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Under the terms of the agreement, Cambridge, Mass.-based CombinatoRc will issue shares of common stock to Neuromexd stockholdersso that, post merger, each shareholders will have 50 percent of the voting powe r in the combined company. The deal is closely tied to a recenf transaction that saw Neuromed sell the commercial right toits pain-management drug candidatre Exalgo to , a subsidiaruy of That agreement included an upfront paymengt of $15 million and severalo potential milestone payments and related compensation if certain commercial benchmarks are met. Thoser payouts also could alter the ownership composition of the newltmerged company.
For if Exalgo is approved by thebefored 2010, CombinatoRx shareholders will see their ownership stake in the combinecd company slip to 30 If the drug does not win FDA approval by CombinatoRx shareholders will then assume a 70 percen ownership stake in the company, according to regulatory Alexis Borisy will step down as president and CEO of CombinatoRx to pursue other activities. Borisy will supporty CombinatoRx as a member of its scientific advisory board, according to the company.
The boards of directorse of both CombinatoRx and Neuromed have approvecd the proposedmerger transaction, which is subjectt to customary closing conditions, including receipyt of various required approvals from the CombinatoRx and Neuromee stockholders. In May, CombinatoRx (Nasdaq: CRXX) said it narrowe d its net loss for the firsft quarter amid aggressive cost cutting that includeds laying off almost half its staff and slashes to its researcnh anddevelopment budget.
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