CurrentOfferings.com Story:

Successful IPO would fatten bank accounts of Icagen execs, investors

By Leo John, Triangle Business Journal, May 16, 2004

If, and it's a very big if at this point, Icagen's plan to go public succeeds, the offering would rain dollars on company executives and investors.

Because of a choppy market for initial public offerings, predictions are hard to make, but industry watchers venture that Icagen should be able to set its share price in the $12 range. That estimate is based on the company's pre-IPO valuation of about $175 million and a current base of about 15 million outstanding shares.

If those numbers hold, the Icagen holdings of the company's founder and chief executive officer, P. Kay Wagoner, would be worth $8 million once the stock lights up Nasdaq's ticker board. She owns about 4 percent of the company.

The company's largest investor, San Francisco-based Alta Biopharma Partners, owns 2.13 million shares, or 13 percent, of the company. That chunk would be valued at about $25.55 million after a public offering.

New York-based venture fund Venrock Associates, which owns about 1.7 million shares, or 10.4 percent, of the company, would see its share of the company valued at $20.4 million.

QFinance, a subsidiary of Durham-based Quintiles Transnational, would see its 5.4 percent stake rake in about $10.5 million.

Icagen on April 8 filed plans to raise $86.25 million through an IPO. If the company raises the money, it would become the first Triangle concern in two years to tap the public markets through an initial offering.

The offering is being underwritten by UBS Investment Bank, CIBC World Markets and JP Morgan. Icagen has yet to disclose a specific price at which its shares would be offered or say how many shares it plans to offer. The company has asked the Nasdaq market for the trading symbol ICGN.

Early investors in Icagen would make significantly more money than those that came in late. Venture firms buying into the company's first and second rounds received preferred shares at a price of $1 to $1.50 each. Later-stage investors bought shares for as much as $15 in a Series G round, according to the company's filing with regulators.

Typically, companies that file for an IPO take about 90 days after the original filing to price the stock, says Ford Worthy, a partner with Durham-based venture fund A.M. Pappas & Associates.

Eight biotech companies have raised a total of $490 million through IPOs so far this year, according to CurrentOfferings, a Web site that tracks IPOs. So far, the stocks of the eight companies identified by CurrentOfferings are down by 8.3 percent from their offering price and down by 12.4 percent from their opening price, says Jeff Hirschkorn, an analyst with CurrentOfferings.

"The IPO waters are very choppy, and with market instability in the last few weeks it's not going to be easy for biotech IPOs," says Tom Taulli of CurrentOfferings.

Founded in 1992, Icagen is working on four drugs. Its most advanced drug is expected to enter Phase III clinical trials this year. The drug targets sickle cell anemia, a kind of blood disorder. A second drug targeting epilepsy and neuropathic pain is in Phase I trials.

In its filing, Icagen lists its 2003 revenue at $5.17 million and a net loss for the year of $14.36 million. The company has $32.43 million in cash. Icagen has about 65 full-time employees and leases a 34,000-square-foot office in Durham.