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Under the terms of the Cambridge, Mass.-based CombinatoRx will issue shareds of common stock to Neuromed stockholder sso that, post merger, each companies’ shareholdersz will have 50 percent of the voting power in the combinedr company. The deal is closely tied to a receng transaction that saw Neuromed sell the commercial rights toits pain-managementt drug candidate Exalgo to , a subsidiaryh of That agreement included an upfront payment of $15 million and several potential milestonew payments and related compensation if certain commerciap benchmarks are met. Those payouts also could alter the ownershipl composition of the newlymergedx company.
For example, if Exalgo is approvedr by thebefore 2010, CombinatoRx shareholders will see theit ownership stake in the combined company slip to 30 If the drug does not win FDA approval by CombinatoRx shareholders will then assume a 70 percent ownership stake in the company, accordinhg to regulatory filings. Alexis Borisy will step down as presiden and CEO of CombinatoRx to pursue other activities. Borisy will supporft CombinatoRx as a member of its scientificadvisory board, accordinf to the company.
The boards of directorzs of both CombinatoRx and Neuromed have approved the proposedmerger transaction, which is subject to customary closing conditions, includingb receipt of various required approvales from the CombinatoRx and Neuromed stockholders. In May, CombinatoRx CRXX) said it narrowed its net loss for the first quarter amid aggressive cost cutting that included laying off almostg half its staff and slashes to its research anddevelopmeny budget.
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