The R&D World Index (RDWI) for the week ending September 27, 2024, closed at 3,980.69 for the 25 companies in the RDWI. The Index was down -0.66% (or -26.26 basis points). Thirteen RDWI members gained value last week from 0.03% (Sanofi SA) to 20.30% (Alibaba). Twelve RDWI members lost value the previous week from -0.21% (Apple) to -4.91% (General Motors).
This week’s R&D highlights include the Organization for Economic Cooperation and Development noting an increase in global economic growth in 2024 and 2025; analysts said the acquisition of Intel is unlikely, and the country needs more nuclear engineers. We also cover TSMC and Samsun senior execs visiting the UAE to discuss building chip-making complexes, Roche narrowing the diseases its pharmaceuticals will treat, and a law professor says tort law is the best way to regulate AI.
Global R&D and economic trends:
Several factors to slightly improve global economic growth
The Organization for Economic Cooperation and Development (OECD), Paris, France, noted last week that falling interest rates and recovering real wages will help drive a slight increase in global economic growth in 2024 and again in 2025. Recent drops in oil prices could aid the final push to tame inflation. However, the OECD was careful to note that the continuing escalation of conflicts in the Middle East could push oil prices higher and delay the recovery. Food prices are also currently still above their pre-pandemic levels, which could also affect recovery.
Analysts say successful acquisition of Intel unlikely
Various analysts, including from Bank of America Securities, New York City, noted last week that there is not likely to be a successful acquisition of the financially distressed Intel, the Santa Clara, California, chip maker, primarily due to the massive size of the deal’s value being more than $100 billion, potentially significant regulatory hurdles (which would include those in China), and the complexity of Intel’s semiconductor design and chip-manufacturing operations. China alone has already stymied several large deals involving U.S. technology firms.
Nuclear engineers in short supply
Demand for clean nuclear energy is rising fast, but the workforce required in this industry is seeing a specific shortfall that will take time to solve. The Oak Ridge Institute for Science and Education, Tennessee, noted last week that the college class 2022 saw only 454 students graduate with a degree in nuclear engineering. At the same time, the nuclear industry faces a maturing workforce, with 17% of industry workers over 55 and 60% aged between 30 and 54, according to the U.S. Energy and Employment report. Potential workers have been reluctant to enter the field due to the nuclear incidents at Three Mile Island, Pennsylvania, Chornobyl, Ukraine, and Fukushima, Japan. Energy demand, including that required for AI-based applications, is forecast to require a workforce of four million by 2050, with U.S.-based workers increasing from their current 68,000 level to more than 200,000.
Technology R&D
Korean chip makers visit UAE to discuss building chip-making complexes
Senior executives from two of the top chip-making manufacturers, Taiwan Semiconductor Manufacturing Company (TSMC), Hsinchu, and Samsung, Seoul, South Korea, recently visited the UAE to discuss building chip-making complexes similar to the scale of their respective Asian facilities. Discussions are still in the early stages, and technical and other hurdles might limit their successful implementation. The UAE would fund the potential projects with a central role for the government to create a domestic technical industry.
Pharmaceutical R&D:
Roche narrowing diseases pharmaceuticals will target
RDW Index member Roche, Basel, Switzerland, announced last week that it is narrowing the diseases it targets with its pharmaceutical R&D activities. Roche is trying to establish a presence in the increasingly crowded obesity field and expand in therapeutic areas such as ophthalmology. These would redirect their past research with drug candidates for Alzheimer’s disease and lung cancer. Roche noted that it is narrowing its drug development pipeline to 11 disease areas and continuing to invest in a targeted way. Managers performed an extensive scrub of their portfolio and cut about 25% of the R&D work in the pipeline. The company also noted that it is seeking a closer alignment between its pharmaceutical and diagnostics divisions.
AstraZeneca implementing AI-powered immune cell atlas
AstraZeneca, Cambridge, U.K., and Immunai, New York City, announced last week that they are extending their multiyear collaboration to implement an AI-powered immune cell atlas in designing the drug maker’s clinical trials of cancer immunotherapies. The two companies previously partnered on research into targets within inflammatory bowel disease based on cell-by-cell analyses of the immune system. Founded by former researchers and computer engineers from Massachusetts Institute of Technology, Cambridge, Harvard University, Cambridge, and Stanford University, California, Immunai has built a digital map of the immune system by charting each cell type’s function and its interactions with the body and various diseases.
AI R&D:
Tort law best way to regulate AI, says Yale prof
An editorial in the Wall Street Journal last week by an associate professor of law at Yale University, Ketan Ramakrishnan, noted that tort law would be the best way to regulate future AI endeavors. A simple and powerful idea animates tort law: if you harm other people by failing to take reasonable care, then fairness requires you to compensate them. Tort law provides the most basic form of risk governance in a decentralized economy. California’s SB 1047, for example, would make clear that companies face legal liability if they negligently cause harm.
Nokia Bell Labs and etisalat join up to create AI-based solutions
Nokia Bell Labs, Murray Hill, New Jersey, and etisalat and (e&), Abu Dhabi, United Arab Emirates (UAE) last week announced an R&D collaboration to innovate for strategic industrial sectors. The collaborators signed a year-long, non-binding memorandum of understanding (MOU) to create AI-based solutions for sustainable enterprise and industrial automation applications to accelerate innovation concepts toward real-world deployments. The collaboration will explore opportunities with industry, universities, and research centers in AI and information and communication technologies that fit an overall vision of industrial automation and digitalization. e&, founded over 48 years ago, operates in 33 countries.
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.
| Company | Ticker | Exchange | 2020 R&D billions$ | 09/20/24 | 09/27/24 | 9/20/24 to 9/27/24 | 1/1/22 to 9/27/24 |
|---|---|---|---|---|---|---|---|
| Alphabet/Google | GOOGL | NASDAQ | 27.303 | 164.64 | 165.29 | 0.39% | 14.11% |
| Microsoft | MSFT | NASDAQ | 17.198 | 435.27 | 428.02 | -1.67% | 27.56% |
| Volkswagen AG | VWAGY | OTC | 17.259 | 10.69 | 11.44 | 7.02% | -60.82% |
| Apple | AAPL | NASDAQ | 18.667 | 228.20 | 227.72 | -0.21% | 28.24% |
| Facebook/Meta | META | NASDAQ | 13.874 | 561.35 | 567.36 | 1.07% | 68.68% |
| Intel | INTC | NASDAQ | 14.503 | 21.84 | 23.88 | 9.34% | -53.63% |
| Johnson & Johnson | JNJ | NYSE | 13.750 | 164.16 | 161.40 | -1.68% | -5.65% |
| Roche Holdings AG | RHHBY | OTC | 14.143 | 39.45 | 40.14 | 1.75% | -22.34% |
| Merck & Co. | MRK | NYSE | 11.381 | 117.17 | 113.69 | -2.97% | 48.34% |
| Novartis | NVS | NYSE | 9.387 | 115.94 | 115.61 | -0.28% | 32.17% |
| Toyota | TM | NYSE | 10.724 | 184.07 | 182.82 | -0.68% | -1.36% |
| Pfizer | PFE | NYSE | 8.336 | 29.42 | 29.09 | -1.12% | -50.74% |
| Alibaba | BABA | NYSE | 6.006 | 89.22 | 107.33 | 20.30% | -9.65% |
| GM | GM | NYSE | 6.727 | 48.88 | 46.48 | -4.91% | -20.72% |
| Honda | HMC | NYSE | 8.806 | 32.72 | 32.22 | -1.53% | 13.25% |
| Ford | F | NYSE | 9.340 | 10.88 | 10.78 | -0.92% | -48.10% |
| AbbVie | ABBV | NYSE | 13.949 | 193.47 | 194.79 | 0.68% | 43.86% |
| Sanofi SA | SNY | NYSE | 7.750 | 57.63 | 57.65 | 0.03% | 15.07% |
| Cisco | CSCO | NASDAQ | 6.331 | 51.97 | 53.02 | 2.02% | -16.33% |
| Bristol-Myers Squibb | BMY | NYSE | 7.130 | 49.41 | 50.91 | 3.04% | -18.35% |
| Astra Zeneca PLC | AZN | NYSE | 6.056 | 78.38 | 77.62 | -0.97% | 33.25% |
| IBM | IBM | NYSE | 5.368 | 217.70 | 220.84 | 1.44% | 65.23% |
| Oracle | ORCL | NYSE | 6.928 | 168.00 | 168.74 | 0.44% | 93.49% |
| Eli Lilly &Co. | LLY | NYSE | 8.606 | 921.49 | 877.79 | -4.74% | 217.79% |
| Stellantis NV | STLA | NYSE | 5.309 | 15.00 | 16.06 | 7.07% | -17.81% |
| Total | 269.522 | 4006.95 | 3980.69 | -0.66% | 41.17% | ||
| ICT | 115.6 | 1938.19 | 1962.20 | 1.24% | 35.36% | ||
| Automotive | 59.8 | 302.24 | 299.80 | -0.81% | -12.31% | ||
| Biopharmaceutical | 83.6 | 1766.52 | 1718.69 | -2.71% | 67.15% |
