ROBO Brief: E-Commerce & Exact Sciences Expands into Cancer Detection
This week, we explore all things e-commerce from the tremendous growth in online grocery as seen through Ocado's performance to the ambitious plans for online retailers heading into the holiday season. We also discuss the expansion of Exact Sciences into early cancer detection after the acquisition of Thrive. Please enjoy these insights from our research team.
Ocado: Reimagining the Future of Online Grocery
COVID-19 has fueled tremendous e-commerce growth, and few companies have been as effective at taking advantage of the opportunity as UK-based Ocado, the world’s largest pure-play online grocer and provider of automation technology solutions for e-commerce. It seems inevitable that the latest lockdowns implemented in the UK and Europe will further boost demand for online ordering and food delivery, and this trend is likely to continue as we enter the holiday season.
A member of both the ROBO and THNQ indices, Ocado’s stock has more than doubled in the past 12 months. The company has demonstrated flexibility and agility since the start of the pandemic, accelerating its innovation and working with its grocery partners to build more capacity in an effort to better meet the surge in demand for online shopping. Over the past several years, Ocado has also made strong progress in developing the machine learning, computer vision, and engineering systems required for robotic picking.
The pandemic has rapidly increased Ocado’s reach and market share, but that was just the beginning for this market innovator. Read more…
Exact Sciences Acquires Thrive to Expand into Early Cancer Detection
On the heels or our recent report on early cancer detection, another company joins the race to serve the $30B+ liquid biopsy market opportunity for early cancer detection. HTEC member Exact Sciences shares gained 18% after its announcement to acquire Thrive Earlier Detection for $2.15B. This is the third major acquisition of an early cancer detection company in the HTEC universe since June, with total valuation exceeding $10B.
It’s no surprise that these companies want to enter this industry, as the unmet need is vast. An estimated 100K lives could be saved each year in the U.S. through earlier cancer diagnosis. Yet less than a third of cancer is diagnosed during these early stages. Companies like Thrive offer the ability to test for multiple types of cancer by taking a simple blood draw from a patient. Once FDA approved, Thrive aims for its tests to be used as a screen, before the patient even experiences symptoms, as well as after treatment, to detect whether the cancer has stayed away.
E-commerce to Dominate the Holiday Shopping Season
It would be an understatement to say that the holiday season will look different this year. Given the uncertainty caused by the pandemic, Americans are expected to start their holiday shopping earlier, benefitting many key THNQ members. Online sales for the rest of the year are forecast to surge 33% year over year to a record $189 billion, according to a recent report from Adobe Analytics and Morgan Stanley.
Companies like Shopify, Etsy, Wix, Amazon, and Square are represented in the best performing subsector in the index, e-commerce, up by 114% YTD. Shopify, in particular, is on track to see another stellar holiday season as online spending shopping surges. On a recent quarterly earnings call, the company highlighted an increased urgency to help small and medium-sized businesses get online, thus helping more brick and mortar retailers establish an online reach.
In addition, its new global partnership with Tiktok will connect Shopify’s one million merchants to a younger audience. As one of the world’s largest and fastest growing platforms, tapping into Tiktok will enable Shopify merchants to sell organically from their videos and profiles.