Icagen adopts plan to block hostile takeovers

Icagen, a Durham drug-development company under pressure from an activist investor because of its sagging stock price, this morning announced it has adopted a shareholder rights plan in case of an unsolicited takeover proposal.

The rights plan, which essentially makes a hostile acquisition prohibitively expensive, would be triggered if an investor acquires 15 percent or more of Icagen shares.

Drug giant Pfizer, which already owns 18 percent of Icagen, would trigger the rights plan if it acquires a 20 percent stake.

The rights plan "was not adopted in response to any specific effort to acquire control of the company," according to a statement from Icagen. "The plan is intended to safeguard against coercive tactics. ... The rights plan is also designed to enhance the company's ability to negotiate with a prospective acquirer."

The move follows an effort by Xmark Opportunity Partners, which owns an 8.6 percent stake in Icagen, to encourage the company's management to boost shareholder value by selling the company.

Xmark wrote a letter to Icagen's board, dated Nov. 29 and included in a Securities and Exchange Commission filing this week, urging that the company find a buyer. Xmark also wrote that it may seek the removal of Icagen co-founder and CEO P. Kay Wagoner if action isn't taken.

In a prepared statement today, Wagoner said Icagen's management remains focused on increasing shareholder value.

"We believe that Icagen's currently depressed share price does not reflect the intrinsic value of the company," Wagoner said. "We believe it is both necessary and appropriate to take measures to protect all of our shareholders from potential actions designed to deprive our shareholders from realizing the full and fair value of their investment."

Shares of Icagen, which began trading publicly at $8 each in February 2005, rose 1 cent to 62 cents in morning trading.