Teva makes outright gains after positive earnings; Illumina flat as health care rallies

By Rebecca Melvin

New York, May 9 – Teva Pharmaceutical Industries Ltd.’s 0.25% convertibles moved up in line with the underlying shares of the bond on Monday, or higher on an outright basis, after falling outright on Friday.

The bonds had gained on a dollar-neutral, or hedged, basis on Friday.

The gains were related to the Petach Tikva, Israel-based pharmaceutical company’s better-than-expected quarterly earnings and confirmation that its $40.5 billion acquisition of Allergan’s generic drug business is still expected to be completed in June.

There was other favorable news in the sector, and investors bought other health care names on Monday as well. Horizon Pharma plc posted positive earnings and reaffirmed its full-year guidance. The Horizon 2.5% convertibles were indicated higher to almost 87 from 82, with the underlying shares up $1.86, or 14%, to $15.27.

Depomed Inc. surged, with the 2.5% convertibles indicated up to 112.25 on Monday from 103.25 to 103.50 previously. Depomed shares rose $2.34, or 15%, to $17.85. Mizuho Securities upgraded the shares of the Newark, Calif.-based specialty pharmaceutical company to “buy” from “neutral” and boosted its stock target price to $19.00.

But Illumina Inc. seemed to miss out on the rally. The Illumina 0% bonds traded at virtually unchanged, as shares edged up 0.8%. The Illumina securities tanked in mid-April after the gene sequencing machine maker issued an earnings warning.

Elsewhere, the market was mixed in mostly quiet trade, market sources said.

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