The R&D Index for the week ending March 8, 2019 closed at 4,359.86 for the 25 companies in the R&D Index. The Index was down 1.84% (or 81.90 basis points) from the week ending March 1, 2019. The stock of four R&D Index members gained value from 0.02% (Astra Zeneca) to 1.80% (Sanofi SA). The stock of 21 R&D Index members lost value from -0.21% (Johnson & Johnson) to -7.22% (Daimler).
The U.S. Labor Department announced last week that job growth slowed dramatically in February (to 20,000), possibly reflecting and off-setting the large gains in previous months (311,000 in January and 227,000 in December). The December to February average was still 186,000 which is close to the monthly average for the past ten years.
R&D Index member Amazon has been criticized over its lack of U.S. tax payments in 2018 despite earning $11.2 billion in profits last year. 2018 was the second consecutive year that the company avoided paying federal taxes, according to a report by the Institute on Taxation and Economic Policy (ITEP). Analysis of Amazon’s financial statements reveal four major deductions that could account for Amazon’s zero tax liability—these include the R&D tax credit, stock-based tax deductions, full (100%) expensing of capital investments and operating-loss carryforwards. Recent changes in the tax laws which became active in 2018 resulted in much larger tax savings than in previous years. It’s even possible that Amazon (and other companies) could have applied unused R&D tax credits in 2018 that they saved for up to 20 years (going back to 1998). Amazon was founded in 1994 as Cadabra.
Amazon was also noted as having the largest rate of increase in USPTO patents, rising by 46% in 2016. Amazon now ranks 14th in the number of annual patents granted. Fifteen of the 25 R&D Index companies are listed in the top 50 patent recipients. R&D Index member IBM has been the top patent company for the past 26 consecutive years.
R&D Index member Qualcomm reported last week that it will scale up its R&D workforce in Taiwan in 2019. Qualcomm expects to expand from its current 600 researchers in two innovation centers (Taipei and Hsinchu) to more than 800 researchers at three innovation centers by the end of 2019 — the location of the new third location was not announced.
| R&D Index Week Ending March 8, 2019 |
| Ticker | Exchange | 2018 R&D millions U.S. $ | 03/01/19 | 03/08/19 | 3/8/19 to 3/1/19 | 3/8/19 to 12/31/18 | |
| Amazon | AMZN | NASDAQ | 26,750 | 1,671.73 | 1,620.80 | -3.05% | 7.91% |
| Alphabet/Google | GOOGL | NASDAQ | 18,796 | 1,148.52 | 1,149.97 | 0.13% | 10.05% |
| Apple | AAPL | NASDAQ | 14,037 | 174.97 | 172.91 | -1.18% | 9.62% |
| Intel | INTC | NASDAQ | 13,702 | 53.30 | 52.48 | -1.54% | 11.83% |
| Microsoft | MSFT | NASDAQ | 13,558 | 112.53 | 110.51 | -1.80% | 8.80% |
| Roche Pharm | RHHBY | OTC | 12,284 | 34.80 | 33.62 | -3.39% | 8.17% |
| Johnson & Johnson | JNJ | NYSE | 11,493 | 138.35 | 138.06 | -0.21% | 6.98% |
| Merck & Co. | MRK | NYSE | 11,323 | 81.65 | 79.80 | -2.27% | 4.44% |
| Volkswagen AG | VWAGY | OTC | 10,915 | 17.95 | 17.00 | -5.29% | 8.97% |
| Toyota | TM | NYSE | 10,848 | 120.34 | 117.71 | -2.19% | 1.40% |
| Novartis | NVS | NYSE | 8,934 | 91.40 | 89.68 | -1.88% | 4.51% |
| Honda | HMC | NYSE | 8,180 | 28.35 | 27.05 | -4.59% | 2.27% |
| Pfizer | PFE | NYSE | 7,942 | 43.36 | 40.89 | -5.70% | -6.32% |
| Daimler | DDAIY | OTC | 7,615 | 60.90 | 56.50 | -7.22% | 7.07% |
| General Motors | GM | NYSE | 7,278 | 39.53 | 37.99 | -3.90% | 13.57% |
| Oracle | ORCL | NYSE | 7,001 | 52.51 | 52.77 | 0.50% | 16.88% |
| Bristol-Myers Squibb | BMY | NYSE | 6,981 | 53.22 | 51.39 | -3.44% | -1.14% |
| Eli Lilly Co | LLY | NYSE | 6,769 | 128.84 | 126.70 | -1.66% | 9.49% |
| GlaxoSmithKline | GSK | NYSE | 6,394 | 40.39 | 40.12 | -0.67% | 5.00% |
| Cisco | CSCO | NASDAQ | 6,009 | 51.41 | 51.07 | -0.66% | 17.86% |
| IBM | IBM | NYSE | 5,842 | 139.20 | 135.09 | -2.95% | 18.84% |
| Bayer AG | BAYN | OTC | 5,743 | 20.40 | 19.54 | -4.22% | 11.21% |
| Astra Zeneca PLC | AZN | NYSE | 5,483 | 41.76 | 41.77 | 0.02% | 9.98% |
| Qualcomm | QCOM | NASDAQ | 5,183 | 54.20 | 53.53 | -1.24% | -6.30% |
| Sanofi SA | SNY | NYSE | 4,694 | 42.15 | 42.91 | 1.80% | -1.15% |
| Total | 243,754 | 4,441.76 | 4,359.86 | -1.84% | 8.25% | ||
| Biopharmaceutical | 716.32 | 704.48 | -1.65% | 5.01% | |||
| Automotive | 267.07 | 256.25 | -4.05% | 4.87% | |||
| ICT | 1,786.64 | 1,728.33 | -3.25% | 7.33% | |||
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 2017 were selected based on the latest listings from Schonfeld & Associates’ June 2018 R&D Ratios & Budgets. These 25 companies include pharmaceutical (11 companies), automotive (5), ICT (8) and conglomerate (1) organizations who invested a cumulative total of more than $209 billion in R&D in 2017, or approximately 10% of all the R&D spent in the world by government, industries and academia combined, according to R&D Magazine’s 2019 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.
