The R&D World Index (RDWI) for the week ending October 25, 2024, closed at 3962.81 for the 25 companies in the RDWI. The Index was down -1.49% (or -60.14 basis points). Seven RDWI members gained value last week from 0.27% (Toyota) to 5.88% (General Motors). Eighteen RDWI members lost value the previous week from -0.27% (Ford Motor) to -7.55% (IBM).

AI R&D

White House OSTP Director supports $32B AI R&D funding

Arati Prabhakar, director of the White House Office of Science and Technology Policy (OSTP), stated last week that the $32 billion annual figure for non-defense artificial intelligence (AI) R&D floated by the National Security Commission on AI and the Senate’s bipartisan AI working group is “exactly the level at which we need to be backing these problems.” There is currently movement from Congressional legislators to sign off on a $2.6 billion funding over six years rather than the current $30 million appropriated to the National Science Foundation for the National AI Research Resource pilot.

Automotive R&D

Stellantis to close Arizona test track

RDW Index member Stellantis, Hoofddorp, Netherlands, announced last week that it will close (and look to sell) its automotive test track in Arizona’s Mojave Desert at the end of 2024, citing severe financial stresses and a changing automotive market. The 1,600-acre site was purchased by Stellantis predecessor Chrysler in 2006. The company will continue to test its vehicles at its Chelsea Proving Grounds site in Michigan. The company has negotiated a lease agreement with Toyota to use its testing facility in the Mojave Desert for high-temperature tests.

Technology R&D

Vast Space announces Haven 2 space station

Vast Space LLC, Long Beach, California, announced summary details of its Haven 2, a proposed successor to the International Space Station. It is nearing its design life and will be retired by 2030 (or so) and deorbited. NASA has conceived the Commercial LEO (low-earth orbit) Destination (CLD) program and is expected to select its Phase 2 winner(s) in mid-2026. Vast is offering its Haven 2 as a solution to continued U.S. and international partner presence in LEO. Vast’s first commercial space station, the single module Haven 1, is set to launch in 2025. Vast plans to have the first module of Haven 2 fully operational and in orbit by 2028. The complete space station design consists of eight interconnected Haven 2 modules located around a 7-meter diameter central Haven module.

LG Chem opens third overseas R&D Center

South Korea’s leading chemical firm, LG Chem Ltd, Seoul, announced last week that it had opened its third overseas R&D center in Frankfurt, Germany. Its Europe Innovation Center is expected to focus on developing technologies involving next-generation rechargeable batteries, biochemicals, and recycling in partnership with local universities and R&D centers. The company also has a Life Science Innovation Center in Boston and a North American Innovation Center in Atlanta. Researchers at the Georgia Center have also signed a memorandum of understanding with the Georgia Institute of Technology for new technology R&D. The company plans to internalize R&D capabilities related to next-generation battery materials, recycling, and bioplastics.

Healthcare R&D

Baxter International plans new kidney care R&D center

Last week, Baxter International, Deerfield, Illinois, announced that it plans to locate an R&D center focused on kidney care in the Minneapolis, Minnesota suburb of Golden Valley. This move comes as the Carlyle private equity group in Washington, DC, buys the kidney unit called Vantive. The $3.8 billion Vantive deal is expected to close in late 2024 or early 2025, with Vantive becoming a standalone company. Vantive develops and supports renal care and organ-support therapies, including types of dialysis and continuous renal replacement therapy.

Sanofi reports strong Q3 results

RDW Index member Sanofi SA, Paris, France, reported third-quarter results last week that beat analysts’ expectations. These results were boosted by earlier-than-anticipated deliveries of flu and respiratory syncytial virus vaccines and growing demand for its blockbuster inflammatory drug, Dupixent. These results align with the company’s plan to focus on innovative drugs. The company’s R&D expenses rose 11% because of increased mid- and late-stage development activity as it sought to develop additional drugs like Dupixent.

Solventum explores sale of purification business

Solventum, the healthcare unit spun off from 3M, St. Paul, Minnesota, earlier in 2024, announced last week that it has retained bankers to explore a sale of its purification and filtration business. Solventum said it would likely use the proceeds of any deal for debt repayments or additional funding for R&D.

Corporate & economic cews

Bank of Canada cuts interest rates

Last week, the Bank of Canada, Ottawa, Ontario, announced cutting its primary interest rate by half a percentage point. The bank said the Canadian economy needed a strong stimulus, with inflation returning to 2% sooner than anticipated. Some economists believe another half-point cut could be implemented in December, given soft consumer spending and business investment. Other economists believe a steady diet of quarter-point reductions is more likely. The Bank of Canada was the first among the Group of Seven monetary authorities to begin easing rate policy after aggressive tightening by global officials aimed at taming historically elevated inflation.

Boeing Faces financial challenges

Numerous rumors surrounding Boeing, Arlington, Virginia, and its financial issues have resulted in items concerning downsizing, getting out of the space business, aircraft reliability, and more. The new CEO, Kelly Ortberg, is grappling with all these, including a now-long machinist strike at its aircraft production facilities. The strike has halted all new aircraft shipments and created a considerable cash flow situation for the company. As a result, the company announced it will sell up to $15 billion of new stock starting this week to prop up its financial commitments. Most analysts feel that the company has enough stability to survive the current crises but at the cost of longer-term debt situations.

The R&D World Index

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.

Company	Company	Ticker	Exchange	2020 R&D billions$	10/18/24	10/25/24	10/18/24 to 10/25/24	1/1/22 to 10/25/24
1	Alphabet/Google	GOOGL	NASDAQ	27.303	165.05	166.99	1.18%	15.28%
2	Microsoft	MSFT	NASDAQ	17.198	418.16	428.15	2.39%	27.30%
3	Volkswagen AG	VWAGY	OTC	17.259	10.35	10.42	0.68%	-61.69%
4	Apple	AAPL	NASDAQ	18.667	235.00	231.41	-1.53%	30.32%
5	Facebook/Meta	META	NASDAQ	13.874	576.47	573.25	-0.56%	70.43%
6	Intel	INTC	NASDAQ	14.503	22.77	22.68	-0.40%	-54.90%
7	Johnson & Johnson	JNJ	NYSE	13.750	165.12	160.88	-2.57%	-5.96%
8	Roche Holdings AG	RHHBY	OTC	14.143	39.56	40.57	2.55%	-21.51%
9	Merck & Co.	MRK	NYSE	11.381	108.70	103.98	-4.34%	35.67%
10	Novartis	NVS	NYSE	9.387	117.18	113.79	-2.89%	30.09%
11	Toyota	TM	NYSE	10.724	171.53	172.00	0.27%	-7.18%
12	Pfizer	PFE	NYSE	8.336	29.22	28.45	-2.64%	-51.82%
13	Alibaba	BABA	NYSE	6.006	102.43	97.42	-4.89%	-17.99%
14	GM	GM	NYSE	6.727	49.18	52.07	5.88%	-11.19%
15	Honda	HMC	NYSE	8.806	30.96	30.23	-2.36%	6.26%
16	Ford	F	NYSE	9.340	11.10	11.07	-0.27%	-46.70%
17	AbbVie	ABBV	NYSE	13.949	188.86	187.85	-0.59%	38.74%
18	Sanofi SA	SNY	NYSE	7.750	54.93	54.34	-1.07%	8.46%
19	Cisco	CSCO	NASDAQ	6.331	56.76	55.74	-1.80%	-12.04%
20	Bristol-Myers Squibb	BMY	NYSE	7.130	53.22	51.92	-2.44%	-16.73%
21	Astra Zeneca PLC	AZN	NYSE	6.056	78.26	75.05	-4.11%	28.84%
22	IBM	IBM	NYSE	5.368	232.20	214.67	-7.55%	60.61%
23	Oracle	ORCL	NYSE	6.928	174.69	173.52	-0.69%	98.97%
24	Eli Lilly & Co.	LLY	NYSE	8.606	917.97	892.72	-2.75%	223.55%
25	Stellantis NV	STLA	NYSE	5.309	13.28	13.64	2.71%	-30.19%
Total				269.522	4022.95	3962.81	-1.49%	40.54%
ICT				115.6	1983.53	1963.83	-0.99%	35.47%
Automotive				59.8	286.40	289.43	1.06%	-15.34%
Biopharmaceutical				83.6	1753.02	1709.55	-2.80%	66.26%