UPDATE 1-CombinatoRx to merge with privately held Neuromed

* To merge with private Neuromed in an all-stock deal

* To issue about 36 mln new shares to Neuromed shareholders

* CombinatoRx shares up 37 pct

July 1 (Reuters) - Biopharmaceutical company CombinatoRx Inc (CRXX.O) said it agreed to merge with privately held Neuromed Pharmaceuticals Inc in an all-stock deal.

CombinatoRx would issue about 36 million new common shares to Neuromed stockholders with each party owning about 50 percent of the voting power of the combined company upon deal closure.

The deal, which is expected to close during the fourth quarter, values Neuromed at about $28.8 million based on CombinatoRx's Tuesday closing price of 80 cents.

However, relative ownership of CombinatoRx will be adjusted based upon the outcome of the regulatory review of Neuromed's lead drug candidate Exalgo, a pain drug currently in late-stage clinical trials.

Upon closing, the combined company will have the CombinatoRx name and is expected to trade under the stock symbol CRXX on the NASDAQ Global Market, the companies said in a joint statement.

Wedbush Morgan Securities acted as financial advisor to CombinatoRx in this transaction and JMP Securities acted as exclusive financial advisor to Neuromed.

Shares of CombinatoRx were up more than 37 percent in premarket trade from their Tuesday's close of 80 cents on Nasdaq. (Reporting by Esha Dey in Bangalore; Editing by Jarshad Kakkrakandy)