The subject of health with Google has been a major one. This is evidenced by the fact that two of its Alphabet companies Calico and Life Sciences are devoted to it in a major way. Life Sciences has lately dubbed diabetes as its debut area of focus and that's just one of them for the time being. In the future, they plan to tackle other widespread diseases.
Despite the company's statements on diabetes and plans to tackle others, the company has only disclosed bare-minimum information on its fledgling, multiple pronged initiatives to tackle healthcare. However, there is one investment bank, Cowen and Company, who is optimistic about this, even with the fact that there is very little information released from Google about this matter. This confidence is due to Google's achievements at creating innovative inventions such as smart contact lenses and a miniature diabetes monitor.
In a substantial research note published last week, it mentioned that Google's stratagem "represent significant unlocked value" and the value of it would become more evident as Google divides its assets between Google Inc. and Alphabet in the fourth quarter of the year.
The note continues on and states this, "A closer look at Google's vast healthcare efforts reveals that the company is targeting very large markets with an expansive list of projects that with even minor success could justify the company's recent investments." Google Ventures presently back 14 life sciences companies. Some of these companies have valuations of over $1 billion.
The report also points out three primary trends that are favorable to Google's strengths which are; the digitization of health data, genome sequencing and a gradual changeover from paying for tests or visits to a doctor to paying for care, based on value. Google obviously has the area of computing covered and two of its Alphabet companies, Calico and Life Sciences have already begun to sign business deals. For example, Life Sciences have inked a corroboration with Dexcom, a pharmaceutical company to make highly advanced tech for people with diabetes in August this year. Cowen estimates the entire market potential to be worth at least $20 billion.
The research note does not contain a definite amount of total value calculated for Google's investments because medical research moves at a very slow pace due to regulations and fluidity of results. John Blackledge who is a Cowen analyst and the co-author of the research paper, says that Google has the potential to earn billions of dollars from healthcare because digital trends are expected to grow in the future. He also mentioned that it does not have to own the healthcare industry, but it would enable all parties involved to make a sizable profit.
"We might be early here," Blackledge concludes. "Three years from now, if we're having the same conversation, we may be able to measure it (Google's total profits) better."