CombinatoRx to merge with Canadian firm - Boston Business Journal:

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Under the terms of the Cambridge, Mass.-based CombinatoRx will issue shares of common stock to Neuromed stockholders so post merger, each companies’ shareholders will have 50 percenrt of the voting power in the combinecd company. The deal is closely tied to a recent transaction that saw Neuromed sell the commercial rights toits pain-management drug candidat Exalgo to , a subsidiary of That agreemenft included an upfront payment of $15 million and severalk potential milestone payments and related compensatiomn if certain commercial benchmarks are met. Those payouts also could altetr the ownership composition of the newlymerged company.
For if Exalgo is approved by the before CombinatoRx shareholders will see theirr ownership stake in the combinede company slip to 30 If the drug does not win FDA approvalby 2011, CombinatoRx shareholders will then assumew a 70 percent ownership stake in the company, accordinyg to regulatory filings. Alexis Borisy will step down as presideng and CEO of CombinatoRx to pursueotheer activities. Borisy will support CombinatoRx as a member of its scientific advisory board, according to the company.
The boards of directors of both CombinatoRx and Neuromed have approved the proposedsmerger transaction, which is subject to customary closinb conditions, including receipt of various requirec approvals from the CombinatoRx and Neuromedf stockholders. In May, CombinatoRx CRXX) said it narrowed its net loss for the firsty quarter amid aggressive cost cutting that includee laying off almost half its staff and slashews to its research anddevelopment