Morning Commentary: New deals in focus; Clovis Oncology shares sharply lower; Exelixis slips

By Rebecca Melvin

New York, Sept. 3 – Market players were sizing up three new deals in the convertibles space on Wednesday as the underlying shares of one issue, Clovis Oncology Inc.’s $200 million of seven-year convertibles, slid in the early going.

Shares of both Electronics For Imaging Inc., which is pricing $300 million of five-year notes, and Depomed Inc., which is pricing $230 million of seven-year convertible senior notes; were off by about 1.5% each.

Elsewhere, Exelixis Inc.’s 4.25% convertibles drooped further in early action Wednesday, changing hands at 59.125, after plunging on Tuesday along with the underlying shares of the South San Francisco, Calif.-based biotechnology company. The company announced disappointing trial data for its Cometriq prostate cancer treatment. The company also said it will cut its workforce by 70%, or 160 employees, because of the weak trial data.

The Exelixis convertibles changed hands at 59.125 early Wednesday after dropping to 60 from 89 on Tuesday.

Piper Jaffray downgraded the shares to neutral after the news.

Ctrip.com International Ltd. was an actively traded bond in the convertibles market so far after the Shanghai-based travel services provider posted news, a New York-based trader said.

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