Clovis Oncology convertibles jump over 25 points on positive trial data; biotech follows

By Stephanie N. Rotondo

Seattle, June 19 – A New York-based sellside source said that Clovis Oncology Inc. was the “nom du jour” on Monday, as the company’s stock popped nearly 50%.

The company’s 2.5% convertible notes due 2021 also got a nice pop, the trader said.

“It’s probably just tracking the stock,” he said of the debt.

“If you are not trading Clovis, you’ve got nothing to do,” he added.

Toward the end of the day, the trader pegged the convertibles at 164.45 versus a stock price of $90.00 a share. Earlier in the day, he had seen the issue trade at 158.6 against a stock price of $84.60.

Another market source deemed the bonds up nearly 37 points at 161.75.

Clovis’ stock jumped $27.91, or 46.53%, to $87.88.

The momentum in the securities came as Clovis shared positive late-stage clinical trial data on its ovarian cancer treatment, Rubraca. The results will help the company market the drug for wider uses than the originally proposed treatment for cancer patients that test positive for defective BRCA genes.

In fact, the data indicated that the drug could be effective on up to four times as many patients as originally expected.

Additionally, Clovis also said on Monday that is had reached a settlement deal on a class action lawsuit related to an experimental lung cancer drug.

The lawsuit was brought by investors who said Clovis misled them on the drug’s potential.

Because of the settlement, Clovis will take a $142 million charge in the second quarter.

On the Clovis news, there was “a lot of biotech following it up,” a trader said.

For instance, Intercept Pharmaceuticals Inc.’s 3.25% convertible notes due 2023 rose to a 98.75 to 99.75 context, which compared to levels around 96 previously.

The underlying equity firmed $7.42, or 6.27%, to $125.82.

Mentioned in this article:

Clovis Oncology Inc. Nasdaq: CLVS

Intercept Pharmaceuticals Inc. Nasdaq: ICPT

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.