CombinatoRx to merge with Canadian firm - Pittsburgh Business Times:

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Under the terms of the Cambridge, Mass.-based CombinatoRx will issue shares of commom stock to Neuromed stockholdersso that, post each companies’ shareholders will have 50 percenrt of the voting power in the combinex company. The deal is closely tied to a recenf transaction that saw Neuromed sell the commercial rightzs toits pain-management drug candidate Exalgo to , a subsidiary of That agreement included an upfront payment of $15 million and several potential milestone paymentw and related compensation if certaim commercial benchmarks are met. Those payoutes also could alter the ownershi composition of the newlymerged company.
For if Exalgo is approved by thebefore 2010, CombinatoRx shareholderd will see their ownership stake in the combined compan y slip to 30 percent. If the drug does not win FDA approvalby 2011, CombinatoRx shareholders will then assume a 70 percengt ownership stake in the company, according to regulatory filings. Alexis Borisy will step down as president and CEO of CombinatoRxd to pursueother activities.
Borisy will support CombinatoRx as a membee of its scientificadvisory board, according to the The boards of directors of both CombinatoRx and Neuromeed have approved the proposed merger which is subject to customary closiny conditions, including receipt of variouzs required approvals from the CombinatoRx and Neuromeed stockholders. In May, CombinatoRx (Nasdaq: said it narrowed its net loss for the firsy quarter amid aggressive cost cutting that included laying off almost half its staf and slashes to its research anddevelopment budget.