NGM Biopharmaceuticals, and Merck & Co., have entered into a multiyear partnership for research, development, discovery, and commercialization of novel biologic compounds across a wide range of therapeutic areas.

Merck will make an initial payment to NGM of $94 million and will purchase a 15% equity stake in NGM for $106 million. Merck will also commit up to $250 million to fund all of NGM’s efforts under the initial five-year term of the collaboration, with the potential for additional funding if certain conditions are met.

“We are very pleased to establish this alliance with Merck, which will be transformational for NGM, providing us with the resources and flexibility to pursue our ambitious research and development goals while preserving our unique drug discovery culture,” said William J. Rieflin, CEO of NGM. “We look forward to working with Merck to generate a robust pipeline of therapies with the potential to make a significant difference in the lives of patients.”

This collaboration, which will encompass multiple drug candidates that are currently in preclinical development at NGM, will include NP201, which is being assessed for the treatment of diabetes, obesity, and nonalcoholic steatohepatits (NASH). Merck will retain the option to license all subsequent NGM programs following proof of concept trials in humans. Should Merck choose to exercise this option, they will lead the global development and commercialization for any approved product.  However, NGM will lead the research and development of existing preclinical compounds, and have the independence to identify and pursue other discovery projects at its discretion.  

“NGM has developed a uniquely powerful research program that has permitted identification of novel, and quite consequential, pathways for metabolic regulation,” said Roger M. Perlmutter, M.D., Ph.D., president of Merck Research Laboratories. “Through this new collaboration, we hope to apply Merck’s well-established translational capabilities to advance innovative biologics that address the needs of patients suffering from diabetes, metabolic dysregulation, and malignancy.”

The terms of the partnership also stipulate that NGM may elect to either receive milestone and royalty payments or, in certain cases, to co-fund development and participate in a global cost and revenue share arrangement of up to 50%, prior to Merck initiating a Phase III study for a licensed program. Furthermore, NGM has the option to participate in the co-promotion of any co-funded program within the United States. Merck will have the option to extend the research agreement for two additional two-year terms.

Not part of the current deal is NGM’s lead program, NGM282, presently in clinical development for primary biliary cirrhosis and NASH, in addition to programs that are the focus of NGM’s pre-existing collaboration agreements.

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