The R&D World Index (RDWI) for the week ending October 13, 2023, closed at 3,023.60 for the 25 companies in the RDWI. The Index was up 1.38% (or 41.16 basis points). Eleven of the 25 RDWI members gained value last week from 0.10% (Novartis) to 7.78% (Eli Lilly & Co.). Fourteen of the 25 RDWI members lost value last week from -0.13% (Astra Zeneca PLC) to -4.01% (General Motors).
The Internal Revenue Service (IRS), Washington, DC, issued guidelines in September on the amortization and capitalization of R&D expenditures after Congress failed to delay the requirement from the Tax Cuts and Jobs Act (TCJA) of 2017. The IRS Notice 2023-63 provides interim guidance on the capitalization and amortization of specific research or experimental expenditures incurred in taxable years beginning after December 31, 2021, under Section 171 of the Tax Code as amended by the TCJA. The notice announced that the U.S. Treasury Department and the IRS intend to issue forthcoming proposed regulations to address the capitalization and amortization of the expenditures, the treatment of them under Section 460, and the application of Section 482 to cost-sharing arrangements involving the expenditures. According to tax experts, the interim guidance answers many questions but leaves others unaddressed.
The Bill and Melinda Gates Foundation, Seattle, announced last week that it will support the development of an AI-powered R&D platform in Africa with a $30 million commitment. The Foundation’s latest investment aligns with its recent focus on funding technological innovation, particularly as it relates to AI, in low- and middle-income regions of the world. The new platform will support health and development research and solutions implementation by African scientists and innovators.
Abu Dhabi announced last week the creation of its global cluster for the Smart and Autonomous Vehicle Industry (SAVI) which will be located in Masdar City. SAVI will provide global players who participate with access to state-of-the-art R&D and testing facilities. SAVI is part of the country’s overall goal of doubling its contribution to its manufacturing sector to its gross domestic product (GDP) by 2031. SAVI will include hardware and software R&D labs, small workshops, and 3D printing and simulation facilities.
RDW Index member Microsoft, Redmond, Washington, announced last week that it has closed its $75 billion acquisition of Activision Blizzard, Santa Monica, California. The acquisition is the biggest deal in Microsoft’s 50-year history and took 21 months to get through a global gantlet of regulators. The latest approval came last week after the U.K.’s Competition and Market Authority (CMA) said the proposed acquisition no longer poses a major threat to competition in cloud gaming. Over the past nine years, the company has struck more than 326 deals worth more than $170 billion.
RDW Index member Bristol-Myers Squibb (BMS), Princeton, New Jersey, announced last week that it will acquire Mirati Therapeutics, San Diego, in a transaction that values the oncology developer at up to $5.8 billion. The deal will add the Krazati lung cancer candidate medicine to BMS’s commercial portfolio. The deal also includes access to clinical assets that BMS said would complement its oncology pipeline.
While negotiations between the United Auto Workers (UAW) union, Detroit, continued with General Motors (GM) Detroit, Ford Motor Company, Dearborn, Michigan, and Stellantis, Hoofddorp, Netherlands, (all RDW index members), GM agreed to include battery production work in the UAW’s national bargaining agreement. That suggests that workers at the company’s U.S. battery facilities could be covered by the union’s main contract with GM. The union stated that it would be an existential threat to the UAW’s viability if these plants were not under the master agreement.
The U.S. has informed Samsung Electronics, Seoul, SK Hynix, Icheon, South Korea, and Taiwan Semiconductor Manufacturing Company (TSMC), Taipei, Taiwan, that they can maintain their current operations in China for the foreseeable future though significant technology upgrades may prove difficult. The U.S. levied major restrictions on China’s semiconductor industry in 2022, aiming to curtail China’s military advances in advanced technologies. Last week South Korea’s government said Samsung and SK Hynix were designated as validated end users, allowing them to import American chip-making equipment for their existing China-based facilities without seeking separate U.S. approval. There is no end date on this designation.
RDW Index member Astra Zeneca, Cambridge, U.K., announced last week eight winners of its 2023 R&D Postdoctoral Challenge and agreed to fund their postdoctoral positions at one of the company’s strategic R&D centers in Cambridge, U.K.; Gaithersburg, Maryland; Boston; or Gothenburg, Sweden. Astra Zeneca’s unique postdoctoral challenge, now running for the second year, enables early-career scientists from anywhere in the world to submit and potentially pursue their own unique research projects to ultimately accelerate drug discovery for some of the world’s most complex and chronic diseases. By encouraging diverse thinking and global collaboration, the company pushes the boundaries of science to deliver fast-changing medicines.
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 2020 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), which invested a cumulative total of nearly 260 billion dollars in R&D in 2019, or approximately 10% of all the R&D spending 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.