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Merck, NGM Bio Extend Broad, Strategic Collaboration To March 2022

Merck & Co Inc. (MRK), known as MSD outside the U.S. and Canada, and NGM Biopharmaceuticals, Inc. announced Wednesday that Merck has exercised its option to extend the research phase of the companies' broad, strategic collaboration for an additional two-year period from March 2020 to March 2022.

The collaboration, originally announced in February 2015, is focused on discovering, developing and commercializing novel biologic therapeutics across a wide range of therapeutic areas.

Under the terms of the original agreement, Merck had the option to extend the initial five-year research and early development phase of the collaboration for an additional two-year period and retains one additional two-year extension option that is exercisable in 2021.

The companies have progressed several potential first-in-class drug candidates into clinical development, including NGM313, now known as MK-3655.

Merck now intends to advance MK-3655 into a Phase 2b study to evaluate the effect of MK-3655 on liver histology and glucose control in NASH patients with or without diabetes.

During the two-year extension period, Merck will continue to fund NGM's research and development efforts at similar levels to the original collaboration terms. Further, in lieu of the $20 million extension fee payable to NGM, Merck will make additional payments totaling up to $20 million in support of NGM's research and development activities during the two-year extension period in 2021 and 2022.

NGM's fibroblast growth factor 19 (FGF19) program, including its lead clinical asset NGM282, currently in Phase 2 studies for the treatment of NASH, is excluded from the agreement and remains wholly owned by NGM.

Merck and NGM also announced today that Merck will terminate its license to NGM's growth differentiation factor 15 (GDF15) receptor agonist program, which is being developed for the treatment of obesity, effective May 31, 2019.

Upon license termination, Merck will grant to NGM an exclusive license under Merck's intellectual property related to the GDF15 receptor agonist program for further development and commercialization of products, subject to the payment of a low single digit royalty on any future product sales back to Merck.

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