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Molecular Partners AG, the digital arm of a financial services company based in Hong Kong, has gone public on the NYSE. Learn more about the Molecular Partners AG IPO, and find out if investors in Canada can buy in.
Note: all dollar amounts on this page are in US dollars unless otherwise stated.
On Wednesday June 16, 2021, Molecular Partners AG, a Switzerland-based clinical-stage biopharmaceutical company, went public on the Nasdaq Global Select Market under the ticker symbol “MOLN.” The company offered 3 million American Depositary Shares (ADSs).
Shares opened at a price of $20. This was 26% lower than the share price that was announced on June 8, which was $27. Closer to the IPO date, the company lowered its initial share price to $21.15. But this still fell short of the actual price investors were willing to pay when stocks began trading.
Altogether, Molecular Partners raised $63.8 million, which fell somewhat short of its earlier goal of raising $81 million.
Molecular Partners originally filed a prospectus with the the US Securities and Exchange Commission on April 22, 2021. According to the document, J.P. Morgan Securities LLC, SVB Leerink LLC and Cowen and Company, LLC acted as lead underwriters of the IPO.
Unfortunately, no. Molecular Partners AG is only selling American Depositary Shares, which are equity shares of a non-US company held by a US depository bank. Generally, only US residents can have accounts with US depository banks. So, Canadians can’t buy Molecular Partners stocks directly.
Depository Banks are financial institutions that hold people’s assets (money, securities etc.) for safekeeping. Where stock trading is concerned, depository banks make it relatively safe and easy for US residents to buy stocks in foreign companies that trade on US exchanges like the NYSE or the Nasdaq. This is because a depository bank act as a custodian of stocks until they’re sold, after which it transfers the stocks between investors’ accounts.
Even though you can’t buy Molecular Partners stock directly if you reside in Canada, you can still invest in other biopharmaceutical companies that are traded on Canadian and international stock exchanges.
|Company||Market Capitalization||Stock info|
|Aeterna Zentaris Inc.||$147.81 Million||TSX: AEZS|
|Devonian Health Group Inc.||$55.28 Million||TSXV: GSD|
|Johnson & Johnson||$439.99 Billion||NYSE: JNJ|
|Bayer Aktiengesellschaft||$52.19 Billion||XETRA: BAYN.DE|
|Pfizer Inc.||$227.71 Billion||NYSE: PFE|
|Merck & Co., Inc.||$192.79 Billion||NYSE: MRK|
|GlaxoSmithKline plc||$99.96 Billion||NYSE: GSK|
|AbbVie Inc.||$205.31 Billion||NYSE: ABBV|
|Takeda Pharmaceutical Company Limited||$54.42 Billion||NYSE: TAK|
|Shanghai Pharmaceuticals Holding Co., Ltd||$65.97 Billion||HKSE: 2607.HK|
You’ll need a brokerage account to buy and sell shares. Here’s how it works:
Agreements between Canada and the US require Canadians holding US stock investments to pay the US Internal Revenue Service (IRS) a 15% withholding tax on any dividends earned on their US stocks. Interest earned from bonds or other interest-yielding US investments are similarly taxed at a rate of 10%.
An exception is made for stock investments held in trust exclusively designed to provide retirement income. Such trusts include RRIFs, LIRAs, LIFs, LRIFs and Prescribed RRIFs. RRSPs are also exempt from US withholding tax if you own US investments in the form of US stocks, bonds or ETFs.
All income from investments, including foreign investments, must be declared as part of your income on your Canadian tax return. Unless your US earnings are exempt from withholding tax, this means you’ll be double taxed on those earnings — first by the IRS, then by the CRA. However, the CRA may allow you to claim foreign tax credits for any taxes you’ve already paid to the IRS.
Speak with a tax professional to find out what rules and exceptions apply to your circumstances.
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