Palvella Therapeutics (PVLA) M&A Announcement summary

Deal rationale and strategic fit

• Merger creates a Nasdaq-listed, clinical-stage biopharma focused on novel therapies for serious rare genetic skin diseases with high unmet need and low competition, leveraging Palvella’s QTORIN platform and Pieris’ legacy assets.

• Combined entity will advance QTORIN™ rapamycin, targeting microcystic lymphatic malformations and cutaneous venous malformations.

• Strategic review process led to this transaction to deliver value to stockholders and preserve potential milestone and royalty streams via CVRs.

Financial terms and conditions

• All-stock transaction; pre-merger Palvella stockholders to own approximately 82% and Pieris stockholders about 18% of the combined company, subject to adjustment and prior to concurrent financing.

• Upon closing, the combined company is expected to have approximately $80.5 million in cash, including $78.9 million from an oversubscribed concurrent private financing.

• Pieris stockholders will receive CVRs tied to proceeds from legacy partnerships, licensing, and potential R&D tax credits.

Synergies and expected cost savings

• The merger combines Palvella’s rare disease expertise and pipeline with Pieris’s financial assets and partnership streams, aiming for operational efficiency and capital discipline.

• Combined cash expected to fund operations and clinical milestones into the second half of 2027.

• Financing supports advancement of QTORIN™ rapamycin through pivotal Phase 3 and additional clinical trials.