Nine months ago Icagen, Inc. (NASDAQ: ICGN) announced they had completed a one-for-eight reverse stock split that managed to push shares from 0.13 to 1.01 and put them back in compliance with NASDAQ listing requirements. Times have changed significantly for the small biopharmaceutical company as Pfizer (NYSE: PFE), the world’s largest drug maker, has expressed an interest in expanding their relationship with ICGN in what has been described as a “potential strategic transaction.”
In a 13D filed on Friday by Pfizer the company acknowledged such a “strategic transaction” could influence or change control of Icagen “by means of a stock or asst acquisition or merger.” That was all investors needed to hear as they pounced on ICGN and pushed shares from an opening of 2.41 to 4.01 in afterhours trading and that surge continued into Monday, hitting a high of 6.18 before pulling back slightly and stabilizing around the 5.85 – 5.93 level with trading volume above the 4.0 million mark late in the day.
On Friday ICGN released a brief statement confirming the negotiations but has left it at that, noting in their announcement “No definitive agreement has been reached. There can be no assurance that any agreement will be reached or that a transaction will be consummated. Icagen does not plan to make future announcements with respect to this matter unless and until its Board of Directors has approved a specific transaction or an extension or other modification of the existing collaboration agreement and it has entered into a definitive agreement or the current discussions have terminated.”
Icagen and Pfizer are already well acquainted as the pharmaceutical giant currently holds a 14% stake in ICGN and the two have had a research and licensing deal in place since 2007. As part of their collaboration on medicines to treat pain and related disorders PFE has funded all aspects and in return has exclusive worldwide rights to commercialize any products that result from the partnership. For their part ICGN is eligible to receive milestones and tiered royalties based upon any product sales for each product created under the collaboration.
Pfizer may have opted to take a more aggressive approach to their relationship with ICGN following news that their new pain medication, Remoxy, had been rejected by the FDA due to inconsistent performance results. While ICGN is not developing a drug similar to Remoxy they have been working on the development of a novel Nav1.7 subtype-selective sodium channel blockers which they believe “represent a promising approach for the treatment of pain and related disorders.”
In May ICGN announced preparations were underway for a Phase II trial of ICA-105665 in the target population of epilepsy patients with treatment-resistant partial onset seizures. While that trial has had its setbacks, including the suspension of enrollment following a “serious adverse event,” the study initiation of sixty patients with refractory partial onset epilepsy is now targeted for the third quarter.
Getting ICA-105665 back on track is certainly of benefit to Pfizer but it is the concentrated work on the sodium ion channel Nav1.7 development that holds the real value. A Phase I single ascending dose study of the lead compound which targets Nav1.7 is currently underway and with favorable results a multiple ascending dose study could take place later this year.
Based on their work with Nav1.7 ICGN and PFE joined forces with the Yale School of Medicine in a three-party collaboration to explore the potential efficacy of investigational compounds identified by Icagen and Pfizer in patients suffering from inherited erythromelalgia (IEM), known as “man on fire syndrome,” a rare genetic disorder caused by a gain of function mutation of Nav1.7 which causes a debilitating and lifelong burning pain.
ICGN noted in their most recent quarterly filing that “information gained from this research may additionally assist the broader efforts of Pfizer and Icagen to find novel sodium channel treatments for patients with various pain conditions,” an indicator that they could hit multiple markets with successful results.
Shareholders of ICGN are already familiar with the long and painful process of trying to attain FDA approval having seen their asthma treatment candidate senicapoc fail and countless problems pushing ICA-105665 down the path to market. Given the problems of the past it almost sounds too good to be true that PFE could erase those dark memories with a nice check but investors are banking on it. ICGN and PFE will remain silent until a deal is reached or declared dead and for ICGN shareholders there is really only one outcome they could be hoping to hear.