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Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside my co host Matt Miller.
Every business day we bring you interviews from CEOs, market pros, and Bloomberg experts, along with essential market moven News.
Find the Bloomberg Markets podcast called Apple Podcasts or wherever you listen to podcasts, and at Bloomberg dot com slash podcast here. And you want to talk rates and fed and all those bankers stuff. You turn to Ira, Jersey. You know, you head down the turnpike, the Parkway Route one. You get to Princeton, New Jersey, and that's where Ira Jersey is with the Bloomberg Intelligence Strategy team.
O way on your way there, you can stop for gas and fill up for what three dollars and thirteen cents?
Yes on roote seventy one in Wall Township this weekend, which all.
Time, you know, just a drop for the energy prices. And that's part of the reason, Ira, that we saw this inflation report come in light. It's good news obviously for the Fed if you buy it, it's good news for the country as well.
Does this mean no more hikes are necessary?
Yeah?
I think you know, this number takes hikes off the table, I think at this point. And yeah, you know, like you mentioned the WORP function and just looking at what short term interest rate products are doing, we're now pricing in for even more cuts in twenty twenty four. I'm still skeptical that the Federal Reserve will actually cut, but certainly the market is thinking that there's a risk of that.
And you know, this is what's been happening though, is that the market's been extrapolating these trends from single numbers, and you know, we have to think that, Okay, maybe we got a zero inflation this month, but next month.
If we get a point.
One or a point two, it's still slower inflation than we had earlier this year, but it's still, you know, not going to be necessarily near the Fed's comfort zone, at least not yet.
So what other parts of the market do you look at to get a sense of kind of where you know future rates may go here?
Yeah, so the big market now used to be the euro dollar market and not meeting the actual dollar, but meaning dollars in Europe and interest rates on short term on short term products. So if you look at the SOFUR futures now you've seen a big shift over.
The last two weeks.
Where SOFA was thinking at the end of twenty twenty five was going to be that we were going to have short term interest rates somewhere around three and a half percent. Now it's even lower than that. Right, So we're seeing some shifts in the market that like twenty five basis points over the last two weeks in the market's expectation for where rates are going to be in two years.
So SOFA futures are a big one.
Obviously Fed funds futures as well, but Fed funds futures most of the volume is really in the first six months of those contracts. So you looking at longer term and what the market's thinking for policy rates, SOFA is the much better product for that.
By way, Paul, you have made a killing on your two years.
Sure.
You know, as the rate obviously comes down the price goes up. You don't need to worry about reinvestment risk. You can sell those things out of profit. Exactly right. I mean just today, I mean we had five spots zero four. Now we're four point eighty five percent of just a big move into short term.
Yeah, these big moves keep happening.
Is there any problem with this much volatility in the treasury market? I'm looking at twenty basis point drops on threes, fives, and sevens and almost that much eighteen and change on twos and tens.
Is that a problem?
I don't think it's a problem.
I think it's a sign of the new environment that we're in with the amount of with the amount of bonds that are outstanding versus the capacity of dealers and other intermediaries to actually see all the flow and take on risks to redistribute that risk at some point is much lower today. And you know, part of this is electronification of the markets and the like, so you're.
Likely to continue to see these.
So actually, we were just looking this morning at comparing where, you know, the types of moves we're seeing now versus say nineteen ninety seven, when you had interest rates that were a little bit higher than they are now, but six seven percent on the ten year instead of you know, four and a half five, But you actually had regularly fifteen twenty basis point moves. So you know, given the
level of rates, this is not that unusual. Well, I think the thing is that we were used to the last decade when interest rates were near zero and when you had tenure yields at two percent, you know, a five basis point move seemed really big. Now that you're at you know, five percent, then you know, maybe a ten basis point move or a fifteen basis point move is kind of you know, on the larger size, but also not particularly unusual.
So so I think you'll see more of these.
Partially doe to rate, partially due to shifts in the market structure that you know, just going to provide for more, you know, more jumps in the market when people are one way and you know, want to get want to get out of risk or into risk in because of data or because of some news out of the Fed, for example.
So I when I first got the Salomon Brothers, the Salomon had like an army of government bond traders, no kidding, I mean just dozens of them, and they were all trading for their book, trading for clients, and they made a lot of money. I'm guessing they also lost money from time to time. Does that even exist on Wall Street? And more? Do government trading desks exists? And do they? Are they profit centers anymore?
So there are government Yeah, there are clearly government bond traders. I think that the what what you've seen, and this started, you know, in the last twenty odd years, you know, and progressed while I was on the street myself, is that you went from having you know, five six people trading treasuries and just treasuries to having somewhat less than that because you have more automated pricing.
So you get auto pricers.
And electronic trading platforms that basically you know, look at supply and demand and and you know price smaller trades in in you know, just electronically without necessarily the dealer having to take much risk. But for those bigger trades, and for trades that you know of decent size, you still have a person who has to accept that trade because whether or not it fits their risk limits of their trading book.
And banks make money on this.
You know, you talk to you know, Alison Williams, who covers the lot of the dealers here at Bloomberg Intelligence, and you look and you know, sometimes fixed income trading.
Is a big profit center and in other times.
Obviously twenty twenty two, for example, was not a particularly good year for trading, primarily because you get stuck with risk, and because you get stuck with that risk, you wind up losing money when when bond prices go down and yields go up. So I think that that you know, the market's changed, and certainly the size of the market and the size of the dealer community has shrunk a little bit, right in terms of personnel and liquidity and
also risk taking. Yeah, liquidity is definitely lower. So you look at the Bloomberg Liquidity Index, which basically shows you how much off the run bond. So these are aren't like the current tenure, but the tenure issued.
Say six months ago.
Liquidity in those securities in particular has gone way down, and that's really where I think you see some of the pain points and one reason why dealers, you know, aren't willing to take as much risk and some of those off the run security. So getting out of out of risk sometimes is going to be much more difficult today than it had been in past years.
Yeah, I don't know. I'm sticking with my thought that we had way more funnel Wall Street than the kids do today. I'm sure you're sticking with that point. Well, it depends which kids, right, Yeah, I'm just you know, I walk on a desk today, I'm like, there's nobody there. I mean, you know, there's a relatively no. I don't know, but anyway, they're making tons of money over there, so good for them. Iver Jersey, chief US interust Rate Strategists for Bloomberg Intelligence.
You're listening to the team Can's are live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot com, the iHeartRadio app and the Bloomberg Business app, or listen on demand wherever you get your podcasts.
Mikey Shaw he is one of our senior analysts over in London. Covering a farmer space. He's been doing it a long time along with that guy, Sam Fazzelli. Mike's got much better hair than Sam Fazelli. Will go there right away. I'm jealous exactly. It's over flowing. So Mike, you guys have done a ton of work on these g LP one drugs. Can you frame out We've had a little bit of time now to kind of think about this and look at the different products out there.
But where are we in terms of developing that market, that part of the market.
I mean, in terms of penetration rates with GLP one drugs for obesity, I think we're still in the very early stages. Excitement around the classes, you know, is constantly growing, even more so after this weekend where we saw the car the detailed cardiovascular outcomes data in the best patients forward go V. I think that was met very positively
by the prescriber community in general. We saw kind of early benefits as early as day one in terms of you know, these drugs can reduce major adverse cardiovasco events in you in these heavy abest patients. I mean, but there's also still a lot to be kind of learnt in in terms of you know, the mechanism itself. When we look at the I mean, the two curves of interests are are the you know, the curve aster outcomes curve and then the body weight curve so well.
And diabetes, right because if you're pre diabetic and you can't stop eating hagendas, this thing could be a lifesaver.
Yeah. So, I mean.
So, I mean when we look at obesity, it's obviously it's a risk factor for you know, diabetes, and in that data set, it showed that, you know, it definitely cut the move of pre diabetics to you know, developing diabetes.
And I mean the key question though with with the data is, yes, body weight is a contributing factor, but given the disparities we saw in terms of maximum weight loss being achieved and that early separation of the core of the of the Calleavascar outcomes curve, it's not the soul you know driver, so that there's.
A secret ingredient what's doing it?
Yeah, I mean that's what Nave said. It's got an X factor which we you know, we need to find out more about.
But that's what you did.
Like this weekend, you're at a conference, right, Yeah, up in Boston. Where was it.
It was in Philadelphia.
Philadelphia.
Oh so you saw the apparently multiple rounds of applause when the data were released.
Yeah, so the room was full.
It's like the sounding evasion.
Okay, Okay. When I go to a conference, this is my schedule. Get up, have a little business breakfast, maybe a little business lunch, maybe meeting in afternoon, and then boom dinner. Then we go to the craps table in Vegas. That's how you do an investor conference. These guys healthcare. They go on the weekend and they go to these conference rooms for like ten hours and have to deal with all this medical scientific data. And you guys actually have to write research notes based upon this stuff on
a weekend. By the way, that's what you guys do, right, Yeah about See, that's no way to give it.
Your badge is worth two drinks at the meat and greet after exactly.
All right, So but in reality, how have you guys sized out this market?
Because listen, listen, I have some important questions, okay, because I want to get this. I've got a doctor's appointment on December seventh, and hopefully he's gonna hook me up.
I need to lose twenty pounds.
I want to avoid getting diabetes and I don't want to die of a heart attack. Then, you know, and I have very weak I have no willpower, right, so I'm hoping that this drug can do this for me and maybe do.
My taxes as well.
I don't want to lose muscle. I only I only want to lose fat.
Is there a competitor to ozempic slash we goo v that is going to help with me with that?
I mean in terms of the data with regardless to kind of lean the loss of lean muscle. It's limited at the moment, but you know, Lily has done a deal for a drug which potentially when you used in compination with the drug which is well just go to approve to z bound, that could potentially address that issue.
Okay, so that's one question I have.
The other one is do I go zepic because I really want to avoid diabetes and a heart attack.
I mean, I need to lose twenty pounds. I don't have to write not morbidly obese? Or do I go we go.
Vy because it's a stronger dose and actually has better results for hard issues.
I mean, in order to get we'll gav as in because of the supply issues, it needs to be on label, right, So you need to be either overweight with a weight related to comobidity so that might be diabetes. Oh you need to be you know, clinically abese, so BMI have thirty or above.
I don't check that box, but I feel like I know people. I can go to Canada, you know, I can get the drug elsewhere. So you're saying like, is we GOV the right choice but it's gonna be hard to get?
Or should I just settle for ozempic.
I mean, at the moment, there's a lot of off label use of a zempiic simply because of the supply supply situation with WEGOV. And in essence, you know, the active ingredient of these of these drugs are both sema glue tide, and in both cases you would start off at a lower dose and then start tie trading up. So the maximum dose for for a zempick is two milligrams, maximum days FORGOVY is two point four.
All right, Amy from South Carolina rates in how long does someone have to stay on the weight loss drugs? Forever? A few weeks? And when you start taking it there's a weight cut back on what's the show there.
Yeah, so there's clinical data from both Lily and Novos showing that you know, as soon as you stop these drugs, you eventually, you know, put on you put the weight back on. Prescribers we've spoken to as well, they're all kind of saying, you know, chronic dosing of these drugs are needed. But I mean there are you there are various kind of things that you could potentially do. You could potentially, you know, reach your targeted weight loss and then perhaps you lower the dose.
Of the drug.
Who pays for this stuff?
So that's one of the main questions at the moment.
So you got to go to the money.
But Mikey, we have the same insurance provider.
If I go in there and I test like positive for pre diabetes, or if I have a BMI of like twenty seven twenty eight, are they gonna is my insurance going.
To pay for this?
I think as we get more and more data, we're going to see kind of access and reinbursement for these drugs improve. I think the outcomes data for w GOOVI, you know, it's a big step in the right direction.
There.
The whole I mean what insurers need to do is you know, balance that the short term costs, which are going to be high of you know, jailping one therapy versus the long term benefits in terms of you know, saving cost savings through reducing kind of hospitalizations.
And there's an actuary at Novo Nordisk and the boss comes into his office and says, how much does heart disease and diabetes and obesity cost the world?
And he says brillions.
Yeah, and then he says, Okay, let's price our drug for that price. Right, That's exactly what they want to do. They want to get it.
So some studies say it saves some studies say it doesn't, but it's basically at the same level.
Yeah, I mean, like the if you look at the direct and indirect costs of of of obesi and diabetes, it runs into the trillions, right. And you know, all the prescribers we spoke to at the conference, you know, they believe in these drugs. They believe that eventually they'll be cost effective in terms of as we get more competition coming into the market, that price point will come down. As we see orals which are cheaper to produce also to prove that going to come down to.
What we need, all right. Mikey Shaw joins us. He's a senior industry anist Bloomberg Contology. Dude, you got to come here to New York more often.
Stuff.
I mean, we see Sam a lot who cares. We'd rather talk to the smart money behind the healthcare research of Bloomberg Intelligence. Mikey Shaw joining us here in our Bloomberg Interactive Brooker's Studio.
You're listening to the tape cans Are live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station Just say Alexa playing Bloomberg eleven thirty.
Jake Saber knows is did I consent Rais?
He did?
Jake's Safer founder, general partner of Emergence Capital. He's out there in Silicon Valley. He does all that stuff. So when we talk about AI, Jake, I'd like to ask people, just say, from your perspective, what is AI?
It's machines helping humans do their jobs.
Machines helping humans do their jobs, right, I'm down with that. So how do you guys view that space and maybe how you view investment opportunities for your venture capital?
Yeah, totally. Well, I'll start with some context on like where we think this fits in our software. More broadly, we're focused just on enterprise software B to B software, something that I near and dear the hearts of Bloomberg folks. Probably presumably our firm have started twenty years ago with the thesis that software would move from on premise to
the cloud. That thesis largely worked, right, So the very first investment for US in four was in salesforce and investing in all sorts of enterprise software companies like Zoom ever since. And we think that this AI wave is very similar to the wave of on prem to the cloud. Okay, So just like that was transformational for tech, we think this will be transformational. We're very bullish and we're very focused on how we can help B to B software companies make that transition.
But should we have a should we have a fast food company talking about AI on an earn quarterly earning conference call?
I think it's real, right, Like, there's so much hysteria and so you have to cut through all the crap to figure out what's real. But like in the case of fast food, the idea of using this to help augment the people doing the drive throughs and make drives is more efficient. Like, that's very real. Voice recognition technology
is real. So I think what may be in danger is I think a lot of tech companies public companies over the past six months have gotten so excited they may have over committed, over promised on what they can do with A in the near term. So we may be you know, near term negative, But I think over the long run, this thing is gonna work.
Dude, think about you don't want a high school like a stoner that you hired for your drive through?
It'd be like, do you want fries with that?
He's not going to be enthusiastic about it. He's not going to remember to ask every time, like AI can be better at up selling in the drive through a pretty.
Man, these fries are.
So goodly all right, So what's the next? Well, I want to say what's the next because I don't eve know where the kind of the starting point is.
But well in video is the only one that we really know, right, I mean, Microsoft, okay with open AI, But where do you invest I mean you're not You're not looking solely at public markets, so you have a much better view of you know, what's what the roots are down underground?
What are you looking at?
So the way I think about it is like there's there's different layers to the AI stuff. There's nvideo, which is at the base layer, right, it's the actual you know, chips that are helping power this. Then there's the foundational models. This is opening and Microsoft developing their own addition to open AI, and there's a bunch of others. And then there's the application layer, and that's the stuff we're most excited about, which is what do you do with this
stuff once it's built? Right, you don't just build it for the sake of building it. But how can you make the stoner dude more effective at taking your order? How could you help doctors treat patients more effectively? How can you help lawyers go through contracts more effectively? So we're investing in companies that do all that stuff aided by AI.
So all right, now, given it feels like we're in the top of the first inning for AI. Yeah, where are you guys looking and what types of deals are you guys looking at?
Yeah, for sure.
So we're seeing a lot of activity in vertical specific AI solutions, and this actually mirrors software. So in the first wave of cloud technology, horizontal SaaS was the thing, so salesforce, work day, et cetera. In the second wave, it was vertical SaaS or what we'd emergence call industry cloud. These are companies like Viva Systems, which is a thirty
billion dollar public company selling into the pharmaceutical industry. The same things starting to happen in AI, where you're taking this technology instead of just trying to broadly apply it anywhere, you're actually choosing a specific job to be done and you're having it solve that problem. So we have invested in companies, as I said, that use this technology to
do help lawyers draft contracts better. So the idea is you can, as you're writing contracts, say hey, help me make this clause mutual, and it will use AI to help draft that. We've invested in companies that help doctors communicate with insurance companies and write the letters to get approvals for different treatments. A company called Doctimity that does that so that kind of concept we think is going
to be really powerful. The question is what are the jobs to be done for which this technology is most applicable in your term.
And what are the data sets that they use to train on.
Is that like a sticky issue because recently Elon Musk came out with his competitor to open aiy Grock.
And apparently it's supposed to use real time data Twitter data.
I didn't even know they could do that without breaking certain you know, privacy clauses. Maybe they don't mind, but you know, I think of Google, they have so much data at their fingertips.
Can they use all that?
So I think companies, the larger companies the ones that have to be the most conservative about this, which is kind of interesting actually, like in many ways, those of the folks that have the most to lose, and so startups I think can be more innovative on this front. They can you know, find different sets of data and
actually kind of outmaneuver some of the incumbents. There's a real innovative's dilemma problem for the incumbents here, right If your Google, if your salesforce, if you're one of these established public companies, you have a lot to lose in this. From a legal perspective, you also if you drastically try to change your UX your user interface, let's say doing a chat based interface is better than doing the traditional interface, you could piss off a lot of your existing users.
So there's risk there. There's also risk on business models. I think a lot of these technologies are starting to think about how do I charge not on a per seat basis or usage basis, but actually on an outcomes basis. Because the technology actually can help you process contracts more quickly or you know, cure patients more quickly. Would have you what if you could start actually charging on that basis,
which would be disruptive to the incumbents. So from as a startup investor perspective, which is what I'm focused on, I'm spending a lot of time thinking about what are the advantages of startup hads over the incumbent in this new era?
How much incremental CAPEX? If I just look at the macro tech CAPEX summers I get from IDCU whatever, and I see some of these big growth rates, how much of that do you think is incremental AI or maybe taking from some other bucket and putting it into AI. I don't know how much. Does think about it as how much is incremental.
It's a really good question. I think some of it will actually come from labor. Right, So, if you had hired a consulting firm before to help you implement some new technology, and you had a big budget for that consulting firm, it's very possible that you can use AI to help you implement this technology more effectively, and so
you don't need to spend as much on consulting firms. Interesting, which actually brings me to another point I've been reflecting on, which is we thought that it was like the stoner dude that was going to be most at risk in this age of AI, that it was a lot of the kind of more blue collar workers, you know, the janitors,
the nannies, et cetera. What's happened with this past year of A is it seems like white collar workers are actually the ones that may have more infringement upon their daily work, and as a result, they're the ones who have to probably get up to speed faster on how to make use of this technology to augment what they do, otherwise they may fall by the wayside.
I always think about this as well the jobs at risk. But what will be created?
You know, because every time there's a technological wave or an industrial wave, it does knock out a whole group of jobs, but it also creates so many more.
So what's going to be created here? It's not just more coders, right please?
No, No, it's not more code.
No.
In some ways we may have different types of coders in the sense that you may not need to know as much code because the AI can help you do it. So you'll have probably more of democratization, So therell be more people to code, but you may have less people to do it at their full time job. I do think like in the near term, figuring out how to implement this technology and existing text acts is something that
everyone's figuring out real time. Remember like this chatchipte thing, it's a year old, Like we've aged a ton and a year, So what's it going to look like in a year two years from now? So I think I think the world will look different, in jobs will look very different.
Jake, just on the VC business today, talk to us about what it's like at in sand Hill Road out there, and if I have a cool technology, can will you fund it?
Well, I'll start by saying sand Hill Road isn't what it used to be.
Really, Yeah.
What I mean by that.
Is like, and where did sand Hill Road come from?
Sand Hill Road went to San Francisco from from sand Hill, So.
Sand Hill from New Jersey actually.
Oh sure, yeah? Yeah?
And Menlo Park, California, where'd that come from?
Much love to the East Coast, Like there's so much.
For advanced study, Albert Einstein my backyard, go ahead.
There's there's a lot of history that came from the East Coast that made West Coast what it is. And actually the military is a lot of what made the West Coast and Silicon Ugway was anyway, Silicon Valley and sand Hill in particular have moved up to San Francisco largely. I think there's more action there. We're at peer five actually.
Right, yeah, but I get that Humphrey slocom action.
Yeah, Like there's a lot of ways to you were talking about with Goovi before. So if you want to get on that train, and I'm like to the right way to do it, I need to get some secret breakfast first exam. I'll do the would go exactly, but to answer a question on like what's the state of VC. There's kind of a weird bipolar state of VC.
Right now, and we got about twenty seconds cool.
What I mean by that is like, there's lots of hysteraian segment on AI, some of which is justified. And there's also some real challenges that these companies who are dealing with high interest rates and having slower sales cycles are facing.
RP.
We'll get you back next time you're in the big town here, Jake Safer, he is a general partner of Emergency Can.
We can do it over Zoom too.
We can do it with Zoom. We love Zoom.
No, I don't, I don't, I don't. We go We go real time here and that's how we do it. Jake, thanks so much for joining us here. Markets tearing up here today, own a back some good inflation data.
You're listening to the tape cans are live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.
I did not know what CGM met until just recently. Continuous glucose monitoring. Yeah, that's a big deal.
Well, and I've been interested in it. You know, I don't have diabetes yet.
You're in good shape.
What are you talking about?
But I'm sure it's in my future because I eat so many sugary foods. But well, I mean, I'm fortunately I trying to stop. I've been interested in these continuous glucose monitors for a while just because I'd like to see how my body reacts different foods. For example, you could eat you and I could eat the exact same meal and we could have very different responses in terms of,
you know, how that makes our blood sugars react. And I think it's really interesting information to have, especially interesting for athletes or for people who are really monitoring their health closely.
But for now, diabetics are getting to use these products, good stuff. Insurance pay for it.
Jeremy Silvan joins the CSC dex coom that is a NASTAK listed company. D x CM is a ticker uh to put in there. They are based in San Diego. I believe, nice choice. Jeez, lame.
Why aren't we all based on San Diego.
I don't understand when I don't know, you know, when the founding fathers set everything.
Up exactly why in New York and watch it.
I mean it's nice, but.
All right, Jeremy, thanks so much for joining us here in our Bloomberg Nactior broker studio d X dex comp for ourn listeners. Tell us what you guys do kind of how you play the game here?
Yeah, sure, and thanks for having us here. Dexcom we make continuous glucose monitors, as you mentioned, our G six and our G seven series as well as Dexcom one. And what the really the product does is that there's a small interest needle that goes right beneath your skin into your interstitial fluid. It monitors your glucose throughout the
course of the day. And so for anybody that is monitoring their glucose levels because they take insulin, because they take other drugs like glp ones, as they monitor their food, their sleep patterns, and ultimately their exercise patterns, we're able to monitor in real time and give feedback as to how your glucose levels are moving in your body really minute by minute. Every five minutes, we send a ping to your phone or to the receiver. We do that.
It's obviously very beneficial to those that need to manage their glucose levels, and by the way, that really spans the entire population.
It's really the fifth vital sign.
So, but it's interesting that you say you can use it to work with GLP ones, to work with semi glue tites likeozepic and we govy are you seeing more more customers do that?
We are, in fact.
You know what we see is if you look at the prescribing patterns, you're really realizing these are companion therapies. You're seeing our prescriptions actually increase when you have somebody who's using a GLP one, and what you find is the outcomes are better. There's an increase in a one C reduction when you have somebody using both of these products. And so, you know, we think about it as if you want to think about it as therapy and diagnosis
coming toge other. The therapy is the drug, the diagnosic is the real insight into what's happening in your body. Those two things are an incredibly powerful combination. You're seeing positions prescribing more and more in that pattern.
What are that so for your CGM business, that is that is your business. Yes, okay, what are the growth drivers on the top line for you?
Yeah?
Absolutely, I mean the total addressable market is huge, and you know, it's one of those things when we sought out to.
Meet an unmet need, we.
Realized and you mentioned sugary foods, a lot of us are sitting down more often than we have in the past. There is a challenge with glucose levels in the body. It started with folks using insulin, but it's really progressed
beyond that. And when you think about the entire population diabetes thirty million in the US, pre diabetes ninety million in the US, Global diabetes over five hundred million YEA, and only about one percent of the people that have diabetes in the world are on this therapy, so there's ninety nine percent to go, and so there's a real opportunity for us to continue to drive adoption really change people.
Is your customer, the physician.
Our customer is the physician, the payer, and the actual customer themselves. I mean, really, this is incredibly personal to the actual patient. They wear it on their body, yep. The physician clearly wants to know it, how it helps them titrate medication. And then obviously the payer wants outcomes, and so you have to have a product that delivers outcomes. Ours delivers outcomes.
So I've seen you see the YouTube videos or Instagram videos where somebody just kind of slaps it on the bottom of her arm or his arm. It doesn't look like it hurts. Explain to you, say needle, But I feel like it's more of a wire almost, isn't it.
That's what it is. I mean, it's I'm wearing one now. Basically you put on your body, a click, a button, it comes on. I don't feel it. Most folks don't. When I say it's a little needle under it. It's about the size of a hair and about about a quarter of an inch.
And how long do you leave it in your arm?
For ten days? So stays in there for ten days, giving you feedback over the course of those ten days. Real easy to put on, real easy to take off. Pairs with your foam, pairs with other devices as well.
And do you leave it on all the time? Do you constantly have one on always?
You have it on twenty four to seven, you swim with it? I noticed you mentioned San diego, you surf with it. If you guys ever want to try it and come out surfing with us, you're more.
Than welcome to.
But absolutely part of wearing it twenty four to seven So it gives you that twenty four to seven feet back.
What do you notice? I mean when you have I don't know, a glass of wine. Do you see a change when you have you know, peanut butter? I mean, what are the things that you notice? You change?
You change your habits, you really do. I'll tell you what's good whiskey. That's a good one, that's not good beer. So there you go, and you're gonna have to battle between those if you want to keep it. But there are foods that you eat that you realize to your point, your body interacts with differently. For me, it's rice. Rice sends me through the roof. And so what I've done is I've stayed. I've changed my behavior around my eating habits.
I stay away from rice. I don't want that to impact my glucose levels, which obviously impacts your health.
Why are you wearing the patch?
So I wear it for the similar reason I like to one. I'm a bit of a sensor nerd since I work at the company.
You know, is this a prescription thing?
It is a prescription.
I have a prescription.
And why did you get the prescription?
Because I wanted to monitor the post levels. It was really important me for long term health.
Concert But the.
Target market is what it's still those? Is it you or is it just somebody who has an underlying condition that requires this type of monitoring.
Today it's really targeted at the diabetes popularation and those impacted, so that population, but longer term it will, believe go well beyond that to folks that are monitoring their health before your physical.
So the Apple Watch isn't enough. We got to go another step.
You have to step.
You have to be accurate. And that's the big thing. The difference between a healthy person and someone with pre diabetes is very very small, so accuracy is paramount.
Yeah, ninety million people have pre diabetes.
And I go once a year from my checkup.
That's not good enough.
You, I'm sure, are a healthy eater and an active fitness guy.
You don't need to worry about it.
But I'm cramming like peanut butter and jellies down my throat as fast as I can.
You know, and I like to watch TV.
How much does this cost from Matt when he doesn't have a prescription.
When you don't have a prescription, you can get online. It's one hundred and seventy nine for a month. That's three different sensors, ten days each.
And then I just think it's interesting. You know that rice drives your blood sugar higher. I would not have any idea if I'm sitting in front of a bowl of rice that that's gonna do it. So, you know, we take these tests. The doctor will say, hey, avoid sugary foods, don't eat anything after dinner, and then come in the next morning. I will avoid ice cream and you know obviously cake and candy, but I probably would eat a bowl of rice no problem, and even sneak one in after dinner.
Wow, look at you going crazy.
Well, but then I would get a bad result on the test.
You might even find out that the ice cream is actually good for you and the rice isn't.
Don't take my work all right?
Twenty one by ratings three whole and zero cells.
The stock has outperformed Medtronic Insulate Tandem Diabetes and Abbot labs over the last five years. I'll look at those because they make you know, competing products or in the same space in the diabetes.
What's the investment message you give to the street.
You know, we have a product, it's the most accurate, simple, it's easy to use, it's covered. So we have a population in front of us, a TAM in front of us that we think is absolutely unparalleled. On top of that, we've been working very, very hard on profitability. I know that's top of mind for investors. And if you look at our performance, a twenty six hundred basis point increase
over the last five years in profitability. So when you combine incredible top line growth we grew twenty six percent organically last quarter and the prior quarter, along with that profitability in this unmatched TAM, I think you really have an incredible investment opportunity. And we've been communicating that to the investing public for some time, and you know you've seen that through our growth over the years. Just really passionate about the company and the opportunity ahead.
Yeah, I'm looking at the projectors out there on the street kind of high teens, low twenty top line growth, IBATHAM margin mid twenties going to high twenties and free cash a positive. If you can't sell that, I think you need another job. So that's why we got all those buys out there. So Jeremy Silvin, thank you so much for joining us. Jeremy is the CFO of dex Com, the symbol to put into your Bloomberg Professional Terminals d XCM there, and he got his undergraduate from Arizona State.
Who's basketball team just coach by the greatest point guard in college history. That's Dandy Early good bud Man.
Thanks for listening to the Bloomberg Markets podcasts. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three.
And I'm Paul Sweeney. I'm on Twitter at pt Sweeney. Before the podcast. You can always catch us worldwide at Bloomberg Radio