Tech

Alphabet Health Unit Founder Exits as Company Targets Commercial Uses

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Verily Life Sciences, a healthcare unit of

Alphabet Inc.,


GOOG 2.16%

said founder and Chief Executive Officer Andy Conrad would be replaced in the top role, as the company attempts to find commercial uses for its wide-ranging project portfolio.

Stephen Gillett, the current president of Verily, will succeed Mr. Conrad as CEO in January next year, with Mr. Conrad becoming executive chairman. Alphabet led a $1 billion round of new funding in the company with other investors, Verily said Friday in a statement announcing the leadership changes.

Verily is attempting to streamline a sprawling portfolio roughly seven years after spinning out of Google’s X moonshots division under the leadership of Mr. Conrad, a well-known geneticist.

The company has focused much of its efforts on making healthcare personalized to individual patients. In January, it announced a partnership with the skin care and cosmetics company

L’Oréal SA

to explore creating online health services using artificial intelligence.

Other Verily projects include a virtual diabetes clinic, an online program for connecting research participants to clinical studies and an insurance offering backed by

Swiss Re Ltd.

In an email to employees, Mr. Conrad said he wanted to spend more time on scientific projects, in addition to “seeing customers and partners and charting a path toward our independence.”

“As you all know, we are working to position Verily to win and concentrating our efforts on fewer programs,” Mr. Conrad wrote in the email. “Reallocating resources to fewer projects should increase productivity and the pace of advancement of these programs.”

Mr. Gillett, a former executive at

Best Buy Co.

and

Starbucks Corp.

, joined Verily as an adviser in 2020. He previously led Chronicle, a cybersecurity company that began as part of X before eventually joining Google’s cloud computing division.

In a separate email to employees, Mr. Gillett said the company had a “strong plan for the rest of the year that I believe will put us in a formidable operating position for 2023 and beyond.”

Verily has also hired McKinsey & Co. and Innosight to do consulting work, according to a company spokesperson. Innosight and McKinsey didn’t immediately respond to requests for comment.

Since spinning out of Google in 2015, Verily has raised billions of dollars from Alphabet and other investors, becoming one of the parent company’s largest so-called Other Bets along with the self-driving car company Waymo.

At the beginning of the coronavirus pandemic, a Verily website designed to direct potentially infected patients to testing facilities in the San Francisco Bay Area quickly became overwhelmed by demand after receiving promotion from the White House.

Alphabet executives have pushed Other Bets to raise money from outside investors in recent years, lightening the burden of the parent company to finance more speculative technology projects.

Other Bets recorded $1.7 billion in operating losses in the second quarter this year on revenue of $193 million, which the company said mostly came from the sale of health technology and internet services.

The private-equity firm Silver Lake, Singaporean fund Temasek and Ontario Teachers’ Pension Plan participated in Verily’s most recent previous round of financing in December 2020, which raised $700 million. A Verily spokesperson declined to name other investors in the most recent financing.

Verily also said Chief Financial Officer

Deepak Ahuja

will leave for another role at the end of this month while remaining an adviser to the company.

Write to Miles Kruppa at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the September 10, 2022, print edition as ‘Alphabet’s Verily Unit To Change Leadership.’

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