0000947871-11-000690.txt : 20110811 0000947871-11-000690.hdr.sgml : 20110811 20110811160853 ACCESSION NUMBER: 0000947871-11-000690 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20110811 DATE AS OF CHANGE: 20110811 GROUP MEMBERS: DOMINIQUE SEMON GROUP MEMBERS: MERLIN BIOMED PRIVATE EQUITY ADVISORS, LLC GROUP MEMBERS: MERLIN NEXUS III, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ICAGEN INC CENTRAL INDEX KEY: 0000902622 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 561785001 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-81358 FILM NUMBER: 111027850 BUSINESS ADDRESS: STREET 1: 4222 EMPEROR BLVD STREET 2: SUITE 350 CITY: DURHAM STATE: NC ZIP: 27703 BUSINESS PHONE: 919-941-5206 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Merlin BioMed Private Equity Advisors, L.L.C. CENTRAL INDEX KEY: 0001429303 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 230 PARK AVE, SUITE 928 CITY: NEW YORK STATE: NY ZIP: 10169 BUSINESS PHONE: 646-227-5270 MAIL ADDRESS: STREET 1: 230 PARK AVE, SUITE 928 CITY: NEW YORK STATE: NY ZIP: 10169 SC 13D/A 1 ss125494_sc13da.htm AMENDMENT NO. 1 TO SCHEDULE 13D
  
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
 

 
ICAGEN, INC.
(Name of Issuer)
 
Common Stock, par value $0.001
(Title of Class of Securities)
 
45104P500
(CUSIP Number)
 
Dominique Sémon
Merlin BioMed Private Equity Advisors, LLC
424 West 33rd Street, Suite 520,
New York, NY  10001
Telephone: (646) 227-5200

With a copy to:

Robert M. Katz
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
Telephone: (212) 848-4000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
 
August 11, 2011
(Date of Event Which Requires Filing of this Statement)
 
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because § 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g) check the following box o.
 
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
 
 
 
 
    
SCHEDULE 13D
 
CUSIP No.  45104P500
  
Page 2 of 7 Pages
         
1
NAME OF REPORTING PERSON
 
 
Merlin BioMed Private Equity Advisors, LLC (IRS No. 13-4178606)
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) o
(b) x
  
3
SEC USE ONLY
 
 
4
SOURCE OF FUNDS (See Instructions)
 
OO
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
 
 
o
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
Delaware
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
 
0
8
SHARED VOTING POWER
 
750,000
9
SOLE DISPOSITIVE POWER
 
0
10
SHARED DISPOSITIVE POWER
 
750,000
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
750,000
12
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
 
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
8.5%
14
TYPE OF REPORTING PERSON (See Instructions)
 
OO
 
 
 
Page 2 of 7 Pages
 
    
SCHEDULE 13D
 
CUSIP No.  45104P500
  
Page 3 of 7 Pages
         
1
NAME OF REPORTING PERSON
 
 
Merlin Nexus III, L.P.
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) o
(b) x
  
3
SEC USE ONLY
 
 
4
SOURCE OF FUNDS (See Instructions)
 
OO
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
 
 
o
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
Delaware
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
 
0
8
SHARED VOTING POWER
 
750,000
9
SOLE DISPOSITIVE POWER
 
0
10
SHARED DISPOSITIVE POWER
 
750,000
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
750,000
12
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
 
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
8.5%
14
TYPE OF REPORTING PERSON (See Instructions)
 
PN
 
 
 
Page 3 of 7 Pages
 
    
SCHEDULE 13D
 
CUSIP No.  45104P500
  
Page 4 of 7 Pages
         
1
NAME OF REPORTING PERSON
 
 
Dominique Sémon
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) o
(b) x
  
3
SEC USE ONLY
 
 
4
SOURCE OF FUNDS (See Instructions)
 
OO
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
 
 
o
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
Switzerland
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
 
0
8
SHARED VOTING POWER
 
750,000
9
SOLE DISPOSITIVE POWER
 
0
10
SHARED DISPOSITIVE POWER
 
750,000
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
750,000
12
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
 
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
8.5%
14
TYPE OF REPORTING PERSON (See Instructions)
 
IN
    
 
Page 4 of 7 Pages
 
 
This Amendment No. 1 (this “Amendment”) amends and supplements the Statement on Schedule 13D filed with the Securities and Exchange Commission on July 29, 2011 (the “Schedule 13D”) which relates to the common stock, par value $0.001 (the “Common Stock”), of Icagen, Inc., a Delaware corporation (the “Issuer”).  Capitalized terms used herein and not otherwise defined have the meaning assigned to such terms in the Schedule 13D.  All items or responses not described herein remain as previously reported in the Schedule 13D.
 
ITEM 4. 
Purpose of Transaction
 
Item 4 is hereby amended and supplemented by adding the following immediately after the third paragraph thereof:

On August 11, 2011, Merlin Nexus and New Leaf jointly delivered a letter (the “August 11 Joint Letter”) to the Issuer’s Board of Directors and issued a press release (the “August 11 Press Release”).  The August 11 Joint Letter states that Merlin Nexus and New Leaf believe that the clinical data supporting the initial safety and efficacy of PF-05089771 in certain clinical trials may have been a driver behind the timing of the Proposed Transaction.  The August 11 Joint Letter further states that only Pfizer holds information material to the PF-05089771 clinical trials, and that this gives Pfizer a greater informational advantage and ability to value the Issuer relative to the other holders of Common Stock.  The August 11 Joint Letter also notes the belief of Merlin Nexus and New Leaf that a proposed alternative bidder would have created value for holders of Common Stock and disputed the assumptions supplied by the Issuer to its financial advisor that led the Issuer’s Board of Directors to reject this bidder.  The August 11 Joint Letter reiterates that each of the Reporting Persons and New Leaf would not tender their shares in the Proposed Transaction on the current terms.  The Reporting Persons disclaim beneficial ownership of all shares held by New Leaf and its affiliates.
 
The references to the August 11 Joint Letter and the August 11 Press Release in this Amendment are qualified in their entirety by reference to the August 11 Joint Letter and the August 11 Press Release, copies of which are filed with this Amendment as Exhibit 4 and Exhibit 5, respectively, and incorporated herein by reference as if set forth in their entirety.
 
ITEM 5
Interest in Securities of the Issuer
 
Items 5(a) and (b) are hereby amended and restated in their entirety to read as follows:

(a)-(b) Based upon the Issuer’s Schedule 14d-9 filed on August 4, 2011, there were 8,852,725 shares of Common Stock outstanding as of July 20, 2011.  Based on the foregoing, the 750,000 shares (the “Subject Shares”) of Common Stock beneficially owned by the Reporting Persons represented approximately 8.5% of the shares of the Common Stock issued and outstanding as of such date.
 

ITEM 7
Material to be Filed as Exhibits
 
The following are filed herewith as Exhibits to this Amendment:
   
Exhibit
Description
   
4.
August 11 Joint Letter, dated August 11, 2011, to the Board of Directors of the Issuer.
   
5.  August 11 Press Release, issued August 11, 2011. 
 
 

 
 
Page 5 of 7 Pages
 
   
SIGNATURE
 
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
 
Dated:  August 11, 2011
   
  MERLIN BIOMED PRIVATE EQUITY INVESTORS, LLC
  By: DOMINIQUE SÉMON, Managing Member
   
         
 
/s/ Dominique Sémon
  
         
 
 
 
MERLIN NEXUS III, L.P.
  By: MERLIN NEXUS III, LLC., General Partner
   
         
 
/s/ Dominique Sémon
  
  Name: Dominique Sémon  
  Title: Managing Member  
         
 
 
         
 
/s/ Dominique Sémon
  
  Name: Dominique Sémon  
         
 
 
 
 
 
 
Page 6 of 7 Pages
 
     
EXHIBIT INDEX
 
Exhibit
 
Description
 
1.
 
Joint Letter, dated July 28, 2011, to the Board of Directors of the Issuer.*
 
2.
 
Press Release, issued July 28, 2011.*
 
3.
 
Joint Filing Agreement, dated July 29, 2011, between Merlin BioMed Private Equity Advisors, LLC, Merlin Nexus III, L.P. and Dominique Sémon.*
 
4.
 
August 11 Joint Letter, dated August 11, 2011, to the Board of Directors of the Issuer.
 
5.  August 11 Press Release, issued August 11, 2011. 
  
*Previously filed.

 
 
 
 
 
 
 
 
 
 
 
Page 7 of 7 Pages
 
 EX-99.4 2 ss125494_ex9904.htm JOINT LETTER

August 11, 2011

Board of Directors
c/o Charles A. Sanders, M.D., Chairman of the Board
Icagen, Inc.
4222 Emperor Blvd, Suite 350
Durham, NC 27703


Dear Members of the Board of Directors:

Following our review of the merger documents filed by Icagen related to the proposed acquisition of the company by Pfizer for $6 a share, we continue to believe the purchase price dramatically undervalues Icagen’s assets, and is not in the best interests of all stockholders.

Based on the information in the Schedule 14D-9 filed by Icagen, we note that Icagen and Pfizer had discussions about a potential strategic transaction on four occasions, in 2006, 2008, 2009 and 2010. In December 2010, Pfizer initiated the phase I study of PF-05089771 in healthy volunteers. Surprisingly, after having declined interest in a strategic transaction in 2010, Pfizer actively reached out and approached one of Icagen’s directors in April 2011 to inquire about Icagen’s potential interest in a transaction.  The timing suggests to us that the clinical data supporting the initial safety and efficacy of the Nav1.7 program may have been a driver behind this unexpected new interest in a transaction.

As you know, PF-05089771 is a selective and potent Nav1.7 targeting compound discovered by Icagen and the first of three compounds to enter the clinical development stage.  According to data found on www.clinicaltrials.gov,1 the phase I single dose escalation study of PF-05089771  initiated in December 2010 was estimated to be completed in March 2011.  In addition to the primary outcome measures related to safety, pharmacokinetics and pharmacodynamics parameters, this trial also incorporated secondary measures to examine potential efficacy.  The key secondary outcome measures include Heat Pain Perception Threshold, Long Thermal Stimulation and Odor Threshold.  These secondary measures have the potential to inform the trial sponsor about potential  efficacy of the compound.  Further, we believe Odor Threshold is unique as it could give initial indications of activity specific to the Nav 1.7 mechanism.  Studies have demonstrated that individuals with congenital indifference to pain caused by mutations that affect the Nav1.7 ion channel have no other known clinical pathology except for anosmia or hyposmia (an inability or decreased ability to smell). 2,3    In June 2011, Icagen issued a press release announcing the initiation of a multiple ascending dose study of PF-05089771, implying that the single ascending dose study was positive.  We believe Pfizer holds information that may be material to the value of the Nav 1.7 program and there is therefore an asymmetry of
 
1 http://www.clinicaltrials.gov/ct2/show/NCT01259882?term=PF-05089771&rank=2 
2 Goldberg, YB et al., “Loss-of-function mutations in the NAv1.7 gene underlie congenital indifference to pain in multiple human populations”  Clinical Genetics, Vol. 71 (April, 2007): 311-319 
3 Nilsen, K.B. et al., “Two novel SCN9a mutations causing insensitivity to pain”, PAIN, Vol. 143, (February, 2009): 155-158
 
 
 
 
 
information that provides Pfizer a greater advantage than that afforded to the remaining stockholders to determine the value of this program.

In its analysis, the Board determined that other options were not competitive with the proposed transaction with Pfizer, but it passed on an opportunity that could have generated additional capital resources.  On June 6, 2011, J.P. Morgan contacted representatives of a biosciences company, “Company B” that had previously approached Icagen regarding its interest in one of Icagen’s programs.  Following a June 13, 2011 management presentation, Company B indicated that it would not be in a position to acquire Icagen for a premium, but did express an interest in a potential acquisition of a certain Icagen program.  We believe this Icagen program is likely to have been the KNCQ program for epilepsy.  We regret that the Board chose not to pursue this strategy further as it could have lowered the cash burn of the company and provided non-dilutive capital to allow the pain programs with Pfizer to reach significant milestones and create value for all shareholders.

The Board decision was influenced by the fairness opinion delivered by J.P. Morgan, which was based on assumptions, financial analysis and forecasts provided to it by Icagen.  Products to treat pain have historically had the ability to generate worldwide sales in excess of $2 billion annually.  We have used much more conservative sales estimates for each compound and assume that at least one of the three partnered programs will fail.  We further risk adjust our assumptions by assuming only a 15% probability of success.  As a result of our analysis, we believe the fair value of Icagen excluding the value of its own internal programs and cash, should be in the range of $100 - $165 million or $11-19 per share.

We reiterate our disagreement with the Board’s approval of the merger agreement and the sale of the company to Pfizer at the current price.  We believe that the unreported phase I clinical data from the PF-05089771 program should be made public as it may be material to the decision of the remaining stockholders of the company as to whether to tender their shares.  We do not intend to tender our shares under the current acquisition terms and continue to consider other alternatives.


Sincerely,




Merlin Nexus III, L.P. 
New Leaf Ventures II, L.P.



cc: 
Anthony B. Evnin, Ph.D., Director
P. Kay Wagoner, Ph.D., CEO
Richard D. Katz, M.D., CFO
  
EX-99.5 3 ss125494_ex9905.htm PRESS RELEASE

 

 
Icagen Stockholders Send Second Letter to Icagen Board to Contest Proposed Price of Acquisition by Pfizer
 
New York, NY, August 11, 2011 – Merlin Nexus and New Leaf Venture Partners (NLV Partners), stockholders in Icagen, Inc. (Nasdaq: ICGN), submitted a second letter to the Icagen Board contesting the Company’s planned acquisition by Pfizer Inc (NYSE: PFE).  According to a July 20, 2011 press announcement, Pfizer plans to purchase the shares of Icagen stock it already does not own at a price of $6.00 per share, resulting in an aggregate transaction value of approximately $56 million.  On July 28, 2011, Merlin Nexus and NLV Partners sent a letter to the Icagen Board to contest the price of the acquisition, and now, following discussions with management, a second letter has been sent to the Board, noting that Merlin and NLV “continue to believe the purchase price dramatically undervalues Icagen’s assets, and is not in the best interests of all stockholders.”
 
Pfizer advanced the first of Icagen's proprietary compounds (PF-05089771) into a phase I single dose escalation study in December 2010, and this trial is estimated to have been completed in March 2011.  As discussed in the current letter to the Icagen Board:  “We believe Pfizer holds information that may be material to the value of the Nav 1.7 program and there is therefore an asymmetry of information that provides Pfizer a greater advantage than that afforded to the remaining stockholders to determine the value of this program.”
 
According to the letter sent today, “after having declined interest in a strategic transaction in 2006, 2008, 2009 and 2010, Pfizer actively reached out and approached one of Icagen’s directors in April 2011 to inquire about Icagen’s potential interest in a transaction.  The timing suggests to us that the clinical data supporting the initial safety and efficacy of the Nav1.7 program may have been a driver behind this unexpected new interest in a transaction.”
 
The letter continued, “Products to treat pain have historically had the ability to generate worldwide sales in excess of $2 billion annually.  We have used much more conservative sales estimates for each compound and assume that at least one of the three partnered programs will fail.  We further risk adjust our assumptions by assuming only a 15% probability of success.  As a result of our analysis, we believe the fair value of Icagen excluding the value of its own internal programs and cash, should be in the range of $100 - $165 million or $11 - 19 per share.”
 
The letter concluded, “We reiterate our disagreement with the Board’s approval of the merger agreement and the sale of the company to Pfizer at the current price.  We believe that the unreported phase I clinical data from the PF-05089771 program should be made public as it may be material to the decision of the remaining stockholders of the company as to whether to tender their shares.  We do not intend to tender our shares under the current acquisition terms and continue to consider other alternatives.”
 
 
 
 
 
    
About Merlin Nexus
 
Merlin Nexus, based in New York, is an investment management company focused on crossover private equity investing in the life sciences industry.  Merlin Nexus invests globally in private and public healthcare companies and manages several crossover private equity funds with capital commitments totaling $200 million.  Our investor base consists of financial institutions, funds of funds, family offices and high net worth individuals.
 
About NLV Partners
 
New Leaf Venture Partners is a leader in healthcare technology venture investing.  Our investment professionals bring a unique blend of technological, clinical, and operational experience to our investments.  We work closely with our entrepreneurs to help build successful portfolio companies.  We focus primarily on later-stage biopharmaceutical products, early-stage medical devices, and laboratory infrastructure technologies.
 
New Leaf currently manages $1.1 billion in assets.  This includes our newest fund, New Leaf Ventures II, L.P., which closed with commitments of $450 million in October 2007, New Leaf Ventures I, L.P. and the healthcare technology portfolio of the Sprout Group, one of the oldest U.S. venture capital fund groups.  For more information please visit http://www.nlvpartners.com
 

 
Contacts:
 
Media:
Burns McClellan on behalf of NLV Partners
Justin Jackson, (212) 213-0006
jjackson@burnsmc.com

Investors/Stockholders:
Okapi Partners LLC
Geoff Sorbello/Laura Bissell/Patrick McHugh, (212) 297-0720
info@okapipartners.com