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Alphabet (GOOGL) to Form JV With ResMed to Treat Sleep Apnea

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In a bid to strengthen presence in the healthcare sector, Alphabet’s GOOGL healthcare division Verily is set to form a joint venture with ResMed RMD.

With the aid of this venture, Alphabet strives to help people with undiagnosed and untreated sleep apnea. Notably, sleep apnea is a widespread sleeping disorder which is potentially dangerous. However, most of the cases remain undiagnosed as there is an acute lack of awareness regarding the disease.

Alphabet is focused on developing a technology that can be utilized for the diagnosis and treatment of this disease.

This partnership aims at combining the advanced techniques of Google such as data analytics, machine learning and artificial intelligence with ResMed’s vast collected data on sleep nights and its efficient medical products for the treatment of sleep apnea.

We believe the latest move will expand the healthcare portfolio of Alphabet, which will aid in reinforcing its market position.

Coming to the price performance, shares of Alphabet have returned 11.2% on a year-to-date basis against the industry’s loss of 3%.



Increasing Focus on Healthcare Sector

Alphabet’s recent healthcare business plans are in sync with its growing focus on healthcare market with the support of its robust analytics techniques and tools.

Per the latest report from Research and Markets, the global healthcare analytics market is anticipated to grow at a CAGR of 25.5% between 2018 and 2023 and to reach $33.8 billion by 2023.

According to the report from Research and Markets, the sleep apnea market is anticipated to reach $6.5 billion by 2023 by growing at a CAGR of 7.8% between 2018 and 2023.

This venture intends to reduce future healthcare expenditure of patients by diagnosing the same now. This is likely to have a profound socio-economic impact on this particular sector.

We believe the company is well poised to cater to the needs of these patients with its recent partnership and techniques.

Further, Verily has collaborated with Johnson & Johnson to work on a startup named Verge Surgical in order to develop a surgical robot.

Additionally, the company joined forces with American Medical Association to launch a medical and health data challenge in an attempt to provide an easier and smoother mode of sharing medical records such as historical lab results related to any disease.

All the above mentioned endeavors will continue to aid Alphabet’s growth in this sector.

Alphabet Inc. Revenue (TTM)

Alphabet Inc. Revenue (TTM) | Alphabet Inc. Quote


Rising Competition

Alphabet’s entry to the sleep tracking system will help it in gaining competitive edge against other tech companies which have forayed into this space like Fitbit FIT and Apple AAPL.

However, the strong efforts of Fitbit and Apple in the healthcare market are likely to mar the endeavors of Alphabet to track sleep apnea to some extent.

Since last year, Fitbit is focused on development of wearables and tools to diagnose and monitor sleep apnea. The company is likely to benefit from this owing to growing use of wearables and severe health risks related to this particular disease.

Additionally, Apple acquired Beddit, developer of sleep tracking devices which are compatible with iOS and Apple Watch as well.

Consequently, intensifying competition in the sleep tracking space remains a concern.

Currently, Alphabet carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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