NGM Biopharmaceuticals: Eye Disorder Data Due 2nd Half Of 2022 (NASDAQ:NGM)

NGM Biopharmaceuticals (NASDAQ:NGM) is a great speculative biotech play to look into. That’s because in the 2nd half of 2022 there is a major catalyst that is approaching. This will be the release of results from the phase 2 CATALINA study using NGM621 for the treatment of patients with Geographic Atrophy. Not only that, but there is another set of data expected during this time as well. This will be the release of results from a phase 1/2 study using NGM707 for the treatment of patients with advanced cancer. Besides these catalysts, the biotech is also advancing aldafermin for the treatment of patients with compensated NASH cirrhosis (F4 NASH) in a phase 2b ALPINE4 study. Trial recruitment was completed in January of 2022 and topline results are expected in the 1st half of 2023. With several catalysts coming up, plus an extensive pipeline, these are the reasons why I believe it is a great speculative biotech play to look into.

NGM621 For Treatment Of Patients With Geographic Atrophy Secondary To Age-Related Macular Degeneration

NGM621 is being developed for the treatment of patients with Geographic Atrophy Secondary to Age-Related Macular Degeneration. That seems like a long description of a disease. Before diving into Geographic Atrophy, it is important to understand what age-related macular degeneration is. Age-related macular degeneration (AMD) occurs when there is a loss in the center field of vision. AMD is broken down into two types, which are:

• Dry macular degeneration – Center of retina deteriorates with vision loss
• Wet macular degeneration – Leaky blood vessels that grow under the retina instead

The main thing is that these patients have blurred vision. Current treatment options might exist but are not ideal. They are surgery and then possibly taking vitamins and minerals to try to slow progression of the disease. Then, what is Geographic Atrophy? Geographic Atrophy is the advanced form of age-related macular degeneration (AMD). It is labeled as such because retina cells waste away and die, thus (atrophy). The “Geographic” term comes into play because the atrophy forms like a map (so much cluster damage), thus geographic. It can target one or both eyes, but if one is implicated, then it is highly likely that the other eye is also. The thing is that even someone with Wet age-related macular degeneration (Wet-AMD) can also obtain Geographic Atrophy as well. Before, during or after Wet-AMD. This disease is a good target, because it is said that about 5 million+ people globally get Geographic Atrophy (GA). In addition, there are currently no FDA or European Approved drugs for it. However, Apellis Pharmaceuticals (APLS) submitted a NDA to the FDA for potential approval of pegcetacoplan for the treatment of patients with Geographic Atrophy (GA) secondary to age-related macular degeneration (AMD). However, a decision on the acceptance of the NDA filing itself is not expected until August of 2022. One quick item to point out is that NGM621 is also a C3 targeted inhibitor. While Apellis will also be competition should it eventually obtain FDA approval, the key is that it established proof of concept in using a C3 inhibitor to treat this patient population. That doesn’t guarantee success for NGM621, but it certainly does increase the odds even if a little bit.

Having said all that, this program is coming along well. The use of NGM621 is being explored in a phase 2 study known as CATALINA. It is enrolling a total of 320 patients with Geographic Atrophy (GA). Patients are randomized to one of four treatment groups. This will include IVT injection of NGM621 given once every 4 weeks, once every 8 weeks, sham control. In essence, NGM is playing with two different dosing schedules to determine if once every 4 weeks or once every 8 weeks treatment is better than the other. Patients are to be treated for a total of 52 weeks, then a 4-week follow-up monitoring period is set in place. The primary endpoint of the study is going to be the rate of change in GA lesion area over a 52-week period. It will be measured using fundus autofluorescence (FAF) imaging. In terms of safety, sham control and NGM621 will be evaluated for systemic adverse events in the eye. The FDA granted “Fast Track Designation” for NGM621 to treat this patient population. NGM621 is a monoclonal antibody drug candidate, which is engineered to inhibit complement C3. There are about 30 to 40 clinical trials utilizing different types of complement inhibitors. Two of the ones you may know about are C3 which NGM and some other bios are using, plus other types of complement inhibitors like: FI, FB, FD and C9.

A small phase 1 study was done using NGM621 to treat patients with GA secondary to AMD. These patients were treated for a total of 12 weeks with no serious adverse events found. Mean visual acuity and GA lesions appeared stable through the 12-week period for all cohorts. These cohorts were different doses of NGM621 which were:

• 2 mg
• 7.5 mg
• 15 mg
• Two doses of 15 mg

The final conclusion is that the drug was safe and well tolerated. About 9 patients (60%) had 14 treatment-emergent adverse events (TEAEs). This includes about 4 patients (about 26.7%) who developed ocular TEAEs. The important thing to note is that none of these adverse events occurred as a result of patients having received NGM621. Most of the events that did occur were patients who received intravitreal injections. The bottom-line is that no patient felt the need to withdraw from the study entirely and that is the best a clinical trial could hope for. Having said that, results from the phase 2b CATALINA study are expected in the 2nd half of 2022. If the company can meet on the primary endpoint of the study, then like Apellis, it too can also submit a NDA to the FDA for possible approval of its drug for GA patients.

Financials

According to the 10-Q SEC filing, NGM Biopharmaceuticals had cash, cash equivalents and short-term marketable securities of $329.8 million as of March 31, 2022. The company has been able to fund itself through an Open Market Sale Agreement with Jefferies LLC. it established back in June of 2020. As of March 31, 2022 $127.2 million of the company’s stock remained available to be sold under the Sales Agreement. Having said that it believes that it has enough cash on hand to fund its operations for at least 1 year from the date of this SEC filing which is May 5, 2022. I don’t believe it needs to raise cash immediately, but it does so it can sell shares under the Jefferies LLC Sales Agreement. Even then, it may not need another type of major cash raise until the end of 2022. Either way, I think that the phase 2 CATALINA study will be readout first before there is a need to raise cash. Hopefully, the primary endpoint of this study is met. In that case, it could possibly raise cash at a much higher price.

Risks To Business

There are several risks that investors should be aware of before investing in this biotech. The first big risk primarily deals with the release of results from the phase 2 CATALINA study, which is expected in the 2nd half of 2022. The second risk factor to consider would be all the other drugs being advanced in the pipeline. Even though NGM Bio has several drugs being developed for the treatment of patients with cancer, doesn’t mean that all of them will ultimately be successful. The final risk to consider would be the financial situation. I think it is okay for now, but if it really needs to raise cash, it would do so by the end of 2022. More specifically, I think it’s possible it could raise cash upon successful results from the phase 2 CATALINA study. That’s only if the study is successful and the primary endpoint is met. Either way, I think it will need to raise cash again before the end of this year in my opinion.

Conclusion

I believe that NGM Biopharmaceuticals is a great speculative biotech play to look into. I already talked about the major catalyst expected in the 2nd half of 2022, which is the release of results from the phase 2 CATALINA study using NGM621 for the treatment of patients with GA. Another catalyst expected in the 2nd half of 2022 would be results from the phase 1/2 study using NGM707 for the treatment of patients with advanced cancer. Lastly, the biotech has several other drugs in its pipeline. Such a drug is aldafermin, which again is being explored for the treatment of patients with compensated NASH cirrhosis in the phase 2b ALPINE4 study. Results from this study are not expected until the 1st half of 2023. This a bit riskier of a catalyst, because aldafermin had already failed in a prior NASH study. However, the difference here is that these are patients with NASH in more advanced disease (F4). While the other failed study focused on F2/F3 NASH patients. Regardless, this provides another shot on goal for the pipeline itself which is a good thing. Based on the potential with the C3 inhibitor drug NGM621 being advanced for GA, plus several other drugs being advanced in the pipeline, these are the reasons why I believe NGM Bio is a great speculative biotech play to look into.