Valeant, other drug makers continue slide; hospital names trade off; energy credits lower

By Paul Deckelman

New York, Oct. 22 – Valeant Pharmaceuticals International Inc.’s paper continued to get hammered in heavy trading on Thursday, although the carnage was not as bad as that seen on Wednesday.

Other pharmaceutical and biotech names remained on the downside in the wake of Valeant’s shocking decline, including Endo International plc and the newly issued notes of Concordia Healthcare Corp.

Horizon Pharma plc’s convertible notes also remained under pressure.

Distressed-debt traders were meantime casting a few glances on Thursday at another segment of the health-care industry – hospitals. Although none of the major names in the sector are considered to be distressed per se, they noted the sharp fall in Community Health Systems, Inc.’s bonds and shares in heavy trading after that company issued guidance on its expected third-quarter earnings, coming in well below analysts’ expectations.

Other hospital operators to take it on the chin on Thursday included Tenet Healthcare Corp., LifePoint Hospitals Inc. and HCA Holdings, Inc.

Away from health care, crude oil prices firmed up, snapping a three-session losing streak. But that did little or nothing to help the beleaguered bonds of such oil and natural gas exploration and production companies as California Resources Corp. and Linn Energy LLC.

On the upside, Avaya Inc.’s bonds firmed smartly in brisk trading, although none of the market participants had seen any fresh positive news out on the communications company that might explain the rise.

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