Nivalis Therapeutics Announces Corporate Restructuring
January 12 2017 - 4:10PM
Nivalis Therapeutics, Inc. (NASDAQ:NVLS), a clinical stage
pharmaceutical company focused on developing innovative solutions
for people with cystic fibrosis (CF), today announced that its
Board of Directors has approved a restructuring plan as part of the
Company’s initiative to explore strategic alternatives focused on
maximizing stockholder value from its clinical assets and cash
resources.
The Company intends to complete a reduction in
force affecting 25 employees, including Jon Congleton, President
and Chief Executive Officer, and David Rodman, M.D., Chief Medical
Officer and Executive Vice President of Discovery. The reductions
are expected to occur between January 15, 2017 and March 31, 2017,
after which, the Company will have approximately five remaining
employees. As a result of the restructuring plan, the Company
estimates that it will incur cash severance costs of approximately
$3 million, which are expected to be paid during the first half of
2017. The reduction in force is intended to preserve the Company’s
cash while it assesses various strategic alternatives, as announced
earlier this month. The Company currently projects that it will
have approximately $45-$47 million of net cash available for the
potential strategic transaction. This projection is based on the
Company’s current expectations and assumptions, including the
consummation of a transaction during the third quarter of 2017, and
the actual amount of net cash available could differ materially
from the Company’s current estimate.
“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, M.D., Chairman of the Board of Directors. “Nivalis is
committed to maximizing shareholder value by preserving the
Company’s cash, and unfortunately this necessitates the announced
restructuring.”
Mr. Congleton will be stepping down from his
role as President and Chief Executive Officer effective January 15,
2017, at which time he will also resign from the Board of
Directors.
The Board of Directors has appointed Mr. Michael
Carruthers, the Company’s Chief Financial Officer, as interim
President, effective January 15, 2017.
Forward Looking StatementsThis press release
contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, including, but
not limited to, statements related to the workforce reduction plan
and the amount and expected timing of costs, expense savings and
other charges related to these activities, the potential for, and
timing of, a strategic transaction involving the Company and
expected net cash available for a potential transaction after
payment of costs, expenses and other liabilities in connection with
the closing of a potential transaction. These forward-looking
statements are based on the current intent and expectations of the
management of the Company. These statements are not guarantees of
future performance or actions and involve risks and uncertainties
that are difficult to predict. The Company’s actual performance in
the timing and outcome of actions and events may differ materially
from those expressed or implied in the forward-looking statements
because such statements are based on assumptions and projections
relating to these activities that are inherently uncertain and may
also be affected by risks such as: that the costs related to
the workforce reduction plan may be higher than estimated; that the
savings related to the workforce reduction plan may be lower than
expected; that the Company may be unsuccessful in negotiating and
successfully completing a strategic transaction or that
consummating a transaction takes longer than expected; that costs
associated with exploring and closing a strategic transaction are
higher than anticipated; and the other risks and uncertainties
described in the Company’s SEC reports filed under the Securities
Exchange Act of 1934, including its annual report on Form 10-K
filed with the Securities and Exchange Commission on March 8, 2016.
All information in this press release is as of the date of this
release, and Nivalis undertakes no duty to update or revise this
information unless required by law.
Contacts:
Investor Relations
John Graziano
1-646-378-2942
jgraziano@troutgroup.com
Media Relations
Lindsay Rocco
1-862-596-1304
lrocco@elixirhealthpr.com
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