Shares of Icagen, which held a reverse stock split Tuesday night, began trading Wednesday under their new, higher price.
The Durham drug development company essentially exchanged eight existing shares for one new share, reducing the total number outstanding and boosting the price per share. The move was designed to help Icagen satisfy minimum listing requirements on the Nasdaq and avoid being delisted.
Despite the split, the shares traded for much of Wednesday below $1, the minimum price to maintain the stock's Nasdaq listing. But the stock rose 7 cents to close at $1.09.
"We're disappointed and we don't think we deserve the market cap we have currently," said chief financial officer Richard Katz, in a phone interview.
"When we chose the one-for-eight ratio, the stock was trading well north of where it is now," he added. "We selected that ratio because it would give us a reaonsable level of comfort."
The stock has continued to fall since summer, when Icagen shareholders approved the stock split. Last week, Icagen announced that it had halted enrollment in a clinical trial testing an experimental epilepsy drug after a patient experienced a "serious adverse event."
Nobody died in the trial, Katz said, but he declined further comment.
Officials are discussing the status of that drug trial with the Food and Drug Administration.
Icagen's shares began trading in Feb. 2005 at $8 each, but declined as the company has struggled to develop a successful drug. The company's researchers are developing experimental medicines to treat epilepsy and pain.
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 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.
The shares began trading this morning under the temporary ticker symbol "ICGND" and will revert to "ICGN" after 20 business days.