Merck takes stake in NGM amid flurry of pharma deals

Merck & Co has taken an equity stake in NGM Biopharmaceuticals as part of a wide-ranging alliance to develop drugs to treat diabetes, obesity and other metabolic diseases.

The US pharma giant is buying a 15 per cent stake in NGM for $104 million, and also paying $96 million in upfront licensing fees, in return for access to the latter's metabolism research programme and a portfolio of compounds in preclinical development headed by NP201, which is being evaluated for the treatment of diabetes, obesity and non-alcoholic steatohepatitis (NASH).

Merck is also committing up to $250 million to fund all of NGM's activities under the collaboration for an initial five-year period, and gets the right to license candidates after proof-of-concept trials.

NGM's lead drug, NGM282, currently in clinical development for primary biliary cirrhosis (PBC) and NASH, is not covered by the agreement.

Merck's R&D head Roger Perlmutter said that NGM had developed "a uniquely powerful research programme that has permitted identification of novel, and quite consequential, pathways for metabolic regulation."

The companies would work together on biologics that "address the needs of patients suffering from diabetes, metabolic dysregulation, and malignancy," he added.

BMS bolsters immuno-oncology pipeline

Meanwhile, Bristol-Myers Squibb (BMS) has also been shopping around for new drug candidates and added to its immuno-oncology portfolio - currently headed by recently-approved checkpoint inhibitor Opdivo (nivolumab) - via a $1.2 billion deal to acquire Flexus Biosciences and a $399 million alliance with Rigel Pharmaceuticals.

Buying Flexus will give BMS rights to F001287, a small- molecule inhibitor of IDO-1, an enzyme produced by some cancer cells that is thought to help them evade detection by a patient's immune system, along with a series of follow-up compounds targeting IDO-1 and other regulatory T cell factors.

Not included in the deal is FLX925 - a dual-inhibitor that targets FLT-3 (including FLT-3 mutations) and CDK4/6 and is in phase I testing. Flexus has indicated that it intends to spin that asset out into a new company.

BMS' deal with Rigel focuses on the joint development of small-molecule compounds that inhibit transforming growth factor (TGF) beta receptor kinases, another target thought to suppress immune responses to tumour cells. BMS is making an upfront payment of $30 million to Rigel, with another $309 million in milestones in the offing should a lead product get approved in multiple indications.

Other M&A news in brief

- The US Federal Trade Commission has given a green light to the proposed $16 billion takeover of GlaxoSmithKline's (GSK) cancer portfolio by Novartis, part of an asset swap deal that will see GSK absorb Novartis' vaccine assets. The approval is contingent on Novartis divesting all assets related to its in-house experimental BRAF and MEK inhibitors, which it agreed to do last month.

- Sosei has reached an agreement to buy the UK's Heptares Therapeutics - which is developing a number of experimental therapies targeting G protein-coupled receptors - for up $180 million in cash and $220 million in future milestones. The UK company will operate as an autonomous subsidiary of its Japanese patent.

- Takeda has bolstered its business in the fast-growing pharma market in Turkey with the acquisition of Toplam Kalite, a subsidiary of Turkish pharma group Neutec, for 300 million Turkish lira ($120 million). The deal will give Takeda rights to 13 gastroenterology, respiratory, metabolic and musculoskeletal drugs products. Turkey's pharma market was valued at around $8.4 billion last year, according to Business Monitor International.