06:35):
Shrag's findings supported a citizens petition urging the FDA to
halt clinical trials.
Speaker 5 (06:41):
I was tagged on Twitter in a post where somebody said, hey, Elizabeth,
you need to look at this, and it was a
link to a citizen petition.
Speaker 1 (06:52):
Dutch microbiologist Elizabeth Bick is a forensic image expert and
pioneer of crowdsourcing to uncover flawed studies. Using such platforms
as pub Peer, she and other sleuths publicly share evidence
of apparent data manipulation.
Speaker 5 (07:08):
These were photos of these scientific papers that looked at
Western blots, which are protein blots, and it showed all
kinds of problems in these scientific papers, and it looked
like a lot of that body of work contained potential
fraudulent results. And so I completely agree that it would
make sense to ask the FDA to hold the trials
(07:32):
on humans, because if the work done on animals already
looks fraudulent, it's very unlikely that a book work.
Speaker 1 (07:39):
Do you know what ultimately happened the Cassava and its medication.
Speaker 2 (07:42):
There have been a number of investigations. The Department of
Justice appears to have pursued a case against how Yongwang.
He was actually arrested for this type of data manipulation,
accusations of data manipulation and fraud, and so I know
that case is proceeding.
Speaker 4 (07:58):
The stock plummeted eighty five percent in a matter of
basically minutes when it was announced that the drug had failed,
and so what happened is a lot of people in
the market lost money on this drug, enormous amounts of money.
The question I have is why the FDA, which is
the agency that had the power to intervene, didn't do
anything for literally years knowing what they knew.
Speaker 1 (08:22):
Cassava says it is cooperating with the DOJ and has
made changes to the leadership team. Wang pleaded not guilty,
But what Pillar and Shrag had found led them to
look beyond Cassava, enlisting a team of private citizens, including Bick,
to investigate whether there might be other problems with Alzheimer's research.
They say they uncovered numerous instances of data manipulation going
(08:45):
all the way back to one particularly influential paper published
nearly twenty years ago.
Speaker 4 (08:51):
We were both kind of stunned when we together discussed
this experiment by Karen Ashen Sylvan Lesnay that was so
instrumental to the field and yet seemed to be very suspect.
Speaker 1 (09:05):
Ash and Lesnie's two thousand and six Nature publication shaped
the field's understanding of Alzheimer's.
Speaker 2 (09:11):
The anilinkistgate hypothesis took a bit of a stumble in
the early two thousands, and this group of investigators Karen
ash and Sylvain Lesnie were one of those who came
in and said, Aha, we think we've identified the silver bullet.
Speaker 4 (09:25):
And so what you had is, for the first time,
ostensibly an experiment that showed a kind of cause and effect,
direct cause and effect of a substance that seemed to
be causing Almozheimer's disease. And lo and behold, it was
an amyloid beta protein.
Speaker 2 (09:40):
And it sort of rescued the amyloid hypothesis. It was
cited thousands and thousands of times, and variations of this
theme were developed. But what we found in the course
of doing this research integrity work, I bumped into a
number of papers from Sylvain Leslie, the first author, and
we found that there seemed to be artifact vitual changes
(10:01):
in his work as well, including in this famous Nature paper.
And as we analyze that paper, we found that the
majority of the figures seemed to have evidence of tampering
in them.
Speaker 1 (10:12):
And I understand doctor Ash actually has withdrawn the paper
now she has.
Speaker 2 (10:16):
It was retracted in the last six months or so.
Speaker 1 (10:19):
The University of Minnesota conducted an investigation and found no
research misconduct, but the authors, with the exception of Lesnie,
agreed to retract the paper, and Ash took responsibility, though
she said she had no knowledge of any image manipulations
until it was brought to my attention. She continues to
back the amyloid hypothesis and her conclusions. Lesnie has not
(10:43):
commented and remains in good standing with the NIH. According
to Ash, Lesnie denies fabricating the data. How did NIH react?
Speaker 2 (10:53):
What I can tell you is that we saw very
slow progress in dealing with these things. We saw Sylvane
Lesni continue to get funding, even new funding after these
reports came out and were widely accepted that these were
serious problems, And initially you wonder how could that be
(11:15):
until you take a larger look at the field and
you realize that the leadership of the NIH has not
been completely immune to these types of problems.
Speaker 1 (11:24):
The administrator overseeing Leslie's NIH grant co authored the now
retracted Nature paper. The team also found issues with the
work of the man who led the division at the
NIH National Institute on Aging.
Speaker 2 (11:38):
A gentleman named Eliashemus Leah, who was the neuroscience director
at the NIA. And this was probably one of the
most prolific cases of apparently doctor data that I'd ever seen.
We stopped analyzing when we got to something like one
hundred and thirty papers and just said that's enough. We
(11:59):
can't spend the rest of our lives looking at this.
But this is somebody who has been able to ascend
to the very highest echelons at the NIAH.
Speaker 1 (12:08):
The day Pillars Report in Science was published, Masleah was
removed from his post. So it appears that there is
a broader problem than you first understood. I wonder what
thoughts you have about where it comes from.
Speaker 2 (12:20):
Science is a human endeavor, right, Scientists are people. The
Garden of Eden happened to all of us, Right, we
are all flawed people, and scientists are going to be
subject to the same temptations as everybody else, and so
I think part of what needs to happen as a
discipline is that we need to be a little bit
less naive.
Speaker 1 (12:40):
What advice do you have for an investor, given what
you've said about some of the problems with science, It
really is quite unsettling if we think the science we
think we know, we don't know.
Speaker 2 (12:50):
If you're going to make an investment of not only
millions or tens of millions or sometimes hundreds of millions
of dollars in clinical trials, but also ask hundreds or
thousands of patients to accept the risk of exposing themselves
to experimental drugs, we should start with do we think
we're starting from a trustworthy foundation. That's a fair question,
and it should be asked consistently. And I think that
(13:12):
sometimes it's time to ask the field to move on, right.
I think that even a non scientist can listen to
Alzheimer's research over the last thirty years and say, I've
been hearing.
Speaker 3 (13:24):
Ameloid and ameloid and ameloid.
Speaker 2 (13:27):
But what's not changing is what's happening for our family members, Right,
And then it's time for something else before we do
this again. Tell me why it's going to be different
this time, and I think that the investors can motivate.
Speaker 1 (13:41):
Change coming up. When Pfizer announced its earnings, many were
focused on its huge commitments to finding a cure for
another dread of disease, the disease of cancer. We hear
from Pfizer's CEO, Albert Borla about his plans to do
do for cancer what Pfizer did for COVID. That's next
(14:03):
on Wall Street Week. This is a story about hope,
hope for those who need it desperately when they learn
they have that disease. All of us dread the diagnosis
(14:24):
of cancer. The surgery was successful. However, tests after the
operation un cancer had been present.
Speaker 6 (14:34):
I know a little bit more people who've been told
they have cancer know a little bit more on other people.
Speaker 3 (14:38):
That's steering you right in the face, and it may
actually happen.
Speaker 1 (14:41):
In twenty twenty four, the United States hit a new milestone,
estimated to pass two million newly diagnosed cases of cancer.
Speaker 3 (14:50):
One it is that the cancer incidence is increasing. Right now.
Speaker 7 (14:53):
We have fifteen million approximately in the world people that
they are suffering from cancer every year. Probably the number
will go to thirty plus in twenty fifty. And that
is happening because first of all, people live longer lives,
and that's the AIDS favors unfortunately cancer, but also there
are risk fock stores and who have better ways of
(15:14):
detecting now guns.
Speaker 3 (15:15):
So that's one they're living longer.
Speaker 1 (15:17):
But actually we're seeing more instance, are we not in
younger people, which is surprising.
Speaker 7 (15:21):
We are, and this is kind of emerging right now.
And there are risk factors starting from environment, starting from
multiple alcohol smoking, but also it is the fact that
we can detect cancers way more efficiently today than we
(15:42):
could do it years back.
Speaker 1 (15:45):
Doctor Albert Borla is the chairman and CEO of Vizer.
Under his leadership, the pharmaceutical company partnered with BioNTech during
the COVID nineteen pandemic to roll out life saving mRNA vaccines.
Speaker 7 (16:00):
How to operate with speed. The vaccine or the operational
war speed that the President Traub actually had initiated was
an operation that removed obstacles, but also within the companies
was an operation that we were suiting for the impossible,
and we came with the mindset nothing is impossible. We
(16:21):
can make it possible. That's a mindset that we can
use again, not to find the solution for COVID, but
to find the solution for cancer or for Alzheimers.
Speaker 1 (16:34):
Cancer is doctor world's next big challenge. At Pfizer. In
twenty twenty three, Pfizer completed it's forty three billion dollar
acquisition of Siegen, a company basing a particular cancer treatment
on monoclonal antibodies. Just this week, Peizer reported earnings that
included an increase in spending on oncology to about twenty
five percent of its revenue. You have made cancer a
(16:57):
real priority for Pfizer, in your investments, in your R
and D, in your development, even your acquisitions.
Speaker 7 (17:04):
Why because we think that we are ready to provide
a solution. We want to save the world again, and
I think our best chance this time it is with cancer.
Speaker 3 (17:15):
The science is there.
Speaker 7 (17:17):
We invest probably double then all the profits that we
made with COVID to acquire a new technology which is
promising a lot.
Speaker 1 (17:27):
The number of US cancer cases may be going up,
but the mortality rate is actually going down. It's fallen
thirty four percent in the last thirty years, and the
national Institutes of Health project that if this trend continues,
the United States will have twenty six million cancer survivors
by twenty forty, a forty four percent increase over twenty
(17:50):
twenty two. Adfiser hopes to keep this trend going through
one particular oncology treatment turbocharged by its acquisition of Cgen.
Speaker 7 (18:00):
It's called Antibody drug conjugate or ADC technology, and this
is like a missile that it is GPS guided, so
it doesn't go anywhere in the body, is going straight
to the target, which is the cancer cell. And what
is on top of this missile warhead, which we call payload,
(18:23):
a chemotherapy that is going to be targeting those cells.
We know that some cancer cells express some proteins. Then
we create an antibody, but it is attracted by these proteins.
The antibody is the GPS system. Then you have a payload,
which is the warkhead. It can be chemical or nuclear
(18:44):
or tactical, depends on what you want to attack. And
then you need to link the two together and that
is called the conjugation. That means that we believe that
in the next ten years, most of the general chemotherapies
could be replaced with targeted therapies like that that have
way less side effects because the chemotherapy attacks also the
(19:06):
healthy cells. Right now we can minimize the impact on
the healthy cells and maximize the impact on the cancer cells.
Speaker 1 (19:14):
How far along are we in the process with this
new technology of really having something that will start curing people.
Speaker 7 (19:20):
I think already we start having traumatic results results that,
for example, they can triple the life expectancy of the
current standards of care. But I don't think it will
be a miracle that will come from one day to another.
It will be though constant improvement. Every quarter. We will
(19:41):
have not only us, but the others as well, releases
of new data of new medicines.
Speaker 3 (19:48):
Eventually, some of these cancers will.
Speaker 7 (19:50):
Be cured, which means that they will disappear and will
not come back back again.
Speaker 3 (19:54):
But many of them will become chronic disease.
Speaker 7 (19:57):
You can learn to leave with your concert with medicines
that are not affecting the quality of your life.
Speaker 1 (20:04):
The Pfizer is not alone in looking for ways to
make cancer more manageable. Research has a key ally in
artificial intelligence.
Speaker 8 (20:13):
I think allows several things. First is it makes diagnosis
and treatment planning more accurate. You know, we're moving away
from one size fits all in terms of treatment of
cancer or many other conditions. We know that each of
us has different manifestations of the way a tumor is
going to grow or spread, or and also how it's
(20:36):
going to respond to treatment, and we need to be
able to bring the best treatment to each patient at
that particular moment in time, and AI is enabling us.
Speaker 5 (20:44):
To do that.
Speaker 1 (20:47):
Doctor Lloyd Minor is the dean of the Stanford University's
School of Medicine, where he has pushed the institution to
focus on precision health, intended to tailor care to patient's
individual needs.
Speaker 8 (21:00):
I think, really we're finding things otherwise we would have
not found because the human brain can only store so
much information and traditional analytic methods have their limitations. Generative
AI is bringing out relationships that we would have perhaps
never been able to garner without the advent of foundation
(21:21):
models and their application to the interpretation of medical data.
I think the deployment of generative AI, the pace of
that deployment and its impact is greater and faster than
any the pace of any technological innovation that I've seen
in my life. And I think we're still at the
relatively early stages.
Speaker 1 (21:40):
Deep minds Alpha fold is proof of how much AI
can do in the medical field. It uses its vast
computational power, trained by one hundred and seventy thousand proteins,
to predict protein structures.
Speaker 9 (21:54):
I remember when I was when I was starting in college,
I joined this lab and were crystallizing proteins and putting
the coordinates of their atoms into a database along with
many others, And I remember Professor Steve Harrison, who was
the leader of our lab, telling us it might take
fifty years before we're able to predict how a protein
(22:18):
folds given its amino acid sequence.
Speaker 1 (22:21):
Marty Chavez has been a fixture on Wall Street since
nineteen ninety three, when he joined Golden Sachs, but his
biochemistry roots go back to his undergraduate days at Harvard University.
Today he serves as a board member of Alphabet, whose
subsidiary Deep Mind won the Nobel Prize in Chemistry for
Alpha fold last year.
Speaker 9 (22:43):
They gave it the fifty thousand amino acid sequences for
proteins that had been sequencedruck and the structure was known
through crystallography. They trained the neural network on that database,
the Protein Data Bank, and then they did something kind
of amazing, which is they then guessed seventy five thousand
(23:05):
protein sequences for which the structure was not known. So
here's the amino acid sequence, guessed the structure. They fed
those guesses back into the model, and then I'm oversimplifying,
of course, but now the model seems to predict with
uncanny accuracy the shape in space of proteins that have
(23:29):
never been crystallized. It seems that the model discovered some
deep patterns in the way proteins fold in space, and
somehow compressed and captured that knowledge into the model.
Speaker 1 (23:45):
We hear a lot about general of AI, and there
were just a Nobel Prize given out for the alpha
fold technology. What does that mean, if anything, for cancer?
How does those two fit together?
Speaker 7 (23:56):
Well, it's a I believe not only for cancer, but
also for cancer is going to propel the biological research.
Speaker 3 (24:02):
AI in unprecedented ways.
Speaker 7 (24:05):
We are going to sort them the time that we
need to be able to develop molecules.
Speaker 1 (24:12):
What's the time horizon as far as you understand it
for generally AI really making a big difference.
Speaker 7 (24:18):
I think quick, I think already we are deploying it.
So it made very big difference in the example of
what I gave you. But as we are deploying any
different aspects of the process from discovery to development, I
think with the next two three years will have phenomenal results.
Speaker 1 (24:36):
Borler points out that Pfizer is investing twice what it
made off of COVID treatments to address the scourge of cancer,
and it will need to replicate some version of that
COVID success in redirecting its efforts. After its stock price
surged from that success, shares are down nearly fifty percent
since December twenty twenty one, leading activist investor Starboard to
(24:56):
take a one billion dollar stake, Advisor turning up pre
I'm suround the company to prove the value of its
cgen acquisition and investment in its drug line. I know
that you're committed to this fight against cancer as an
ad vizor to save lives first and foremost, but it's
also a business. How big a business opportunity is it? Potentially,
if you really have breakthroughs, it.
Speaker 7 (25:18):
Is very big business opportunity. I will tell you something.
There is a myth about the pharmaceutical business model and
the myth says that whatever is good for patients and
whatever is good for storeholders fundamentally at odds.
Speaker 3 (25:32):
In fact, the reverse is true. You can't make any money.
Speaker 7 (25:36):
Actually, you're going to lose all your money in this
business unless you are able to discover very meaningful, not
meet too solutions, very meaningful solutions for the patients. So
if we discover medicines that really double and triple the survival,
then is very good business. If we fail because we
take a lot of risk, is not good business.
Speaker 1 (25:58):
You always have new drugs in the pipeline. Where are
you on cancer drugs in the pipeline right now?
Speaker 3 (26:05):
It is the crowns.
Speaker 7 (26:06):
We are having most of our pipeline drugs and the
most important are coming from cancer. Of course, we have vaccines,
we have internal medicines, we have work in obesity, we
have work in authrieties and the inflammation.
Speaker 3 (26:20):
But cancer is where we have most of them.
Speaker 7 (26:22):
And I would say that three of the most prominent
candidates are entering, or have entered, or are about to enter,
face three studies.
Speaker 1 (26:33):
For doctor Borla, the mission to make life more livable
with cancer is worthwhile because it is a disease that
affects us all, no matter where we come from or
who we are.
Speaker 3 (26:44):
It is a global problem and affects all of us.
Speaker 7 (26:47):
Maybe not all of us as patients, thankfully, but all
of us as sons and daughters, as fathers and mothers, unfortunately,
as friends, as neighbors. There is something that is scaring
people right now, and it is not only in the US,
or in Europe or in the most advanced economic recounts.
Speaker 3 (27:10):
Coming up.
Speaker 1 (27:11):
President Trump says he wants to get federal spending down.
Bridgewater founder Ray Dalio gives us his diagnosis for what
could turn into a debt crisis and what the President
and Congress need to do to avoid it. This is
(27:41):
a story about going broke. Whether you're a person, a company,
or an entire nation. It all comes down to the
same thing, not being able to pay your debts as
they come do.
Speaker 6 (27:53):
The US fiscal federal government's fiscal path fiscal policy is
on an unsustainable path. The level of our debt relativity
economy is not unsustainable. The path is unsustainable.
Speaker 1 (28:06):
The United States has been running up a large tab
for years now, going from a debt of five point
seven trillion dollars in two thousand to over thirty five
trillion dollars in twenty twenty four, and so far it
doesn't show any signs of slowing down, with the Congressional
Budget Office projecting that at the rate it's going, the
(28:26):
US will owe over fifty trillion dollars by twenty thirty five,
or about one hundred and eighteen percent of its annual GDP.
Speaker 3 (28:34):
The debt ceiling was the Trump.
Speaker 1 (28:36):
Administration comes to office aware of the challenge posed by
the federal debt and is taking steps it says will
help address the problem. Bridgewater founder Ray Daalio has written
a new book available at no charge online, addressing the
US debt problem. It's called How Countries Go Broke, and
he starts with how much the US is going to
(28:57):
have to borrow and who will lend it the money
money it needs.
Speaker 10 (29:01):
The difference is they can print money, and that's basically it.
Speaker 11 (29:06):
So what you have is a situation where there's a
supply and a demand for debt. As we have a
new supply that will equal in the United States.
Speaker 10 (29:17):
Now, by the way, this is a problem.
Speaker 11 (29:18):
Elsewhere too, but it's about seven and a half percent
of GDP.
Speaker 10 (29:23):
So the supply of debt is going to be large.
That's new debt.
Speaker 11 (29:27):
If I calculate also who are the buyers of that debt,
and that there's not going to be enough demand for
that debt doesn't look like there'll be enough demand. And
the way that it works, so there's two things to
keep in mind. There's supply and demand, and then what
do central banks do or what do the governments do
when they don't have enough demand. Central banks come in
(29:50):
and make up that demand. They essentially print money, and
then they buy that and then that has a consequence.
And so just like in two thousand, twenty twenty one
we went through they needed to give money away and
the government needed to borrow, and the central bank produced
(30:11):
the money and bought that. That devalues money, raises inflation,
and so on.
Speaker 1 (30:17):
Thus far, the United States has been able to support
ever growing debt and deficits because of that ability to
print money. But Dahlio warns that throughout history countries have
run up against the demand of creditors sooner or later
to get paid.
Speaker 11 (30:32):
It is when the owners of that debt we have
over thirty six probian dollars essentially of government debt, when
they start to also fear that it may be monetized
like the Japanese. Japanese is a very good example Japanese.
If you have terrible investment to own bonds, they didn't
(30:54):
go down in value, but you got an interest rate
that was three percent below another interest rate US interest
rate by way example, and the currency depreciated by three
and a half percent. They were losing six and a
half percent a year for many, many years.
Speaker 10 (31:09):
That's what it can be like.
Speaker 11 (31:10):
Of course, there's an inflation component that enters into the depreciation.
One of the things I also want to emphasize is
people pay too much attention to depreciation against another exchange rate.
Normally at such times, many countries have this issue and
they don't want their currency to depreciate. So what you
(31:31):
see is the depreciation of all currencies in relationship to
things like gold or other assets.
Speaker 10 (31:39):
And that's where you have to pay attention to it.
Speaker 1 (31:42):
So if there is a debt wall out there somewhere
that we will run into, how close are we to
it and how can we tell? As with our personal finances,
Daliu says, it's when we end up borrowing not to
invest in our future, but to pay the interests on
what we've already borrowed.
Speaker 11 (32:00):
Debt isn't the problem. If the debt is used to
produce an income that is large enough or larger than
enough to service the debt. It's like a company if
you more like your finances. But what happens is it accumulates,
tends to accumulate. Think of it like a disease that
has a progression, and it goes through these various stages,
(32:24):
and so you can kind of see where the stages are.
We're relatively late in the cycle because we're also having
central banks lose money. That's a marker when they're balance
sheet deteriorates, when they have a negative networth. For example,
in the UK, can the central bank have a negative
net worth according to their laws, the central government has
(32:46):
got to recapitalize the bank. That becomes a budget item.
So there are certain red flags. There are a bunch
in this study that I've put out so that you
could see them debt service payments, borrowing to borrow. So
we are in the later stages of this. This is
something that will be I think the most important issue
(33:08):
that we'll be talking about. We're not talking about it now,
but we will be talking about it. Over the next
few months.
Speaker 1 (33:14):
Because the budget is the issue, Dio sees signs in
the market that now point toward the end of the cycle.
Speaker 11 (33:23):
What happens is that you see interest rates rise, led
by the long end when there's an easing of monetary
policy and the currency depreciating. Well, you think, wait, isn't
Fed lowering interest rates. Isn't the Bank of England lowering
interest rates? Why are long term interest rates going up? Okay,
(33:47):
they're not intervening. There must be something with the supply
demand of those bonds, because it's not their transactions that
are driving those interest rates up.
Speaker 10 (33:56):
And the currency is falling at the same time.
Speaker 11 (34:01):
Okay, that is reflecting leaving, in other words, selling the
bonds and leaving that instrument.
Speaker 10 (34:07):
So when you have that dynamic, it's a red flag.
Speaker 11 (34:11):
So we're having elements of that dynamic. So not only
is the supply demand operating that way, but the market
action is operating that way.
Speaker 1 (34:21):
If Dalio is right, if the United States is approaching
the end of what he calls the long debt cycle,
what should it do to make sure it doesn't hit
that wall.
Speaker 11 (34:31):
There are three factors that drive the budget deficit, spending, cut, spending,
it'll be reduced taxes. Race tax is not tax rates
but tax. Sometimes you can cut tag race and raised
get that more tax revenue. So I just want to
say taxes, tax revenue, but interest. If the government was
(34:56):
operating as a unit with the central bank, and there
was a coordination, if there was a fiscal tightening coordinated
with monetary easing, both of those things reduce the problem.
And so an action of getting it a three percent
of GDP stream out of number the three percent solution.
(35:17):
I think that the policymakers have to start from the
top and say three percent of GDP, we can do this,
We will do this in one way or another. They
can't let their pet programs. I think they don't have
that mantra. They don't have what is the amount? And
then they have to agree at least if we can't agree,
(35:38):
what do we do?
Speaker 10 (35:39):
Do it proportionately?
Speaker 11 (35:41):
Whatever you do, you must do this because if you don't,
you are risking what I would call you this, this
heart attack due to that constriction of debt service payments
and or a piece of that plaque breaking off sort
of the sale of those bonds. Your risking that needlessly,
and so many things are so beautiful you don't need
(36:04):
to do that.
Speaker 1 (36:05):
In the end, Dahlio's how Countries Go broke isn't simply
a Jeremiah. It does warrn of some pretty dire consequences
if we don't act and don't act soon, But he
also sees a path forward toward what he calls a
beautiful deleveraging.
Speaker 11 (36:20):
A beautiful deleveraging one way or another is there's ways
of reducing your debt and debt burdens, some of which
are deflationary and some of which are inflationary, and if
you balance those, you will reduce it in a balanced way.
Speaker 10 (36:36):
That's what I mean by beautiful deleveraging.
Speaker 11 (36:39):
So, for example, fiscal spending cuts or tightening raising taxes
will reduce the debt burden, but it's a deflationary influence.
There is interest rates, and reducing interest rates is a
stimulative way because it reduces debts servius payments directly for
(37:02):
the government, so they have a lower debt bill, and
it also is stimulative to the economy at the same time,
which can raise tax revenues and also raise asset prices.
If we think beyond what our usual constraints are about
dealing with the budget. In other words, don't just think
about spending and taxes as vehicles, but also think about
(37:27):
interest rates and the interest rate component that could be
a balance dealing with that reduction that can accomplish the
goal without being depressing and gets it on a better
physical track.
Speaker 1 (37:43):
That does it for us. Here at Wall Street Week,
I'm David Weston. This is Bloomberg. See you next week
for more stories of capitalism.
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