The R&D World Index (RDWI) for the week ending June 10, 2022, closed at 4,570.85 for the 25 companies in the RDWI. The Index was down -3.18% (or -150.14 basis points) from the week ending June 3, 2022. Only one of the 25 RDWI members gained value: 17.84% (Alibaba). Twenty-four of the 25 RDWI members lost value from -0.11% (Bristol-Myers Squibb) to -9.70% (Intel).
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Automaker Ferrari S.p.A., Maranello, Italy, announced last week that the company plans to expand its facility in northern Italy to add a third production line which will be dedicated to the manufacture of electrified vehicles. The expansion will include a new battery R&D center as well. The company’s focus is now on an electrification strategy and how this technology can adapt to a changing world. Big spending might be required ahead of the company’s launch of its first full electric vehicle in 2025. Investors are expected to be surprised by the scale of the R&D investment required to reinvent Ferrari.
RDW Index member Mercedes-Benz (Daimler) R&D India, Karnataka, India, launched an assessment framework last week with Villgro, Chennai, India, and World Resources Institute India, (WRI India) to raise awareness of the socio-economic and environmental impacts with the electric vehicle (EV) sector. As startup EV suppliers struggle with the constraints of capital, resources and time, this framework (based largely on sustainable development goals, or SDGs) is expected to encourage the building of products and services that contribute to a more equitable, clean and inclusive ecosystem. The framework will encourage the adoption of sustainable EV-based manufacturing processes.
Aerospace manufacturer Raytheon Technologies, Waltham, Massachusetts, (the world’s second largest defense company by sales) announced last week that it was moving its headquarters to Arlington, Virginia, in Q3 2022 (from Waltham). Raytheon manufactures Pratt & Whitney jet turbine engines and the Patriot missile defense system. Raytheon follows Boeing, which announced its headquarters move from Chicago to Arlington in May 2022. The combination of Lockheed Martin, Northrop Grumman, General Dynamics and other big defense services players already in the suburban Washington area enlarges the competition for workers in the software and data engineering fields in this region. Amazon.com is also developing a satellite headquarters in Arlington.
The U.S. Department of Labor announced last week that the consumer price index (CPI) increased in May 2022 by 8.6% over that in May 2021. Surging fuel (+34.6%) and food (+11.9%) prices pushed the CPI higher and there is little indication of when this trend will ease, according to economists. The CPI increase ensures that the Federal Reserve will increase short-term interest rates at its meeting on June 14-15 by at least 0.5% to a range of 1.25% to 1.5%, although an increase of 0.75% is not considered out of reach due to the sustained inflation news. Another 0.5% fed rate increase is expected at their July 26-27 meeting. Treasury secretary (and former Federal Reserve chair) Janet Yellen noted last week that the U.S. is likely facing a prolonged period of high inflation. European inflation has been running about 3-percentage points higher than in the U.S., due primarily to their higher energy costs. The European Central Bank (ECB) is expected to raise its interest rates in July as a response to inflation. Russia’s inflation rate has soared to 17.1% higher in May 2022 than in May 2021 due primarily to Russia’s invasion of Ukraine.
The semiconductor chip shortage plaguing automakers for the past two years is now starting to affect the next generation of smartphones and communications data centers, according to a report last week in the Wall Street Journal. Chip makers such as Taiwan Semiconductor Manufacturing Co. and Samsung are noting that the semiconductor chip-manufacturing equipment they hoped to use to increase production is now arriving later than expected with shortages of less advanced chips now affecting the overall production problems. Yields on the high-performance chips are also failing to meet expectations further complicating production deliveries.
Vaccine experts last week overwhelmingly recommended that the U.S. Food and Drug Administration (FDA) approve Novovax’s, Gaithersburg, Maryland, COVID-19 vaccine. This vaccine is the first available using traditional protein-based vaccine technologies, over the relatively new messenger RNA (mRNA) COVID-19 vaccines developed by Pfizer and Moderna.
The Centers for Disease Control and Prevention (CDC) announced last week that the Omicron COVID-19 variants BA.4 and BA.5 are increasing in the U.S., adding to the mix of the springtime surge of the disease. The BA.2.12.1 variant has been the dominant Omicron version. The increase in at-home testing products/protocols has limited the CDC in determining specific infection data. The new variants do not seem to have translated to a specific surge in severe illnesses and hospitalizations.
Biotech firm Entos, Edmonton, Alberta, Canada, announced last week the opening of its new 9,600 ft2 R&D facility in Torrey Pines, San Diego. The new lab will be shared with Entos’s sister companies, Oisin Biotechnologies, OncoSenX and Aegis Life, allowing those companies to expand their team and infrastructures to support overall continued growth.
A study by RDW Index member AstraZeneca, Cambridge, U.K., was released last week revealing its drug Enhertu, cut the risk of breast cancer tumor progression in half. Developed in collaboration with Daiichi Sankyo, Tokyo, the drug is already on the market for a subset of breast cancer patients.
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.
