Durham drug-development company Icagen approached dozens of companies during the past three years about a possible acquisition before finally announcing its takeover by Pfizer last month.
But Icagen and its investment adviser J.P. Morgan Securities were rejected repeatedly, Icagen reported in a filing with the Securities and Exchange Commission. In the summer and fall of 2009 alone, the quest involved contacting about 40 companies "to discuss possible strategic alternatives."
As of Oct. 2009, Icagen hadn't gotten any nibbles, the SEC filing states.
The SEC filing describes Icagen's long struggle to find a larger partner that would provide money needed for further research of experimental drugs to treat epilepsy and other ailments. Icagen had run into several regulatory roadblocks developing successful treatments and was running short on cash.
In July, Icagen and Pfizer announced the deal worth $56 million, or $6 per share.
But the companies are facing pressure from several large investors who say that price is still too low. Two investment firms contend that Icagen could be worth three times as much, based on promising results for experimental pain medicines.
In its SEC filing, Icagen notes that $6 per share "was the highest purchase price available."
The company's board determined that "the proposed acquisition by Pfizer was the only viable transaction available to the company, a better alternative than remaining as an independent entity and in the best interest of the company and its stockholders."
In a letter to Icagen shareholders this week, co-founder and CEO P. Kay Wagoner urged them to accept Pfizer's so-called tender offer as soon as possible.
The $6 per-share offer is scheduled to expire at midnight on Aug. 31.
J.P. Morgan began seeking "potential acquirers and collaboration partners" for Icagen in Oct. 2008. During the next several months, J.P. Morgan contacted about 30 companies with no luck.
Even Pfizer, which signed a partnership with Icagen in 2007 to develop pain medicines, declined to discuss an acquisition when it was approached by J.P. Morgan in 2008, 2009 and 2010.
Then in April of this year, a Pfizer official talked with an Icagen board member about a possible acquisition worth $4 to $5 per share. Icagen executives refused to sell at that price but began negotiations.
As those negotiations were occurring in June, J.P. Morgan discussed possible deals with six other companies, but couldn't find an offer that trumped Pfizer's.
If Icagen accepts a better offer from another suitor, it will owe Pfizer a $2.25 million breakup fee.
Icagen shares, which traded as low as $1 last fall, traded at $5.98 this morning, down 2 cents.