Biopharma names up in convertibles action; EV truck makers woeful as competition rises

Chicago, July 17 – Over 8% of the roughly $571 million of trading action in the convertible bond space went to a biopharma name on Monday, as investors picked up news of positive and promising topline results from a late-stage study.

BridgeBio Pharma Inc. has two convertible bonds outstanding and both were in play, with more traders in and out of the company’s 2.25% convertible bonds due 2029, but also interested in the 2.5% convertibles due 2027.

It was not the only good news in the space.

Halozyme Therapeutics, Inc. also had exciting news to report for patients with chronic inflammatory demyelinating polyneuropathy.

The company’s 1% convertibles due Aug. 15, 2028 followed the company’s stock up, as reported by a source late in the day.

Most of the top-trading names were in positive territory, but a couple of automakers left the session worse than where they started. Specifically, investors in convertibles from Rivian Automotive Inc. and Ford Motor Co. saw a decline in prices, also on topical news in their respective sector.

BridgeBio

BridgeBio was the name du jour.

The company’s two convertible bond issues are less than extravagantly liquid and on a normal day will either trade zero or less than a handful of times.

On Monday, however, the company’s 2.25% bonds due Feb. 1, 2029 hit at least $39.2 million of volume shortly before the market closed and the 2.5% convertible due March 15, 2027 had $30.5 million of the issue on the tape.

The first issue, the 2.25% convertibles, left the day markedly better, with the last reported trade just a touch above 78.

They went out Friday at 63.5, the highest trading price of last week.

When the 2.25% convertibles priced, they priced against a stock price of $65.79 with an initial conversion premium of 47.5%.

The 2.5% convertible bonds closed Monday at 105.94 after closing Friday at 80.25.

The company’s stock went out 75.85% better on the day than where it started, $32.04 at the close with its 52-week high reached at around noon ET at $34.28 per share.

When the company’s 2.5% convertible bonds priced, the stock price was $31.06 and the initial conversion premium was 37.5%, for a conversion price of $42.71.

BridgeBio announced positive results from a phase 3 study of ATTRibute-CM of acoramidis for patients with transthyretin amyloid cardiomyopathy, an “increasingly recognized cause of heart failure,” the company noted in its release.

The company has a few milestones to go but mentioned that it will be working out commercial launch plans as a next step.

Halozyme

San Diego-based biopharmaceutical company Halozyme had positive results of its own, although not quite as dramatically optimistic as a new heart drug.

Positive topline results for a drug for chronic inflammatory demyelinating polyneuropathy were announced, a drug for a rare type of autoimmune disorder.

The news pushed the company’s stock up 5.36%, to $40.27 per share at the close.

Halozyme’s 1% convertible bonds due Aug. 15, 2028 were trading with $17.8 million on the tape.

Two trades on Friday had them in the mid-to-high 94 area.

The news on Monday lifted them to above 97 by day’s end.

The yield was 1.59% on the bonds when the market closed.

Halozyme priced the $720 million issue in 2022 when stock was $43.09 per share and the bonds came with an initial conversion premium of 30%, for a conversion price of $56.02.

Rivian

Rivian Automotive, an electric vehicle manufacturer known for its pickup truck, is finally facing long-touted competition in the field.

Tesla’s very first pickup is ready to roll off the line, after long delays.

Rivian’s stock price reacted, closing the day down 3.34% at $23.99 per share.

The company’s 4.625% convertible bonds due March 15, 2029 were also off, marked by a source near the end of the day at 143.71.

Trace data had them finishing Friday at 148.44.

There was over $10 million of trading on the bonds.

The company was founded in 2009.

The 52-week high for the company’s stock is $40.86 and the low is $11.68.

The convertibles priced near the low point, on March 7, when stock was $14.64. The conversion price is $20.13, representing a 37.5% initial conversion premium.

Ford

Ford was not immune to the Tesla news and reacted by slashing prices on its electric Lightning pickup truck and announcing a ramp up in production.

The stock market still sighted trouble ahead.

Ford’s stock closed the day 5.97% lower, at $14.09 per share.

Less active than Rivian, the automaker’s 0% convertibles due 2026 were also moving, though, and following the stock down.

Ford’s bonds went out Monday marked at 105.4, as reported by a source.

The issue is generally liquid, and trading action had them closing the previous week at 108, under where they started the July 10 week at 108.51.

Mentioned in this article:

BridgeBio Pharma Inc. Nasdaq: BBIO

Ford Motor Co. NYSE: F

Halozyme Therapeutics, Inc. Nasdaq: HALO

Rivian Automotive Inc. Nasdaq: RIVN

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