January 4, 2017
By Mark Terry, BioSpace.com Breaking News Staff
Boulder, Colo. – Nivalis Therapeutics announced yesterday that it is evaluating “strategic alternatives,” which may include the possibility of an acquisition, merger, or other strategic transaction.
Nivalis is focused on identifying, developing and commercializing drugs for cystic fibrosis (CF). Previously known as N30 Pharmaceuticals, it changed to Nivalis in February 2015. The company went public in July 2015.
On November 28, the company announced topline results from its Phase II clinical trial of cavosonstat, 200 mg and 400 mg, in patients with CF who had two copies of the F508del-CFTR mutation that were being treated with Orkambi. Although the drug had minimal side effects, it failed to show benefit in absolute change in percent predicted FEV1, which was the primary endpoint.
“While we are disappointed in the outcome of this trial, we plan to continue to investigate the therapeutic potential of cavosonstat and our S-nitrosoglutathione reductase (GSNOR) inhibitor portfolio to determine next steps,” said Jon Congleton, president and chief executive officer of Nivalis, in a statement.
In the company’s third-quarter financial report on November 7, 2016, the company published a net loss of $7.4 million, or ($0.48) per share, versus a net loss of $6.1 million ($0.39 per share) in the same quarter in 2015. Most of the loss was attributed to the two Phase II trials of cavosonstat.
In the same month, Nivalis announced that Cynthia Smith, then the chief commercial officer of ZS Pharma , a subsidiary of AstraZeneca , had joined the company’s board of directors. She had also previously served as vice president, market access and commercial development at Affymax.
In addition to today’s announcement, Nivalis indicated it plans to finish its ongoing SNO-7 clinical trial of cavosonstat in patients with CF currently on Kalydeco (ivacaftor). That trial is expected to be completed this quarter.
To assist with its strategic alternatives, Nivalis had hired Ladenburg Thalmann & Co. Inc., an advisory firm. In addition to a possible merger, sale or partnership, the company indicated it plans to streamline operations. Although that often means layoffs, nothing specific was said in the company announcement regarding job cuts.
Greg Avery, writing for the Denver Business Journal, notes that as of September 30, 2016, Nivalis had $16 million in cash and $50 million in marketable securities. “That could make Nivalis a candidate for being acquired by another company looking to go public,” he writes. “Such reverse mergers became more common during the waning months of 2016 as the IPO market struggled and companies sought a cost-effective way to access public markets.”
He cites Boulder-based Mirage Therapeutics merging with Carlsbad, California-based Signal Genetics in November as an example of such a deal.
Another recent example is when Boston, Mass.-based Tokai Pharmaceuticals and tic Pharma, a privately-held pharma company, merged under the name of OticPharma. Arsalan Arif, writing for Endpoints News, said, “Last August, Tokai became the latest in a long string of public biotechs to hit a brick wall running at full speed. The late-stage failure of its cancer drug galeterone effectively shredded its stock price and its business plan, forcing the company to rapidly ax staffers and start looking for strategic alternatives in the face of an extinction-level event.” Nivalis is currently trading for $2.36.
