Morning Commentary: BioMarin As outperforming, BioMarin Bs in line amid takeout rumors

By Rebecca Melvin

New York, March 27 – BioMarin Pharmaceutical Inc.’s convertibles were trading actively and higher on an outright basis on Friday, while on a hedged basis, the A convertibles were better and the B convertibles were flat, amid takeout speculation that lifted the underlying shares 14%, according to market sources.

The BioMarin 0.75% convertibles due 2018 were seen at 152 bid, 152.75 offered versus an underlying share price of $131.00, a New York-based trader said.

That was up about 14 points on an outright basis and up about a point on swap, depending on one’s delta, the trader said.

The BioMarin 1.5% convertibles due 2020 surged 18.5 points on an outright basis to 158.25, according to Trace data. That was seen flat, or in line on a swap basis.

Shares of the Novato, Calif.-based biopharmaceutical company were last up $16.66, or 14%, at $132.18.

Driving the gains were takeout rumors that resurfaced and lifted the stock, a trader said.

Health care and biotechnology stocks have sold off of late, and health care convertibles have been mixed, but on Friday a bid was back in everything, the trader said. “When you have a big index name like BioMarin up 12.8%, that has an impact,” the trader said.

“The As opened up a bit, and the Bs nuked straight up,” the trader said.

The trader pointed to a takeout rumor in the form of a blog report that Shire is considering offering to acquire BioMarin. Citing unnamed sources, Betaville blogger Ben Harrington said Shire recently approached BioMarin about a merger deal.

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