September 7, 2018
David Woodhouse
Chief Financial Officer
NGM Biopharmaceuticals, Inc.
333 Oyster Point Boulevard
South San Francisco, CA 94080
Re: NGM Biopharmaceuticals, Inc.
Draft Registration Statement on Form S-1
Submitted August 10, 2018
CIK No. 0001426332
Dear Mr. Woodhouse:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1
Prospectus Summary, page 1
1. Please revise your table on page 2 and in the Business section to reduce
the length of the
arrows for NGM282 and NGM313. The arrows indicate that you have
completed Phase 2
for NGM 282 and Phase 1 for NGM313, but your disclosure indicates that
you are still
conducting such trials.
2. We note your statement on page 3 and elsewhere that NGM313 has the
potential to be a
best-in-class product. The term "best-in-class" suggests that the
product
candidate is effective and likely to be approved. Given the early stage
of development of
David Woodhouse
FirstName LastNameDavidInc.
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Comapany 7, 2018
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NGM313, it is not appropriate to suggest that this product is likely
to be the most effective
treatment available. Please delete these references throughout your
registration statement
including your statements that NGM313 has the potential to be the
treatment of choice for
patients. If your use of the term was intended to convey your belief
that the product
is based on a novel technology or approach, you may discuss how your
technology differs
from technology used by competitors.
3. We refer to your statements here and elsewhere in your prospectus that
your approach
allows you to "rapidly advance and evaluate" your product candidates
to enable the
demonstration of proof of concept in humans. Please tell us why you
believe this time
frame is realistic given the lengthy and uncertain process of seeking
regulatory approval.
Risks Associated with Our Business, page 4
4. Please expand your disclosure to include a bullet discussing the
significant percentage of
your stock owned by your officers, directors, and principal
shareholders, including Merck
and its voting agreement with you. In addition, we note your
disclosures elsewhere in
your prospectus that Merck has agreed to vote its shares in favor of
your director
nominees and certain other matters. However, Section 2 of your side
letter agreement
appears to indicate that Merck has agreed to vote its shares in favor
of any action
recommended by and approved by the majority of the board. Please
clarify.
Implications of Being an Emerging Growth Company, page 5
5. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
Use of Proceeds, page 65
6. We note your statements that there is no binding election to exercise
the Merck option,
and that Merck may purchase fewer or no shares in the private
placement. Please revise to
state the estimated amount of proceeds solely from this offering that
you expect to use for
each of your intended purposes. You may separately include a
discussion regarding your
expected uses for proceeds arising from the private placement.
Additionally, to the extent
known, please revise to separately disclose the estimated amounts you
intend to use to
continue development of NGM282 and your various other programs. Please
also indicate
how far the proceeds of the offering will allow you to proceed with
the development of
each of your programs, and identify the amount of other funds needed
to reach regulatory
approval and commercialization of NGM282. Refer to Instruction 3 to
Item 504 of
Regulation S-K.
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Comapany 7, 2018
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Critical Accounting Policies and Estimates
Stock-Based Compensation, page 88
7. Once you have an estimated offering price or range, please explain to
us how you
determined the fair value of the common stock underlying your equity
issuances and the
reasons for any differences between the recent valuations of your
common stock leading
up to the IPO and the estimated offering price. This information will
help facilitate our
review of your accounting for equity issuances including stock
compensation and
beneficial conversion features.
NGM282: A Rapid and Potent Approach to Treating NASH, page 99
8. Expand your disclosure in the penultimate paragraph on page 113 to
discuss all serious
adverse events observed during the trials, and not just the most
common ones. Please also
specify the serious adverse event referenced in the penultimate
paragraph on page 117 and
the first full paragraph on page 118, and make similar changes with
respect to your other
trials.
9. Please explain your use of the term "clinically-meaningful" in the
penultimate paragraph
on page 109. Please also explain your use of p-values and the your use
of the term
"statistical significance" in the last paragraph on page 109, and how
they relate to the
FDA's evidentiary standards of efficacy.
10. In your discussions of each of the cohorts of your Phase 2 trial in
NASH patients, please
expand your disclosure to clarify whether there were secondary
endpoints for such
cohorts, and if so, whether they were met. Please also disclose the
primary endpoints for
the cohorts 2 and 3, and expand your disclosure in the last paragraph
on page 110 to
discuss the specific preliminary data and associated p-values for your
reductions in Pro-
C3 levels and the PIIINP and TIMP-1 components of the ELF score.
11. Please expand your disclosure on pages 115-116 to discuss the number
of patients in the
trial, and the data underlying your statements that NGM282 was
associated with
statistically significant reductions in triglyceride levels and
statistically significant
increase in cholesterol concentrations.
12. Please revise your table on page 108 to indicate the time at which the
results were
measured (e.g., 12 weeks from dosing), and what "Relative %" of
MRI-PDFF and ALT is
measuring.
13. We note your statements on page 99 and elsewhere in your document that
based on a
review of publicly available data on clinicaltrials.gov, you believe
NGM282
surpasses what other agents currently in clinical development for NASH
have
demonstrated to date. Given that you have not conducted head-to-head
trials with the
referenced agents, and the significant variables across clinical
trials, it does not appear
appropriate to make this comparison. Please delete this statement or
tell us why you
David Woodhouse
FirstName LastNameDavidInc.
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Comapany 7, 2018
September NameNGM Biopharmaceuticals, Inc.
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believe it is appropriate.
NGM313: An Insulin Sensitizer for the Treatment of Type 2 Diabetes and NASH,
page 120
14. We note your statement that NGM313 has the potential to be a safe and
effective once-
monthly injectable insulin sensitizer for the treatment of type 2
diabetes and NASH.
Safety and efficacy determinations are solely within the authority of
the FDA and
comparable regulatory authorities. Please revise your prospectus
disclosure to remove all
references to your product candidates as being safe and effective,
including preliminary
indications of efficacy. You may present the objective results of
trials in the Business
section, and any discussion of preliminary results should be
sufficiently balanced with a
disclosure of the preliminary nature of such results, including for
example, the lack of
quality control procedures.
15. Please disclose the number of patients in the phase 1b NGM313 trial
dicussed on pages
123-124, and the underlying data regarding changes in serum
concentrations of fasting
glucose, ALT, AST, triglycerides, LDL cholesterol, and HDL
cholesterol, including the
number and/or percentage of patients that experienced the results you
discuss. Please
expand your disclosure regarding the phase 1 trial for NGM313 on pages
124-125 by
disclosing the underlying data, the number and/or percentage of
patients that experienced
the results you discuss, and, regarding your statements indicating
"significant" changes,
please clarify whether such changes were statistically significant.
Manufacturing, page 154
16. Please revise to describe the material terms of your Development and
Manufacturing
Services Agreement with Lonza Ltd. Please also file the agreement as
an exhibit to the
registration statement or tell us why you believe you are not required
to do so.
17. We note your risk factor disclosure on page 20 that certain of your
raw materials are
available only from a single supplier. Please expand your disclosure
here to discuss your
sources and availability of raw materials and the names of any
principal suppliers. See
Item 101(h)(4)(v) of Regulation S-K.
Intellectual Property, page 155
18. Please revise to disclose the foreign jurisdictions in which you have
issued or pending
patent applications, to which patent portfolios they relate, and
expected expiration dates.
Please also disclose expected expiration dates for any material
pending U.S. application.
Additionally, we note your risk factor discussion on pages 50-51
regarding various third
party patents and patent applications that may affect your product
candidates. To the
extent that any such third party patents or applications may have a
material effect on any
of your product candidates, please expand your disclosure here to
discuss.
19. We note your statement that you have a license agreement with Lonza
Sales AG under
which you license cell lines used to produce certain of your product
candidates. Please
David Woodhouse
NGM Biopharmaceuticals, Inc.
September 7, 2018
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revise to describe the material terms of this agreement. Please also file
the agreement as
an exhibit to the registration statement or tell us why you believe you
are not required to
do so.
Notes to Consolidated Financial Statements
5. Research Collaboration and License Agreements
Merck , page F-22
20. Please refer to the $449 million in milestone payments you are eligible
to receive upon the
achievement of specific clinical development or regulatory events as
discussed in the
second to the last paragraph on page F-25. Revise your disclosure to
provide a description
of each milestone and related contingent consideration pursuant to ASC
605-28-50-2. At a
minimum, provide a break out for each indication (i.e. first indication,
second indication
and third indication) for each of the three geographic areas (i.e. United
States, European
Union and Japan).
General
21. Please provide us proofs of all graphics, visual, or photographic
information you
will provide in the printed prospectus prior to its use, for example in a
preliminary
prospectus. Please note that we may have comments regarding this
material.
You may contact Sasha Parikh at 202-551-3627 or Jim Rosenberg at
202-551-3679 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Dorrie Yale at 202-551-8776 or Erin Jaskot at 202-551-3442 with any
other questions.
Sincerely,
FirstName LastNameDavid Woodhouse
Division of
Corporation Finance
Comapany NameNGM Biopharmaceuticals, Inc.
Office of
Healthcare & Insurance
September 7, 2018 Page 5
cc: J. Carlton Fleming
FirstName LastName