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Merck Sees No Future for NGM Bio’s Eye Drugs and Declines Licensing Options


Two months after NGM Biopharmaceuticals’ drug candidate for a vision-loss disorder failed its mid-stage test, partner Merck is dissociating from that program and others covered by a multi-year research alliance during which the pharmaceutical giant has paid nearly $600 million.

The failed drug candidate, NGM621, was in development for geographic atrophy, a disorder that initially leads to deterioration of a patient’s central vision that can eventually progress to total blindness. In a regulatory filing, NGM said Merck verbally told the company it will not exercise its option to license NGM621 and compounds related to that drug candidate.

The collaboration agreement had given the Merck the option to license NGM621 bundled with other preclinical ophthalmology compounds, but the pharmaceutical said it will not exercise that option either. The notice to South San Francisco-based NGM comes one month before the expiration date of the option.

NGM’s Merck collaboration, which began in 2015, initially spanned a broad range of therapeutic areas. The pharma giant paid $94 million up front and made a $106 million equity investment in the biotech. Merck did exercise an option to develop one program from the alliance, the nonalcoholic steatohepatitis (NASH) drug candidate NGM313. Now renamed MK-3655, the antibody drug is currently in Phase 2 testing under Merck.

Last year, NGM and Merck restructured their alliance to focus on ophthalmology and cardiometabolic disorders. The restructured deal extended the research phase of the pact through the first quarter of 2024. The amended deal gave Merck the option to license compounds upon the completion of a human proof-of-concept study.

Geographic atrophy is characterized by damage to the macula, which is part of the retina. There are no drugs for the vision-loss disorder, which is associated with excessive activity of the complement system, a part of the immune system. NGM621 is an antibody designed to block the complement system protein C3. NGM was in the mix with Apellis Pharmaceuticals and others developing drugs that block complement system proteins in order to slow the progression of geographic atrophy (an FDA decision on the Apellis drug, pegcetacoplan, is expected by late February).

The 320-patient Phase 2 test of NGM621 compared it to a sham injection. Despite failing to meet the main goal of showing a change in the retinal lesions that form from geographic atrophy, the biotech had noted that fewer patients in the treatment arm developed the growth of new blood vessels in the eye that contributes to vision loss. Furthermore, the company said excluding the patients who had the largest lesions at the study’s baseline showed greater reductions in lesions over the course of 52 weeks of treatment. If NGM has since found anything promising from its reanalysis of the trial data, it did not say. Regardless, Merck decided not to pursue anything further with NGM621 or NGM’s other eye programs.

NGM has fallen short with some of its internal R&D. Its wholly owned NASH program, a drug candidate called aldafermin, failed a Phase 2 test last year. The remainder of NGM’s pipeline is in oncology. The most advanced of the five cancer programs is NGM120, an antibody drug currently in mid-stage testing in metastatic pancreatic cancer and cachexia.

Through the end of September, Merck had paid NGM $599.8 million under the collaboration, according to the company’s third quarter financial report. If the company’s geographic atrophy drug candidate has any future, NGM must find someone else to foot the bill. In the quarterly report, NGM said if Merck does not exercise its option on the program, “which it may decide given that the Phase 2 CATALINA trial did not meet its primary endpoint, we would need to partner the program in order to proceed with further development of NGM621, if any.”

The financial report lists $101.4 million in cash and cash equivalents, and $198.7 million in short-term marketable securities. NGM said in the filing that it believes those funds will be enough to support the company for at least 12 months.

Photo: Karen Bleier/AFP, via Getty Images

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