April 18 (Bloomberg) -- Berkshire Hathaway Inc. Chairman Warren Buffett has been diagnosed with stage 1 prostate cancer that is “not remotely life threatening,” the billionaire investor said in a letter to investors.
Buffett, 81, will begin a two-month treatment of daily radiation in July, he said. The regimen will restrict his travel during the period and not otherwise change his daily routine, said Buffett, who is also chief executive officer of the Omaha, Nebraska-based company.
“I feel great -- as if I were in my normal excellent health -- and my energy level is 100%,” Buffett said in the letter yesterday. “I will let shareholders know immediately should my health situation change. Eventually, of course, it will; but I believe that day is a long way off.”
The diagnosis is the least severe of four stages of the cancer, which affects 1 in 8 men over the age of 70. The five- year survival rate for local prostate cancer, such as Buffett’s, is close to 100%, according to the American Cancer Society.
“It’s a slowly progressive disease,” said Sean Collins, a radiation oncologist at Georgetown Lombardi Comprehensive Cancer Center in Washington, who has no personal knowledge of Buffett’s condition. “If someone had a short life expectancy you wouldn’t treat them at all. With a 10-year life expectancy, radiation treatment is a rational decision.”
Buffett has been preparing for an eventual transition for more than a decade, and told shareholders in his most recent annual letter that the board has a candidate for CEO, without naming the executive. Vice Chairman Charles Munger is 88.
Class B shares slipped 0.9 percent to $80.06 at 9:51 a.m. in New York. Uncertainty over management transition weighs on Berkshire’s credit grade, Standard & Poor’s and Moody’s Investors Service said in March.
“We expect modest weakness in the shares,” said Meyer Shields, an analyst at Stifel Nicolaus & Co., in a note to investors yesterday. “Succession-related uncertainty remains one of the primary concerns underlying our hold rating, but we don’t think today’s news makes these concerns significantly more imminent.”
The diagnosis should pressure Buffett to publicly identify his successor, said Beth Saunders, Americas chairman for FTI Consulting strategic communications in Chicago, who has advised companies including Coca-Cola Co. and Dow Chemical Co.
“He has a higher threshold because of his importance to the company,” Saunders said in an interview. “I think he’s failed to meet it so far.”
The CEO received the diagnosis April 11 and had a magnetic resonance imaging test yesterday that showed no incidence of cancer elsewhere in his body, he said. The annual shareholders’ meeting, scheduled for May 5, will proceed according to plan, CNBC reported, citing an interview with Buffett.
Buffett “is out in the open, and I like that,” said Thomas Russo, a partner at Berkshire investor Gardner Russo & Gardner. He said the disclosure was better than was given by Apple Inc. co-founder Steve Jobs, who was diagnosed with pancreatic cancer in 2003 and died in October at 56.
Jobs, who helped rebuild Apple from industry also-ran to the world’s most valuable company, was forced to take three leaves of absence because of health issues. Steve Dowling, an Apple spokesman, declined to comment.