The R&D Index: Market Watch for the week ending January 27, 2017 closed at 1,563.74 for the 25 companies in the R&D Index. The Index was up 0.34% (or 5.35 basis points) over the week ending January 20, 2017. Fourteen R&D Index companies gained value last week from 0.03% (GlaxoSmithKline) to 4.85% (Microsoft). Ten R&D Index companies lost value last week from -0.07% (Astra Zeneca) to -13.74% (Qualcomm) – General Motors, at 37.01 was unchanged for the week.
The big fall in R&D Index member Qualcomm’s stock was due to two lawsuits filed last week by R&D Index member Apple in China, one alleging Qualcomm did not license ‘standard essential patents’ properly and another for violating China’s Anti-Monopoly Law. For the week, Apple stock rose nearly two basis points (1.6%). The Federal Trade Commission (FTC) also filed a suit against Qualcomm stating the company is using unfair and anti-competitive practices to force cellphone companies, and specifically Apple, to use its processors. Also, in December the Korea Fair Trade Commission fined Qualcomm for an unfair business model that licenses Qualcomm technology at the handset rather than the chip level.
R&D Index member Johnson & Johnson agreed last week to acquire Actelion for $30 billion, its largest-ever acquisition. The deal for the Swiss biotech company will spin out the company’s drug discovery operations while J&J will retain the company’s commercially available treatments for rare diseases and some drugs currently in late-stage development. The spin out will done into a separate company, with J&J holding 16% of its shares.
Harvard University announced last week that it is outsourcing the management of its $35.7 billion in endowments. Harvard’s 5.7% returns on its investments have trailed the 8.1% returns of Yale and Columbia endowments for several years. Harvard’s endowments provide more than a third of the school’s operating costs and contribute to its student financing, research and professor salaries.
In a meeting last week with the heads of R&D Index members GM and Ford and Fiat Chrysler, President Trump stated that he would work to ease environmental regulations, cut corporate taxes and push for economic policies favorable to U.S. manufacturing. Trump also reiterated his position that companies would pay a steep price for companies moving factory work abroad. The automotive sector of the R&D Index was down nearly 1% for last week.
A report in the Wall Street Journal noted that investors are turning more cautious following the Trump inauguration, by increasing cash and hedging against a potential resurgence in volatility. A U.S. trade war and devaluation of China’s currency were cited as some of the investors’ largest fears in a WSJ survey.
| R&D Index Week Ending January 27, 2017 |
| Ticker | Exchange | 2015 R&D billions$ | 01/20/17 | 01/27/17 | 1/27/17 to 1/20/17 | 1/27/17 to 1/1/16 | ||
| 1 | Microsoft | MSFT | NASDAQ | 12,448 | 62.74 | 65.78 | 4.85% | 18.57% |
| 2 | Intel | INTC | NASDAQ | 12,128 | 36.94 | 37.98 | 2.82% | 19.25% |
| 3 | Roche Pharm | RHHBY | OTC | 10,242 | 29.19 | 29.68 | 1.68% | -13.90% |
| 4 | Toyota | TM | NYSE | 9,112 | 118.92 | 116.69 | -1.88% | -5.16% |
| 5 | Johnson & Johnson | JNJ | NYSE | 9,046 | 114.15 | 113.38 | -0.67% | 10.38% |
| 6 | Novartis | NVS | NYSE | 8,935 | 70.65 | 72.21 | 2.21% | -16.11% |
| 7 | Apple | AAPL | NASDAQ | 8,397 | 120.00 | 121.95 | 1.62% | 15.86% |
| 8 | Pfizer | PFE | NYSE | 7,690 | 31.77 | 31.42 | -1.10% | -3.00% |
| 9 | General Motors | GM | NYSE | 7,500 | 37.01 | 37.01 | 0.00% | -0.88% |
| 10 | Merck & Co. | MRK | NYSE | 6,704 | 62.53 | 61.75 | -1.25% | 16.91% |
| 11 | Ford Motor | F | NYSE | 6,700 | 12.36 | 12.49 | 1.05% | -11.36% |
| 12 | Cisco | CSCO | NASDAQ | 6,411 | 30.10 | 30.98 | 2.92% | 14.06% |
| 13 | Oracle | ORCL | NYSE | 6,042 | 39.87 | 40.23 | 0.90% | 10.13% |
| 14 | Astra Zeneca PLC | AZN | NYSE | 5,997 | 27.07 | 27.05 | -0.07% | -20.32% |
| 15 | Honda | HMC | NYSE | 5,990 | 30.44 | 30.08 | -1.18% | -5.79% |
| 16 | Bristol-Myers Squibb | BMY | NYSE | 5,920 | 49.23 | 47.74 | -3.03% | -30.61% |
| 17 | Qualcomm | QCOM | NASDAQ | 5,833 | 62.88 | 54.24 | -13.74% | 8.52% |
| 18 | Sanofi SA | SNY | NYSE | 5,519 | 40.35 | 39.88 | -1.16% | -6.50% |
| 19 | Eli Lilly Co | LLY | NYSE | 5,331 | 76.81 | 75.38 | -1.86% | -10.52% |
| 20 | GlaxoSmithKline | GSK | NYSE | 5,250 | 38.72 | 38.73 | 0.03% | -4.02% |
| 21 | IBM | IBM | NYSE | 5,247 | 170.65 | 177.30 | 3.90% | 28.87% |
| 22 | Daimler | DDAIY | OTC | 5,169 | 70.64 | 70.72 | 0.11% | -9.22% |
| 23 | Siemens | SIE | XETRA | 4,929 | 117.00 | 119.20 | 1.88% | 32.62% |
| 24 | Bayer AG | BAYN | XETRA | 4,649 | 102.50 | 105.95 | 3.37% | -8.82% |
| 25 | Ericsson | ERIC | NASDAQ | 4,124 | 5.87 | 5.92 | 0.85% | -38.40% |
| Total | 175,313 | 1558.39 | 1563.74 | 0.34% | 2.77% | |||
| Biopharmaceutical | 642.97 | 643.17 | 0.03% | -7.41% | ||||
| Automotive | 269.37 | 266.99 | -0.88% | -4.98% | ||||
| ICT | 523.18 | 528.46 | 1.01% | 18.37% | ||||
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 2015 were selected based on the latest listings from Schonfeld & Associates’ June 2016 R&D Ratios & Budgets. These 25 companies include pharmaceutical (11 companies), automotive (5), ICT (7) and conglomerate (2) organizations who invested a cumulative total of more than $175 billion in R&D in 2015, or approximately 11% of all the R&D spent in the world by government, industries and academia combined, according to R&D Magazine’s 2016 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 Microsoft, Intel, Roche Holdings, Novartis, Johnson & Johnson, Pfizer, Toyota Motor, General Motors, Merck & Co., Ford Motor, Cisco, Apple Computer, Sanofi SA, Qualcomm, IBM, Astra Zeneca plc, Honda Motor, Daimler, Oracle, GlaxoSmithKline, Siemens, Eli Lilly Co., Ericsson, Bristol-Myers Squibb and Bayer AG. 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 $4.1 and $12.4 billion annually on their R&D efforts.
