The R&D World Index (RDWI) for the week ending December 17, 2021, closed at 5,518.10 for the 25 companies in the RDWI. The Index was down -2.09% (or -117.84 basis points) from the week ending December 10, 2021. The stock of 14 RDWI members gained value from 0.06% (Intel) to 12.69% (Pfizer). The stock of 11 RDWI members lost value from -0.39% (Sanofi SA) to -12.74% (General Motors).
RDW Index member Oracle, Austin, Texas, was noted last week to be in talks to purchase electronic medical records company Cerner Corp., Kansas City, Missouri, in a deal valued at approximately $30 billion. Cerner develops software used by hospitals and doctors to store and analyze medical data. Oracle already provides technologies that help health insurers and providers to increase efficiencies and improve patient outcomes. Oracle was expected to spend more than $6 billion on R&D in 2020, while Cerner invested more than $600 million. Oracle currently has a market value of more than $280 billion.
The Merck-Wellcome Trust Joint Venture Hilleman Laboratories, New Delhi, India, announced last week that it is opening a vaccine and biologics development hub in Singapore to continue its efforts to develop affordable vaccines against infectious diseases. The 30,000-ft2 site will create a new R&D center in Singapore’s Biopolis industrial park. The project will cost about $58 million and take two years to complete. The site will consist of two components — a manufacturing site for Phase II drug materials and an R&D facility for preclinical studies.
RDW Index member Toyota Motor Corp., Toyota City, Japan, announced last week that it will sell 3.5 million battery-driven electric vehicles (EVs) by 2030, up from 2 million the company previously forecast. The company expects its Lexus luxury brand to be all-electric by 2030 in China, North America and Europe. The company is hedging its plans, however, stating it will invest about $35 billion in the development of hybrid electric-gas powered vehicles by 2030. Theh 3.5 million battery EVs is expected to be about a third of all Toyota sales in 2030. Toyota also is continuing to invest in the development of hydrogen-powered vehicles.
The latest 6.8% U.S. inflation figures announced triggered federal reserve officials last week to announce that three quarter-point interest rate increases are likely to be made in 2022 to keep the economy under control. The fed also indicated that it will quickly scale back its asset purchases by March 2022, instead of June, implying the first interest rate increase could be made in mid-March. The continuing inflationary rate increases combined with an ever-tightening labor market to reshape fed officials plans which initially didn’t expect interest rate increases until 2023. Most fed officials now expect inflation to be at 4.4% for 2021 and decline to 2.7% in 2022 and 2.1% by the end of 2024.
3M Corp., Saint Paul, Minnesota, agreed last week to combine its food-safety business with food testing and animal healthcare specialist Neogen Corp., Lansing, Michigan, to create a combined company valued at $9.3 billion. 3M is expected to spend about $2 billion on R&D in 2020 while Neogen will spend about $12 million. Neogen sells test kits to keep track of sanitation and allergens within the food-supply chain, while 3M’s food safety business is part of its healthcare business, one of 3M four major units.
RDW Index member Pfizer, New York City, agreed last week to purchase Arena Pharmaceuticals, San Diego, for $6.7 billion which would increase Pfizer’s pipeline for medicines for inflammatory bowel diseases. Pfizer will gain Arena’s lead drug etrasimod, a pill in late-stage clinical studies for ulcerative colitis, with testing results due in the first quarter of 2022. If approved, etrasimod would compete with RDW Index member Bristol Myers-Squibb’s Zeposia, a pill with similar biological function targeting immune cell receptors, which was approved in May 2021 by the U.S. Food and Drug Administration (FDA). Global sales of Zeposia were forecast to reach $2.9 billion in 2025.
Electric truck startup Rivian, Irvine, California, announced last week that it will start construction of its second U.S. manufacturing facility in Georgia. The company already manufactures electric trucks at its Normal, Illinois, plant, which started production in September 2021. It plans to build more than 1,200 vehicles in 2021. The new $5 billion Georgia plant will have an annual capacity of 400,000 vehicles and create 7,500 jobs. Production is expected to start in 2024.
Nauticus Robotics, Webster, Texas, an underwater robotics company driven by artificial intelligence (AI) software announced last week that it was merging with special purpose acquisition company (SPAC) CleanTech Acquisition Corp., Greenwich, Connecticut, in a deal valued at $560 million. Nauticus, led by former NASA engineers, aims to work on projects with applications in energy and fishing and will focus on lowering sea pollution, such as in offshore drilling and undersea oil field services.
RDW Index member Merck & Co., Kenilworth, New Jersey, announced in early-2021 that it was scrapping its own failed plans to develop a COVID-19 vaccine and instead formed a production partnership with RDW Index member Johnson & Johnson, New Brunswick, New Jersey. The first production batches of these COVID-19 vaccines shipped last week. Merck is now producing more than 500,000 doses of these vaccines daily for use outside of the U.S., including countries desperate for shots. These doses do not require a special freezer to keep them cold, which the Pfizer and Moderna vaccines require. Merck initially began manufacturing the J&J vaccines in August, but it took until now to receive regulatory approval for clearing the production shipments, which are shipped to a distribution center in the Netherlands for global distribution.
Pfizer, last week announced that trial results of its experimental COVID-19 antiviral pill had a positive response for those patients infected with the coronavirus. This reduces the risk of hospitalization and likely appears to work against the Omicron variant of the virus. The drug, Paxlovid, is being reviewed by the FDA to clear use in high-risk adults, which could still come about this year. Pfizer said that the pill is 89% effective at reducing the risk of hospitalization and death. In early studies, the drug was also found to be 70% effective in adults at low risk of severe COVID-19, though it failed to reduce or resolve their symptoms within four days.
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 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.