CombinatoRx & Neuromed Merger at risk? (NASDAQ:CRXX)

Neuromed and CombinatoRx, Incorporated (NASDAQ:CRXX)has agreedto sign a definitive merger agreementvalued $28.8 million USD on 30^thJune, 2009 according to a news published by the RTT News.

Although the “merger” declaration with privately held Neuromeds Pharmaceutical Inc. did give a much required market boost, premarket trades for CombinatoRx Inc fell by 34 pct as reportedby Reuters November 16^th,2009.

@@CalendarLeft@@ Regardless of the market fall for CombinatoRx, both companies are still sticking to the merger agreement and expected to close the transaction on 22^ndNovember, 2009. Coincidentally, a pain killer drug “Exalgo” announced by Neuromed is in its current form not sufficient for approval under Section 505(b)(1) of the Food, Drug and Cosmetic Act of 1938, as amended (FDCA)

Exalgo, developed by ALZA Corp, is an “extended release” hydromorphone formulation, targeted for pain relief. U.S. marketing rights to this drug was sold to Neuromed Pharmaceuticals in April 2007 and later in June 2009, Covidien plc acquired its licensing rights through Mallinckrodt Inc. Hydromorphone is a “Schedule II opoid” having been in use for many years. Currently available oral hydromorphone are immediate release, requiring a dosage of several time per day.

@@Adsense@@ According to CombinatoRx, Exalgo would utilize the “OROS® PUSH-PULL(TM)” osmotic delivery system, designed for Exalgo to be released over an extended period of time in a controlled rate. CombinatoRx states that Exalgo would offer an additional option for opioid tolerant patients in the management of moderate to severe pain, if approved.

In October 2000, an approval letter issued by the FDA stated that Exalgo’s approval needed to be supported by onesuccessful well-controlled and adequate clinical trial.

After Sucessful completion of the “late-stage trial” in March earlier this year, Neuromed handed in a comprehensive response to the FDA issued approvable letter on the 22^ndof May, 2009. FDA had accepted the response in the following month.

CombinatoRx proposed their “Drug abuse Mitigation Strategies” to the mutual board formed of the “Anesthetic and Life Support Drugs Advisory Committee” and “Drug Safety & Risk Management Advisory Committee”, who conducted a joint meeting and had authorized the proposal, moving Exalgo one step closer to approval.

“We are pleased that the committee endorsed the REMS program as proposed by Covidien and Neuromed,” said Timothy Wright, President, Pharmaceuticals, Covidien. “The committee has asked us to look at the possibility of a phased rollout, and we look forward to discussing this input with the agency and other pain management experts.”

Exalgo was expected to be approved on the upcoming PDUFA review scheduled on the 22^ndof November and now that this did not happen the merger transaction may be at risk.