Mid-Year Outlook: Derek Hamilton
July 28, 2020
Today’s Trendsetters in Technology and Health Care
Jeff: Welcome to Ivy live early this month or of investment management team attended the most important technology and biotechnology events of the year the Consumer Electronics Show and JP Morgan's Global Healthcare conference. Not only did we get to hear about Innovations expected to come to Market five years from now the current product Cycles what they mean for our general welfare and importantly future Financial results nearly every relevant biotech technology and technology company attended these conferences today portfolio manager Brad Warden and assistant portfolio managers Charles John and Gage Krieger are here to share their Insight. Good afternoon guys, so there's two very important conferences to our industry and many others happen.
Earlier this month. I'm going to start with you Gage. I mean, you know not so many years ago. If you wanted to see Innovation, you went to the Consumer Electronics Show or CES, but it's not true these days JP Morgan's Global Healthcare conference. You can certainly see a lot of it there. What was it like this year? What was the buzz?
Gage: There was a lot of buzz this year. I think that there is a lot of positivity from these companies and the management teams that lead them and relating biotech to technology. I think there's a ton of overlap. I think Innovation is one key theme that you see kind of coming out of the industry and every which way I think that pace of innovation is accelerating and all the research and diligence we do suggest that pace of innovation could should continue to accelerate for years to come and a lot of that Innovation is enabled by technology and Brad and Charles have a lot of overlap here and what this technology looks like and how it works. So a couple things come to mind you have access to this into that technology and increasing quite rapidly and as well as the affordability of that technology getting the hands of large Pharma and biotech companies like Pfizer and Merck but also down the stack to companies that are private or recently IPO’ed who don't quite have the budgets to invest in research and Discovery. But today they do and Technologies really fueling that okay.
Jeff: What are the what are some of the the innovations that you saw me? What have we seen in the past year to that taking us in a New Direction?
Gage: Yeah, couple things come to mind. There's several next generation modalities is the referred to in the industry. These are Cutting Edge techniques and ways to administer medicine and create new medicines a couple come to mind first is gene therapy. This is actually taking live cells and putting into people's body with the hopes of creating a cure for many diseases. Most of the industry is focused on rare diseases today and you saw the first gene therapy ever approved the United States make it to Market in 2018. Another area of focus is cell therapy. You saw the first cell therapy companies bring product to Market to treat cancer that happened in 2018 as well. And then lastly an area that is gaining a lot of attention and is for the first time moving into humans is Gene editing and that's effectively going into the body and manipulating a gene with the effect of correcting a defect or putting a missing gene into the DNA to actually help the body fend off or be able to combat a disease that's in there. So all of that all of those different modalities I suggested again our have been hypotheses. They've been science experiments in labs for decades, but it's really been the last couple of years as technology has moved up that stereotypical s-curve. That's really enabled all these companies to bring the promise of these new ways to treat disease to Market and finally into Humans.
Jeff: And Gage mentioned that kind of technology biotech. They kind of interact. A lot of these things wouldn't be possible without a prominent chip company out there with it.
Brad: That's right. Yeah. I mean, I think if you think about what would Gage is talked about in terms of the technology that's happened over the last few years. It's really brought this what we didn't have enough of was the computing power and the capability the parallel processing that could take all the information and basically do things like sequence of the genome, right? I mean it's so now you can get your genome sequence you can start to dig deeper in terms of those genes and genetics and looking at ways to treat rare diseases where we really couldn't get to that level of depth in the past. And so Nvidia is a company that that we followed and we've seen for a long time in the technology space, you know big player in side of gaming inside of now autonomous vehicles and the data center. Well that data center part of things to now is carrying over into the bio tech And I know when Gage was out there in video was actually both at the healthcare conference and at the Consumer Electronic Show, they've got a hundred researchers and people at Nvidia that work specifically on the healthcare space and Healthcare Arena. And so as you think about Innovation really that that pushing Moore's law and the ability to do so much more compute wise with things like an Nvidia GPU or memory. Those are the things that are really unlocking a lot of the things that are then accelerating the R&D process that then carries over into names like in the biotech space.
Jeff: useful for more than playing games and Mining crypto currency. We actually get some real benefit out of it. How's the money flow into the biotech sector these days. I mean, it's very expensive to get these things to Market.
Gage: Yeah. So with Innovation comes comes cost and funding needs 2018 was actually a year a record year for funding. So it was a record year for the number of Bio Tech IPOs as well as the aggregate dollars raised by those IPOs that was parallel to the funding. We saw in the private Market as well. So there's clearly a lot of focus from the investment community in funding these opportunities funding these breakthroughs and really being a part of the Innovation that that we that we started off with.
Jeff: How far away I know they're important drugs have come out in the past couple of years. But how far away are we from? Just something truly remarkable happening in biotech?
Gage: So we're on the cusp of that right. Now. I mentioned Cell Therapy coming to market last year. There's several companies in the space that have taken this new technology to treat cancer and what you're actually seeing is a Curative effect in certain types of cancer. These were patients and the type of cancer these patients had had been treated for many years with declining progress and or their disease continued to progress and with this new technology or actually harnessing the body's own immune system to fight this cancer and we're seeing fantastic results. Whereas I alluded to some patients are actually seeing cures.
I'd reference another area of gene therapy. There's a couple of companies focused on a few rare diseases. One of them being a company focused on do Duchenne muscular dystrophy. This is a really terrible disease that impacts many many patients throughout the world mainly Kids, and there's a few companies investing in the space that we're on the cusp of potentially curing or at least altering the course of the disease for these patients so kids that wouldn't be able to walk by their 10th birthday are now up playing baseball jumping on trampolines. And so while we're still very early and all of this process the promise of this Innovation and bringing these new medicines to Market is really we're right on the doorstep of being able to do that in a more widespread basis and tying that together with the funding, investors are funding the space, too really push the envelope here. So you're seeing a huge wave of innovation that continues to come so it's a very exciting time to be following the space and to be an investor in the space and really help these companies usher in new ways to treat disease and help people
Jeff: Great. All right, Brad Charles CES, I've been there. It's always a good time. What kind of things you see? I think we've got some pictures to show the viewing audience today and we can kind of go through and maybe tell some stories that probably people aren't aware of. I think we start with John Deere. What is what is John Deere doing it the Consumer Electronics Show.
Brad: Yeah. I mean, I think if you think about consumer electronics, you don't really think about seeing a huge combine in the in the exhibit halls. But I mean, if you look at the history of innovation that's happened some of the things that guys like a John Deere have done in terms of autonomous vehicles in terms of combines, tractors, all of those things have been very very leading Edge and very practical and have been at work in fields for a long long time. So this year, you know seeing John Deere at the consumer electronic show what they're also showing now is some technology that they've acquired that can that is basically using both machine learning and computer vision technology. That would be attached effectively to the back of a boom or something like that is you're spraying a field. So the ability then to selectively identify types of weeds that are in the field and then selectively treat them with herbicides. And so depending on what type of weed that is in the amount that you would need what's happened over time as you started to see some of these weeds develop immunity to relative amounts of weed killer. And so now what you're able to do is selectively then identify, treat and then on the back end of that also then capture another image to verify what you've done so there's also data being created for that. So then you'll know the density of weeds in your field all those things. So then on the front end when you replant or Retreat up front, you can then adjust that. So there's a lot of knowledge that's being built there, but it's also a productivity enhancer and if you think about the environment to sometimes you can cut by eighty ninety percent the amount of chemical you're putting in a field as you're doing this because selectively you're only putting it on the weeds where you need to you're not broadly spraying it. So there's a promise of better environmental better productive saving money and more effective treatment. And so that's the promise of innovation and that's something those are the types of things that we see, you know, as technology starts in different areas. It starts to move across but this is an example outside of what you would normally think about it a Consumer Electronics Show, but one that's very practical and one that that I think as you look over time is great for the farmer. It's great for kind of everyone and improves the returns obviously for a somebody like a John Deere as well.
Jeff: How much money can Farmers save here Charles?
Charles: Yeah, we I think when we had some of the management of these companies come through they had this example of a farmer in Arkansas, but this went from 300,000 down at $30,000. And so I think it's got real economic implications where farmers can increase their returns. And so we see this when you when you just think of the semiconductor of the software space we see this across multiple Industries, not only Gages, you know, the healthcare but also consumer and Industrial and one of the things that I'm sure we'll talk about is this this notion of edge Computing and so far the world is taken everything and put them in Amazon, Azure and Google compute in the big cloud infrastructure and now because it's moving to Industrial and consumer and health care. A lot of these companies are realizing that they cannot back haul a lot of this compute and data back to the cloud.
And so now they're coming to software and semiconductor companies and saying we got to put a lot of this stuff out there in the field and can you help us figure this stuff out? And so what's happening is you've got customers like Rockwell Collins and Siemens and GE coming to sell semiconductor companies and saying Help Us figure this data out and in the past you had a factory floor that was just you know machines that were not connected and now you've got them connected to this this come the upcoming 5G networks and because of that they've got you know they've got data they've got voice they've got images and they got to process that and so now you have companies like Nvidia and Intel selling the microprocessors and gpus you've got the analog company selling them components that act as an interface between the real world and the digital world. And so this industry that used to be just PCS or smartphones now, it's PCS and smartphones and Industrial and auto and so many different verticals that are getting impacted. And so I think it's you see this Innovation happening across not just one and Market but across multiple and markets
Jeff: That's a big part of the cost of them automobile today. And it especially this type of automobile mm electronic vehicle. Would you see at the show regarding these things?
Charles: Yes, the one I'm sure Brad talk about a lot of the Ed and the Ada is but some of the more near term impact that you see is Intel acquired this company called mobile eye and there are a few of the Acquisitions in the space one of the things if you look at the regular mirrors and a car now, it used to be just a mirror and now you've got you'll see them up in the screen and in a bit they've just got multiple cameras in them and you've got so if you have a high-end car, you've got close to six or seven different cameras that can zoom up above the car, it can stitch an image 360 Degrees around the car and tell you if there's a collision if there's someone next to the car for security purposes. So there's also the automotive that we think of is going to change fundamentally and so in 10 years, maybe the autonomous car is going to be an extremely important, you know change in how we get from point A to point B, but in the near term just in terms of you know, when you reverse if you've got a teenager who's only driving a car and he's reversing it has automatic braking you've got a rear view mirrors that are going to have you know different ways of looking at you know, what's around the car there are lots of incremental Innovations happening and that's being driven by a lot of silicon and Machine Vision and a I getting into the car today and I think to
Brad: I think as you look at what's happened and having been going to the Consumer Electronics Show for a number of years as what's evolved in the auto market, I think one of the things that you see is really this electronification of the car so you look at things like networking you're taking a lot of weight out of the car because you're putting high-speed cables inside the car. So we're really seeing over the last couple years some of these things that were call it, you know demonstrations or future concept vehicles now going to real Vehicles the vehicle you saw on the on the screen earlier the Mercedes vehicle, which is a fully electric vehicle. That's the other part that you're going to see I think as you go forward is that you're going to start to see real progress in electric vehicles. I think all of us know obviously Tesla has been the leader in the space, but I think you know, you're going to see companies like a Mercedes like a BMW like some of the more mainstream companies really coming with, you know, anywhere from 2 to 10 available vehicles that are all fully electric and when you do that, you also add a lot of content and Innovation inside the car and also creates a lot more ability to do different things from point to point or other types of vehicles and business models that we haven't really thought about in the past. So I think this idea of bringing new types of capabilities into the car is really starting to accelerate and pull in the idea of a smartphone and that you would drive a smartphone around I think the kind of to Charles comment the this whole idea of autonomous vehicle is probably you know, it's a ways away in terms of fully autonomous. I think we got to get past a lot of hurdles there. But the promise of that is very real and I think that's something that we're seeing that Evolution happen each and every year and it's there's a lot of these capabilities that are becoming real that we're going to see on a go-forward basis.
Charles: So this has real implications of society in general if you've got a hundred million cars being built every year and just in the United States, you've got 35,000 people that died on the roads every year. So that's a hundred people a day and so with autonomous cars with all these safety features if you can bring down that death rate, I think that's huge for society. You talk about just spacing and highways a between, you know, someone driving slow drum and running fast and when you get a DOT on this cause then suddenly your highways become a lot less congested with 5G when that does launch they'll have car to car communication. And so then at some point you must surely don't even need signals had roads and so there's just lots of implications that impact Society at large and for the industry, if you're talking about a thousand dollars per car or $500 per car and semiconductor content that's you talking about a fifty to a hundred billion dollar Tam, which was not there a decade ago. So it's real and I think every year that goes by we'll see a lot more innovation in the space.
Brad: Yeah. I mean, I think as you think about semiconductors is a big piece that if you think about all of the Innovation that's happening in the past right with the PC with mainframes with data centers all of these things ultimately driven by silicon. And that's the enabler and I think the picture you see on your screen right now is of the trunk of a car that shows an Nvidia drive system that that is the brains and ultimately a server behind that autonomous capability. And so that goes back to the conversation. We're having earlier about Gages space in terms of that compute power enabling a lot of different applications. Whether it's John Deere in the field, whether it's autonomous vehicles could be large semis, you know that are delivering product from Terminal 2 Terminal or biotech companies doing research there at ultimately comes back to that silicon and we've made so much progress in those capabilities over the last, you know decade or so that it really is starting to show up and some pretty exciting things. And we also have drones that don't really look like drones anymore. We're finding some practical application. It's not just for my front yard go to a Are there we go? What's this used for Charles?
Charles: Yes, you know the one so at Waddell a bunch of us do go for this conference every year and the one interesting thing is every year you see incremental changes the conference. And so maybe three years ago you had these toys running around flying around the conference is an entire floor. And that was all there was you are DJI and a bunch of other companies and what's interesting is every year that's gone by you see them getting bigger and you see them carrying heavier loads and so one of the things with technology is every single year. It just drives a lot more cost out of the system and it and it the value that creates is it goes up a lot. And so three years ago. You had some guy running a drone and taking pictures and today this the two pictures you see on the screen one is it's used by the police in the Middle East or he can actually fly on this thing. It's a the constraint now is the battery size because it only allows it to go up for it for an hour, but the other next picture you see is by Bell helicopters and this is not 2050 or something and two years. They're going to have that commercial where they can take about 25 or 30 people. And so we've seen this happen with silicon. We've seen it happen with LED with solar power. And so it drones you can instead of having propulsion BAE Systems. You can have electric vehicle battery based systems. And so I think it's interesting now next year. I bet you'll have maybe a bunch of these that are about to go commercial and different ways to get from point A to point B. The other incremental I would say is I think last year you just had a bunch of you know, headsets that people hadn't staged and today when we went this time. You had the headsets for sure, but there was just so much gaming content, you know, you have this one Contraption which strap people onto the server motor and they put a VR headset and it creates a virtual reality of a high-speed chase over the Chinese Great Wall and it flips them 360 degrees and it and so and there were just hundreds of these games. And so when we talk about, you know, AR & BR are you can see the consumers gaming experience about a change pretty dramatically in the last few years.
Jeff: So Gage work. I mean, I know you're excited about the space about Healthcare biotech After going to this conference, I mean did it did it change your views the way you're looking at the world at all that a generate more excitement that it just kind of concrete your views.
Gage: I think I started at the outset saying there was a lot of enthusiasm from these companies and at large there were very few negative cited across the space. So I'd say my learnings are incremental and it just solidified my view of the opportunities to invest in this space one on the Innovation front and the fact that there's so much more that these companies can do and create to help people but I think it also bolstered my view around just the healthcare as an industry overall as an attractive investment space. I mean a couple of stats to think about today just in the US Healthcare represents 22% of GDP. I mean, that's a massive number and that number is continuing to grow another interesting statistic that I'll borrow from someone who was up on stage at the conference was each day. There's 10,000 new patients that qualify for Medicare. Right? And in the Aging demographics is not just a phenomenon exclusive to the US that's helped that's happening in developed markets around the world and even Emerging Markets like China are experiencing that as well. So as people age they consume more they consume or Healthcare that means more medicines they need to take and so that Outlook that space just the it has so many components in place that make it ripe for finding new investment opportunities. So I'm really excited. I learned a lot at the conference and I'll definitely carry that forward and my process.
Jeff: Okay. Let me throw a little water on your fire here. We've got an election cycle coming up. I think you mentioned Healthcare represents 22% of GDP. Was that the number yeah cost prescription drug cost. It's going to be a big issue Brad manages a portfolio that didn't invest a lot in technology and Healthcare he comes to you and says, you know, what do you tell Brad about that kind of risk?
Gage: Yeah. So the word risk is really what's key to focus on. I think while there is a lot of innovation what comes with Innovation as competition. So you always have to be mindful of that risk when in your investing and cutting-edge areas like biotechnology, but a part of that risk, as you mentioned is the price it's not cheap to do these to do the to fund this R&D to come out with these breakthroughs. So with an election cycle, we're on the eve of an election cycle. I was reading in the paper today that the first presidential debate happens in six months and what you've already seen is the Democrats who are FrontRunners for that nomination talking about welfare for all so medicare-for-all is the moniker that some of them are running on. So I think the rhetoric the tone and the focus on Health Care cost rising and how the country and countries around the world deal with that I think is one that's very important to pay attention to so the way I think about it is it's one of many risk factors. We need to consider when were investing our clients money and it's a risk factor that I believe is increasing as we move forward throughout the election cycle, but also just practically the costs and the number of people that are going to consume Healthcare is going up. So we need to find a real balance there about how to bring these Innovative medicines to Market that I mentioned but also find a way to pay for it. So I think Now's the Time that these conversations become a reality and there's real changes that happen through the Health Care system. So it's a risk factor that that we monitor that we pay attention to and it's one that we consider in any investment we make so it's top of mind for us and will continue to manage that risk as we go forward.
Brad: I mean, I think one of the things that really has been scrutinized recently has been this idea of price increases for the sake of pricing increases, you saw the rhetoric really pick up out of out of trump and then you actually saw the company's react a little bit and pull back a little bit on these price increases. So there's kind of a self-reinforcing mechanism there a little bit so but when there are novel therapies to what Gage was really referring to when you start to think about biotech drugs that are altering an entire life that may be where our Healthcare System would spend millions and millions of dollars and you're able to you know, admit a single Gene editing therapy that then changes that patients life first and foremost, but also saves the system enormous amount of money when you have Innovative therapies like that we want to pay for those the FDA is going to want to see those therapies coming to Market and we need to incentivize that kind of innovation. So I do believe that if you think pragmatically about the space there are areas where there should be price deflation right where you have long-lived drugs and you know there were some things going on where people were cornering the market on drugs. I mean that's absolutely wrong. Right. Those are the types of things that we want to do away with and the add cost to the system but the ones with that are Innovative that really alter not only quality of life, but also alter the cost curves. I mean, it's great from an economic standpoint as well. And those are the types of therapies that as we sit down and analyze new biotech companies and new biotech opportunities. Those are the ones that were looking for that say Hey, this can be a win across the healthcare system and also Grant big returns to investors now, obviously as Gage said getting through Phase 1, Phase 2, phase 3, all those trials is challenging, but at the same time that's kind of what we do on a daily basis is really scrutinize that and such that we can then continue to push to find ideas to put into our portfolios that makes sense from an economic standpoint and to see good returns for our investors.
Jeff: you had a great story around technology semiconductor content going up etcetera etcetera. And I think that's widely believed or our stocks telling us the happy story right now.
Charles: And yeah, so with the technology stocks in general, I think they're quite a few crosscurrents, you know, there's cyclical concerns. There are definitely concerns around the ongoing Chinese and US trade War you've got concerns in some parts of Europe that are slowing down but I think these are just Ebbs and flows in the market and you know, if you can have a long-term investment Horizon then some of these companies they've got very well-placed IP. They've got good modes. They've got good free cash flow profiles. And so if you can find the right companies, I think you will benefit in the long run and that's what we try to do is, you know, I think predicting the next quarter is extremely hard and then we also look at it from a very Global lens and that's one of the one of the things you see at CES where
It's not a very Eurocentric, you know, you've got the Chinese the Taiwanese the Japanese the Koreans and they've got just huge boots and a lots of innovation and that's happening, you know, globally and so we try to look at companies not just in the US, but if we can find a good investment thesis in in Korea or in China, then we try to perceive those. So soon the near term, of course, you do see crosscurrents. We're hoping it, you know, it gets resolved and Common Sense prevails and then in the long run, I think the return profiles for some of these companies are very attractive.
Jeff: Yeah, we're talking about it this morning tsmc came out and did not offer good guidance at all, but the market actually reacted fairly positive. So maybe we're at a point where we're pricing a lot of this in right now, so it's a good okay. We've got a few questions if you've got a question again, go ahead and enter and we'll try to get to it.
It's about self-driving trucks how far away we are from actually seeing those on the road?
Brad: I would say that right now. We have self-driving trucks on the road. Right? I mean we've seen a lot of tests that are ongoing where you see semis or 18 wheelers on the on the road and I think actually that's one of the more simple problems to solve actually if you think about it, you're going from a point call it one terminal to another terminal across what is likely the same route continuously go back one way and back the other so really it's one of the most simple things. I mean you think about a giant truck autonomous sounds kind of scary but truly from an algorithmic and thinking about the ability to do that and facilitate. You got to think about different kinds of weather time of day all of those types of things. But at the same time that problem is very solvable so you actually have the capability to do that now and then it's a matter of building the infrastructure around it. It's about getting the approval to do it both at a federal state level, comfort with those types of things. So there's all of that capability is there now it's just a matter I think of time in the evolution of that and then ultimately you would just have someone that has to control it at the front and at the back end and you can imagine you end up with a control room where you have an operator rather than having a truck driver and all these trucks may have 10 different screens of 10 different autonomous trucks that that are being monitored all at the same time. So that technology is very real. It's happening right now. I think it's a matter of I mean years before you see things like that, but I would say the technology is largely there in terms of the ability to do things like that.
Charles: And one of the things I would add is, you know, so the audience can go to YouTube and just plug in platooning and that's you know, a technology where you can they still require a human driver for one of the trucks and then he's got six trucks behind him a three trucks behind him and they just follow him at an exact distance for hundreds of miles and it saves you fuel. It saves you on the additional truck drivers and so it's you have that today and I think it just gets to Brad's point. It gets more and more sophisticated and the ultimate point will be when the human is removed. But then you get those you retain those truck drivers and they monitoring the, you know, the movement of all these trucks and so I think it's happening today.
Jeff: Okay. We have a question again to you Charles 5G what companies benefit from 5G deployment?
Charles: Yes so5g is starting this year and the Cadence of countries would be you know, Japan and Korea tend to be leaders in this there. They're already deploying it u.s. Is not far behind Verizon and AT&T have already started their roadmaps and China's not far behind with Europe being the last and so every, you know, every six to eight years you have these new technologies coming in and with 5G, of course, you can have lower latency you're going to have higher throughput and so it's going to facilitate a lot of things like AR and VR and one of the one of the other areas is going to be industrial where they have this concept called Network slicing where you can have one network for the you know for the First Responders. You can have one network for very high security industrial applications. You can have one network for all our cell phones. And so you have a host of companies that that can benefit from this as long as they have good IP and products, you know in the infrastructure food chain, you've got companies like Ericsson and Nokia in the handset space, you've got companies like Qualcomm, you know that could that could benefit is so as long as people have good products and good pricing as 5G ramps. I think you're going to have a bunch of companies that benefit from this and this will be a 2 3 year cycle Okay Age.
Jeff: Somebody would like to know the difference between cell therapy and gene therapy and how to treatments vary with those two.
Gage: Yeah. So I think the simplest way to explain it as cell therapy is taking cells out of the body altering those cells adding or subtracting certain elements to them. The example I gave is you trained the cells to do something once they're pulled out of the body to go in and fight that cancer and this case when they go back in the body. So Cell Therapy the way it exists today in the approved treatments are take cells out alter them put them back in the patient's body and let them go to work gene. Therapy is different that's referred to as in Vivo. So what you're doing is taking a medicine that's already been engineered and putting it into the body one time and at that point the cells that are in the in the medicine go to work in the body and actually go into the cells they're intended to and alter those genes to the desired effect or intent of that therapy. So while they're very similar and there's a lot of overlap and the Technologies you need to enable and bring both those products to Market are very similar the approaches and the type of diseases. There are treating our different today. But I think big picture both of these types of ways to treat disease are very similar and we're going to see more derivations kind of from that as we go forward.
Jeff: I knew we'd get one of these questions on here with Healthcare CBD treatment pain management real what companies benefit from that?
Gage: Yeah. So it is real despite the sort of cultural or ideological views that that take hold and people have visceral responses to this the fact that matter is the FDA approved the first CBD derived product last year GW Pharma is the name of the company that's bringing this to Market. It treats several forms of rare epilepsy and the clinical data that this company was able to show from doing studies across a number of Children's and adults was quite impressive. So if you take away the stigma of kind of where these active ingredients come from, you know, there's real therapeutic benefit therapeutic benefit real medical benefit that people get from pursuing, you know, this new way to treat disease. So again, it's technology that's enabled these companies to actually figure out that you know out there and plants there's new ways new active ingredients that you can go ahead and put in the body and really help people. So it's real it's sold today in the United States and there's a whole pipeline behind that of additional products that are in take advantage of what that compound has to offer.
Jeff: I think it might even be legal in Kansas today. So that's saying something which we live in Kansas by the way, so
One more question. We're running a little long on time. But I know it's a really important area going forward for technology and that's Robotics and Automation and the companies that are their leaders there.
Charles: Yeah, so I think Robotics and the big change I feel with this spaces a lot of the machines couldn't see or hear before and now we're giving them the ability to see and understand the world around them and that makes a huge amount of difference and so on a factory floor when you think about it, you know, it's a dangerous work environment. There's lots of heavy machinery and you suddenly put so companies like cognex, kean's when they have these robots that can see and understand the world around them. It makes the workers lives a lot more safer. It makes the factory floor a lot more safer and more productive. And so I think this is here to stay and then you combine it with things like Brad's talked about with you know, with the with silicon becoming a lot more important with with laser Technologies combined with these two you certainly have a lot more productivity out of existing assets. And so it's an it's an early stages and you've got Silicon Valley which is throwing a lot of
Capital behind it and they try to attack the problem in very different ways. But I think the consumer aspect is might be a bit far off but in industrial it's being used today. It's you know companies like eons have been doing it for a very long time and I think and I think the amount and and it's real in the sense that it improves the returns for not that much incremental investment. And so so it's going to start in industrial they're going to you know, they're going to stress this that model whether companies like Google or Facebook or tencent can come out with consumer robotics that takes a lot more time because you have something which is called strong AI wear today. If you go talk to the robot, you know, you can program it to understand 10 questions, but you go ask him about you know, some random question. It won't know how to respond because the eye is just not that sophisticated today with the in the industrial space. You've got ten Specific Instructions for it. And so and that's why I feel in the in the industrial
Locations it's it's there today. It's going to keep growing in the consumer space. It might be a bit longer.
Okay, one final thought and we've been talking, you know broadly about Innovation today Healthcare technology. Are there any other to better growth sectors out there for the next 15 years?
You know, I mean if I look across the excitement of what is happening in the space obviously having a personal bias to it given that's where we focus from a from a portfolio standpoint. It's hard to find some and all but obviously the Technologies are going across other sectors as well. I mean, you can extrapolate the what's happening in technology to things in the industrial space that Charles spoke to that are happening in energy right energy exploration. You think about the fracking Technologies or other things like that that that largely became possible because of vision and other things that you did in that equipment. So I think of the things that are happening Technologies driving all these things but height Healthcare I think is one that's going to see massive change and I think Gage mentioned early on cancer and we look at the Cancer therapies and what's happening in the pipeline there and and and the impact that that's had I think in all of our lives right and people that we've known and that that's an extremely exciting.
Thing where their breakthrough Technologies happening every single day. So I would say yes technology and Healthcare are probably the two most exciting and in my book, but I would say if you step back and look at it. It's really a very broad impact that these things are having across the across the globe. All right, but that thank you guys very much is interesting conversation. I always like to hear about these new Innovative techniques that are happening. Thanks again.
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