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Carl Icahn Buys a Drug-Turned-Real Estate Company

Holly LaFon

Holly LaFon

277 followers

In between rattling a succession of major corporations such as eBay (EBAY) and Family Dollar (FDO), and channeling his activist prowess into the embattled Fannie Mae and Freddie Mac, Carl Icahn (Trades, Portfolio) has taken a stake in Cadus Corp (OTCBB:KDUS) according to GuruFocus Real Time Picks. Icahn bought 12,563,840 shares of the pharmaceutical-turned-real estate company on June 6, giving him a total of 17,824,678 shares, which represents 67.81% of the outstanding shares.

Cadus Corp was founded in 1992 initially to develop yeast-based drug-discovery teachnologies. The company developed more than 25,000 genetically individual yeast strains capable of building hybrid yeast cells, as well as a technology that injected human genes into yeast cells to create hybrid yeast cells.

Cadus sold its drug discovery assets and ceased internal drug discovery operations and research efforts in July 2009. In the interim, it sought another company or asset to acquire or invest in, while receiving some revenue from the licensing of its technologies – which ceased in 2010. As of March 31, 2014, it may still sell or license its drug discovery technologies as a peripheral component of its business plan.

Instead, the company announced plans to shift its business entirely. It is currently dealing in renovating Florida real estate as it considers other prospective acquisitions in various industries. In the first quarter, the company acquired five residential properties in Florida costing $10.6 million in total. By May 14 it had acquired for more properties costing approximately $10.2 million.

Cadus has not reported revenue since 2010. It hold approximately $37.6 million accumulated deficit primarily related to research and development endeavors and administrative costs. Its legal expenses also increased by approximately $118 million related to its ceasing to file as a shell company with the SEC.

The company as of the end of the first quarter held cash of $10.6 million, and it held a rights offering expiring on May 29 in order to raise capital.

Icahn is also connected to the company as the principal shareholder of its brokerage services company, Bayswater Brokerage Florida LLC, and as owner of a significant shareholder of Cadus, Barberry Corp.

In March 2014, the company named as its new president and chief executive officer Hunter C. Gary, a senior vice president of Icahn Enterprises LP (IEP) and director at Herbalife Ltd. (HLF).

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Rating: 5.0/5 (1 vote)

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Comments

kfh227
Kfh227 premium member - 6 months ago

Wow, this is an interesting opportunity. Somewhat of a gamble but if it works, teh payoff could be HUGE. I worry about Icahn buying hte entire company though.

kfh227
Kfh227 premium member - 6 months ago

After a small amount of research, I bought a small position. Mostly like the CEOs background. Granted I think he is wearing too many hats right now (at multiple companies).

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