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

By John McCalister on 11/20/2009 – 7:30 am PSTOne Comment

Neuromed and CombinatoRx, Incorporated (NASDAQ:CRXX)has agreed to sign a definitive merger agreement valued $28.8 million USD on 30th June, 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 reported by Reuters November 16th, 2009.

Regardless of the market fall for CombinatoRx, both companies are still sticking to the merger agreement and expected to close the transaction on 22nd November, 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.

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 one successful 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 22nd of 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 22nd of November and now that this did not happen the merger transaction may be at risk.

One Comment »

  • robert says:

    Just because the Exalgo was not approved does not mean the merger is at risk. The merger is essentially a done deal as the majority of shareholders are institutions and everyone wants this merger.

    There are also clauses in the merger agreement that favor a later approval date of Exalgo for CRXX. All in all, things couldn’t be going better IMHO.

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