Coronavirus affecting long-term global R&D in this week’s R&D World Index

The R&D World Index (RDWI) for the week ending August 13, 2021, closed at 5,502.43 for the 25 companies in the R&D World Index. The Index was up 1.01% (or 55.03 basis points) from the week ending August 6, 2021. The stock of 16 R&D World Index members gained value from 0.29% (Eli Lilly & Co.) to 7.57% (Pfizer). The stock of nine R&D World Index members lost value from -0.09% (Facebook) to -3.96% (Alibaba).

Southwest Research Institute (SWRI), San Antonio, Texas, last week was awarded a $34 million contract for the R&D of autonomous and robotic vehicles for the U.S. Army. SWRI has been developing automated vehicle technologies since 2006 through a multidisciplinary internal research program known as MARTI (Mobile Autonomous Robotic Technology Initiative). This program has evolved to serve military and commercial clients with the development of automated systems using sensing, machine learning and connected and automated vehicle (CAV) technologies. SWRI’s robotics systems have been integrated into more than 15 military ground vehicle platforms, some of which were deployed overseas as part of the Dismounted Soldier Autonomy Tools (DSAT) program. The current five-year contract will support the U.S. Army Ground Vehicle Systems Center with similar R&D programs.

Nearly half of U.K. industrial firms have decreased their R&D investments since the start of the COVID-19 pandemic, according to research released last week at Durham University Business School, Durham, U.K. Eighteen percent of those UK firms have actually halted their R&D programs altogether. The study, however, notes that 40% of U.K. firms have increased their ICT (Information and Communications Technology) efforts. These could be associated with firms having to support their researchers’ working from home and remote operating situations. The study analysts concluded that the COVID-19 pandemic will have long-lasting negative effects on productivity and corporate growth. The ICT investments reflect the firms’ plans to increase their digital footprint. The study also revealed a large drop in the U.K.’s GDP (gross domestic product) which is hoped to be temporary.

Moderna, the Cambridge, Mass., developer of the U.S.-distributed COVID-19 vaccine, announced last week that it will build a plant in Canada to make messenger RNA (mRNA) vaccines to fulfill Canadian orders for Moderna vaccines, including COVID-19 booster shots and other vaccines the company is developing. The location of the factory has not yet been determined, but it will be completed by the end of 2024. Moderna is discussing similar plants with countries in Europe and Asia. The company also recently announced that it was adding two additional vaccine production lines to its Cambridge plants and has doubled its workforce to more than 1,500 over the past year. The company stated that it could build between five to 10 such facilities around the world in the coming years.

China’s largest electric vehicle battery manufacturer, Contemporary Amperex Technology Co. (CATL), announced last week that it plans to sell as much as $9 billion in stock to help boost its manufacturing capacity. CATL is a major supplier to Tesla’s Shanghai factory, along with NIO, Xpeng, Li Auto and Daimler. With a market capitalization of about $180 billion, CATL is one of the most valuable companies listed in China’s Shanghai Composite Stock Market. CATL stated that it plans to use most of the proceeds from the stock sale to increase production of lithium-ion batteries at its facilities in Fujian, Guangdong and Jiangsu provinces. It also plans to invest in R&D and use some of the proceeds for working capital. To save costs, CATL is researching sodium-ion technologies to make less expensive batteries.

Palo Alto, Calif.-based Tesla has stated that it is still hiring researchers for its first overseas R&D Center in Shanghai, China, which is scheduled to open in the second half of this year. This facility will be focused on developing Tesla’s mass-market $25,000 Model 2 (likely name, but not yet designated), which would be manufactured in China and likely start production in late-2022. Production of Tesla’s Semi and Cybertruck electric vehicles (EVs) have been delayed in favor of developing the new mass market product.

RDW Index member Google is reportedly planning to build a large R&D and hardware manufacturing campus in the Silicon Valley area of California. The “Midpoint” campus is expected to have 20% office space and 80% space focused on manufacturing hardware, storage and distribution. The company has spent more than $389 million for land in northern San Jose on which it will site the five building R&D center.

The U.S. Centers for Disease Control and Prevention (CDC) last week recommended administering additional mRNA vaccine doses to certain immuno-compromised people. The plan was unanimously recommended by the CDC’s 11-member Advisory Committee on Immunization Practices. The vaccines recommended included the Pfizer/BioNTech SE and Moderna COVID-19 vaccines. Eligible people would not require any documentation or prescriptions for the additional (third) shot and would be able to declare their eligibility at any site where vaccines are administered.

New York City-based Philip Morris International last week announced its offer of $1.5 billion for U.K.-based pharmaceutical inhaler firm Vectura Group. In its offer, Philip Morris promised a lavish R&D budget far more than Vectura’s $25 million 2020 R&D investment. Buyout firm Carlyle Group earlier posted a $1.3 billion bid for Vectura which it said was final. Health organizations have criticized the Philip Morris bid and warned that Vectura might be blocked from participating in drug-based clinical trials if it is owned by a tobacco manufacturer (Philip Morris). Philip Morris needs support from holders of more than half of the Vectura shares to gain control of the inhaler company.

 

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 2019 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) who invested a cumulative total of nearly $260 billion 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.