Icagen will make a new move this month to avoid having its shares delisted from the Nasdaq.
The Durham company developing new treatments for pain and epilepsy will hold a one-for-eight reverse stock split on Sept 21. The split will take effect at the start of trading on Sept. 22, the company announced Friday.
Investors will essentially get one new share for every eight they now own. Such a move will reduce the number of outstanding shares but increase the per-share price to help meet the Nasdaq's minimum listing requirements.
Icagen's shares began trading publicly in Feb. 2005 at $8 each, a successful Wall Street debut for one of the Triangle's promising drug-development companies. But the stock hasn't traded above $1 since January, as investors worry about the money-losing company's financial health and whether it will be able to develop a successful drug and win regulatory approval.
The stock closed Friday at 28 cents. At that price, the post-split shares would be worth $2.24 each.
In June, Icagen shareholders approved the reverse stock split, but company executives wanted to wait to discuss its listing with Nasdaq officials. The Nasdaq gave Icagen until Nov. 8 to get the closing price of its stock above $1 for 10 consecutive trading days. A delisting could spur some investors to shun the stock, which would shift to the over-the-counter market.
Icagen officials also are considering other steps to boost the company's value and raise additional funding. It previously hired investment bank JP Morgan to find new partners or a buyer.
As of June 30, Icagen had cash of $12.4 million, and in July received a $3 million milestone from partner Pfizer. But the company, which cut costs and jobs last year, continues to spend about $3 million a quarter on its various drug research efforts.
The payment from Pfizer was triggered when Icagen researchers started a clinical trial to test several compounds as pain medicines. Icagen announced in 2007 that it would collaborate with Pfizer on new drugs, a partnership that could be worth hundreds of millions of dollars if an experimental drug is successful.
The new trial on healthy volunteers will test compounds designed to block a so-called sodium channel in the body's cells, with a goal of reducing the ability to feel pain.