CUSIP No. 45104P500
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Page 2 of 7 Pages
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1
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NAME OF REPORTING PERSON
Merlin BioMed Private Equity Advisors, LLC (IRS No. 13-4178606)
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) o
(b) x
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS (See Instructions)
OO
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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o
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
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7
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SOLE VOTING POWER
0
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8
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SHARED VOTING POWER
750,000
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|||
9
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SOLE DISPOSITIVE POWER
0
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|||
10
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SHARED DISPOSITIVE POWER
750,000
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
750,000
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
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o
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.5%
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14
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TYPE OF REPORTING PERSON (See Instructions)
OO
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CUSIP No. 45104P500
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Page 3 of 7 Pages
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1
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NAME OF REPORTING PERSON
Merlin Nexus III, L.P.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) o
(b) x
|
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3
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SEC USE ONLY
|
|||
4
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SOURCE OF FUNDS (See Instructions)
OO
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|||
5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
|
o
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6
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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
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TYPE OF REPORTING PERSON (See Instructions)
PN
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CUSIP No. 45104P500
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Page 4 of 7 Pages
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1
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NAME OF REPORTING PERSON
Dominique Sémon
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) o
(b) x
|
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||
3
|
SEC USE ONLY
|
|||
4
|
SOURCE OF FUNDS (See Instructions)
OO
|
|||
5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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o
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Switzerland
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|||
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
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TYPE OF REPORTING PERSON (See Instructions)
IN
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ITEM 4.
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Purpose of Transaction
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ITEM 7
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Material to be Filed as Exhibits
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Exhibit
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Description
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6.
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August 25 Joint Letter, dated August 25, 2011.
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7.
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August 25 Press Release, issued August 25, 2011.
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MERLIN BIOMED PRIVATE EQUITY INVESTORS, LLC | ||||
By: DOMINIQUE SÉMON, Managing Member | ||||
/s/ Dominique Sémon
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MERLIN NEXUS III, L.P.
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By: MERLIN NEXUS III, LLC., General Partner | ||||
/s/ Dominique Sémon
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Name: | Dominique Sémon | |||
Title: | Managing Member | |||
/s/ Dominique Sémon
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Name: | Dominique Sémon | |||
Exhibit
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Description
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1.
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Joint Letter, dated July 28, 2011 to the Board of Directors of the Issuer.*
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2.
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Press Release, issued July 28, 2011.*
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3.
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Joint Filing Agreement, dated July 29, 2011, between Merlin BioMed Private Equity Advisors, LLC, Merlin Nexus III, L.P. and Dominique Sémon.*
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4.
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August 11 Joint Letter, dated August 11, 2011 to the Board of Directors of the Issuer.*
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5.
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August 11 Press Release, issued August 11, 2011.*
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6.
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August 25 Joint Letter, dated August 25, 2011.
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7.
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August 25 Press Release, issued August 25, 2011.
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(1)
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Pfizer is seeking to acquire Icagen for $56 million but the true cost to Pfizer to acquire the company’s assets is only $22 million when near-term R&D and milestone payments as well as the cash Icagen currently owns are put into the equation. This cost would be even lower if the Pfizer-Icagen R&D collaboration were renewed after it expires later this year.
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(2)
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Icagen has several R&D programs that could lead to breakthrough therapies for the treatment of pain, representing potentially multi-billion dollar commercial opportunities. Pfizer's most recent SEC filing indicates that “neuroscience and pain” is one of its five high-priority therapeutic areas with the highest potential to deliver value. Ion channels were identified as an area of focus by Pfizer's leadership team. They state, "Icagen’s development platform, expertise and know-how in the ion channel space was seen as a potential source of new opportunities for Pfizer, beyond the opportunities available under the parties’ Collaborative Agreement."1 We conservatively estimate that Icagen’s pain programs alone could be worth $100-165 million or $11-19 a share.
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(3)
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A 2006 paper in the journal Nature described the ion channels targeted by this collaboration and the families who have genetic mutations that prevent them from feeling pain. The authors write, "The complete inability to sense pain in an otherwise healthy individual is a very rare phenotype."2 Pfizer understands the value of these targets as they funded this study and two of the co-authors are Pfizer employees.
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(4)
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Pfizer initiated the phase I study of the partnership’s lead compound in December 2010 and proposed to acquire Icagen in July 2011 after having declined an acquisition on numerous prior occasions. Pfizer's actions suggest that the data are trending positive for the following reasons: 1) the first study was advanced to a second study suggesting that so far the drug is safe, 2) the study was designed to measure signs of activity such as heat pain or odor because families with the genetic mutations have both an inability to feel pain and a reduced sense of smell, and 3) the trial data are open to Pfizer as they are required to monitor safety. These data provide Pfizer with an unfair advantage not afforded to all investors to determine the value of this program.
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(5)
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Icagen's Board chose not to pursue other strategic options that could have allowed the pain programs currently partnered with Pfizer to reach significant milestones and create additional value for all shareholders.
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