New Tech, Partnerships in Healthcare Improving Access

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube search Bloomberg Global News. Well. Earlier this year, the World Economic Forum noting that in one alone, forty four billion dollars was raised globally in health innovation that's twice as much as and the acquisition of health and health

heap companies rose fifty percent. Here's another fun fact, the World Economic Forum finding that up to eight percent of providers in the US are planning to invest in tech and technologies including digital health, AI, machine learning, as well as tools to support clinical staff and caregivers over the next five years. And I feel like Tim, that plays so much in to what we're going to get into with our next guest. Yea, our next guest Atman. L. Rocky is the CEO of color Health. I'vemen joining us

this afternoon on the phone from San Francisco. Color Health is based in the Bay Area. It's a health tech company. It's focused on COVID nineteen testing and vaccine efforts for state governments, for local governments, particularly in California and Massachusetts. Atman, it's good to have you with us. How are you hello, good afteroon, Thanks for having me well, thanks so much for joining us. Characterized, how would you characterize what you've been doing over the last couple of years as the

pandemic has well been ongoing. Yeah, it's been a really um, you know, interesting evolution I think, and across the entire space, and in fact, actually for us, it really predated the pandemic where we were working on a large population health

programs UM even a few years ago. UM and even at the time, I think one of the things that was quite apparent is that aside from like discovering new therapeutics and you you know, diagnostics and so on, one of the things that still room does a big challenges making healthcare accessible, like often times. I think in the US there is health care that's available but not actually

accessible to people. Question when you're talking about basic public health, and I think with the pandemic has really forced our entire industry too, you know, really shift hard to focus on how do you deliver basic and essential services to very large populations in a way that takes a lot of the friction out of their out of their experience.

And and so we've seen that obviously through testing vaccines UM and even now as well through tested treat programs, and people are because they're getting diagnosed, making them able to receive access to care in a way that's as immediate as possible and takes away all the different bumps in the road that usually impede access for for every for people in their everyday lives. UM and take a step back, tell us exactly what you guys are doing

specifically specificity sure so um so colors. So you know, as you mentioned, we're started off as a health tech company. We do today is that we run UM public health programs UM both for local state governments as well as large employers to UM make available for their populations either testing vaccinations or medication related services, whether in COVID or not.

But so to make it give you a concrete example to Color today runs the biggest school testing programs in the country across um over a dozen states in the US. California is the largest one, but across all of our sites, we run over ten thousand different sites where people can receive access to test store vaccines in a way that's like extremely uh simple and direct, where the flad access to a simple online sign up flow when they go

onto the sites. We handle all of the logistics and um all the aspects of delivering the service so that people can just literally show up and within a couple of minutes they show if they get the service, and then they can go about their day and so and that's where really what Color has been, um you know, our bread and butter has been to build the systems that make it possible to deliver these simple services in

a way that actually simple in people's experience. Well, that's what I wanted to say, because I think there are simple services that many just take for granted and like yeah, I'm going to get my flu shot, no big, no, no, no big you know, no brainer, right, But for a lot of Americans, you're saying that's not so easy. So it's things like what flu shots is it for kids in there? You know, in schools their typical vaccines. I remember as a kid getting a lot of shots in schools.

Um is like, what, what specifically are you talking about? Yeah? Yeah, so so vaccine is a great example. So actually, the state of Massachusetts is one of our very close partners and where we started off initially working with them to do COVID vaccinations, but over time they expanded our program to cover all public health immunizations and they're to your point. The experience for people is like, how do you make it possible to set up a vaccine in the in

places where that are consistent with their lives. I think what we realize is that when you need to go out of ben for your life, out of your life to go get basic care, life gets in the way, right, Like you need to take time off work, you need to take you know, find find a clinician, so on. However, one vaccine site shows up in a church or in ah, in your children's school or at your workplace, that immediacy

makes it that much of an easier decision to make. Hey, Adman, I want to get your thoughts on some of the other companies that you work with, because you've you're based in San Francisco, you're based in Silicon Valley. You've also advised and invested in a lot of companies that are not even in health tech, like Pinterest, Slack, instant cart. What's the temperature right now? We've done a lot of reporting over the last couple of weeks about some belt

tightening happening in Silicon Valley. Give us your take. I think it's a broader than Silicon Valley. I think it's pretty pretty extensive right now. But I mean, you know, I've I've I've started and run when company through uh several downturns now through the dot com like downturn in two thousand now into the two thousand a uh and now.

And you know, I think at times like this, you know, these always operating cycles, and on the upswing, the market really rewards and forgets that there's a discount rate on the future, and really rewards growth and rewards kind of

just expansion. I think at times like this, what ends up happening is that I think these windows of time or once someone some of the best companies actually really come into their own where you have to focus on building a great business model and focus on actually, you know, making a this model long term profitable and viable UM. And we've color have been quite fortunate that, like we

had actually had that focus for quite a while. So we're entering into this phase in a in a mode that actually UM where for us it enables us to kind of keep operating as we are. We've been profitable

for quite a while. UM. But the I think what's challenging right now is if you know, for companies that are that came off momentum of last year with UM you know, a huge burn rate and also assuming that cash was going to remain cheap for a very long time, I think, you know, at times like this, everyone has to really focus on profitability and you know, making UM their models, you know, viable in the long term as opposed to just being funded by by the by investors.

So true, I feel like that message is coming through loud and clear. I mean, you guys just signed are recently I guess a Series E financing and announced four point six billion dollar valuation. You said you were profitable at the Bloomberg New Economy in Panama talking with the CEO of oft d Local forgive Me, and also of Loft.

I mean that was one of the things that came out is that those who are established, either startups with plenty of funding rounds and an established infrastructure or have gone public, they're going to do much better than some of the earlier startups, especially in what's going to be a tighter and less liquid environment. Ahman, thank you so much. I really appreciated Autman the Rocky. He's co founder and CEO of our Health. It's a health technology and clinical

testing company. He was joining us on the phone in San Francisco. He's also co founder of mixer Labs, which was acquired by Twitter back into thousand nine. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well, we mentioned that we had to focus on today on health and life sciences.

A lot of money going into that area. We mentioned also earlier from the World Economic Forum up to providers in the US are planning to invest in technologies including digital health, AI, machine learning, as well as tools to support clinical staff and caregivers over the next five years. Our next guest involved in this deal space. We're talking to use of Saban, managing partner at Acuity, joining us from London. Use Off, How are you good? How are

you doing? We're doing pretty well. Thanks. We've really got a great healthcare theme with today's show, understanding biotech, especially investments in the space. We've reported a lot in recent weeks, and big thank you to our team and Silicon Valley about the belt tightening that we're seeing at startups, even major tech companies like Meta Platforms and PayPal and Twitter either announcing layoffs, freezing hirings, or in Twitter's off case,

rescinding offers. What are you seeing from from your position? We get asked a lot if this downturn is different than than previous ones, and we believe it is, but so were all other previous ones, and the keys to focus what led to the recession right before it happened. There have been three recessions since in the last quarter of years, since eight and more than double dot number before.

Only one lasted over a year. That was thirteen years ago in two thousand and eight, and and that was the only one that was remotely comparable to the current pull back. With respect to the VC industry, and and

and since then things have evolved materially. Banks have stronger liquid teach LPs have hired dry powder, and the evolution of technology is much faster than it was, so I we personally believe that there will be a faster course correction um and and healthcare is fairly uncorrelated to the market as far as patient sickness, so we should see

a more rapid recovering becoming boss. Is the space different than other traditional venture capital spaces because life sciences and Caroline talked a lot about this, the resilience of life sciences, especially in the context of real estate. Carol, because we've seen a lot of investment in real estate around the country when it comes to life sciences, because it's one area where that perhaps I mean that advocates would say

is is recession proof. But you said, do you see it differently than than other areas where you where venture capitalists you invest. We do, indeed. And as far as your port on real estate, it is uh incredibly tough today to find lab space for interesting for the computes in that that we're looking at, especially in the Boston area where most of them are faced. UH, lab space is getting increasibly expensive to get increasing these cars and they have to get significantly out of Boston to to

be able to find lab space. So yes, we see quite a few issues with really stayed. But looking at the broader VC industry, I mean, in the first quarter of two thousand twenty two, ten point four billion dollars was invested in globally tech startups, which is off from the previous quarter where we had a little over sixteen

billion invested. And we saw huge health take deals that saw their their evaluation half quarter lobal quarter and and the Q one two mega round fundraising tally for healthcare what's much smaller than any single quarter going back to Q two twenty. So as far as health care, we believe that that mental health and telehealth segments will continue to generate strong demand and investor interest, but also as a defensive sector, pioneering therapeutics will rebound faster given the

uncorrelated relationship between thickness and market sentiments. So, you know, it's interesting when I was looking at your website earlier on today and for our interview, you know, you guys talk about new science um and voids in the new science and tech space, what what are the voids in

new science and tech space. You just talked a little bit about it, because I sometimes think when we're talking about disruption innovation in healthcare and and science in the science space, we're thinking like metavers is in the in the medical community, as we talked earlier. But when we talked earlier with the head the CEO of color right, you know this is about shots and vaccines and just something that sounds so basic, But that's innovation and disruption

if you think about making sure it's all accessible. So how do you think about new science and the voids and new science and where you want to put your investment dollars. So for as ASPIS, we're concerned and less with the technology is truly disruptive. We believe that commercialization will continue to be challenging. We will see significantly reduced interest rate into ME two technologies that which is an

area that we try to actively avoid. We look at health care from a much broader perspective than a pure life science is fund were focused on five subsectors, which are biopharma, devices and diagnostics, digital health, sensors and wearables, and consumer health. And so we look at healthcare not just as a way to try and find the last the latest UH biotech firm that will develop the latest f aproved drug that but more as a way to keep healthy people healthy, to improve health care access, to

lower the cost of health care. And so those white spaces that you've seen on our website is something that we actively look for to to try and improve outcomes.

And for instance, I'll give you the example of one of our portfolio companies, which is a Boston based company called just got about thirty seconds, go ahead, yeah, please, yes, yes, which is a company that has developed a new process, new design, and new pathway to reduce the cost of biologist manufacturing by over and so this is this is going to change the game as far as UM disrupting a three billion dollar industry that's dominated by the same

four companies, and that's indicated for the last forty years. Those are the kind of like the paces that we look to to to film talked to a lot of Americans who are paying for the cost of drugs and they would argue that that is one here that has not been disrupted really and and could use it UM really fascinating. Look forward to catching up with you again. Usef Saban I, managing partner of Acuity, joining us on the phone in London. This is Bloomberg Business Week with

Carol Masser and Bloomberg Quick Takes Tim Stenovic on Bloomberg Radio. Well, the summer Blockbusters season already underway thanks to the long waited sequel to Top Gun. We're talking about Top Gun. Maverick with Tom Cruise, hit the big screen this past weekend. Everyone here is the best there is. Who the hell are they going to get to teach us? Captain Pete Maverick Mitchell, let me be perfectly blocked. You are not my first choice. If you were here at the request

of Admiral Kazanski a k a iceman. He seems to think that you have something left to offer the Navy, but that is I can't imagine you'll have do respects her. I'm not a teacher. I just want to manage the expectations. Yeah, that's what I would say to my bosses. I'm just trying to manage expectations. So't I'm just kidding. Get on your motorcycle and go a hundred. I just want a nickname like Maverick. I just gotta tell you a top Gun Maverick took in a hundred and twenty seven million.

I think that was one of the latest numbers I saw. And it's three day opening and an estimated a hundred and fifty six million over the four day holiday weekend for a record Memorial Day take. It did well. It did well. Part of that had to do with Kelly gil Blam, our entertainment reporter here at Bloomberg News. She joins us on the phone from Los Angeles many times did she see She's seen it twice already, Kelly, how are you twice? Was that for work or just because

you loved it? You know? Part of it is my you know, terrible task of work in which I have to see the greatest movies, um in the world. Uh. And then also just you know, I had to also see if my husband, the biggest top guns fan, you really enjoyed it. I gotta go see it. I'm waiting for my dad. We're going to see it this summer. Okay, So is it a good movie? First of all? Oh, yeah, it's really good. It's um, you know, a very classic blockbuster.

You know, there's big stunt that you can only really get the full enjoyment of on the big screen and the uh classic Hollywood movie star and Tom Cruise, who is still in top form at nearly sixty years old. What's remarkable to me is, given how long his career has been, how well this film did, and how it blew his other records out of the water. I was surprised to see that his opening weekends haven't been as

high as I thought they would be. Kelly, No, I think a lot of reporters, when they started to write their story is about this, looks through the old data and we're shocked that he's never had a hundred million dollar domestic opening. He's not even had close to one. The closest that he ever had was in two thousand five with More of the Worlds, which made sixty five million dollars, and this has doubled that, not even risky

business going way back. So the one that made him star. Yeah, although you know there's some inflation that is working in the favor of top Gun Maverick too. Alright, so tell us you know, um this movie. First of all, I mean, how did it compare with other pre summer summer blockbuster openings pre pandemic. I guess I would say I think what you're seeing is something that's like what we would

see before the pandemic. So I would say it is just comparable to that, which is great news because it's been a really long time, uh since we've seen a film that wasn't based on something to do with comic books. Uh. Really, you know, a cold of people's attention, get people to get off the Netflix and get off whatever streaming service, get out of the house and buy a movie ticket. Um. So this feels very much like and maybe even before that in terms of a start of summer movie going.

Was that an Avengers diss that you just did not at all? But it's it's just we're so used to seeing those. Uh, you know, the Hulk is at your door as we speak, Kelly. I'm just going to tell you, Kelly, we have some interesting data from Bloomberg Intelligence about the figure. You know, the latest data, so a hundred sixty point five million dollars in the US and Canada from its opening day through Monday. That's what uh, Paramount Pictures, the

producer said, So they just updated it. This is according to your latest story, this figure you write raises the prospects for the first real summer movie going season, and it suggests that the industry could actually recover to eight five of its previous high annual tickets, all more than eleven billion dollars. That's according to Bloomberg Intelligence, So we could eventually get back to what we saw pre pandemic,

partly thanks to top Gun. The question is, does does this film after people see it, get people who've been avoiding theaters for two years back to see other films. I think it does. Um, you know, it's hard to say whether that's still going to be a very male dominated trend because it has been mostly men that have been going, uh, you know, through the past two years. And also for this movie. Um, and the word of mouth of this was so strong and people were so

excited about it. I think, you know, in the demo that it was trying to reach. It definitely reminded them of why the theater is different from your home. And I do think they'll keep coming back. Um. You know, the actual theater stocks kind of didn't do that well today. You think they would have had a bigger boost. And I think there's still some question about other audiences because you know, as excited as we were after this weekend

with the performance of Top Top Gun. You know, a week ago we were talking about a new film that came out down to Nabby, Uh, sequel to a pre pandemic movie that was kind of a surprise hit, and that was the primary demographics about as older women, and they did not turn out they were not really that interested. Um, so you know, can they have a really broad appeal because it's not just men that you know, we're going to the theater before the pandemic. It was families and

women and people of all ages. Uh. That's kind of the question now that we need to answer, right, although I think I know in your stories is almost six percent The audience was male. Fans were over age fifty five likely meaning they called the they recalled the first Top Gun, so it was kind of nostalgia at playing. We got listened a minute, Kelly. Um, I am curious about the Taiwanese and Japanese flags. I mean they got

politic call. Yeah, this was a fascinating wrinkle and um shout out to the Wall Street Journal for some of the reporting they did. Um kind of documenting. There was a breakdown. Initially had a big investor, ten Cent, which is a Chinese tech company that was like, yeah, this will be great for US. Um, you know, this is a sure fire hit. But as kind of relations between

the US and China got more difficult. Um being a part of this really pro kind of US military or US power film caused him to have to pull out. And then you know this kind of thing about the flag on on Tom Cruise's bomber jacket erupted. So there was some interesting underpinnings here in the political world of between the US and China. A right, while the summer often running. Kelly, thank you so much, Kelly Gilblam. She is entertainment reporter at Bloomberg News, joining us on the

phone from Los Angeles Journal. Yeah, but you let me drive? Oh no, no, no, no, who's all right? I'll do right, Gravels, I want to drive. It's a good question. Drive. This is the drive to the clob Well Don on Bluebird Radio. Right, TikTok everyone. Uh, We've got about ten minutes left in today's trading session. Bouncing around yet volatility is certainly the name of the game here in two we are off

our highs and loads of this session. What does it mean on this last day of trading in May the NASDAC justest up about sixteen points down down seventy six. As you heard from Doug in the S and P, just down about seven and a half. Jack Murphy is co chief investment officer at Easterly Investment Partners. Jack joining us this afternoon on the phone from Beverly, Massachusetts. Jack, how are you. How are you today? Good? We're good. We're trying to make sense of kind of a wacky

trade today. Is this all about end of the month rebalancing? Because because I don't know, well, i'd say that there's a there's a lot of noise all the time at the end of months, and there's been a lot of noise in the market the last few months overall. Uh, I'm not sure what people are focused on today. Uh, you know, we kind of take a little bit of a longer term view, um, and so you know, day to day events really don't overly affect this. But no,

day to day might not. But what about YOURR to date? I mean, if you think about the trend line right? Uh. We were kidding at the top of our our broadcast, um, Jack about you know, selling may go away, and I feel like, well, we've already been selling this year, So I do wonder, you know, kind of what is the next next trend. We're trying to figure out bottom in stocks, We're trying to figure out the top and rates. We're

trying to figure out peak inflation. Like there's just so many different questions and yet, you know, it doesn't feel like the financial crisis. It doesn't feel like necessarily two thousand one. How do you see this market environment and the opportunit unities or lack thereof. Yeah, I mean, we we take a very company specific bottoms of focus and the companies we get on the phone, and you know, we tend to focus on companies with pretty good balance

sheets and uh, pretty good competitive positions. And I think most companies think, you know, business while they can see things slowing down over the horizon, uh, you know, they don't. They haven't seen that yet. And you know, most of the banks outside of mortgages haven't seen a lot of credit issues yet. But we suspect that might still come.

You know, in the industrial space, if you have sort of a long cycle business, and we focus on a lot of companies with longer cycle businesses, you know, they're they're they feel really good about their cash flows or where their turnarounds or the opportunity of China reopens. And you know how much this Russian noises is noise to a lot of companies because it's not that big a component of most people's revenues. You mentioned longer cyclical businesses.

Those are the companies that are among those that you focus on. So give us a couple of either more specific sectors or we would love some names. I know our our investment audience would love names. Yeah. One of the ones we've had been involved in for a couple of years now is invent, which was the company that spun out of Pentero a couple of year a few years ago. And you know, they're really involved with electrifying

grids and hardening grids and thermal protection and grids. And you know, their orders have been good, their outlooks been good. I think the relative market shares are pretty strong. UM. So they have been yeah m VT UM. You know, so they're pricing to recover their rows and their orders have been good. Their balance she's pretty good. They've done a lot of really smart m and a UM and

the evaluation is still compelling. You know, we value everything on free cash flow and it's still trades of the discount to most of the things in the industrial space. And I think they think they think business is great right now. Yeah this year, uh, and it's about a

six billion dollar company. What's another one, Jack, you know, luckily our biggest positions Unilever um in interesting would say, you know, so you know we've been involved in stocks for trying is uh just kind of stuck their nose in the past, um, And I think you know that they proved to be an adult in the room in board discussions. I think you only ever probably has needed some of that over the last four or five years. It has not been a good stock for us a

year to date, and we're involved from last year. So obviously it's you know, we're getting a little bit of payback today. But it's been tough, um, you know. But they are doing the right things there. They aren't emerging markets. They you know, with two thirds of their business and emerging markets. They do buy back their stock, They do pay a really healthy dividend yield. You know, the valuation

is compelling. I think there's a lot of room uh for improvement here and you're you're getting it at a sort of this discount valuation. I think a lot of the you know, the people, a lot of people in Europe are probably saying, you know, we could ignore this thing, or we could be short this thing in the past, and and maybe with some positive direction at the board level, you can't take that position any longer. So I think, you Labor is a pretty good idea here. You know,

it's interesting. I've talked with Allen the CEO. Certainly I did that during the pandemic, and it does feel like it's a company that is thinking about, you know, some of the things that can umers want, investors want in terms of sustainability and s G initiatives to some extent, and I think, yeah, we'll have to see where it goes. Is to mention, I mean the a d R that trades in the US is down about ten percent. Uh, and we will ultimately see where it goes. Um. What's

another name that you like or that you hold? You don't leave your said is your biggest position? Yeah? Luckily? Um, luckily today, I guess you know, one of the there's another you know, And I think our take is, look, you know, growth stocks have come down a lot, but the value the valuations of growth stocks still trade above a twenty five year trend, and and value stocks have kind of done okay this year, but they're still be below with twenty five year trend. So we think this

kind of rotation continues. Um. You know, but well that's what I do. Think you should take a less cyclical posture here. And we've got a bunch of stuff and consumer stables we like. You know, one of those is a weird company called c Board SEB is the ticker UM. This is sort of an agricultural conglomerate that's involved and you know, they have a big pork business. They have a big uh they own a fifty joint venture in a Turkey business. They do some shipping of commodities, they

have a commodity million trading business. They're just are about to start a plant that's going to make renewable biodiesel. So they do a lot of interesting things. Uh. No one's ever heard of this company. Yeah, the volume is so low. It's stock though, so it's you know, you're you're you're getting that in the stock price, right um. And and you know it's controlled by one family that hasn't proven to be overlea shareholder friendly in the past. But I think if you do breakup value in the

stock are normalized the margins for the different businesses. Um you get it, you can get a huge price target here relative to the to the current stock price. You know, we can value this thing as high as thirteen or fourteen thousand dollars a share, which would be a triple. You don't find many of those, I think in the consumer stable space, and so that's what we think. This

one's really really interesting. Park Marine sigre in alcohol commodity trading, which is why you understand they're playing a lot revenues coming out of the Caribbean, Central and South America. Fascinating play. Makes me kind of want to get to get their CEO on and talk a little bit more about what they are doing. Hey, Jack, thanks for talking names with us and also giving some of your macro. But I love when we can dig and drill down deeper. As

he said, bottoms up. They're looking at these companies. Jack Murphy, portfolio manager, co chief investment officer at Easterly Investment Partners. They've got some two point seven billion in assets under management, joining us on the phone from Beverly, Massachusetts. Thanks for listening to Bloomberg Business Week, download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio

or watch us on YouTube. Search to Bloomberg Global News