The R&D World Index (RDWI) for the week ending May 7, 2021 closed at 4,890.37 for the 25 companies in the R&D World Index. The Index was up 0.78% (or 37.63 basis points) from the week ending April 30, 2021. The stock of 20 R&D World Index members gained value from 0.11% (Microsoft) to 6.08% (Eli Lilly & Co.). The stock of five R&D World Index members lost value from -0.07% (Alphabet/Google) to -2.44% (Alibaba).
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Southeastern China’s Shenzhen announced last week that it will invest more than $108 billion over the next five years in high-tech R&D as it seeks to reinforce its position as China’s innovation powerhouse. The city’s Communist Party chief, Wang Weizhong said that 5% of its GDP would be allocated to investment in R&D in core technologies, including artificial intelligence (AI), 6G communications, autonomous vehicles, intelligent networks and other “frontier areas.” The value of its digital economy is expected to account for more than 31% of its GDP by 2025. Investments in basic research and applied basic research would not be less than 30% of its total R&D funding. The city is already home to about 14,000 high-tech firms with Chinese electric carmaker Xpeng opening a new R&D center there last Thursday.
There are more than 275 different COVID-19 vaccines in development globally, with more than 90 of them in human clinical testing protocols, according to the World Health Organization (WHO). The primary U.S.-authorized vaccines from Pfizer/BioNTech SE and Moderna are two-dose inoculations administered several weeks apart and must be stored at refrigerated temperatures before use. Next-generation vaccines are being evaluated as pills, nasal sprays and easier to store and transport versions. Vaccines that are effective against the new virus variants are also being developed. A nasal spray vaccine being developed by Altimmune, Gaithersburg, Md., could also induce a mucosal immunity which could clear the virus from the respiratory tract and reduce transmission by vaccinated people. Some of these new vaccines from biopharms GlaxoSmithKline, Sanofi, Pfizer, Moderna, Johnson & Johnson, AstraZeneca and others could be available in 2022.
RDW Index member Sanofi announced last week that it has formed a three-year immunology collaboration with Stanford University, where the company will provide funding and scientific inputs of mutual interest in therapeutic areas including autoimmune diseases and inflammatory conditions. A joint steering committee will oversee the project which should include up to three programs annually with Sanofi hosting an annual research forum for both organizations. The first research project will explore the impact of Sanofi’s investigational molecules in excessive type 2 inflammations.
U.S. Department of Energy (DOE) Secretary Jennifer Granholm last week noted that cyber security R&D would be a top priority for DOE technology programs in the agency’s 2022 fiscal budget. This response came even as Congressional lawmakers noted that no mention of cyber security was made in the DOE’s FY2022 budget overview. The lawmakers noted hacking events against water treatment plants in Florida that nearly resulted in a town’s water supply being poisoned with dangerous levels of lye. Granholm stated that the DOE is refocusing the DOE’s Office of Cybersecurity, Energy Security and Emergency Response.
RDW Index member Intel announced last week that it will invest another $600 million in Israel to expand its R&D. The company also confirmed that it will spend $10 billion in a new chip fabrication plant at its Kiryat Gat, Israel, site where construction has already begun. Intel is investing $400 million to convert its Mobileye unit headquartered in Jerusalem into an R&D campus for developing self-driving vehicles. Another $200 million will be invested in building an R&D center in the northern port city of Haifa, next to an existing Intel development center.
The automotive semiconductor chip shortage severely affects most carmakers’ just-in-time (JIT) supply chain scenarios which have been put in place over the past several decades. JIT systems, which originated in Japan, were developed to avoid waste. But, as supply chains became more global and manufacturers increasingly relied on single suppliers, the system became brittle, with natural disasters and rapid growth events causing long-term issues and global plant shutdowns due to a lack of parts. Carmakers are now collecting information on their suppliers’ materials sources to avoid a similar repeat in the future.
A recent Tax Court Case (Max, TC Memo 2021-37) revealed that manufacturers cannot claim the R&D tax credit for manufacturing designs. To qualify for the tax credit, businesses must meet at least four basic criteria including being 1) related to creating new or improved existing components, 2) technological in nature, 3) have an uncertainty and 4) involve a process involving the testing of alternatives.
RDW Index member Pfizer last week announced that it raised its sales forecast for its COVID-19 vaccine to about $26 billion, a 73% increase reflecting the vaccine’s growing global role. Global demand for these vaccines is expected to remain in force for at least several years as people seek to maintain protection. Booster shots are expected to be needed at least six months after being vaccinated and then annually, according to Pfizer’s CEO Albert Bourla. While testing continues on new vaccines to prevent variants, booster shots of the original vaccine will likely be administered initially. Bourla noted that COVID-19 variants have not been shown to circumvent their original vaccine.
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.
