Alpine Immune Sciences to merge with Nivalis Therapeutics

The merger will result in a combined company with a novel protein-based discovery platform focused on inflammation and immuno-oncology.

Alpine is focused on developing novel protein-based therapies using its variant immunoglobulin domain (vIgD) platform technology. The vIgD platform is designed to create novel therapeutics that modulate multiple therapeutic targets, including many present in the immune synapse.

Alpine's vIgDs are developed via a unique process known as directed evolution which can produce proteins capable of either enhancing or diminishing an immune response, creating a platform applicable to both oncology and inflammatory diseases.

Alpine plans to initiate a Phase 1 clinical trial with its first compound, a dual ICOS/CD28 antagonist engineered for use in autoimmune and inflammatory diseases, in the second half of 2018.

Howard Furst, Chairman of the Board of Nivalis said: "We believe this transaction with Alpine is an exciting path forward to advance important new therapies for patients and to create significant value for shareholders.

"Alpine, which has discovered novel ways to target the immune synapse, is led by a solid and experienced management team that has successfully brought immunotherapies to market."

Mitchell H. Gold, M.D., Executive Chairman and Chief Executive Officer of Alpine Immune Sciences said: "This merger provides a unique opportunity to accelerate the development of our novel immunotherapy platform focused on both inflammation and immuno-oncology.

"We look forward to building on our early success by taking multiple novel programs into the clinic to help patients with significant medical needs."

Nivalis' financial advisor for the transaction is Ladenburg Thalmann & Co. Inc., and Nivalis' legal advisors are Latham & Watkins LLP and Ballard Spahr LLP. Alpine's legal advisors are Sidley Austin LLP and Ascent Law Partners LLP.

About the Proposed Transaction

On January 3, 2017, Nivalis announced the initiation of a process to explore and review a range of strategic alternatives focused on maximizing stockholder value from its clinical assets and cash resources.

As part of that process, bids were solicited from interested parties and over eighty interested parties submitted a proposal to enter into a strategic transaction with Nivalis.

After a thorough review of each alternative and extensive negotiation with Alpine Immune Sciences, Nivalis' board of directors unanimously decided to approve and enter into a definitive merger agreement with Alpine.

Frazier Healthcare Partners, Alpine BioVentures, and OrbiMed Advisors will invest a combined additional $17 million into Alpine Immune Sciences prior to the close of the transaction based on a valuation of Alpine which is consistent with that used to calculate the exchange ratio under the merger agreement.

Following the merger, current Alpine shareholders will own approximately 74 percent of the combined company and current Nivalis shareholders will own approximately 26 percent of the combined company.

The exchange ratio is based on a valuation of Nivalis equal to $50 million, which includes approximately $44 million in cash expected to be held by Nivalis at the time of closing. The combined company is expected to have approximately $90 million in cash and cash equivalents at the closing of the transaction.

The transaction has been approved by the board of directors of both companies. The merger is expected to close in the third quarter of 2017, subject to the approval of the stockholders of each company and the satisfaction or waiver of other customary conditions.

Management and Organization

Mitchell H. Gold, M.D., Alpine's Executive Chairman and Chief Executive Officer, will become the Chairman and Chief Executive Officer of the combined company. Following the merger, the board of directors of the combined company will expand to seven seats with two representatives from Nivalis.

Upon closing of the transaction, the name of the combined company will become Alpine Immune Sciences, Inc. and shares of the combined company's common stock will trade on the NASDAQ Global Market.