NGM bags $107M from an IPO designed to back their play in the big NASH R&D race

Keying off some encouraging preliminary Phase II data for NASH and a longstanding collaboration with Merck that has generated hundreds of millions of dollars in research support, NGM Bio joined the 2019 class of biotech IPOs with a $107 million windfall.

The company successfully sold 6.7 million shares at $16 — the top of the range.

Jin-Long Chen

They’ll use the new money to follow through on their ongoing Phase II for NGM282, gambling that they can continue to impress investors with the data as they pursue their grand ambition of winning an OK for a best-in-class NASH drug. They’ll continue to reap data from the Phase II this year as researchers track results in more patients, then shift to a Phase IIb that reads out in 2020, which they hope will set the stage for a Phase III pivotal program.

It hasn’t all been clear sailing at NGM, though. Their lead drug is a modified version of FGF19, a human hormone that has been linked to liver cancer. That link prompted the FDA to put a hold on their IND, according to the S-1, back in 2014 when they were planning to test it for diabetes. They later dropped the diabetes plan and moved on to NASH, with no new regulatory issues coming up.

NGM got to this point in large part because of the close ties between Merck R&D chief Roger Perlmutter and NGM CSO Jin-Long Chen. Merck paid NGM $200 million to kick off their relationship in 2015, with $106 million going for a 15% equity stake. And they have remained eager to foster the alliance. Just a couple of weeks ago Merck agreed to hand over another $20 million of research support to extend their alliance by an extra 2 years. And Merck also agreed to back the IPO, beefing up its stake in the company to close to 20%.

Their stock starts trading today as $NGM.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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