-- ICA-105665: The Company continues to advance several compounds in its
KCNQ potassium channel program for the treatment of epilepsy and
neuropathic pain. In September 2007, the Company announced the initiation
of a single dose escalation trial of ICA-105665, the most advanced of these
compounds. Results from this study are currently expected during the first
quarter of 2008. In preclinical testing, ICA-105665 has demonstrated a
broad spectrum of activity in seizure models, including models of treatment-
resistant seizures, as well as efficacy in certain models of chronic pain.
-- Sodium and Calcium Channel Programs: In the Company's multi-target sodium
channel and multi-target calcium channel programs for neuropathic and
inflammatory pain, leads and advanced leads focused on several novel ion
channel targets have been identified. The Company has been awarded issued
patents and has filed numerous additional patent applications in this area.
As previously reported, the Company recently entered into a partnership
with Pfizer on three of these sodium channel targets.
-- Senicapoc for Sickle Cell Disease: Following the recommendation of the
independent data monitoring committee, the Phase III study of senicapoc for
sickle cell disease was terminated earlier this year due to futility for
the primary endpoint. Final data are under review and will be shared with
the study investigators in the near future. While the Company does not
plan to continue development of senicapoc in sickle cell disease, the
exploration of senicapoc for immuno-inflammatory disorders continues.
-- Senicapoc for Other Indications: The Company is continuing preclinical
studies of senicapoc in a variety of inflammatory and proliferative
disorders. As previously noted, the ion channel target of senicapoc,
KCa3.1, or the IK-1 channel, is expressed on a number of immune system
cells and other cell types important in the pathogenesis of these
disorders. In vitro and in vivo data supportive of the role of blockers of
this channel, such as senicapoc, in the treatment of various immune and
inflammatory disorders have been generated both at Icagen and at various
independent laboratories. The Company intends to initiate a Phase I
clinical study in early 2008 to assess the safety, tolerability and
pharmacokinetics in healthy subjects of higher doses of senicapoc than
those tested in previous clinical trials. Additionally, the Company is
planning to initiate a Phase II clinical trial in an immuno-inflammatory
disease during the second half of 2008 pending the results of additional
preclinical efficacy studies as noted above.
-- Astellas Collaboration: Astellas Pharma, Inc. ("Astellas") is evaluating
lead compounds in preclinical studies with potential utility in the
treatment of dementia, including Alzheimer's disease. One of these lead
compounds has recently been discontinued due to unfavorable results in
genotoxicity studies.
Corporate Developments
In August 2007, Icagen announced the formation of a global research and
development collaboration with Pfizer on three sodium channel targets for
the treatment of pain and related disorders. The two companies are
combining resources to identify compounds that target these three ion
channels. Pfizer is funding all aspects of the collaboration including the
research and development efforts at Icagen and will have an exclusive
worldwide license to commercialize products that result from the
collaboration. Under the terms of the agreement, Pfizer is providing $38.0
million in committed funding to Icagen over the first two years of the
collaboration, including an initial upfront license fee of $12.0 million,
up to $15.0 million through an equity commitment, and research and
development funding. The equity commitment includes an initial equity
investment of $5.0 million which was made at fair market value upon signing
of the agreement and an equity put option, exercisable by Icagen, to sell
to Pfizer at the fair market value at the time of exercise up to $10.0
million of common stock, subject to specified terms and conditions, during
the first 18 months following the date of the equity purchase agreement.
Icagen is additionally eligible to receive up to an aggregate of $359
million for each product contingent upon the achievement of specified
research, development, regulatory and commercialization milestones. Icagen
is also eligible to receive tiered royalties, against which the
commercialization milestones are creditable, depending upon sales achieved.
Financial Results
Revenues for the third quarter of 2007 totaled $12.9 million, as compared
to $2.2 million during the same period in 2006, an increase of 497%. The
increase in revenues for the third quarter of 2007, as compared to the same
period in 2006, was due to a $10.1 million increase in revenue resulting
from the accelerated recognition of deferred revenue due to the termination
of the McNeil collaboration and a $1.5 million increase in revenue due to
the Pfizer collaboration, partially offset by decreased cost sharing
reimbursement from the McNeil collaboration for the clinical development of
senicapoc. As a result of the termination of the McNeil collaboration, the
remaining balance of deferred revenue associated with the McNeil
collaboration as of June 30, 2007 was recognized as revenue in the third
quarter of 2007.
Operating expenses for the third quarter of 2007 were $7.7 million, as
compared to $8.0 million for the same period in 2006, a decrease of 3%.
The decrease in operating expenses for the third quarter of 2007, as
compared to the same period in 2006, was due primarily to decreased
research and development expenses related to the development of senicapoc
for the treatment of sickle cell disease.
Net income for the third quarter of 2007 totaled $5.6 million, as compared
to a net loss of $5.5 million during the same period in 2006. The increase
in net income for the third quarter of 2007, as compared to the same period
in 2006, was primarily due to the accelerated recognition of deferred
revenue from the McNeil collaboration as noted above.
Revenues for the first nine months of 2007 totaled $18.2 million, as
compared to $6.7 million during the same period in 2006, an increase of
173%. The increase in revenues for the first nine months of 2007, as
compared to the same period in 2006, was due to a $11.8 million increase in
revenue resulting from the accelerated recognition of deferred revenue from
the McNeil collaboration as noted above and a $1.5 million increase in
revenue due to the Pfizer collaboration, partially offset by decreased cost
sharing reimbursement from the McNeil collaboration for the clinical
development of senicapoc.
Operating expenses for the first nine months of 2007 were $26.8 million, as
compared to $26.4 million for the same period in 2006, an increase of 2%.
The increase in operating expenses for the first nine months of 2007, as
compared to the same period in 2006, was due primarily to increased
research and development expenses, partially offset by lower general and
administrative expenses.
Net loss for the first nine months of 2007 totaled $7.3 million, as
compared to $18.6 million during the same period in 2006, a decrease of
61%. The decrease in net loss for the first nine months of 2007, as
compared to the same period in 2006, was primarily due to the accelerated
recognition of deferred revenue from the McNeil collaboration as noted
above.
Financial Guidance
The Company is providing revised financial guidance for 2007 which reflects
both the formation of the Pfizer collaboration and the termination of the
McNeil collaboration.
The Company's prior expectation for full year 2007 revenues had been in the
range of $16 to $17 million. Due to the formation of the Pfizer
collaboration, the Company now expects revenues to be approximately $21
million. This revised revenue guidance includes the partial amortization
of the $12 million upfront payment from Pfizer, the R&D funding from
Pfizer, and the recognition of the entire balance of deferred revenue
associated with the McNeil collaboration, which was approximately $12.5
million as of December 31, 2006. The Company's expectation for research
and development expense had been in the range of $24 to $28 million. The
research and development expense is now expected to be in the range of $27
to $29 million. The guidance for R&D expense reflects a non-cash expense
of approximately $1.6 million associated with the write down of a
capitalized license payment that was made to Children's Medical Center
Corporation ("CMCC") in connection with the McNeil collaboration. The
Company's expectation for general and administrative expense is unchanged
at approximately $5 to $6 million. The Company's prior expectation for the
operating loss had been in the range of $11 to $15 million. The operating
loss is now expected to be in the range of $11 to $13 million, which
reflects the non-cash revenue and non-cash expense associated with the
termination of the McNeil collaboration agreement as discussed above.
The guidance provided above includes the effect of stock-based compensation
expense in accordance with Statement of Financial Accounting Standards No.
123 (revised 2004), Share-Based Payment. For 2007, the Company's
expectation for stock-based compensation expense is unchanged at
approximately $2.5 million.
Conference Call
Icagen will host a conference call to discuss these results today at 10:00
a.m. Eastern Time.
Conference call details: Date: Friday, November 2, 2007 Time: 10:00 a.m. Eastern Time Dial-in (U.S. and Canada): 888-228-5138 Dial-in (International): 913-312-0659 Access code: 1605746 Web cast: www.icagen.comAn archived version of the webcast will also be available on Icagen's website for at least two weeks following the call. A playback of the call will be available from approximately 1:00 p.m. Eastern Time on November 3, 2007 for seven days and may be accessed by dialing:
Access number (U.S. and Canada): 719-457-0820 Access number (International): 888-203-1112 Access code: 1605746About Icagen Icagen, Inc. is a biopharmaceutical company based in Research Triangle Park, North Carolina, focused on the discovery, development and commercialization of novel orally-administered small molecule drugs that modulate ion channel targets. Utilizing its proprietary know-how and integrated scientific and drug development capabilities, Icagen has identified multiple drug candidates that modulate ion channels. The Company is conducting research and development activities, in some cases in collaboration with leading pharmaceutical companies, in a number of disease areas, including epilepsy, pain and inflammation. Forward-Looking Statements This press release contains forward-looking statements that involve a number of risks and uncertainties. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "intends," and similar expressions are intended to identify forward-looking statements. Important factors that could cause actual results to differ materially from the expectations described in these forward-looking statements are set forth under the caption "Risk Factors" in the Company's most recent Quarterly Report on Form 10-Q, filed with the SEC on August 7, 2007. These risk factors include risks as to the Company's history of net losses and how long the Company will be able to operate on its existing capital resources; the Company's ability to raise additional funding; the Company's ability to maintain compliance with NASDAQ's continued listing requirements; whether the Company's products will advance in the clinical trials process; the timing of such clinical trials; whether the results obtained in preliminary studies will be indicative of results obtained in clinical trials; whether the clinical trial results will warrant continued product development; whether and when, if at all, the Company's products, including senicapoc, will receive approval from the U.S. Food and Drug Administration or equivalent regulatory agencies, and for which indications, and if such products receive approval, whether they will be successfully marketed; and the Company's dependence on third parties, including manufacturers, suppliers and collaborators. We disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.
Icagen, Inc.
Condensed Statements of Operations
(in thousands, except share and per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- ----------------------
2007 2006 2007 2006
----------- ---------- ---------- ----------
Collaborative research and
development revenues:
Research and development
fees $ 11,953 $ 505 $ 14,508 $ 1,465
Reimbursed research and
development costs 917 1,652 3,734 5,213
----------- ---------- ---------- ----------
Total collaborative
research and development
revenues 12,870 2,157 18,242 6,678
Operating expenses:
Research and development 6,395 6,780 22,456 21,972
General and
administrative 1,329 1,217 4,393 4,455
----------- ---------- ---------- ----------
Total operating expenses 7,724 7,997 26,849 26,427
----------- ---------- ---------- ----------
Income (loss) from
operations 5,146 (5,840) (8,607) (19,749)
Other income, net 466 373 1,280 1,188
----------- ---------- ---------- ----------
Net income (loss) $ 5,612 ($ 5,467) ($ 7,327) ($ 18,561)
=========== ========== ========== ==========
Net income (loss) per
share:
Basic $ 0.14 ($ 0.25) ($ 0.20) ($ 0.84)
=========== ========== ========== ==========
Diluted $ 0.13 ($ 0.25) ($ 0.20) ($ 0.84)
=========== ========== ========== ==========
Weighted average common
shares outstanding-
Basic 39,245,452 22,277,996 36,298,526 22,188,454
=========== ========== ========== ==========
Diluted 41,623,856 22,277,996 36,298,526 22,188,454
=========== ========== ========== ==========
Icagen, Inc.
Condensed Balance Sheets
(in thousands)
(Unaudited)
September 30, December 31,
2007 2006
-------------- --------------
Assets
Cash and cash equivalents $ 46,125 $ 25,131
Other current assets 2,277 921
Property and equipment, net 1,194 1,566
Technology licenses and related costs, net 516 2,183
Other long-term assets 128 1,014
-------------- --------------
Total assets $ 50,240 $ 30,815
============== ==============
Liabilities and stockholders' equity
Current liabilities $ 11,072 $ 6,481
Deferred revenue, less current portion 5,210 11,513
Equipment debt financing, less current
portion 489 774
Other non-current liabilities 25 -
Stockholders' equity 33,444 12,047
-------------- --------------
Total liabilities and stockholders' equity $ 50,240 $ 30,815
============== ==============
Contact Information: Contacts: Richard D. Katz, M.D. SVP, Finance and Corporate Development; Chief Financial Officer Icagen, Inc. (919) 941-5206 Gregory Gin Lazar Partners, Ltd. (212) 867-1762