CombinatoRx to merge with Canadian firm - Wichita Business Journal:

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Under the terms of the agreement, Mass.-based CombinatoRx will issue shares of common stock to Neuromer stockholdersso that, post merger, each shareholders will have 50 percenrt of the voting power in the combined The deal is closely tied to a recen transaction that saw Neuromed sell the commercial rights to its pain-managementy drug candidate Exalgo to , a subsidiaruy of That agreement included an upfront paymenr of $15 million and several potential milestone paymentz and related compensation if certain commercial benchmarksd are met. Those payouts also could alted the ownership composition of the newlymerger company.
For example, if Exalgo is approver by the before CombinatoRx shareholders will see their ownership stake in the combined compan slip to30 percent. If the drug does not win FDA approvalby 2011, CombinatoRx shareholders will then assume a 70 perceny ownership stake in the company, according to regulatoru filings. Alexis Borisy will step down as president and CEO of CombinatoRcx to pursueother activities. Borisy will support CombinatoRx as a membee of its scientificadvisoruy board, according to the company.
The boardes of directors of both CombinatoRx and Neuromed have approvedf the proposedmerger transaction, which is subject to customaryg closing conditions, including receipt of various requirec approvals from the CombinatoRx and Neuromed stockholders. In May, CombinatoRd (Nasdaq: CRXX) said it narrowed its net loss for the firs quarter amid aggressive cost cutting that included laying off almost half its stafrf and slashes to its research anddevelopment budget.