Icagen Soars on Pfizer Deal

The stock climbs on news of a collaboration with the drug giant.
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A pain-fighting pair-up with

Pfizer

(PFE) - Get Report

propelled biopharmaceutical company

Icagen

(ICGN)

some 70% higher Tuesday morning.

The companies will form a joint research committee and collaborate to develop and market compounds that target three sodium ion channels as a way to treat pain. Durham, N.C.-based Icagen already has a broad portfolio of intellectual property in this area.

Icagen will hold exclusive commercialization rights, and Pfizer will fund the entire collaboration. Icagen will receive $38 million over the first two years, including $12 million upfront for licensing and $15 million though an equity commitment.

Regarding the equity commitment, Pfizer is purchasing $5 million in common stock (2.69 million shares at a price of $1.86 each) and has the opportunity to purchase $10 million in additional common stock at fair market value.

In addition, the companies said Icagen could receive $359 million in research, development, regulatory and commercialization milestones on top of tiered royalties.

The companies anticipate the first closing of the transaction to occur on Aug. 20. Subsequently, Icagen expects to finish the third quarter with about $46 million in cash and $20 million in committed funding. The company will release new guidance for the year with third-quarter results.

Icagen soared $1.33, or 69%, to $3.25 before the opening bell Tuesday. Pfizer was unchanged.