Alpine’s data room was the most exclusive club in biotech. Then Vertex became the VIP

Alpine's data room was the most exclusive club in biotech. Then Vertex became the VIP

After Alpine Immune Sciences presented initial data for the kidney disease therapy povetacicept at a conference in November 2023, the biotech’s confidential data room became the most exclusive club in biotech. Four unnamed companies, plus Vertex Pharmaceuticals, already had confidentiality agreements in place with the autoimmune and inflammatory disease biotech at the time of the data reveal, according to regulatory documents posted Monday. But Vertex would ultimately prevail, buying Alpine for $4.9 billion on April 10. Alpine showed that low-dose povetacicept improved proteinuria in patients with IgA nephropathy (IgAN) in a poster session at the American Society of Nephrology Kidney Week conference on Nov. 2, setting off a hot pursuit for a deal. The company moved to get a phase 3 test of povetacicept underway, while executives fielded calls from interested companies hoping to learn more about the development plan. Data rooms were set up, but the documents show that Alpine kept a strict “use it or lose it” policy, cutting off several companies if they didn’t log in. According to the filing, at “an industry conference held in San Francisco on January 8 through January 11, 2024”—likely the deal bonanza known as the J.P. Morgan Healthcare conference—Alpine’s executive met with representatives from Vertex and four other companies that had been interested in povetacicept for a while. Meetings continued through February, with Vertex expressing interest in some sort of strategic business combination transaction. The companies met on Feb. 28 to discuss clinical data for povetacicept from the phase 1b/2a study. The same day, Alpine cut off one of the first companies that had been dancing around a potential deal due to a lack of communication. In early March, a business development executive from Vertex called Alpine CEO Mitchell Gold, M.D., to tell him the cystic fibrosis pharma was interested in a deal. Meanwhile, Alpine teased more data for povetacicept to come at the upcoming World Congress of Nephrology in April. Gold received more details from Vertex Executive Chairman Jeffrey Leiden on March 12, with a deal proposed to arrive in two weeks, once certain due diligence information was sent by the biotech. Once the basic terms were aligned, Leiden said he wanted the deal to close in about four to six weeks. Gold expressed concerns about the timeline given the data to be released at the kidney conference and the potential for Alpine to raise capital following the release. Still, he said he would bring Vertex’s plans to the board. The board met that day, deciding that they would not release nonpublic information to Vertex, but that the pharma was welcome to make an initial acquisition offer based on public information. The deal would then need to arrive ahead of the conference, or else wait until afterward. Around this time, Alpine said it cut off two other companies from an electronic data room due to non-communication, while another company circled back to get access. Alpine closed the markets on March 19 at $39.95 per share, a 13% increase over the day before. The next day, Vertex delivered its proposal, stating that it would like to buy Alpine for $60 per share using existing cash resources. After considering the offer and the potential that seeking competing proposals could risk a good deal with Vertex, the board authorized its financial advisor to reach out to a company referred to in the documents only as Company D, “given Alpine’s potential strategic fit” and because of the company’s “financial capacity to make a competitive proposal.” Turns out Company D was indeed interested. Gold returned to Vertex and said the offer was not enough to enter into exclusivity but offered to make a presentation in hopes of getting better terms. After much back and forth in late March and early April, Company D ultimately declined to submit an offer, saying that it “was not in position to make an acquisition proposal that it believed would be competitive,” per the filing. Vertex came back on April 5 offering $64 per share, but Gold pushed for $65. After Vertex agreed to Gold’s ask in writing, Alpine’s advisors determined that the offer was likely the best option and recommended that the board go forward. On April 10, the deal was finalized and the companies announced their merger via a press release. Alpine then released the conference data showing that povetacicept spurred a 64.1% reduction in proteinuria, an indicator of poor kidney filtration. Alpine is now planning to launch a phase 3 trial for patients with the indication in the second half of the year and is also testing the drug in patients with lupus and autoimmune cytopenias.

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