Morning Commentary: Depomed convertibles, shares lower; health care in focus during conference

By Rebecca Melvin

New York, Jan. 11 – U.S. convertibles were mostly down on an outright basis in tandem with weakness in the equities market early Monday.

Depomed Inc.’s 2.5% convertibles due 2021 traded down 2.6 points to 101 on an outright basis, according to Trace data, with shares of the Newark, Calif.-based specialty pharmaceutical company lower by about 5% to $14.60 last.

It was not clear what an accurate level for Depomed would be or how the bond was doing on a swap basis. “I’m trying to figure that out myself,” a New York-based trader said.

Depomed develops and commercializes products for pain and disorders of the central nervous system. Last week Mizuho Securities initiated coverage on the company at “neutral.”

The health care sector was in focus as the annual J.P. Morgan health care conference was underway in San Francisco.

Convertible issuers scheduled to present at the conference on Monday included: Medicines Co., Wright Medical Group NV, Molina Healthcare Inc., Jazz Pharmaceuticals plc, Teva Pharmaceutical Industries Ltd., Acorda Therapeutics Inc., Illumina Inc., Incyte Corp., Ironwood Pharmaceuticals Inc., HeartWare International Inc., Teleflex Inc., Pacira Pharmaceuticals Inc. and United Therapeutics Corp.

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