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Merck Exercises Option For NGM Biopharma's Investigational Insulin Sensitizer

Merck (MRK) and NGM Biopharmaceuticals Inc. said that Merck has exercised its option to license NGM313, an investigational monoclonal antibody agonist of the ß-Klotho/FGFR1c receptor complex that is currently being evaluated for the treatment of nonalcoholic steatohepatitis or NASH and type 2 diabetes. This is part of the companies' broad strategic collaboration to discover, develop and commercialize novel biologic therapeutics announced in 2015.

With the exercise of this one-time option, which was triggered by NGM's completion of a proof-of-concept clinical study of NGM313, Merck gains exclusive worldwide rights to develop, manufacture and commercialize NGM313, now renamed MK-3655, and related compounds.

In connection with the option exercise, NGM received a $20 million payment from Merck. NGM retains an option, at the initiation of the first Phase 3 clinical trial for MK-3655, to participate in up to 50 percent of a global cost and revenue sharing arrangement for MK-3655.

If NGM does not exercise its option, NGM is eligible for further payments associated with the progress of MK-3655 development, as well as commercial milestone payments and tiered royalties ranging from low double digit to mid-teen percentage rates on product sales.

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