PDUFA date 22 November 2009 .
Time to get in eom !!!
CRXX
MarketCap 70 Mio$
Cash 45 Mio$
Price 0,95 $
CombinatoRx and Neuromed Sign Merger Agreement
-- Merger to Create a Sustainable Biotechnology Company: Brings Together Significant Product Assets, Unique Discovery Capabilities and Financial Resources –
- Conference Call Scheduled for Today at 8:30am ET -
* Press Release
* Source: CombinatoRx, Incorporated
* On Wednesday July 1, 2009, 7:30 am EDT
CAMBRIDGE, Mass. & VANCOUVER, British Columbia--(BUSINESS WIRE)--CombinatoRx, Incorporated (NASDAQ: CRXX - News) 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™.
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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.
“By combining forces with Neuromed, we can create a sustainable biotechnology company that has significant product assets, unique discovery capabilities and substantial financial resources. In addition, Christopher Gallen and the rest of the Neuromed management team will bring their considerable product development expertise to bear on the CombinatoRx pipeline and discovery platform. Collectively, the Neuromed team have contributed significantly to more than 10 successful NDAs or other major regulatory submissions and they have launched over 10 pharmaceutical products” said Robert Forrester, Interim President and CEO of CombinatoRx. “Further, this is a unique merger structure, with a contingent valuation element providing downside protection and upside participation for shareholders. This merger with Neuromed will leverage the operational efficiencies created by CombinatoRx’s recent restructuring, including workforce reductions and divestiture of our Singapore subsidiary, to focus on our core technology, simplification of our balance sheet and reduced cash burn going forward. As a result, we expect to have sufficient cash to continue operations into 2012,” concluded Forrester.
“Through this merger with CombinatoRx, we have the opportunity to build a biopharmaceutical organization with a novel approach to drug discovery and development,” commented Christopher Gallen, MD, Ph.D., President and CEO of Neuromed. ”CombinatoRx’s unique discovery approach and the multiple mid- and early-stage product candidates in the CombinatoRx pipeline, combined with Neuromed’s clinical development experience, project management driven culture and ion channel inhibitor programs, will enable the potential creation of new therapeutics. The recent CombinatoRx-Novartis oncology collaboration further recognizes the potential of the CombinatoRx technology by combining the innovative discovery for which Novartis is well known with the systematic exploration of combination therapy made possible by the CombinatoRx platform.”
Details of the Proposed Transaction
Under the terms of the transaction agreements, CombinatoRx will issue shares of common stock to Neuromed stockholders with each party’s pre-merger stockholders owning approximately 50% of the voting power of the merged organization upon closing. Based on the timing of the FDA’s approval decision on Exalgo™, the percentage ownership will be adjusted by issuing shares out of escrow to former Neuromed holders or returning shares from escrow back to CombinatoRx.
* If Exalgo™ approval is received by December 31, 2009, pre-merger CombinatoRx stockholders will own 30% of the combined company.
* If approval is received between January 1, 2010 and September 30, 2010, pre-merger CombinatoRx stockholders will own 40% of the combined company.
* If approval is received between October 1, 2010 and December 31, 2010, pre-merger CombinatoRx stockholders will own 60% of the combined company.
* If approval is not received by December 31, 2010, pre-merger CombinatoRx stockholders will own 70% of the combined company.
The boards of directors of both CombinatoRx and Neuromed have approved the proposed merger transaction, which is subject to customary closing conditions, including receipt of various required approvals from the CombinatoRx and Neuromed stockholders. Subject to customary closing conditions, including receipt of various required approvals from the CombinatoRx and Neuromed stockholders and the effectiveness of an amendment to the organizational documents of Neuromed Canada to facilitate the conversion of its outstanding indebtedness, the transaction is currently expected to close during the fourth quarter of 2009. CombinatoRx stockholders representing approximately 35% of the voting shares of CombinatoRx have already committed to vote in favor of the transaction. Neuromed stockholders representing in excess of 60% of the voting shares of Neuromed have committed to vote in favor of the transaction. Upon closing of the merger, the combined company will have the CombinatoRx name and is expected to trade under the stock symbol (CRXX) on the NASDAQ Global Market. Wedbush Morgan Securities Inc. acted as financial advisor to CombinatoRx in this transaction and JMP Securities acted as exclusive financial advisor to Neuromed. Goodwin Procter served as legal advisors to CombinatoRx and WilmerHale served as legal advisors to Neuromed.
