Motley Fool Money: Business Plans and Science Projects
Release Date: May 14, 2025
Hosts: Mary Long, Matt, Ricky Mulvey
Guest: Dr. Silvio Otescu, Founder and CEO of Mesoblast
1. Market Overview: The S&P 500's Wild Ride
Mary Long opens the episode by addressing the fluctuating performance of the S&P 500 since the beginning of the year. Highlighting its varied performance across different time windows, she states:
"From five years ago today, the S&P 500 is up 105% from January 1st of this year. It's effectively flat from April 2nd, aka Liberation Day, it's up about 4%. And from April 8th, which is when the market had touched into bear market territory, it's up over 18%. [00:56]
Matt emphasizes the importance of a long-term perspective, pointing out that despite macroeconomic challenges such as the COVID-19 pandemic and tariffs, the market has shown resilience:
"Over the long term, the stock market has been up and to the right trajectory. And I would expect that to continue here into the future. And it's a great reminder that even though when you're going through all those macro uncertainties in real time, they seem really important over the long term, not as important as they seem when you're going through them. [02:56]
Mary adds that uncertainty remains a constant in the market, noting the slight cooling of inflation to 2.3% and questioning whether a "soft landing" has been achieved:
"We have gotten the soft landing that we've been teased, teased about for the past several years? [03:46]
Matt responds cautiously, suggesting that it's too early to draw definitive conclusions but remains optimistic about potential rate cuts and a supportive macroeconomic environment:
"I do expect that, you know, if we continue on this trend, that we are going to see some rate cuts this year. [04:39]
2. Spotlight on Oklo: A Promising Yet Unproven Nuclear Tech Firm
The conversation shifts to Oklo, a nuclear technology company that has seen its stock surge by approximately 80% year-to-date. Mary inquires about the bullish investor sentiment despite the company not having an operational reactor:
"Why are investors so bullish on a company that doesn't have a reactor running quite yet? [05:05]
Matt attributes Oklo's rise to the surge in interest in nuclear technology, fueled by advancements in AI and increased electricity demands. He details the company's background, including its SPAC IPO in May 2024 and notable board members like OpenAI CEO Sam Altman:
"We have seen just this huge surge in interest in nuclear technology that's really being powered by what's going on in AI of increased expectations for electricity demand through the end of the decade. [05:05]
However, Mary raises concerns about Oklo's financials, highlighting the company's net loss and lack of revenue:
"It's worth not just noting, but underlining, bolding, italicizing that it is still very much in the early stages of development, doesn't have a reactor quite yet. [07:07]
Matt concurs, emphasizing the challenges in valuing Oklo due to its lack of revenue and operational reactors:
"For me, you know, until they have built a plant, have some kind of revenue or cost structure we can model, I don't really know if there's really a great way to, to put a valuation on, on this company. [08:27]
Mary further discusses the impact of Sam Altman's recent resignation from Oklo's board, noting a 12% stock drop, and questions whether this is a positive or negative for the company.
Matt downplays the significance of Altman's departure, focusing instead on the fundamental need for Oklo to build and deploy reactors effectively:
"In general, I would say it's not super meaningful. What's super important for the business is actually getting these reactors built and deployed in a cost effective way. [10:50]
Comparatively, Matt introduces BWX Technologies (BWXT) as a more established player in the nuclear sector, highlighting its current revenue streams and successful reactor deployments:
"BWXT has real results, generating real revenue today... unlike oklo, which is not currently selling, medical isotopes are generating revenue. [13:50]
3. Disney's ESPN Standalone Streaming Service: Pricing and Market Strategy
Shifting gears, Mary addresses Disney's new standalone sports streaming service, ESPN+, priced at $29.99 per month. She expresses skepticism about the price point compared to her existing streaming subscriptions:
"This feels pricey to me. But what do you say? How do you think Disney landed on this 30 bucks a month number? [14:33]
Matt analyzes the pricing strategy, explaining that the $29.99 fee includes additional content and is positioned to attract core sports fans without alienating cable partners:
"I do think it's priced attractive enough to bring in that person that only cares about sports, but not to pull off, you know, the person who is fine, you know, wants to watch some CNN and things like that away from, from the cable bundle. [16:16]
When Mary inquires about his personal willingness to subscribe, Matt remains non-committal, stating he might opt for ESPN+ during peak sports seasons but is unlikely to maintain a standalone subscription:
"I want to watch all the games, right? I want to watch Sunday Ticket and I want to watch NFL Red Zone, which I'm not going to get with this, with this service. [16:27]
4. Mesoblast Interview: Pricing Life-Saving Treatments
The episode transitions to an in-depth interview with Dr. Silvio Otescu, Founder and CEO of Mesoblast, a regenerative medicine company. The discussion focuses on the company's groundbreaking treatment for inflammation-based diseases and the complexities of pricing life-saving therapies.
Mary introduces the topic by summarizing Mesoblast's FDA-approved treatment, Rionsil, for pediatric patients suffering from graft-versus-host disease (GVHD):
"How do you put a price on a treatment that cures a life-threatening disease? Mesoblast is a regenerative medicine company that's developed a cure for inflammation based disease... [18:39]
Dr. Otescu explains the significance of Rionsil, emphasizing its life-saving potential and its impact on healthcare costs:
"This is all about reducing healthcare costs. On top of that, a child who's cured of this disease by Ryonsil... the economic value to the community... substantially valid in terms of the economic value to the community. [21:42]
Addressing pricing controversies, Dr. Otescu justifies the cost by highlighting the overall savings to the healthcare system and the enhanced quality of life for patients:
"Our therapy, which is curative in 50, 60% of children from day one, is substantially valid in terms of the economic value to the community. [21:42]
Mary references a similar treatment, Temcell in Japan, noting its lower cost and querying the price difference. Dr. Otescu distinguishes Rionsil as a second-generation, more effective treatment compared to its predecessors, justifying the higher price point based on improved efficacy and the higher costs of the U.S. healthcare system:
"Ryonsil in the US is a second generation product, is way superior, has different potency. [24:51]
Looking ahead, Dr. Otescu shares Mesoblast's ambitions to expand its regenerative medicine portfolio, targeting a variety of inflammatory diseases and continuing to innovate in the field:
"The next five years are going to be about growth, about sales, and about new products that will address sort of this burden of disease with a whole new class of medicines that until now have not existed. [29:10]
Conclusion
The episode of Motley Fool Money delves into the complexities of market performance, the challenges of valuing emerging tech companies like Oklo, the strategic pricing of new streaming services, and the ethical and economic considerations in pricing life-saving medical treatments. Through insightful discussions and expert interviews, listeners gain a comprehensive understanding of the interplay between business strategies, market dynamics, and societal impact.
Note: All quotes are extracted and paraphrased from the podcast transcript to provide context and are attributed with approximate timestamps for reference.