Morning Commentary: Neurocrine Biosciences convertibles eyed on clinical trial failure

By Abigail W. Adams

Portland, Me., Dec. 12 – Neurocrine Biosciences Inc.’s 2.25% convertible notes due 2024 were the focus of trading activity in the secondary space on Wednesday with the notes plummeting alongside stock after the failure of a mid-stage clinical trial.

More than $86 million was on the tape early in the session with Neurocrine’s 2.25% notes accounting for $28 million of the trading volume, a market source said.

The notes were down about 16 points outright to trade at 116, a market source said. Stock plummeted more than 21% to $67.25 shortly before 11 a.m. ET.

Neurocrine announced prior to the market open on Wednesday that the mid-stage clinical trial for its treatment of Tourette syndrome in children failed to meet its endpoints.

Outside of Neurocrine, trading volume in the secondary space remained light with few names seeing more than $3 million in trade.

Splunk Inc.’s 1.125% convertible notes due 2025 popped above par in early trading for the first time since shortly after pricing.

The 1.125% convertible notes were seen changing hands at 100.375 with about $3 million on the tape.

Splunk stock was up 4.55% to trade at $111.13 shortly before 11 a.m. ET.

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