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We US and Chinese negotiators have concluded their latest round of talks, a trade talks, of course, that were underway in Stockholm, with an agreement to extend their tart truth truth or so it seems. We have some questions here. US Treasury Secretary Scott Besson and US Trade Representative Jamison Greer holding a press conference last hour in Stockholm, the Treasury Secretary saying an extension not a done deal.
If we boomerang back to the April second level, if they would go to thirty four. I noticed as the earlier question said that the Chinese Deputy minister did say that we had agreed on a pause. We have not. Nothing is agreed until we speak with President Trump. He's on Air Force one, I believe, doing a press conference right now, and we will be seeing him in the Oval tomorrow to go over the deal with him, and then he'll decide if the pause continues.
As is all right. That, of course, was US Treasury Secretary Scott bess And earlier in Stockholm with more on where we are. Bloomberg News correspondent Oliver Crook was in the room where it happened in Stockholm, where that press conference was went underway just about thirty thirty five minutes ago. Oliver pause, no pause. I think we're all still kind of scratching our head to understand exactly what was agreed to.
Yeah, I think we were too a little bit, and that was helpful for the Secretary of the Treasury to give a little cast, a little bit more light on that. You know, far be it from Donald Trump to withhold any suspense from us. Basically, the two days of negotiations that we had by the Chinese Vice Premier, the US Treasury Secretary I'm the ambassador on trade, Jamison Greer ended a couple hours ago. Then they briefed the media and it ended, it seemed initially by the Chinese saying that
they basically a ninety day pause. The continuation of the truce between the United States and China that that would continue for another period of time.
They didn't specify the period of time.
Then we started to hear from the Americans with a slightly different story that basically this is still conditional to Donald Trump's approval. We understand that Scott Befson did speak with Donald Trump after the conversations before he gave that press briefing, but he's going to give a more complete briefing a little bit tomorrow in the Oval Office in the White House in order to get the final sign off from Donald Trump, who may you know, change his mind,
may demand something else. But again, we the deadline that we're facing here is August the twelfth, when these terrif rates will shoot.
Right back up.
So for the market, this is really a crucial thing to get over the line.
Interestingly enough, at least the equity market not reacting much to this news. Perhaps it was priced in, perhaps there was the expectation that there would be some sort of extension here. I want to go to rare Earth, specifically Oliver and what we learned about the way that rare earths, not just today but really over the last few months, have taken center stage when it comes to these negotiations, what do we know about that?
Well, what I think is interesting is that there were concessions on rare earth. There were concessions in exchange for that, on the Age twenty chips by Nvidia, by the United States, the allowing of selling them into China. And we should say that one could interpret this as a sort of act of goodwill on both sides in order to try to make progress. But the reality of the situation is that for each of these economies, they're dependent on the other.
There is no alternative for these technologies. This is not just an act of good will. This is the leverage that China holds over the United States. It is the leverage that the United States holds over China. And they did manage to make some breakthroughs on that. And again this is something that was active in the discussions with the delegation from China and the United States.
Today we heard from Jamison.
Greer saying that I don't want to talk about magnets basically. Ever, again, as far as they're concerned, the magnets should be flowing.
They are flowing now, and.
That this should be a close topic and that they can then put that aside in order to make progress on the many other issues that are sort of large issues between the China and the United States, they'd like to basically put into it, and as far as they're concerned, they hope it's done all right, Oliver.
Back in June, President she of China, we know, invited President Trump to Beijing. Are the two leaders talking at all during these talks? Are they just waiting until I don't know the final terms. What's what's kind of going on behind the scenes here?
Yeah, I mean our impression is that the last time that they spoke, this came up during the press conference, was in the call that they held in June. We understand that Shijiping did invite Donald Trump and the first Lady Millennia Trump to China at some point. There has been some discussions today. I think there was a Donald Trump truth saying that basically he's not seeking a discussion with President Jijenping, but he has been invited. But this is really at the crux of the issue here, right.
The Chinese, in the last few decades have been building out their economy, have been building out.
Their status on the global stage.
They don't want to be seen sort of bowing theatrically to the United States on these trade issues. The Europeans have much less of a problem with that. They're being much more pragmatic about these sorts of things. But for the Chinese, this is not just about trade. This is
about their status on the global stage. And I'll remind you that in Trump won the first Trump administration, these trade negotiations between the Chinese and the United States, they were held in Washington, d C. These discussions today are being held in Geneva, the United Kingdom, and Stockholm in
neutral sort of third party places. And we've seen what China's appetite is to escalate this trade where if they have to, they shot the tariff up to one hundred and twenty five percent, which is how we got to this truce. But that is the sort of dynamic going into this. Both leaders want to appear strong and need to exert their leverage on the other.
What are the questions that remain unanswered at this point in terms of the details, the nitty gritty and what really needs to be hashed out here.
Yeah, so, I mean, there are a panoply of different issues. For example, there's the issue of TikTok right, there is a buyer potentially for TikTok in the United States, so says Donald Trump, the Chinese still need to give a nod to sell that. That is apparently something that did not come up in these conversations. There is the question of fentanyl Bess and says that he is not pleased with sort of how things have been progressing there.
China could still be doing more.
I mean, there is the issue of Russia, which increasingly we've seen Donald Trump change his position on Russia and Vladimir Putin, and we had a large discussion apparently between the two delegations today on the question of Russia and Scott Besson again airing their displeasure at the continued buying of fossil fuels both from Russia and China, but also that dual use military technology that they're seeing increasingly on
the battlefield in Ukraine. So these were active discussions. And then there's also this question of the secondary sanctions that Trump is now talking about imposing on people who buy crude oil from Russia if Putin does not come to the negotiating table in the next ten days.
This came up in the.
Press conference and when asked you know whether or not the Chinese position had altered. Scott Besson said, basically, the Chinese take their sovereignty very seriously.
They don't really want to be told what to do.
And if they want to pay one hundred percent tariffs as a consequence of buying Russian oil, than they will.
Secretary of the Treasury Scott Essen said, we understand China's agenda much better. What is really the Chinese agenda? What is really the US agenda? Is it just for both to kind of get wins here ultimately.
Well, what's interesting is again what we see in the dynamic with the European Union.
And the United States.
You have a situation with Japan, the UK, the EU where they almost want to appear to be giving more to Trump than they are sort of potentially giving these sort of you know, big, sort of sweeping statements of committing to buying you know, seven hundred and fifty billion dollars of energy, you know, investment pledges of six hundred billion. These are sort of big concessions. But again, there is a lot of room to fudge these sorts of things.
With China, you have sort of the opposite dynamic where the Chinese do not want to appear to be giving more. They want to appear to be giving less. And I think that really is the tone in these discussions. And I think that again, what this meeting was supposed to do is to kick the can down the road another
ninety days. You didn't get that today. I think that everyone is hopeful, and we should say overall, the tone that we got from this press conference from the ambassador, from the Treasury Secretary, they were saying, these were very, very constructive discussions, and even if we didn't get a deal today, they're sort of were signalings maybe why you're seeing modest reaction in the market that they will get it over the line, right, And.
We know another thing that will be a focal point is the Treasury Secretary say that they'll meet with the President in the Oval Office tomorrow. All Right, Gonna leave it there, Oliver, Thank you so much. Oliver Crook, Bloomberg News out there in Stockholm.
You're listening to the Bloomberg Business Weekdaily Podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch us live on YouTube, Mac.
I'll about you.
Let me drive.
Oh no, no, no, no, this is not a toy, honey.
Please.
Lest I want to drive. It's a good question. This is the drive to the clothes plunks for me.
Well, Ja don on Bloomberg Radio.
All right, TikTok, everybody, just about eighteen minutes to go until we wrap up the trade on this Tuesday. It's kind of fomcee because we know.
The Fed is fed Tuesday.
For it is kind of ish. They began their two day meeting today.
Yeah.
For J.
Powell, every day is a FED day.
Yeah, I guess it is.
Some days, Mike's key. Every day is a FED day.
Some days a construction day. Some days I mean a pressure day.
We'll talk about that.
We do have stocks hovering near their loads of the session. We did see yields ticking down a little bit. We had a lot of economic news that came our way. Let's get to it with Danielle di Martino Booth. She is CEO and chief strategist of QI Research, formerly at the Dallas Fed. Back here in our Bloomberg Interactive Brokers studio. Nice to have you here. How are you. I'm doing very well today.
How are you doing okay to be here, counting my blessings, happy, my children are healthy, all of those things.
Yeah, I agree, right like every day. Those are the things that certainly matter and make us feel much better. Having said that, we're thinking about the FED and kind of the late that lays ahead of them, or that they're considering right now, the plate of economic data, anecdotal data news from the White House a day where we think there's an extension between US China talks, but it sounds like that hasn't been confirmed quite yet. What do you think is top of mind for the FED as
they are sitting and meeting. You know, there's a lot going on.
I think there's probably a sense of despondency and regret right now.
At the FED.
I think that the full array of data would have them cutting rates tomorrow if not for you know, the constancy of the humiliation coming out of the White House. So, I mean, you don't see the labor differential in the Consumer Confidence report decline for seven months, which it did today, Jobs hard to get rose up to the highest since March of twenty twenty one. You don't see that outside of We've never seen it outside of recession.
So what I'm hearing you say is that the pressure from the White House is to ky rates is having the exact opposite effect on the Federal Reserve.
It absolutely is.
I mean, at this point it's kind of a matter of integrity because you don't want to appear that you're cow towing, acquiessing, whatever you want to call it. But it's to the detriment of the of the real economy. And that's exactly what we're seeing, and for heaven's sake, it's on both sides of the dual mandate. When we had case Shiller hit this morning, three months ago, the three month annualized rate was plus one point six percent.
This morning, the three month annualized rate was negative three point seven three percent. There is a fast decline in shelter inflation going on, and that is the biggest input to CPI. So the Fed is winning big on the inflation front and it is losing on the labor front.
So if the Fed can't cut tomorrow as a result of politics fifty basis points in September and signal that they're doing that.
From Jackson Hall, is it twenty twenty four.
It's not. It's twenty twenty five.
I know, but that would be an exact repeat, now, wouldn't it.
It would be it would be do you think they should do that?
I think they're going to end up doing that.
And you know, I'll add another little tidbit on politics. Just because Waller and Christopher Waller and Michelle Bowman are Trump appointees, I don't think that should necessarily negate their expected descents tomorrow.
Well. J.
Powell is a Trump appointing, of course he was.
Of course he was, and to thumping Senate votes that were even almost as thumping when he was reconfirmed. So he's very much a bipartisan type of FED chair. Again, it's a shame. It's a shame that they're not able to act tomorrow.
Danielle, do you think the presidential policies and certainly how they were presented in terms of tax cuts and spending, that they would be good for the economy? And we certainly had a guest on yesterday who thinks that there will be somewhat stimulative and that the FED doesn't necessarily need to be cutting rates at this point. To be fair, we do have an extension on this US China trade deal, so we don't know exactly what this is going to
play out. And to be fair, we do know that tariffs are going to be higher they already have been, So why wouldn't it be smart for the Fed to maybe hold back until they really know what they're dealing with, because it would be terrible right to.
Have the Fed cut and they have to raise rates again. It would be Arthur Burns all over again and the reducs. And I completely understand that. But your vacation intentions are falling. Hilton just announced negative one point five percent year over year for revenue per available room. Domestic air travel is down, Spending on services is down as much as it is because if there is any goods inflation, they're simply you
can't squeeze blood out of a rock. There's only so much in a household budget when inflation adjusted earnings are falling, which they are. And underemployment is just off the Richter scale. So these are very real phenomena, and I promise you the FIT is deliberating about all of them.
You said unemployment is off the rich underemployment.
Okaycter employment just a few years ago.
If you were going from where my mother lives in College Station to the Bush Airport in Houston. An Uber driver is making ninety dollars for that particular ride. Now they're making thirty five forty dollars for the same exact drive.
Why.
Because the gig economy is saturated with individuals who have exhausted their unemployment benefits. Right, your exhaustion rate for continuing claimants continuing jobless claimants is thirty nine point six percent. That means it thirty nine point six percent of people who are among the almost two million continuing job as claimants have run through what the states pay. You better be driving for Uber or door Dash.
I had this, this exact conversation that Daniel's outlining with a lift driver in San Diego when we were there, Carol. He had been out of work since the pandemic, highly qualified to work in I believe, aeronautical engineering, and could not find a job.
Look who would have said that two years ago.
So again, this is an anecdote coming from me.
It's an anecdotomy, I understand. But I have a rising college senior. I cannot tell you how many of his friends are coming to me and saying I can't get a job.
I can't get a job. I can't get a job.
I couldn't get an into my internship was canceled. There's a hiring freeze. I mean, there is a class of twenty twenty four. The only thing that's better about it is that it's better than the class of twenty twenty five.
Yeah, I know, it's interesting anecdotal because I've seen the reporting too, and I too have a daughter who just graduated and she's got a job, thankful, and has since last fall. And all of our peers they have gotten jobs. So it's like, I don't know, I'm trying to understand exactly where this economy is. The Atlanta Fedge is coming out and upping its GDP forecasts. I mean that export number is higher than we thought it was going to be.
I mean that's like GDP trade math. But who's not going to be paying attention to consumption when we see GDP in the morning.
But net, net, how do you see the Trump administration policies? Are they stimulative? They are certainly sold as being good back for the US economy. That's your original question. Than Mike concern is or I think many would say their concern is that the Fed's got to be really careful.
So the assumption is that the horse that we lead to water is going to drink right, because the only the thrust of the bill is preventing a negative income shock such that the tax cuts do not expire at the end of this year.
So you're preventing a negative income shock.
You're certainly not sending money out into the economy in the sense that it was in the post pandemic era the Cares Act.
That's not happening.
So I mean, maybe uber and lyft drivers are going to get a lift right because they're not going to get taxed on those on the tips that they make. But again, we are seeing consistent and persistent declines in capital expenditure plans, and so you.
Can lead the horse to water, but can you make that horse drink? So just fifteen seconds. So the valuations, the record after record that we've seen the S and P five hundred, do you think that's not warranted? Considering it sounds like I don't is hope a strategy? So you would say, no, we're overvalued, and it's I would certainly think, so, all right, going to leave it there. Fun to have you here, Danielle de Martin. You know Booth. She's CEO and chief strategiest of QI Research, joining us here.
This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and the Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa played Bloomberg eleven thirty.
Carol summed up well on our editorial call this morning when she said, let's get Brook Sutherland on to talk planes, trains and automobiles.
And so Brook, we all love to know this space.
That's why she's here with us. I just want to give everyone an idea of the planes part of this. Boeing almost halted its cash burn in the second quarter and I reported a smaller than expected loss. The trainsportion of this is Union Pacific a green to acquire Norfolk Southern in a seventy two billion dollar cash and stock transaction. And automobiles. We have to stretch this one a little bit,
I know. So Okay ups shares tumbled after the company said economic volatile, they continues to roil its operations, but hey, they got a lot of trucks Carol think it's fair to say it counts as automobiles, all right, So let's get to it.
Let's get to Brook Sutherland. She's Bloomberg News Boston Bureau, chief writer of the Bloomberg Industrial Strength newsletter, and she joins us from the Boston bureau. Brook, we do want to start with trains mega merger. Why is this the right time for a deal, especially in a day when Norfolk their shares are down, they lowered their outlook for full year revenue growth. I mean, is this combination going to make it better?
That's certainly the hope. And you know, frankly, I really think the railroad industry is out of better ideas to grow at this point. You know, we've really seen stagnating or even declining volumes in the rail industry in recent years, just given the competition from the trucking industry in particular. If you think about it, trucks can go pretty much
wherever they want. There's your automobile reference there, but you versus trains are really limited to the tracks that they have, and that does put them at a bit of a competitive disadvantage, even though there are advantages in other respects. For you know, they tend to be more energy efficient, they tend to be less costly, and so, you know, I think the railroads are thinking to really chip away
at that market sharehold that the trucking industry has. They have to make things more efficient for their customers, and the idea would be that if you could set up a network that's truly coast to coast from California to New York, that that would take out some of those pain points that turned customers off from the railroad industry.
I was struck on Friday when we spoke to Kyle Porter and I read his piece on this book that this would be the only US transcontinental railroad. It would, It would, And that's a result of you know, the past what one hundred and fifty plus years of anti trust action?
Is that why, you know, there's really been a lot of consolidation in the railroad industry. Who've just more recently sort of been in this period of pause, partly just because it had consolidated so much. But you did see, you know a little bit of a step forward with Canadian Pacific ultimately buying Kansas City Southern, and that I guess, you know, sort of has started the wheels grinding again in terms of could even more consolidation be possible in
this industry? You know, I do still think that that's a bit of an open question of how regulators will respond to this deal. That Kansas City Southern deal was approved under sort of a loophole to these tougher two thousand and one merger rules that the rail industry's primary regulator has adopted that requires any merger to benefit the public interest. So it's done enough just to show that
you are preserving competition. You will have to actually enhance competition and provide proof that you're actually benefiting communities and the greater public interests. And so that's a very high bar that hasn't yet not actually been met. And so you know, Union Pacific and Northern Southern are betting on, you know, a more welcoming regulatory landscape that might finally allow a deal like this to come to fruition. But we really don't know.
It ain't done until it's done, right, all right, let's go to UPS just because shares have been tumbling after the company said economic volatility continues to roil its operations. UPS is another great indicator on the US economy so I'm trying to make sense of economy versus company specific.
You know, I think it's a mix of both. I think if you look at UPS's business in particular, they are uniquely affected by some of the trade dynamics that we've seen, particularly you know, the alterations have been made to that deminimous exemption. And then on the other hand, there really are struggling in their business. I mean, this is an area that really boomed during the pandemic as people were at home and we're ordering so much stuff, and you had you know, UPS em FedEx really trying
to add capacity to meet that demand. And then now we're on the other side of that, as consumers have shifted their spending back to services. UPS is trying to cut cost to be competitive after that labor deal that it struck earlier. And you know, I think you're really seeing sort of a confluence of events that that's really pressuring UPS from multiple angles.
So no forecast for the year. I mean, that's it is a massive lack of visibility.
It is unusual, although we have heard, you know, similar comments from other companies talking about just how hard it is to get your hands around what that demand picture looks like in the back of the year, you know, a lot of reticence in terms of committing to that growth doubt. Look, we have seen, you know, companies go ahead and put guidance out there, but I do think, you know, to UPS's credit, there are a number of unknowns remaining in the back half of the year, and
they're taking more of a wait and see approach. Yeah.
I was particularly surprised about this one, Brook because we did have the airlines come out about a quarter ago, and you know, we talked about Delta and then of course United as well, and then you know, three months later, they've essentially turned a corner and they're talking about how great things are. Yet we're not seeing that or hearing that from Carol Tomey over at UPS. Look, these are apples and oranges when we talk about the businesses here.
But what is unique about UPS's business that they don't have visibility that other companies do.
Well.
I don't know, you I don't think everything is great for the airlines either. You know, they've been willing to put guidance back out there, but the guidance that they have moved forward with is lower than what they were expecting.
Before tariffs came into the picture. And you know, of course, we did see that demand pull back in the immediate after math of the tariffs, and some of the airlines, particularly those with businesses that cater more to premium flyers or business travelers, are expecting more of a rebound in the back half of the year. But that uncertainty is still there and is still impacting the airlines, just in
different ways. And so, you know, I think to UPS's point, there are a number of different factors here, and their business is uniquely affected by terriffs because it's much more direct. With airlines what you're looking at as sort of more indirect consequences. Does consumers feel the pain from inflation and goods and maybe rethink that trip that they were planning to take?
All right? Well, speaking of airlines, let's talk about one company that provides those narrow and wide body jets, and that is Boeing. Shares down four percent today, Johnson reporting that Boeing almost halted its cash burn in the second quarter, indicating a turnaround initiated by Kelly Ortberg a year ago is paying off as the company delivers more aircraft. One thing that I've noticed about Boeing over the last few months is the way they're being used as this bargaining
chip when it comes to trade negotiations. And I'm wondering, Brook in your view, how much of a boon could that be for the company that's trying to turn itself around.
It's definitely a benefit. And what's interesting is that, you know, in Trump's last trade war, Boeing frequently complained about being used as a pawn. We saw China, you know, more or less halt new orders of Boeing planes as a way of exerting leverage in those trade negotiations. And now you know, the shoe is someone on the other foot, and we see countries more or less tripping over themselves
to you know, trumpet their purchases of Boeing planes. This is one of the highest value exports that the US has, and so as a means of sort of chipping away at that trade deficit, a big blowing Boeing airplane purchase can really go a long ways.
So Boeing, I mean every time I feel like, I mean, the stock's down four percent today. Thoughts in terms of the outlook and what we kind of need to continue to focus on with this one. Is it all just about orders? It's also about making sure I no other issues with their planes.
Your thoughts on this, I mean, I think that might be a little bit of profit taking here. We have seen a pretty good rally and Boeing shares heading into earnings. I mean, this was a very good quarter for them, especially just given all of the cashlow challenges that they had. And I can think you now, you know, the question is they've got to keep doing this. They've got to keep chugging along. But is this the best stock to own in aerospace right now or are there potentially other
opportunities out there? And I think that's some of what's playing out in investor's lines right now.
Yeah, definitely a good point. I mean, the stock is up nearly thirty percent year to date, so it really has had quite a bounce back after having a really tough time for a while. Brook, thank you so much. We did it around the world when it comes to transportation, and then some Brooks Southerland of course. Bloomberg News Boston Bureau chief joining us there from our Boston bureau.
You are listening to the Bloomberg Business Weekdaily podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
For US Health and Human Services Secretary Robert F. Kennedy Junior, he has suggested that psychedelic therapy for depression and trauma has the Trump administration support. This actually was in a report by the Associated Press earlier this month that the Secretary recently talked to members of Congress about and we're guessing that it may have caught the attention of the team over at the publicly traded small cap company Compass Pathways. We wanted to know more, and let's get to Kabir Noth.
He's chief executive officer of Compass Pathways, and he joins us here in studio. Kabir, welcome, Welcome. Remind our audience about the work you are doing and your synthetic psilocybin experimental drug for treatment resistant depression. Tell us about where you are, what this drug is, and what it has shown.
To do so far.
Thanks very much, Carol on Tim and it's great to join you here. So yes, a Compass Pathways, we're a company in the final stages of developing synthetic psilocybin as a potential treatment for treatment resistant depression, or what we call patients living with persistent depression. That's a big problem, affecting some three million people in the US, and it's debilitating. Many of them are unable to work. The majority will have had some sort of suicidal thoughts in the course
of their depressive illness. So we're a leading psychedelic company and potentially the closest to regulatory approval.
You've used the word potential twice. You said it's a potential treatment and then you said potentially you're a leading company there when it comes to FDA approval. Is it unproven?
We have generated robust evidence now from two studies. The first was published a couple of years ago, and then just last month we released more data from the first of our final stage studies. What can I tell you about that first safety this we didn't see any unexpected safety signals in this treatment of patients living with persistent depression. And secondly, after just a single treatment, after six weeks,
we saw a significant reduction in depressive symptoms. And just to emphasize that, because you'll be aware of the kind of the typical paradigm of antidepressants, something you take daily. This was a single treatment and with the effect measured after six weeks. Now we have already are two for two in terms of these trials clinical trials that we've conducted.
But we're continuing to see more evidence generated, first in one of these late stage trials, and second we have another study ongoing where we're also looking at the impact potentially of another treatment.
We should point out that about a month ago, in that study came out, the stock your shares tumbled almost fifty percent, hitting a record low. What I guess I want to understand, so it was below what Wall Street expected. It did meet your goal from what I understand, your company goal, but Wall Street was very disappointed. Tell us how this works. How does one psilocybin treatment kind of cure depression? Persistent depression.
Psilocybin you can think of as if you like a key, a key that unlocks a door or a set of doors in the brain, and while those doors are open, that enables the patient to work through some of their fixed negative thinking and potentially have relief from their depressive symptoms.
To do that, there is a profound subjective experience, so there is a psychedelic experience that lasts six to eight hours, and as I say, during the course of that the drug is working in such a way that it unlocks these doors and allows the person, the patient to engage with some of those negative thoughts and potentially, as I say,
get relief for those depressive symptoms. The fact is, as I say, we've seen and what's amazing, that one single treatment can show sustained effects at least through to six weeks and potentially longer. In our earlier trial, our earlier clinical study that we did, we saw that for many patients that were sustained out to twelve weeks.
What's many? How many? Forgive me tim, like, I'm just curious how many.
So that was a study of around two hundred and thirty patients of whom a significant number were on what we call the active dose of the medication, and what we saw was a quarter of them had from that single dose they were actually sustained freer depression out to twelve weeks. And in this population of people who have typically tried multiple treatments and for whom very little is any longer working, that was a remarkable response.
When patients do take this single dose. What is the environment that they're in during that six to eight hours, and are they guided in some way by therapists of sorts.
It's a physically it's a calm, comfortable setting. They have the option of ey shades, there's music playing, and there are appropriate safety safeguards in place. Psilocybin is a very inner directed mechanism, so what actually happens is the patient has this profound influence, but where there is somebody in the room, it's largely silent. There is not directed therapy in the course of that intervention.
How do you run an effective clinical trial for a drug that the experience is such that the person knows they've taken this drug rather than a placebo. Somebody who takes a placebo is not going to have a psychedelic reaction to the placebo.
At Compass, we thought about this before we even started our studies. So our prior big study, the one I reference with two hundred and thirty patients, we design that in such a way that there was the choice of three different doses of psilocybin. One was a low dose, a second was an intermediate dose, and in patients who've never had this experience, before. That's truly confounding in terms of they cannot tell whether they got a medium dose or a high dose of that drug. This is important because,
as you say, otherwise it will be very obvious. But that design was very effective for that earlier stage study we did, and we've replicated that design in one of our late stage studies.
We're talking with Kabir Andathi's chief executive officer of Compass Pathways here in studio. You keep saying synthetic. What's the difference between synthetic and naturally occurring?
So we are manufacturing a pill to the highest standards of purity, no contamination. We know exactly what is in the pill. This is a manufactured pill that we are treating with.
So that you know exactly in terms of dosage. Is that what I'm saying, So if naturally occurring is different.
Potentially it is naturally occurring whereas well as is synthetic. So we know exactly what's in it, We know the exact pill. What will it cost It's primeriture to speculate on that at the moment we're still conducting these final stages of our studies.
But expensive and would it be something I mean if you get a approval, is it safe to make the assumption that it would be covered.
The whole premise for founding Compass Pathways was to enable that form of broad access. So the reason that the company has gone through doing these rigorous, robust clinical studies so that we is exactly so that we can discuss that with the FDA potential for regulatory approval, and then if we're fortunate enough to get there, the chance to
negotiate with both commercial insurers and government pairs. Let's remind ourselves that these three million people that I referred to, they are relying on insurers, commercial insurers and government pairs to actually cover their drugs. I believe we will be able to demonstrate significant value given how different this is from other treatments available today in depression.
Kabir Carol mentioned that the Associated Press reported earlier this month that RFK Junior recently talked to members of Congress about psychedelic therapy for depression and trauma. Apart from that, have you seen any real signs of support for the administration for this new class of drugs or type of type of treatment.
We have had support from the FDA throughout our development process. We have breakthrough designation.
Before Robert F. Kennedy Junior took over ASH, and we have had.
A motivated and engaged agency. We're excited to see the voices from HHS from Veterans Affairs today suggesting that they also see the potential for this class, and we're very happy to work to see how we could potentially accelerate access while at the same time ensuring that we continue to generate really good, robust, good evidence that these are safe and effective.
Talk to us about timeline, though, is it I feel like we've been I know Blimberg has been reporting on this class of drugs and treatments, and I think we've all seen pieces that yours right for a long time that for people who or other treatments don't seem to be making a change for them. So I don't know, is is it another few years, is it the end of this year, is it the end of next year? And is it that the Trump administration could somehow settle this through much more quickly.
I think there are clearly people in the current administration who, as I say, see the potential of this. Well, we want to make sure we do this right as well, So we want to make sure we do that in the right way, with the right rigor.
And so on.
We are conducting, as I say, the final stages of studies. We have two ongoing of which the second will wrap up in the second half of next year. The data we released last month, though it hasn't yet been reviewed by the FDA, we have a meeting planned with them where we'll discuss with them and we'll discuss the potential for any acceleration of a filing and a regulatory process.
Do you also think about other usages, whether it's PTSD and other applications, And I'm just curious where what you might be exploring in that world.
Our next priority beyond persistent depression is indeed PTSD. That is something with very high prevalence, some thirteen million in the US, for which there are only two very old drugs approved, and unfortunately recently there have been two advisory committees recommending against new drugs in that space. So yes, we see PTSD as a key area. We generated some data last year and we will be announcing the design of another late stage trial for PTSD immanently.
I know the USFDA is the gold standard for going through the regulatory process to be viewed by the world as a credible treatment for something. But these days, is it worth going after approval in another country to try to do this on a smaller scale to prove that yes, it indeed works.
We will be exploring approval in a range of countries. So our studies have been international, US, Canada, Europe as well. We have taken advice over the years from the European regulatory authorities. We're a UK based company as well, so we've been speaking to the MHRA, the regulatory authority in the UK. So yes, this is a problem for patients across the world and we would look to exploit it where we cat.
Kabir just got about thirty forty seconds. We're actually me talking with the CEO of Astra Zeneca right after this. I'm just curious in terms of big Farmer, have you had any preliminary discussions with larger, larger pharmaceutical partners interested in commercialization, co commercialization or distribution.
What I know is the big farmer is tracking this space closely, and what's been great is to see the re entry of some big farmer back into psychiatry over the last couple of years. So I know they watched this space. But we at Compass are determined that we can do this ourselves and are excited about the opportunity to bring this potential new treatment to patients who so clearly need it.
So no strategic alignment that you would consider. You plan on doing this alone.
That's our plan.
Okay, great stuff, Stay in touch. Thank you, let us know how things are going. I really appreciate it. Kiberer, be well. Kiberath, He's chief executive officer of Compass Pathways, joining us right here in studio.
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