One-time charges relating to a merger created much higher net losses during Epix Pharmaceuticals Inc.'s fiscal 2006 third quarter.

The Lexington, Mass., biotech company (Nasdaq EPIX) lost $133.1 million during the quarter ending Sept. 30, compared to a $5.7 million loss in its fiscal 2005 third quarter. The number jumped because of a one-time charge of $123.5 million recorded for ongoing research and development connected to Epix's merger with Predix Pharmaceutical Holdings Inc. in August.

Company revenue reached $1.3 million during the third quarter, down from $2.3 million in the same quarter last year.

Epix pursued its $125 million merger with Predix in an effort to diversify its product line after repeated delays in U.S. regulatory approval for its Vasovist imaging agent, which has received approval in Australia, Canada, the European Union, Norway, Iceland and Switzerland.

The merger transaction includes a $35 million milestone payment based on Predix's strategic collaboration with Amgen Inc., for which the merger triggered the extra money.

The combined company focuses on imaging agents and treatments for hypertension, anxiety and depression, and pulmonary disease.