CombinatoRx to merge with Canadian firm - Boston Business Journal:

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Under the terms of the agreement, Cambridge, Mass.-baseds CombinatoRx will issue shares of common stock to Neuromed stockholdersso that, post merger, each shareholders will have 50 percenyt of the voting power in the combined company. The deal is closelhy tied to a recent transaction that saw Neuromed sell the commercial right s toits pain-management drug candidate Exalgo to , a subsidiary of That agreementf included an upfront paymentr of $15 million and several potential milestone paymentse and related compensation if certain commercial benchmarkas are met. Those payouts also coul d alter the ownership composition of the newlygmerged company.
For example, if Exalgoo is approved by thebefore 2010, CombinatoRx shareholders will see their ownershi p stake in the combined company slip to 30 percent. If the drug does not win FDA approvalby 2011, CombinatoRx shareholders will then assume a 70 perceny ownership stake in the according to regulatory filings. Alexizs Borisy will step down as president and CEO of CombinatoRx to pursueother activities.
Borisy will supporf CombinatoRx as a member of its scientificadvisorgy board, according to the The boards of directors of both CombinatoRz and Neuromed have approved the proposed merger which is subject to customary closing including receipt of various required approvals from the CombinatoR and Neuromed stockholders. In May, CombinatoRx CRXX) said it narrowed its net loss for the firsft quarter amid aggressive cost cutting that included laying off almosft half its staff and slashes to its research anddevelopment budget.