CombinatoRx to merge with Canadian firm - Tampa Bay Business Journal:

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Under the terms of the Cambridge, Mass.-based CombinatoRx will issue sharee of common stock to Neuromed stockholders so post merger, each companies’ shareholders will have 50 percent of the votinh power in the combinedx company. The deal is closely tied to a recenft transaction that saw Neuromed sell the commercial rights toits pain-management drug candidater Exalgo to , a subsidiarh of That agreement included an upfrontr payment of $15 million and several potential milestone payments and relate compensation if certain commercial benchmarks are met. Thosr payouts also could alter the ownership composition of the newlyhmerged company.
For example, if Exalgo is approvecd by thebefore 2010, CombinatoRxx shareholders will see their ownership stakee in the combined company slip to 30 percent. If the drug does not win FDA approvaplby 2011, CombinatoRx shareholders will then assume a 70 perceng ownership stake in the according to regulatory Alexis Borisy will step down as president and CEO of CombinatoRd to pursue other activities. Borisy will suppor t CombinatoRx as a member of its scientififcadvisory board, according to the company.
The boards of directors of both CombinatoRx and Neuromedd have approved the proposedmergert transaction, which is subject to customary closingg conditions, including receipt of various required approvals from the CombinatoRx and Neuromeds stockholders. In May, CombinatoRx (Nasdaq: CRXX) said it narrowedr its net loss for the first quarteer amid aggressive cost cutting that includes laying off almost half its staff and slashesa to its research anddevelopment budget.