Twitter drops outright, mixed to lower on hedge; Medicines opens up; Synergy to price

By Rebecca Melvin

New York, Oct. 28 – Twitter Inc.’s convertibles fell on an outright basis and traded mixed to lower on a dollar-neutral, or hedged, basis, sources said on Tuesday, after the San Francisco-based social media company posted quarterly earnings that met or beat estimates but disappointed on user growth and certain guidance going forward.

Medicines Co.’s convertibles popped along with shares on an outright basis and opened up as much as a point on swap after news the Parsippany, N.J.-based pharmaceutical company won a favorable judgment in patent suit litigation.

Other health care names were in focus as their shares surged, including Clovis Oncology Inc. and Solazyme Inc. Those shares jumped 6% and 10%, respectively.

Meanwhile, Wright Medical Group Inc.’s convertibles were in focus after news that the medical device maker and Tornier NV have agreed to combine in an all-stock deal that would move Wright’s headquarters to the Netherlands.

Driving gains in health care and biopharmaceutical companies was “continuation,” a trader who is focused on the sector said. “The market was up. Everyone has their hats back on to buy more paper,” he said.

In the primary market, Synergy Pharmaceuticals Inc. launched an offering of up to $150 million of five-year convertible senior notes in an overnight deal talked to yield a fixed 7.5% and with an initial conversion price of $3.11, which matched the stock’s close on Tuesday, according to market sources.

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