R&D Market Pulse: China Becoming Top EV Battery Supplier

The R&D Index for the week ending February 8, 2019 closed at 4,235.74 for the 25 companies in the R&D Index. The Index was down -1.49% (or -60.34 basis points) from the week ending February 2, 2019. The stock of 11 R&D Index members gained value from 0.23% (Intel) to 4.82% (GlaxoSmithKline). The stock of fourteen R&D Index members lost value from -0.21% (General Motors) to -9.79% (Daimler).

China’s top electric vehicle (EV) battery maker Contemporary Amperex Technology (CATL) and R&D Index member Honda signed a memorandum of understanding (MOU) last week to cooperate on jointly developing lithium ion batteries for electric vehicles. CATL stated that it would supply 56 gigawatt hours of batteries to Honda by 2027 and set up an office near Honda’s research unit outside Tokyo. They also could supply some batteries for Honda’s North American market. Honda also is in talks with Panasonic for batteries. CATL also supplies batteries to BMW, Volkswagen, Nissan and SAIC Motors Corp.

R&D Index member Sanofi announced last week that it is reprioritizing its $7 billion R&D budget through 2021. It has stopped work on 13 projects in development and another 25 in research and will instead focus on more promising experimental drugs in immunology, oncology and rare blood disorders. They also noted that the company expects to become less dependent on external partners, particularly following its buyouts last year of Bioverativ and Ablynx. Sanofi’s pipeline cuts reflect its commitment to a more focused drug development portfolio. Sanofi expects to submit 9 new medicines and 25 additional indications for regulatory approval by 2022. The company also plans to employ new data science and machine learning techniques to generate higher quality data, accelerate development submissions and reduce costs.

The Federal Reserve system last week announced a new set of stress tests for banks that imagines a 6-point increase in unemployment to 10%, along with stress tests in corporate lending and commercial real estate markets.

R&D Index member Google/Alphabet announced its 2018 4Q results last week with the following data: revenue grew 22% year-over-year to $39.3 billion, its R&D budget grew 40% year-over-year to $6 billion and its capital expenditures grew by 64% to $7.1 billion. These spending increases cut into Google’s growth expectations and worried some investors.

R&D Index Week Ending February 8, 2019

		Ticker	Exchange	2018 R&D millions U.S. $	02/01/19	02/09/19	2/9/19 to 2/2/19	2/8/19 to 12/31/18
1	Amazon	AMZN	NASDAQ	26,750	1,626.23	1,588.22	-2.34%	5.74%
2	Alphabet/Google	GOOGL	NASDAQ	18,796	1,118.62	1,102.38	-1.45%	5.49%
3	Apple	AAPL	NASDAQ	14,037	166.52	170.41	2.34%	8.03%
4	Intel	INTC	NASDAQ	13,702	48.73	48.84	0.23%	4.07%
5	Microsoft	MSFT	NASDAQ	13,558	102.78	105.67	2.81%	4.04%
6	Roche Pharm	RHHBY	OTC	12,284	33.01	33.76	2.27%	8.62%
7	Johnson & Johnson	JNJ	NYSE	11,493	134.20	132.40	-1.34%	2.60%
8	Merck & Co.	MRK	NYSE	11,323	76.45	77.52	1.40%	1.45%
9	Volkswagen AG	VWAGY	OTC	10,915	17.45	16.34	-6.36%	4.74%
10	Toyota	TM	NYSE	10,848	122.00	117.31	-3.84%	1.06%
11	Novartis	NVS	NYSE	8,934	87.66	88.85	1.36%	3.54%
12	Honda	HMC	NYSE	8,180	29.13	26.76	-8.14%	1.17%
13	Pfizer	PFE	NYSE	7,942	42.88	42.23	-1.52%	-3.25%
14	Daimler	DDAIY	OTC	7,615	60.65	54.71	-9.79%	3.68%
15	General Motors	GM	NYSE	7,278	38.78	38.70	-0.21%	15.70%
16	Oracle	ORCL	NYSE	7,001	50.81	51.03	0.43%	13.02%
17	Bristol-Myers Squibb	BMY	NYSE	6,981	49.89	50.22	0.66%	-3.39%
18	Eli Lilly Co	LLY	NYSE	6,769	120.89	119.60	-1.07%	3.35%
19	GlaxoSmithKline	GSK	NYSE	6,394	39.20	41.09	4.82%	7.54%
20	Cisco	CSCO	NASDAQ	6,009	47.34	47.19	-0.32%	8.91%
21	IBM	IBM	NYSE	5,842	134.10	133.71	-0.29%	17.63%
22	Bayer AG	BAYN	OTC	5,743	19.24	18.86	-1.98%	7.34%
23	Astra Zeneca PLC	AZN	NYSE	5,483	36.65	37.01	0.98%	-2.55%
24	Qualcomm	QCOM	NASDAQ	5,183	49.61	50.29	1.37%	-11.62%
25	Sanofi SA	SNY	NYSE	4,694	43.26	42.64	-1.43%	-1.77%
	Total			243,754	4,296.08	4,235.74	-1.40%	5.17%
			Biopharmaceutical		683.33	684.18	0.12%	1.98%
			Automotive		268.01	253.82	-5.29%	3.88%
			ICT		1,718.51	1,709.52	-0.52%	6.16%

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.