The R&D Index for the week ending August 24, 2018 closed at 4,765.49 for the 25 companies in the R&D Index. The Index was up 0.73% (or 34.57 basis points) from the week ending August 17, 2018. Seventeen R&D Index companies gained value last week from 0.07% (GlaxoSmithKline) to 4.58% (Bayer AG). Seven R&D Index companies lost value last week from -0.01% (IBM) to -1.51% (Bristol Myers Squibb). Volkswagen AG was not included in the tabulations last week because the company terminated its sponsored ADR (American Depositary Receipt) program on August 13 while J.P. Morgan established an unsponsored ADS (American Depositary Share) program (VWAGY) on August 14 representing Volkswagen AG’s ordinary shares. Two ADSs were exchanged for every one ADR. VWAGY closed on August 24 at 15.84.
The industry group PhRMA (Pharmaceutical Research and Manufacturers of America) last week released its 2018 annual member survey and industry profile indicating that overall R&D spending was at a record high in 2017 of $71.4 billion, up 9% from $65.5 billion in 2016. Of the PhRMA member companies, domestic R&D in 2017 was $55.8 billion with another $15.6 billion spent abroad, revealing a 6.4% increase in domestic spending and a 19.2% increase in R&D spending abroad. The report also revealed that the FDA approved 56 novel drugs in 2017 and that there are more than 1,100 new medicines and vaccines in development for cancer alone.
Boeing Aerospace also revealed that it will perform R&D for self-piloting systems and autonomous technologies at a new 100,000-square-foot R&D center at MIT in Cambridge, Mass. (Kendall Square), which is scheduled to open in 2020. The Boeing Aerospace and Autonomy Center will also be the new home of Boeing’s recently purchased Aurora Flight Sciences R&D and will also support Boeing’s creation of NeXt, its next-generation airspace management system. Separately, Boeing also announced it had purchased Millennium Space Systems, El Segundo, California, which produces satellites as small as 50 kg for military and national security applications.
The Federal Reserve’s Chairman Jerome Powell, last week reinforced the Fed’s strategy of gradually raising short-term interest rates against criticisms that the Fed is either moving too slowly or too quickly and thereby jeopardizing the economy’s expansion. This criteria is based on stable inflation and falling unemployment. Powell also reiterated that a third rate increase for 2018 is likely at their meeting in September to a range between 2.00% and 2.25%.
| R&D Index Week Ending August 24, 2018 |
| Ticker | Exchange | 2018 R&D millions U.S. $ | 08/17/18 | 08/24/18 | 8/24/18 to 8/17/18 | 8/24/18 to 12/29/17 | ||
| 1 | Amazon | AMZN | NASDAQ | 26,750 | 1,882.22 | 1,905.39 | 1.23% | 62.93% |
| 2 | Alphabet/Google | GOOGL | NASDAQ | 18,796 | 1,215.85 | 1,236.75 | 1.72% | 17.41% |
| 3 | Apple | AAPL | NASDAQ | 14,037 | 217.58 | 216.16 | -0.65% | 27.73% |
| 4 | Intel | INTC | NASDAQ | 13,702 | 47.10 | 47.66 | 1.19% | 3.25% |
| 5 | Microsoft | MSFT | NASDAQ | 13,558 | 107.58 | 108.40 | 0.76% | 26.72% |
| 6 | Roche Pharm | RHHBY | OTC | 12,284 | 30.12 | 30.58 | 1.53% | -3.17% |
| 7 | Johnson & Johnson | JNJ | NYSE | 11,493 | 134.47 | 135.95 | 1.10% | -2.70% |
| 8 | Merck & Co. | MRK | NYSE | 11,323 | 69.06 | 69.04 | -0.03% | 22.69% |
| 9 | Volkswagen AG | VWAGY | OTC | 10,915 | 32.01 | 15.84 | * | -60.83% |
| 10 | Toyota | TM | NYSE | 10,848 | 123.28 | 122.84 | -0.36% | -3.40% |
| 11 | Novartis | NVS | NYSE | 8,934 | 83.04 | 83.75 | 0.86% | -0.25% |
| 12 | Honda | HMC | NYSE | 8,180 | 30.00 | 29.68 | -1.07% | -12.91% |
| 13 | Pfizer | PFE | NYSE | 7,942 | 42.09 | 42.40 | 0.74% | 17.06% |
| 14 | Daimler | DDAIY | OTC | 7,615 | 63.21 | 63.66 | 0.71% | -24.72% |
| 15 | General Motors | GM | NYSE | 7,278 | 36.38 | 35.95 | -1.18% | -12.30% |
| 16 | Oracle | ORCL | NYSE | 7,001 | 48.36 | 49.26 | 1.86% | 4.19% |
| 17 | Bristol-Myers Squibb | BMY | NYSE | 6,981 | 60.89 | 59.97 | -1.51% | -2.14% |
| 18 | Eli Lilly Co | LLY | NYSE | 6,769 | 105.55 | 105.77 | 0.21% | 25.23% |
| 19 | GlaxoSmithKline | GSK | NYSE | 6,394 | 41.25 | 41.28 | 0.07% | 16.38% |
| 20 | Cisco | CSCO | NASDAQ | 6,009 | 45.87 | 46.32 | 0.98% | 20.94% |
| 21 | IBM | IBM | NYSE | 5,842 | 146.06 | 146.04 | -0.01% | -4.81% |
| 22 | Bayer AG | BAYN | OTC | 5,743 | 22.73 | 23.77 | 4.58% | -23.54% |
| 23 | Astra Zeneca PLC | AZN | NYSE | 5,483 | 38.12 | 38.30 | 0.47% | 10.37% |
| 24 | Qualcomm | QCOM | NASDAQ | 5,183 | 66.06 | 67.15 | 1.65% | 4.89% |
| 25 | Sanofi SA | SNY | NYSE | 4,694 | 42.04 | 43.58 | 3.66% | 1.35% |
| Total | 243,754 | 4,730.92 | 4,765.49 | 1.42% | 25.68% | |||
| Biopharmaceutical | 669.36 | 674.39 | 0.75% | 5.75% | ||||
| Automotive | 284.88 | 267.97 | -5.94% | -18.11% | ||||
| ICT | 1,894.46 | 1,917.74 | 1.23% | 15.71% | ||||
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 2018 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 Amazon, Alphabet/Google, Microsoft, Intel, Apple, Volkswagen AG, Roche Pharma, Toyota, Johnson & Johnson, Novartis, General Motors, Pfizer, Bristol-Myers Squibb, Cisco, Qualcomm, Oracle, Honda Motor Company, Astra Zeneca plc, Merck & Company, Daimler, Bayer AG, Sanofi SA, IBM, GlaxoSmithKline and Eli Lilly Co. 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 $4.5 and $17 billion annually on their R&D efforts.
