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Midday Commentary: InterMune skyrockets on positive trial data; Stone Energy quiet after earnings
By Rebecca Melvin
New York, Feb. 25- InterMune Inc.'s 2.5% convertibles, which were busted as of Monday, surged by more than 40 points in early trade Tuesday as shares of the Brisbane, Calif.-based biotechnology company more than doubled on news that its Esbriet lung disease drug worked successfully in a phase 3 study and looks like it will be approved by U.S. regulators.
InterMune's 2.5% convertibles traded very actively up to near 130 from the 80s on Monday. On Feb. 3, the bond traded 85.5 bid, 86 offered with the underlying share price at about $12.00. Early Tuesday, the shares were at $35.50, up $21.59, or 155%.
"If any holders had a hedge on, it was probably on the light side, so I would say it's good for anyone involved," a New York-based trader said.
Also in focus was Stone Energy Corp., which reported earnings late Monday that disappointed investors, who sent shares lower by more than 6% early Tuesday.
The Stone Energy 1.75% convertibles due 2017 were not heard in trade in early action, but on Monday, the bonds traded at 116.125.
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