West Coast Editor

Icagen Inc.'s potential $1 billion-plus deal with Pfizer Inc. to develop sodium ion channel modulators for pain took the hurt out of a Phase III setback with senicapoc for sickle cell disease and the loss of two other pharma partners recently.

"We've been through a lot," noted Richard Katz, CFO of the Research Triangle Park, N.C.-based firm, but Icagen's stock (NASDAQ:ICGN) rose on news of the Pfizer deal, which provides plenty of cash that Icagen can use for its internal programs - including, maybe, more work with senicapoc.

Shares closed Tuesday at $2.08, up 16 cents, or 8.3 percent, after trading as high as $2.80 during the day.

Pfizer, of New York, is paying an up-front license fee of $12 million as part of $38 million in committed funding over the first two years of the deal. Another $15 million comes through an equity investment, and Pfizer is providing research and development money as well in the deal, expected to close Aug. 20.

The equity part consists of a $5 million stock buy by Pfizer at fair market value on the date of the agreement, along with a put option under which Icagen can sell to Pfizer another $10 million at any time during the first 18 months after the deal is finalized. "It's just a matter of picking the right time to do it," Katz said.

Icagen could get as much as $359 million more in milestone payments for each marketed product that comes out of the effort, along with tiered royalties.

A joint research committee will monitor the work on three specific sodium ion channels, with Pfizer funding all aspects and gaining exclusive worldwide commercial rights to any approved compounds.

"Whether we wind up with three compounds moving forward, who knows, but that certainly is the objective," Katz said, adding that the deal is "not one of those where the small company does everything and then the big company steps in and takes it." Instead, a full set of Pfizer scientists and Icagen scientists will work together.

Links have been established between sodium ion channels, and not just animal data but genetic findings as well. Making quite a stir in the scientific and popular press late last year was the gene SCN9A, which encodes the alpha-subunit of the voltage-gated sodium channel. A paper in Nature discovered that a defect in the gene could make people insensitive to pain. Researchers found six Pakistanis with the mutation in three related families.

"At the time, we announced we were doing work on that target," Katz acknowledged, but said he could not disclose whether it became one of the three involved in the Pfizer deal. Others are probably investigating the sodium-channel space, he said, but "it may be more pharma than biotech. It's a very specialized focused area."

In June, Icagen said McNeil Consumer & Specialty Pharmaceuticals, a subsidiary of New Brunswick, N.J.-based Johnson & Johnson, would terminate the firms' partnership for senicapoc as of September, after the April stoppage of the Phase III trial. A data monitoring panel said the study was unlikely to meet its primary endpoint of reducing crisis rate, and Icagen's stock fell more than 24 percent on word of the probable failure.

"At least, to our knowledge at this point, there were no safety issues specifically identified by the committee," Katz said. "We're very interested to have a look at that data and see if there are other indications where we could move forward."

Possibilities include pulmonary hypertension secondary to sickle cell disease, and risk of stroke in pediatric sickle cell patients. Senicapoc targets the IK channel, expressed on many cells involved in inflammation and cell proliferation, so it also might prove useful in diseases such as atherosclerosis, asthma and rheumatoid arthritis.

"We're doing some preclinical work to better define that," Katz said.

In its second-quarter earnings report filed earlier this month, Icagen made it known that Bristol-Myers Squibb Co., of New York, has decided "based on formulation issues, among others," not to pursue development of a lead compound discovered in the deal targeting atrial fibrillation.

The BMS partnership had been in place for a while. "Several years ago, the research was completed, and they had a few compounds they were evaluating," Katz told BioWorld Today. "We've requested data on that [spurned] compound as well as some of the others."

Last month, Icagen filed an investigational new drug application for ICA-105665, a small-molecule compound for epilepsy. The drug is an activator of subtypes of KCNQ ion channels, and has showed efficacy in treating seizures. Icagen intends to develop ICA-105665 as a chronic therapy, and aims to start a Phase I study in the third quarter in healthy male volunteers.

"We won't know [if the FDA has cleared the INDA] for another couple of weeks," Katz said. "But once we've established safety, we'll be able to go in two directions - an epilepsy trial and a pain trial." ICA-105665 boasts a broad spectrum of activity, he said, and organizations such as the National Institute of Neurological Disorders and Stroke are boosting research into compounds that work better for seizures.

"A lot of people can't drive or may not be able to have a job," Katz said. "There's a lot of medication available, but there are still people with breakthrough seizures, and that's about a third of patients."

Thanks to the Pfizer deal, Icagen will end the third quarter with $46 million in cash and $20 million in committed funding, comprising the $10 million in equity and about $10 million in R&D money.

"Historically, we've been spending $5 million to $6 million per quarter," Katz said, noting that the figure is not formal guidance. In any case, the Pfizer money "certainly gives us a lot of runway," he said.

Icagen's ion channel technology platform has allowed the firm to clone the entire ion channel genome and develop a 250,000-molecule collection of compounds.

"There's a very rich resource base here, and new programs are coming out of that all the time," Katz said. The firm has a calcium-channel program for pain, and "we're looking at a host of new targets, also primarily for pain" but other indications as well, he said.

Putting all the chips on a single drug "didn't work too well, with our sickle cell program," Katz said, and the company had to refocus. "But we have a renewable resource. A couple of years ago, we weren't even looking at sodium channels, and look where we are today."