The R&D World Index (RDWI) for the week ending July 9, 2021 closed at 5,190.00 for the 25 companies in the R&D World Index. The Index was up 0.01% (or 0.54 basis points) from the week ending July 2, 2021. The stock of 14 R&D World Index members gained value from 0.10% (Microsoft) to 7.26% (Oracle). The stock of 11 R&D World Index members lost value from -0.30% (Pfizer) to -5.42% (Alibaba).
The U.S. Department of Homeland Security (DHS) last week withdrew the time limit proposal on student visas, which was added in September 2020. Under the proposed 2020 plan most visas would expire after four years, which impacted foreign students wanting to go to graduate school and those working as R&D interns for industrial, academic and government research labs. DHS said it had received more than 30,000 over the proposed visa time limit, of which more than 99% were opposed to the plan.
U.S.-based Tesla Energy (the EV automaker’s energy division) last week announced a deal with Austin, Texas-based Brookfield Asset Management and real estate developer Dacra to deploy solar roofs and Powerwalls on a “large scale’ in a new solar-based community being built in Austin. Tesla and SolarCity have developed a solar roof system that integrates the solar cells and modules inside a roofing system structure rather than just panels positioned on top of a roof. In June 2021, Tesla and Alset EHome agreed to supply solar panels and EV chargers for 20 new homes being built in Porter, Texas.
Newport News, Va.-based defense shipbuilder Huntington Ingalls last week announced it is acquiring cybersecurity and R&D company Alion, McLean, Va., for $1.7 billion. The deal will allow Huntington to expand its work to support U.S. Navy simulation and training work, as well as operations that support military intelligence, surveillance and reconnaissance. The acquisition will also be expected to expand Huntington’s technical solutions division which was launched in 2016 to focus on cybersecurity and autonomous systems which has a $3 billion contract backlog and a staff of 3,500, of which 80% have security clearances.
A Staff Report released by the U.S. House of Representatives last week, “Drug Pricing Investigation,” noted that the top 14 large pharmaceutical firms spent $577 billion on stock buybacks and dividends from 2016 to 2020, $56 billion more than they spent on R&D ($521 billion) during the same time period. Executive compensation during this period totaled $3.2 billion, growing 14% over that five-year period. According to the report, many pharmas spent a significant portion of their R&D budgets on finding ways to suppress generic and biosimilar competition, rather than on innovative research.
Global automaker Stellantis NV announced last week that it plans to spend more than $35.5 billion through 2025 on development of EVs (electric vehicles). Stellantis was formed this year through the merger of Fiat Chrysler NV and France’s PSA Group. The investment will include battery development and sourcing with a focus on driving down costs on these EV components. The Stellantis strategy will support the establishment of five battery factories in North America and Europe with electrified options available on all 14 of its brands, including an electric Ram truck and Dodge muscle car which are expected to be available in 2024. This strategy follows similar plans and multi-billion-dollar R&D investments announced earlier this year by General Motors, Ford Motor Co. and Volkswagen.
RDW Index member Volkswagen last week announced that the global shortage of semiconductor chips plaguing global automobile production will worsen over the next six months (through the end of 2021). This warning shifts earlier 2021 forecasts stating that the chip shortage would bottom out in 2Q 2021 and gradually improve over the next six months. Analysts’ forecast of $61 billion in lost automaker revenue in 2021 has also been raised now to more than $110 billion. Many automakers have adjusted their output to be able to produce more lucrative models to deflect some losses, but all expect to not meet their initial production estimates. These production shortfalls and their respective temporary plant shutdowns are expected to affect the revenues available for 2022 R&D investments.
The U.S. Food and Drug Administration (FDA) last week narrowed its approval of Biogen’s Alzheimer’s drug, which was granted in June 2021. The Aduhelm treatment will now only be available initially to those class of patients for which Biogen performed its clinical trials, primarily those with relatively mild symptoms. Aduhelm is a monoclonal antibody drug that helps clear from the brain a sticky protein, called amyloid, which is thought to be a primary cause of the disease.
New Jersey-based AeroFarms announced last week that its United Arab Emirates (UAE) subsidiary has started construction on an R&D facility in Abu Dhabi. AeroFarms produces food plants in a vertical indoor field which uses significantly less water than traditional outdoor agriculture and because of its vertical arrangement it can pack more plants into less space than is possible on a horizontal outdoor field. Abu Dhabi Investment Office invested $150 million in ag technology companies in 2020, AeroFarms was one of those companies.
RDW Index member Pfizer last week stated it will seek FDA approval in the coming weeks to distribute a booster shot of its COVID-19 vaccine to increase protection as new variants arise. Pfizer will also start clinical trials in August of an updated version of its vaccine that will better protect against the Delta variant. Pfizer is seeking booster authorization based on encouraging initial studies. Some studies have shown that the Pfizer and Moderna two-shot protocol vaccinated patients have seen a drop in protection over the past six months, implying a booster shot might be necessary, although the Centers for Disease Control and Prevention (CDC) and the FDA have repeatedly stated that Americans do not need a booster shot at this time.
China’s COVID-19 vaccines from Sinopharm and Sinovac Biotech have been distributed into much of the developing world, including Indonesia. However, the waning protection seen in other vaccines (as noted above) is also being seen in the Chinese vaccines with efficacy values dropping to as low as 51% in Brazilian tests. The increased contagiousness of the Delta variant makes this a particularly important issue for Chinese vaccine users. More than 40% of China’s 1.4 billion population has been vaccinated with the Sinopharm/Sinovac products so a waning efficacy is equally important for Chinese patients. The Delta variant isn’t circulating widely in China so vaccine makers cannot yet conduct in-depth studies.
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 2019 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) who invested a cumulative total of nearly 260 billion dollars in R&D in 2019, or approximately 10% of all the R&D spent 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.
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