The R&D Index for the week ending January 11, 2019 closed at 4,213.78 for the 25 companies in the R&D Index. The Index was up 2.02% (or 83.51 basis points) from the week ending January 4, 2019. The stock of 20 R&D Index members gained value from 0.85% (Microsoft) to 11.55% (General Motors). The stock of five R&D Index members lost value from -0.28% (Pfizer) to -5.69% (Astra Zeneca).
Economists surveyed by the Wall Street Journal see a growing risk of an economic recession within the next one to two years. Fueling these concerns are trade tensions with China, the Fed’s rising interest rates, slowing global growth, the deeply divided U.S. government, the conclusion of the Mueller Presidential investigation and the sharp stock selloff at the end of 2018. Nearly 60% of the economists surveyed said they expect a recession to start in 2020.
Dublin, Ireland-based pharma Allergan announced last week that it will set up an R&D group in the Kendall Square district of Cambridge, Massachusetts in the first quarter of 2019. Allergan joins R&D Index members Eli Lilly, Johnson & Johnson, Novartis and Pfizer, along with more than 20 other biotech firms having R&D sites located in the area. Allergan also has other R&D sites in New Jersey and San Francisco. The current Allergan was created from the Irish corporate 2015 tax inversion of Ireland’s Actavis and the then-U.S.-based Allergan.
According to multiple sources (WSJ, Reuters and Bloomberg), Huawei’s Silicon Valley R&D subsidiary Futurewei is now blocked from sending technologies developed in the U.S. back to its headquarters in China. This move joins actions by the governments of Australia, the U.K., Germany, Poland and other countries that prohibit Huawei from building telecom networks, especially the new 5G systems. The bans are in place due to concerns over espionage by Huawei personnel on behalf of the Chinese government.
Japan’s Kyowa Hakko Kirin pharma announced last week that it has signed deal with Guiford, Connecticut-based InveniAI to use its AlphaMeld AI software to find new uses for drugs already in the pharma’s pipeline. This deal joins other AI-based agreements made over the past several months by R&D Index members Merck, Bayer AG and Novo Nordisk and other AI software developers to help discover new drug targets and help predict side effects much earlier than with present techniques. Kirin’s 2018 R&D investments was approximately $460 million, placing it as one of the world’s top 40 pharmas (by revenue).
The ongoing partial U.S. government shutdown has also affected the partial closure of the Securities and Exchange Commission (SEC) and as a result pushed back plans for IPOs (Initial Public Offerings) that were planned to be listed in January. No major company is now expected to file for IPO in January, according to Dealogic data. Bankers and lawyers previously stated that 2019 looked to be a banner year for IPOs. Some R&D plans could also be at risk with a continued shutdown since tech companies often tap into public markets early on to raise cash for their R&D programs.
| R&D Index Week Ending January 11, 2019 |
| Ticker | Exchange | 2018 R&D millions U.S. $ | 01/04/19 | 01/11/19 | 1/11/19 to 1/04/19 | 1/11/19 to 12/31/19 | |
| Amazon | AMZN | NASDAQ | 26,750 | 1,575.39 | 1,640.56 | 4.14% | 9.23% |
| Alphabet/Google | GOOGL | NASDAQ | 18,796 | 1,078.07 | 1,064.47 | -1.26% | 1.87% |
| Apple | AAPL | NASDAQ | 14,037 | 148.26 | 152.29 | 2.72% | -3.46% |
| Intel | INTC | NASDAQ | 13,702 | 47.22 | 48.93 | 3.62% | 4.26% |
| Microsoft | MSFT | NASDAQ | 13,558 | 101.93 | 102.80 | 0.85% | 1.21% |
| Roche Pharm | RHHBY | OTC | 12,284 | 31.80 | 32.41 | 1.92% | 4.28% |
| Johnson & Johnson | JNJ | NYSE | 11,493 | 127.83 | 129.75 | 1.50% | 0.53% |
| Merck & Co. | MRK | NYSE | 11,323 | 76.27 | 74.90 | -1.80% | -2.07% |
| Volkswagen AG | VWAGY | OTC | 10,915 | 16.02 | 16.66 | 4.00% | 6.79% |
| Toyota | TM | NYSE | 10,848 | 119.73 | 125.07 | 4.46% | 7.77% |
| Novartis | NVS | NYSE | 8,934 | 85.89 | 87.77 | 2.19% | 2.28% |
| Honda | HMC | NYSE | 8,180 | 27.31 | 29.27 | 7.18% | 10.66% |
| Pfizer | PFE | NYSE | 7,942 | 43.00 | 42.88 | -0.28% | -1.76% |
| Daimler | DDAIY | OTC | 7,615 | 53.89 | 56.20 | 4.29% | 6.50% |
| General Motors | GM | NYSE | 7,278 | 33.33 | 37.18 | 11.55% | 11.15% |
| Oracle | ORCL | NYSE | 7,001 | 46.71 | 48.29 | 3.38% | 6.95% |
| Bristol-Myers Squibb | BMY | NYSE | 6,981 | 46.89 | 47.99 | 2.35% | -7.68% |
| Eli Lilly Co | LLY | NYSE | 6,769 | 114.66 | 116.18 | 1.33% | 0.40% |
| GlaxoSmithKline | GSK | NYSE | 6,394 | 38.62 | 39.38 | 1.97% | 3.06% |
| Cisco | CSCO | NASDAQ | 6,009 | 42.92 | 43.49 | 1.33% | 0.37% |
| IBM | IBM | NYSE | 5,842 | 117.32 | 121.46 | 3.53% | 6.85% |
| Bayer AG | BAYN | OTC | 5,743 | 18.61 | 18.96 | 1.88% | 7.91% |
| Astra Zeneca PLC | AZN | NYSE | 5,483 | 39.18 | 36.95 | -5.69% | -2.71% |
| Qualcomm | QCOM | NASDAQ | 5,183 | 56.60 | 57.50 | 1.59% | 1.04% |
| Sanofi SA | SNY | NYSE | 4,694 | 42.82 | 42.44 | -0.89% | -2.23% |
| Total | 243,754 | 4,130.27 | 4,213.78 | 2.02% | 4.62% | ||
| Biopharmaceutical | 665.57 | 669.61 | 0.59% | -0.20% | |||
| Automotive | 250.28 | 264.38 | 5.63% | 8.21% | |||
| ICT | 1,639.03 | 1,639.23 | 0.01% | 1.80% | |||
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.
