Lilly to Buy Three Vaccine Developers for Up to $3.8 Billion

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1:57But that doesn't stop the pharmaceutical companies from doing more deals. As I said it before, I'll say it again. And in the next life, I'm coming back as a health care M &A banker because they get paid every single week, it seems like. And this week's no different. Madison Mueller joins us here, a health care reporter for Bloomberg News. Eli Lilly agrees to buy three vaccine developers for as much as three point eight billion dollars. Madison, what's Eli Lilly looking to do here? Yeah, I mean, it's definitely an interesting time to be buying into the vaccine space, given sort of the political climate that we have in the U.S.

2:26with Health Secretary Robert F. Kennedy Jr., who has pulled funding from various vaccines, and we've sort of seen a loss of public support for vaccines. But that has not stopped Lilly. I mean, Lilly has been on a tear recently with M &A. The company has a lot of cash on hand thanks to the popularity of its blockbuster obesity and diabetes medications. And what it's looking to do now is to build toward that next era of growth, what happens after these medications that are fueling its growth right now lose patent protection, as they always do in the pharmaceutical industry. And so vaccines are going to be, at least it appears to be, part of Lilly's sort of next era.

3:06They hired former FDA official Peter Marks last year to lead their infectious disease unit. And then this is their first real foray into that space. So there are three different companies, as you saw, that they are buying as of today to target various different global health crises from antimicrobial resistance to Epstein-Barr virus and others. So it will be pretty interesting to see what happens here. Shingles as well. One of the things that might go up against, I guess the leader in that space is the, is it called? Shingrix. Shingrix. Yeah. The Shingrix vaccine. So do we know more about this deal?

3:43I mean, I know the three companies that they're buying are privately held, but do we know anything else about these deals? Because usually with these kinds of things, there are milestones as you, I guess, I don't know, set sales goals or what have you. Yeah, yeah, exactly. And that is a part of this. There are going to be milestone payments. These various companies, I mean, based sort of all over the world, a couple in the U.S., outside of the U.S., I think one is based in Zurich. And so they, you know, Lilly has a track record of going earlier in the, you know, drug development process. They like to go for these earlier stage, cheaper deals versus later on sort of bigger mergers.

4:23And that's, this is the sort of the same pattern that we're seeing here. A couple of them are in clinical development already. One of them is about to be ready for phase one trials. And so Lily will be able to really partner with them and take them through that process, which is something that's often hard and expensive for biotechs to do on their own. So for these big pharma companies that are out there in the marketplace with these weight loss drugs, they're not standing still, are they? They're making a better, more powerful, less side effects? What's Lilly doing? Lilly is basically doing everything.

4:53I mean, they have their strategy and obesity is to throw everything that they have at this. They don't want to be left out of it. They don't want what happened to Novo Nordisk to happen to them. I mean, Novo has sort of been caught flat footed just by how quickly this market has moved. And there are a lot of competitors and a lot of people, like you said, trying to develop better weight loss drugs, whether that's, you know, pill forms or less side effects or taken monthly. Um, Nova's sort of struggling to figure out its next move and fill its pipeline. Lily has, you know, strategically made the decision years ago to, to throw everything that they had at obesity.

5:29Um, and so they are looking at different types of molecules, something called amylin, which is thought to maybe be a little bit gentler on the stomach, maybe not have the same GI effects that the current generation of weight loss drugs have. They're looking at less frequent dosing. They're looking, they just had a new pill approved. They are looking at drugs that are even more effective than the ones currently on the market. So it's pretty much like everything under the sun they want to be playing in. The next area they need to focus on, they being the pharmaceutical industry, baldness. Baldness.

6:01Oh yeah. Huge opportunity there. That'll put the hair back on, you know, half the men. Propecia was a big. I mean, is that something that they're talking about? Cause that is the same areas is like obesity. Exactly. So Lily actually does have a drug drug for alopecia, which is a little bit different, but there is another company and I'm, I'm blanking on the name, but I know the ticker is Maine, which is pretty creative. Um, that has been getting some hype recently because they are developing a supposedly better hair loss treatment. So that's one that I know people have been watching. But, you know, when you look at these stocks, like Eli Lilly has barely budged year to date.

6:40And you mentioned Novo Nord is sort of being held flat footed year to date. They're down almost 12 percent, which I mean, I guess I get that. But I would I would expect a more enthusiastic response to Eli Lilly. And for some reason, the stock's just not moving much. Yeah. I mean, I think that's because at this point, it's they've just grown so much. I mean, their valuation is enormous. They hit a trillion dollars. They were the first healthcare company to hit a trillion dollar valuation last year. And I think it's hard for investors to see much more right now. Like when you're at the very, very top.

7:12They sort of topped, right? They peaked. Right. Like what is there to get excited about? Which, you know, there is a lot that Lilly is doing. But I think to get it up from the high, high, high point that it's at now, I mean, it has to be something pretty spectacular. So I think that right now investors are sort of just watching and waiting to see what happens. Like, are they eventually, you know, is there a mistake or a hiccup coming or are they going to be able to sustain this incredible growth? And so I think that that's sort of the moment we're in right now. Stay with us. More from Bloomberg Intelligence coming up after this.

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9:42You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. When we talk IPOs, we've been talking all about SpaceX over the last, and for good reason. There's going to be some huge, huge offering there, and as well as maybe some AI deals coming down to space. But there's another one out there. There's a quantum computing IPO. That's the other secret sauce out there in addition to AI. You mentioned quantum computing, and that gets your attention there.

10:17Anthony Edwards joins us here, equity capital markets reporter for Bloomberg News. Talk to us about Honeywell, this Honeywell-backed deal, Quantinium. What does this company do and what do they come in public for? Yes, well, Quantinium is another quantum computing company. I mean, there's been quite a few that have gone public over the last, say, three or four years. But most of those have gone public via SPAC mergers, which is probably, you know, sometimes that raises a question mark about their quality. and obviously also the SPAC merger process sort of lends itself to companies that perhaps don't have an established level of profitability.

10:53But so the interesting thing here is that this is a fairly large IPO. This company will be looking, Quantinium, will be looking to raise about a billion dollars for a sort of market value market cap of around sort of 12, 13. And, yeah, I mean, the company is not profitable, but it is a bit more mature than most of the other quantum computing names out there. But, you know, this is just going to be another way for people to play quantum computing, which has become one of these big themes. And, you know, what is quantum computing? Well, you sort of need a degree in quantum mechanics to explain it to you well, but basically these are, you know, very powerful computers that these companies are developing and, you know, it's a little bit way off, but these can solve some really complex tasks that really classical computing can't.

11:40So, you know, that's about as good an explanation as I can give you. So what are some of the complex tasks they can solve? Like, what are some of the ways that quantum computing can make money or help businesses in kind of in this moment we're in? Yeah, well, I think the classic use case which people have been talking about and certainly with this, the marketing of this IPO is around drug discovery, where basically that is a process that takes, you know, can take a very long time to take a drug from, you know, the R &D to commercialisation and using these, you know, powerful computing, that's one idea, I guess, is that you may be able to really speed up the whole R &D process because the way these computers work is that they can sort of process so much information sort of simultaneously in a way that classical computing can't and you can really sort of go through these trials and much, much quicker and really get through that process.

12:40That's just one area. And obviously, the full commercial adoption of quantum computing is some way off. And obviously, there's a view that there'll be plenty of other ways in which quantum computing can be deployed in the future as well. Well, the Trump administration is supporting quantum computing. They announced on May 21st,$2 billion in funding for some of these companies. Is Quantinium part of that group? Yes. Quantinium got$100 million out of that deal. Obviously, in recent times, the US government has put a bit of money into some companies and companies like Intel. That's become obviously a very hot stock after being a very poor stock for a very long time.

13:22But yeah, so the whole sector, well, there's$2 billion devoted to about nine different companies, IBM getting a billion dollars was the lion's share of it. But there were some companies that actually missed out. So, you know, some people wondering why that was, but basically the government's prepared to invest a lot of money. Governments around the world are actually showing preparedness to invest a lot of money in quantum computing because they feel like It has sort of an important industrial and national security relevance to them. SpaceX, let's take it right back there. Have we seen a schedule, a roadshow schedule yet?

13:56No, but basically the expectation is that, I mean, this IPO continuum is going to price on Wednesday, June 3rd. Okay. But the current expectation is that SpaceX will be launching its IPO or begin marketing its IPO on the day after that potentially. And so really what we're seeing is Continuum, and then there's actually about a handful of other companies that are looking to go public before SpaceX, which somewhat flies in the face of the idea that other companies are going to completely steer a wide berth of SpaceX. But, you know, we don't expect to see a lot of other IPOs on the road at the same time as SpaceX, but we are going to see a decent amount of companies here, about$4 or$5 billion worth of deals come right before SpaceX.

14:37Right. Or just, I'm not sure, front run the right term, but just to kind of get out there before SpaceX sucks all that capital out of the marketplace, presumably. Well, you know, I think the early indications are that there is going to be a lot of demand for SpaceX. I think we're going to find out more about that over the next week or so. I mean, it's been interesting because when that filing came out last week, I mean, I think a lot of people scratched their heads around the financials and the like. But I think, you know, there's a palpable sort of level of interest and hype around the whole thing, which probably means that they are going to be able to get the money fairly well.

15:05And, you know, we can see that the banks are showing, I seem relatively confident they can raise some pretty reasonable sums of money in some of these other deals as well. Stay with us. More from Bloomberg Intelligence coming up after this. Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds, and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R &D spend, small cap stocks with improving operating margins, or the S &P 500 minus high debt companies.

15:51Chances are there isn't an ETF that fits your exact criteria. But on public, you just type in a prompt and their AI screens thousands of stocks and build a one-of-a-kind index. You can even backtest it against the S &P 500. Then you can invest in a few clicks. Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market.

16:31If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But even the best strategies can't prevent every bad day. For more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments with expertise, personal attention, and independent agents who focus on relationships, not transactions. The Cincinnati Insurance Companies. Let them make your bad day better. Find an agent at c-i-n-f-i-n dot com. Sending a file is easy. Making sure your clients understand the file is the hard part. But with PDF Spaces in Adobe Acrobat, you can give your clients the full picture with custom intros, audio summaries, and a helpful AI assistant to your docs.

17:23So if you want to stop the endless follow-ups, do that with Acrobat. Need to make your docs crystal clear? Do that with Acrobat. Want to make sure your clients get everything they need to hear? Do that with Acrobat. Learn more at adobe.com slash do that with Acrobat. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. This next segment, this is a really be matt miller i don't know where he is but i'll try we'll try to do it justice here um craig judell joins us global autos editor for bloomberg i think you have another title now right yeah yeah what's your new title you're like grand poobah we moved you back from london managing editor for uh for business title yes that's that's big we moved him back from london so craig's here in new york for better or worse craig talk to us about ferrari that's all people are talking about here they launched their first fully electric car.

18:26Again, I'm not like a Ferrari dude. That's a Matt Miller's territory. But tell us what you're saying. I knew no matter what, it was going to be something that I would be talking with a lot of people this morning, knowing that this unveiling was going to be happening last night. But it absolutely has been, you know, universal and and universally a sort of what is this, you know, how is this a Ferrari? It is very un-Ferrari like in its exterior design. It looks like just more of a sort of typical car. I do think that, you know, they do get some credit for, you know, some of the details that they shared previously.

19:04The interior, I think, is widely, you know, widely, you know, well-regarded and has some cool touches to it. But from the outside, it looks, you know, very un-Ferrari-like and is very polarizing. Yeah, the Ferrari is known for its, like, really sleek, beautiful Italian lines. And this looks a little bit like a Prius. Yeah, and it's interesting that Johnny Ive, you know, was brought in for the design of this. So, you know, maybe that was intentional to sort of really shake things up and also perhaps to create some distance, given that no matter what, this was going to have to be quite a departure from what we've come to know from Ferrari for so many years.

19:47How committed to EVs are the Ferraris of the world, the Lamborghinis of the world? I mean, when you're buying a car, you're like a Matt Miller. You want to be seen. You want to be heard. You want the roar of this thing and the distinctive roars, the sounds that these supercars make. How committed are these manufacturers? We've seen a lot of the higher end manufacturers actually take steps back from making this transition. And it was always going to be complicated. I do think that there are going to be some markets in the world where they have to have a vehicle like this for compliance reasons.

20:20That even for really low volume manufacturers like Ferrari, which they will sell this vehicle in the hundreds as opposed to what we're used to seeing from the mass manufacturers. And so, you know, this is not necessarily a case where, you know, Ferrari is going to live or die based on the success of this vehicle. But there are also going to be some countries where there is not sort of slack cut for even high, you know, high value but low volume manufacturers like Ferrari. And so they need to make this transition, even if it's a very gradual in nature. So in addition to the awesome rumbling engine, also the cars are supposed to go really fast.

21:02They are built for speed. What about this one? Yeah, I think this is interesting. It's going to be sort of commoditized that we see, you know, really quick acceleration for electric vehicles. We've seen that for some time. Right. And I think that's something you have to give Elon Musk credit for that. You don't have a situation where electric cars need to be sort of compliance vehicles that look like toasters and like science projects. You can make an electric car, you know, not just sexy, but, you know, the instant torque that you get out of out of an electric vehicle with battery that just that that power goes straight to the wheels.

21:41You're going to get that. And you would expect that of Ferraris where they have they're going to have a motor on each wheel for this vehicle. It is going to be incredibly quick, about two and a half seconds from zero to 60. So this one will absolutely throw your head back, even if, you know, maybe it's not the biggest looker, you know, to sort of show off to your friends. All right. While we got you here, you mentioned it, Tesla here. I mean, what's going to happen with this company? Because everybody's attention, including I'm assuming Elon Musk's attention, is on SpaceX. What are you guys who follow Tesla since day one?

22:17How do you think this is going to play out? I think it's fascinating that also that we probably take for granted how long it's been the case that this is the company that Elon Musk has paid most attention to. and that even for Tesla being as successful as it has been and built itself into the far and away, the most valuable car manufacturer, SpaceX has long been his baby and sort of what he's sort of focused on of taking us to other planets. I do think that it's fascinating to me that some of the people that are closest to Musk now are sort of talking very openly about the notion that the SpaceX IPO might be sort of step one in further consolidation of his empire and that perhaps a Tesla-SpaceX combination down the line.

23:12Stay with us. More from Bloomberg Intelligence coming up after this. Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds, and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R &D spend, small cap stocks with improving operating margins, or the S &P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria.

23:50But on Public, you just type in a prompt and their AI screens thousands of stocks and build a one-of-a-kind index. You can even backtest it against the S &P 500. Then you can invest in a few clicks. Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market.

24:20Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures at public.com slash disclosures. If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But even the best strategies can't prevent every bad day. For more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments with expertise, personal attention, and independent agents who focus on relationships, not transactions. The Cincinnati Insurance Companies. Let them make your bad day better.

25:00Find an agent at c-i-n-f-i-n dot com. Sending a file is easy. Making sure your clients understand the file is the hard part. But with PDF Spaces in Adobe Acrobat, you can give your clients the full picture with custom intros, audio summaries, and a helpful AI assistant to your docs. So if you want to stop the endless follow-ups, do that with Acrobat. Need to make your docs crystal clear? Do that with Acrobat. Want to make sure your clients get everything they need to hear? Do that with Acrobat. Learn more at adobe.com slash do that with Acrobat. You're listening to the Bloomberg Intelligence Podcast.

25:41Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. The World Cup is coming, starts June 11th. First game for the U.S. of A, June 12th, U.S. against Paraguay. So you got that going for you. It's big business. It's big business globally. We're not really into it so much yet here in the U.S., but I'm sure we'll get there over the next few weeks. Jen Bartasha, she's been crunching the numbers. She covers all the retail stuff for Bloomberg Intelligence. Jen, I'm seeing some huge numbers of what the World Cup means, economic impact across the globe.