The next bellwether biotech IPO has arrived

NGM Biopharmaceuticals wants to be the next billion-dollar biotech on Wall Street, and so it's moving forward with an IPO that offers a springtime referendum on investor sentiment.

Back in September, NGM filed paperwork to go public but fell silent as biotech indices tumbled in the fourth quarter. Now, apparently pleased with the state of the market, NGM has revived those plans and is pitching an offering that would value the company at about $1.1 billion.

Whether NGM can get that valuation will be interesting to watch. On the one hand, NGM’s most advanced therapy is meant to treat NASH, a liver disease whose prevalence has made it popular target for drug companies predicting a blockbuster opportunity. On the other hand, it uses a biological pathway that has in the past been linked to liver cancer in rats, an association that led to an FDA-imposed clinical hold back in 2014.

The IPO is expected to price early next month, and NGM’s fate could speak volumes about the market’s appetite for biotech-related risk.