Getting Under The Hood of Google’s Verily And Trying To Figure Out How It Works

December 15, 2015
By Mark Terry, BioSpace.com Breaking News Staff

Now that Google’s Life Sciences spinoff has a new name, Verily, analysts and investors are curious to see what the ambitious life science company’s financials look like. They’re also understandably curious about what the company is actually doing that might someday generate revenue, and investors being investors, the sooner the better.

Verily is the first of Google’s many “moon shot” companies to stand alone under its new Alphabet umbrella. Verily’s focus is fairly broad, but seems to be on merging big data and healthcare, while also developing various biological data monitors. Its direction, to date, has included developing a contact lens that can monitor a diabetic’s blood glucose level, as well as a Band-Aid sized health monitor. It also bought a high-tech company that manufactures spoons to aid people with Parkinson’s disease tremors.

It has announced seven medical partnerships, two research projects, and one acquisition, but that’s not the end, apparently. So although ambitious, investors—and presumably anyone else who has an even modest interest in the company—would like some specifics on what Verily is doing and how and if it’s going to make money.

As Mark Bergen, writing for Re/code says, “Some in the bio-tech industry wonder whether Verily’s far-reaching research ambition comes at the expense of moving things to market. The research lab has made very ambitious pledges but showed scant evidence of making them realities, said one bio-tech investor familiar with the company.”

And the unnamed investor goes on to say, “They’re very good at PR. They use every possible buzzword.”

That certainly was the response of many when the company launched its new name last week, with grandiose but not very specific statements like, “Imagine a chemist and an engineer and a behavioral scientist, all working together to truly understand health and prevent, detect, and manage disease. Picture a world in which technology and life sciences are not distinct, but partners with a unified mission.”

So on a more nuts-and-bolts level, what is known about Verily’s operations? It has developed partnerships with Novartis , DexCom and Sanofi on diabetes research, focused more on monitoring, apparently, than in disease research. The chief technology officer of Dexcom, Jorge Valdez, indicates they are working on glucose monitors, but says, “We’re both in the middle of hiring a ton of additional members,” but points out that these things take time. “It’s probably not going to happen overnight.”

Novartis has indicated that its contact lens device will start human trials in 2016, but not for diabetes. It hasn’t specifically indicated what the trial will investigate other than a vision-related disease.

The company made a deal with biotech company Biogen, Inc. in January to develop wearable sensors related to multiple sclerosis.

Verily is also working in the area of nanodiagnostics, some sort of baseline project that probably utilizes big data to assimilate all of a person’s genetic and healthcare data, and the acquisition of Liftware, which manufactures a device to help patients with Parkinson’s disease. They recently made a deal with Johnson & Johnson for medical robotics, and last week announced a joint venture named Verb Surgical.

Verily also signed a $50 million funding deal with the American Heart Association (AHA), and has hired Tom Insel, the former director of the National Institute of Mental Health to head up some sort of mental health project.

No particular financial figures are expected until January. At that point Alphabet is expected to release two sets of earnings data, one for Google and the other for everything else. It’s unlikely each of its subsidiaries will break down individual company data, although there may be some information that can be gleaned.

It’s probably important to keep in mind that Google is entering into a very new business model with these companies—actually having businesses that sell products or services. As Bergen wryly points out, “One plausible way to describe Google is as a high-tech university subsidized by search ads.”