The R&D World Index (RDWI) for the week ending May 3, 2024, closed at 3,510.86 for the 25 companies in the RDWI. The Index was up 0.78% (or 27.13 basis points).

Fourteen RDWI members gained value last week from 0.09% (Microsoft) to 9.49% (Pfizer).  Eleven RDWI members lost value last week from -0.17% (Novartis) to -11.64% (Stellantis NV).

RDW Index member Toyota Motor, Toyota City, Japan, announced last week that its California R&D center in Gardena, California, will be renamed the Hydrogen Headquarters or simply H2HQ. According to its North American President and CEO, Toyota has developed hydrogen fuel cell electric solutions for over 30 years, advancing this scalable, zero-emission technology as part of its electrified portfolio. The Gardena facility previously supported the development of the Mirai, infrastructure growth in California, and helped create hydrogen-powered heavy-duty truck prototypes.

After a record low in 2022, the pharmaceutical industry’s return on investment (ROI) for R&D is seeing a financial return, according to a recent report by Deloitte, New York City. Pharma R&D increased to 4.1% in 2023, following the record low of 1.2% in 2022. In 2023, the top 200 big pharma companies invested $145 billion in R&D. Due to changing regulations, increasing cost pressures, declining sales, and difficulties in replenishing their drug product pipelines, projected R&D returns remain well below the cost of capital. The report noted that the new Medicare drug-pricing negotiation provision under the Inflation Reduction Act stifles drug development innovation. To boost innovation, the report recommends that pharma invest in early R&D, through both traditional and AI-enabled approaches, and remain strongly focused on execution to accelerate drug development timelines.

CoreWeave, New York City, a cloud-company startup supported by Nvidia, Santa Clara, California, tripled its $19 billion valuation in a new funding round highlighting the booming demand for cutting-edge systems powering AI. The $1.1 billion funding round was led by investment firm Coatue, New York City, and follows a round about five months ago that values CoreWeave at $7 billion. Coatue rents out semiconductor chips housed in data centers that customers use to create and deploy AI systems. Coatue is one of the big winners of the AI boom by moving faster than the traditional technology giants in offering access to the latest AI hardware. Coatue has also secured large allocations of Nvidia’s best chips to cater to the AI niche. Investors Magnetar Capital, Altimeter Capital, Lykos Global Management, and Fidelity are in the latest funding round.

RDW Index member Microsoft, Redmond, Washington, announced last week that it will invest $1.7 billion in cloud and AI infrastructure in Indonesia over the next four years ahead of an expected boom in demand for AI computing in the world’s fourth most populous country. The investment will build on the company’s plans to design the country’s first data center region and mark Microsoft’s biggest investment in Southeast Asia’s largest economy. Microsoft hopes to train 2.5 million people across the region in AI skills. More than 3.1 million SE Asian developers already use Microsoft’s GitHub software development and collaboration platform. The number of public generative AI projects on this platform tripled in 2023.

Last week, the U.S. Food and Drug Administration (FDA), Washington, D.C., issued a new rule on how it oversees medical labs that offer tests for things as diverse as illicit drugs and genetic indicators for disease risk. The rule is set to go into effect in about two months. The FDA will first scrutinize tests that are complicated or high stakes. The FDA has allowed, for many years, hospitals, and other groups to conduct medical tests without agency oversight, but the FDA now wants labs to prove that they are accurate. The new rule will reshape how such medical testing and associated research is done in the U.S.

German automotive company BMW, Munich, Germany, announced last week that it will invest $2.76 billion to adapt one of its major Chinese factories in Shenyang, to produce more electric vehicles (EVs). The upgrade will ready the factory to manufacture BMW’s Neue Klasse series EV models with production targeted for 2025. BMW partners with state-run Brilliance Automotive to manufacture and sell its cars in China. BMW has flagged its Neue Klasse series for several years as an advanced architecture for a new generation of EVs and plans to produce at least six models. EVs comprise 15% of BMW’s total deliveries globally in 2023, up from 9% in 2022.

RDW Index member Johnson & Johnson, New Brunswick, New Jersey, said last week that it would put a $6.5 billion settlement offer for tens of thousands of talc-related lawsuits to a vote in its latest attempt to resolve those personal injury claims in bankruptcy. The company will seek votes from claimants who allege that its cosmetic talc caused ovarian cancer. If three-quarters of all personal injury claimants vote yes, J&J could place a corporate affiliate in bankruptcy to bind all talc plaintiffs to the settlement. The plan would commit the company to pay ovarian claimants $6.475 billion over 25 years, ranking as one of the largest mass-tort settlements ever.

 

R&D World’s R&D Index is a weekly stock market summary of the top international companies involved in R&D. The top 25 industrial R&D spenders in 2020 were selected based on the latest listings from Schonfeld & Associates’ June 2020 R&D Ratios & Budgets. These 25 companies include pharmaceutical (10 companies), automotive (6 companies), and ICT (9 companies) which invested a cumulative total of nearly 260 billion dollars in R&D in 2019, or approximately 10% of all the R&D spending in the world by government, industries, and academia combined, according to R&D World’s 2021 Global R&D Funding Forecast. The stock prices used in the R&D World Index are tabulated from NASDAQ. NYSE, and OTC common stock prices for the companies selected at the close of stock trading business on the Friday preceding the online publication of the R&D World Index.