Midday Commentary: Orexigen lifts at open, but shares weaken slightly; Alliant Tech eyed

By Rebecca Melvin

New York, Dec. 3 - Orexigen Therapeutics Inc.'s newly priced 2.75% convertibles traded up a couple of points out of the chute early Tuesday, but they trended back toward par with weaker shares in subsequent action, market sources said.

The San Diego-based biopharmaceutical company priced $100 million of the seven-year convertible senior notes at the rich end of talk late Monday.

The new Orexigen was seen at 102 bid, 103 offered at the open. Later, the securities were quoted at 100.875 bid, 101.125 offered versus a share price of $6.01.

Alliant Techsystems Inc.'s convertibles were trading in early action. The Alliant convertibles were quoted at 161.25 versus an underlying share price of $122.44, which was "roughly where they have been in the last couple of weeks," a New York-based trader said.

Given the current richness of this bond, the trader predicted that hedge funds would be sellers of the paper, and that pricing would "drift down" in the next week or so.

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