Bloomberg's Koons on Pfizer, Again's Kilduff on Oil (Audio)

of crude oil. West Texas Intermediate is higher now by three point three percent, back about forty seven dollars a barrel forty seven seventy four right now on w t I. That is a gain of one dollar and fifty three sets goal of a dollar forty benounced to twelve seventy four, a gain there of point one percent. And we have got the SMP five hundred indecks up twenty four a gain of one two percent. We're brought to you by Carbonite. You never know when disaster will strike your business, from

spilled coffee to malware attacks. Protect your digital files with secure automatic cloud up from Carbonite. Visit carbonite dot com today to get two three months with offer code broadcast again. The Dow up two hundred eleven points again there of one percent. I'm Charlie Pellets and that's a Bloomberg Business flash. This is taking stock with Pims Box and Kathleen Hayes

on Bloomberg Radio. Fiser may have had to walk away from its one hundred sixty billion dollar takeover of Allergan last month, but that doesn't mean it's sitting back and resting on its laurels. Today it agreed by Annacre Pharmaceuticals for five point two billion dollars and in this step will gain control of an experimental treatment for eczema condition that affects about eighteen to twenty five million people in

the United States. Joining US Now as Cynthia Coons of Bloomberg News, she wrote the lead story for the terminal today and she joined us now to tell us more about the deal and what it means for Freiser. So how did this come about? Well, its farther stand this deal only took about a month to come together, and Fisor can move quickly when they want to. Clearly, they had a lot of cash um and they're using cash

they have within the US UM for this deal. So basically, ever since the Allergan deal came apart, they've been saying, you know, it's been saying the CEO Fiser that he's after going after late stage assets, assets that are going to bring revenue quicker instead of early stage, say scientific geared companies that are developing drugs, but there still might be years to prove whether or not they work. And

so this is a perfect example of that. This is the kind of thing that he would have been eyeing, and they moved quickly so that they didn't end up in a competitive bidding process, which makes a lot of sense for them, Cynthia, this is what are all in five point two billion dollar deal, including the debt. What does this deal indicate about Fiser's plans for a split in their business of new drugs, new medicines, and then in another company, perhaps those medicines and drugs that have

lost protection. If anything, it looks now like they're closer than ever to going down the road of a split. If they weren't thinking of doing that, there wouldn't be an urgency in deals. And it feels as though this deal, coming so quickly out of the gate after the Allergan deal fell apart, is an indication that they're going to move quickly. They're gonna do a lot of deals and they're going to get the company ready for a split.

It would be pretty hard to shareholders aren't going to go ahead with a split, considering they spent hundreds of millions of dollars assessing this possibility already. But of course they're going to take certain things into consideration, and one

of those is the tax implications of a split. One of the arguments that they've made is that their competitors in the space of Brandon Pharmaceuticals, a lot of them are DOMA filed overseas, and obviously fives I wasn't able to go ahead with that plan, So they're going to look at things like that when they decide whether or

not a split is viable. But doing a deal like this just indicates that they're trying to bulk up the innovative side of the business so that they have the pipeline and the approval is coming down the track ticking over in the next couple of years, be a competitive company on their own as an independent innovative company. Fungus how how how important are these to FIS or how big are these markets potentially? Well, ex is a very

large market. This is specifically a treatment for a topic dermatitis, and if it's improved, this is a very competitive segment. But if it's approved, it's going to be for the mild to moderate category, which is pretty niche, and that's where more Fiser could make a mark with it. Of course, they're going to have to prove a dermatologist that this is the drug they need to use for this. They're obviously using other things right now, and so this isn't This is kind of going to be carving out a

new a new category there. And so to some extent some analysts have said, look, it's probably more like a one to two billion dollars in sales kind of target for this drug rather than two plus billion. But by there's a really strong company. They have a long history of trying out new drugs, and they can do this. They can just they just have to convince dermatologists that this has got to be the kind of standard of

care for a new patient population. Thank you very much, Cynthia Coon's Bloomberg Healthcare of porter telling us about Fiser and their acquisition of Anacor shares A visor up about half a percent today. They're up about three percent so far. This year and it pays a dividend of three point six percent. All let's turn our attention now to the

energy markets. With energy prices moving higher. Right now, the benchmark West Texas and some media contract taking a look at this month forward is up more than three and a quarter percent. Here to tell us more, John Killed a founding partner of Again Capital. John always a pleasure. UM. I wonder if you could comment on the report that Goldman Sachs has said that the global glut of crude has turned into a deficit? Do you buy that? Um, they're a little ahead of me on that conclusion. Tim,

I'm always good to speak with you as well. By the way, UM, I don't the numbers don't quite add up that much. I think there was a little overshoot in terms of how much Nigerian oil production has been lost over the past a couple of weeks here now, the Nigerian oil Minister was on the wires today saying that they they're pumping one point four million and I had to say, it's not very precious oil either. This oil was sitting on tankers better part of this past

year looking for a place to sell into. So you know it has spite the market, but you have to take a hard look as to how valuable this oil really is. So you have long been arguing that the bottom and oil had not been actually established. You still feel that way. You've been traded in the mid forty bucks a barrel for some time now in West Texas Intermediate. Yeah, I mean, we're obviously, you know, good ways away from where we were in terms of the bottom at this point.

But when you when you look at these we've strung together some significant supply distruction events that were outliers are the Ka oil workers strike, as Tar Sanspire, this situation with Nigeria, and um. You know, I think part of what's propping prices of a bit is a strong demand out look that I don't see necessarily playing out, particularly as it relates to the energy intense Asian economies led

by China. The data just it's being poor every time one of these countries like Japan, South Korea, or the Chinese report, So I think the demand side of this equation is not going to hold up. And then if the supply situation proves to be transitory through some of these instances that we're going through, uh, we'll be back in the soup again pretty easy. Can you can you make any comment on any production outages that may exist in places like Canada, but also across the ocean in Libya. Well,

the Libyan situation is very interesting. It keeps evolving. I think the deal that's a secretary carry announced today is a big step. And actually there is going to be a loading now again to a cargo in East Libya, so they that is a switch that's just ready to be flipped. Now, the two sides there have been fighting, you know, intensely with each other, denying the export export

of oil there. But if that ramps up, which it easily could, Uh, that's gonna be another factor for this market now that the one supportive outage him is down in Venezuela because they are on the precipice of an economic implosion, their chumber's days pulling out, so we could in fact lose their oil and that that could be a bit of a game changer for the market. More

than anything else. Has China's economy, the slowdown there have been completely priced into the market now, the oil market, No, I don't believe it has actually as a matter of fact, you know, we know that they're they're scrambling to try to prop up as much growth as they can right now, and they haven't even started, um, you know, rationalizing their

steel industry. The other thing, too, is that a lot of the quote unquote demand growth be seen out of China has really gone into stockpiling and be to supply. Uh these teapot refiners they're actually making a hundred and fifty of the refined product capacity. They have been exporting record amounts of diesel fuel, which is contributed to a glut there. So I think that there's a lot of dynamics there that I don't think had been priced into

the market on the bare side of the equation. John, of course, you've taken note of Sandridge Energy and it's filing for bankruptcy protection. Are we're going to see more of these bankruptcies in the United States? We've had quite a few now, and a Sandwich is obviously pretty notable, But yes, I do. I think that there's still more to come. And um, I'm still waiting for some deals to be struck here because I know that the rich, I keep saying, throwing this whole thing, the rich are

gonna get richer. Penn um, and then there's some good values. The one thing we can take hard in as Americans and consumers is that these assets are obviously through the bankruptcy process will be repriced. So it's not like they're going to vanish into pin air to be lost forever. The infrastructure and all that's still there. It's just that now hopefully they build these new companies that emerge will be able to produce oil at new lower prices, which

should be good for everybody. Are you surprised that Goldman Sacks was surprised to buy the sudden oil market turn and the glut vanishing? Um? I guess you know these are in the energy market cap. You know, you know, I've talked about this space for over the years now. There's always something UM and always had to be kind of be on the lookout for stringing together these events when they start to occur there like celebrity debts, they seem to come in threes, if not more, and UM,

you know, you gotta deal with it. So but I think that there may be an overreaction on their part at this point, and I would be careful because it's interesting that a lot of the they had record length in the market coming into this run up that's been shed with the deal of it, and we've also seen the build up now of shorts in this market. We get to see all that data thanks to the CFCC every week, as you know, and that's been building up, so they they might have been a little late here

if you asked me. All right, well, John Kilda, thank you so very much, right on time for us. He's founding partner at Again Capital. He's not entirely convinced at the bottom and oil prices has been set. The market has not priced in the slowdown in China, for example, John killed up joining us today to talk about the move up in oil. I'm Kathleen Hayes along with Pim Fox taking stock on Bloomberg Radio. Dave Wilson will be coming up with his chart of the day and the

economics Brief with carl Rick Odonna from Bloomberg Intelligence. Keep it right here on Bloomberg Radio.