Dendreon drops after bankruptcy filing; Salix recoups some; Isis Pharmaceuticals on tap

By Rebecca Melvin

New York, Nov. 10 – Dendreon Corp.’s convertibles fell sharply on Monday after the Seattle-based biopharmaceutical company announced that it has filed for Chapter 11 bankruptcy protection.

The Dendreon convertibles initially fell more than 15 points to the upper 40s but bounced back to the mid 50 level by late morning, market sources said. Dendreon shares fell to $0.18 from $0.94 on Monday.

Elsewhere, Salix Pharmaceuticals Ltd.’s convertibles were actively traded in carry-through action from Friday when the shares and bonds of the Raleigh, N.C.-based specialty drug company dropped after it posted earnings that missed estimates, and also flagged inventory problems, lowered guidance and announced that its chief financial officer has resigned.

Theravance Inc. was also in focus after the San Francisco-based biopharmaceutical company posted a wider third-quarter loss, but beat expectations for revenue. Shares fell 6%, and the Theravance 2.125% convertibles due 2023 traded at 75.4, which was down nearly 3 points, according to Trace data.

Otherwise, the convertibles market was described as pretty quiet. In the broader markets, U.S. equities were modestly higher but quiet ahead of a market close for the bond markets on Tuesday in observance of Veterans Day.

After the market close, Isis Pharmaceuticals Inc. launched a new deal for $425 million of seven-year convertibles that was seen pricing after the market close Tuesday.

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