Pfizer Inc. said Wednesday that it's reached a definitive agreement to buy Icagen, a small biopharmaceutical company that's developing pain medicines, but the news sent Icagen shares down sharply amid lawsuit threats.
The deal could boost Pfizer's portfolio of drugs for treating pain, one of its six priority research areas _ just weeks after U.S. regulators rejected an experimental abuse-resistant painkiller important to Pfizer.
Within hours of the deal's announcement, at least five law firms, trolling for potential clients, issued news releases stating they are investigating claims that Icagen's board of directors may have breached their fiduciary duty by undervaluing the company.
The world's biggest drugmaker by revenue, Pfizer already sells two blockbusters for chronic pain: Lyrica, for nerve pain and fibromyalgia, and Celebrex, for arthritis and other pain. It also sells Neurontin, a capsule for shingles pain that now has generic competition.
In March, Pfizer spent $3.6 billion for King Pharmaceuticals, which specializes in abuse-resistant painkillers, gaining some promising experimental pain drugs and several existing products. Those include the Flector pain patch, Avinza, a morphine pain treatment, and Embeda, the first approved narcotic painkiller designed to discourage abuse.
Pfizer has collaborated with Icagen Inc., of Research Triangle Park, N.C., for nearly four years and had exclusive rights to commercialize any resulting products.
New York-based Pfizer already owns about 11 percent of Icagen shares. It will now start a tender offer of $6 a share for the remaining 8.3 million shares, a total price of $56 million. The companies expect to close the deal before year's end.
In trading Wednesday, Icagen shares dropped $1.79, or 23 percent, to $5.96.
Pfizer's offer is at a discount of 23 percent to the stock's closing price Tuesday, and over the past year, Icagen stock has traded between 93 cents and $8.40.
Shares of Pfizer lost 4 cents to $19.90.
Pfizer desperately needs new, big-selling drugs soon. Its cholesterol fighter Lipitor, the world's top-selling drug with nearly $11 billion in annual revenue, loses U.S. patent protection on Nov. 30, and other drugs also have generic competition looming.
Pfizer has had numerous highly anticipated experimental drugs, including some for pain, fail in patient testing in recent years. That's depressed its share price and ratcheted up investor pressure, leading Pfizer's board to oust CEO Jeffrey Kindler in December. Successor Ian Read, a longtime Pfizer executive, has since been tweaking Pfizer's research portfolio, continuing cost cuts and trying to acquire new drugs.
Four weeks ago, the Food and Drug Administration rejected what was seen as the key drug in the King deal, Remoxy, which is designed to discourage abuse. The FDA, which had also held up approval of Remoxy in 2008, asked Pfizer for more information about it.
Earlier in June, the FDA did approve another drug developed by King and partner Acura Pharmaceuticals Inc., the powerful painkiller Oxecta, but analysts expected it to bring lower sales than Remoxy.
Oxecta and Remoxy both are similar to OxyContin, but are immediate-release painkillers. Long-acting Oxycontin is the country's top-selling painkiller _ and one of the most-abused prescription drugs, although maker Purdue Pharma LP last year began selling a reformulated version that may be harder to abuse, as it's not easily crushed or chewed. The two newer drugs, and others in development, are designed to be hard to crush and then snort or mix with alcohol, or otherwise misuse to get intoxicated.