Why Is Cancer-Focused NGM Biopharmaceuticals Stock Trading Lower On Monday?

On Monday, Venture capital firm The Column Group agreed to acquire NGM Biopharmaceuticals Inc NGM for $1.55/share in cash. 

The Column Group is NGM Bio’s longest and largest stockholder, holding approximately 26% of NGM Bio’s outstanding shares.

NGM Bio stock is trading lower with a session volume of 1.9 million, compared to the average volume of 1.02 million, as per the data from Benzinga Pro.

The price per share corresponds to a total equity value of $135 million on a fully diluted basis and represents an 80% premium over the last trading day closing price (December 29, 2023) prior to NGM Bio’s Form 8-K confirming receipt from the TCG Stockholders of a non-binding expression of interest. 

NGM Bio’s cash, cash equivalents, and short-term marketable securities were $166.0 million as of September 30, 2023, and an estimated $144.2 million as of December 31, 2023.

A special committee of “independent and disinterested directors” had made a “thorough exploration and review of strategic and financial alternatives,” including mergers with a number of other entities, before recommending NGM take up the Column offer, NGM Bio said.

In January, NGM Biopharmaceuticals announced new data from an ongoing Phase 1 Part 1b study evaluating NGM707 in combination with Merck & Co Inc’s MRK Keytruda (pembrolizumab). 

The company reported encouraging findings in heavily pretreated patients in multiple solid tumor indications, including MSS colorectal cancer.

In April 2023, NGM Biopharmaceuticals reduced its workforce by 75 staffers, or a third of the workforce, to extend its cash runway into 2025.

In an email to employees announcing the decision, CEO David Woodhouse said, “Raising capital has become increasingly difficult for companies in our industry over the last couple of years.”

CATALINA Phase 2 trial testing NGM’s C3-inhibiting antibody in geographic atrophy flunked the primary endpoint, and the biotech’s shares took a beating when it unveiled the results in October.

Price Action: NGM shares are down 19.9% at $1.53 on the last check Monday.

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