Merck Licenses NASH Compound From NGM Biopharma for $20 Million

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Merck & Company has licensed NGM313, now renamed MK-3655, from South San Francisco-based NGM Biopharmaceuticals. MK-3655 is a monoclonal antibody agonist of the b-Klotho/FGFR1c receptor complex. The drug is being studied to treat nonalcoholic steatohepatitis (NASH) and type 2 diabetes.

The option was triggered by NGM’s completion of a proof-of-concept study of the compound. Under the terms of the deal, Merck picks up exclusive worldwide rights to develop, manufacture and commercialize MK-3655 and related compounds. 

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Merck paid NGM $20 million up front. NGM holds an option at the launch of the first Phase III clinical trial of the compound, to participate in up to 50 percent of a global cost and revenue sharing deal for the drug. If NGM chooses not to exercise that option, it will be eligible for more payments associated with the progress of MK-3665 in addition to commercial milestones and tiered royalties.

“Merck’s decision to exercise its option for NGM313 provides a strong endorsement of NGM’s powerful drug discovery engine and our ability to translate our novel biologic insights in the clinic,” stated David Woodhouse, NGM’s chief executive officer. “The Phase Ib data we presented last year demonstrate NGM313’s potential as a potent, once-monthly insulin sensitizer for the treatment of both NASH and type 2 diabetes. We look forward to Merck’s advancement of this program through clinical development to potentially address the substantial unmet medical need for a single treatment that addresses pathophysiological states common to both diseases.”

NGM released positive data from its Phase Ib trial of NGM313 in November 2018. The company was evaluating it in obese, insulin resistant patients with nonalcoholic fatty liver disease (NAFLD). They showed that a single dose of the compound had a statistically significant decrease in liver fat content and improvements in several metabolic parameters after five weeks.

Merck expects to advance MK-3655 into a Phase IIb trial in NASH with or without diabetes.

NASH is a huge unmet medical need linked to the obesity epidemic. It resembles cirrhosis of the liver but affects people who are not necessarily heavy drinkers. There are no specific treatments except for lifestyle changes—exercise and losing weight. 

NASH can cause liver scarring and inflammation that can lead to liver cirrhosis, as well as cardiac and lung problems, liver cancer and death.

The National Institutes of Health (NIH) estimate that as many as 30 million Americans, or 12 percent of U.S. adults, currently have NASH. Maria Yataco, a gastroenterologist at the Mayo Clinic in Jacksonville, Fla., who conducts NASH and liver disease research, told CNBC, “By 2020 NASH will overtake hepatitis C as the No. 1 cause of liver transplantation in the U.S.”

There are even people in their 20s and 30s showing signs of NASH, according to Leona Kim-Schluger, a hepatologist and professor at the Recanati/Miller Transplantation Institute at Mount Sinai Hospital in New York. “There is even NASH in the pediatric population,” she told CNBC.

The global market for a NASH treatment is projected to be about $35 billion. According to BioMedtracker, there are 55 NASH drugs in clinical trials, with only four in Phase III trials. Most, 33, are in Phase II.

Other companies focused on NASH include Gilead Sciences, AllerganIntercept Pharmaceuticals, and French biotech company GENFIT. Intercept’s Ocaliva (obeticholic acid) has been approved by the U.S. Food and Drug Administration (FDA) to treat another liver disease, primary biliary cholangitis. It is currently in a Phase III trial for patients with advanced-stage NASH, with interim data expected in the first half of this year.

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