US-based drug developer NGM Biopharmaceuticals went public today in a $107m initial public offering that provided exits to pharmaceutical companies Merck & Co and Takeda.
The IPO consisted of approximately 6.7 million shares issued on the Nasdaq Global Select Market and priced at $16.00 each, at the top of the $14 to $16 range NGM set late last month. Merck & Co has acquired $65.9m more shares in a concurrent private placement.
NGM utilises what it calls a biology-centric approach to drug discovery and is working on treatments for cancer, liver, cardio-metabolic and ophthalmic diseases.
The company will put $95m to $105m of the proceeds from the offering into advancing its lead drug candidate, NGM282, a treatment for a variation of fatty liver disease known as non-alcoholic steatohepatitis. It is expected to enter phase 2b clinical development later this year.
Between $45m and $55m will go to the development of the rest of NGM’s pipeline, which includes two candidates it has been working with Merck on, but which NGM will gain full control of from next month.
The offering comes after $295m in funding for NGM from investors including Merck, which paid $106m for a 15% stake in the company through a 2015 collaboration agreement, and Takeda’s corporate venturing unit, Takeda Ventures.
Column Group, Prospect Ventures, Tichenor Ventures and Topspin Fund are also shareholders, and all four participated in the company’s $57.5m series D round, which closed shortly before the Merck deal.
Merck’s stake in NGM will increase from 16.3% to 19.9% once the offering and placement have closed. Its other main investors are The Column Group (a 23.7% stake post-IPO), Prospect Ventures Partners (7.6%), Topspin Fund (7.4%) and Rho Ventures (5.8%).
Joint book-running managers Goldman Sachs, Citigroup Global Markets and Cowen and Company have the chance to acquire another 1 million shares, potentially increasing the size of the offering to $123m. NGM’s shares opened at $15.19 today and are trading at at time of publication.
