Medicines trades actively; Momo quiet despite share move; convertibles mostly steady

By Rebecca Melvin

New York, Aug. 27 – Medicines Co.’s convertibles traded in heavy volume on Tuesday after a sharp move up on Monday on news that the company’s first phase 3 trial of its inclisiran drug hit primary endpoints and all secondary objectives.

The Medicines’ 2.75% convertibles due 2023 remained at the top of the volume leader chart and traded up another 3.4 points on an outright basis to 109.21 after a 5-point jump on Monday.

Medicines’ 2.5% convertibles due 2022 traded up another nearly 7 points to 133, and Medicines’ 3.5% convertibles due 2024 surged 16 points to 187.7, according to Trace data.

Shares of the Parsippany, N.J.-based biopharmaceutical company extended gains by rising another $1.66, or 4.2%, to $41.51 on Tuesday, after a $4.82, or 14%, pop to $39.85 on Monday.

The Medicines bonds were seeing a lot of volume on Tuesday, but the real move occurred on Monday, a convertibles trader focused on health care names said.

“The stock is where it should be,” the trader said regarding the Medicines shares, adding that the company is a takeout candidate since the company is unlikely to be able to market and sell the inclisiran drug on its own.

“They don’t have the capital and cannot market and sell this drug. But the data was good and it’s a solid drug in its class,” the trader said.

The trader noted the high volume of trade in the notes, but said that the real move was on Monday. It wasn’t clear if the notes had “opened up” on Tuesday, the trader said near the market close.

Meanwhile, Momo Inc.’s convertibles were quiet although the American Depositary Shares of the Beijing-based mobile social networking platform in China moved sharply higher in early trading after the company posted better-than-expected second-quarter results.

Momo reported non-GAAP earnings per share of 49 cents for the second quarter, which was lower year over year, but on revenue that was 32% higher, according to Momo’s unaudited financial results.

The Momo 1.25% convertible notes due 2025 were last seen in trade at 91.625, according to Trace data. Shares closed on Monday at $32.73, but they began to climb at the market open in New York and had been up 7.1% at $35.05 in the early going.

“I don’t know if it was much of an event,” a New York-based market source said when asked about the lack of trade in this name.

Overall convertibles were holding their own in what was described as “a difficult tape.”

U.S. stocks swung lower after early gains as uncertainty regarding trade and rates continues to dog financial markets. But convertible valuations were said to be steady, according to a New York-based market source on Tuesday.

In addition, the countdown to the long holiday weekend for Labor Day in the United States and concomitant market reset that typically occurs post Labor Day was underway.

“It’s kind of dead,” a New York-based trader said.

SPDR Barclays Capital Convertible Bond ETF was down 0.019, or 0.04%, at $52.31 near the market close in New York.

Medicines trades in bulk

Medicines’ 2.75% convertibles due 2023 remained at the top of the chart, with $20.64 million of bonds changing hands.

That paper traded higher on the day by 3.4 points at 109.21 late in the session, when the underlying shares were up about 4% on the day. The 2.75% notes due 2023 had jumped 5 points on Monday.

The Medicines’ 2.5% convertibles due 2022 traded up another nearly 7 points to 133 on nearly $15 million of volume, and the Medicines’ 3.5% convertibles due 2024 surged 16 points to 187.7 on $9 million of volume, according to Trace data.

Shares of the Parsippany, N.J.-based biopharmaceutical company extended gains by rising another $1.66, or 4.2%, to $41.51 on Tuesday, after popping $4.82, or 14%, to $39.85 on Monday.

Medicines is developing its inclisiran drug to treat high cholesterol with Alnylam Pharmaceuticals. The primary endpoints tracked changes in LDL-C out of 18 months after the start of treatment.

Mentioned in this article:

Medicines Co. Nasdaq: MDCO

Momo Inc. Nasdaq: ADS: MOMO

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