Corgentech Inc. and AlgoRx Pharmaceuticals, Inc. have entered into a definitive merger agreement to create a late-stage company with a deep pipeline of clinical products that will be largely focused on developing and commercializing products for pain management and inflammation.

The combined company will have four products in its pipeline. AlgoRx's portfolio of pain management drug candidates includes ALGRX 3268, which is in Phase 3 clinical trials, ALGRX 4975, which is in Phase 2 clinical trials, and ALGRX 1207, which is soon to enter the clinic. Corgentech continues to develop NF-kappaB Decoy, which is in two Phase 1/2 trials for the treatment of eczema.

Under the terms of the agreement, Corgentech will issue, and AlgoRx stockholders will receive in a tax-free exchange, shares of Corgentech common stock such that AlgoRx stockholders will own approximately 62 percent of the combined company on a pro forma basis and Corgentech stockholders will own approximately 38 percent. The agreement and plan of merger has been approved by both boards of directors and will need to be approved by the companies' stockholders.

"We believe that the combination of Corgentech and AlgoRx will add significant value for our stockholders by dramatically bolstering our product pipeline with late-stage product candidates that bring us closer to commercialization," stated John P. McLaughlin, chief executive officer of Corgentech. "We are also optimistic about the potential of our NF-kappaB Decoy product candidate for eczema and believe that the combination of the two companies offers diversification for stockholders of both companies," he added.