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It's Sunday, July 21, 2019. Please enjoy ARK's weekly newsletter curated by our thematic analysts and designed to keep you engaged with disruptive innovation.

Will Elon Musk Help Our Brains Control Our Smartphones?

Follow Tasha on Twitter @TashaARK


This week we learned more about Neuralink, Elon Musk’s attempt to create human cyborgs. At its launch event, management revealed Neuralink’s implantable electrodes for closed loop therapies, or systems that will be able to read information from and send information to the brain that will be powered and enhanced by deep learning and other forms of artificial intelligence.


Neuralink has created a system of threads connected to a chip which a robot will implant in a “lasik-like” procedure. The implant will require no hospital, no neurosurgeon,[1] and no stitches, enabling patients to return home the same day. Neuralink’s plan is to implant up to 10,000 electrodes per patient, 1,000 times more than the most powerful FDA-approved system for deep brain stimulation to treat Parkinson’s.[2] Like existing deep brain stimulation treatments, Neuralink aims to help those affected by Parkinson’s, Dystonia, Obsessive Compulsive Disorder, and Epilepsy, as a start.


Neuralink is not alone on the bioelectronics front, as GlaxoSmithKline (GSK) has struck partnerships with Alphabet’s Verily and others for similar research studies.


Neuralink plans to start human clinical trials next year, an aggressive timeline in keeping with Elon Musk’s other game changing projects. Seemingly, it has not filed for an IND designation, 6-12 months after which the FDA will or will not grant approval. Then, enrolling patients could take another 2-6 months, after which trials to assess safety and efficacy can begin. Even if it were to receive fast track designation, Nueralink would have trouble meeting its timeline to launch in 2020.


That said, ARK is intrigued to learn more about another one of Musk’s wild and wonderful sounding projects, and looks forward to sharing future updates.


[1] Although Nueralink does have a neurosurgeon on its team today, who presented in scrubs at the launch event.

[2] Source: Nueralink presentation


Why Does India Have the Cheapest Mobile Data in the World, and What Will It Enable 

Follow James on Twitter @jwangARK


One gigabyte (GB) of mobile data in India costs just $0.26, 30x less than the world average of $8.53 and the cheapest in the world. Mobile data is so cheap that most Indians are skipping cable + WiFi and streaming music and videos over their phones. In 2018, Indians consumed 9.8 GB of data on average per month compared to 7.0 GB for North Americans, according to Ericsson. Despite its reputation for poor infrastructure historically, we believe India’s mobile internet is the most accessible in the world.


India’s mobile price plans are thanks to Reliance, a highly profitable petrochemical conglomerate that ranks 148th on the Fortune Global 500. In 2010, Reliance expanded into mobile with an ambitious plan to provide fast 4G wireless at affordable prices throughout India. Launched in 2016, the service has signed up more than 300 million subscribers to date.


India’s mobile data leadership is great news for streaming video providers like Hotstar and Netflix. In most parts of the world, high speed cable internet is necessary to access streaming video, as mobile-only plans are too expensive. In India, mobile data is so inexpensive that Netflix has launched a mobile-only plan at less than $5 per month. With time, India’s mobile internet infrastructure is likely to spawn new business models that will not be possible in most other countries.



Libra Could Compromise Banks’ Hefty Interchange Fees

Follow Max on Twitter @mfriedrichARK


Among the founding members of the Libra Association, not one is a bank. Why not?


Several US banks discussed Libra during their earning calls this week. Citigroup CEO Mike Corbat said that he read the Libra white paper several times, that Citi is “not dismissive at all” of Libra and related technologies, and that “interchange is an example of a friction that has existed for a period of time, and as we’ve seen elsewhere in the world, will likely continue to come down”. In contrast, JP Morgan’s Jamie Dimon said he “wouldn’t spend too much time” on Libra.


According to our research, large issuing banks like Citigroup and JP Morgan capture up to 80% of the economics associated with card transactions, thanks to interchange fees. While more than 10% of the annual revenue of these large banks, interchange fees account for nearly 25% of their non-interest income, as shown below.

If it overcomes political opposition, Libra has the potential to reduce the “friction” associated with interchange fees and compromise bank interchange revenue streams. According to Kevin Weil, head of Facebook’s Libra wallet, even with its focus on AML/KYC compliance, Calibra’s fees will be “10 times lower [for businesses] than what they are today.”



The Broad Institute Attempts to Accelerate the Licensing of CRISPR Cas9 

Follow Manisha on Twitter @msamyARK


This week, the Broad Institute, Harvard, and MilliporeSigma (MRK) consolidated their respective intellectual property (IP) by giving researchers access to CRISPR-Cas9 in a single process. The IP consolidation may be in response to recent patent wins by rival UC Berkeley, specifically the award of an eighth patent for the use of CRISPR-Cas9, not to mention an additional 7 patents pending.


While the latest patent news does impact the UC System and the Broad Institute, in ARK’s view they will have little bearing on their partners, Intellia Therapeutics (NTLA), CRISPR Therapeutics (CRSP), and Editas Medicine (EDIT), as the use cases for these companies is for human therapeutics. Instead, Mammoth Biosciences and SHERLOCK Diagnostics, private CRISPR-based diagnostic companies, will be impacted most because they are focused on non-human diagnostics as opposed to therapeutics.

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.



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