March 07, 2016

Bio-pharma DR capital raisings surge in 2015

Depositary Receipts’ 2015 Market Review shines a light on high-growth sector


BNY Mellon has published its annual DR Market Review, a comprehensive look at investor and issuer activity in the depositary receipts markets, rich with charts and graphics that highlight key industry metrics from 2015. Depositary Receipts allow companies and investors around the globe to connect seamlessly across borders, playing an increasingly important role in global financial markets.

As of December 31, 2015, there are more than 3,600 total DR programs in existence and available to investors worldwide. More than 100 new sponsored and unsponsored programs were created in 2015 to better meet the needs of investors in specific sectors and/or geographies. For the year, 160 billion DRs valued at $3.1 trillion traded on global exchanges. More than $9.9 billion in capital was raised through 41 depositary receipt–based initial and secondary offerings. The report also notes that the number of overall DR investors grew from 3,261 in 2Q10 to 4,533 in 2Q15, a 39% increase.

“2015 was a challenging year for most markets,” said Christopher M. Kearns, CEO of BNY Mellon's Depositary Receipts business. “Despite this, we continued to support the sophisticated needs of issuers and investors around the globe and to make DRs an even more significant tool for them.

“As the leading depositary bank, BNY Mellon was at the forefront of many initiatives designed to add value for our clients. Social Finance is at the core of our business strategy. Last year, we became the first depositary to provide detailed data and insights to help clients understand the Environmental, Social and Governance (ESG) factors that are reshaping global investment strategies.”

By far, the most active area for DR-based capital raisings in 2015 was the pharmaceutical and healthcare sectors. Last year saw 23 companies from these sectors raise $5.7 billion in DR form. This compares with eight companies that raised roughly $1 billion in 2014, and only three firms that raised less than $200 million in 2013. That’s a nearly 30-fold increase in capital value raised over three years.

“These capital-raising transactions by bio-pharma firms can be used to broaden their investor base or to increase funding for research and development, which in turn can improve lives. We’re proud to play a role in the process,” Kearns added.

Top performing ADR country indices for 2015 include Denmark (+28.5%) and Ireland (+18.3%), followed by Belgium (+9.1%), Japan (+8.6%) and Israel (+8.0%). Of the top 10 individual DR program performers, four each were based in China and Argentina, with one each from Russia and Australia. Russia’s Ros Agro (+190.8) was the top gainer, followed closely by Chinese firm Hanwha Q Cells Co. Ltd. (+189.5%) and Argentina’s Pampa Energia SA (+105.1%).

BNY Mellon acts as depositary for more than 2,600 American and global depositary receipt programs as of December 31, 2015. Acting in partnership with leading companies from over 65 countries, BNY Mellon is committed to helping securities issuers access the world’s rapidly evolving financial markets and delivers a comprehensive suite of depositary receipt services. Learn more at www.bnymellon.com/dr.

Sources: Bloomberg, BNY Mellon, and other depositary websites; all data as of Dec. 31, 2015, except where noted.

This article is for informational purposes only. BNY Mellon provides no advice nor recommendation or endorsement with respect to any company or securities. Nothing herein shall be deemed to constitute an offer to sell or a solicitation of an offer to buy securities. Depositary Receipts: Not FDIC, State or Federal Agency Insured; May Lose Value; No Bank, State or Federal Agency Guarantee. BNY Mellon provides no advice nor recommendations or endorsement with respect to any company, security or products based on any index licensed by BNY Mellon, and we make no representation regarding the advisability of investing in the same.