BlackBerry says partnership with health-care company Nanthealth offers growth

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BlackBerry (TSX:BB) is reaching into the health-care sector with the purchase of a minority stake in U.S.-based technology company NantHealth.

The Waterloo, Ont.-based smartphone company said the partnership will collaborate on various projects that include a new BlackBerry device designed for the medical industry and an operating system that links medical devices to NantHealth’s cloud-based networks.

All of the infrastructure will be government-level privacy certified and allow health-care professionals to share information securely, it said.

BlackBerry has been tightening its focus on what it considers key sectors that still value devices operating on a secure infrastructure. One of those areas is in the medical community, where mobile devices used by doctors can be linked to other equipment.

While financial terms of the NantHealth agreement weren’t disclosed, BlackBerry CEO John Chen said this is the type of partnership that’s important to the company’s goal of returning to profitability.

“BlackBerry’s capabilities align closely with NantHealth’s and this investment represents the type of forward-looking opportunities that are vital to our future,” Chen said in a news release on Tuesday.

Chen was hired last November to turn around BlackBerry, which has seen consumers leave in droves for Apple iPhones and Android smartphones, and many businesses also jump ship. He has moved to reduce costs, partly through layoffs, and find new ways to capitalize on BlackBerry’s technology.

NantHealth is a private company operated by billionaire heath-care investor Patrick Soon-Shiong. He founded its parent company NantWorks after previously selling two pharmaceutical companies, cancer-treatment developer Abraxis BioScience and American Pharma Partners.

While it’s unclear exactly how the partnership will benefit BlackBerry’s financial results, the transaction is a step in the right direction, said Jeffries & Co. analyst Peter Misek.

“The problem is that I have no sense for where revenues for this business, or this partnership, could materialize or how they would materialize,” Misek said in an interview.

“Chen is going to do a lot of good things, we’re just not always going to be able to see the fruits of his labours for awhile.”

NantHealth said its cloud-based platform is installed in about 250 hospitals and connects more than 16,000 medical devices.

Medical professionals will be able to use BlackBerry services, like an enhanced-security version of BlackBerry Messenger, to communicate. The companies say BlackBerry’s QNX division, which developed the BlackBerry 10 operating system, is seen as a key part of diagnostic and monitoring devices in hospitals and home-care environments.

“The future of the health care industry requires the ability to share information securely and quickly, whether device-to-device or doctor-to-doctor anywhere and at any time,” said Soon-Shiong in a release.

“Providing actionable information at the time of need will significantly improve the efficiency of health care and, more importantly, the efficacy of care for the patient.”

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