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Merck to pay NGM up to $20M to extend pact for developing biologic therapies

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Merck to pay NGM up to $20M to extend pact for developing biologic therapies

Merck & Co. Inc. extended its collaboration to develop biologic therapeutics for various diseases with NGM Biopharmaceuticals Inc. until March 2022.

The original five-year agreement between Kenilworth, N.J.-based Merck and South San Francisco, Calif.-based NGM was set to expire in early 2020.

Merck will pay privately held NGM up to $20 million to fund NGM's research and development during the two-year extension period instead of paying a $20 million extension fee.

Under the same collaboration, originally signed in 2015, Merck in January exercised its option to acquire NGM's investigational medicine NGM313 to treat liver disease and type 2 diabetes for $20 million.

In addition, Merck terminated its license to NGM's program, which targets the growth differentiation factor 15, or GDF15, protein to treat obesity. The program included two investigational product candidates — NGM386 and NGM395.

Merck's decision was based on preliminary data from its phase 1 trial of NGM386, which showed that the drug did not help in reducing body weight compared to placebo.

Merck will license the GDF15 program back to NGM, subject to receiving any royalty on any future product sales arising out of the program.

NGM said in a March 20 press release that it will study the data from Merck and decide whether to continue the development of NGM386 and NGM395.

NGM added that the termination does not impact any other programs under the collaboration.

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