If the "as it's" is a typo for "as it is", then we can consider the "it" to be semantically empty. This kind of "it" is sometimes called a dummy or expletive pronoun.
The phrase "as it is" can be used as an idiom with a meaning close to "under current circumstances" or "in this situation". In that case, the "it" doesn't refer to anything. The same lack of semantic value can be found in the sentence "it is raining" -- there is no "it" which rains, but the predicate still requires a subject.
Watson's future doesn't look good now. His future will look even worse if his scan results contain bad news.
When "it is" stands as a complete clause, it should not be contracted. The "as it's" in your example must be a typo of something. Replacing the typo with "as it is" makes more sense than replacing it with "as its". The idiomatic "as it is" doesn't require an antecedent, and I cannot find a suitable antecedent for "as its" in this sentence.