Healthcare is changing rapidly. Which companies will emerge as the huge winners with these major changes? We asked three of our healthcare contributors to weigh in on the subject. Here's why AbbVie (NYSE:ABBV), Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG), Johnson & Johnson (NYSE:JNJ), and Veeva Systems (NYSE:VEEV) could represent bold bets on the future of healthcare.
Finding the elusive fountain of youth?
George Budwell (AbbVie): If anything qualifies as a moonshot effort, it's the partnership between AbbVie and Alphabet to cure age-related diseases. In 2014, AbbVie signed on to act as the pharma expert behind Alphabet's Calico LLC life-sciences company. The basic idea driving this unique partnership between a tech and a pharma giant is to develop breakthrough treatments for diseases like cancer and dementia that are often strongly associated with getting older.
While the two companies haven't revealed much about the collaboration -- beyond their plan to work out the molecular and genetic mechanisms promoting longevity in naked mole rats -- AbbVie has already sunk a hefty $500 million into this speculative effort. That's a strong sign that AbbVie is indeed serious about pursuing novel therapies with game-changing medical and commercial potential -- even if they do come with an unusually high risk of failure.
The bottom line: AbbVie and Alphabet's anti-aging collaboration is apparently still in the idea stage, based on the lack of actual clinical trials -- but it could one day revolutionize modern medicine, given its ambitious goal of understanding the molecular foundation of the aging process in humans.
Rise of the robots
Keith Speights (Verb Surgical): Science fiction is becoming a reality all around us. Robots might not rule the world, but they're becoming increasingly important in nearly every area -- including healthcare. That's why I really like what Verb Surgical is doing.
Verb Surgical was founded by Alphabet and Johnson & Johnson in 2015. The goal of the two big companies in forming Verb was to develop a new generation of robot-assisted surgical systems using big data and machine learning.
The vision is for these robot surgical systems to analyze a video library of hundreds of previous surgeries and recommend where the surgeon should cut. This system would be smaller and less expensive than current systems like Intuitive Surgical's daVinci robotic surgery device.
Verb Surgical doesn't have to start from scratch to make this possible. J&J already developed a basic prototype of the robot, and Alphabet already has the machine-learning technology necessary for the anatomical-recognition software.
If Verb Surgical succeeds -- and I suspect it will -- the future of healthcare will mean that surgeons will have plenty of help from smart technology. Instead of Mr. Roboto, we might be saying Dr. Roboto in just a few years.
Managing data to make the future possible
Brian Stoffel (Veeva Systems): On the surface, my pick is nowhere near as bold or exciting as George's or Keith's, but I think it's every bit as vital to the healthcare sector churning out life-changing solutions in the decades to come. Veeva Systems was founded when Peter Gassner -- then an executive at salesforce.com -- realized that pharmaceutical companies had unique cloud needs that the one-size-fits-all model at salesforce couldn't adequately address.
So he started out by founding Veeva and focusing on customer relationship management with his Veeva CRM Suite. For most of the time since the company's 2007 founding, this has been Veeva's bread-and-butter business.
But over the past two years, a big new product -- Veeva Vault -- has been turning heads. The application allows employees across a company to use a single portal to record all of the relevant data necessary to bring a drug from the idea stage to clinical testing to market -- all while complying with the necessary regulations.
It's been a huge hit: In the most recent quarter, bookings for Vault exceeded CRM, and reviews have been so positive that Veeva will start offering Vault as a product outside of the life-sciences industry this year.
But the bottom line is this: Veeva's moat comes from both high switching costs and the gobs of data it collects to better serve its customers because its product can quickly become engrained within a company's standard operating procedure. It will be a force for bringing the medical field's bold bets to fruition, and it could yield huge results for patient investors.