FDA looks to ban nicotine in cigarettes, in this week’s R&D Power Index

The R&D World Index (RDWI) for the week ending June 24, 2022, closed at 4,795.35 for the 25 companies in the RDWI. The Index was up 8.65% (or 381.72 basis points) from the week ending June 17, 2022. Twenty-three of the 25 RDWI members gained value from 0.58% (Volkswagen AG) to 15.04% (Alibaba). Two of the 25 RDWI members lost value last week from -4.18% (Daimler AG) to -4.94% (Cisco).

RDW Index member AstraZeneca, Cambridge, U.K., announced last week that it is investing $69 million in its Alexion division in Dublin, Ireland. The Investment involves the scaling up of its manufacturing capabilities and an expansion of its R&D in Dublin and Westmeath over the next 18 months. This includes the installation of new drug substance production equipment and warehousing facilities to support ambient and cold storage at both sites. AstraZeneca acquired Alexion Pharmaceuticals in 2020 in a $39 billion deal. This announcement follows previous news that AstraZeneca was planning a $360 million investment in a new manufacturing facility at Alexion’s Blanchardstown, Ireland, site.

RDW Index member Ford Motor Co., Dearborn, Michigan, announced last week that it will build its next generation of electric vehicles (EVs) at its factory in Valencia, Spain. The shift to EVs will result in a significant reduction in the company’s traditional workforce at the Valencia plant and its Saarlouis, Germany facility. Ford’s Cologne Germany plant is expected to begin producing EVs in 2023 using technology Ford licenses from Volkswagen, AG. The Valencia plant will use Ford’s own EV technology. Volkswagen AG recently announced that it will invest more than $11 billion in Spain to build an EV battery plant that’s expected to begin production in 2026.

Kellogg Co., Battle Creek, Michigan, announced last week that it plans to split into three companies, Global Snacking, North American Cereal, and Plant. The largest of the three, Global Snacking with more than 81% of Kellogg’s total sales, will move its headquarters to Chicago, the other two divisions will remain headquartered in Michigan. Kellogg invested about $150 million in R&D in 2020. All three divisions are currently profitable and there was speculation by investors that the company may choose to sell off its plant-based food business at some point in the future (it currently only has about 2.4% of Kellogg’s total sales, $340 million).

BMW (Bayerische Motoren Werke), Munich, Germany announced last week that it had opened a $2.2 billion plant for the production of EVs in Shenyang, China. This plant is BMW’s third production facility in China. The new plant has flexible production systems which allow the company to adjust production quickly based on market conditions. It is designed for EVs but can make other models as well. BMW invested slightly more than $6 billion in R&D in 2020. The first model to be produced in the new plant is BMW’s I3, an electric sedan priced at more than $52,000. The company expects to sell I3s in China by 2023.

RDW Index member Intel, Santa Clara, California, announced last week that it was delaying the groundbreaking ceremonies for its planned multibillion dollar chip manufacturing facility, outside of Columbus, Ohio. Intel still plans to build the $20 billion facility and says it will start construction by the end of 2022, but the company is concerned with the slowness of Congressional legislation that includes about $52 billion in funding for expanding domestic semiconductor production and R&D (the CHIPS Act). Intel’s competitors, the Taiwan Semiconductor Manufacturing Co., is constructing a new plant in Arizona and Samsung Electronics is building a factory in Texas.

Chevron, San Ramone, California, announced last week that it will be moving many of its administrative operations to its Houston facilities. The company said it will continue to be headquartered in California but will look for a new smaller location. Its Houston office now has more than three times the number of employees as its San Ramone office. The company invested about $600 million in R&D in 2021 and is the second largest U.S. oil company. This move follows last week’s announcement of construction equipment giant Caterpillar’s move from Chicago to Texas and ExxonMobil’s headquarters’ move next year from Dallas to Houston.

RDW Index member Novartis, Basel, Switzerland, announced last week a five-year commitment of $250 million to support research in neglected tropical diseases (NTDs) and malaria in conjunction with the Kigali Summit on Malaria and NTDs. The company’s current endorsement reaffirms its 2012 commitment against these diseases. The new R&D investments are meant to focus on novel drug candidates for four diseases. About 1.7 billion people suffer from NTDs and most affect impoverished communities causing devastating health, social and economic consequences.

The U.S. Food and Drug Administration (FDA) and the Biden Administration last week announced a plan to eliminate nearly all nicotine in cigarettes. The plan would not take effect for several years with the full plan published in May 2023. The move would be the biggest step by the U.S. government to curb smoking since the landmark court settlement against cigarette makers in 1998. The proposed FDA rule is expected to see strong legal challenges by the cigarette makers.

 

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) who 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.