Merck & Co and NGM Biopharmaceuticals team to take on obesity and diabetes

By Gareth Macdonald

- Last updated on GMT

Merck & Co and NGM team
Merck & Co and NGM team
Merck & Co and NGM Biopharmaceuticals have announced their collaboration on a range of biological therapeutics, including treatments for both diabetes and obesity.   

NGM is to receive an upfront payment of $94m to support early phase investigations over an initial 5 year period, with potential funds of up to $250m should they meet milestone criteria. Merck has additionally paid a 15% equity stake in NGM for $106m.

The pharmaceutical giant entered a price war to gain rights over the NP201 compound, still in its preclinical stages of development for the treatment of diabetes, obesity and nonalcoholic steatohepatitis (NASH). The collaboration hopes to combine the success of NGM's existing platform of therapies, with Merck's later stage capabilities, to advance innovative biologics in these areas.

Merck said: “[NGM] has a lot of important early phase research, and when you combine that with Merck's strength, we will have great opportunity ahead of us with innovative biologics.”

NGM William Rieflin agreed, adding: “We look forward to working with Merck to generate a robust pipeline of therapies with the potential to make a significant difference in the lives of patients​.”

Under the agreement, NGM will head all research, discovery and early stage development, whilst having complete autonomy to identify and pursue any program that they may choose. Merck's role kicks in later, when trials are required for human proof of concept. Following this, they then have the option to license any resulting programs, and lead the global product development and commercialisation.

NGM appeared on Merck's radar having been recognised for its unique approach to developing treatments. Unlike conventional platforms that use in vitro methods of testing, its focus lies instead with informatics from in vivo models.

It was also granted Fast Track Designation by the FDA for the compound NGM282, of which has been developed for NASH and primary biliary cirrhosis (PBC). This program is worth noting however, not to feature in any agreement with Merck.

Merck has recently been generating opportunities to attract new products, and just last month, signed a $100m deal with RNA Therapeutics. Last year it sank $3.9bn into hepatitis C treatment developer Idenix Pharmaceuticals.

The market for both obesity and diabetes medications is expected to grow over the coming years. The anti-diabetes drug industry was worth $35.6bn in 2012 and is predicted to increase in value to $55.3bn in 2017.

Whilst being closely related to diabetes, the obesity market is also set to increase in value from $420m in 2010 to $2.6 billion in 2020 in the US, France, Germany, Italy, Spain, UK, and Japan alone.

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