The Cross-Border Biotech Blog

Learn more about Neuromed’s deal with CombinatoRx, check out what MedMira’s been doing with all the cash from its equity line, and find out who’s closed deals and who’s just closing doors in this week’s Monday Deal Review

Neuromed-CombinatoRx:

As we noted at the time, Neuromed is merging with CombinatoRx (NASDAQ: CRXX).  The deal has an interesting structure, since it’s occurring almost on the eve of the PDUFA date (this Fall) for Neuromed’s lead product, Exalgo.  Currently, the split of the post-merger CombinatoRx shares is 50/50 between Neuromed and CombinatoRx backers.  However, the longer the delay until FDA approval for Exalgo, the greater the share of the combined company goes to CombinatoRx.  Specifically:

• FDA approval by the end of 2009 – Neuromed’s backers get 70% of the shares;
• FDA approval Q1-Q3 2010 –Neuromed’s backers get 60%;
• FDA approval Q4 2010 — CombinatoRx shareholders keep 60%; and
• FDA approval after December 2010 (or never): CombinatoRx’s shareholders keep 70%.

Neuromed’s president and CEO Chris Gallen, will be president and CEO of CombinatoRx post-merger.  The In Vivo blog says that “CombinatoRx has been trading at or shed the majority of its value last October after the failure of its lead osteoarthritis candidate, and then restructured in November. Since then it has essentially traded below the value of its cash on hand, making it a prime candidate for a reverse merger.”  Et voilà!

Expansion in China:

Citing China’s US$125 billion investment in April toward healthcare reform, MedMira Inc., (NASDAQ: MMIRF, TSX-V: MIR) entered into a strategic partnership with Triplex International Biosciences Co., Ltd. Triplex has a large customer base and existing diagnostics product line in China.

Wrapping Things Up:

• Adaltis Inc. (TSX: ADS), a Montreal-based in vitro diagnostic company, is seeking court protection under the CCAA.
• YM BioSciences Inc. (NYSE Alternext US:YMI, TSX:YM, AIM:YMBA) reported that its subsidiary, CIMYM BioSciences Inc., and Oncoscience AG have resolved the issues between the companies cooperatively, thereby avoiding a trip to the London Court of International Arbitration.  The parties are working together on nimotuzumab, a humanized monoclonal targeting EGFR that has a “remarkably benign side-effect profile.”
• MDS Inc. (TSX: MDS; NYSE: MDZ) completed the divestiture of its Phase II-IV business that it announced last month.
• Akela Pharma Inc. (TSX: AKL) got in some trouble in May, when it faced a demand from Tekes, the Finnish Funding Agency for Technology and Innovation, to repay grants totalling almost a million Euro that were conditioned on Akela’s (now-reduced) Finnish operations. Akela and Tekes reached a settlement this week that will allow Akela to pay back the grants received plus interest over four years — through 2014.