In one of the biggest business announcements of the year, Google announced that it would reorganize its diverse tech ventures under a holding company entitled Alphabet. Among the many companies that Google would oversee are its healthcare entities which include Life Sciences and Calico. This restructuring is primarily driven by Google's desire to clearly differentiate companies and clarify ventures, enabling investors to more easily devote funds to projects they feel are more aligned with their interests.
The creation of Alphabet will also likely produce ripple effects in numerous tech related industries. The healthcare sector is expected to benefit considerably from Alphabet, as Google has invested a considerable amount in this field. In 2014, Google expended almost $153 million on life sciences or almost one third of its available funds. Under the Alphabet umbrella, projects like Life Sciences and Calico will become semi-autonomous companies, reinforcing Google's intent to emphasize more medical research. By redistributing internal resources and giving these life sciences divisions free reign, Google is essentially empowering Alphabet to take a leadership role in the health care industry.
One of the most exciting and promising of these companies is Calico which will be headed by Arthur Levinson, who was previously the CEO of Genentech. Calico has assembled a crack team of doctors, chemists and biologists to tackle issues related to aging. Calico has partnered with other companies like AncestryDNA to research millions of family trees in order to understand how genetics relates to longevity. This company will build on these and other research initiatives to develop anti-aging therapeutics and cures for age-related diseases.
The life sciences division of Google X will also attain independence during the Alphabet reorganization. This will enable the new company to pursue current and future projects like the glucose monitoring contact lenses (it is currently developing in association with Novartis), nanodiagnostics, a cardiac monitor and the Baseline Study which accumulates genetic and molecular data across a range of human subjects to determine what constitutes optimal health. Led by Andy Conrad, this new company will focus on transitioning new technologies from research to clinical testing.
Perhaps the most important way that Google/Alphabet will impact the health care industry will be its continued funding of promising health care startups through its hedge fund division, Google Ventures. Although only 9 percent of its capital was invested in healthcare enterprises in 2012 and 2013, Google Ventures devoted almost 36 percent of its funds in this sector in 2014, suggesting that the organization is recognizing the growing potential of this sector.
Google X is the engine powering many of these other Alphabet enterprises. Google X is the designation for the division that envisions bold, new initiatives and attempts to map a path from concept to application. While Google X is not limited to exclusively medical concepts, this impressive group of thought leader have often provided the template for successfully realizing a revolutionary concept. Expect new health care ideas, technologies and products that have their roots in the Google X team.
Article written by:
Robert Moghim, M.D.
CEO, Health Carousel Locum Tenens