Is Healthcare Google’s Next Big Business After Search? This Investment Bank Thinks So.

Health is a big deal for Google. Two of its Alphabet companies are devoted to it. One of them, Life Sciences, recently named diabetes as its inaugural area of focus with other widespread diseases to come. Google’s co-founders (and Alphabet chiefs) are obsessed with massive, intractable medical problems.

Yet the company has given minimal disclosures on its nascent, multi-pronged initiatives in health care. Still, one investment bank believes Google’s efforts — which include inventions like its smart contact lens and miniature diabetes monitor, as well as its venture investments — could create its next multi-billion dollar business. In a sizable research note published last week, Cowen and Company wrote that Google’s moves “represent significant unlocked value” that will start becoming clearer as the company separates the finances of Google and Alphabet in the fourth quarter.

“A closer look at Google’s vast health care efforts,” the report says, “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.”

Cowen cites three major trends in the sector that play to Google’s strengths: The digitization of health data; a shift toward paying for care based on value, rather than visits or tests; and genome sequencing. Google’s cloud computing expertise positions it well in the first trend while it has, through the two Alphabet companies, Calico and Life Sciences, begun inking business deals aimed at the other two. In August, Life Sciences signed a partnership with pharmaceutical company Dexcom to make high-tech products for diabetics, a total market Cowen pegs at $20 billion in potential.

Source : Recode.net