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Stat News reports that Alphabet's Verily, Google's biotech company, has awarded a research contract to a luxury health clinic owned in part by Verily CEO Andrew Conrad. This contract, it adds, has raised eyebrows inside Verily as well as among corporate governance experts, Stat News adds.

Among Verily's ongoing studies is the Baseline project, which is collecting genetic, molecular, clinical, and other data from some 10,000 patients. While Stat News notes that Duke University and Stanford University will be testing most of the volunteers for that project, a small feasibility study is being conducted at the California Health & Longevity Institute.

Conrad tells Stat News that he pushed for the contract to go to his clinic "[b]ecause I think it's cool. Because it's super efficient to have everything in one spot." He adds that the clinic houses all the necessary testing equipment, so volunteers would only need to make one trip.

Stat News adds that it's not clear what experience the clinic — which offers medical services like MRIs as well as more spa-like teeth whitening and massage services — contributes to the Baseline project.

Charles Elson, who directs the corporate governance center at the University of Delaware, tells Stat News that this "raises all kinds of red flags" for Alphabet and could hurt shareholders. "[T]hese kinds of transactions are so problematic," he adds.

Conrad says that Google X — the deal was in motion before Verily was spun out on its own — compliance and ethics officers OKed the deal.