The R&D World Index (RDWI) for the week ending September 22, 2023, closed at 2,978.01 for the 25 companies in the RDWI. The Index was down -2.05% (or -62.45 basis points). Six of the 25 RDWI members gained value last week from 0.41% (AbbVie) to 3.87% (Volkswagen AG). Nineteen of the 25 RDWI members lost value last week from -0.13% (Apple) to -9.77% (Intel).
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ICT (Information and Communications Technology) company Ericsson, Stockholm, announced last week that it will receive about $4 billion in funding from the German Ministry of Economic Affairs and Climate Action over the next five years to work on the R&D of 6G radio microelectronics projects. This project is part of a wider European Union initiative — the Important Project of Common European Interest on Microelectronics and Communications Technologies (IPCEI-ME/CT). The focus of the Ericsson project is on the early development of 6G Massive MIMO (multiple-input multiple-output) radios to strengthen Europe’s semiconductor ecosystem and establish a complete value chain.
China’s National Bureau of Statistics, Xicheng District, Beijing, announced last week that its R&D investment rose more than 10% in 2022 to $421 billion, most of it targeted for experimental development. The proportion of this investment allocated to basic research remained relatively low (approximately 6.6% of the total), potentially hindering some of China’s development goals, according to analysts. The ratio of R&D to gross domestic product (GDP) rose to 2.54% in 2022, an increase of 0.11 percentage points over that invested in 2021.
Pharmaceutical developer Merck KGaA, Darmstadt, Germany, announced last week that it is supplementing its drug discovery efforts by collaborating with BenevolentAI, London and Excientia, Oxford, U.K., to develop (with artificial intelligence (AI) tools) small molecule drugs in the areas of oncology, neurology, and immunology. Merck has selected three potential first-in-class and best-in-class targets for each alliance. The company may select molecules for further preclinical and clinical development. Each collaborating AI company received low double-digit up-front payments and will be eligible for several hundreds of millions of dollars more if milestones for all of the three initial programs are met. Both companies also have development alliances with other biopharma companies that are RDW Index members.
RDW Index member Cisco Systems, San Jose, California, announced last week that it has struck a $28 billion deal to acquire analytics and security software company Splunk, San Jose. The deal is expected to close in September 2024 and will expand Cisco’s software portfolio and produce more recurring revenue. The combination is expected to create one of the world’s largest software companies by providing its customers with AI and other tools to analyze their data and detect security threats. The deal is not expected to need approval from the China government, there is no overlap in the Cisco portfolio.
DeepMind Technologies, a London, U.K. subsidiary of RDW Index member Google, Mountain View, California, has revealed that it has cataloged 71 million genetic mutations in the structure of proteins that could cause disease in the human body. AlphaMissense, DeepMind’s AI model evaluates structural variations in proteins and predicts the likelihood that a mutation will cause harm. The model looks for missense mutations in which a protein’s composition varies by a single amino acid. DeepMInd is making its catalog of missense mutations publicly available to help geneticists and doctors improve rare disease diagnoses and develop treatments that target the genetic causes of these diseases.
Amazon, Seattle, held its annual fall device event last week and despite previous announcements by the company that it was getting out of the hardware business (reinforced by a 26,000-person layoff), the company still introduced at least 10 new products. The most notable product was the introduction of generative AI to its home companion Alexa. The new device is expected to be available by mid-2024. Generative AI was not mentioned during the event as being available for the company’s industry-leading AWS cloud service, which currently generates more than $85 billion for the company.
As noted in multiple media, the Federal Reserve made no changes to its governance of short-term interest rates during its scheduled meeting last week. Comments made by fed chair Jerome Powell, following their meeting, however, kept open the possibility of further rate increases even as early as this year. Media projections noted that almost two-thirds of the fed officials still favor one more rate increase this year to offset rising inflation data.
Drug developer Novo Nordisk, Bagavaerd, Denmark, reported last week that they found bacteria in batches of the main ingredient for a diabetes pill made at the company’s Clayton, North Carolina, plant earlier this year. The U.S. Food and Drug Administration (FDA) inspected that plant in July and issued a report saying that the company had failed to investigate the bacteria cause thoroughly and that the plant’s microbial controls were deficient. This plant makes the drug ingredient semaglutide which is used in the diabetes pill Rybelsus. Semaglutide is also the main ingredient in the company’s popular injections Ozempic and Wegovy, but the company said that the semaglutide for those products is not made at the North Carolina facility. The FDA said last week that it is not aware of ongoing issues that raise any concerns about the quality of drugs made at the North Carolina plant.
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.
