Bloomberg Businessweek Weekend-November 21, 2020

the United States. We did have some good news. Fisor and Maderna both had upbeat news when it came to a vaccine, and yet the world was reminded constantly that we still are in a health pandemic, probably well into one. With that in mind, our stories are highlights this week, mostly have a virus angle, but we do have a few surprises. So coming up this hour, you're going to hear from the CEO of Maderna and the CEO of Welcome Leap. You'll also hear from the chief epidemiologist at

the Chinese Center for Disease Control and Prevention. Also the president CEO at Mahindra Agriculture of North America on who is buying tractors during the shutdown. You will be surprised. We begin the with the cover story of this week's magazine.

The cover art alone, I've got to say, you've got to go online or check it out on the news stance because it really encapsulates our love affair with our pampered pets and how they are training all of us to use the online retailer of everything and anything for pets. We're talking about Chewy. Blumberg News Wealth reporter Ander's Melon and Bloomberg business Week editor Joel Webber joined us for more.

It's a fun one, um. And this is one that, um, I think we were we've been interested in for a while because look like the staff of Business Week has a lot of cats and dogs at home, UM, And there have been acquisitions that were made during the pandemic. And if you have a dog and go to a dog park like I do, you also recognize that there were many, many, many more dogs in this neighborhood than

there were before the pandemic. And one of the big beneficial areas of this has been Chewy, the online pet retailer that does pet deliveries. And that's what our stories about it is. And I gotta say, Joel, it's one of those things in the shutdown that as I would walk Ey dog Scout around the very quiet neighborhood, I would see boxes of things, and I often saw Chewy boxes on the curb. Yeah, and you know they're coming

to our house to um. It's actually in one of our story meetings that turns out that you know, there's a lot of co op apartments in New York City that aren't supposed to have pets, and Chewy Boxes are outing them because it's like, oh, look delivery exactly. So the story of Chewi, though, I think it's it's one of these amazing ones because you know, the company has

been around for for nine years. Uh started basically by a couple of guys who just realized they were going to get into the jewelry business and then realized, wait a second, there could be a bigger opportunity and pets, and they basically scrapped it out for nine years, and in the process of that sort of faded from the company, and the company now has a has a new CEO, and the story sort of starts with Andrew's crunching numbers

and realizing that he's actually incredibly highly compensated. How how highly compensated is about a hundred eight million the twenty nine team. That's what brought me onto to this story. I am, we ran our highest paid CEOs list this summer and assume It's thing made a hundred eight million last year. And I turned to my editor and said,

who in the world assume it's thing? And it turns out to see the CEO of Chewy And that's yeah, that's where it all started, right, And it's kind of like what is to Actually, we have a market guest who comes on and every time she's like, by Chewy, by Chewy, by Chewi. I mean, this is a business, you know, and you put it in the story on theres that it's very much kind of akin to Amazon and it's early days. Yeah, it really is. It's it's

what sets it apart from Amazon. Amazon was a model for much of the the quickness, the ease, and the pricing. But what really sets Chew a part is the fact that you actually have a customer so is number to call and if you call it, there's a person that responds to you within six seconds and it's willing to talk to you four hours. If that's what you feel like about your pet, about pet food, about the fact

that you know anything. I've heard stories of customer service agains have literally been on the phone for several hours with with pet owners that call in. One of the things Carol, that I think is really interesting about the businesses. You know, Amazon when it started, it had that one area of expertise that it just nailed, which was books. It was like, how do we bring as many books

as we possibly can online? And do um e commerce says as a bookstore, right, And I think Chewy actually kind of like it's almost like they surveyed the landscape and said, what's the thing that we could have recurring payments with that Amazon hasn't thought to do yet, and how do we figure out what that is and then do it at warp speed effectively? And they recognize that pets. So this thing, it's a the number in the story nine billion dollars a year being spent by Americans on pets.

If you could get one slice of that, it's a great business. And what they figured out was that there's a lot of things that you can do that are recurring payments, whether it's dog food deliveries or medications and all of those things are just cruise control. That's a subscription revenue model, and it has just allowed them to go sort of warp speed. And they were on a pretty good trajectory before the pandemic, and then the pandemic

really played to it. And so Andrews tell us about what they how how they've really capital capitalized on everything this year. Yeah, they've already in the first two quarters they added more customers than in all of the prior fiscal years. And they're on track to finally turned EBIT down positive this year. And they are also on track to hit roughly seven billion dollars in revenue from if I don't misremember around four point nine. They're definitely a

lot of growth during the pandemic. That was Bloomberg business Week editor Joel Weber and Bloomberg News Wealth reporter Ander's Melon on this week's cover story and why is the Year of the Pet? Check Out that full cover story and more great coverage in this week's issue of Bloomberg Business Week magazine. It is online, on newsstands and always on the Bloomberg Coming up, from pampered pets to giving commercial renters a helping hand during the pandemic, This is Bloomberg.

This is Bloomberg Business Week with Garrol Masser from Bloomberg Radio. We'll bring you some of the highlights from our daily radio broadcast and podcast, and that included a conversation about real estate in a week where we saw many stories crossing the Bloomberg about central London rents plummeting as residents fell to suburbs, office workers wanting to keep working at home, just not every day. So with all of that in mind, we caught up with Pierre de Bas. He is co

founder and managing partner of Romer Debas. It's a New York City based law firm specializing in real estate. He gave us an update on the hard hit retail in

restaurant industries. The biggest issue that we're encountering, especially in you know, major cities around the country, is what's going to happen, um if the second wave continues going down this path, and how the local economies of densely populated cities which are not having that same level of density and the local demand coming from the workforce and from people who fled the city impacting local businesses UM. And

I'll give you a good example. We're talking about one of one of the most important topics right now is retail and restaurant and what is the future retail restaurant look like? And how is that going to impact the commercial real estate market? And when you take a city, you say, take from Manhattan for example. You know, we're sitting here in midtown Manhattan and it's roughly depending where you read, ten to fourteen of the workforces back in

the office. And you know, certain pockets of the city are not resident their commercial neighborhoods where they're unit probably office buildings, so on and so forth, not apartments where people live and reside. So what impact we're seeing is that, you know, what's that going to have on restaurants in particular and retail And you know how our landlords renegotiating rents to keep these businesses afloat, and what happens to the local economies if these businesses go under. Well, and

help me out here, because you understand this industry. I mean I think about and I look around the neighborhoods as I go in and out of the city. I mean there's a lot of empty retail. Uh, there's a lot of boarding up of places, And I do wonder that you know, the retail of the restaurants that we lose, how long does it take for that to come back? I mean, restaurants, It's unbelievable the cycle, right we know it's a tough business, and yet we constantly see new

entries on the market on the marketplace. But you understand cycles. You know, when we've got a really tough cycle like the one we're going through right now, how long does it take to build it back up? You know, with a restaurant's based in particular, That's what everybody is sitting here and speculating in terms of, you know what I'm renegotiating leases with landlords, I'm seeing completely different you know, opinions and tactics that landlords are using in responses in

terms of tenant um, concession requests and renegotiations. And from my perspective, you know, if I'm looking at it from as a landlord, you know you want to keep these tenants and businesses afloat as long as possible because you know there will be a light at the end of the tunnel. We've had great news in the last two weeks in terms of you know, the progress of a vaccine and you know, you can see that life will have some semblance of normalcy in the next year or so.

Um A long time though, right, that's a very long time. Note, it's a it's a it's a great point to bring up. That's a really long time next year. So you know, I say that in an optimistic tone with the you know,

with it's in with negative news and reality. But you know, the question though to ask is that if that tenant vacates, when is there going to be a next someone else who wants to come in and start a restaurant in the middle of this, right, Like, that's the thing that's mind blowing to me is that you know you're gonna sit on that vacant, that space vacant for several years in my opinion, UM where reading that unless there's relief

or a quick rebound in the market. You know, we're talking roughly up to two thirds of restaurants potentially going under UM in the New York City area. Now, you know, to you to answer your question terms of how long will that teach to recover? You know, and nobody knows, but we're talking years, We're talking you know that it's too much of an absorption rate. Well, you know, I do wonder too, Um, Pierre, did the financial crisis give

us a little bit of a playbook on this. I know it's not the same type of crisis, Um, but it was a tough one and it lasted a long time and took use a long time to come back. Yeah, it certainly did. And and that's the most recent crisis to compare this too. And clearly you know, that had a financial ripple effect across all of New York City.

But this is just so you know, it's this is impossible to find a point of comparison, you know, given them, we're talking a global health pandemic which is causing you know, the governor to intervene in cap capacity and restaurants, which is causing people to have, you know, the fear for their own health to go outside you and congregate with others.

I mean, it's it's just drastically different. You know. Back in two thousand and eight, you know, clearly, Um, the city lost a lot of money, and there was you know, people did flee the city, but it was nowhere near the same exodus of people that have left the city as a result of the pandemic. Yeah, it's pretty remarkable. I mean, you could feel it in the city. You

just can feel it. You know. It's interesting. What are kind of some of the um offerings that landlords are are are putting out for their tenants to kind of help them out in this time. You know, my favorite one, we are office renegotiated a lease for a restaurant tenant where um they're located in Rockefeller Center. So when you take the location, you know, the demographic that's going to the restaurant is either tourists or people who work in the area and are going to freak with the restaurant.

It's not a residential neighborhood. So clearly that that that demographic is not in New York City right now. You're on tourists in the workforce, it's not here. So we renegotiate that specific um LESA and a couple of others where the rent for the next twelve months is ten percent of the gross receivables of the restaurant. So if the restaurant makes a hundred thousand dollars this month, the

landlord gets ten thousand dollars. If the restaurant makes you know, fifty dollars next month, land or gets five dollars UM, And it's really a way for landlords to show vested interest in preserving you know, small businesses and maintaining some some semblance of cash flow right, which like we said, it's when are you replacing that tenant? And it's better than none. But do those tenants then have to peer make it up later on or is that just like listen,

we understand you're not making a lot of money. This is what your rent is going to be for this month, and we're not going to try and come back later. You know, I'm seeing all different approaches. The most common one landlords will first come and say, we'll give you deferment and we'll tack it onto the back end. But like you said earlier, you know, restaurant business a tough business to begin with, even in good times, could they afford one point five times rent? So that's not viable

for most. UM. Some are giving you know, rent relief and forgiveness. But you know, the smart ones are committing to something for the next six to twelve months, giving them something to keep them going UM and also have incentive to keep going and then seeing what the world looks like in reassessing UM. That's why you know, I love the idea of the fixed percentage of gross revenue

for you know, twelve months time period. So I can talk to you from it, from perspective of a lawyer representing a number of businesses and also as a small business owner. You know, I I co founded their firm. We have about forty employees total, and I can tell you the people love working from home. They ideally, in a perfect world to have a hybrid model where you know, they have access to an office but aren't required to

come in daily. And you know, if you would have asked me back in March when we first had the shutdown, you know, I'm I'm one of the few forty year olds who still writes check. So I'm a little bit of old school myself check occasionally, just occasionally to a couple of times of months, just for old time's sake. And you know, I I love coming in office. I

I don't I personally don't like working from home. That's room or debas co founder and managing partner Pierre de Bass not liking working from home, but as we know, many do and they want flexibility. You are listening to Bloomberg Business Week coming up real estate figures out life in a pandemic, So too has the agg industry. And who knew homeowners they're buying tractors while stuck at home. That's coming up. This is Bloomberg. This is Bloomberg Business

Week with Carol Masser from Bloomberg Radio. One of the areas impacted by COVID nineteen is one that was deemed essential during the health pandemic. We're talking about the global agricultural industry. A major player in that industry Mahindra, the conglomerate based in India, And like other companies which were initially shut down by the pandemic, Mahindra Agriculture North America got a surprise when business actually picked up. We got more on that from Vier and Popli, president CEO at

Mahindra Agriculture North America. He was in Houston, US seeing a pretty large number of cases. And so everyone's, you know, it's pretty much like the rest of the country. Everyone's kind of bearing masks and kind of isolating themselves and living further and further out from everyone each other. And so at some level, somehow it seems to be working

well for the tractor business. Well, let's talk about this I mean, first of all, if you could take me back to the spring, what was going on for you and your team at the company, And I'm curious, then kind of take us forward how things have evolved. But what was it like back in the spring. Well back in the spring, I think in March when this thing started.

I think, like everyone else, we were completely panicked, and you know, we really pulled back, you know, went down the roads of shutting down the plants and manufacturing and the supply chain kind of froze. We had our own versions of layoffs and furloughs, but you know, you know, we tried to focus on then. But what we found was the retail industry suddenly took off somewhere towards the

end of April. And I guess as people were spent more and more time and their farms and back in their homes, they were wanting to do more home improvement moving out. So we saw the tractor industry started to pick up pretty quickly, and uh so we had to figure a way to come back. And you know, we started the same thing, which is temperature checks, you know, split shift, slowly bringing people back, putting in all the plastic barriers and separate and redesigning the production line and

production flow through. So ever since that happened has just been momentum has been gaining. And so far the industries, you know, just the year to day, I think industries up twenty three. That's pretty remarkable. We'll talk to me a little bit um. You're about the demographics of who was buying because my understanding, my producer Paul Brenna was filling me a little bit earlier that I think seven percent of your sales were customers that actually never had

owned a tractor before. Actually that's the people. Wow, okay we left out of zero. That's tremendous. I mean, first of all, what kind of tractor are they buy? So basically, we generally operate in the you know, the small track, the midland compact tractors that are between twenty two horseper and those are largely driven by you know, rural lifestyle small farms and the second tractor, a third tractor and a big farm. So they're not the really big road

cropping tractors. They're smaller in size and they operate more in the large homeowners and rural lifestylers. A bit of a surprise for you to see that market come alive. Yeah, it was. You know, I think pretty much the whole

industry has been caught by surprise. Uh we've seen you know, the industry inventory and the dealerships are down significantly obviously because of the huge demand, and you know, the supply chain being challenged, and you know, our ability to ramp up globally and get parts in has been a bit of a challenge. But now we're we're back on track and you know, being able to supply back in. But it was a big surprise. No, no, no, forgive me,

I cut you have the supply chain. Was it problematic a little bit in the beginning, Oh, yes, it was. I think you know, with shipping shut down, ports, shut down factories all over the world, also going through their own world. You know, the pandemic is global, so it's not just one country that's impacted, right, So everything was shut down, so we had a tough time getting parts made,

getting them moved, bringing them in. Then you know, the whole challenges of the local market of getting the workers in, getting them you know, protecting them and keeping them safe. And then even our dealers, you know, many of our dealers had to transition to this new environment, so helping them on the journey of digital marketing, helping them on the journey of safe delivery cleaning equipment. So there was a it was a pretty interesting and a lot of work to be done in the last six sad months

that we had to go through. I hear and one thing I want to ask you, so Charlie Pallatt are our news broadcaster bringing that headline US covered nineteen deaths to two fifty thousand. That is according to Johns Hopkins, these are really troubling numbers. When you see these numbers, you know, and we're starting to see cities and certainly states are continuing to do rollbacks and shutting down parts of their economy. What do you think about and how

might that impact your business? I mean, you guys have seen kind of a benefit as more people have been home. Do you anticipate then, in an odd way like we've seen with a lot of businesses, whether it was Netflix or some others or zoom Um or Peloton, that you will continue to benefit as a result. Well, you know it is it is a really sad situation and you know, every LifeLock is tough to deal with. Since the point

is that the FED is announced. I think very a benign interest rate regime over the next twelve to eighteen months. So you know, money availability is there, and I'm hoping that you know, there will be one more stimulus announced fairly soon. And when these two come in, and if this trend continues, I guess you know, people are going to be stuck at home and you know, they need

things to do. And yeah, I do think that the tractor industry will continue to do well, and you know, people will want to improve their homes or you know, you're also seeing a trend of people, you know, with this work from home, the concept of distance to distance has vanished. He's right, so many things have changed as a result of COVID. That's Mahindra Agriculture North America's CEO

and president, Baron pop Late. You're listening to Bloomberg Business Week, Still Ahead, Never Again, preventing Tomorrow's health crisis from the Bloomberg New Economy Forum. This is Bloomberg. This is Bloomberg Business Week with GARYL. Masser from Bloomberg Radio. This week, Bloomberg hosted virtually it's third annual New Economy Forum. It's four days of virtual programming each day focusing on a

different pillar that's facing the world. I moderated a conversation on how the world can ensure that we never never have another catastrophe like COVID nineteen and the panel included Stefan Bonsal, chief executive Officer of Maderna, Regina, Dugan, CEO at Welcome Leap, and Dr Woo Zoo, chief epidemiologist at the Chinese Center for Disease Control and Prevention. Here's some of that conver station, including Durner's big news this week.

On Monday, we announced that the first deterim analysis of face free study, the study of fluty thousand participants, so the most ninety five percent pause see. But the piece that makes me are most more excited is the fact that of the eleven people with severe this is they were all on plastival. We are none on the vaccine. And so if you think about it, what does that mean.

I mean that once we get the final data within the next you know, seven to fifteen days, we should be able to see if this is confirmed that if you get all vaccine, we have a ninety five percentation. So having noticed this, and if you get disease you will have mild symptoms, I mean, do not have severe disease.

And as we know, because well it's been a big impact in terms of hospitalization of a patient during the worst I tu for passion, during the world's death and all the impact it has had, but only a human life, of course, but on the mental health, on the economy,

we think this could be a game plan. And so what's bothering now is getting the final data all looked up, submitting these two regulatory agencies around the world, and hopefully I wipe, getting the vaccine approven, the emergency used before the end of a year. We're making as much product as we can. And then we said, will I before twenty million doses ready to ship as soon as we have a regulatory report. All right, So that's certainly some upbeat news. Dr who I want to bring you into

this conversation. When you and I spoke over the weekend, I believe you were in shin Jong or had been in shin Jong. China has done and I think most would argue that as among the biggest, the most developed country, you guys have done a good job in terms of containing the virus. But even so, there continues to be breakout. Where are we in China when it comes to COVID nineteen. I just come back from a sin John. Now back to the Beijing. We are just controlled another outbreak in

the Kashka shin Joan Wi, a parliament region. The epidemic has started in the letter of October and brought under control in the November. In the China, I think what we did it to have very stronger sibilants and peaked control the epidemic as a war. So go back to the earlier response to the initial outbreak in Oha. Most of the people suspect China delayed or does not responded very quickly. Actually, I give you two examples. We did

a very bold decision. For example, when the outbreak first noticed by doctors, that's a last December twenty seventh, and the national experts arrived in the Wuhan, they made a decision to close the seafood market. At that time they were only forty cases and the twenty seven of them

had exposure to a seafood market. Methodic decision is a tough and the national acts and the local expert as different opinion, and the local expert has gone against to achieve that a decision, and now that decision, it's a chap down whist city. So we are responded to the COVID nine team very quickly. We're quite to remove all the right virus from a community to cleia up. That makes society is say so now, China, I think it's the best to the zero local transmission. Now, oh, y Riggin,

I want you to come in on this too. What are you hearing from your network about kind of where we are in this process and in this cycle in terms of dealing with the virus. Well, I want to calibrate for a moment, because remember, the normal time to go from an outbreak to a vaccine is something like five to ten years. So this achievement here is remarkable, unprecedented.

The team at Maderna goes from virus sequence to first dosing in humans in sixty three days, and as fun is fond of saying, that's an advance a decade in the making. In fact, I remember a decade ago when m RNA based vaccines were first proposed and the critics said there was no evidence to suggest it would work, and others said there is no evidence to suggest it won't. We should try and if we are successful, it would matter,

And here we are today, in fact it matters. So I think what we're hearing now is how do we begin to work on the next pieces? So how do we shorten the clinical trial? How do we begin to get manufacturing underway so that we can couple the early warning with a rapid response. And there's still much more to do there. And in my view, this is the spot Nick moment of our generation, right and in the same way that sput Nick inspired a space age, so

to might this pandemic inspire a health age? Lots to do? So I want to continue this conversation because now I want to kind of look forward to the pull that's out there. We'd love to hear your response the question. We're asking, what are the lessons from Asia's successful response

to COVID nineteen. Some individual freedom must be sacrificed for the public good, that's answer A answer B Early lockdowns, reduced overall economic impact answers C more investment in digital health infrastructure, including contact tracing and d face coverings work. So having said that, we'll look for those responses. So let me ask you, how do we make sure this never ever happens again. Bloomberg New Economy said, there is no greater challenge for our global leaders and figuring out

how to make sure this never happens again. Stefan, can we do this? Do we now have the playbook? I think we've learned a lot, And as Regina said, I mean, first what has been done this year by scientists around the world and the collaboration we have seen. He's unprecedented in some of the speen. But we've learned a lot

as well. And I think there are two dimensions where we should invest aggressively across the world in public private partnership to reduce the time to get to a vacuum, because as we know, you know, public measures are extremely important and right now wearing a mask and social distancing are critical. Treatment are very important to take care of people in the hospital, but to really get back to normal,

we need to vaccinate people. And some of the focus on the vaccine front, which is really the piece side of the most So there are two things that I think we need to really invest a lot of. One is going after the top ten or twenty patrogens arrasies that are known to be at risk and doing extensive work doing all the poltical trilnical work in animals, run phase one, which is when you decide what those do you need, and then run phase two to give you

around the fousand people of safety. Because if we had done that, for for example, mirth or salves the first sal us before the start of a year, when we got the sequence put online by the Chinese, we could have right away gone into a phase three. So instead, as Regina said on March six, seemed to start a phase when we could have started the phase three if we knew the dose and that already exposed enough people. Because it's only a few sequence change of mutation. So

that's number one pre clinical and clinical work. And think about it. I will guess estimate it's around twenty four million dollar per virus, so times tennal twenty virus. It is nothing at the global scalaber granet. The complete is manufacturing.

If we have had a big plant in Asia, a big plant in Europe, a big in Africa, one in the US North and Northern and souven hemisphere, that could make say fifteen million dollars a month, you could have had starting right away in January, fifty millions of the month that will make you around for army and those plants. By the summer, we have your face pre data. In June we have fermiaca. Other people think about the different

the winter we will hopefully right now, step on. I want to jump in because right I understand that we could reduce the timeline. Dr Wu come in on this because I think a big part of this discussion is is it all about vaccines? Is it vaccines that save the world. I mean the w h O warning that they're not going to arrive in time for us to really deal with this second wave of COVID and that they should not be seen as a unicorn magic solution. Dr Wu, Are vaccines the answer to all of this?

I think at this a moment is not yet. I think because the question you asked about how to let this happen again, I think most of the urgent question how to bring the epidemic under control. It's a very urgent. So just look at the beginning of the winter, the number of the cases continue to rise in the European countries. In the United States, number of dedy cases reaching over sixty six hundred of sound in the that's enormous, So when get to the winter, the number of kids that

will continue. I think the public health methods like we're masks, social distance, hand washing and venti nation, all of these public health and meathods still the major effective methods to be used to control the epidemic. So the like saying it's a good message is a good uh. Technical weapons for control the epidemic, However, that cannot be used in the winter or cannot be brought the epidemic under control

before next spring. So now we we think we need to have two strategic go hand by hands of the

health at one hand and push vaccine other hands. That was Dr who Uno, chief epidemiologist at the Chinese Center for Disease Control and Prevention, along with Stefan Boncell, chief executive officer at Maderna, and Regina do Gain, CEO at Welcome Leap, and they were at this week's Bloomberg New Economy Form talking about how to avoid another virus and rebuild global public health catch more discussions with global leaders.

You could find that from the New Economy Forum just go to New Economy form dot com and also Bloomberg dot com. That wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. I'm Carol Masser. Were coming up in our next hour, including exciting results when it comes to the vaccine this week,

but we've got to slow down. There are still lots of questions to be answered about those results from Fiser and Maderna will cover that story, plus creating the world's safest restaurant franchise and the magic mushrooms that could change the world for millions of people. That's coming up on Bloomberg Business Week. This is Bloomberg. This is Bloomberg Business Week with Carol Masser from Bloomberg Radio. Hi, I'm Carol Masser. Coming up in our second hour of the weekend edition

of Bloomberg Business Week. Highlights from our daily radio show, including stories in the magazine and some of our favorite interview and then includes the restaurant franchise idea that started out to do one thing and then found its footing in a COVID nineteen world. We'll talk about that with John Taffer, bar rescue host an executive producer. Also the Insider's Guide to Jeopardy Yes, that wildly successful and long running game show, and the magic mushrooms that the FDA

says are a breakthrough therapy. First up, though, another story reported for Business Week about the optimism over vaccine developments from both Fiser and Maderna, and yet, as Bloomberg News health reporter James Patton points out, the remarkable vaccine results leave a lot of questions unanswered. James joined us from London, along with Bloomberg business Week editor Jill Weber, James Um and Bob Lang wrote, this story actually just sort of right off the heels of the Fightser News and then

then Dinners stuff happened. And I still think that all the stuff that they raised in their story remains relevant. And you know, the one that I think is the elephant in the room is is one that I think, Carol, just playing off of what you just said, I think everyone is really interested in, which is how long will this efficacy last? UM? So okay, it over to Mr Patton with that what other question? Let's let's talk about that question. But I'm also interested in the other unknowns

that UM. You know, we as journalists are are asking about UM and will continue to ask about as the race for a vaccine continues. Well, Joel mentioned one of the big questions is how long that protection is going to last. We we simply don't know the answer to that or when the immunity could wear off. So we don't know how often people may need to get booster

shots down the road. That's a significant UM question. UM researchers are UM you know, also waiting for more data on the vaccine's ability to prevent not just serious illness but infections and to stop people from passing it on to others. UM. So you know, we've seen two press releases from from Viser and its German part or BioNTech, and now from Maderna UH. And you know these are hugely promising and the results are extraordinary. UM. But we don't you know, have all the data yet that experts

need to UM to assess these products. Are still waiting for some key UH safety data. The people who UM ultimately receive the vaccines will need to be tracked you know, for many months UH to monitor safety. So UM, you know there are you know, not to mention the issues, I mean you're talking about vaccine insitancy, How many people are actually gonna take vaccines once they're rolled out, the production and logistics, storage, distribution, all of those, all those

issues remain. So again, you know, we have to keep in mind that what we're seeing in the past week is a big turning point and and this is really positive news, but we still have to uh, we still have to wait to get answers to bunt of these questions. Okay, James, I want to ask um specific just um, you know, we had the Fiser stuff last week, We've had the

Mandernal stuff. I'm wondering, UM, how much we should be reading into the differences between those two vaccines so far, since that's you know, one of those other questions that remains sort of um unanswered but very of the moment. How how are you looking at the differences between them? Yeah, well, it's a good it's a good question. I mean, the the obvious um similarity is that both of these rely on uh, you know, this novel technology known as messenger RNA.

Uh So you know that is an approach that's never been used before to develop uh an approved vaccine. And um, you know a number of others are using very different approaches. But one of the um uh they actually I'm in common is many of these vaccines under development are targeting uh.

You know, everyone's heard of the spike protein now, UM, and that actually bodes well for many of the others as well, like Astra Zeneca and its partner UM University of Oxford that are going to have data coming coming soon.

But there is also a difference distinction between the Fiser Majornas Majornay vaccines in terms of in terms of storage and so that is um uh you know, that's another another one that people are going to be closely um following because UM that could you know, especially in the case of the Fiser vaccine, that could uh could slow

things down a bit well. And actually, just to be very specific though, yeah, James tell us, tell us about the specific differences there, because the Fiser one obviously requires a cold storage that's colder, colder than my Freds. Yeah, exactly exactly. So UM. Basically today what was interesting is and this is a this is a positive um, a positive development. The UM the company pointed to data that basically shows that the vaccine is able at refrigerator temperatures

for thirty days. Now that is much longer than previously estimated, and that is very important because of those storage and distribution uh issues that we're talking about that are seen as big challenges. So, you know, Fiser's vaccine needs to be stored at these like ultra cold temperatures until a few days before it's used. Um. And so those are important distinctions between the two. I think in the case of the Madurna vaccine, it could be kept in freezers

though um it doesn't need um. You know, it doesn't need the same kind of facilities that the Fiser vaccine will will will need ultimately. So so that's a big that's a big issue, uh down the track. Yeah, that's a reminder that there are still several big issues about getting a vaccine out to the world. That was Bloomberg Health reporter James Patton and Bloomberg business Week getitor Joel Weber. That story, by the way, written by James along with

Bloomberg healthcare reporter Bob la Greth. You're listening to Bloomberg Business Week. I suggest that the next thing people are gonna do after they get the vaccine as go to dinner. It started as an idea before COVID as a solution to a very tight labor market. Now it's finding itself right at home in the pandemic that's coming up. This is Bloomberg. This is Bloomberg Business Week with Carol Masser

from Bloomberg Radio. Hi, I'm Karl Masser. Coming up in our second hour of the weekend edition of Bloomberg Business Week. Highlights from our daily radio show, including stories in the magazine and some of our favorite interviews, and then includes the restaurant franchise idea that started out to do one thing and then found its footing in a COVID nineteen world. We'll talk about that with John Taffer, bar rescue host

an executive producer. Also the Insider's Guide to Jeopardy, Yes, that wildly successful and long running game show, and the magic mushrooms that the FDA says our breakthrough therapy. First up, though another story reported for Business Week about the optimism over vaccine developments from both Fiser and Maderna, and yet, as Bloomberg News health reporter James Patton points out, the

remarkable vaccine results leave a lot of questions unanswered. James joined us from London along with Bloomberg Business we getitor Joe Weber, James m and Bob Langwith wrote this story actually just sort of right off the heels of the Fighter News and then the Benners stuff happens, and I still think that all the stuff that they raised in

their story remains relevant. And you know, the one that I think is the elephant in the room is is one that I think, Carol, just playing off of what you just said, I think everyone is really interested in, which is how long will this efficacy last? UM? So Okay, it over to Mr Patton with that what other question? Let's let's talk about that question. But I'm also interested in the other unknowns that UM. You know, we as journalists are are asking about UM and will continue to

ask about as the race for a vaccine continues. Mentioned one of the big questions is how long that protection is going to ask we we simply don't know the answer to that or when we immediate would wear off, So we don't know how often people may need to get booster shots down the road. That's a significant UM question. UM researchers are UM you know, also waiting for more data on the vaccine's ability to prevent not just serious illness but infections and to stop people from passing it

on to others. UM. So you know, we've seen two press releases from from Fiser and its German partner by on Tech and now from Manserta. UH. And you know, these are hugely promising and the results are extraordinary. UM, but we don't you know, have all the data yet that experts need to um to assess these products. Are still waiting for some key UH safety data. The people who UM ultimately receive the vaccines will need to be tracked you know, for many months uh to monitor safety.

So UM, you know there are you know, not to mention the issues. I mean you were talking about vaccine hesitancy, how many people are actually gonna take vaccines once they're rolled out, the production and logistics, storage, distribution, all of those, all of those issues remain. So again, you know, we have to give in mind that what we're seeing in the past week is a big turning point and and this is really positive news, but we still have to uh, we still have to wait to get answers to onto

these questions. James, I want to ask um specifically just UM, you know, we had the Visor stuff last week, we've had the Mandernist stuff. I'm wondering, UM, how much we should be reading into the differences between those two vaccines so far since that's you know, one of those other questions that remains sort of um unanswered but very of the moment. How how are you looking at the differences between them? Yeah, well, it's a good it's a good question.

I mean, the the obvious um similarity is that both of these rely on uh you know this novel technology known messenger RNA. UH. So you know that is an approach that's never been used before to develop uh an approved vaccine. And um you know a number of others

are using very different approaches. But one of the um uh they actually have in common is many of these vaccines under development are targeting uh you know, everyone's heard of the spike protein now um, and that actually bodes well for many of the others as well, like astros Eneka and its partner UM University of Oxford that are

going to have a data coming coming soon. But there is also a difference distinction between the fiveser Majorna's Majorna vaccines in terms of in terms of storage and so that is um uh you know, that's another another one that people are going to be closely um following, because um that could you know, especially in the case of the Fiser vaccine, that could could slow things down a bit.

Well actually, just to be very specific though, yeah, tell us tell us about the specific differences there, because the Fiser one obviously requires a cold storage that's colder, colder than myphreds. Yeah, exactly exactly. So UM basically today what was interesting is and this is a this is a positive UM, a positive development. The UM the company pointed to data that basically shows that the vaccine is stable

at refrigerator temperatures for thirty days. Now that is much longer than previously estimated, and that is very important because of those storage and distribution uh issues that we're talking about that they're seen as big challenges. So you know, Fisers vaccine needs to be stored at these like ultra cold temperatures until a few days before it's used. Um. And so those are important distinctions between the two. I think in the case of the Majorna vaccine, it could

be kept in freezers. UM. It doesn't need um, you know, it doesn't need the same kind of facilities that the Defiser vaccine will will will need ultimately. So so that's a big that's a big issue, uh down the track. Yeah, that's a reminder that there are still several big issues about getting a vaccine out to the world. That was Bloomberg Health reporter James Patton and Bloomberg Business wee getitor Joel Webber. That's story, by the way, written by James

along with Bloomberg healthcare reporter Bob blain Grith. You're listening to Bloomberg Business Week. I suggest that the next thing people are gonna do after they get the vaccine is go to dinner. It started as an idea before COVID as a solution to a very tight labor market. Now it's finding itself right at home in the pandemic that's coming up. This is Bloomberg. This is Bloomberg Business Week with Carol Masser from Bloomberg Radio. You know that sound

that is, of course from the game show Jeopardy. And we recently got the sad news of the past thing of Alex Trebek at the age of eighty. Now he and the show Jeopardy inextricably linked, as Trebek hosted the show for thirty seven years. Journalist Claire mcneir has written a book about the show. It's entitled Answers in the Form of Questions, A Definitive History and Insider's Guide to Jeopardy.

She gives us behind the scenes look into one of America's most popular and successful game shows, clear by the Way as a writer for The Ringer, where she covers sports and culture. We began by talking about the top performing contestant, Ken Jennings. Kind of such an interesting figure in Jeopardy's history, and obviously I am biased now that he has written my forward, but he is really a delight.

He was first on the show in in two thousand four, and he won seventy four games and of course became this kind of national sensation in this been on the show um many times since then, including this past January when he won the Greatest of All Time tournament, and so that he had kind of retired from Jeopardy game plan now is actually a consulting producer with the show.

But he's really interesting case because he he has been able to sort of track these changes in the way that m Jeopardy is played over the years, and that was that was really something I was curious about going into the book and wanted to highlight. He He has said that really what we're seeing right now is kind of a moneyball moment for Jeopardy where it used to be in two thousand four, even ten years ago, but

even less than that. It used to be like, if you were preparing for Jeopardy, you got the call to go on and and tape an episode, you had baby three weeks before your taping, you know, make some flash cards for the presidents and vice presidents and then you'd you'd be good to go. But now people prepare in this rigorous kind of academic way. In physical ways, people try to shave down uh their reaction time so that

they can master the buzzer more effectively. They they you know, use all kinds of mass to tell them what to do in Final Jeopardy, and with daily doubles, it's it's become this really kind of advanced statistic sort of thing. Yeah, it's like the good old days and we just take the s a T and we didn't really think about it. Now it's like, man, everybody's got like, hey, listen, tell us about the test that contestants take, because my understanding is that Alex used to take it a lot, and

I'm wondering, didn't you take it? I did? Unfortunately yes, M Yeah, So the any any aspiring Jeopardy contestant takes a fifty question UM online tests and it's the kind of material you would see on the show. You don't have to write in UM the who is or the what is, but it is that same kind of general interest sort of stuff you would see on any any given night. And it is generally thought that thirty five

out of fifty is a passing score. It's a really hard test, but they don't even tell you how you do, much less what a passing score is. So of course it becomes this thing where after people take the test, they huddle with other contestants to compare answers and they figure out exactly how they did. It's like being in high school again, right exactly exactly, And and if they do pass, they might get invited then to an audition

where they basically do the same thing over again. And of course what that looks like now is you do it over a video with with one of the show's producers and contesting coordinators UM, and it kind of in real time saying the answers UM, and then if you pass that, you move on to sort of a buzzer audition. Can you play the game? Would you? Would you work on television kind of thing. Um, and and then you might get invited to the show after after that final stuff.

But yes, I was more or less tricked into taking the test by the producers. I'd I had gone to for the book basically file and one of one of the auditions last year, and uh, at the last minute they informed me that I would be required to take the past as well, and need lessen said, you will not be seeing me on Jeopardy anytime, and which is absolutely for the best. I know. That's that's UM with you. I'm with you on that. Um. What I want to ask you is Alex Trebeck. What was he like? Yeah,

he he was. He was so what he seemed like on the show. He he so much. Was that that kind of scholarly, smart, sharp, curious, kind of a cerbic, self deprecating person. He was really funny too, and I think, well, one of my favorite discoveries in this was, um, you could see at the end of episodes Alex Turbec approaches the contestants podiums and and kind of has like a chit chat, shakes the champions hand, but you can't hear

what they're saying. They turned the mics off for that, and I talked to a whole lot of contestants who had been on the stage, and what they said is that more often than not, what he was saying was he just wanted to talk about whatever the final Jeopardy question is. Then he wanted to ask the people who

got it, how did you work that out? And he wanted to kind of softly chib the people who didn't get there, who of course are heartbroken that they were just lost on Jeopardy, And he just he he really did care about those things. He cared about the trivia. It was important to him, um and I think that just it came through in his hosting, and I think it did so much to help the show have that identity. I mean, it is it is so hard to imagine

Jeopardy without Alex Trebeck. You know. I think Ken Jennings and bodies a lot of what people would want in the Jeopardy contestant in that he has a lot of those same qualities, and that he is very smart, he does care very much about these things. He is funny, obviously because he's been on the show so much over the last sixteen years. He is kind of synonymous with Jeopardy, we shall see what happens. That's Clara mcneir, writer for

The Ringer, where she covers sports and culture. Her book Answers in the Form of Questions, A Definitive History and Insider's Guide to Jeopardy. Here's a question, who will be the next host of Jeopardy? All right? Straight ahead on Bloomberg Business Week. Someone who is trying to find answers for millions of sufferers and the answer that may lay in something that's been around for thousands of years. This is Bloomberg. This is Bloomberg Business Week with GARYL. Masser

from Bloomberg Radio. We're gonna wrap up this week with something innovative, provocative and still yet in the early phase and be featured in an upcoming edition of Bloomberg bus As we talks. It's about one of this year's successful I p O is a company that has patented a synthetic version of the active ingredient and so called magic mushrooms for use in treatment resistant depression. We caught up with Compass Pathways chairman, CEO and co founder George Goldsmith.

He joined us from London and talked to us about what has been a very personal story from our point of view. We had our son really struggled with mental health issues when he lent to university, like far too many young people do. We thought, how hard could this be? You know, they're good treatments and therapies, Yet the more he encountered, the more difficult it was for him to be recognizable to us with the side effects, and it

didn't really help him. So we then started talking to lots of different people doing our own research, my co founder and wife as Guy, as a doctor and in her own researchers, she stumbled across philocybin and philocybin research and we became really intrigued by this um. The other thing that happened simultaneously is the more people we talked about our own challenges that we were facing, the more

we heard from others about their challenges. These would be long term friends who we've known for quite a while, but they never felt comfortable sharing their own challenges until we did. And that really led us to to understand that almost everybody has a story of you know, how the current system isn't quite helping enough people well enough, and that really inspired us to look at this research. We saw this promise, and and the issue is how do we bring it to patients, not just bring it

into the next journal article. And journal articles are critically important, but they're necessary but not sufficient to bring this to patients.

And that's really our well. And I do you know, it's interesting I was doing some reading on this and that my understanding is for those you know, patients and individuals who deal with and and suffer depression, that there the existing treatments only really work for about seventy patients, leaving as many as ninety millions still struggling around the world. I think that's some world health organization. So it is a huge and I hate to put it in business terms,

but we are Bloomberg. It's a huge market. It is hate give me great markets of suffering, for it is a huge market, right in that sense. And so there's a tremendous amount of suffering and I think we've been pretty good at developing tools to ameliorate of that, but is quite quite difficult because what happens is with each new treatment, those people actually have less and less likely that to be helped by what's next. And there's been a very large studies in the US by the National

Sudamental Health and we really have documentation for that. So if we have the opportunity to do something unique here, which is well do so what we do is we provide a very high dose of suicide in a carefully controlled setting under supervision by especially trained therapists. So this isn't anything that anyone do at home and um patients listen to a special soundtrack and they're really supported through

this process. And what happens is that afterwards, for many patients they experience an immediate reduction and depression that actually lasts for quite a while. And what are research really looking at is well, who benefits not everyone, so who doesn't and what separates the people who benefit for a few weeks from the single dose for a few months

of people who actually have even longer experiences. So we've went to the FDA and actually we're operating now in ten countries dueing clinical research, twenty one research sites, and we're really looking at how do we do the real deep research to generate the information and insight. We need to go to what's the next phase rest which would be phase three trials, and we'll be reporting out on our Phase two trials about a year from now. So

we're and really excited about the progress. And I should say that the FDA has named your experimental treatment quote a breakthrough therapy, which is, you know, really wonderful to kind of get that acknowledgement, but it also means now you've got to do more rigorous, more risk adverse testing.

It's a lot of pressure, I'm assuming, and you've got to make sure you're working with the right scientists, the best scientists, the best clinical trials correct well, absolutely and absolutely and then even more so right because obviously there's a history here um as what we're looking to do

is the highest quality, rigorous, most rigorous research. The first support of Call for Us was actually even before we formed the company, to speak with regulators players just to understand what did they think about this and what we were really struck by in all the conversations, and the breakthrough therapy designation is I think a perfect example of this. The problem is so big, and that's what you said, you know, there's such a huge amount of suffering here.

The tools we have are good for some, but not enough. They saw this is the promising So what we found is that a huge amount of support, but we really have to get this right. We have to get it right for patients, for their families and society. How big of a market opportunity do you think is there for compass pathways just quickly, Well, I think that what we see and this is not obviously they're about ninety million

people suffering from so called treatment resistent depression. But to be clear, this isn't people who is not a group

of people who are resisting treatment. This is a group of people for whom are treatment stoke work and so perhaps you know, I think this is really really important, but that's just the start, because really what we're looking at is working on areas of mental health where people get caught in patterns of negative thinking or patterns of obsessive thinking that happens in other areas like anxiety or

O c D or other things. And we're really curious about how could this mechan is um of a high dose of psilocybin therapy yield benefit for other classes of people who aren't help enough. So is this like a potentially a multibillion dollar drug potential um? Well, I think that it is potential to have it be a therapy. It's really important that it's not a drug drugs. It's given in constant combination with psychological support and that's the

critical pick. Hey, So before I move on, though, you did say and I thought this was a really important distinction, George, as you said, it's not a drug, it's a potential therapy. Having said that, I do think you know our listeners are curious, UM about how big that market size might be anxiety disorders to print it, the depression treatment market, it's expected to be something like So what's your expectation or thoughts on this? So a few things. One is

I appreciate your digging into this. So just to give you some and your listeners some perspective. Depression is the leading cause of disability worldwide, just depression, UM. And in the US, the annual costs of depression is forecast to be about two hundred billion per year and a large number of that is direct costs of out patients in patient medical services, pharmaceutical services, and the number you referred

to is largely in the pharmaceutical space. Now, what we know is that about a third of patients, as you mentioned, simply aren't helped, and the third of patients that aren't helped actually are about three or four times more expensive two or three depends on kind of where where you're doing the data UM than patients who are helped by these medicines UM. And so we have not only a very large group of patients who aren't helped, but also

those are the most expensive patients. And so if we could make a difference in their lives, I think there's a huge opportunity to really um develop a new model of care for them. And this is what's so interesting about what we're doing. It is therapy, right, It's a single dose under supervised circumstances, with preparation and then some

follow up afterwards. And what's really unique about this. So they did some really fascinating work at Johns Hopkins where a lot of this research was reborn in the over ten years ago. One of the questions they asked patients who had gone through this, and they asked this question six weeks after this experience, They said, how meaningful would you say this experience was in your life? Personally meaningful? And people were given you know, is at the most

meaningful of the top five you know? And so over seventy said the single experience was one of the top five most meaningful experiences of their life. Right, So you can't you can't really put you can't you can't write no, no, no. And I wish you we were in person because you could see me smiling, because you can't put a value on it. And I have a sister who works in this area, so I've kind of grown up learning about this, and I agree that there's an unbelievable cost by not,

you know, helping out this sector of our population. And also it's invaluable in terms of they basically get their lives back. Having said that, you kind of evaded my answer. So there was this like a multibillion dollar potential treatment or tens of Yes, I think it is multi billion. Yeah, um, and you know we've had so But again that's if the trials were well, what's let's let's talk about that,

because that's a big deal. I mean, listen, we're all learning about the drug process, right because of the drug approval process, because of COVID. What challenges does does the US present? What regulatory hurdles still remain? And I do wonder if you're following kind of the playbook from marijuana kind of prescription first, recreational second, how are you thinking about it? Not at all. We're really thinking about the huge unmet needs there is for patients. Uh, And that's

you know, what we're really focused on is access. Nuts means approval by medicaid, by you know, insurers. So from day one, we've been really focusing on making sure that if this in fact is successful in trials, people have access to it, and that means working with insurers even in the design of clinical trials to make sure they have the evidence because hey, this for this patient population,

so that's super important to us. It's a different model than a recreational model, and that's Compass Pathways chairman, CEO and co founder George Goldsmith. And that wraps up the weekend edition of Bloomberg Business Week from Bloomberg Radio. Thanks so much for joining us. I'm Carol Masser. Be sure to tune into our daily show Monday through Friday, starting

at two pm Wall Street Time on Bloomberg Radio. Be sure to also check out our Bloomberg Business Week podcast wherever you get your podcasts, and don't forget we're also on YouTube. Just search on Bloomberg Global News and check out our Bloomberg Business Week Extra podcast. We had a chat with Mattel President Richard Dixon on a new digital platform called Hotel Creations. Bloomberg Business Week available on newse Stance Now online and of course always on the Bloomberg.

Have a safe weekend, everybody. This is Bloomberg.