NGM raises $122M for new research plans after going private

NGM Biopharmaceuticals, a company that went private earlier in 2023, has successfully secured $122 million from venture investors to support its newly outlined drug development strategies. The funding comes from a Series A round, as revealed by NGM on Wednesday, and aims to finance a key registrational trial for the company’s drug aldafermin, targeted at treating primary sclerosing cholangitis (PSC). Additionally, the funds will support a Phase 2 trial for another drug candidate, NGM120, aimed at addressing hyperemesis gravidarum, a rare pregnancy-related condition characterized by severe and frequent vomiting.

This funding marks the first significant financial boost for NGM since its transition from a public entity to a private company in April. The move to privatize was announced in February, involving affiliates of The Column Group, which is NGM’s largest shareholder and the main investor in the recent Series A funding round.

Founded in 2007, NGM Biopharmaceuticals has ventured into various therapeutic areas over the years. The company's research efforts culminated in an initial public offering in 2019, which initially saw a rise in the company’s stock value. However, subsequent clinical setbacks hampered its progress. Aldafermin, initially tested as a treatment for metabolic dysfunction-associated steatohepatitis (MASH), did not meet expectations in a mid-stage trial in 2021. Another drug candidate aimed at treating vision loss also failed in a clinical study the following year.

In response to these challenges, NGM implemented cost-saving measures, including staff layoffs in April 2023. By the end of that year, the company's shares had plummeted to less than $1 each. The privatization move saw affiliates of The Column Group buying each outstanding NGM share for $1.55, which they and other stockholders did not already own.

David Woodhouse, CEO of NGM, believes that the company's turn to private ownership is advantageous. "Private is a better place to be," Woodhouse stated in an interview. He expressed confidence that the Series A funding confirms NGM’s ability to access capital as a private entity, aligned with its current developmental programs.

NGM’s current focus is on advancing aldafermin for PSC and NGM120 for hyperemesis gravidarum, while continuing some oncology research. Woodhouse explained that the company evaluated its previous assets to determine where their resources would be most valuable. They concluded that both aldafermin in PSC and NGM120 in hyperemesis gravidarum presented highly compelling prospects deserving of investment.

Primary sclerosing cholangitis (PSC) is a disease that causes inflammation and damage to bile ducts, potentially leading to liver failure and bile duct cancer. Aldafermin is an analog of a hormone believed to help regulate bile acid levels. Hyperemesis gravidarum, on the other hand, is an extreme form of nausea and vomiting during pregnancy, distinct from typical morning sickness. This condition can lead to severe dehydration, malnutrition, and, in more severe cases, complications like preeclampsia and preterm birth. NGM120 aims to block signaling of a protein known as GDF15, which is associated with vomiting reflexes in cells near the brain.

Currently, there are no approved therapies for either condition in the U.S. NGM plans to initiate both the registrational trial for aldafermin and the Phase 2 study for NGM120 in the fourth quarter of this year.