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Organization and Description of Business
 12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Description of Business Organization and Description of Business
NGM Biopharmaceuticals, Inc. and its wholly-owned subsidiary, NGM Biopharmaceuticals Australia Pty Ltd., or NGM Australia, collectively referred to as the Company, is a biopharmaceutical company focused on discovering and developing novel, potentially life-changing medicines based on scientific understanding of key biological pathways underlying grievous diseases with critical unmet or underserved patient need. The Company's portfolio of product candidates ranges from early discovery to Phase 2b development.
The Company was incorporated in Delaware in December 2007 and commenced operations in 2008. The Company's headquarters are located at 333 Oyster Point Blvd., South San Francisco, California 94080.
Pending Transactions Contemplated by the Merger Agreement
On February 25, 2024, the Company entered into the Agreement and Plan of Merger, dated as of February 25, 2024, or the Merger Agreement, with Atlas Neon Parent, Inc., a Delaware corporation, or Parent, and Atlas Neon Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent, or Merger Sub. Parent and Merger Sub are affiliates of The Column Group, LP, which, along with certain of its affiliates, is collectively referred to as TCG. TCG is the Company's largest stockholder, holding approximately 26.7% of the Company's common stock as of December 28, 2023.
The Merger Agreement provides for, among other things, (i) the acquisition of the Company by Parent through a cash tender offer, or the Offer, by Merger Sub for each issued and outstanding share of the Company’s common stock for $1.55 per share, or the Offer Price, and (ii) the merger of Merger Sub with and into the Company, or the Merger, with the Company surviving the Merger. Subject to the terms of the Merger Agreement, the Offer Price will be paid subject to any applicable tax withholding and without interest.
Upon the unanimous recommendation of the special committee of the Company's board of directors, or the Special Committee, the members of the Company's board (other than David V. Goeddel, Ph.D. and Roger M. Perlmutter, M.D., Ph.D. who recused themselves because of their relationship to TCG, and William J. Rieflin, who recused himself because he had entered into the Rollover Agreement (as defined in the Merger Agreement) at the time of the board's determination) have unanimously determined that the terms of the Offer, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and the Unaffiliated Stockholders (as defined in the Merger Agreement), authorized and approved the execution, delivery and performance by the Company of the Merger Agreement and, subject to the terms and conditions of the Merger Agreement, the consummation by the Company of the transactions contemplated by the Merger Agreement, declared the Merger Agreement and the transactions contemplated by the Merger Agreement advisable and recommended that the Unaffiliated Stockholders accept the Offer and tender their shares of common stock pursuant to the Offer.
The Offer is being made subject to all terms and conditions set forth in the Offer to Purchase, dated March 8, 2024, or, as it may be amended or supplemented from time to time, the Offer to Purchase, and in the related Letter of Transmittal, or as it may be amended or supplemented from time to time, the Letter of Transmittal. The Offer to Purchase and the Letter of Transmittal constitute the Offer. The Offer will expire at one minute after 11:59 p.m., Eastern time, on April 4, 2024, unless extended in accordance with the terms of the Offer and the Merger Agreement and the applicable rules and regulations of the U.S. Securities and Exchange Commission, or the SEC.
Pursuant to the terms of the Merger Agreement, as of the effective time of the Merger, or the Effective Time, by virtue of the Merger and without any action on the part of the holders, (i) each outstanding share of the Company's common stock (other than any shares of common stock (a) held in the treasury of the Company, (b) owned, directly or indirectly by TCG, Parent, Merger Sub or any other subsidiary of Parent, or the Rollover Stockholders (as defined in the Merger Agreement) at the commencement of the Offer, (c) irrevocably accepted for purchase in the Offer or (d) owned by any stockholders who are entitled to and who properly exercise appraisal rights under Delaware law) will be converted into the right to receive the Offer Price without interest, less any applicable tax withholding; (ii) the vesting of each option to purchase shares of the Company's common stock, or the Company Stock Options, shall be accelerated and (A) each Company Stock Option that has an exercise price per share that is less than the Offer Price, or an In-the-Money Option, that is then outstanding will be cancelled and, in exchange therefor, the holder of such cancelled In-the-Money Option will be entitled to receive an amount in cash, without any interest thereon and subject to applicable tax withholding, equal to the product of (x) the total number of shares of the Company's common stock underlying such In-the-Money Option as of immediately prior to
the Effective Time multiplied by (y) the excess of the Offer Price over the applicable exercise price per share of the common stock underlying such In-the-Money Option, and (B) each Company Stock Option that is not an In-the-Money Option will be cancelled for no consideration; and (iii) each unvested restricted stock unit, or RSU, of the Company that is then outstanding shall become immediately vested in full and cancelled, and, in exchange therefor, the holder of such cancelled RSU will be entitled to receive an amount in cash without interest, less any applicable tax withholding, equal to the Offer Price.
Merger Sub’s obligation to accept shares of the Company's common stock tendered in the Offer is subject to conditions, including: (i) that the number of shares of the Company's common stock validly tendered and not validly withdrawn, equals at least a majority of all shares of the Company's common stock then owned by the Unaffiliated Stockholders as of the expiration of the Offer; (ii) the accuracy of the Company’s representations and warranties contained in the Merger Agreement (subject to certain exceptions and qualifications described in the Merger Agreement and except, generally, for any inaccuracies that have not had a Company Material Adverse Effect (as defined in the Merger Agreement)); (iii) the Company’s performance in all material respects of its obligations under the Merger Agreement and (iv) the other conditions set forth in Exhibit A to the Merger Agreement. The obligations of Parent and Merger Sub to consummate the Offer and the Merger under the Merger Agreement are not subject to a financing condition.
Following the completion of the Offer, subject to the absence of injunctions or other legal restraints preventing or prohibiting the consummation of the Merger, Merger Sub will merge with and into the Company, with the Company surviving as a wholly-owned subsidiary of Parent, pursuant to the procedure provided for under Section 251(h) of the Delaware General Corporation Law, without any additional stockholder approvals. The Merger will be effected as soon as practicable following the time at which Merger Sub purchases the shares of the Company's common stock validly tendered and not withdrawn in the Offer.
The Merger Agreement contains customary representations and warranties by Parent, Merger Sub and the Company. The Merger Agreement also contains customary covenants and agreements, including with respect to the operations of the Company's business between signing and closing.
The Merger Agreement contains customary non-solicitation restrictions prohibiting the Company’s solicitation of alternative business combination transactions and restricts the Company’s ability to furnish non-public information to, or participate in any discussions or negotiations with, any third party with respect to any such alternative business combination transaction, subject to customary exceptions in the event of an acquisition proposal that was not solicited in violation of these restrictions and that our board of directors (acting upon the recommendation of the Special Committee) or the Special Committee determines constitutes or could reasonably be expected to lead to a Superior Company Proposal (as defined in the Merger Agreement).
The Merger Agreement contains customary termination rights for both Parent and Merger Sub, on the one hand, and the Company, on the other hand, including, among others, for failure to consummate the Offer on or before June 15, 2024. If the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement in connection with the Company’s entry into an agreement with respect to a Superior Company Proposal, the Company will be required to pay Parent a termination fee of $2.0 million.
We anticipate that the Offer and the Merger contemplated under the Merger Agreement will be consummated in the second quarter of 2024. However, there can be no assurance that the Offer and the Merger contemplated by the Merger Agreement will be completed. If the Merger is effected, the Company’s common stock will be delisted from The Nasdaq Stock Market LLC and the Company’s obligation to file periodic reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, will terminate, and NGM Bio will be privately held.
Pending consummation of the Offer and the Merger, the Merger Agreement generally requires the Company to operate in the ordinary course of business consistent with past practice and restricts the Company from taking certain actions with respect to the Company's business and financial affairs without Parent’s consent. Such restrictions will be in place until either the Offer and the Merger are consummated or the Merger Agreement is terminated. These restrictions could restrict the Company's ability to pursue or prevent the Company from pursuing attractive business or fundraising opportunities (if any) that arise prior to the consummation of the Offer and the Merger. For example, the Company's ability to raise additional capital through the issuance of equity securities, incur indebtedness or to pursue business development or similar arrangements are generally restricted without Parent’s consent during the pendency of the Offer and the Merger.