Connect with us

Business

Alphabet’s Verily bets on long-term payoff from virus-testing deals

Published

on

Alphabet's Verily bets on long-term payoff from virus-testing deals 1

By Paresh Dave

OAKLAND, Calif. (Reuters) – For Alphabet Inc’s Verily, a healthcare venture that is one the tech giant’s most prominent “other bets,” the coronavirus pandemic offered an immediate business opportunity.

Starting last February, the company shifted many of its about 1,000 employees to developing software for governments and employers to manage coronavirus testing.

It quickly landed major customers including the state of California, which records show paid Verily $49.6 million to use its Baseline software to schedule virus tests.

Smaller deals included a previously unreported $3.1 million grant from the National Foundation for the Centers for Disease Control and Prevention to operate California testing sites.

Verily executives said the pandemic work was a chance to demonstrate the company’s capabilities, and attract new customers.

“The conversations are naturally flowing in that way,” said Dr. Jessica Mega, Verily’s chief medical and scientific officer.

Critics say the effort has been another distraction for Verily, which has bounced between dozens of projects without producing a stable revenue stream. The venture has drawn more than $1.8 billion in funding from Alphabet and outside investors including private equity firm Silver Lake.

Converting temporary buyers into long-term clients may be wishful thinking, four industry analysts said.

Two former executives and a current employee criticized the company for taking on another one-off opportunity instead of focusing on attracting recurring subscribers to its software for clinical research, disease management and other tasks.

“I don’t think COVID will give them significant tailwinds,” said one of the people, speaking on the condition of anonymity.

Chief Executive Andy Conrad has told employees Verily is driving toward an initial public offering, and more consistent sales would be essential for a successful Wall Street debut.

Verily’s overall sales are not disclosed by Alphabet. Evercore ISI analyst Kevin Rippey estimated 2020 “other bets” overall revenue at about $650 million, with Verily contributing under $175 million. The former executives described Verily’s actual revenue as higher, and another analyst suggested $200 million to $300 million as more realistic.

‘WE HAD TO HELP’

Spun out of Google in 2015, Verily develops devices and software aimed at improving data collection, treatment, research and patient care.

It has enjoyed bursts of revenue from collaborations with healthcare companies, including work with DexCom Inc on a miniaturized blood glucose monitor and a scuttled, high-profile experiment with Alcon AG to create a smart contact lens for similar measurements.

But Verily’s financial future hinges on software products led by Baseline, which helps drugmakers enroll participants for clinical trials and analyze study data. It aims to reduce paperwork and site visits compared with traditional methods.

Mega said the company refashioned Baseline to schedule coronavirus tests after governments such as California started asking for help. The software also powers scheduling for 460 Rite Aid Corp pharmacies, which provide testing as part of a partnership with the Department of Health and Human Services.

Baseline enabled about 2 million people to get tests nationwide last year, she said, a fraction of the 250 million administered overall.

Dr. Vivian Lee, Verily’s president of health platforms, said government COVID-19 projects helped jumpstart separate testing software dubbed Healthy at Work and Healthy at School.

The new tools have 20 customers between them, including Brown University and some biotech companies, Verily said. The University of Alabama, Birmingham has spent $6.9 million on Healthy at School, according to previously unreported records.

Ralph Zottola, an assistant vice president at the university, said it is considering Verily for software to validate whether students have been vaccinated because the company has been “a good partner.”

When the need for coronavirus testing software ends, Verily aims to transition some new customers to Onduo, one of its core offerings alongside Baseline. The program includes sensors, diet coaching and other personalized tools that insurers and employers can provide for managing chronic diseases and general wellness.

Onduo counts Walgreens Boots Alliance Inc and insurers such as CareFirst as customers.

Still, both Onduo and Baseline remain very small players in medical software markets researchers say are worth over $100 billion in the United States annually, and some larger rivals like Teladoc Health Inc’s Livongo and Omada Health Inc did not divert resources to the pandemic last year.

Livongo, which directly competes with Onduo, reported sales more than doubled to $267 million during the first three quarters of 2020 compared with same period a year earlier.

Mega defended Verily’s moves during the greatest public health crisis in a century.

“Across the company, we’ve raised our hands,” she said. “There was an opportunity, we had to help, but it’s accelerating our core business.”

(Reporting by Paresh Dave; Editing by Jonathan Weber and Bill Berkrot)

Business

Battling Covid collateral damage, Renault says 2021 will be volatile

Published

on

Battling Covid collateral damage, Renault says 2021 will be volatile 2

By Gilles Guillaume

PARIS (Reuters) – Renault said on Friday it is still fighting the lingering effects of the COVID-19 pandemic, including a shortage of semiconductor chips, that could make for another rough year for the French carmaker.

Renault reported an 8 billion euro ($9.7 billion) loss for 2020 which, combined with gloomy take on the market, sent its shares down more than 5% in late morning trading.

“We are in the midst of a battle to try to manage a difficult year in terms of supply chains, of components,” Chief Executive Luca de Meo told reporters. “This is all the collateral damage of the Covid pandemic… we will have a fairly volatile year.”

De Meo, who took over last July, is looking at ways to boost profitability and sales at Renault while pushing ahead with cost cuts. There were early signs of improving momentum as margins inched up in the second half of 2020.

The group gave no financial guidance for this year, although it said it might reach a target of achieving 2 billion euros in costs cuts by 2023 ahead of time, possibly by December.

Executives said they were confident the carmaker could be profitable in the second half of 2021, but that they lacked sufficient market visibility to provide a forecast.

Renault struck a cautious note, saying it was focused on its recovery but warned orders had faltered in early 2021 as pandemic restrictions continued in some countries.

The group is facing new challenges as the European Union tightens emissions regulations and after rivals PSA and Fiat Chrysler joined forces to create Stellantis, the world’s fourth-biggest automaker.

The auto industry endured a tough 2020 but a swift rebound in premium car sales in China helped companies such as Volkswagen and Daimler to weather the storm.

Auto companies globally have since been hit by a shortage of semiconductors that has forced production cuts worldwide.

“The beginning of the year has shown some signs of weakness,” De Meo told analysts, but added the chip shortage should be resolved by the second half of 2021. “We have taken the necessary measures to anticipate and overcome challenges.”

Renault estimated the chip shortage could reduce its production by about 100,000 vehicles this year.

SHARP HIT

The group was already loss-making in 2019, but took a sharp hit in 2020 during lockdowns to fight the pandemic, which also hurt its Japanese partner Nissan.

Analysts polled by Refinitiv had expected a 7.4 billion euro loss for 2020. The group posted negative free cash flow for 2020.

The 2018 arrest of Carlos Ghosn, who formerly lead the alliance between Renault and Nissan, plunged the automakers into turmoil.

In a further sign that the companies have been working to repair the alliance, De Meo told journalists that Renault and Nissan will announce new joint products together in the coming weeks or months.

Renault has begun to raise prices on some car models, and group operating profit, which was negative for 2020 as a whole, improved in the last six months of the year, reaching 866 million euros or 3.5% of revenue.

Analysts at Jefferies said the operating performance was better than expected. Sales were still falling in the second half, but less sharply.

Renault is slashing jobs and trimming its range of cars, allowing it to slice spending in areas like research and development as it focuses on redressing its finances. It is also pivoting more towards electric cars as part of its revamp.

It was already struggling more than some rivals with sliding sales before the pandemic, after years of a vast expansion drive it is now trying to rein in, focusing on profitable markets.

De Meo told journalists on Friday that the French carmaker will make three new higher-margin models at its Palencia plant in Spain, where manufacturing costs are lower, between 2022 and 2024.

($1 = 0.8269 euros)

(Reporting by Gilles Guillaume and Sarah White in Paris, Nick Carey in London; Editing by Christopher Cushing, David Evans and Jan Harvey)

 

Continue Reading

Business

UK delays review of business rates tax until autumn

Published

on

UK delays review of business rates tax until autumn 3

LONDON (Reuters) – Britain’s finance ministry said it would delay publication of its review of business rates – a tax paid by companies based on the value of the property they occupy – until the autumn when the economic outlook should be clearer.

Many companies are demanding reductions in their business rates to help them compete with online retailers.

“Due to the ongoing and wide-ranging impacts of the pandemic and economic uncertainty, the government said the review’s final report would be released later in the year when there is more clarity on the long-term state of the economy and the public finances,” the ministry said.

Finance minister Rishi Sunak has granted a temporary business rates exemption to companies in the retail, hospitality, and leisure sectors, costing over 10 billion pounds ($14 billion). Sunak is due to announce his next round of support measures for the economy on March 3.

($1 = 0.7152 pounds)

(Writing by William Schomberg, editing by David Milliken)

Continue Reading

Business

Discounter Pepco has all of Europe in its sights

Published

on

Discounter Pepco has all of Europe in its sights 4

By James Davey

LONDON (Reuters) – Pepco Group, which owns British discount retailer Poundland, has targeted 400 store openings across Europe in its 2020-21 financial year as it expands its PEPCO brand beyond central and eastern Europe, its boss said on Friday.

The group opened a net 327 new stores in its 2019-20 year, taking the total to 3,021 in 15 countries. The PEPCO brand entered western Europe for the first time with openings in Italy and it plans its first foray into Spain in April or May.

Chief Executive Andy Bond said its five stores in Italy have traded “super well” so far.

“That’s given us a lot of confidence that we can now start building PEPCO into western Europe and that expands our market opportunity from roughly 100 million people (in central and eastern Europe) to roughly 500 million people,” he told Reuters.

To further illustrate the brand’s potential he noted that the group has more than 1,000 PEPCO shops in Poland, which has a significantly smaller population and gross domestic product than Italy or Spain.

The company, which also owns the Dealz brand in Europe but does not trade online, has already opened more than 100 of the targeted 400 new stores this financial year.

Pepco Group is part of South African conglomerate Steinhoff, which is still battling the fallout of a 2017 accounting scandal.

Since 2019 Steinhoff and its creditors have been evaluating a range of strategic options for Pepco Group, including a potential public listing, private equity sale or trade sale.

That process was delayed by the pandemic, but Steinhoff said last month that it had resumed.

“The business will be up for sale at the right time. It’s a case of when, rather than if,” said Bond, a former boss of British supermarket chain Asda.

Pepco Group on Friday reported a 31% drop in full-year core earnings, citing temporary coronavirus-related store closures.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) were 229 million euros ($277 million) for the year to Sept. 30, against 331 million euros the previous year.

Sales rose 3% to 3.5 billion euros, reflecting new store openings.

($1 = 0.8279 euros)

(Reporting by James Davey; Editing by David Goodman)

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Call For Entries

Global Banking and Finance Review Awards Nominations 2021
2021 Awards now open. Click Here to Nominate

Latest Articles

Battling Covid collateral damage, Renault says 2021 will be volatile 5 Battling Covid collateral damage, Renault says 2021 will be volatile 6
Business27 mins ago

Battling Covid collateral damage, Renault says 2021 will be volatile

By Gilles Guillaume PARIS (Reuters) – Renault said on Friday it is still fighting the lingering effects of the COVID-19...

Portable Oxygen Concentrators Market to Register 7.8% CAGR Through 2026; Sales to Surge as Oxygen Therapy Becomes Crucial in Covid-19 Treatments 7 Portable Oxygen Concentrators Market to Register 7.8% CAGR Through 2026; Sales to Surge as Oxygen Therapy Becomes Crucial in Covid-19 Treatments 8
Research Reports3 hours ago

Portable Oxygen Concentrators Market to Register 7.8% CAGR Through 2026; Sales to Surge as Oxygen Therapy Becomes Crucial in Covid-19 Treatments

Portable oxygen concentrator manufacturers are largely concerned with the maintenance of inventories throughout the coronavirus crisis, with optimization of supply...

Cancer Supportive Care Products Market to Reach US$ 32 Bn by 2030; Sales Limited by Complications for Cancer Patients Through Covid-19 Infections 9 Cancer Supportive Care Products Market to Reach US$ 32 Bn by 2030; Sales Limited by Complications for Cancer Patients Through Covid-19 Infections 10
Research Reports3 hours ago

Cancer Supportive Care Products Market to Reach US$ 32 Bn by 2030; Sales Limited by Complications for Cancer Patients Through Covid-19 Infections

The cancer supportive care products market is anticipated to reach a valuation of US$ 32 billion by 2030. The industry is expected...

Bronchoscopes Sales to Rise 1.5x Between 2018 and 2028; Potential Covid-19 Diagnostic Applications to Generate Lucrative Growth Opportunities 11 Bronchoscopes Sales to Rise 1.5x Between 2018 and 2028; Potential Covid-19 Diagnostic Applications to Generate Lucrative Growth Opportunities 12
Research Reports3 hours ago

Bronchoscopes Sales to Rise 1.5x Between 2018 and 2028; Potential Covid-19 Diagnostic Applications to Generate Lucrative Growth Opportunities

Bronchoscope manufacturers remain focused on development initiatives to improve product functionality and accuracy for higher adoption amid healthcare facilities. The bronchoscopes...

US$ 1.1 Bn Hypoparathyroidism Treatment Market Still in Infancy 13 US$ 1.1 Bn Hypoparathyroidism Treatment Market Still in Infancy 14
Research Reports3 hours ago

US$ 1.1 Bn Hypoparathyroidism Treatment Market Still in Infancy

Mushrooming incidences of thyroid cancer have amplified the number of thoracic surgeries, thus stimulating growth of hypoparathyroidism treatment market. Future...

Asia Pacific Plastic Additives Market Research Report by Type, by Production Technology, by Application, by Function – Global Forecast to 2020 – Cumulative Impact of COVID-19 15 Asia Pacific Plastic Additives Market Research Report by Type, by Production Technology, by Application, by Function – Global Forecast to 2020 – Cumulative Impact of COVID-19 16
Research Reports3 hours ago

Asia Pacific Plastic Additives Market Research Report by Type, by Production Technology, by Application, by Function – Global Forecast to 2020 – Cumulative Impact of COVID-19

The market report envelopes an all-in information of the global Asia Pacific Plastic Additives market and the nature of the market growth...

Comprehensive Report on Metal Stamping Market 2021 | Trends, Growth Demand, Opportunities & Forecast To 2025 | American Industrial Company, Martinrea International Inc., Magna International Inc 17 Comprehensive Report on Metal Stamping Market 2021 | Trends, Growth Demand, Opportunities & Forecast To 2025 | American Industrial Company, Martinrea International Inc., Magna International Inc 18
Research Reports3 hours ago

Comprehensive Report on Metal Stamping Market 2021 | Trends, Growth Demand, Opportunities & Forecast To 2025 | American Industrial Company, Martinrea International Inc., Magna International Inc

The market report envelopes an all-in information of the global Metal Stamping market and the nature of the market growth over the foreseeable...

Rheology Modifiers Market 2021 Segmentation and Analysis by Recent Trends, consumption by Regional data, Development, Investigation, Growth by to 2026 19 Rheology Modifiers Market 2021 Segmentation and Analysis by Recent Trends, consumption by Regional data, Development, Investigation, Growth by to 2026 20
Research Reports3 hours ago

Rheology Modifiers Market 2021 Segmentation and Analysis by Recent Trends, consumption by Regional data, Development, Investigation, Growth by to 2026

The market report envelopes an all-in information of the global Rheology Modifiers market and the nature of the market growth over the...

Fine Hydrate Market | Present Scenario, Key Vendors, Industry Share, and Growth Forecast up to 2026 | Nabaltec AG, Huber Engineered Materials, Hindalco Industries Limited 21 Fine Hydrate Market | Present Scenario, Key Vendors, Industry Share, and Growth Forecast up to 2026 | Nabaltec AG, Huber Engineered Materials, Hindalco Industries Limited 22
Research Reports3 hours ago

Fine Hydrate Market | Present Scenario, Key Vendors, Industry Share, and Growth Forecast up to 2026 | Nabaltec AG, Huber Engineered Materials, Hindalco Industries Limited

Future Market Insights in this report on the fine hydrate market has drawn an in-depth picture of the global market....

Ion Exchange Resins Market 2021 | Latest Trends, Demand, Growth, Opportunities & Outlook Till 2026 | Top Key Players: The Dow Chemical Company, Lanxess Ag, Purolite Corporation 23 Ion Exchange Resins Market 2021 | Latest Trends, Demand, Growth, Opportunities & Outlook Till 2026 | Top Key Players: The Dow Chemical Company, Lanxess Ag, Purolite Corporation 24
Research Reports3 hours ago

Ion Exchange Resins Market 2021 | Latest Trends, Demand, Growth, Opportunities & Outlook Till 2026 | Top Key Players: The Dow Chemical Company, Lanxess Ag, Purolite Corporation

An in-depth analysis of the current ion exchange resins market along with an effective evaluation of the future avenues of...

Newsletters with Secrets & Analysis. Subscribe Now