The R&D Index for the holiday-shortened week ending September 7, 2018 closed at 4,746.50 for the 25 companies in the R&D Index. The Index was down -2.83% (or -138.34 basis points) from the week ending August 31, 2018. The stock of six R&D Index companies gained value last week from 1.26% (Bristol-Myers Squibb) to 2.43% (Qualcomm). The stock of nineteen R&D Index companies lost value last week from -0.70% (IBM) to -9.26% (Bayer AG).

R&D Index member Novartis announced last week that it would sell parts of its Sandoz generic drug business in the U.S. for up to $1 billion. Novartis stated that the sale was aimed at focusing Sandoz on higher growth areas, such as more complex generics, value-added medicines and biosimilars. This move follows efforts by Novartis to sell its stake in a consumer healthcare business earlier this year to joint-venture partner (and R&D Index member) GlaxoSmithKline for $13 billion.

Harley-Davidson Motorcycle Co., which is headquartered in Milwaukee, Wisconsin, announced last week that it was opening an R&D center in Silicon Valley, California, by the end of 2018 to develop the technologies necessary to build electric motorcycles. The first electric powered motorcycles are expected to be available by August 2019. The first electric Harley is expected to be a production version of its Project LiveWire concept motorcycle. According to company representatives, the EV will have a distinctive sound, much like their current large gas-powered motorcycles. The company has also stated that it will produce an expanded lineup of EVs, including lighter motorcycles, scooters and possibly even bicycles.

China’s Huawei is going head-to-head with Apple Computer with their new smart phone technologies. Huawei announced last week in Berlin that it has a 7-nm-based mobile chipset, while Apple is expected to announce on September 12 its own 7-nm mobile chipset for its new line of smart phones. Huawei’s Kirin 980 chip features neural processing units allowing it to perform AI functions. Huawei has stated that it plans to invest $15 to $20 billion in R&D for the next several years. Apple is expected to spend $16 billion on R&D in 2019.

China’s HNA Group announced last week that it was selling off the vast majority of its foreign holdings, which include hotels, banks, insurance firms and airlines. Ingram Micro, Irvine, California, which HNA acquired in 2016 for $6 billion is also one of the companies it plans to divest. Ingram is the world’s largest distributor of computer-related products.

R&D Index Week Ending September 7, 2018

		Ticker	Exchange	2018 R&D millions U.S. $	08/31/18	09/07/18	9/7/18 to 8/31/18	9/7/18 to 12/29/17
1	Amazon	AMZN	NASDAQ	26,750	2,012.71	1,952.07	-3.01%	66.92%
2	Alphabet/Google	GOOGL	NASDAQ	18,796	1,231.80	1,177.59	-4.40%	11.79%
3	Apple	AAPL	NASDAQ	14,037	227.63	221.30	-2.78%	30.77%
4	Intel	INTC	NASDAQ	13,702	48.43	46.45	-4.09%	0.63%
5	Microsoft	MSFT	NASDAQ	13,558	112.33	108.21	-3.67%	26.50%
6	Roche Pharm	RHHBY	OTC	12,284	30.96	30.67	-0.94%	-2.88%
7	Johnson & Johnson	JNJ	NYSE	11,493	134.69	137.32	1.95%	-1.72%
8	Merck & Co.	MRK	NYSE	11,323	68.59	69.67	1.57%	23.81%
9	Volkswagen AG	VWAGY	OTC	10,915	16.00	15.45	-3.44%	-61.80%
10	Toyota	TM	NYSE	10,848	124.08	119.30	-3.85%	-6.19%
11	Novartis	NVS	NYSE	8,934	83.01	81.78	-1.48%	-2.60%
12	Honda	HMC	NYSE	8,180	29.63	28.65	-3.31%	-15.93%
13	Pfizer	PFE	NYSE	7,942	41.52	42.20	1.64%	16.51%
14	Daimler	DDAIY	OTC	7,615	64.65	62.86	-2.77%	-25.66%
15	General Motors	GM	NYSE	7,278	36.05	33.91	-5.94%	-17.27%
16	Oracle	ORCL	NYSE	7,001	48.58	47.81	-1.58%	1.12%
17	Bristol-Myers Squibb	BMY	NYSE	6,981	60.55	61.31	1.26%	0.05%
18	Eli Lilly Co	LLY	NYSE	6,769	105.65	107.03	1.31%	26.72%
19	GlaxoSmithKline	GSK	NYSE	6,394	40.50	39.60	-2.22%	11.64%
20	Cisco	CSCO	NASDAQ	6,009	47.77	47.05	-1.51%	22.85%
21	IBM	IBM	NYSE	5,842	146.48	145.45	-0.70%	-5.19%
22	Bayer AG	BAYN	OTC	5,743	23.33	21.17	-9.26%	-31.91%
23	Astra Zeneca PLC	AZN	NYSE	5,483	38.34	37.18	-3.03%	7.15%
24	Qualcomm	QCOM	NASDAQ	5,183	68.71	70.38	2.43%	9.93%
25	Sanofi SA	SNY	NYSE	4,694	42.85	42.09	-1.77%	-2.12%
	Total			243,754	4,884.84	4,746.50	-2.83%	25.18%
			Biopharmaceutical		669.99	670.02	0.01%	5.06%
			Automotive		270.41	260.17	-3.79%	-20.50%
			ICT		1,931.73	1,864.24	-3.49%	12.48%

About the R&D Index

R&D Magazine’s R&D Index is a weekly stock market summary of the top international companies involved in research and development. The top 25 industrial spenders of R&D in 2017 were selected based on the latest listings from Schonfeld & Associates’ June 2018 R&D Ratios & Budgets. These 25 companies include pharmaceutical (11 companies), automotive (5), ICT (8) and conglomerate (1) organizations who invested a cumulative total of more than $209 billion in R&D in 2017, or approximately 10% of all the R&D spent in the world by government, industries and academia combined, according to R&D Magazine’s 2018 Global R&D Funding Forecast. The stock prices used in the R&D Index are tabulated from NASDAQ, NYSE, XETRA and OTC common stock prices (in U.S. dollars) for the companies selected at the close of stock trading business on the Friday preceding the publication of the R&D Index in R&D Magazine’s R&D Daily eNewsletter.

The companies used in the R&D Index include Amazon, Alphabet/Google, Microsoft, Intel, Apple, Volkswagen AG, Roche Pharma, Toyota, Johnson & Johnson, Novartis, General Motors, Pfizer, Bristol-Myers Squibb, Cisco, Qualcomm, Oracle, Honda Motor Company, Astra Zeneca plc, Merck & Company, Daimler, Bayer AG, Sanofi SA, IBM, GlaxoSmithKline and Eli Lilly Co. Stock prices are based on those stocks traded on the U.S. exchanges. R&D Index trends (in the stock prices) are just one indicator of the amount of capital available to these high-technology companies to invest in R&D and should not be implied to indicate the absolute value of R&D investments made by these organizations. The companies chosen for the R&D Index have very large sophisticated internal and global R&D organizations with each company investing between $4.5 and $17 billion annually on their R&D efforts.