Verily, yesterday was a good day. The company formerly known as Google Life Sciences sold a minority stake to Singapore’s National Wealth Fund, Temasek, for $800m and separately offered evidence that its robotic surgery collaboration with Johnson & Johnson had borne fruit.
The capital from Temasek will go towards bringing some of Verily Life Sciences’ products to market, the group says, but just what these products might be is still a mystery. Presumably one will be a descendant of the digital surgery prototype it says it has delivered to its partners at J&J's subsidiary Ethicon Endo-Surgery. But even here details are scant: it is not clear what this device can do, or how it will be able to find a niche in a space dominated by Intuitive Surgical.
Singapore slings the cash
The only conclusion it seems possible to draw from the Temasek investment is that Verily can be valued at more than $1.6bn. How much more – what proportion of the company Temasek obtained for its $800m – is a closely guarded secret.
Verily’s motives for seeking external investment, rather than tapping its parent company, Alphabet, for cash, are clearer. Alphabet was formed to allow the various parts of the Google empire to operate independently; Verily and Google are now sister subsidiaries. Verily has drawn its funding from its parent until now, so the Temasek cash will perhaps allow it a little more autonomy.
It will also allow it to push east. A large proportion of Temasek’s $180bn portfolio is in China and other Asian countries, and Verily says it wants the fund’s expertise and networks as much as its money. One of Temasek’s directors will take a seat on Verily’s board.
External equity investment is a new direction for Verily, but the company often works in a collaborative manner, forming partnerships and occasionally establishing joint ventures to develop a particular technology. Verb Surgical, its joint venture with Ethicon, is one of these, and one that has – unlike many of the others – yielded at least a prototype.
Verb demonstrated the system in front of Ethicon, J&J and Alphabet staff yesterday. But the public is none the wiser; while the company has said the Verb platform includes robotics, imaging, advanced instrumentation, data analytics and connectivity, what exactly the prototype device looks like, and which procedures it is designed to perform, is still known only to insiders.
|Google’s ventures in pharma & medtech|
|Sanofi||Onduo: diabetes management||August 2016|
|GlaxoSmithKline||Galvani: bioelectronic medicines||August 2016|
|Dexcom||Miniature, disposable continuous glucose monitor||February 2016|
|Ethicon (J&J)||Verb: robotic surgery||March 2015|
|Biogen||Multiple sclerosis||January 2015|
|Abbvie||Calico: age-related diseases||September 2014|
|Alcon (Novartis)||Smart contact lens technology||July 2014|
At least it’s something. Development of the autofocusing contact lens Verily is working on with Novartis’s Alcon unit has been delayed, with a planned deadline for the start of human trials in 2016 being abandoned and no new date given. And work towards a contact lens to sense diabetic patients’ sugar levels by analysing their tears seems to have been abandoned entirely – perhaps unsurprisingly given its scientific implausibility.
Still, scientific progress does not always advance in a straight line, and many Alphabet schemes have been glorious failures; witness the withdrawal of Google Glass, for example. At a time when the traditional funding models in medtech appear to be under stress perhaps Verily should be applauded for trying a new approach. Still, more information on all its projects would be welcome.