The R&D Index: Market Watch for the week ending April 21, 2017 closed at 1,590.55 for the 25 companies in the R&D Index. The Index was down -0.96% (or -15.34 basis points) over the week ending April 14, 2017. Fourteen R&D Index companies lost value last week from -0.38% (Daimler) to -5.40% (IBM). Eleven R&D Index companies gained value last week, from 0.34% (Novartis) to 3.04% (Intel).
Venezuelan officials unexpectedly seized R&D Index member GM’s production facilities and car stocks last Wednesday. The seizure was triggered by a provincial court embargo in favor of a local car dealer who had sued GM for nearly $400 million in 2000 over contract disagreements. GM immediately stated that it was quitting the country after working there for 70 years. GM had not produced any vehicles since 2015, citing an inability to import parts via the country’s complex currency control system. It had, however, been required to compensate its 2,700 employees during this period. GM stock rose 1.08% for the week. Venezuela’s GDP has steadily declined over the past three years, as has its total R&D (from all sources) from $2.1 billion in 2015 to less than $1.8 billion in 2017. It ranks 52nd in R&D Magazine’s listing of global R&D investing countries and will likely fall in future rankings. Venezuela ranks fourth in R&D investments in South America behind Brazil ($37 billion), Argentina ($5 billion) and Chile ($2 billion).
A recent report by Deloitte revealed that the number of pharma-based consortia over the past ten years has increased by a factor of nine, while early stage partnerships doubled. The report notes changes away from narrow-focused asset-based pharma partnerships to more collaborative research based alliances and joint ventures. Those biopharms revealed as participating in these trends include R&D Index members Astra Zeneca, Bristol-Myers Squibb, GlaxoSmithKline, Johnson & Johnson, Lilly, Pfizer, Roche and Sanofi.
A report released last week by the Boston Consulting Group (BCG) noted that China is currently outspending the U.S. in late-stage R&D. The cross-over point for these investments occurred in 2015 and at the current rate, China is expected to invest up to twice as much as the U.S. by 2018 ($650 billion for China versus $310 billion for the U.S.). These development funds are primarily state-funded in China, while most of the development funds in the U.S. are from industrial corporations. Part of the issues in the U.S., according to the BCG report, is that U.S. corporations are reluctant to collaborate with other companies due to competitive concerns.
R&D Index Week Ending April 21, 2017
| Ticker | Exchange | 2015 R&D billions$ | 04/14/15 | 04/21/17 | 4/21/17 to 4/14/17 | 4/21/17 to 1/1/16 | ||
| 1 | Microsoft | MSFT | NASDAQ | 12,448 | 64.98 | 66.40 | 2.19% | 19.68% |
| 2 | Intel | INTC | NASDAQ | 12,128 | 35.25 | 36.32 | 3.04% | 5.43% |
| 3 | Roche Pharm | RHHBY | OTC | 10,242 | 31.92 | 31.60 | -1.00% | -8.33% |
| 4 | Toyota | TM | NYSE | 9,112 | 104.18 | 106.58 | 2.30% | -13.38% |
| 5 | Johnson & Johnson | JNJ | NYSE | 9,046 | 124.99 | 121.76 | -2.58% | 18.54% |
| 6 | Novartis | NVS | NYSE | 8,935 | 73.15 | 73.40 | 0.34% | -14.73% |
| 7 | Apple | AAPL | NASDAQ | 8,397 | 141.05 | 142.27 | 0.86% | 35.16% |
| 8 | Pfizer | PFE | NYSE | 7,690 | 33.88 | 33.64 | -0.71% | 3.86% |
| 9 | General Motors | GM | NYSE | 7,500 | 33.39 | 33.75 | 1.08% | -0.76% |
| 10 | Merck & Co. | MRK | NYSE | 6,704 | 62.61 | 61.89 | -1.15% | 17.17% |
| 11 | Ford Motor | F | NYSE | 6,700 | 11.11 | 11.34 | 2.07% | -19.52% |
| 12 | Cisco | CSCO | NASDAQ | 6,411 | 32.42 | 32.82 | 1.23% | 20.84% |
| 13 | Oracle | ORCL | NYSE | 6,042 | 44.00 | 44.43 | 0.98% | 21.63% |
| 14 | Astra Zeneca PLC | AZN | NYSE | 5,997 | 30.14 | 29.76 | -1.26% | -12.34% |
| 15 | Honda | HMC | NYSE | 5,990 | 28.45 | 28.52 | 0.25% | -10.68% |
| 16 | Bristol-Myers Squibb | BMY | NYSE | 5,920 | 52.83 | 53.48 | 1.23% | -22.27% |
| 17 | Qualcomm | QCOM | NASDAQ | 5,833 | 52.79 | 52.50 | -0.55% | 5.04% |
| 18 | Sanofi SA | SNY | NYSE | 5,519 | 45.65 | 44.09 | -3.42% | 3.38% |
| 19 | Eli Lilly Co | LLY | NYSE | 5,331 | 85.88 | 81.89 | -4.65% | -2.79% |
| 20 | GlaxoSmithKline | GSK | NYSE | 5,250 | 41.81 | 40.78 | -2.46% | 1.07% |
| 21 | IBM | IBM | NYSE | 5,247 | 169.53 | 160.38 | -5.40% | 16.57% |
| 22 | Daimler | DDAIY | OTC | 5,169 | 66.42 | 66.17 | -0.38% | -15.06% |
| 23 | Siemens | SIE | XETRA | 4,929 | 126.55 | 125.35 | -0.95% | 39.46% |
| 24 | Bayer AG | BAYN | XETRA | 4,649 | 106.55 | 105.20 | -1.27% | -9.47% |
| 25 | Ericsson | ERIC | NASDAQ | 4,124 | 6.36 | 6.23 | -2.04% | -35.17% |
| Total | 175,313 | 1605.89 | 1590.55 | -0.96% | 4.53% | |||
| Biopharmaceutical | 689.41 | 677.49 | -1.73% | -2.47% | ||||
| Automotive | 243.55 | 246.36 | 1.15% | -12.32% | ||||
| ICT | 540.02 | 535.12 | -0.91% | 19.86% | ||||
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
