NGM, Partners Seek Next Diabetes Drug Targets Among GI Tract Hormones

Xconomy San Francisco — 

NGM Biopharmaceuticals, led by veteran biotech innovators from Amgen, Genentech and Tularik, made a big bet five years ago that it could plumb the human digestive tract for new hormones and other agents that might help control metabolic disorders such as obesity and Type 2 diabetes. Private backers have put more than $76 million behind that vision. And now three pharmaceutical giants have lined up with their own endorsements, in the form of partnership deals that could hasten the company’s scientific progress.

The small private South San Francisco company announced a partnership deal this month with AstraZeneca’s biologics unit MedImmune, its third big collaboration in the last 15 months. Johnson & Johnson subsidiary Janssen Pharmaceuticals signed on in January, following a deal inked with NGM in March 2012 by Daiichi Sankyo.

“We’re delighted that the work we’ve done has been recognized by these three pharmaceutical companies,” says NGM’s CEO William Rieflin (pictured above). “They share our belief in the utility of our approach.”

NGM has been exploring almost uncharted territory in its search of the stomach and small intestine for regulatory molecules that send signals to the rest of the body about the type and quantity of nutrients passing through them. Such agents might be a key part of the regulatory network that, in healthy people, keeps tight control of the amount of sugar in the blood. Poor blood sugar control leads to diabetes and related disorders such as cardiovascular disease and nerve damage. Strong evidence of the potential role of GI tract proteins has emerged from the results of certain gastric bypass surgeries, which originated as weight loss treatments but have also restored blood sugar levels to normal in some patients who had previously needed to take insulin to stabilize blood sugar. NGM is pursuing insights generated from those surgeries.

NGM was built around relationships that go back for decades. It’s a sort of reunion among past players at Tularik—a South San Francisco oncology research leader that Amgen acquired for about $1.3 billion in 2004.

Rieflin, who was chief financial officer of Tularik, remembers it as a great place for biologists under the leadership of its CEO David Goeddel. Goeddel’s career as a seminal biotechnology innovator began in 1978, when he joined the then-fledgling startup called Genentech as the first scientist it hired.

Goeddel went on to co-found Tularik in 1991, and its “superstar biologist” was Jin-Long Chen, Rieflin says. Chen’s colleagues saw him rise through the ranks, and wondered whether he would follow Goeddel’s path and form a company of his own some day.

“This guy was such a force of nature,” Rieflin says. “A lot of us thought, if he ever wanted to do something we wanted to be part of it.”

Chen joined Amgen after it absorbed Tularik, but after several years he left to pursue his own ideas. What Chen wanted to explore was a novel way to develop treatments for obesity, diabetes, and related metabolic disorders, which have grown into a global health scourge. Chen had headed research units addressing metabolic disorders at both Tularik and Amgen, and he was interested in a little understood result of abdominal surgeries that rearrange the “plumbing” of the gastrointestinal tract to help morbidly obese people lose weight.

Almost immediately after certain forms of this bariatric surgery, many patients who had suffered from the dangerously unstable blood sugar levels associated with diabetes saw their blood glucose tests return to normal. This can happen before any significant weight loss occurs, and is not necessarily related to a change in food intake.

Chen wanted to find out whether these surgeries alter the output of hormones and other proteins from various regions of the GI tract. If so, it might be possible to isolate the agents that help re-establish blood sugar control, in an interplay with insulin and other known regulatory molecules. That would open the possibility of developing drugs that could mimic the benefits of bariatric surgery without the risks of an operation.

By the time Chen was ready to form a company, Goeddel was ready to arrange financial backing as a managing partner at The Column Group, a San Francisco venture capital firm. In 2008, Chen founded NGM as The Column Group co-led a $25.5 million Series A financing round with Prospect Venture Partners and Rho Ventures. Goeddel became chairman of NGM’s board. The following year, NGM added another board member with a solid spot in biotechnology history—Arthur Levinson, chair of the Roche unit Genentech, former Genentech CEO, and chairman of Apple’s board of directors.

Rieflin was an angel investor and consultant for NGM before he joined the company as CEO in 2010, when NGM also completed a $51 million Series B funding round. Over the past five years, scientists at NGM have created experimental in vivo models of … Next Page »

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