Struggling Nivalis Cuts 80% of Staff, Including CEO and CMO
January 13, 2017
By Mark Terry, BioSpace.com Breaking News Staff
Boulder, Colo. – Nivalis Therapeutics announced today that as part of a restructuring plan, it will cut 25 staffers, or about 80 percent of its workforce, including two top executives.
Nivalis is focused on developing and commercializing drugs for cystic fibrosis (CF). Previously known as N30 Pharmaceuticals, it changed its name to Nivalis in February 2015. The company went public in July 2015.
On November 28, 2016, Nivalis announced 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.
In the company’s third-quarter financial report on November 7, 2016, Nivalis reported 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.
The company indicates that the force reduction will include Jon Congleton, president and chief executive officer and David Rodman, chief medical officer and executive vice president of Discovery. The cuts will happen between January 15, 2017 and March 31, 2017. Once completed, there will remain about five employees.
The company’s chief financial officer, Michael Carruthers, will act as interim president effective January 15.
Nivalis believes there will be cash severance costs of about $3 million. The company projects it will have about $45 to $47 million of net cash available to continue with its operations and a possible strategic transaction.
On January 3, 2017, Nivalis reported that the board of directors was exploring strategic alternatives that could include an acquisition, merger, business combination or other strategic transaction.
In addition, the company plans to finish an ongoing SNO-7 clinical trial of cavosonstat in patients with CF currently taking Kalydeco (ivacaftor). That trial is expected to be completed in the first quarter of 2017.
“We are extremely grateful for the outstanding leadership of Mr. Congleton and the many contributions of Dr. Rodman, as well as our other impacted employees, who have dedicated themselves to Nivalis’ efforts in cystic fibrosis,” said Howard Furst, Nivalis’ board chairman, in a statement. “Nivalis is committed to maximizing shareholder value by preserving the Company’s cash, and unfortunately this necessitates the announced restructuring.”
Nivalis is currently trading for $2.21.
In a January 3 article in the Denver Business Journal, Greg Avery noted, “The company reported having $16 million in cash and $50 million in marketable securities on hand as of September 30. That could make Nivalis a candidate for being acquired by another company looking to go public. 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.”