Morning Commentary: Flexion Therapeutics convertible notes in focus, pop on acquisition

By Abigail W. Adams

Portland, Me., Oct. 11 – It was a light-volume start to the week in the convertibles secondary space on Monday with U.S. bond markets closed for the Columbus Day holiday.

However, Flexion Therapeutics Inc.’s 3.375% convertible notes due 2024 were in focus following news Pacira BioSciences Inc. would acquire the company.

The 3.375% convertible notes due 2024 saw heavy volume early in the session with the bonds popping on an outright basis alongside stock.

The 3.375% notes rose 10 points outright to 99.5 following the news.

Flexion Therapeutics’ stock was changing hands at $9.33, an increase of 61.42%, shortly before 11 a.m. ET.

News broke early Monday that Pacira BioSciences would acquire Flexion for $8.50 per share, in addition to a non-tradeable contingent value right worth up to $8 a share, according to a company news release.

Flexion’s convertible notes have long been in busted territory with the premium on the notes “massive,” a source said.

Pacira BioSciences is also a convertible notes issuer. However, the pharmaceutical company’s 0.75% convertible notes due 2025 were not active early in Monday’s session.

Pacira’s stock was also up on the news and was changing hands at $50.09, an increase of 4.42%, shortly before 11 a.m. ET.

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