Isis adds on hedge after drug data disappoints; LinkedIn adds outright, on hedge

By Rebecca Melvin

New York, Feb. 3 – Convertibles trading was driven mostly by company-specific news on Tuesday as equities and crude oil prices rose.

Convertibles in the biopharmaceutical sector were firm despite the generally “the soft tape” that saw shares in the industry weak, a biotech convertibles trader said.

But Isis Pharmaceuticals Inc.’s convertibles traded down on an outright basis with a decline in the stock shares, but were better on a hedged basis after the Carlsbad, Calif.-based gene-based drug developer announced that its experimental antisense drug ISIS-PTP1B Rx may have only marginal glucose lowering capabilities, the trader said.

The Isis convertibles dropped by about 5 points on an outright basis, but expanded about 0.5 point on a dollar-neutral, or hedged, basis.

“Our tape is a little soft today,” he said. “There may have been a little rotation [out of the sector], as the market is up, in general,” he said. Nevertheless biotech convertibles looked firm and Isis, which accounted for the lion’s share of trading in the sector, was strong.

Shares of Salix Pharmaceuticals Ltd. bucked the general down trend, jumping on takeover rumors that Valeant Pharmaceuticals International Ltd. and Shire plc are mulling bids for the Raleigh, N.C.-based specialty drug company, a trader said.

Salix’s 1.5% convertibles due 2019 were seen up at 219 with its shares higher by more than 5% at $140.50. The Salix 3.75% convertibles, which are less frequently traded, were seen in a 303 context.

© 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.