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 commo stock to Neuromed stockholders so post merger, each companies’ shareholderse will have 50 percent of the votinf power in the combinee company. The deal is closely tied to a recentg transaction that saw Neuromed sell the commercia rights toits pain-managementr drug candidate Exalgo to , a subsidiary of That agreemenyt included an upfront payment of $15 milliomn and several potential milestone paymentsd and related compensation if certain commercial benchmarks are met. Thoser payouts also could alter the ownership composition of the newlymergee company.
For example, if Exalgo is approvec by the before CombinatoRx shareholders will see their ownership stake in the combined company slip to 30 If the drug does not win FDA approvalby 2011, CombinatoRzx shareholders will then assum a 70 percent ownership stake in the according to regulatory filings. Alexis Borisy will step down as president and CEO of CombinatoRx to pursueother activities. Borisy will support CombinatoRxz as a member of its scientififadvisory board, according to the company.
The boarda of directors of both CombinatoRx and Neuromed have approved the proposedmergetr transaction, which is subject to customar y closing conditions, including receipt of various requires approvals from the CombinatoRx and Neuromed In May, CombinatoRx CRXX) said it narrowed its net loss for the firstt quarter amid aggressive cost cutting that included layin g off almost half its staff and slashes to its research and development