Episode 155 - Marks on the Markets: Biotech and Healthcare with Finny Kuruvilla
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This week, Finny Kurruvilla from Eventide Asset Management joins us to talk about public equities with a specific focus on biotech and healthcare.
All opinions expressed on this podcast, including the team and guests, are solely their opinions. Host and guests may maintain positions in the companies and securities discussed. This podcast is for informational purposes only and should not be relied upon as specific investment advice for any individual or organization.
Episode Transcript
Transcription is done by an AI software. While technology is an incredible tool to automate this process, there will be misspellings and typos that might accompany it. Please keep that in mind as you work through it.
John Coleman: Welcome back to the Faith Driven Investor podcast. This is John Coleman and this is our monthly marks on the Market series where we talk to experts in investing. Coming from a Christian perspective who can comment on current events in markets today, we have a very, very special episode and a very special guest. Finny Kuruvilla is with us today. Finny is the co chief investment officer and founding member of Eventide Asset Management with a couple of partners with whom he founded the firm. Eventide is a long standing member of the faith driven investing community, although they do a variety of different investments in both private and public markets, Finny has more degrees than I could possibly capture here, including MDs, PhDs and master's degrees from a variety of awesome institutions like Harvard Medical School, Harvard University, MIT and Caltech. And he's a leader in health care investing as well as broader investing. Finny, thanks so much for being on today.
Finny Kuruvilla: Great to be with you, John.
John Coleman: Well, I want to leap right in. We'll get a chance to dig into more of your background later. But everybody's been kind of whipsawed by markets over the last year. It's been a pretty volatile time in markets, and I don't think that health care investing has been any different. What is the latest? What's the current state of the markets in health care investing now?
Finny Kuruvilla: Yeah, you're right, John. It has been very challenging for markets broadly and in general. One of the things we've seen is that more interest rate sensitive domains in the market have been especially hit hard. So that tends to be domains that have growth farther out. So more high innovation, high financing type industries have been punished. And so that definitely includes aspects of health care. So one set of health care companies that has been especially hit hard is biotechnology companies. So they tend to be long duration. So most of the value is and many years from now, they also have high capital needs in terms of financing. So they often have to go to the market to raise more money given that they're usually not profitable. So those have been challenged. There have been some bright spots in the middle of all of the difficulties. So in general, one of the things that we've seen is that cash flow positive companies have done relatively well. And so, for example, a lot of small medtech companies have done exceptionally well. This has been a great year for M&A. We can talk more about that. So we've seen a lot of companies appreciate on the back of very robust M&A from the larger companies. And then we've also seen domains like cancer screening do really well, Alzheimer's disease, which has been something that has become a passion project for us here, has been another area of significant growth. So there has been some bright spots in the midst of what's been a challenging market. And overall, we think that the long term drivers are positioned really, really well for health care. And so we continue to be excited about the space.
John Coleman: When you mentioned the duration of biotech investments and especially innovative health care companies that require a lot of capital and how they've been sensitive to markets recently, particularly, I imagine, interest rates and just the M&A markets having previously dried up. I'm interested to get into that. If you were to take a look today, do you think the air has been let out of those markets so far from a macro perspective, or do you actually think the macro environment still has more room for these securities to decline?
Finny Kuruvilla: Yeah. So generally speaking, those companies have had the stuffing knocked out of them to the point where they're priced at very low valuations. And the typical company and especially in the biotech side, has declined somewhere in the 50 to 80% range. So it's taking a very significant hit and that began a little bit more than two years ago when we'll talk about this probably later. But when some of the covid enthusiasm went away, there are a few areas where some companies still look a little expensive. But I would say, broadly speaking, the industry looks very cheap. And if you use long term measures of is the industry expensive or is it fairly valued? It certainly looks fairly valued. One of the things that's challenging in our space is how do you value companies where you can't use price to earnings or price to free cash flow or EBITDA, but are some of the more classic measures of valuation given that most of them are not profitable? And so you can use measures instead like enterprise value divided by cash on the books. So that's a measure of roughly how much enthusiasm there is in the space. And of course, you have to look at burn rates as well to make sure that you've normalized there. But on those measures, for example, last summer was actually an all time low in the space in terms of valuation. It's gotten a little bit better since last summer. But on the whole, I would say that the companies are valued quite inexpensively.
John Coleman: And you touched on this previously. Look, I think most of us have the perspective that health care has pretty good fundamentals. Right now, broadly speaking, in the sense that it's a greater proportion of us spend, at least internationally. It is. If you think about biotech and if you think about some of the areas in health care in which you're focused, obviously markets have disconnected, but have you seen any change in the fundamental forward outlook for the companies themselves or for the industry? Or is that still universally positive as health care continues to increase?
Finny Kuruvilla: Yeah, in general, it's gotten quite a bit stronger for these companies. So I'll give you a few examples of what are the leading indicators of health for these companies. So the first is the demographics of the population. So one of the things that I think most of us know is that as you get older, you tend to use a lot more health care and those last 1 to 2 decades of your life use a lot more health care than you've used in the earlier younger portions of your life. And I think as almost everyone is aware, the world is getting a lot older where a lot more of a gray haired society. Last year was the first year in history that China's population actually declined. Even in Western Europe, Japan. We're seeing tremendous shifts in demographic structure there. So that bodes very favorably for the industry and that is likely to continue for years, decades to come. That's number one. Number two is there has been tremendous technology innovations that have occurred in the last few years. I was a practicing physician up until roughly 2006 or so. And I look back at how we were treating patients, particularly with some of the diseases that we used to see, and it almost looks primitive. Just 20 years ago, what we were doing compared to what's happening today, I mean, if you had told me in 2023, these are some of the therapies and how they're going to be used, I would have said, sounds a little sci fi to me, but it's happened and the pace of technological improvement has been just astounding. So just to give you a little bit of a flavor for this, when the human genome was first sequenced in roughly the year 2001, it cost about $3 billion to sequence that first individual, and it took roughly 12 years. So $3 billion in 12 years. Today, you can do that for less than $1,000 and it takes less than a day. So the costs have shrunk from 3 billion to less than a thousand. And then what used to take 12 years. Now it takes less than a day. And that pace of innovation far surpasses even what, for example, we've seen with Moore's Law and semiconductors and computers getting faster and being able to have more memory on board. And that kind of just incredible gain in technology and then knowledge in terms of what are the parts of our genome that are responsible for health or disease. We have grown literally exponentially in the last 20 years or so, and most of those discoveries have yet to make their way into medicine. So there's a lag of at least ten years or so between when someone comes up with a good idea before when it's actually used in human populations. And so this kind of technological improvement is just incredible. And we are we're right on the cusp of what promises to be a very exciting century of innovation. I sometimes say that we humanity in the year 2100, so most of us sadly will be dead and gone. But our grandchildren in the year 2100 will look at us today in terms of our health care, similar to how we look at cavemen who are using leeches and spears to slash their bodies for health care. Right. That's going to be the degree of of improvement that happens in this century because we still, you know, even very basic questions like, you know, how does memory get made and stored? What is really the sustenance and the genesis of cancer? How do we really understand autoimmune disease? You know, we still don't really understand at a deep level what causes those disease. And so we're in this place now of how can we take these little seeds of insight that we're getting from these genome studies into being real actionable therapies that can be useful in human populations. And so it takes time to develop that. And that's going to be what happens over the decades to come. And so that shift to these more high tech type therapies using some of these insights from the genome technologies is what's to come. And that's only going to be accelerated. By, for example, AI which if we have time, we can talk about some of that. But another tremendous tailwind that the space has is we have more and more economies coming online that have the ability to access modern health care. And so you look at India, for example, that is slowly but surely starting to become more of a modern economy with access to something like what we have in the US. I mean, we're talking about, you know, 1.4 billion people coming online. This doesn't even count. For example, countries like Africa, a lot of Latin America that still really doesn't have access to the kind of health care that we do in North America. And so that's another tailwind now where we're talking about massive populations. They're going to be coming online in future decades. And then you layer on the fact that the diseases of, let's call them addiction. And so this includes obesity. So, so much of obesity is really an addiction related problem. Tobacco of mental health, which is often tied in to a lot of issues of technology, loneliness, social media. Yeah, very profound structural reasons for that. These are going to be the kinds of diseases that biotech can at least partially address, maybe not fully address, but at least partially address. So we have a lot of reasons to be optimistic about some of these tailwinds that we have going into the century.
John Coleman: Well, just a small caveat, and then I want to pick up maybe with some examples. Going back to the areas that you're most excited about that are near commercialization, those that you're actually keeping an eye on. But I'm not a physician, but one of my children has a rare genetic disorder that only about 1600 people in the world have her family of disorder that they've actually sorted out now, that they can study genes. And only two people that we've discovered have her exact gene disorder. And what's amazing to me is both the progress we've made to be able to even diagnose a thing like that, which wasn't possible a handful of years ago, but also the progress we need to make to understand how to treat it or how to deal with these different disorders that aren't well studied or don't have a clear path. And so it is that dichotomy of just remarkable progress. But 100 years from now, you have to think our current approaches are going to look pretty primitive to whomever is practicing at that time. So many great threads to pick up on. But you had mentioned Alzheimer's and cancer, for example, in your initial comments. And one of your themes here was the advances that are coming that people don't even know about or that have lagged behind the research and are just coming to market. What are three or four areas that you're keeping an eye on that you think are actually near to coming to market that are most exciting?
Finny Kuruvilla: Yeah, I would certainly include Alzheimer's in that. So that is one that is just now coming to market like this year. And so I'm right now in Boston, Massachusetts. So just across the river, there's a company called Biogen that got FDA approval for just last month, in fact, for the very first disease modifying treatment of Alzheimer's disease. And so while in general, one of the sad but true facts of medicine is that a lot of what medications are doing is they're addressing symptoms or manifestations of disease rather than the root cause. The root cause is often very difficult to address and sometimes technologically impossible. But one of the things that we have now just in the last six or nine months made progress and as a society is the root cause of Alzheimer's disease. And so the way to think about Alzheimer's is that in your brain, in an Alzheimer's patient, what happens is there are these what are called plaques that are forms that just like you get a plaque on your tooth, you get a plaque in your brain, it's a three dimensional ball. And this ball ends up killing the neurons that it touches. And if you go in under a microscope and take out this little ball and ask what's inside of it, there's two main proteins, two main components inside of that ball, and one of them is called a beta. And we've known this for decades and decades. This has been widely known. But how in the world you cleanse the brain from this? Well, somebody had a very clever idea. Which is to use our immune system to clear out these plaques from our brain. So our immune system, of course, we use all the time to fight off infections or to fight off cancer. Not a lot of people appreciate that. That's a different story. But here somebody figured out, well, hey, why don't we take an antibody? So an antibody you can think of, it looks like a Y. And the top part of the Y binds to it sticks to something that is dangerous, say, a virus or a bacteria. And when the top of that Y sticks to its target, it sends off a signal to the immune system saying, Hey, there's something bad here, come and kill it or can't clear it. And so these cells come in and they eat what's at the tip of that Y, and they end up degrading it and thus getting rid of the infection. Well, somebody said, well, why don't we develop an antibody against this, a beta, this component of these plaques, the chief component of this plaque, and then we'll administer it to patients, give it to them in their veins, let the antibodies swim through the veins, go into the blood, and let the immune system clear out. And then let's measure what if we can clear it out so you can do what's called PET scanning or PET imaging just to see if the plaque is still there. And then let's also measure cognitive function. So looking at memory, for example, executive function, some of the things that we all value that you lose, unfortunately, with Alzheimer's disease. And so these data were presented last year, and it was very exciting that they showed in these PET scans, if you administer this antibody, it's called the cannon MAB that is just given IV. Like I said, that indeed you get very profound, in fact, almost complete clearance of these plaques within a few months. And then more importantly, if you measure the clinical function of the brain, the executive function, memory, etc., you see a 27% improvement cloud there, which is a big deal. And I have a father in law who recently passed away from Alzheimer's disease. And it's a absolutely awful way to die because you lose so many of the functions that really make us human. And so when this came out, I mean, I was jumping up and down with joy here because Alzheimer's is a disease that we don't need to suffer from if we can get at this root cause. So there's now a second company, Eli Lilly, that is going to hopefully get FDA approval soon. And now that the industry has a foothold, one of the things that biotech is really good at is once it gets a foothold, then it can iterate and improve, right? But you need something solid to be able to grab a hold of. And so that's definitely the first area that I'm watching very carefully. And if you look at Alzheimer's, morbidity and mortality, in other words, deaths and suffering both from patients as well as family and caregivers, this could be a real game changer.
John Coleman: Well, an example, if any, just of what you described about the pace of technology. I'm reading a book called Outlive by a guy named Peter Attia. Right now. I don't know if I'm pronouncing his last name properly. And I just finished a chapter on Alzheimer's, which was honestly that the most hopeless of the diseases or disorders that he was discussing. Right. Because there was really no progress in preventing or treating it other than behavioral modifications, exercise, things like that. And what you're describing seems to have manifested almost entirely since even that recent book came out. I mean, that's a remarkable amount of progress against a disease that really had no, from what I understand, effective treatment until now other than preventative things like exercise and diet.
Finny Kuruvilla: That's right. Yeah. And Peter Attia is someone who is a very smart physician and that book is not that old. It had just came out for this reason. Yeah. Yeah. And the fact that it's already outdated, there is testament to how quickly the industry is changing. The other area that I am very excited about is cancer screening. So I think most people realize that if you can catch cancer early, then the probability that you can get it removed and live a long and normal life is much more viable. When people find cancer late at stage three or stage four, then that's tend to be when you get the really bad outcomes. So this, for example, explains why pancreatic cancer or ovarian cancer, these are organs that are deep within your abdomen. They're typically not caught until later on stage three or stage four. And so the mortality from those diseases is much higher than it is, for example, with diseases that it's much more obvious, like, say, a basal cell carcinoma, something on a scan where you can just cut it out because you see it. And so early detection is half of the battle with cancer. And it will one day be the case that we'll go in for our annual exam with our PCP and they'll simply draw blood. And as it turns out, your cancer is shedding small amounts of DNA. Into your blood. It's very, very trace amounts. But these small amounts of DNA have signatures of mutation on them that if you have the right technology, you can identify them and say, oh, you know what? This person who came into my office, they've got early stage prostate cancer or breast cancer or ovarian cancer and then go in and do scans and surgery to get rid of it much more early and getting ahead of the curve. So that's really exciting. We've already made some headway in that. So one of the classic examples of a company that we've invested in now for a very long time is using stool to detect colon cancer. So the traditional way of looking for colon cancer is a colonoscopy, very unpleasant. I think most people know how you do that. You have to drink some very unpleasant solution that clears out your bowels and along to but the camera gets put up your rear end and you have to go under a form of anesthesia conscious sedation for that. Who wants that? I mean, that's not very pleasant. But now that's becoming much more standard of care is somebody mails a box to your home and you use the bathroom. You just take a piece of stool, fish it out of the toilet, put it in the box, mail the box back to the company. And what they will look for is in the stool a trace amount of this mutated cancer DNA and use that as an early warning system, so to speak. And we know that the sensitivity on detecting cancers there is greater than 90%. So it's very good. And now it's becoming standard of care that starting in age 45, you can do that instead of having to do a colonoscopy. Wow. So that's pretty awesome for especially those of us who are in our forties or beyond that don't necessarily want to do the whole colonoscopy ordeal. And so there are that company and then a couple of others that we've been investors in are looking at how can we make this purely blood based? Because even that's got to deal with your own stool. That's not the most pleasant. And why not have it be the case that when you go into your annual visit, just do the blood draw while you're getting your cholesterol checked and your blood glucose and all that, that they'll just additionally check for a panel of cancers. And so that's very, very exciting. The blood based cancer screening is still yet at the experimental stage and it's not yet prime time, but I think in the next 5 to 10 years it will be something that becomes much more routine. So I'm very, very excited about that as a way to address the second largest killer of people in America, which is cancer. Speaking of which, there's so many other areas that I'm excited about, but I will say that cancer, for me is near and dear to my heart, primarily because when I was a physician, a lot of the patients that I saw had leukemia or lymphoma or one of these blood related malignancies. And I just think it is just awesome the kind of technology that we have enjoyed that is completely changing the way that the cancer is done. So let me illustrate here with an example of something that I think is very profound. So in general, with cancer, the most common cancer of childhood is leukemia. So a lot of us probably know individuals who had leukemia as a child or parents who have children who have had leukemia. It's very common. And the way that leukemia therapy has progressed is astonishing. So in 1970, if you had a child with leukemia, he or she only had a 10% chance of making it to adulthood. So fairly bleak. Today, it's somewhere around 85 to 90% chance of making adulthood so much, much better. Odds of survival there. And that's on the back of a lot of great therapies that have been developed in the industry. And in particular, though, one of the things that we've known for a long time is that so much of what cancer therapy really is, is it's giving basically poison to a person. And what you're trying to do is you're trying to poison the cancer faster than you're poisoning the rest of their body. And there is a window that you can try to thread in order to make that happen. But it's a narrow window. And it's also why, for example, the side effects from chemotherapy are what they are. They will kill more rapidly dividing cells. So when you're giving these poisons, the cells that are dividing the most quickly are going to be the ones that take the hit. So your hair will fall out. As it turns out, the hair cells are rapidly dividing your gut. Cells are turning over very rapidly. And so you'll get nausea, vomiting, diarrhea, fatigue. A lot of these things are the consequence of these very crude. Let's give them poisons. And in fact, a lot of chemotherapies are, in fact. Iterations of chemicals that were used in war in order to kill major populations. It's kind of scary. So this is how a lot of chemotherapy is built on, is just let me give a fancy form of poison and try to thread that needle very carefully. Well, when I was a physician, as I said, that was the mainstay of what therapy would be is giving these glorified toxins or poisons. I'll tell you a true story here of a little girl named Emily. She was diagnosed at five years old with this leukemia, the most common form of childhood cancer. 85% chance of cure. 85 to 90 parents were told, hey, if you've got to pick a cancer, this is the one to get. They're all like, okay, let's go through the therapy. She goes through the therapy and lo and behold, she relapses, and so does she's in this 10 to 15% that aren't likely to make it. And after this relapse, it comes back very aggressively. And as cancers often do, when they come back, you just feel really bad for the patient because you very quickly run out of other options. Parents are told she's got weeks to live. They were told, just put her in hospice, make her comfortable. But unbeknownst to them, this was at CHOP at Children's Hospital of Philadelphia. There was a brand new therapy that was being developed, and she was literally the very first patient to get it. So, wow, this therapy is so cool. Let me explain it to you. So I mentioned to you before that one of the jobs that our immune system has is to kill cancer. So a lot of us realize our immune system kills bugs, bacteria and viruses, but we don't appreciate enough how our immune system is actually fighting cancer all the time. So as it turns out, every single one of us has some low grade cancer that's brewing somewhere inside of us. But most of the time your immune system is scanning your whole body and it's looking for something different than normal. And it'll kill that cell because it recognizes it as foreign. And so that is something that we should wake up and thank God for every day, because our immune system is our number one anti-cancer prevention agent that we have. And this is the reason why, for example, HIV patients who've got weaker immune systems often die of cancer. Well, one of the things that somebody figured out to do is why not take someone's own immune system and the T-cell in particular, and we'll take it out of the body and we're going to infect that T-cell with the virus. And what we're going to do with this virus is it's going to be a good virus, not a bad virus, but a good virus. And that virus is going to have a homing beacon on it that's going to train that T-cell to go straight to the cancer and kill it. And so they did this with Emily. They just took out her blood, just a simple blood draw, isolated those T cells, treated them with this virus, and then re infused her own, now modified T cells back into her body. And guess what happened was that in 23 days, her leukemia was gone. And wow. Yeah, it's amazing. And you could actually watch. And they did this. These scientists and physician did this. They would take regular blood draws and they would watch these modified T cells grow in terms of numbers in her blood as they were amplified and as they saw this cancer and they would go and kill the cancer. And so this particular therapy, it's called CAR-T, is FDA approved now. And we will often see somewhere between 60 to 80% what's called complete responses, meaning that the cancer is completely gone. So Emily, as I mentioned, was diagnosed at five years old. She's in her twenties now. She's very healthy, walking around, doing great. This is like awesome, right? Like we're engineering our immune cells to do things that they otherwise wouldn't do and train them to kill cancer. And so this whole frontier of using the immune system. Using things like CAR-T immuno oncology therapies to train it to get better at killing cancer in a more directed manner, as opposed to giving the simple and kind of toxic style chemotherapies is going to be the future. So that's another area that I'm really excited about. So this will be three of my favorite areas Alzheimer's disease, cancer screening, and then training the immune system to kill your cancer.
John Coleman: Finny Those are amazing examples. What a cool story about Emily as well. One thing you're describing I'd love to dig into for investors is the life cycle of these medical innovations is quite long. Right. Starting with university research or basic research, culminating in commercialization through a pharmaceutical company, etc.. And across that spectrum, there are both private markets and public markets investors. Talk to us a little bit about the role that both private and public markets play in this space and also just any difference in the way markets are reacting in the current environment between those two. Like are you seeing as big a collapse in private markets as in public markets, for example, and valuations, or is that disconnected somewhat?
Finny Kuruvilla: Yeah. So there's certainly a vital partnership that exists between the private and public markets. And so there's this whole field of venture capital that goes and finds these promising ideas that incubates them from early stage all the way to a hand-off of an IPO into the public markets. And if it weren't for America's very vibrant venture capital industry, the world would be very impoverished. So some of those therapies that I just mentioned to you, like those CAR-T, those those trained immune cells came from venture backed companies and approaches. So this is an essential partnership. In general, public markets aren't ready to receive these very early ideas yet until they have some validation. And so that validation takes place in the womb, if you will, of these private vehicles that are typically venture backed. And so in terms of where we are there, there's this phenomenon that's existed for many years where the public markets tend to lead the private markets. And so when there's a lot of great opportunities for IPOs, then that tends to be a way that the private markets get their exits. You know this industry very well also, but the private markets need liquidity. They need some way to exit in order to raise more funds. And so when the public markets are open and the private companies can go IPO and eventually the private investors can generate a return on their capital. And so for that reason, there is this lead that the public markets have on the private markets. There's certainly an interdependence there. But in general, that's the relationship that we've seen right now. We're in this place because of the public markets, as we talked about earlier, declining in their valuations. And in general, it's harder to IPO when people are a little more fearful. That's meant that private funding has also declined and there's not nearly as much money that is going into Series A's and B's, as was the case a couple of years ago. And so that'll change and things will eventually normalize and go back. But right now we're on the private side. We're about where we were in 2013. So we've actually taken quite a step back in terms of amount of funding there. So that's quite unfortunate. But we've seen this happen before and in general, once we get a little more animal spirits, once we get more excitement in the public markets, then IPOs will open up and that will enable some of these private companies to IPO, which will then enable the private companies, the venture companies, to go and raise more capital. So that's high level where we're at right now.
John Coleman: Which is interesting because we're closing in on highs again in public markets, but it still is lacking. I love the term animal spirits. It still is lacking animal spirits a little bit, right, Because we're you know, the public equity markets have recovered, but you're still not seeing an IPO market quite as active in an M&A market. There's still a lot of caution, I think, right now.
Finny Kuruvilla: That's right. And the reason that the public markets are doing well, especially the Nasdaq, but even the S&P 500 is because their market cap weighted and so or I think most people understand this, but in case someone doesn't. If you look at the S&P 500 and that index, it's not equally weighting across 500 companies. It's overweighting on the companies that have a higher market cap. So Apple, Google, Amazon, Meta, those kinds of companies have a significantly larger weight in the index. And because there were such fears about recession really for the last year or so, what's happened is that people have gone into these mega-cap names, especially mega-cap technology companies, and that has pushed up these indices. But where we're at right now is the dispersion, meaning the spread and valuation between the largest cap companies and the smallest cap companies is actually two standard deviations wide of normal, meaning that that spread is very vast right now. So you've got really expensive companies on the high market cap side and then very inexpensive, very cheap companies on the small market cap side. And so it's unusual that we have this kind of spread happen. In fact, often it's the case that a lot of the big companies are regarded as sleepier companies that maybe don't have as much growth ahead of them and the small companies, that's where the action is because they're going to grow and there's a lot of excitement there. But right now, partly deserved the large cap companies have shown because of AI and some other reasons that there's cause for excitement there. And in general, the very predictable defensive quality is that people now appreciate that Google and some of these other companies have they actually have done really well through even hard times where people have realized they're not quite as cyclical as people once thought. So that's the reason why we've seen some of this disparity in valuation.
John Coleman: So I want to hit a couple of other quick topics before we get to some of our concluding questions. One, I promised myself I was not going to ask because it felt like asking about Bitcoin like four years ago. But you mentioned artificial intelligence. So I am going to ask, where do you see the intersection of AI and health care right now? What are you most interested in at that intersection at the moment?
Finny Kuruvilla: Yeah, I recently did a call on this and AI in general and where it's at. And one of the things that we need to differentiate is that AI is an umbrella term and there's a lot of differing component technologies underneath it. The one right now that has everybody excited are the LAM, large language models. So ChatGPT is the most famous bard, which is Google's version, is the second most well known. And these are not as sophisticated as a lot of people might think. They're very impressive, no doubt. But basically what they've done is they've ingested huge amounts of text and they're very good at predicting what will be the result of, say, an autocomplete. In a lot of ways they're just glorified autocomplete functions. Certainly impressive, no doubt. And there's good reason why there's enthusiasm there. But in terms of really achieving the kind of. Judgment and rationale that humans have. They're a long way away. Now, how can this breakthrough and LAM help the world of health care? It certainly can. And there's a few dimensions of assistance that we can have. I mean, in general, I think these LAM will be a lift to most industries. Just because it's I recently heard an analogy that it's like you've got an assistant sitting next to you who's passed the AP English test. Maybe their judgment isn't that great yet. So maybe they're like a high school student who's just gotten a four or five on their AP English exam. That's kind of what you have now as an assistant sitting next to you. And I use chat GPT for when I want to quickly get a digest of a lot of material because it is good at doing that, where I think it's going to be helpful eventually and we're going to need a few years of investment here. But besides that general uplift from having an assistant next to you, who is this AP English High School student who's done well there, it's going to be helpful for predicting things like what drugs will be especially effective to target certain medications and then what populations will be more precisely targeted from a particular therapy and receive greater benefit there. So for things like pattern detection, it's going to be amazing. One of the areas that I think is one to watch and I've been saying this for like ten years, is if you take head to head a skilled physician and some kind of AI algorithm and you give it a bunch of patients who have a bunch of symptoms and you say who can predict what the patient really has, the handwriting is on the wall that AI is going to be the physician over time. And that's something that is going to be very transformative to health care because computers are just way better than humans at doing pattern recognition much more rapidly. So you think about radiology looking for the spot on the lung as a cancer or not, or, as I said, kind of classic internal medicine diagnosing symptoms. And so what this means is that there's going to be a replacement eventually, probably not that long from now, of a lot of traditional doctors who are basically doing pattern recognition with some of these AI engines that are going to completely trounce humans at that. And just like today in chess, we know the even the best chess players, Magnus Carlsen and Caruana and all these people, they can't be the best chess algorithms. The best doctors will not be able to be these highly skilled and well trained AI algorithms. So look out for that and advise your children and those thinking about going into medicine to be cautious about how they choose their career and make sure that they're choosing one that's going to have some longevity.
John Coleman: That's fantastic. Before we close with what you're learning through Scripture, it's kind of obvious the redemptive nature of the work you're doing just from the stories that you've told so far. But maybe comment briefly on how you think redemptive investors or faith driven investors should think about participating in health care, because there obviously are some things like ethical quandaries that you encounter, etc.. But how do you think about your faith in the context of investing in this space?
Finny Kuruvilla: Yeah, there's a lot to be said on this, and I know you're also a deep thinker in this, but I would say that in general the world has gotten somewhat skeptical about progress. You know, if you go back and look in the early 20th century or mid 20th century, there was a lot of optimism about technology. And then eventually it turned, especially in the back half of the 20th century, to a lot of fear, you know, Terminator and things like that. And we have forgotten that the creation mandate that God gave to all humans starting in Genesis one, is something that we have yet to realize, and it is something that health care is probably, in my opinion, almost certainly the single greatest area of where technology and progress can manifest itself in positive ways. And so as investors, as we're thinking about where to allocate our capital, this is an area that I think just screams out unmet need here. This is an area where we can feel really good about advancing the global common good. There are other areas where sometimes I look at and I think, wow, what is the true common good that this is promoting? How is human flourishing really going to come from this company? You know, not mentioning any specific companies here, but often it feels like people are simply chasing profits as opposed to thinking about how does God want us to be allocating capital to really meet the needs of humanity? And I think health care is a very special field and that if you have some basic screens in terms of, you know, for example, not promoting abortion and things like that, then I think we. Can feel really, really great about how we can better advance the lives of millions and millions of people all over the world.
John Coleman: Well, Finny, we want to conclude today with what we ask all our guests, which is just what you're learning through scripture that you want to share. I know you're a deep thinker on these topics, and you do have a very thoughtful spiritual life. So is there anything right now that you're studying that you want to share with others?
Finny Kuruvilla: Yeah. So I recently have been doing a fairly deep dive as a family and a couple of Paul's letters, namely his letters to the Thessalonians and then his letters to Timothy. And one of the concepts that I've been very captivated by and doing a lot of further biblical study on is a term that I got this from a commentary, but the term is mimetic discipleship. And so if you think about how Jesus did his discipleship, it was very much this process of following him. And then in the process of following him, we become transformed. And so you can summarize discipleship and the line from Jesus in Matthew 4 where it says Follow me and I will make you fishers of people or fishers of men, the older translation say, And so you follow. After Jesus, you imitate him. You have this. Essentially what the disciples had was a 24 seven school of imitating Jesus and following in his paths. And then there's a promise attached to that following, which is, I will make you fishers of the people. And I think we've moved more into an informational based way of trying to do discipleship as opposed to a mimetic or following way of doing discipleship. And it's in a sense like not surprising given how a lot of our education models are operating. But you give someone information via a sermon or a book or something like that which have their place. And I'm certainly a fan of good sermons and good books, but I think more often than not, we're lacking that component of mimetic discipleship. And mimetic is, of course, the adjectival way of describing the word imitate. And here I would point to the example of the field of medicine. So can you imagine what medicine would be like if you just gave people some textbooks and you said, Go read these books and go be a doctor? Right. It would be like, I don't want to be treated by someone who's gone through that kind of training. Instead, what happens is your first two years of med school are the textbook years. The second two years you're watching somebody else do something and you're helping them. And then when you start internship and residency, they're watching you. But you got somebody over your shoulder. And eventually, after four years of that, then they release you to be able to train somebody else in that process. And so it's tilted much more at this aspect of mimetic training, you know, mimetic learning where you are. Yeah, you've got to know some information, of course, but you really don't become a doctor until you've completed all of that. And I just think, how much of Christianity have we built on more of an information transfer type system as opposed to a mimetic system? And this came up because and especially first Thessalonians, it's a dominant theme, which I had personally missed, of how Paul is describing how he establishes his church and in this case, Thessalonica. And it's a great study to do to go through and trace out that theme of where is Paul appealing to this concept that really Jesus initiated what mimetic discipleship is all about. So yeah, I'm very excited about this and wanting to go deeper into this.
John Coleman: Finny Kuruvilla I wish we had 3 hours for today's podcast instead of just this hour. I think you have left us with a lot to think about and a lot of positive hope for the future with innovations in health care. So we're grateful to you for coming on the Faith Driven Investor podcast today and for all you're doing it, Eventide and elsewhere. Thanks so much for being with us.
Finny Kuruvilla: Thanks, John. I appreciate being with you.