Medicines higher in active trade; Depomed deflects Horizon offer; Ctrip off its lows

By Rebecca Melvin

New York, July 7 – The Medicines Co.’s convertibles moved higher in active trade on Tuesday in a continuation of action from Monday when the bonds traded better than the overall space. In the broader markets, stocks swung from sharp losses to gains after the S&P 500 stock index bounced off a technical marker.

The Medicines bonds – of which there are two series – were up on an outright basis, and firmer on swap, after outperforming convertibles on Monday with only a slight contraction on swap, a second trader said.

The big mover in health care, however, was Depomed Inc., the trader noted. Depomed rejected a hostile takeover bid from Horizon Pharma plc, which represented a 42% premium over Depomed’s closing share price on Monday.

Depomed shares surged 39% on Tuesday, and the bonds were up multiple points on swap, a trader said.

Horizon is also a convertibles issuer. It priced $400 million of 2.5% convertibles in early March. Horizon shares were down, but the convertibles were not heard in trade.

Ctrip.com International Ltd.’s 1% convertibles, or the C tranche, which priced last month, dropped to 93.25 versus a share price of $68.00 in late-day action. That was down on the day but a little bit better than earlier levels, a sellsider said. Shares of the Shanghai-based travel services provider had been down as much as 12% on the day but ended down by less than 1%.

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