BioMarin bonds, stock drop as FDA criticizes drug; Mentor falls; SunEdison draining

By Stephanie N. Rotondo

Seattle, Nov. 20 – BioMarin Pharmaceutical Inc. took a hit Friday as Food and Drug Administration staff issued a critical report on the company’s drug, drisapersen.

The company’s 0.75% convertible notes due 2018 and the 1.5% convertible notes due 2020 declined 4 to 5 points outright in early Friday trading, trading in a 124 to 125 and 128 to 129 context, respectively. The equity underlying the bonds meantime dropped nearly 6% to $97.00.

FDA staff said that thus far, the data provided by BioMarin did not support an approval of the muscle-wasting disorder drug. In particular, the staff was concerned about the impact the drug has on the kidneys, as well as how the drug affected children five years old and younger.

Meanwhile, weak earnings and a guidance revision hurt Mentor Graphics Corp.’s convertible notes.

“They went down a lot,” a trader said. “They spread out like 6 points on the way down.”

And, as has been the case of late, SunEdison Inc.’s convertibles “continued to stay active,” according to a trader.

At mid-afternoon, the trader said that about $20 million of the renewable energy company’s convertibles had traded, all continuing on their downward trajectory.

One of the more active issues was the 2.625% convertible notes due 2023, the trader said. He pegged that issue at 25.

“It came at par in May,” he said of the issue.

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