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Portfolio Activity - CVTX

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An Unexpected Retreat!

Shares of CV Therapeutics (NASDAQ:CVTX) slumped in after-hours trading on news the biotech company plans to issue additional common stock and convertible notes. The drug developer said it will sell 6 million common shares and $100 million of convertible senior notes through co-lead managers Lehman Brothers and Merrill Lynch. The offerings are separate and are not contingent on each other, and the company expects to use part of the net proceeds from the convertible note offering to repurchase up to $79 million of its 4 3/4% convertible subordinated notes, which are due in 2007.

Although the issue has yet to breech near-term technical support, traders who do not want to own the underlying shares should consider an early exit in the position. We will monitor the activity of the stock price in the coming sessions before making an official recommendation.

OW Staff

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