Also in this playlist...
This transcript is automatically generated
Are welcome to -- this is dot com live everybody -- happy Friday along with Kelsey -- from the Wall Street Journal digital network -- -- and it today great to see you -- -- let it be here I'm probably -- and we have a -- our plan is a couple things are gonna do today that are different than what we sometimes you've.
For example we are gonna spend a lot of health care everybody's so engaged health care that's being discussed right now because Rome and Washington to Wall Street to main street everybody is talking -- -- an American people agree that the hot -- that it takes more interesting right television back so we're gonna spend out good part of this hour on the health care debate but all the different -- -- what you've heard before.
We're looking at some of the business implications terms of how you can make money on this top Biotech we'll talk about H1N1 a little bit -- we'll talk about mergers and acquisitions and and the debate in Washington anyway we have that that today we have the markets again.
Does not wanna go down in terms of stocks were 33 in the Dow GDP number what you make -- it's a 1% annual rate in the last quarter was not as bad as we thought.
It's not because they -- again in these numbers are revised and we did get a ridges in the first quarter -- you know we have -- sort of look at it -- and what it could be certainly.
Showed signs of strength I think a lot of people are taking this as a sign that yes we have turned a corner.
Many economists say may be the recession bottomed out in June we look at the official reading firm for awhile but that seems to be the prevailing thought that the folks -- doctor.
Yes and you're right about the revisions back to Q wanted to last year where I downward revisions -- you hope that doesn't happen this time around but we'll see what's your Bill Stone thinks.
At a Philadelphia PNC bank where his chief investment officer -- -- our first guest today.
Good to have you on the show.
-- it will have a test Kelsey was talking about we get them we're gonna get a read we -- to have a revision to.
Q1 in the GDP and now we get this Q2 number which isn't as bad as we thought we'll see -- third and fourth quarter looks but.
Let's start there with the economy.
Where are we.
Well I think I'll start with the good things first I'd say we are officially rated declare that some time here in the third quarter.
The Great Recession of 2008 and 2009 that will end.
Good news I.
The -- it is good -- your birthright.
And I hit exactly I think it -- -- -- is you're right in pointing out that there's a lot of moving pieces here.
And in the reason why I think the markets were certainly originally negative you know kind of of move to mixed to slightly up.
-- when you take a look at it that consumption numbers or what will call consumer spending were weaker than expected.
And that certainly gives people pause because we really need that to kick in to get the GDP going.
We know that if Easter about government spending GDP was down more than 2% for the for the second quarter.
OK -- so everything we say -- -- -- session is over let's just put that as a sort of nodding off point so now what are we looking at -- recovery that is weak that is jobless or unexpectedly strong.
Well I think you have to say we're we're at least our baseline expectation is for a sub par economic recovery.
Hey doing good I guess the good news is because earnings of fallen so far and Nader and companies of -- is a good job cutting cost.
That you still have a good opportunity for earnings to come through pretty well.
An Indian I -- the point because we've seen so much cost cutting at the -- in real revenue growth with an immediate earnings reports and the new reality on Wall Street it's sort of the last that is the new good but we can't cut our way out of this recession we can't we have to see some genuine -- so you're telling talking your investors.
It isn't -- telling them to look for one of the signs -- companies are really opposed.
Some strong growth in numbers and it could -- -- a while and if so does that then damage the momentum we're seeing here on.
In the stock market especially.
Well I think you have his chance of seeing some sort of revenue grew -- growth in the third quarter but I I gotta be honest that would expected probably more in the fourth quarter.
The consensus numbers would indicate that the consensus is looking for.
Revenue growth in the fourth quarters so I think that's where you gotta say if we aren't able to -- -- in the fourth quarter.
There may be some.
It's jitters -- more than jitters maybe in the market.
So with that in mind more than jitters in the market how do you play this visual and is you know -- to -- symbol.
Aren't we seeing a huge run already.
Off not only off the march lows but even more recently in the market I mentioned today coming in this thing doesn't wanna go down right -- -- Does look like as you said maybe would be a negative reaction in the GDP especially because of the revisions not yet we're still up.
So how do you play that -- chase performance if you if you haven't gotten in already and if so where.
Well and that's the tough part is I think.
A lot of people figure well the market's likely to go up because there are some people stuck with -- maybe being forced to chase performance.
Because the market's been stronger than many expected and we know from.
From the measurements that there's a lot of cash sitting on the sidelines and if you're trailing relatively.
The pressure comes on you.
Just like we saw when the markets were falling -- it more likely that it feeds on itself on the down.
It's -- -- do you play it.
We were kind of playing it in the sense that.
We say -- your baseline allocation so if you should be it 65% stocks 35%.
Bonds stay there but yet maybe stay a little bit more conservative within the equity -- so.
We have an overweight to large cap we've got a little under weighed in on international.
Just to try and it.
Give a little bit of a buffer if things do tend to go bad again.
This is something you don't have to watch very very closely in terms of not just putting your money -- and letting it sit there and this very idea of it used to be just put sort of the long term investing putted there I mean anything really happened now some people relate to -- -- -- honest with their advisors of course.
Exactly and and we we we -- still long term investors -- opening net net it's the right place to be.
But you're right in the sense that I think you have to admit that there's a larger -- of outcomes at the moment.
We're not only -- equity but the geopolitical or I mean it you know what in the oil industry we're seeing a lot of things happening so mean it it just not -- people been so focused on the stock market that really.
Influences in and sort of those kind of catastrophe things that that's spooked the market or perhaps send things off track could come from anyway at this point.
Yeah I break it down to you know just -- -- in general which is what you got to it's just they kinda cut its fair across the board.
You know and one of the interesting things speaking of risk -- just -- gas has one of the interesting phenomenon.
Over the last few months we mentioned how much the US market is up and it's it's up a lot off the march -- you know depending on you measure -- 3040% and but other markets emerging markets and which -- where you're taking on more risk usually then and probably now are up much much more there's been tremendous growth -- some of these emerging markets.
A wonder if that'll continue to talk about chasing performance in the immediate do you think -- -- that somewhere you still wanna be here now.
That you're right in that that's a little bit of scary part of things you we currently have about 20% of our international application.
Allocated to emerging markets.
The way we're thinking about it is that it's a different kind of risk in the sense that.
Now the market seems to have priced in a much higher growth rate for those countries so that see you know that's the risk that think you're.
-- alluding to but on the other side.
It brings to you a little bit of a insurance against commodity price increases because they tend to be more correlated with commodity prices going up.
Also the vast majority of them haven't really had a banking crisis and we think they're banking industries are.
More solid -- obviously what we've gone through so I think there's a little bit of diversification.
That at least you get from them.
Okay we'll see how it all works out bill thank you but thanks for coming on accident.
Bill Stone PNC bank chief investment officer here foxbusiness.com.
Live so does that get -- the -- communities.
So that's true -- -- so many points he brought up but is it not to slot -- want to talk their earnings are what corporations is gonna happen but we have to also say there's going to be a lot of regulation a lot of slump coming out of Washington with health care if we're talking about today.
And with -- having such a big industry had a big part of the economy right out it could determine how those companies perform.
A lot of back and forth not only to health care companies -- some of the buyout Texas we're gonna spend good part of the next hour talking about.
Our special coverage of the health care debate how to fix the technology involved in the company's.
That are providing that is coming up next this is foxbusiness.com.
All right health care and the technology behind it a lot of people are talking about that these days and so are we here at Fox Business along with Kelsey Hubbard for the Wall Street -- digital network I'm Connell -- great to have you with his over the next hour Kelsey really gonna.
Get into this because we talk all the time about health care in the political back and forth but what about the ways to make some money off it -- a lot there -- you think.
That isn't a lot of the Biotech companies have seen some action recently.
Because there's a lot of investment going on there and their trials have been actually pretty successful on senate.
These big name drugs so -- in the -- merger and acquisition stuff going on there which we hadn't seen a long time so there is a lot of opportunity there.
A lot of some states are getting involved trying to lure the Biotech industry.
To their states to sort of generate jobs and see it as a way to really boost their economy so yeah we -- -- a lot of action going on in this in there -- and a lot of them.
Certainty at the same time because they all want to see if there -- any way related to this debate in Washington.
How are things gonna play out what is the final plan if we do get one by the end of the year actually -- constitute and what.
He's going to be -- that -- one of the things that's been I think very very interesting that this health care debate is one of the reasons I mentioned that the top as the technology involved just about every plan what do you disagree on the specifics of our paying for there.
The -- public option or anything else includes some sort of a plan that makes health care information technology.
More visible part of what we have going forward and I have to make sense right that we written on paper pencil anymore.
Actually we -- -- technologically.
You know sophisticated society a lot of people used technology hand held devices.
In their life so it just makes sense that hospitals and doctors would use that technology to make patient care more efficient.
But there's so many problems that it because it's the cost you know that it's very cost prohibitive it's very expensive.
Do -- do and you have to think all these hospitals and so many states some of these counties cities.
All have to be linked together on one -- sort of technological platform to make it all come together and while it's a great idea and I think we'll eventually get there it is.
Definitely and leave you with challenges in her and had -- a -- -- but no movement to make it a paperless industry.
A paperless industry -- and as one of the things we're gonna talk about here over over this next hour of coverage you know another thing and we'll get into this -- a moment is.
It is not related -- what's happening in Washington but what about as we head into the fall all the talk of the H1N1.
Virus that have been out there we've almost forgotten about it that's back there are companies involved in that discussion and we're gonna talk about.
Some of those companies as well so we'll get into that a lot to cover here and you know we will be Campbell will also give you hopefully some stock.
Recommendations or ideas or thoughts that you should have as you watch the debate unfold in Washington but we begin with -- Armstrong got here in New York -- as a columnist.
At MarketWatch has been on the program many times before -- thank you very much for coming back it's good good to see you.
Couple topics that we -- cover with -- and I mentioned H1N1 -- would do wanna get into that but at the top I meant you know it.
This overall debate of what's happening in Washington with health -- a lot of people look at it and their first.
-- -- how's this going to affect me.
But from -- investors wanna be some is watching this network and try to make investments there's a lot of uncertainty here for drug related companies with a -- Biotech -- health care companies what should they have in mind is that look at.
There's a lot of different issues they need to think about I think one debate for Biotech investors that's very important is the question of exclusivity for Biotech drugs known as you know traditionally.
Biotech drugs were not susceptible to generic competition like non Biotech drugs work.
Right and now that's that could potentially change and there's a debate going on in Washington about.
Biotech drugs once they come on the market should be protected from generic competition.
Should be five years should be seven as the president has suggested should be twelve as some people in the senate think.
And that's really gonna move the Biotech stocks when we get a decision on that.
It looks like we're gonna get the good twelve years which should be a nice nice boost for the Biotech -- that'll help a lot of the Biotech stocks I would what's the argument behind going that long twelve year sentences long time it does sound like a long time but the drugs take a long time to develop -- tremendous amount of money.
The trials take a long time because they're often very sick patients.
Takes very long to do good good or bad benefits of the drugs.
And there's a lot of risk involved for every drug that succeeds and gets to the market you've done trials on two or three that have failed so.
You want to give the company's enough time to recoup their significant investments.
And what the companies that investors are sincerely should be looking at it are they the ones with through the game changing drugs and -- I think that's right I mean the drug companies are looking at an environment where there's going to be a lot of pressure on pricing.
And I think they know that the drugs that are going to be able.
To hold price are those drugs that make a big difference for very sick patients and that's played out in these smaller companies have been bought.
By the big pharma companies they are -- they've generally been companies working cancer that have drugs that have a chance of making a huge difference.
In diseases like advanced breast cancer malignant melanoma so on and so forth where the prognosis usually very -- You give.
You're a chance of giving your some additional life you're going to be able to charge what you want -- that drug and effective cancer drugs -- with the daily I mean the annual revenue might be.
50000 dollars a patient died in -- -- -- give -- some examples there kind of in general but specifically her Bristol-Myers when they brought -- whenever I was just adds -- good example sample the I I think it's an excellent example because.
The Medarex drug.
Some imperfect results in clinical trials.
It's only effective for a few patients but those patients for whom it's effective have gotten a lot better.
-- rather than just adding a few months to life we're talking about patients who had very advanced skin cancer which is a deadly disease who lived eight more years.
And that's the kind of drug you're going to be able to get a premium price for and people are gonna be happy today because they're gonna get there to see their kids get our column.
Can you imagine that it had some sort of unstable results in -- -- heard -- moving towards that these threes right that's really where the risk for investors are in getting in.
Too -- at the -- at the prospect that this kind of a drug could hit and really.
Save lives and -- we are saying but what happened to the.
I'll -- -- fallen into that very trapped myself of investing in a company that had beautiful phase two results they've given the drug to thirty patients.
And the patients have done well better.
But then you find out in phase three where you might get the drug and a 300 patients.
That could -- really odd is dangerous for -- -- group of patients or doesn't work as well as hoped so.
Win Bristol-Myers vice Medarex or when I buy stock in a small Biotech with good phase two results.
You're always taking a risk big upside.
Big downside no one thing -- interest in any time I've done the obvious that it is -- we have just have a discussion is a really speaks the innovation that happens in this country and obviously that helps people real people to get better you said right.
How quickly they can.
Does the that the debate over health issues that's happening in Washington as we head into the fall.
Cloud that it all and make it the less likely that we'll see -- -- in the future or document the stretch well.
The -- I think it's absolutely a concern.
You know you've been scientists.
You don't care about truth and beauty and human health -- you know they're motivated by money by like like the rest of us which is fine which is fine and he'll do a better job right right that's what we hope.
And it's so that there is that worry on the other side on the other hand.
There are court I think there are legitimate questions about whether.
And monetary -- so closely linked to a lot of our best and most important drugs have been developed at universities.
Is that where we should be focusing our money instead of at at the corporate level I think there's arguments on both sides but.
You certainly don't want a system that.
Doesn't allow Biotech company who makes a revolutionary drug to make a lot of money.
As if -- car companies are do you have relationships with some of big pharmaceutical companies around is that's something investors should watch for our look at when willow navigating -- -- -- I think -- -- a good point when I looked at.
Biotech companies that have been bought out over the last two years of really clear -- trend that emerged.
With the fact that.
The companies that are getting bought our companies that already have relationships with big partners are already partnered with Novartis or.
Gender Genzyme more with -- -- -- with whoever.
And what that tells you is that somebody Smart in the business.
Thinks this company already has a good idea so they've made a co promotion agreement where they are cooperating on the science and so forth so once with a very consistent pattern.
Companies that have successfully partnered often get bought out.
And they'll be more of that you think more more consolidation so to speak as long as nothing couples wrinkle in it absolutely but I think the the big pharmaceutical companies are long on cash and short on motivation so we'll see more of -- -- apparently while we have you here rob I just said at the top of one of the touch on the H1N1.
Situation a little bit because hey that's coming back in the news you know -- -- -- the back into the fall.
Health issues are obvious there vaccine.
He's -- to be coming at some point so that's another part of it which companies do we need to be watching.
-- the big names in vaccines are sent a few of endless amount of France GlaxoSmithKline.
Baxter which is -- US company and Novartis of Switzerland.
All have the technological capacity to make vaccines in large volumes which is tricky you can't just open up a little vaccine enterprise ten -- hope -- I remember I did remember when Glaxo is earnings came out -- this is damn sure the other companies are similar marriage rumors.
That the CEO talking about -- -- -- -- the trial by August get the vaccine -- September and he was talking about maybe.
Putting out and drops and just -- how this is going to be delivered what -- these vaccines and look like well I think they'll probably there they may be available they may be shots you know.
And and how much -- of these companies are going to be able to manufacture is an ongoing issue all of these companies have mentioned in their conference calls.
That they're not really sure what their manufacturing capacity is going to be.
And that that's gonna have -- a big effect.
And and the World Health Organization has -- said the market is potentially ten to twenty.
Billion dollars -- isn't easy to figure out where the profit for from -- that this is gonna come from for these companies well.
I think that it's a bit of a public relations issue.
You don't want to be seen as GlaxoSmithKline.
As a company that's happily sitting there making a fortune on everybody's terror about the bird flu -- the H1N1 flu so.
I think they're gonna have to be careful about how they price how much of it they give -- to poor countries.
There -- the manufacturing concerns that I mentioned earlier.
And I'm also not sure.
How expensive it's gonna turn out to be to make these products so what the margins are going to be so I think again to return to the investor's point of view.
Big numbers get thrown around like that World Health Organization number right but how much of that those big revenue numbers turn into numbers on the bottom line.
The question out there rob thank you again a pleasure to be here.
All right rob Armstrong Dow Jones Newswires and who writes about these health issues as a columnist good stuff.
Are we are just getting started here at our a special on healthcare -- how you can make money in this debate that's going on down in Washington we have an analyst coming up next to -- tell you just that.
Later on a Children's Hospital that's gone.
All digital was -- -- I don't if one makes money Kelsey off this this today because they're sick of hearing about the politics and politicians take a little time off trying to figure out what they're gonna be next -- you.
You know you want to make a few books and something in.
Now people need to know where to invest they need -- -- but it's hard because there's much uncertainty around regulation and the proposals to reform health problem for hope program racked up people -- sort of unsure where to put their money.
Doctor mark my name is that managing director of equity research is -- and company.
And now mark joins us now to talk about his variation and we'll get -- some -- specifics of the company's did you -- well but.
You know in general we're having this debate here about health -- and in this sector for the Biotech and and and and abolished sectors about the affected as well are trying to work through it.
What should people be thinking about.
You thinking about that.
Medications are key point health care right now their medications regardless of what.
-- comes out.
Who wins life.
That we need medications to treat a number of the diseases that are out there in terms of cancer cardiovascular disease.
Some of these drugs will improve on this under the care and felt a little goal where William T Kirk said where no other jobs have gone before provide innovative cures.
And care for for many patients.
And really what do you say talk about these medications the Biotech companies that are our development is that an area where investors should be watching.
Well we like Biotech because we hate -- as the home of innovation.
I think that that Biotech companies are willing to take the risks are very very focused.
And they have -- Gotten even better than before in terms of beefing up their management teams and working with the FDA to get a clinical trial that works these innovative drugs are the ones that will really make a difference in terms of the patients' lives and also the profits will follow for the companies that develop -- drugs correctly.
-- nation's great thing and we were talking about a rob Armstrong was solid as Dow Jones a little while ago and now you know you said basically the same thing.
Mark with -- -- really he would get a pen and paper out this who might get into some specifics in terms of companies and ones that people should watch.
First of all things that you think are going right in this industry begin with a company.
Called Dendreon mrs.
DN DN and the NASDAQ market I want to tell me about this company and why you think it's doing things right.
I think -- has done a great job in terms of developing nearly project pro bash.
Which is the -- for the management of advanced prostate cancer.
Number one cancer in men Monday they had a clinical trial that had needed some more questions asked answered by.
Ford FDA is designed to talk correctly they work with the FDA.
And conducted a very big drama -- 500 men had positive tasty results and right now they're working on developing their application to the FD.
I may be going back and hopefully we'll have a product in the real world we think in the first half of next year -- they're gonna.
Right direction and an -- if we're talking about have had positive results in phase three -- rob just told us is really the area that can get some investors think companies tripped up in another looking at is Alexion Pharmaceuticals.
And and -- -- about this company -- they really took a product and brought all the way to an FDA approval and that's not easy to do so.
And -- bit more about their story.
So -- is developing has developed a monoclonal antibody very high area.
In therapeutics today seeing these these drugs and to have.
Powerful advocacy but avoid the side effects that -- -- with so many other medicines.
This -- this for development for.
It for you have rare blood disease common they've launched -- -- now in the US but also outside the US to take care patients.
I'm avoiding that kidney failure avoiding blood clots which we often see in many of these patients right now what you're -- smartly is developing the drug.
For other related indications that suggest it -- work because of the mechanism drug.
So we like it for the eight increasing sales for the current indication as well as the wisdom and execution for that.
Which were developing the job for related condition.
Now we talked earlier in the program about.
Which has already been bought out by by Bristol-Myers I don't know that you -- something like that but in terms of -- in an equity investment that you you like what they're doing or an obviously Bristol detailing yes.
So Medarex had a number of qualities that we like and Biotech company they -- had a lead product that you're developing a number of indications.
Melanoma was the lead indication that we favorite.
And now it looks like it's going part of mr.
We like other companies they're using that monoclonal antibody technology that would just talked about.
Seattle Genetics using monoclonal antibodies.
In terms of developing.
Late -- products leads these trials.
It also also in blood cancers leukemia lymphoma.
Very common diseases and fortunately the elderly population bigger elderly population coming down the track and -- general -- Which has a product which is developing prostate cancer and lung cancer also monoclonal antibody.
Similar technology to Medarex and monoclonal antibodies.
-- different diseases huge unmet need in these areas.
I did tell you market Kelsey -- we were talking earlier I I just think it's very he has a lot of times.
We we tell -- start talking about Biotech companies -- get lost and then you know companies may -- haven't heard of before you're trying to understand the stock's -- But the these stories here are remarkable in terms of again to go back to this theme of innovation and what companies private enterprise is doing in this market.
And has for years and then the question becomes at this time when we're debating what we should do about.
Health care going forward it more government involvement -- interfere with that at all what's your thought on that concept mark.
I think I think it makes sense to spend money.
Where we have -- -- here which needs help or it or where there's area there's no standard of care at all.
They need to drugs that provided minimal benefit or just allow for patent extension that's not gonna fly in the news in there in the real world going forward.
In order for companies to be successful they have to innovate innovate innovate and that means improving the standard -- -- having drug that acts on.
Not one that is twice today vs three times a day or once and they were just twice today.
Then the true benefits for patients either by adding onto the standard of care and improve -- well we already have out there.
War and that's examples Seattle -- -- general and or doing what -- I did and that is going after a disease where there really isn't any standard of care right now.
We they're really being innovative in making a huge different in the in these patients' lives.
Not only it and making a difference in terms of the quality of the life.
Also the quantity -- the cost could be -- here because they prevent all the complications seen with disorders.
Can you say innovate innovate innovate is the key but that really cost a lot of money and we knew we talked earlier about some of the things have gone right in this industry -- Some of the challenges they face especially in this environment where money is not -- to find.
There especially for a small -- You bring up a good point in the invasion is not inexpensive.
The bottom line is it takes about a billion dollars to develop a job.
From the early stages in the test tubes working it through animal studies in bringing to human studies and -- the real world and that's a lot of money.
And the capital markets have to be open in order for companies to develop drugs to how the resources to develop these drugs so it's very expensive.
-- FDA is under people they're not enough workers there today successfully look at the applications.
As -- Lot of innovation going through the FDA but there needs to be more people at the FDA more fun for the FDA.
To have the time and energy go over these applications that provide feedback these drugs actually make it into the market.
And we'll talk about Kennedy you know what services that really this is high risk and therefore things are not going to work and and investors have to be ready for that companies have to be ready for that.
With good plans for companies to diversify for investors to buy a basket of goods rather than put all the -- and one in one company.
Because they're going to be failures in this high risk high reward area.
I guess that's the final question that now tee markers -- your viewers might be watching -- and I again like me -- -- -- -- on these individual stocks to.
And what have you -- stuff is complicated you got to do your research do you recommend.
ETFs for example that that -- Biotech does that make sense to people.
I agree here provide the basket so I -- the basket approach -- -- -- and more importantly -- -- the field overall.
Will present Health Care Reform what -- medications with a need the new and powerful medications and biotechnology.
Is the home of innovation we like that sector overall.
Thank you mark thank you for coming on good insights.
And our mark on an area if he's at Needham and company where -- -- director of equity research for what throughout the good stuff because it -- to people who.
My citizen lot to understand he went through specifics this that this company's doing I watched this one because of this and there's a lot of there's a lot going on there.
Better than you know July a good month for Biotech and my -- and investors in fact share prices -- in that sector according to the NYC biotechnology index.
A 24% not bad at all -- as the market bounced back so today now what about.
The favorite topics and all this Health Care Reform if there is one is the technology the new technology that's involved.
We got some good stuff coming up for you on that -- you know one of the system things.
You would hope when they figure out health care.
And if they figure -- health care.
That at least at the very least now what else they do we have better technology you don't for some companies are doing right did you -- -- the doctor's office with the guys.
You -- piece of paper and on can -- different.
Get a get a prescription and I know enough about it so I hope they're figuring that out that dobbs we're gonna talk about.
It just a moment actually -- here from a children's hospitals -- all digital it's actually have a very very interest rate story so we'll get to that after we talked to -- Smith whose job.
At the executive vice president health care information management systems society that's a long way of saying that's -- an association that's focused on just what we're talking about right technology and health care.
There's got to be a lot going on in in -- in what you're doing in your business because you're following this debate in Washington I'm sure as close as anybody else are we gonna make it.
Some advancements in technology and you know Kelsey and I go to the doctor down the line -- -- going to be.
Easier better faster more efficient.
That certainly is the hope.
There is significant amount of funding that is coming into the health -- space for use the best use of information technology.
Thanks for the American reinvestment and Recovery Act.
The CBO scored those -- -- About 36 billion dollars and is also estimating there'll be about twelve billion dollars in savings.
By the best use of information technology over the next five years or 36 billion dollars that's a significant amount of money coming into this space.
-- of the system say it will reduce wasteful spending and it will reduce.
Multiple tests being -- -- people going -- -- -- different hospitals and whatnot but the challenges are a great it is very expensive -- you just mentioned so talk a little bit about how we're gonna move forward and this is such a big debate in Washington and so many people are weighing -- but there seems to -- no clear -- what do you think -- the -- -- Sure.
What -- First things that a clinician or a hospital needs to learn about.
Is what are the options regarding information technology.
What do they need in order to improve their work flow in into order to improve the quality of the care to their patients.
Once they understand what their needs are then they need to go through a selection process where they are evaluating the -- various vendors systems.
That are available.
Open source is also another option for hospitals and clinicians there are multiple -- To this to make the best decision.
Then of course -- -- the implementation and you need to address the big change management in the workflow issue right train your staff to get the best use out of that I -- that you've invested in right.
But in terms of priority what should people that tackle first inning because -- -- we only have a limited amount of resources of a doctor's offices in the dark ages what -- they really need to go after first that would make a real difference.
Off for their patience cost effective to some degree but also a difference maker.
Electronic medical records -- specifically addressed in our and that is where the funding is is targeted.
Is that physicians and hospitals over the next five years we'll have the opportunity -- earn incentives.
Based upon the meaningful use of health -- specifically electronic health records.
And a President Obama is diminished his station had set 2014.
As the -- he wants the hospitals to -- electronic health record for every American -- how is that doable I mean is that.
Overly ambitious or you think that's pretty on track of what is capable being done with.
It's absolutely a lofty goal.
If you can look into the crystal ball and see whether or not that goal is actually going to be -- Having these financial incentives is a big step forward in getting the ball rolling.
There are also many practices in hospitals across the nation.
That we can learn from best practices that are available.
There are excellence programs out there the Nicholas C Davies award of excellence which recognizes the best use of electronic health records.
And from those kinds of case studies other hospitals and physician practices can also learn about how to harness -- ET so that they are improving the care that they are delivering to their patients.
Voted the same time Carly you know this a lot of it comes down and the debate in Washington comes down to cost and how we're gonna pay for all of this.
-- the ITF this side of it people are using that argument doesn't favor Health Care Reform to say.
This is how we're bringing down the cost long term can you give us tangible example say.
Hey if we do this you're gonna save X percent what's the most what's that did the biggest moves we can do.
You -- help they've -- putting records on line in what had to make sense and electronic records what can we really do to bring down.
With with electronic health records you have the opportunity if they're done well you have the opportunity to.
CN significantly reduce repetitive testing because you have the information right in front of you so you don't have to incur the cost.
Of a repetitive test.
You also have the opportunity for care provider to -- out in front of him or her.
During that care encounter with the patient the information that they actually need so that they can.
Provide the best possible treatment because they know exactly what's going on.
That's another way that we can control costs.
A third way is when you have patients who have ongoing medical concerns.
Or well baby visits are another example where care providers can reach out to patients and patients themselves can also be tracking.
When they need to interact with the care provider to maintain.
The best health that they possibly can into stay healthy those are some three samples right off the top of my head.
A different area like to get your perspective on a lot of people worry everything going -- line about privacy issues especially when it comes to medical records and their medical history.
How you -- shore with eight all on line system -- an all digital system that.
If someone can't hack the system -- the people's.
Information will be protected.
-- -- an excellent question and privacy and security is as you point out.
A massive important topic that we are focused on very clearly.
What the best that you can do hard to put checks and balances in place.
Through to various laws that have been passed one was hit over ten years ago in the most recent one is.
The American reinvestment and Recovery Act that also has privacy and security provisions inside of it.
There are state laws addressing privacy and security issues and there are also best practices in place in the industry right now.
Care provider earth can.
The best possible privacy and security to make our health records as secure as it possibly can be.
And then you're right tells it as a big issue is if people are afraid of that and they're not gonna move forward with the technology that we want to -- to save the costs and all trickles down from there okay -- Thank you very much thanks for coming on today and thank you you know we -- and we mentioned how great this story is that in Pittsburgh we really we wanted to give people and this is that was a great conversation say hey this is what we could happen XYZ.
But a real world example of how people are already doing -- and -- doctor Stephen deceive us at the Children's Hospital Pittsburgh if you PNC vice president medical affairs there he joins us from Pittsburgh.
You guys are all digital -- Children's Hospital completely digital out of out of that.
Well it's been a long trip for us this took us about seven years.
We made the commitment a long time ago that when we moved into our new hospital.
Which we moved into a couple months ago that it would be a paperless hospital.
It's not easy like I say it took -- seven years we started -- Computerized order entry and now we are happily paperless.
And the public gets -- third what are the benefits of what are some of the challenges but we set -- what they -- the talk about some of the challenges that you have along the way what -- semi surprising that you thought was going to be easily implemented in doing this that actually turned out to be more of a nightmare.
Well nothing's been a particular nightmare but I think one thing that you -- have to remember and and and this has been brought up before is that.
You're not just taking a process that you're doing on paper and computer rising it and now doing the same process so.
You're workflow has to change and in a hospital environment that involves physicians and involves nurses respiratory therapists all of the many many people -- -- that patient.
We found with the electronic record that on average.
Seventy people touch -- patient during her hospitalization so it's it's complex seventy people out -- is that without it without electronic record what was the number before.
-- -- was the same we just had no way of.
Knowing he had no idea how many of all I get in -- I'm a mom lost amount thank you very much I get it out now there are -- bunch of things here -- and I wanna know about.
One of them cost that we get to that he's seven years bottom must be costly.
It's to put it in place abilities just.
Tentatively what's change you obviously as you said you know more than -- used to so things are happening and now you know they're happening but what about things that weren't happening that are now happening that are different new.
Well a lot of things have changed that you mention that we know things that we didn't know before -- a great example is.
We know how many people touch the patient.
Right now how many orders are written on a patient -- know who's writing the orders.
The kinds of things that are different now really have to do we have.
The way care is delivered at the bedside so -- used to be that care was given and then you go back you pull out a charge you write down what you're doing.
Now the computer may be sitting at the bedside.
The nurses administering medication.
Using a bar code on the medication a bar code on the patient's wrist.
And the fact that that medication was administered.
Is recorded in the health record.
Immediately upon and that hasn't taken a lot of time right united now killed himself the paperwork and all I kind of stuff that I'm sure they were complaining like crazy about before this happened -- -- now.
You know you think that it would save time but often -- time is traded so it takes more time to administer the medication.
Less time to record that you -- -- -- the medication it it may work out about evenly.
However the accuracy.
The administration and the accuracy of recording that data are both improved.
But I'm sure a lot of people want to know have you seen an increase in the quality of care.
And increase in -- or reduction of errors that have been made since you've gone all -- at all.
We have had a reduction in medication errors mean you'd love to think that you never have medication errors but of course they occur.
And medication errors occur in three main places the first is at the point of prescribing.
The second is in the pharmacy when the medication is dispensed in the third is in administration at the bedside.
And yes we have put systems in place.
The first was the ordering system which contains automatic checks for appropriate -- thing based on weight.
And those types of things the second was a pharmacy system in the third is our bedside administration system.
We have been able to watch and it's been very gratifying he areas the errors pardon me and each of those -- areas come down very significant.
-- knows that and -- the whole idea right that's happening that way see you talked earlier right at the outset when the first thing she said -- this was a seven year process.
Was it easy they were a lot of bumps along the road and then you got it done but it -- Q while.
One of the things that's being talked about in Washington now as people debate this is.
How much is it going to cost how much did your costs go up over that time period over the seven years.
And now that you are there how much is it saving you because that really is the goal at the end of the day.
Well I think the savings at this point our potential but we can really see them we're at the point where.
We have done this very intensive.
And now -- at a relatively steady state you're never had a completely steady state.
But we are now able to tap into our data warehouse which is.
Absolutely fabulous and look at things such as standardizing care standardizing medications.
That may have equal effectiveness.
But less cost.
So we see a lot of cost savings on the horizon but we're really just starting to get into that phase.
I'm not the person who would know what the cost of implementation -- -- of them not a technical guy that's fair but I can tell you that it was a very very significant investment.
Money as well as time on it -- get this.
-- -- and the that you get the sense it's worth it.
That's your that's your -- deliberately.
It is absolutely need the benefits outweigh the -- but nothing really difficult to.
Get all these hospitals there Nina would mean -- the -- we can talk about the doctors in your hospital was it hard to get them on board to.
A new system I'm sure they had a very well oiled machine in place on how to bring patients in treat them and do you have any really destruction and it kind of signing -- this new program and getting them on -- with the new policies and structures and all that was it hard.
It was a little bit difficult for you know on the position so I can say this -- a little bit stuck in our ways and as I said it's not simply taking what we do and taking it from a paper to a computerized process there really is a significant change in workflow.
And everybody has to buy into that initially when we first went to your physician order entry this was a huge sea change.
In the way that our physicians work as well as everybody else it was a very difficult transformation.
With each step along the way it's becoming easier and easier because first of all.
Our group is very used to change secondly we've got a very motivated group I have to say who have been wonderful to work with right but lastly.
People have seen the benefits of each of these changes along the way and so they become less and less resistant to the next change.
-- -- thanks for coming on telling us as historic -- -- it helps people understand what's going on.
How they -- maybe get behind some changes coming from the night that may be true so I think you -- working.
Doctor Stephen deceive -- their university Pittsburgh so they -- Children's Hospital they have already gone digital all digital art.
Witnessed some of opportunity series are working on here it Fox Business startup summer we've got a new idea on that that's coming up.
And also what some some some towns are doing to try to attract businesses health care in -- Biotech arena may surprise you as well.
Much more still to come to collect.
And I welcome back we I really like that idea of going all digital media encouraging to see what can be done although the question out there is still how much money let's say because even our last guest was telling -- he does not quite know yet right what the -- -- Can they were doing a lot of things before now they have to do different things and it's that you know.
And putting that together and seeing how many cost benefits they can get -- it's done yet to be determined.
Right we we talked earlier this hour a lot about Biotech -- is on the specifics of companies and investments and what have you but there's a town.
-- North Carolina.
Greensboro where they're really looking to bring in more Biotech related business as we debate health care all around the country -- -- -- chamber of commerce.
Is partnered up with the North Carolina Biotech center to do disrupt clapper.
Is the -- and the chamber of commerce and he joins now rally Bob good to see you.
With the idea here.
Well it's great to see you and I think we're having an influx of the all as a good north Carolinians say to -- down here tomorrow well two and a half and half -- taken care of but -- -- it's a collaboration.
You know we've got to do things a little differently after the last year the lesson learned is be creative and start being proactive and so.
Were up partnering together with.
About seven different agencies coming together to create what we hope will be a strong partnership.
To attract bioscience and biotechnology companies to the Triad region so it's a regional it's not just the greens -- community but it's.
An extension of the entire region better known as the Piedmont Triad.
-- and it.
Preacher doing a virtual concierge explained it exactly what that is -- -- support educations for innovation and funding it exactly doing what what is that virtual concierge.
Well the virtual concierge is that is a term that we we came out with to say.
It doesn't require bricks and mortars it doesn't require -- its it's virtual and it's.
We're trying to service concierge to those seven different agencies that are about research and development universities.
The technical college is providing the workforce and ultimately also -- -- current biotechnology.
Companies that are in the region.
To serve with their experience and hopefully.
There are there ministership.
We serve as the facilitator so it's a concierge services so folks will come to us CES is the if you will the front door and weakening get him in front of whatever agency's best suit their needs and hopefully their interest and whatever is ultimately -- land them in the Piedmont Triad.
There's one thing that I think is interesting as we talk about maybe trying to create jobs down there and what have you is obviously the goal do something like this a year year and you hope it works over the long term is that this isn't.
Federal stimulus money this is and that's just seems like everything we talk about all the stimulus is leading to this or it's not working here whatever the case -- -- Public private partnership right no government money involved is that a better model on how to out of the -- compare do you think.
Well I think it's a great it's a great model because when you have buying from a community when you have private public private partnerships and you have the business community.
Leading the charge.
Well -- you have a greater buying and that any effort to go regional and bring more people to the table Izzo is seen at a greater with a greater success rate.
And so what our model is is it's bringing these entities together.
Whatever's gonna best support our region and hopefully highlight the strengths but also it's about a commitment to move away.
From what was a basic manufacturing economy to a knowledge based economy.
And what it's gonna take and what kind of commitment on behalf of the community and the business community to do that and so it's about investing in creating a foundation for the future.
And -- Biotech why are you focusing on that what sector specifically and why do you think that will bring you jobs will grow your economy.
Is North Carolina superstar.
Right now Biotech jobs and the Biotech workforce.
Are turning out almost five times more.
Opportunities than the private sector workforce is saying and so Biotech jobs and Biotech for the future we've also got great opportunities.
By leveraging current Biotech companies such as Syngenta crop prevention as well as -- former caps that are within the region.
Using their successes and their ability to reach out around the globe and hopefully bring -- and and so it's about investing.
And a knowledge based economy and where we want to be and what we want to transition from and what we see -- our future.
We've also got great opportunities between the universities the public universities and Greensboro credit got that have come together to create a joint school for nano technology and nano engineering.
And say you've got.
Seven colleges and universities and at thirty to thirty -- mile radius so great research and development opportunities you've got strong workforce opportunities.
And we think now's the time that.
-- -- economy has been tough but -- will come out of it and ultimately we're gonna be better prepared to hopefully bring us companies from around the world to the Piedmont Triad.
All right as we do that rob about the final thing from you -- he would try to bring them in and as you -- content rough economy restarted about back whatever the case may be as we do that we're debating things like health -- in Washington whether the government should be more involved in what have you.
How does that affect as a positive negative or no impact at all on what you're trying to do down there.
While I think it's positive -- I -- them the more we talk about health care more health -- in the -- is the more opportunity here is for the biotechnology.
And and certainly the -- around but most importantly when you've seen things such is the national institute for health is.
Looking at 30% budget increase words that we haven't heard in a long time but a budget increase.
Well that means more researching grant opportunities for these companies he's not for -- and hopefully these international bioscience firms.
And so were were extremely excited we see it is the way we wanna get out and so the the best part about the entire process.
Is the amount of buying support in regional effort that we've got going on in the Triad.
My thanks rob good luck with it all right.
Great thank you rob -- with the -- from chamber of commerce down there in North Carolina -- we did a series all summer long here -- foxbusiness.com.
Called start -- summer.
Not part of our our theme here is some of opportunity and what have you and there are so many great company check it out of the website foxbusiness.com and today.
We have another example Michael courses here and so is Tim -- and Michael and and -- from a company called noble face therapeutics that -- cast threats thank you very much for coming in this is you're developing treatments from I'm told that slowdown.
The onset of resistance to antibiotics.
I mean how does that work I was kind of intrigued by that thing.
-- okay how you do that.
That's a great question so essentially what we're doing is we can specifically -- identified.
The genes that are causing antibiotic resistance to happen.
No we can design new technologies that can go into the cells that are causing these infections as physically knocked down those particular resistance -- -- -- we have a broad range of technologies or to achieve this but a lot of people do this or is anybody a student this is a pretty new approach you for go for developing these kind of therapeutics most people have been developing small Montana by accident or very broad spectrum.
And just hit a lot of things at once we have a very targeted approach -- going about this.
And that you we all know that these things can tell it's time to actually bring to market what is your timeline you have any at -- at this point is when we might see this.
Right so we're currently in Barkley preclinical level of developments of we've gone through animal trials but you know what you're correct that it takes a long time to bring -- to the FDA's and you know a five to seven year timeline is kind of what we're envisioning you know human -- -- -- -- knives and -- -- -- -- five sets of five to seven you Michael W -- how does that how does that play itself out than the next process from where you are now to where you're going -- what.
But for the actual in actual fact seven years time and it's not taken into account the time that was spent developing and doing respective.
Grad school years that's another five years.
That is essentially the -- right for this and in the next five years of planning to go into initially -- -- to.
Have a real clinical indication and -- okay.
A human safety trial which is usually the first that phase one I think you know you -- grad school yeah I think we -- could step take a step back here for a moment and again we're doing a series called -- -- summer right now and and tell the story of how you actually started to adopt.
Michael you tell us first and you know insurance and as well Tim and I met at Boston University what we're doing our Ph.D.
in the -- of Jim Collins and we initially thought -- working together because we're just in the basic science behind it how do but -- actually become.
Resistant to antibiotics how to evade all these multiple aren't about to happen developed over the years.
And initially we were disinterested and figuring out the mechanisms but as the progress towards also graduation.
We figured out while the sex is something that can have an impact and for us the main the main focus is trying to bring something to the patient.
In order to help them.
With the situation that is getting worse and worse there are lesson lesson about that actually work -- -- -- -- got that idea and kind of -- kind of ran with that.
It -- it you have to be you -- you have to have an entrepreneurial spirit wanna do this yourself -- you go work for somebody else right or.
Sure of it you know I think what really sets -- Biotech a lot of these new technologies is that we're -- an earlier -- -- far from the ground up.
Close on the completely new and happen to have the chance that the risk of course but have a chance -- -- -- new therapeutic to the world and that's what it excites us and our teammates and -- And who've been with us along the way.
And one of the things that we -- -- have this morning when I guess is how expensive it is to be innovate and I mean it's a great thing but yet very very costly and how did you get the start -- money to do to him.
While the main thing in this economy I think and also -- -- -- to be thrifty so we have been doing a lot of work as as part of our Ph.D.s that can be commercialized but.
We're doing now as you some of that federal stimulus money so we're applying for grants Coca that are essentially non dilutive -- we have not approached him and a couple of company.
Because in this time that is progressively more difficult while I think -- if it were you have you even thought about that possibility -- you -- kind of live off these grants for awhile because they have ever mostly we talked to say.
Although maybe things -- started turning get better.
If you had to go -- raise money that he think he could be tougher to be pretty tough and that I think Mike is right we're trying to stick with a non dilutive funding as for now we've been through a round of business plan competitions this year that we -- Actually quite a few of those who remember.
Congratulations -- -- to start off on and development.
And just because what you're doing is so revolutionary that the eight -- I mean I know they've been here that we talked about staph infection MRSA 25% of all staph infections.
Are resistant to antibiotics out there so any sort of breakthrough in that would -- I'm sure.
Benefit the people get excited have to look at that thing -- -- stuff like part of the equation but the from the main point is that.
We can have an impact on the patient and we're not the only ones who work on the -- -- -- But we leave the more people walk and had the better it is actually have somebody be able to -- something because you're still faced.
With all the clinical trials to face with FDA approval so it is a difficult road and along one.
Did it how much do you think him -- I don't know maybe this that you mention the impact you have -- think about that and say.
You want this is pretty neat that I can really this is not only we came up with the scientific model here we have a business.
Model we're raising money we're doing that you could be doing that anything you can be making you know whatever cars.
Planes struck us now.
-- -- washing machines who knows but you're doing something that impact people but how much do you think about that.
A lot of chatting about a daily basis I'm as well as directorship -- -- medical -- as well it's -- in the hospital dailies seeing.
In patients being affected by things that.
Frankly you know we should be we treat this right you said this could should be able to do something exactly so that's something I think about what what's -- -- you mention -- you mr.
Stefan favorite that they have learnt about good examples -- so I think the MRSA bacteria that your supervisor people have been worried about for a long time is definitely at the top of our list.
-- there are these infections on tomatoes -- the Salmonella outbreaks things like that are also very high at the top of our list as well so.
There -- many different potential targets.
How to rob Armstrong earlier from Dow Jones Newswires and -- talk about how -- -- separate plug Biotech companies is a key game changing.
Drug -- with you know the cancer under I've been talking -- earlier who.
Are you hoping -- badly -- you've been looking at that is that you might be attractive to bigger pharmaceutical companies because you perhaps could be developing the game changer here.
Yeah and -- -- -- do the key behind it is that antibiotics alone often induce resistance to happen.
And so our -- a little bit different takes complete different motive approach and is able to actually.
Reverse resistance many times so we're actually be able to -- resistance back in the other direction and that's why we think -- -- attention.
We're about to -- -- Mikey is the is the is the goal long term as a working for somebody else is the goal to be.
Bought by somebody else is that what you think about going in or do you just let that develop the initial the initial goal affection not to.
You've bought or say we wanna go to the market and and then have -- -- -- -- the initial goal was let's get the technology out there so we think about it from a medical point of view from a patient and -- -- if you.
We know that the technology can work the technology has to get out there and somebody has to push initially which is definitely us and we're open to any and all possibilities however.
We believe the ultimate -- -- -- the technology needs to get out there and not be shelved somewhere in a large company.
And could it all ultimately also -- -- cost saver for medical costs down the road if if people don't have to be given all these antibiotics to see which one works -- in the buildup -- of the Cincinnati and other than.
-- -- drug potentially cut that down.
That's actually -- -- them and wanna point out that we don't -- supply and antibiotics by any means we actually cool formulate our treatment with the antibiotics that you have to cut some of the but it still -- work.
And we -- also prolong the life time that they have in the clinic to have -- these doctors be able to use.
These antibiotics further so.
We hope that we can do that and we hope -- well we wish you definitely the best -- can and -- thank you for coming into the in my mind against him is -- we should be looking for you guys have to.
-- -- -- again have a private sector yes definitely an up or -- -- I'm gonna go back tomorrow that's -- -- -- -- gonna follow and -- -- -- back -- that was -- -- left us again that's what's ahead -- with all your life and thank you thank you like you noble face right is the name of the company.
That's another example of what we've been talking about the better part of the hour that there is a lot of innovation in this in this realizes what -- -- quick reminder to everybody thought hopefully -- likely to solve the last hour talking about health care Biotech and everything else if you did.
-- Internet show every day from this very same studio foxbusiness.com.
Noon eastern time from noon until 1 eastern time and -- available any time of the day on who aren't iTunes is a podcast.
Kelsey Hubbard from Wall Street Journal digital network it's always great to have content for having me you know always happy soon and generally and myself -- that show every day and we hope to see you wanna.
Take everybody thanks for joining us.
Filter by section