Biotechnology names lower outright; AMAG Pharmaceuticals moves in line in active trade

By Rebecca Melvin

New York, Sept. 25 – Many biotechnology and health care names fell on an outright basis in the U.S. convertibles market on Friday as those issues followed their underlying shares downward.

Sector selling accelerated into the session close, dragging the S&P 500 stock index and Nasdaq stock index into negative territory following early gains.

“The biotechs are getting beat up. Insurers hurt too,” a New York-based convertibles trader said.

Akorn Inc. saw its 3.5% convertibles fall to about 366 from 403 on Friday as shares of the Buffalo Grove, Ill.-based pharmaceutical company dropped sharply through the afternoon, closing down $3.28, or 9.3%, at $32.06.

Lexicon Pharmaceuticals Inc.’s 5.25% convertibles due 2022, a small issue of $88.5 million, fell to 153 from 165 as shares of the Woodlands, Texas-based firm slumped nearly 10%.

AMAG Pharmaceuticals Inc.’s in-the-money 2.5% convertibles due 2019 remained active early Friday, following busy trade on Thursday. The bonds were seen to be moving up in line, or flat, with the underlying shares of the Waltham, Mass.-based specialty pharmaceutical company in the early going, after expanding about a point on a stock move lower on Thursday, according to a convertibles trader. But they fell back in afternoon trading amid a downdraft in biotechnology names.

The AMAG bonds were quoted at 186.5 bid, 187.5 offered versus an underlying share price of $46.00 at late morning. But with the equity down to $43.73, the convertibles were back down to about 173.

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