CombinatoRx (CRXX) To Merge With Privately-Held Neuromed Pharmaceuticals

July 1, 2009 7:34 AM EDT

CombinatoRx, Incorporated (NASDAQ: CRXX) and Neuromed Pharmaceuticals, Inc., a privately-held biopharmaceutical company, today announced they have entered into a definitive merger agreement under which CombinatoRx and Neuromed will merge in an all-stock transaction.

Under the terms of the merger agreement, CombinatoRx is expected to issue approximately 36 million new shares of its common stock to Neuromed stockholders with each party owning approximately 50% of the voting power of the merged organization upon closing. Relative ownership of CombinatoRx will then be adjusted based upon the outcome of the FDA’s review of the NDA product candidate, Exalgo.

This merger brings together the product assets and financial resources of both organizations, including potential Exalgo™ milestones and royalty revenue and Neuromed’s proven drug development expertise, with the CombinatoRx portfolio of product candidates and its unique drug discovery capabilities. The rights to Exalgo™, designed to be a once-daily, oral hydromorphone treatment seeking FDA approval for chronic to severe pain, were recently acquired by Mallinckrodt Inc., a subsidiary of Covidien plc, for $15 million in upfront payments, additional development funding of up to $16 million to cover internal and external costs associated with Exalgo, an approval milestone of $30 million, which could potentially increase up to $40 million, and tiered royalties on Exalgo™ net sales after approval. Neuromed has filed a New Drug Application for Exalgo™ with the FDA, which has a November 22, 2009 PDUFA review date.

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