The R&D World Index (RDWI) for the week ending March 11, 2022, closed at 4,958.89 for the 25 companies in the RDWI. The Index was down -1.96% (or 99.38 basis points) from the week ending March 4, 2022. The stock of 9 RDWI members gained value from 0.02% (Daimler AG) to 4.92% (Astra Zeneca PLC). The stock of 16 RDWI members lost value from -0.08% (Johnson & Johnson) to -13.81% (Alibaba).
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Along with the Russia-Ukraine crisis, the RDWI fell last week due to the continuing rise in the U.S. inflation rate, which rose to a 7.9% annual rate in February, according to data released by the U.S. Department of Labor. Excluding volatile energy and food prices, the consumer price index (CPI) rose at a 6.4% annual rate from the 6.0% rate in January. These rates are the highest in 49 years — the high inflationary period following the Vietnam war. Strong consumer demand and supply chain disruptions related to the COVID-19 pandemic have all contributed to this inflation rate. A tight labor market has also added to these issues. Automotive prices have been a big factor in this rise as used car/truck prices rose more than 40% in January 2022 from a year earlier and new car/truck prices were up more than 12% in the same period — when buyers could find them. The Ukraine war is likely to raise fuel prices even higher in the coming months, further boosting the CPI.
Bayer AG, Leverkusen, Germany, last week agreed to sell its pest-control division to the private-equity firm Cinven, London, for $2.6 billion. Bayer had announced in 2021 that it intended to unload the pest-control division so it could more fully focus on its core agricultural portfolio and reduce debt. Bayer had incurred large debts when it purchased Monsanto in 2018 and was further loaded down with lawsuits involving Monsanto’s Roundup weedkiller. Cinven last week stated that it plans to increase innovation and accelerate growth of Bayer’s U.S.-based Environmental Science Professional business. Bayer’s R&D investment in 2021 was about $7 billion.
RDW Index member Bristol Myers-Squibb (BMS), New York City, announced last week a long-term lease with Alexandria Real Estate Equities to build its newest core R&D facility, a 427,000-ft2 building inside the mega San Diego campus in the University Town Center dubbed Alexandria Point. BMS will be the anchor tenant of the campus which promises to provide more than 2 million ft2 of laboratory and office space and a conference center for large 800-person events.
One of the largest-ever R&D experiments is the $25 billion ITER (International Thermonuclear Experimental Reactor), under construction since 2007 in southern France and not expected to be fully operational until 2035. The project, however, has been put on hold by France’s Nuclear Safety Authority (ASN), until ITER can respond to multiple safety concerns. ITER staff say they intend to satisfy ASN so they can begin welding by July 2022 on the doughnut-shaped tokamak reactor. This would allow the researchers to open ITER by 2025 to begin initial experiments. One ASN issue is on the safety limits of the 1.5-m-thick concrete slab on which ITER rests. A second concern involves protection of staff from potential radiation from the experiments. A third concern is on deformities discovered in two of the nine welded sections that make up the tokamak.
The U.S. House and Senate have approved the FY2022 $1.5 trillion omnibus spending package and forwarded it to President Biden for expected approval in the week beginning March 14. The bill was sent to the president one day before a mandatory government shutdown would be set in motion. The bill includes $1 billion to fund research and treatments for medical issues like cancer and Alzheimer’s.
Moderna, Cambridge, Massachusetts, last week said it would never use its COVID-19 vaccine-related patents to stop others from manufacturing its vaccine in more than 90 low- and middle-income countries. However, it did state that it was prepared to begin enforcing patents in wealthier countries. The company said it was willing to license the technology to those wealthier countries on “commercially reasonable terms.” The company did not state when it might begin seeking to enforce its patents in the wealthier countries.
LanzaTech NZ, Chicago, announced last week that it was merging with a special purpose acquisition company (SPAC) to go public in a $2.2 billion deal. LanzaTech traps carbon emitted during industrial processes and uses bacteria to convert the waste gas into sustainable gases such as ethanol. LanzaTech is merging with AMCI Acquistion Corp. II, Greenwich, Connecticut. Companies using LanzaTech’s process include Chinese steelmaker Shougang Group, Unilever, and Coty.
RDW Index member Google, Mountain View, California, announced last week that it was purchasing Mandiant, Reston, Virginia, for about $5.4 billion. Mandiant is a cybersecurity firm that publishes reports on malicious state-sponsored cyber campaigns. Mandiant is one of the smaller players on the NYSE FactSet Global Cyber Security Index. Mandiant is expected to support Google’s cloud operations.
RDW Index members General Motors, Detroit, and Ford Motor Co., Dearborn, Michigan, are in talks with Pacific Gas & Electric (PG&E) to test their use of electric vehicles to power homes during outages and potentially pump electricity back into the grid. The experiments set to begin this summer could help PG&E customers retain power during public-safety power shutoffs, or preemptive outages meant to reduce the risk of power lines sparking wildfires during windstorms.
Following the U.S. ban on Russian imports of fossil fuels due to its invasion of Ukraine, the Biden administration has begun talks with Venezuela to ease its 2019-imposed oil sanctions for a limited time to reduce the rise in oil prices. The politicized offer would shuffle the refining of Venezuelan heavy crude back to Gulf Coast refiners. It would also release Venezuela from its Russian connections.
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. Multri 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.
