Indeed, Alphabet Inc., which has tested diabetes-detecting contact lenses and launched covid-19 testing programs. The life sciences division, bracing for a heated health-tech market, said it raised $1 billion in new investments led by its parent company. up
As part of Friday’s announcement, Verily also said two executives will be leaving their positions at the company. Founder and longtime CEO Andy Conrad will become executive chairman, and Werley’s current president, Stephen Gillett, will step in as CEO in January. Chief Financial Officer Deepak Ahuja has left for “another opportunity”.
The capital infusion will be used to support the company’s data platforms, research and technology efforts aimed at making healthcare more personalized, Verily said. The company will consider further investment in strategic partnerships and possible acquisitions. The new roles are part of succession planning as the company becomes more operational and business-focused, he said.
In fact, Google Life Sciences was formerly part of a semi-secretive research and development group within a company called Google X, until it was spun off as an independent subsidiary of Alphabet in 2015.
Daniel Ives, an analyst at Wedbush Securities, said the cash infusion will better position Verily to compete as dealmaking accelerates in the health tech space. In July, Amazon said it would acquire one medical chain, Clinics, in an all-cash deal valued at $3.49 billion.
“It’s an arms race with Amazon, Apple, Microsoft and their other technology partnerships as they build their muscle in the healthcare vertical,” Ives said. “I see the billion dollars of capital as dry powder just to do more M&A and get into investment mode in the next 12 to 18 months when it really matters.”
Fidelity is working to grow its other betting businesses to profitability. The group posted a loss of nearly $5.3 billion last year. The developments at Verily reflect last year’s restructuring of Alphabet’s self-driving car unit Waymo and could pave the way for a breakup, Bloomberg Intelligence analysts wrote in a note after the announcement.
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