Stock Alert for CombinatoRx Inc. ($CRXX)

CombinatoRx Inc. (NASDAQ: $CRXX)

CombinatoRx Inc. (CRXX) is a biopharmaceutical company focused on developing synergistic combination pharmaceuticals. The Company has devoted substantially all of its resources to the development of its drug discovery technology and the research and development of its drug candidates, including conducting preclinical and clinical trials and seeking intellectual property protection for its technology and product candidates. It has been advancing a portfolio of four product candidates, Synavive (CRx-102), CRx-401, CRx-191 and CRx-197, through clinical research and development, and has a number of product candidates that have either completed phase IIa clinical trials or are in preclinical development. Its portfolio of clinical product candidates targets multiple diseases including immuno-inflammatory diseases, metabolic disease, chronic pain and topical dermatoses. In December 2009, CombinatoRx and Neuromed Pharmaceuticals Inc. announced that they have merged.

The Company was founded in 2000 and is based in Cambridge, Massachusetts.

Share Statistics (4-May-10) FY






Q4 2008 Q4 2009 %


Symbol CRXX Revenue, $Mn 14.94M 14.13M 5.4% 3.90M 8.58M 120.0%
Current price $1.81 Gross marg. 100.0% 100.0% 0.0% 100.0% 100.0% 0.0%
52wk Range: $2.60-0.58 Oper. margin -384.1% -468.3% 21.9% -364.9% 154.7% 142.4%
Avg Vol (3m): 2,633,090 Net margin -357.0% -460.9% 29.1% -390.5% 293.4% 175.1%
Market Cap. 160.55M
Dil. Shares Outst. 88.9M EPS, $ -1.78 -1.87 5.1% -0.43 0.57 232.6%

Source:, SEC Filings.

Financial Summary

Fourth Quarter and Year-End 2009 Financial Results (Unaudited):

As of December 31, 2009, CRXX had cash, cash equivalents, restricted cash and short-term investments of $25.9 million compared to $43.7 million on December 31, 2008.

Total revenue was $8.6 million in the fourth quarter of 2009 compared to $3.5 million reported in the fourth quarter of 2008. For the year ended December 31, 2009, revenue was $17.3 million compared to $12.3 million for 2008. Revenue increased from 2008 to 2009 due to the accelerated recognition of deferred revenue related to the early termination of the Company’s agreement with Angiotech.

Net income for the quarter ended December 31, 2009, was $25.2 million, or $0.57 per share, as compared to a $15.2 million loss, or ($0.43) per share, in the fourth quarter of 2008. Stock-based compensation expense was approximately $0.8 million in the fourth quarter of 2009 as compared to $0.9 million in the fourth quarter of 2008. For the year ended December 31, 2009, net income from continuing operations was $1.3 million, or $0.03 per share, compared to a net loss of $60.6 million, or $(1.74) per share, in the year ended December 31, 2008. Stock-based compensation expense was approximately $3.9 million and $5.7 million in the years ended December 31, 2009, and 2008, respectively.

Research and development expenses totaled $3.1 million in the fourth quarter of 2009 compared to $9.8 million in the fourth quarter of 2008. Research and development expenses were $21.2 million in the year ended December 31, 2009, compared to $55.3 million in the year ended December 31, 2008. The $34.1 million decrease from the 2008 period to the 2009 period was primarily due to a decrease of $16.7 million in preclinical and external clinical expenses, a $10.8 million decrease in compensation and benefit expenses, associated with reduced headcount attributable to the 2008 and 2009 restructurings, a $5.6 million decrease in consulting, lab supplies, facilities, depreciation and other overhead costs related to our 2008 and 2009 restructurings, as well as a $1.0 million decrease in non-cash stock-based compensation expense.

General and administrative expenses were $5.1 million in the fourth quarter of 2009 compared to $3.0 million in the fourth quarter of 2008. General and administrative expenses were $17.1 million in the year ended December 31, 2009, compared to $14.5 million in the year ended December 31, 2008. The increase was due primarily to professional and consulting expenses related to our merger with Neuromed.

Financial Strength (4-May-2010) Company Industry Sector S&P 500
Quick Ratio (MRQ) 2.30 4.94 2.57 0.71
Current Ratio (MRQ) 2.30 5.38 3.08 0.84
Long-Term Debt to Equity(MRQ) 0.00 21.00 24.36 142.80
Total Debt to Equity (MRQ) 0.00 25.85 31.17 204.59

Source:, SEC Filings.

Analyst Consensus

No chart available.


No consensus analysis data available.


Investment Highlights

2009 and Recent Accomplishments:

  • The U.S. Food and Drug Administration (FDA) approved Exalgo(TM) (hydromorphone HCl) extended-release tablets for the management of moderate to severe pain in opioid tolerant patients requiring continuous, around-the-clock opioid analgesia for an extended period of time. The approval of Exalgo triggered a $40.0 million milestone payment to CRXX from Mallinckrodt Inc., a Covidien company, who acquired the U.S. marketing rights to Exalgo. Going forward, CRXX is eligible to receive tiered royalties on net sales of Exalgo by Covidien.
  • CRXX and Neuromed Pharmaceuticals Inc. merged, bringing together the product assets and financial resources of both organizations, including Exalgo(TM) revenue, the combined portfolio of product candidates and both company’s unique drug discovery capabilities. Mark Corrigan, MD, former EVP of Research & Development at Sepracor and a member of the CRXX board of directors, was appointed President and Chief Executive Officer of CRXX.
  • PrednisporinTM (FOV1101), a CRXX-derived combination drug candidate, was recognized as a key asset by Sanofi-Aventis in its acquisition of our collaborator, Fovea Pharmaceuticals, based on positive clinical results with Prednisporin in subjects with persistent allergic conjunctivitis. CRXX also enhanced its economic interest in Prednisporin and the other product candidates licensed to Fovea for ophthalmic development. CRXX will be eligible to receive development and regulatory-based milestone payments for Prednisporin of up to approximately $40.0 million and increased tiered royalty payments of up to 12% of net sales.
  • Phase 2 clinical data was presented on SynaviveTM (CRx-102) in knee osteoarthritis (OA) at the American College of Rheumatology (ACR) 2009 Annual Meeting and the Annual European Congress of Rheumatology meeting (EULAR) in which efficacy was observed early in treatment and sustained in all WOMAC measurement subscales including pain, stiffness and physical function. These efficacy levels were maintained throughout the 12-month knee OA extension trial and, importantly, no treatment-related increases in glucocorticoid associated adverse events were observed in the Synavive-treated subjects.
  • A strategic alliance was established with the Novartis Institutes for Biomedical Research, Inc. focused on the discovery of novel anti-cancer combinations utilizing the CRXX proprietary combination high throughput screening (cHTS) platform and Chalice analyzer software. This non-exclusive collaboration is exploring combination effects in cell lines representing a broad spectrum of cancers to provide a robust and systematic understanding of combination therapy opportunities. CRXX received an upfront payment, research funding support for two years and is eligible to receive clinical, regulatory and commercial milestones. In addition, CRXX retains the right to conduct oncology research on its own behalf as well as partner with others in the field of oncology, and retains certain intellectual property which may arise from the collaboration.

2010 Pipeline and Business Goals:

  • Focus the CRXX portfolio and development efforts in the core therapeutic areas of pain and inflammation:
    • Exalgo, which is licensed to Covidien, for the management of moderate to severe pain in opioid tolerant patients requiring continuous, around-the-clock opioid analgesia for an extended period of time.
    • Synavive (CRx-102) for the treatment of immuno-inflammatory diseases.
    • Prednisporin (FOV1101) which is licensed to Fovea, a subsidiary of Sanofi Aventis, for the treatment of inflammatory ocular diseases such as allergic conjunctivitis.
    • N-Type and T-Type calcium channel blockers for the treatment of chronic pain.
  • Advance development of an existing product candidate:
    • Synavive (CRx-102) for the treatment of osteoarthritis
  • Advance an N-type lead program from our Ion channel modulation platform into development.
  • Continue to apply the Company’s state-of-the-art drug discovery technologies to discover new pain and inflammation product candidates for its internal portfolio:
    • Selective Ion channel modulation platform
    • cHTS drug discovery technology
  • Continue to seek additional revenue-generating research and technology collaborations for the Company’s drug discovery platform.
  • Maintain financial strength with sufficient resources to fund operations into 2014.

CRXX recently announced the publication of new preclinical data in BLOOD, The Journal of the American Society of Hematology. In the article entitled, “Adenosine A2A receptor agonists and PDE inhibitors: a synergistic multi-target mechanism discovered through systematic combination screening in B-cell malignancies,” CRXX researchers demonstrate the powerful and unexpected synergistic interactions of A2A Agonist and PDE Inhibitors as potential adjunctive therapy to glucocorticoid (GC) containing regimens in the treatment of multiple myeloma (MM) and other B-cell malignancies.

By deploying the CRXX combination high throughput screening (cHTS) technology to identify compounds that synergize with GCs to inhibit the proliferation of the MM cells, researchers were able to identify two classes of targeted agents that synergize with GCs and quite strongly with each other. This synergy was observed broadly across a large panel of MM and diffuse large B-cell lymphoma (DLBCL) cell lines. Exposure of these cells to A2A agonists and specific PDE inhibitors results in rapid synergistic inhibition of proliferation and induction of apoptosis.


Technical Analysis


CRXX is trading above its 50 day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

CRXX is trading above its upper Bollinger Band. Relative to recent price action, the stock is currently overextended and due for either a pause or retracement.

The MACD for CRXX currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9day moving average. Second, the MACD is above 0 which implies that the underlying moving averages are trending higher.

Comparative Analysis

Company Name Ticker Price per Mrkt. Cap. P/E P/S
May4-2010 symbol Share, $ $ Mn 2009 2010 2009 2010
Ligand Pharmaceuticals Inc. LGND 1.88 220.59M n/a n/a 5.66 n/a
Angiotech Pharmaceuticals Inc. ANPI 1.17 99.63M n/a n/a 0.35 n/a
OrthoLogic Corp. CAPS 0.93 37.92M n/a n/a n/a n/a
Drug Manufacturers Median 119.38M n/a n/a 3.00 n/a
CombinatoRx Inc. CRXX 1.81 160.55M n/a n/a 6.78 n/a

Source: Thomson Financial

Insider Trading Activity


Inside Purchases – Last 6 Months

Shares Transaction
Purchases n/a 0
Sales 3,180,440 2
Net Shares Purchased (Sold) (3,180,440) 2
Total Insider Shares Held 6.43M n/a
% Net Shares Purchased (Sold) (33.1%) n/a

Net Institutional Purchases — Prior Qtr to Latest Qtr
Net Shares Purchased (Sold) (19,252,000)
% Change in Institutional Shares Held (255.5%)

Source: Yahoo Finance

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