The R&D World Index (RDWI) for the week ending July 14, 2023, closed at 2,889.75 for the 25 companies in the RDWI. The Index was up 1.73% (or 49.15 basis points). Nineteen of the 25 RDWI members gained value last week from 0.01% (Apple Computer) to 6.31% (Facebook/Meta Platforms). Five of the 25 RDWI members lost value last week from -0.58% (Eli Lilly & Company) to -1.62% (Toyota). One RDWI member had no change this week Ford Motor Company at 14.98.
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RDW Index member Roche Holding, Basel, Switzerland, announced last week that it is in talks to purchase Roivant Sciences, Basel, for about $7 billion. Roivant has developed a drug for a debilitating stomach disorder known as ulcerative colitis and Crohn’s disease. Roivant obtained the drug in a deal with Pfizer, New York City, in late 2022 and is currently in Phase 3 clinical trials.
The Federal Trade Commission (FTC), Washington, announced in a civil subpoena last week that it is investigating OpenAI’s ChatGPT to determine if the software focuses on unfair or deceptive practices relating to risks of harm to consumers, including reputational harm. OpenAI, San Francisco, is asked in the subpoena to describe in detail the extent to which the company has taken to address or mitigate risks that their large language model products could generate statements about real individuals that are false, misleading, or disparaging. The FTC says it is concerned that ChatGPT (and other artificial intelligence (AI)-driven software) have no checks on the data that they can mine.
RDW Index member Eli Lilly & Company, Indianapolis, announced last week that it will acquire Versanis Bio, Boston, for $1.925 billion. Versanis has developed a still-experimental drug, bimagrumab, for treating obesity and related diseases. The drug could complement Lilly’s Mounjaro obesity drug by offsetting any loss of muscle mass that could result from the reduction in appetite triggered by the obesity treatment.
Last Week, the U.S. Department of Labor reported that the consumer price index (CPI) rose 3% in June 2023 from its June 2022 level, a decline from the 4% reported for May and its lowest level since 2021. Despite this drop in inflation, the Federal Reserve is still expected to continue to raise its interest rates, possibly as early as its next meeting on July 26 or wait until its September 20 meeting. Fed officials are reluctant to not raise the interest rates at least one more time in 2023 to avoid having inflation rise again.
The boom in AI applications is driving chip makers to speed up their development of chip designs that stack chips together in a 3-dimensional array, much like the plastic Lego pieces are stacked. These “chiplets” are an easier way to design more performance into the devices. Advanced Micro Devices (AMD), Intel, Microsoft, Qualcomm, Samsung Electronics, and Taiwan Semiconductor Manufacturing Co. (TSMC) formed a coalition in 2022 to create standards for designing these chiplets. Nvidia joined later as did IBM and some Chinese companies. Apple already uses a chiplet design for its products which are manufactured by TSMC.
Japan’s Ministry of Economy, Trade and Industry last week announced plans for a tax incentive for corporate innovations, such as patents and copyrights to encourage domestic and foreign companies to establish R&D centers in Japan. The “innovation box”, as the tax break is called applies a preferential rate lower than the ordinary corporate tax to increase from intellectual properties derived through R&D in Japan. Target sectors for the Innovation box include pharmaceuticals., semiconductors, and electric vehicles. Other countries with an innovation box concept include France, Britain, Italy, India, and Singapore. Australia is planning its own concept. Japan’s ministry expects tax revenues will increase in the future by promoting R&D.
Foxconn Technology, Taipei, Taiwan, announced last week that it has ended a partnership to make semiconductor devices with India-focused resources conglomerate Verdanta, London. The two companies announced a $20 billion collaboration in 2022 which was slated to set up a plant in Gujarat, India. Reasons for the action included “to explore more diverse development opportunities. Foxconn has removed its name from the collaboration.
RDW Index members Volkswagen AG, Wolfsburg, Germany, and Stellantis, Amsterdam, the Netherlands, jointly announced last week that they have created a $1 billion collaboration in a supply chain for metals to power their electric vehicles (EVs). Each company is committing $100 million to create a publicly traded mining company producing nickel and copper from two Brazilian mines that run on hydroelectric power. Mining giant Glencore, Baar, Switzerland, is also putting in $100 million and has agreed to turn the nickel and copper from the mines into battery-grade material at processing facilities in Western Europe and North America which would qualify for subsidies in Europe and the U.S. This transaction highlights desperation to secure raw materials outside of China, the current global dominant processor of battery metals.
RDW Index member Johnson & Johnson, New Brunswick, New Jersey, announced last week that it is suing four doctors who published studies citing links between talc-based personal care products and cancer, saying they made false claims that damaged the company’s reputation. In the lawsuit, the company alleges three doctors published a paper saying they identified 75 people with malignant mesothelioma whose only known exposure to asbestos was cosmetic talc.
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
