A venture firm breathes new life into an old NGM drug
KdT Ventures is launching a new biotechnology startup based on a drug it’s licensing from NGM Biopharmaceuticals, the companies announced Thursday.
The deal hands the Austin-based venture firm’s currently unnamed startup worldwide rights to an experimental drug called NGM313, which will be developed for an unspecified rare disease. NGM Bio will get a stake in the new company, an undisclosed upfront cash payment and potentially up to $608 million in future payouts should NGM313 hit certain development, regulatory and sales targets. NGM Bio could also receive sales royalties if the drug eventually gets to market.
The deal represents a revival for NGM313, an antibody drug that activates a cluster of proteins involved in metabolism. NGM once developed the drug for diabetes and a liver condition now known as metabolic dysfunction-associated steatohepatitis, or MASH and, in 2019, licensed it to Merck & Co. as part of a longstanding partnership. Merck stopped testing in 2023 and returned ownership rights, however, after the drug didn’t reach the pharmaceutical company’s threshold for effectiveness in a Phase 2 trial.
Still, in Thursday’s statement, NGM Bio and KdT noted how NGM313 has been studied in more than 300 trial volunteers, demonstrating proof that it works as intended and has a “favorable tolerability profile.” Those characteristics have led KdT to form a startup around it and evaluate the drug in a non-metabolic disease. A Phase 2 trial is expected to start next year.
“Our partnership with NGM Bio to advance NGM313 into clinical development for an important and chronically underserved patient population reflects KdT’s commitment to backing transformative science that meaningfully impacts patients’ lives,” Cain McClary, KdT’s founder and managing partner, said in the statement.
The deal also marks the latest turn in what’s been a roller coaster ride for NGM Bio. Launched in 2007, the company raised nearly $300 million in private funding and parlayed its relationship with Merck into a pipeline of drugs for several different conditions as well as an initial public offering in 2019. But the company’s fortunes changed once publicly traded, as two of its candidates failed mid-stage trials in MASH and geographic atrophy.
The company laid off a third of its workforce in 2023 and a year later, agreed to be taken private again in a deal with affiliates of The Column Group. The firm led a $122 million Series A round in July to help fund a revamped research plan for NGM, which includes a pair of Phase 2 tests in the chronic liver disease primary sclerosing cholangitis and hyperemesis gravidarum, a rare condition of pregnancy.
“[W]e’re excited for NGM313’s next chapter under the stewardship of KdT’s new venture,” said NGM Bio CEO David Woodhouse, in the statement.
Additional details on the new startup will be shared in the coming months, McClary added.
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