The R&D World Index (RDWI) for the week ending September 1, 2023, closed at 3,022.69 for the 25 companies in the RDWI. The Index was up 2.04% (or 60.33 basis points). Sixteen of the 25 RDWI members gained value last week from 0.28% (Stellantis NV) to 10.10% (Intel). Nine of the 25 RDWI members lost value last week from -0.10% (Bristol-Myers Squibb) to -6.06% (Volkswagen AG).
The Federal Trade Commission (FTC), Washington, D.C., announced last week that it was ending its legal challenge of drugmaker Amgen’s, Thousand Oaks, California, $27.8 billion deal to buy Horizon Therapeutics, Dublin, Ireland, averting a trial that was to have started this month. The deal also dismisses the anti-trust claims of six states that joined the FTC in May 2023 to block the deal. Amgen agreed in the FTC deal not to bundle the Horizon treatments (for rare diseases) and said it would not offer conditional rebates or other tactics which would entrench the monopoly position of Horizon’s products. Amgen was expected to quickly seek final approval to close the transaction by the end of 2023.
RDW Index member Eli Lilly & Co., Indianapolis, announced last week that it will continue to Invest in R&D in China to accelerate local pharmaceutical innovations and benefit the patients. Lilly currently invests 25% of its revenue in R&D with the key in Chinese R&D being the incubation of early ideas. Lilly also announced its intention to develop new strategic cooperation projects with five local biotechnology companies. About 25% of the people in the world with diabetes are in China and only half are in control of their situation. Lilly expects to focus a new diabetes product it recently introduced globally in this market.
Chipmaker Arm Ltd., Cambridge, U.K. (a subsidiary of Softbank Group, Tokyo), announced last week that it plans to meet with investors ahead of its stock market debut on the Nasdaq exchange. Softbank is expected to sell about 10% of its outstanding shares in the offering. Arm’s initial public offering (IPO) gives Softbank a way to sell down its position in Arm over time and gives Softbank fresh capital to restart its wide-ranging investments in technology startups. The company is expecting a valuation of Arm of $50 billion to $55 billion, which would make it the largest IPO in 2023.
Economic analysts last week concluded that the federal reserve bank is not likely to further increase short-term interest rates to offset inflationary pressures. These opinions resulted from Federal Reserve Chairman Powell’s remarks at an annual fed symposium in Jackson Hole, Wyoming. Powell purposely failed to say that there wouldn’t be any more rate increases to offset any potential queries as to when there might be rate cuts. The fed’s current rate target is 5.25% to 5.50%. Any rate cuts are not expected until sometime in early 2024, according to analysts.
OpenAI, San Francisco, the developer of the artificial intelligence (AI) software Chat GPT tool introduced a business version, ChatGPT Enterprise. This new tool puts it in direct competition to its largest backer and partner (and RDW Index member), Microsoft, Redmond, Washington. The new software is tailored to help employees learn new concepts of skills, such as coding and to analyze internal corporate data. The product is built on OpenAI’s most advanced language model, GPT-4, and will run twice as fast as the paid version of ChatGPT. It’s also designed to address corporate concerns about protecting proprietary data. It won’t use customer data for training or to improve its own services. Microsoft now offers its AI competitive Bing Chat Enterprise for Microsoft 365 customers.
Xaloy LLC, Austintown, Ohio, announced last week it plans to establish a new R&D center near its headquarters to expand production capacity and increase efficiency for polymer processing. Xaloy will build the center with the goal of creating new technologies and advancing sustainability. Xaloy will receive assistance from a JobsOhio R&D Center Grant for the project. The Xaloy Innovation Center will have state-of-the-art facilities and equipment for research, product, and process development.
The Hevolution Foundation, Riyadh, Saudi Arabia, announced last week that it has allocated more than $1 billion/year to develop new treatments for aging. This level of research funding greatly exceeds current longevity research, which mostly comes from the National Institutes of Health’s National Institute on Aging, Gaithersburg, Maryland. The non-profit American Federation for Aging Research has received about $8 million from Hevolution. Researchers still view Saudi Arabia with suspicion but are seeing the distribution of the funding.
The U.S. government last week named 10 drugs that will be subject to the first-ever price negotiations by Medicare, which was granted these powers in 2022. On the list are treatments for cancer, diabetes, and heart disease that can cost tens of thousands of dollars a year or more, including blood thinner Eliquis and diabetes treatment Jardiance. The Biden administration stated that they will not back down from court fights with industry opponents in its efforts to deliver more affordable medicines. Lower prices will only take place in 2026 and will save an estimated $25 billion per year by 2031. Medicare plans to use the cuts to put a $2,000 annual cap on how much members must pay out of pocket for drugs starting in 2025.
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 spent 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.