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VERY EXPENSIVE DRUG. HOW DOES THIS POTENTIAL DISCOUNT MAKE THE DRUG MORE AFFORDABLE? >> IT HAS ALWAYS BEEN AFFORDABLE. SCARLET: AFTER THE 5000% INCREASE? >> YES. SCARLET: CAN YOU EXPLAIN IT AGAIN? >> N I GAVE INTERVIEWS ON THISO, SUBJECT. IT'S AVAILABLE TO EVERY CUSTOMER THAT NEEDS IT. ALIX: WHAT YOU FEEL THERE IS SO MUCH OUTCRY? WHY DID YOU FEEL YOU GOT SO MUCH HEAT? IT STARTED THE DRUG PRICING CONVERSATION WASHINGTON AS WELL. >> I THINK POSSIBLE CUSTOMERS NEEDED A LOWER PRICE. THE CUSTOMERS WHO CAN GET THE PRODUCT CONFORMITY'S DEBT FROM PHARMACIES HAVE NO ISSUES. >> MARTIN SPOKE TO THE UNIVERSITY IN ATLANTA. THEY SAID LAST YEAR, BEFORE YOU GUYS RELEASE THE DRUG, THEY WERE SPENDING $18,000 PER YEAR TO STOCK 14 BOTTLES WHICH IS THE VOLUME THEY NEED. THIS IS FOR ACUTE CASES. THEY SAID THEY BUDGETED FOR THIS YEAR FOR OVER $1 MILLION BECAUSE THE PRICE INCREASED. THAT WILL COME DOWN WITH SOME OF THE DISCOUNTS YOU WILL BE OFFERING. FROM TALKING TO OTHER HOSPITALS, IT SEEMS THESE GUYS WERE ALREADY NEGOTIATING SOME DISCOUNTS FROM THE LIST PRICE THROUGH THOSE PURCHASERS OR AT THEIR SUPPLY POWER. WHO WILL END UP GETTING THESE DISCOUNTS? HOW MUCH WILL THEY BE? THERE IS INFORMATION THE PRESS RELEASE AND WE TRIED TO GET INFORMATION YESTERDAY AND WERE NOT ABLE TO ABOUT A REDUCTION IN THE LIST PRICE THAT WOULD NOT TRANSLATE INTO A BENEFIT TO PATIENTS. I'M STRUGGLING TO UNDERSTAND WHO WILL GET THESE DISCOUNTS OR IF THIS IS GOING TO BE HOSPITALS ATTENTION -- ATTENDING TO NEGOTIATE. >> HIGH-VOLUME HOSPITALS WILL BE ABLE TO GET DISCOUNTS OF UP TO 50%. THAT'S THE BURDEN OF THE HIGH COST. >> WHAT ABOUT OTHER HOSPITALS? MAYBE THEY ONLY SEE A HANDFUL OF PATIENTS A YEAR? >> IT'S A VERY RARE DISEASE SO TO STOCK A 100 COUNT BOTTLE'S EXPENSES AND WE HAD MADE A 30 COUNT BOTTLE WHICH WILL BE MORE AFFORDABLE. LESS PILLS, LESS PRICE. THAT WILL BE HELPFUL TO THESE PATIENTS. ALIX: HOW MANY HOSPITALS HAVE YOU BEEN TALKING TO? >> WE ARE TRYING TO FOCUS ON THE TOP 800 HOSPITALS IN THE COUNTRY AND WILL GO TO THE NEXT YEAR DOING THAT. SCARLET: YOU HAVE SAID NO PATIENT NEEDING THIS DRUG WOULD BE DENIED ACCESS. HOW CAN YOU ENSURE THAT? >> THE SAME WAY EVERY OTHER DRUG COMPANY DOES, SOME OF IT IS GIVEN AWAY FOR ONE DOLLAR. I HAVE SAID THAT MANY TIMES. >> YOU TALK ABOUT THE PATIENT ACCESS PROGRAMS AND PHYSICIAN TO GIVE YOU CREDIT FOR SOME OF THE THINGS YOU HAVE BEEN DOING. IT BEGS THE QUESTION -- ARE COMMERCIAL PAYERS GET THIS? ARE PEOPLE WHO NEED THIS GETTING REIMBURSED AND WILL THEY HAVE ACCESS TO THESE DISCOUNTS OR IS IT JUST SO HOSPITALS CAN SUCK MORE EASILY? >> I'M NOT SURE HE UNDERSTAND YOUR QUESTION. THE GOAL OF OUR SYSTEM IS THAT NO PATIENT IS LEFT BEHIND. 60% OF OUR DRUGS ARE GIVEN AWAY FOR ONE DOLLARS. . THERE ARE OTHER SAFETY NETS AND IS FURTHER PRICE REDUCTION WILL HELP EVEN MORE FOR HOSPITALS WHO HAVE DIFFICULTY STOCKING HIGH VOLUMES. >> WHEN YOU'RE DEALING WITH THE PATIENT PAYING PREMIUMS AND THEIR INSURANCE COMPANY HAS TO PAY HUNDREDS OF THOUSANDS OF DOLLARS FOR THIS DRUG, THAT AFFECTS WHAT THAT PATIENT ANOTHER PATIENTS WILL PAY. >> YOU'RE DEAD WRONG, IT IS ONE OF THE STRONGEST DISHES ONE OF THE SMALLEST DRUGS IN THE PHARMACEUTICAL >> MARKET. IT HAS AN EFFECT ON WHAT PATIENTS PAY. >> IT'S A $500 BILLION SYSTEM. IT DOES NOT AFFECT THE SYSTEM AT ALL. >> BECAUSE IT'S SUCH A SMALL DRUG, YOU GUYS CAN DO THIS AND WHO CARES? IS JUST ICING ON THE CAKE? >> YOU HAVE TO TAKE INTO PERSPECTIVE THE REALITY OF THE SITUATION. IT SOUNDS LIKE YOU ARE DISTORTING IT. THIS DRUG IS SO TINY. >> WHAT IF EVERYBODY DID WHAT YOU ARE DOING NOW? >> THAT'S NOT POSSIBLE. SCARLET: WHAT IS THE MOST EFFECTIVE WAY OF KEEPING PATIENTS'OUT-OF-POCKET FENCES LOW? >> INSURANCE. SCARLET: THE WAY IT IS NOW? >> ABSOLUTELY, IT RENDERS CO-PAY AT A LIMITED PRICE AND THE AFFORDABLE CARE ACT RENDERS CO-PAYS ADEQUATELY LOW PRICES. ALIX: SOMETHING BECAME A IN THE NEWS TODAY -- YOU AND OTHER INVESTORS BOUGHT A 70% STAKE INCALABOSOS WHICH I BEEN LEFT FOR DRAGON THE DRUGS WEREN'T WORKING AND PEOPLE DID NOT THINK THERE WAS PROMISED. WHAT DID YOU SEE IN A COMPANY THAT OTHER PEOPLE WERE MISSING QUESTION MARK >> WE ACQUIRED A MAJORITY OF CAL WHICH IS A PUBLICOBIOS GLEE TRADED COMPANY. THE TRIALS ARE STARTING RIGHT NOW FOR THEIR DRUG AND WE ARE EXCITED AND HOPEFULLY THE PATIENT TO HAVE THIS TERRIBLE, FATAL DISEASE WILL GET BETTER. WE WILL KNOW IN THE FIRST OR SECOND QUARTER IF THE TRIAL WORKS. ALIX: WHAT DO YOU FEEL YOU SAW THAT PEOPLE DIDN'T. IT SEEMS THEY HAVE BEEN STRUGGLING FOR A WHILE AND THERE MANY DIFFERENT WAYS YOU COULD HAVE INVESTED IN THE COMPANY. YOU MIGHT HAVE WAITED UNTIL THEY WENT INTO BANKRUPTCY. WHY DID YOU GO ABOUT IT IN THIS WAY? >> WE COULD NOT GET THE COMPANY TO CALL US BACK WHICH WAS UNUSUAL. WE SEE THIS IN CORPORATE AMERICA. THERE'S A LOT OF IRRESPONSIBILITY ESPECIALLY IN HEALTH CARE MANAGEMENT TEAMS IN CORPORATE AMERICA SO HE BOUGHT THE COMPANY ON THE OPEN MARKET OURSELVES. WE NAMED OURSELVES THE NEW MANAGEMENT AND THE COMPANY NOW HAS THE CASH TO DO THIS CLINICAL TRIAL COULD -- THAT COULD BE HIS LIFE-SAVING DRUG FOR CANCER PATIENTS. THE STOCK MARKET IS INNOVATION. THERE ARE DRUGS THAT WERE GIVEN AWAY FOR $1 MILLION AND SOLD FOR $20 BILLION A HANDFUL OF YEARS LATER. THIS HAPPENS ALL THE TIME AND I THINK IT WILL BE EIGHT PROMISING DRUG. SCARLET: YOU PLAN TO OPERATE THESE AS SEPARATE COMPANIES. >> THAT'S RIGHT. 2 ARE THERE NO SYNERGIES DOWN THE ROAD. >> MAYBE DOWN THE ROAD BUT WE ARE FOCUSED ON THREE YEAR SURVIVAL DRUGS WHICH ARE 20%. THERE IS NO FDA DRUG LIKE WHAT WE ARE LOOKING FOR. >> YOU HAVE A 70% STAKE IN THE COMPANY? ARE YOU TRADING ADDITIONALLY OR ACQUIRING MORE SHARES QUESTION ? >> KENNY TRADING ON THAT STOCK WOULD HAVE TO BE REVEALED IN 24 HOURS A YOU WILL KNOW. THERE IS SECTION 16 BE OF THE SEC ACT THAT YOU CANNOT SELL A STOCK WITHIN SIX MONTHS AFTER ACQUIRING MORE THAN A 10% STAKE WITHOUT DIEBOLD IN PROFITS. WITHOUT DIVULGING PROFITS. ALIX: WE SAW OF PROBLEMS OF ION TRAIT. SCARLET: HOW COULD SHORTS HAVE DRIVEN UP THE SHARE PRICE QUESTION MARK >> I DON'T PAY ATTENTION TO THE STOCK MARKET. WE HAVE TO MAKE SURE THIS DRUG GETS DEVELOPED. JMML AND CMMML HAS A LOT OF PROMISE. GLAXOSMITHKLINE BOUGHT A SIMILAR DRUG. I GOT PAID TO BUY THIS AND THERE IS MORE CASH IN THE COMPANY THAN THE PRICE I PAID. I'M LOOKING FORWARD TO THE FUTURE OF THIS MEDICINE. ALIX: IT SEEMS LIKE THE CHATTER AFTER THE FILING CAME OUT IS THAT THIS COULD BE A REVERSE MERGER. >> I DON'T SEE A REASON OR NEED TO REVERSE MERGE TURING. VERY FEW PEOPLE HAVE FOCUSED ON IS DRUG AND NO ONE'S ASKED ME WHY I DID THIS. WHY DO YOU THINK IT'S WORTH SO MUCH MORE THAN WHAT YOU PAY FOR IT? IT'S NOT A STOCK MARKET GAME OR TRICK. THIS IS ABOUT DYING PATIENTS IN A DRUG THAT CAN WORK FOR THOSE PATIENTS.0 TURING IS DOING GREAT AND CAN IPO ANYTIME IT WANTS. WE ARE FOCUSED ON CREATING VALUE. KALABIOS, I EXPECT WE CAN ANNOUNCE AN ACQUISITION FOR THEM TO ACQUIRE NEW PRODUCT BY THE END OF THIS YEAR. . WE ARE IN TALKS WITH THREE SEPARATE ACQUISITIONS THAT CAN CREATE MORE VALUE. SCARLET: WOULD THIS BE DRUGS FOR COMMON OR RARE DISEASES? >> PROBABLY RARE DISEASES. 2 OF THEM ARE NOT FDA APPROVED AND ONE IS. THEY ARE PROGRESSING RAPIDLY IN COULD BE GREAT FITS. SCARLET: WHEN IT COMES TO THE COMMERCIAL PROSPECTS OF A DRUG, WAY SKILL NOT AN ADVANTAGE? >> IT IS BUT AT THE END OF THE DAY, THESE ARE TWO SEPARATE COMPANIES. I ASSUME THAT'S WHAT YOU'RE REFERRING TO. SCARLET: YOU'RE GOING AFTER MEDICINES THAT TREAT RARE DISEASES. >> YEAH, WE KNOW OTHER COMPANIES HAVE DONE REMARKABLY WELL WITH RARE DISEASE DRUGS BECAUSE THEY ARE VERY EXPENSIVE AND RARELY USED. THESE ARE NOT DRUGS THAT MAKE UP THE BULK OF PHARMACEUTICAL REVENUE BUT THEY CAN STILL BE BLOCKBUSTERS AND THEY ARE IMPORTANT TO THE PATIENTS WHO NEED THESE MEDICINES HAVE TO BE HIGH PRICE FOR THERE IS NOT ENOUGH VOLUME TO MAKE UP A REVENUE. THERE IS NO INTEREST IN DRUG MAKERS TO SELL THESE DRUGS FOR A HANDFUL OF PEOPLE. >> THE FOLKS WHO PREVIOUSLY OWNED THIS DRUG, WHAT DID THEY FAIL TO SEE? WHY DID IT FAIL SO BADLY WITH THEM? >> THAT'S A GREAT QUESTION. I THINK IT'S CREDIBILITY AND TRUSTWORTHINESS. THEY TRIED AND OTHER DISEASES AND THEY FAILED IN THE THIRD ATTEMPT, IF YOU ASK INVESTED TO FIND ANOTHER PROGRAM, IT WILL NOT BE RECEIVED WELL. WHEN WE CAME IN WITH FRESH N FRESH IDEAS AND SAID WE SUPPORT THIS AND INVESTORS IN MY LAST TWO COMPANIES KNOW MY TRACK RECORD WHICH IS GOOD, I THINK WE WILL BE SUCCESSFUL. ALIX: YOU MENTIONED OTHER POTENTIAL AND MENDE DEALS? -- AND MANY DEALS? M&A DEALS. >> R&D IS THE GREATEST RETURN. I AM NOT A ONE TRICK PONY. RAISING DRUG PRICES OF GREAT WAY TO MAKE RETURNS FOR INVESTORS BUT A BETTER WAY IS TO DEVELOP NOVEL DRUGS FOR VERY SICK PATIENTS THAT DON'T HAVE ANY CHOICES AND THAT'S WHAT WE DO. SCARLET: JUST TO WRAP THINGS UP, FOR THE DEMOCRATIC PRESIDENTIAL CANDIDATE, THEY ARE LOOKING AT A CONTROVERSIAL PRICING OF DRUGS. WHAT WOULD YOU SAY TO THEM AND WHAT DON'T THEY UNDERSTAND? >> THEY UNDERSTAND THAT PEOPLE LIKE ME HAVE TO TAKE HUGE RISKS. WE NEED ANOTHER $100 MILLION THAT I WILL GIVE TO THEM SO WE CAN DEVELOP CERTAIN DRUGS. PEOPLE WITHCMML HAVE NO HOPE SO THE SYSTEM THESE THE ABILITY TO SAY THAT ONLY 3000 PEOPLE MIGHT COST US AND IT COSTS $100,000 FOR ME TO WANT TO RISK THAT MONEY OR I WOULD INVEST IN SOMETHING ELSE. THERE HAS TO BE AN INCENTIVE FOR DRUGMAKERS TO DO THIS EXPENSIVE RESEARCH. OTHERWISE, I WOULD NOT HAVE RESCUED THE COMPANY. ALIX: THANK YOU SO MUCH. SCARLET: WE'VE GOT MORE COMING