PFE Tender Offer for Icagen Succeeds - Analyst Blog

Pfizer Inc. (PFE) recently announced the successful completion of the initial cash tender offer for all outstanding shares of Icagen, Inc. (ICGN). The tender offer period expired on September 2, 2011.

As of September 2, 2011, about 4,617,045 shares of Icagen’s common stock were validly tendered. Besides this, Pfizer owns 1,067,015 shares of Icagen’s common stock. Taken together, this represents 54% of the fully-diluted shares of Icagen. This indicates the fulfillment of the condition for the minimum number of shares that need to be tendered so as to allow Pfizer to accept for payment and pay for such shares.

In addition to announcing the successful completion of the initial cash tender offer, Pfizer announced the commencement of a subsequent offering period that is scheduled to expire on September 12, 2011 (6:00 p.m., New York City time).

Pfizer had first announced its intention to acquire Icagen in July 2011 for $6 per share. The total value of the deal, including the value of the shares already owned by Pfizer, is about $56 million.

Earlier in August 2007, Pfizer and Icagen had entered into a collaboration for the discovery, development and commercialization of compounds that modify three specific sodium ion channels that are to be used as potential treatments for pain and related disorders. With the help of these sodium channels, the companies are seeking to develop effective treatments for serious pain disorders, which will have fewer side effects.

With the Icagen deal, Pfizer is looking to add to its already diversified product portfolio. Icagen currently has two programs in epilepsy and pain.

Neutral on Pfizer

We currently have a Neutral recommendation on Pfizer, which carries a Zacks #3 Rank (short-term Hold rating). While near-term earnings growth will come in the form of cost cutting and share repurchases, longer-term growth will be dependent on the success of drug development.

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