Alphabet (NASDAQ:GOOGL)’s GOOGL healthcare unit Verily recently announced that it has raised an additional $700 million from the former and external investors. These investors include Silver Lake, Temasek and the Ontario Teachers’ Pension Plan.
The financing will support the expansion of the company’s commercial businesses including varied life sciences programs, namely, surgery, pathology and immunology.
It plans to use the funds for expanding research including its insurance efforts and the healthcare platform Baseline, which has been used by the company for COVID-19 research. Baseline is a collection of tools and services designed to make it easier for individuals to participate in clinical research.
Markedly, last March, the company launched Project Baseline’s website for COVID patients. Later in May, Verily announced plans to launch an antibody research study for the virus. It also opened a clinical lab in South San Francisco to create greater lab capacity for COVID testing.
Reportedly, the Baseline platform has so far helped nearly 2 million people across the United States to get screened and tested.
We believe the latest effort of Verily is a positive amid this coronavirus-induced global crisis. This is likely to instill investor optimism in the stock.
The latest move bodes well for Alphabet’s strengthening efforts toward bolstering footprint in the multi-trillion healthcare industry.
Wrapping Up
Verily, which is Alphabet’s life science division, has become an integral part of the multi-trillion healthcare industry on the back of its technology solutions.
The company has taken a number of noteworthy initiatives in the healthcare space. These initiatives hold promise in the ongoing pandemic scenario that has been triggering tremendous disruptions to economies and in turn impacting the business health of companies globally.
This August, Verily in association with Zurich-based insurance firm Swiss Reis formed a subsidiary, Coefficient Insurance Co, thereby expanding the former’s foothold in the health insurance space.
The subsidiary was formed to help the companies in cost reduction, which has become crucial amid this unprecedented crisis triggered by the coronavirus outbreak.
The latest funding is expected to drive Verily’s business growth. We note that it is part of Alphabet’s Other Bets segment. Hence, it is expected to drive growth of this segment.
Zacks Rank & Stocks to Consider
Currently, Alphabet carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include The Trade Desk (NASDAQ:TTD) Inc. TTD, Dropbox (NASDAQ:DBX), Inc. DBX and Inuvo, Inc. INUV, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for The Trade Desk, Dropbox, and Inuvo is currently projected at 25%, 40.9% and 30%, respectively.
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