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| Sergey Brin in 2010--Wikimedia Commons CC BY 2.0 |
Google parent company Alphabet ($GOOG) has been slow to reveal financial details on its newer businesses. But now Google co-founder and Alphabet executive Sergey Brin is starting to offer some insights. He told company employees at a recent meeting that Verily, its med tech-focused business, is already profitable on a cash basis, tech pub Re/code reported.
That's likely due to the slew of partnerships that Verily has already executed with high-profile med tech players--including a smart contact lens deal with Novartis ($NVS); a miniaturized continuous blood glucose monitor partnership with Dexcom ($DXCM); a robotic surgery deal with Johnson & Johnson ($JNJ); a diabetes monitoring partnership with Sanofi ($SNY); and a genomics data deal with the Broad Institute. The financial details haven't been disclosed for any of these.
Verily also is already involved in pilot trials with the U.K.'s National Health Service and it's been tapped for the massive Precision Medicine Initiative in the U.S., which aims to gather and analyze genomic data on more than one million Americans. The latter has a $215 million commitment in the 2016 federal budget.
In 2015, Alphabet reported $448 million in revenue for its "Other Bets," which include Verily as well as other non-Google companies such as Nest and Google Fiber. But it didn't break out that revenue in detail. Re/Code suggests that of last year's total, $340 million, came from Nest with another almost $100 million from Fiber. However, that doesn't leave much that could be attributed to Verily, none of whose partnerships have resulted in a product.
Brin was a bit on the defensive at the recent all-hands meeting, fielding recent media criticisms of Alphabet's "Other Bet" companies, including recent questions about the management of Verily by Andrew Conrad that has reportedly resulted in a number of employee departures and the concern that Alphabet is spending inordinate amounts of cash on the new businesses.
"You know, it's actually sad to see sometimes where it appeared that ... former employees or soon-to-be former employees talked to the press. But, anyhow, I can tell you what's going on with these companies, fortunately," Brin prefaced his comments to employees, according to Re/code.
"So, in Verily's case, despite a handful of examples, their attrition rate is below Google's and Alphabet's as a whole. And also, there are articles that have generally said we are blowing a lot of money and so forth. It's true that, you know, as whole our 'Other Bets' are not yet profitable, but some of them are, including Verily on a cash basis and increasingly so," he reportedly concluded.
- here is the Re/code article