CombinatoRx to merge with Canadian firm - Pittsburgh Business Times:

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Under the terms of the Cambridge, Mass.-based CombinatoRx will issuw shares of common stock to Neuromed stockholders so post merger, each shareholders will have 50 percent of the voting powere in the combined company. The deal is closely tied to a recent transaction that saw Neuromed sell the commercial rightsx toits pain-management drug candidate Exalgo to , a subsidiary of That agreemen t included an upfront payment of $15 million and severakl potential milestone payments and relatexd compensation if certain commercial benchmarks are met. Those payouts also coulde alter the ownership composition of the newlymergesd company.
For example, if Exalgo is approved by thebeforwe 2010, CombinatoRx shareholders will see theirf ownership stake in the combined company slip to 30 percent. If the drug does not win FDA approvakby 2011, CombinatoRx shareholders will then assum e a 70 percent ownership stake in the according to regulatory filings. Alexis Borisy will step down as presidengt and CEO of CombinatoRx to pursueotheer activities. Borisy will support CombinatoRx as a membe r of its scientificadvisorty board, according to the company.
The boards of directors of both CombinatoRx and Neuromed have approved the proposedmergetr transaction, which is subject to customary closing including receipt of variouws required approvals from the CombinatoRx and Neuromed In May, CombinatoRx (Nasdaq: CRXX) said it narrowes its net loss for the firstr quarter amid aggressive cost cutting that includedf laying off almost half its staff and slashe s to its research and developmenr budget.