US-based biotechnology company NGM Biopharmaceuticals has secured a collaboration agreement with pharmaceutical company Merck that will see it receive $450m over the next five years, according to Forbes.
Merck will provide NGM with $106m in equity funding in exchange for a 15% stake, as well as a $94m upfront cash payment. It will supply the remaining money in yearly $50m instalments that will support research and development at NGM.
Merck will gain options on preclinical drug candidates through the deal which it hopes will be able to treat chronic conditions such as diabetes and obesity.
NGM meanwhile will retain full ownership of its lead drug candidate, which is aimed at an autoimmune disease of the liver known as primary biliary cirrhosis and at a fatty liver disease known as nonalcoholic steatohepatitis.
Merck will leave NGM to do the initial research, and will only step in to assist once candidates have matured to clinical trials. NGM plans on expanding its research and development team by around 25.
Founded in 2008, NGM had previously raised approximately $130m from backers including Takeda Ventures, the corporate venturing arm of pharmaceutical company Takeda, Rho Ventures, The Column Group, Prospect Venture Partners, Tichenor Ventures and Topspin Partners.