The R&D World Index (RDWI) for the week ending May 13, 2022, closed at 4,717.95 for the 25 companies in the RDWI. The Index was down -1.11% (or -52.96 basis points) from the week ending May 7, 2022. Nine of the 25 RDWI members gained value from 0.26% (Alphabet/Google) to 1.23% (Sanofi SA). Sixteen of the 25 RDWI members lost value from -1.13% (Bristol-Myers Squibb) to -9.53% (Roche Holdings AG). Novartis was unchanged for the week at 85.82.
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The U.S. Department of Labor last week announced that the U.S. consumer price index (CPI) for April dropped slightly to an 8.3% annual rate from its 8.5% rate in March. This was the first drop in the CPI in eight months and was attributed to a slight decline in April gasoline prices, which have since reached a new high. The U.S. economy added 428,000 new jobs in April, the 12th consecutive month in which job gains exceeded 400,000. Most economists expect the CPI to decline in the coming months due primarily to base effects in mid-2021. China’s consumer inflation edged up in April to 2.1% from a year earlier, up from 1.5% in March. China announced last week that its producer price index was up 8.0% in April, led primarily by rises in imported energy costs.
The California electric Independent System Operator (ISO), Folsom, California, last week announced that it anticipates a shortfall in supplies this summer, especially if extreme heat occurs. The Midcontinent Independent System Operator (MISO), Carmel, Indiana, also stated that capacity shortages may force it to take emergency measures (such as rolling blackouts) to meet summer demands. Operators of renewable energy systems, including batteries for storage, have also warned that enough of their systems have not been put in place to offset anticipated demands.
RDW Index member Pfizer, New York City, announced last week that it plans to buy the rest of Biohaven Pharmaceutical Holding, Inc., New Haven, Connecticut, for about $11.6 billion. Through the deal, Pfizer will gain Biohaven’s migraine drug Nurtec. Pfizer purchased about a 2.6% stake in Biohaven earlier this year. Analysts expect Nurtec to generate about $4 billion in annual sales by 2030. Pfizer will continue to search for small- and medium-size deals for innovative drugs that fit Pfizer’s existing disease areas and can help deliver growth in the future.
RDW Index member Volkswagen AG, Wolfsburg, Germany, announced last week that the company will resurrect the Scout off-road vehicle as part of its bid to expand in the U.S. The new Scout brand will include an electric SUV and an electric pickup truck. The Scout would operate as a VW subsidiary, alongside Audi, Porsche, Bentley and Lamborghini. The company hopes to sell up to 250,000 Scout vehicles a year in the U.S. starting in 2026. Scout would have its own U.S. production facilities since VW’s other U.S. plants would not be able to handle the additional capacity. VW plans to invest an initial $1 billion in the new venture and then look to obtain additional financing from other sources.
RDW Index member Apple, Cupertino, California, is reported to change its product development focus to rely more on Chinese engineers to oversee the Asian contract manufacturers that build most of its products. U.S.-based Apple engineers have been locked out of this responsibility for the past two years due to China’s COVID-19-based immigration restrictions. China’s Apple-based workforce has taken on a growing technical expertise, being trained by several generations now of Apple engineers and technicians. New streaming technologies has also helped this remote management process. The American Chamber of Commerce in China also reported last week that 74% of its members stated that China’s stringent COVID-19 policies had affected their ability to attract or retain skilled foreign staff.
Telecom systems provider, Optiva, Toronto, announced last week the establishment of an R&D Center of Excellence in Osijek, Croatia. This adds to its other R&D Centers of Excellence in Belfast, Northern Ireland in 2021 and Bengaluru, India in 2022. Optiva has tripled the size of its R&D team over the past year. Optiva chose Croatia due to its concentration of engineering expertise and talent, including universities, business partnerships and opportunities.
Heavy equipment developer Caterpillar, Deerfield, Illinois, announced last week that it will grow its remanufacturing revenue by 25% by 2030 above 2018 levels. It also wants to double its services revenue to $28 billion by 2026. Remanufacturing engines and rebuilding entire equipment systems will help the company meet a growing demand for more environmentally friendly products. It also helps ease supply chain problems by offering new options when new parts or machines are not available. Caterpillar invested $1.8 billion in R&D in 2020.
The European Bank for Reconstruction and Development (EBRD), London, last week stated that Ukraine’s economy is expected to decline by 30% in 2022, due to the Russia -Ukraine war. Ukraine’s economy had been growing by 3.4% in 2021, before Russia invaded. The EBRD sees Ukraine’s growth rebounding by 25% in 2023. Ukraine’s R&D investments are similarly expected to decline in 2022 in a similar amount due to the war. Ukraine invested slightly less than $3 billion in R&D in 2021.
Developer Trammell Crow Co., Dallas, last week announced that it plans to develop a new life sciences campus on land owned by Johns Hopkins University, in Montgomery County, Maryland. Initial plans call for 757,000 ft2 of lab and research space across three buildings, with the potential to grow to 1.6 million ft2 across seven buildings. Construction will begin in June 2023.
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 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.
