ARK Disrupt Issue 60

ARK Disrupt Issue 60: Cancer Treatments, MaaS, Snap’s IPO

Please enjoy ARK Disrupt Issue 60. This blog series is based on ARK Brainstorming, a weekly discussion between our CEO, Director of Research, thematic analysts, ARK’s theme developers, thought leaders, and investors. It is designed to present you with the most recent innovation takeaways and to keep you engaged in an ongoing discussion on investing in disruptive innovation.

1. First-In-Human TALEN-Edited CAR-T Immunotherapy Treats Leukemia Successfully

In a study published in the journal Science Translational Medicine, physicians reported that two babies remain cancer-free after 18 months post TALEN-edited CAR-T therapy. Both babies, diagnosed with a blood cancer known as acute lymphoblastic leukemia (ALL), were the first human recipients of this therapy.

CAR-T therapy (Chimeric Antigen Receptor-T cells) harnesses an individual’s T-cells (immune system) and rewires them to target and kill tumorigenic cells. Gene-editing systems like TALENS and CRISPR can improve the outcome of CAR-T therapy.

While many research groups and companies are developing CAR-T therapies for cancer indications, they face a number of limitations. First, many patients do not have enough healthy T-cells to be harvested. Second, CAR-T therapy can cause deadly side effects such as graft-versus-host-disease (GVHD) and cytokine release syndrome (CRS).

That said, the success transplantation in the two babies confirms the utility of TALENs as a gene-editing platform that can activate the immune system. Additionally, in the study 64% of cells edited with TALENS demonstrated a successful knock-down of genes, suggesting the possibility of a class of “universal” CAR-Ts that do not require harvesting an individual’s own T-cells.

In November 2016, a group of scientists in Chengdu, China, injected patients with the first CRISPR-edited CAR-Ts. While the results of that study have not been published, both TALENs and CRISPR will continue to play pivotal roles in immunotherapy. Immunotherapy could turn cancer from a killer into a chronic disease…or into a cure.

2. Mobility-As-A-Service: Why Self-Driving Cars Could Change Everything

ARK expects that before 2020 fully autonomous vehicles will become commercially available, enabling the rise and rapid growth of autonomous taxi networks. These networks should decrease the cost and inconvenience of point-to-point mobility dramatically, spurring a transformative boost in economic productivity. As a result, the traditional automotive industry may be subsumed by mobility-as-a-service (MaaS) platforms that could become one of the most valuable investment opportunities in public equity markets. For more perspective and insights, please read our original research white paper here.

3. Snap Inc. Is Going Public: First Impressions From Its Initial Public Offering S-1 Filing

Snap Inc.SNAP, the parent company of Snapchat, filed its IPO papers this week. Based on its S-1 prospectus, Snap seems to have a unique worldview, rapid growth, staggering costs, and no pretense of public shareholder governance. We did a quick write up of our initial findings, which you can read here.

4. Electric Vehicles Should Change The Automotive Industry’s Business Model

ARK believes that electric vehicles (EVs) will gain strategic advantage as sales gravitate to the direct-to-consumer model, led by TeslaTSLA. Traditional dealerships earn the bulk of their profits by servicing traditional internal combustion engine (ICE) vehicles. With 10-20% the number of ICE vehicle parts, EVs require much less maintenance, giving traditional dealerships little incentive to sell them. Exacerbating this conflict, a direct sales model provides continuous over-the-air performance updates as part of its service, while traditional dealerships not only require a visit to their service centers for such updates but also charge for them.

This week, the EV business model got another three booster shots:

Whether or not dealerships heed Audi’s advice, the mismatch of incentives between auto manufacturers and car dealerships will intensify as EV models take share from traditional cars at an accelerating rate during the next three to four years.

4. “Open Data” Should Drive Important Efficiencies Into The Financial Services Sector

“Open data” seems to be making its debut in the financial services sector. US banks are becoming more comfortable sharing data with third party providers, paving the way for open banking. This week, both Chase and Wells Fargo gave their customers the option to share their financial data electronically with Intuit’s applications, including Mint and TurboTax. In emerging markets, banks like Sasfin in South Africa are integrating with cloud based accounting platforms like Xero, helping to streamline financial operations for small businesses.

These relationships aim to improve customer satisfaction and to lower the cost of customer acquisition. When shared securely or published openly, data can enable applications and tools that are valuable to bank customers. Accessing and organizing their own banking data through aggregators and application providers like Intuit and Yoodle, customers are able to choose the most suitable and cost-effective financial products and services.

Among the benefits to customers and small businesses are:

  • Easy comparisons of services and fees across banks.
  • Transparency of loan terms based on transactional data.
  • Productivity enhancements as accounting shifts to the cloud.
  • Fraud monitoring and detection across multiple accounts.

Embracing open data, early adopter banks should be able to lower their costs of customer acquisition significantly. As they customize and personalize products, banks should be able to increase their interactions with existing and prospective customers, creating longer term relationships, and barriers to entry.

ARK's statements are not an endorsement of any company or a recommendation to buy, sell or hold any security. For a list of all purchases and sales made by ARK for client accounts during the past year that could be considered by the SEC as recommendations, click here. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. For full disclosures, click here.