NGM Bio Prices $125M Share Offering; Stock Falls 4%

NGM Biopharmaceuticals on Jan. 5 announced the pricing of an underwritten public offering of 4,629,630 shares at a price of $27 per share. Shares of the biopharma company lost 4.3% and closed at $27.99 on Tuesday.

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NGM’s (NGM) aggregate gross proceeds from the offering are expected to amount to $125 million, before deducting the underwriting discounts and commissions and estimated offering expenses. The share sale is expected to close by Jan. 8 subject to closing conditions.

The underwriters have been granted a 30-day option to purchase up to an additional 694,444 shares of its common stock at the public offering price, less underwriting discounts and commissions under the agreement.

Goldman Sachs, Citigroup and Cowen are joint book-running managers for the offering with Raymond James and B. Riley Securities as lead managers.

On Jan. 5, Stifel analyst Derek Archila raised the stock’s price target to $43 (53.6% upside potential) from $32 and reiterated a Buy rating, as he selected NGM as one of his two top picks for 2021 in the small to mid-cap biotech space.

Archila liked the risk/reward ahead of results from aldafermin’s ALPINE 2/3 study in F2-F3 NASH that was conducted in August. The study was undertaken to evaluate a dose response towards improvement in liver fibrosis.

According to the analyst, the 3mg dose will show “a robust fibrosis benefit,” (See NGM stock analysis on TipRanks)

From the rest of the Street, the stock scores an analyst consensus of a Strong Buy based on 5 unanimous Buys. The average analyst price target of $41 implies upside potential of 46.5% to current levels.