Milken Institute Chairman Michael Milken joins Yahoo Finance Live to discuss interest in medical investment and innovation, the power of bioscience, the future of health, and the outlook for medical research.

Video Transcript

- Well, the COVID-19 pandemic was a catalyst for change and investment across the medical sector. Investors are now turning their attention to new breakthroughs and advances in technology and innovation. Michael Milkin's new book "Faster Cures Accelerating the Future of Health," out now, chronicles the progress made in medical research and public health over the years. The Milken Institute Chairman joins me now, along with Yahoo Finance his own Anjalee Khemlani. Thank you so much for joining us this morning.

I do want to talk about your "Wall Street Journal" op ed here. You say that another medical revolution is on the way. For investors who are yet to see the value of that at this point, what companies or advancements are you focused on?

MICHAEL MILKEN: Well, I think the major change that's occurred here in the last couple of decades has been one of the improvements and access to technology. So the idea that everything was in your blood was an idea put forth almost 40 years ago. But no one could figure out what was in your blood. And many people stored blood with the idea later, could you go back in time and discover what the challenge might have been?

But as you know, the very first sequencing of the human genome took 13 years and cost over $3 billion. Today, less than an hour and $100 to $200 and the price is dropping. So that allows us not to have to guess. That allows us to sequence an individual's human genome, sequence their disease, sequence their microbiome, and be much more precise on how we deal with disease. And so it's the technology of computers that are a million times faster. Data storage costs dropping to one billion. That has afforded us and brought us here to the age of a new medical revolution.

ANJALEE KHEMLANI: Michael, Anjalee here. I want to talk about that you've talked about the progress that has been made in science and innovation. But what about the investment part of it when we're talking about biotechs and early stages, especially. They're very high-risk investments. How would you characterize the way that the country is handling it and the investment community is handling the responsibility of bringing these forward?

MICHAEL MILKEN: Well, there's always a challenge. And if you go back to the period of time 20 years ago or so, at one point in time, there were 180 bioscience-type companies, biotech, that were public. And combined, they were generally worth about $150 billion. Merck was worth more than all of the 180.

But those 180 were spending far more on medical research and new technologies than Merck. And a couple of years later, just two of those companies were worth more than Merck. And so today, we have large what were biotech companies-- Amgen, Genentech, part of Roche. But as you know, and many of your viewers and listeners know, November 21 was kind of the high for bioscience companies.

Hundreds of these companies went public. It was maybe too early for many of them. And then a year later, we saw the prices crashing for many of these small companies-- 60%, 70%, 80%, 90%. So today, we have a situation somewhat similar to where we were a little more than 20 years ago. Many of these companies have liquidity, but they sell at a discount to the cash. But what we do know is that the future-- the future, in many ways, is in the field of bioscience.

Now, when I was at Berkeley in the '60s, there was this movie called "The Graduate". And Dustin Hoffman played this young 21-year-old not knowing what to do. And he was at this event, and the father of one of the people hosting the event took them over and told them there was only one word he needed to in his career, and that was plastics. Well, that was 1967.

Today, bioscience is really the future. It's not just our health. It's energy. It's the environment. It's food. Unfortunately, it's bioterrorism defense. And so what we know today and what technology is allowing us to unleash, is the power of merging technology with what we know about bioscience. And one of the reasons I wrote this book was my concern that we had come so far, so fast.

In less than one year, we had vaccines for our COVID-19 challenge. But we have a tendency to gear up and then gear down. But this is a great opportunity for the entire world and for my generation to eliminate many diseases that my children, grandchildren will have to deal with. There are enough problems for them to deal with. And so I feel it's our responsibility to put many things behind us, such as cancer.

ANJALEE KHEMLANI: Yeah, absolutely. And you're talking about that especially with reference to COVID. I know that the US government just announced Next Gen with $5 billion to replace that Operation Warp Speed plan. But in your book, you also note that a country like the US, a Nations in general like the US that have invested in public health and medical research and innovation are the reasons why they progress. And I wonder with this new investment, is that enough or is there more that needs to be done for us to be prepared for the next pandemic?

MICHAEL MILKEN: Well, it's not just the next pandemic. It's many other diseases. And so I think many people in the world of finance do not realize that the driver in the last 200 years of economic expansion has been the number one public health and medical research. And it's really hard for young people to realize that life expectancy on our planet at the start of the 20th century was only 31 years of age. And so we've had this dramatic transformation, maybe the greatest achievement of humankind has been increasing median life expectancy from 31 years to 70 some odd years.

And with this, has driven the world's economy. And so that is why this investment is so important. Many years ago, and I wrote about it, as we were thinking about how to increase, and getting the federal government to increase its funding of medical research, we worked and put something on called The March. And it occurred in 1998, and thousands of people worked on it, a half a million people participated. And President Clinton signed into law within a couple of months the doubling of the NIH budget. And there's been an incremental investment of almost $500 billion, a half a trillion in medical research since that date.

And that's one of the reasons why when we look back, it was only nine weeks, 63 days between the sequencing of the DNA of COVID-19 virus and the first time it went into a human being. And so extending life, extending the quality of life, at the same time, has been a significant driver. It's hard for people to maximize their potential, to fulfill their destiny and what they want to do and build meaningful lives if they're constantly faced with serious medical diseases.

And it isn't just the individual themselves. As you and everyone knows, it's the entire family. It might be their coworkers that are affected by a life threatening disease that an individual has. So yes, those countries that are the leaders in bioscience will be the leaders in the world in this century.

ANJALEE KHEMLANI: Michael, I know one of the things you're really passionate about is equity access to capital. And that includes health equity. But putting it all together, when we look at what has happened over the years, and especially the spotlight that the pandemic put on these topics, have we gotten to a point where we've made any progress at all with both access to capital and health equity for minorities?

MICHAEL MILKEN: Well, we've made enormous progress to access the capital for millions of companies today. So I would say but it's not complete. Not every individual has the knowledge or the relationships. And so we do have financial deserts in the United States. And we discovered that during the pandemic, when we have millions of people that don't have a bank account, and when you wanted to support them, how do you get the money to them? We knew we had food desert, that many parts of the country did not have a place that you could get fruits or vegetables in the neighborhood. And lastly, we learned that we had medical deserts, that we did not have ability to care.

And when you realize what people have done the analysis on, and then in a 20-minute subway ride in New York from Manhattan up to the Bronx, you shorten life expectancy by a dramatic amount. Or in other parts of the country. And so health equity is exceedingly important. But there's another very important factor here.

And that is the face of the United States and the world is changing. There are states in the United States now where only 15% of the children are of European ancestry. In the state of California, the majority of people under 25 are of Latin American ancestry. And the next largest, fastest growing group is Asian ancestry. And so if we have primarily Caucasians or people of European ancestry in our clinical trials, we're not going to be able to service the dramatic change in demographics that are not occurring-- and occurring just in the US, but around the world.

And so this area of health equity, we have to find a way to get a much more diverse and representative part of our country involved in clinical trials and health care programs. And I think this will benefit all of us. So I think there's a major push. And data and technology have a large role to play in that effort.

- Indeed. And as you mentioned, there is prediction and prevention all tying in to really help with health equity there. A big thank you there for taking your time this morning, Michael Milken, Chairman of the Milken Institute. and Yahoo Finance, Anjalee Khemlani, thank you for joining me in this morning.

MICHAEL MILKEN: Thank you.