13D Filing: James E. Flynn and Nivalis Therapeutics Inc. (NVLS)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

[Rule 13d-101]

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO §
24.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO § 240.13D-2(a)

(Amendment No. 2)*

Nivalis
Therapeutics, Inc.

(Name
of Issuer)

Common
Stock, par value $0.001 per share

(Title
of Class of Securities)

65481J109

(CUSIP
Number)

(Name,
Address and Telephone Number of Person Authorized to Receive Notices and Communications)

April
17, 2017

(Date
of Event which Requires Filing of this Statement)

If the filing person
has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ☐.

Note: Schedules
filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7
for other parties to whom copies are to be sent.

(Continued on following
pages)

(Page 1 of 15 Pages)

* The remainder of this cover page shall be filled out for a
reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page
shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”)
or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).

SCHEDULE 13D

(1) Comprised of 1,124,740 shares held by Deerfield Special
Situations Fund, L.P. , 402,064 shares held by Deerfield Private Design, L.P., 647,152 shares held by Deerfield Private Design
International, L.P., 726,242 shares held by Deerfield Private Design Fund II, L.P., and 832,216 shares held by Deerfield Private
Design International II, L.P.

SCHEDULE 13D

 SCHEDULE 13D

 SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

(2) Comprised of 1,124,740 shares held by Deerfield Special
Situations Fund, L.P., 402,064 shares held by Deerfield Private Design, L.P., 647,152 shares held by Deerfield Private Design
International, L.P., 726,242 shares held by Deerfield Private Design Fund II, L.P., 832,216 shares held by Deerfield Private Design
International II, L.P. and 9,225 shares of Common Stock
underlying an option held by Howard P. Furst, a partner in Deerfield Management Company, L.P. and a director of the Issuer. Does
not include 3,075 shares underlying such option, representing the portion thereof that is not vested and will not vest within
60 days from the date of this report.

SCHEDULE 13D

SCHEDULE 13D

(3) Comprised of 1,124,740 shares held by Deerfield Special Situations Fund, L.P., 402,064 shares held
by Deerfield Private Design, L.P., 647,152 shares held by Deerfield Private Design International, L.P., 726,242 shares held by
Deerfield Private Design Fund II, L.P., 832,216 shares held by Deerfield Private Design International II, L.P. and 9,225 shares
of Common Stock underlying an option held by Howard P. Furst, a partner in Deerfield Management Company, L.P. and a director of
the Issuer. Does not include 3,075 shares underlying such option, representing the portion thereof that is not vested and will
not vest within 60 days from the date of this report.

This Amendment No. 2 (this “Amendment”)
to Schedule 13D amends the Schedule 13D filed on June 26, 2015 by (i) Deerfield Mgmt, L.P. (“Deerfield Mgmt”),
(ii) Deerfield Special Situations Fund, L.P. (“Deerfield Special Situations Fund”), (iii) Deerfield Management
Company, L.P. (“Deerfield Management”), (iv) Deerfield Private Design Fund, L.P. (“Deerfield Private
Design”), (v) Deerfield Private Design International, L.P. (“Deerfield Private Design International”),
(vi) Deerfield Private Design Fund II, L.P. (“Deerfield Private Design II”), (vii) Deerfield Private Design
International II, L.P. (“Deerfield Private Design International II”) and (viii) James E. Flynn, a natural person
(“Flynn” and collectively with Deerfield Mgmt, Deerfield Special Situations Fund, Deerfield Management, Deerfield
Private Design, Deerfield Private Design International, Deerfield Private Design II and Deerfield Private Design International
II, the “Reporting Persons”), with respect to the securities of Nivalis Therapeutics, Inc. (the “Issuer”),
as amended by Amendment No. 1 thereto, filed on September 20, 2016 (as amended, the “Schedule 13D”). Deerfield
Special Situations Fund, Deerfield Private Design, Deerfield Private Design International, Deerfield Private Design II and Deerfield
Private Design International II are collectively referred to herein as the “Funds.” The principal purpose of
this Amendment is to report the Funds’ entry into a support agreement with the Issuer, as described below.

Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to them in the Scheduled 13D.

Item 4 of the Schedule 13D is hereby
amended by adding the following:

On April 18, 2017, the Issuer announced
that it entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), dated as of
April 18, 2017, with Nautilus Merger Sub, Inc. (“Merger Sub”) and Alpine Immune Sciences, Inc. (“Alpine”),
which provides, among other things, for the merger of Merger Sub with and into Alpine (the “Merger”). As a condition
to Alpine’s willingness to enter into the Merger Agreement, on April 17, 2017, each of the Funds entered into a Support Agreement
with Alpine and certain other stockholders of the Issuer signatory thereto. The Support Agreement provides that each Fund will
vote all of the shares of Common Stock held by such Fund together with any shares of Common Stock acquired by such Fund after the
date of the Support Agreement (the “Subject Shares”) (or cause the record holder of the Subject Shares to vote)
in favor of the approval of the Merger Agreement, the transactions contemplated thereby (including the Merger), certain amendments
to the Issuer’s certificate of incorporation, any proposal to adjourn or postpone a meeting with respect to the Merger to
a later date, and any other proposal included in a proxy statement in connection with, or related to, the Merger for which the
Issuer’s board of directors has recommended that the Issuer’s stockholder vote in favor. The Support Agreement also
provides that each Fund will vote (or cause to be voted) all Subject Shares against any competing acquisition proposal.

The Support Agreement prohibits the Funds
from transferring any Subject Shares or taking any action that would have the effect of preventing the Funds from performing their
obligations under the Support Agreement, in each case, subject to customary exceptions set forth in the Support Agreement. Pursuant
to the Support Agreement, each Fund irrevocably appointed the Company, and any individual designated by the Company, as its proxy
and attorney-in-fact to vote the Subject Shares in accordance with the Support Agreement.

The foregoing summary of the Support Agreement
is not intended to be complete and is qualified in its entirety by reference to the full text of the Support Agreement, a copy
of which is incorporated by reference as Exhibit 99.3 hereto.

Item 5. Interest in Securities of the Issuer.

Items 5(a), (b) and (c) of the Schedule
13D are hereby amended and restated as follows:

(a)

(1)       Deerfield
Mgmt

(2)        Deerfield
Management

(3)        Deerfield
Special Situations Fund

Number of shares: 1,124,740

Percentage of shares: 7.18%

(4)       Deerfield
Private Design

Number of shares: 402,064

Percentage of shares: 2.57%

(5)       Deerfield
Private Design International

Number of Shares: 647,152

Percentage of Shares: 4.13%

(6)       Deerfield
Private Design II

Number of Shares: 726,242

Percentage of Shares: 4.64%

(7)       Deerfield
Private Design International II

Number of Shares: 832,216

Percentage of Shares: 5.32%

(8)       Flynn

(b)

(1)        Deerfield
Mgmt

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote:
3,732,414

Sole power to dispose or to direct the disposition:
0

Shared power to dispose or direct the disposition:
3,732,414

(2)       Deerfield
Management

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote:
3,741,639

Sole power to dispose or to direct the disposition:
0

Shared power to dispose or direct the disposition:
3,741,639

(3)       Deerfield
Special Situations Fund

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote:
1,124,740

Sole power to dispose or to direct the disposition:
0

Shared power to dispose or direct the disposition:
1,124,740

(4)       Deerfield
Private Design

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote:
402,064

Sole power to dispose or to direct the disposition:
0

Shared power to dispose or direct the disposition:
402,064

(5)       Deerfield
Private Design International

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote:
647,152

Sole power to dispose or to direct the disposition:
0

Shared power to dispose or direct the disposition:
647,152

(6)       Deerfield
Private Design II

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote:
726,242

Sole power to dispose or to direct the disposition:
0

Shared power to dispose or direct the disposition:
726,242

(7)       Deerfield
Private Design International II

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote:
832,216

Sole power to dispose or to direct the disposition:
0

Shared power to dispose or direct the disposition:
832,216

(8)       Flynn

Sole power to vote or direct the vote: 0

Shared power to vote or direct the vote:
3,741,639

Sole power to dispose or to direct the disposition:
0

Shared power to dispose or direct the disposition:
3,741,639

Flynn is the sole member of the general
partner of each of Deerfield Mgmt and Deerfield Management. Deerfield Mgmt is the general partner, and Deerfield Management is
the investment advisor, of Deerfield Special Situations Fund, Deerfield Private Design, Deerfield Private Design International,
Deerfield Private Design II and Deerfield Private Design International II. Pursuant to an arrangement between Deerfield Management
and Furst, for so long as Furst is employed by Deerfield Management, any compensation that Furst receives from the Issuer is for
the economic benefit of Deerfield Management and must be transferred to Deerfield Management, for no consideration, subject to
applicable restrictions on transfer. See Item 6 for additional information regarding such arrangement.

(c) On September 12, 2016, the Issuer granted
to Furst, a partner in Deerfield Management and a director of the Issuer, the September 2016 Option. The September 2016 Option
vests in 12 equal installments, commencing on October 12, 2016, and is exercisable for $7.77 per share.

Item 6. Contracts, Arrangements, Understandings
or Relationships With Respect to Securities of the Issuer.

Item 6 is hereby amended by adding the
following:

The information set forth in Item 4 with
respect to the Support Agreement is incorporated by reference herein.

Item 7 is hereby amended by adding the
following:

SIGNATURE

After reasonable inquiry
and to the best of their knowledge and belief, the undersigned certify that the information set forth in this statement is true,
complete and correct.

Dated: April 24, 2017