Morning Commentary: DepoMed’s convertibles trade just under 140; PTC Therapeutics poised to move up

By Rebecca Melvin

New York, Sept. 19 – The convertibles market got off to a quiet start on Monday with light secondary market action and no new issues launched or priced in the primary market, a New York-based trader said.

Friday’s action was still in focus.

DepoMed Inc.’s 2.5% convertibles, which jumped about 15 points on Friday, changed hands on Monday at the upper end of that range, or at 139.125 to 139.875, according to Trace data. The common shares of the Newark, Calif.-based specialty pharmaceutical company also spiked on Friday and were trading slightly higher again on Monday.

The DepoMed stock and bonds surged amid rumors that the company was exploring a sale, a trader said.

Novavax Inc.’s 3.75% convertibles were not heard in trade after the bond plunged by 100 points to the low 40s on Friday after the Rockville, Md.-based biotechnology company reported that trials for its RSV respiratory disease vaccine candidate had failed. But the common stock bounced off its lows and was last at $1.38, or up 9 cents, or 7%, on Monday.

Elsewhere, PTC Therapeutics Inc.’s 3% convertible was in focus and poised for a climb in tandem with the underlying common stock of the South Plainfield, N.J.-based pharmaceutical company. The PTC Therapeutics stock and bonds were up after regulatory approval of Sarepta Therapeutics Inc.’s Eteplirsen drug to treat patients with Duchenne muscular dystrophy, a trader said.

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