Salix Pharmaceuticals slumps outright, adds on heavy deltas; Allcripts Healthcare drops

By Rebecca Melvin

New York, Nov. 7 – Salix Pharmaceuticals Ltd.’s convertibles dropped sharply on an outright basis but expanded at heavier deltas on a hedged basis on Friday after the Raleigh, N.C.-based specialty drug company posted earnings that missed estimates.

Salix also flagged inventory problems, lowered guidance, and announced that its chief financial officer has resigned. The news sent shares down 34% and was followed by multiple downgrades.

Allscripts Healthcare Solutions Inc.’s convertibles plunged outright along with the underlying shares of the Chicago-based medical software company after the company posted quarterly results that missed estimates.

Overall trading action was light on Friday, with Salix accounting for a good chunk of total volume, sources said.

Herbalife Ltd.’s convertibles, which were also shot down on disappointing earnings this week, were last seen at 75 bid, 75.75 offered, according to a New York-based trader on Friday.

That was down some 12 or 13 points on an outright basis for the week, which occurred as shares of the Cayman Islands-based nutrition supplements company fell to $37.50 on Friday from about $55.00 on Monday.

LinkedIn Corp.’s 0.5% convertibles, which debuted in the market on Thursday, were seen firm at 103. The Mountain View, Calif.-based business-oriented social networking service priced $1.15 billion of the five-year senior notes at the cheap end and beyond the cheap end of initial talk late Wednesday.

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