New Isis Pharmaceuticals trades below par, slips on hedge; Dendreon steady; Home Inns adds

By Rebecca Melvin

New York, Nov. 12 – Isis Pharmaceuticals Inc.’s newly priced 1% convertible bonds traded below par on Wednesday after the Carlsbad, Calif.-based developer of gene-based therapeutic drugs priced $425 million of the seven-year notes at the cheap end of talked terms.

The new Isis 1% convertibles were seen at 99.375 bid, 99.875 offered versus an underlying share price of $51.00, a Connecticut-based trader said at late morning.

“The stock didn’t cooperate, and the bonds were heavy right from the get go,” a New York-based trader said.

On a delta of 75% to 80%, the bonds contracted about 0.25 point even though shares were lower.

The lion’s share of market action on Wednesday was in the new Isis bond. But there was also trading in the health care space. Dendreon Corp.’s convertibles were trading at about 55.5, which was seen as essentially the new reset price after the bonds fell sharply on Monday after the Seattle-based biopharmaceutical company’s Chapter 11 bankruptcy filing.

Also in health care, Allscripts Healthcare Solutions Inc.’s convertibles traded up with higher shares after the Chicago-based medical software company announced that Catholic Health Initiatives has selected Allscripts Hosting Solution to provide enterprise-wide information technology through 2020.

Elsewhere, Home Inns & Hotels Management Inc.’s 2% convertibles, a short-dated, bond floor name, traded better by about 0.5 point even though shares of the Shanghai-based hotel chain were lower after its third-quarter earnings report.

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