Icagen should be sold, investment firm says

One of Icagen's largest investors is pushing for a sale of the Durham drug-development company and may seek to oust its top executive.

In a recent letter to Icagen's board of directors, Xmark Opportunity Partners blames CEO Kay Wagoner for the company's "embarrassingly precipitous loss of share value."

Icagen's stock, which first began trading publicly in February 2005 at $8, has lost about 60 percent of its value in the past year. The stock rose 3 cents in midday trading today to 59 cents.

In particular, Wagoner and the company's board have not acted aggressively enough to "navigate the market's troubled waters" by taking steps to cut costs and find strategic partners, Xmark officials wrote. The letter was included in a filing with the Securities and Exchange Commission.

"At this point, we believe that the company's only legitimate option to salvage the value of its proprietary technology is to pursue" a buyer, Xmark officials wrote.

But the Ridgefield, Conn., investment firm thinks that Icagen's management is "entrenched and unwilling" to formally explore a sale because they don't own much stock and would lose their "historically high salaries."

If Icagen's management doesn't take "appropriate steps to benefit all shareholders," Xmark is considering seeking the removal of Wagoner because "we feel she is ill suited to lead the company." Xmark also may try to remove several board members.

Xmark now owns 4.1 million Icagen shares, for a stake of about 8.6 percent, according to the SEC filing.

Icagen's largest investor is Pfizer, the world's largest drugmaker. The companies have a partnership to develop painkillers. Icagen also is working on experimental treatments for asthma and epileptic seizures.

Wagoner and Icagen chief financial officer Richard Katz were not immediately available for comment.