Ladies and gentlemen, thank you for standing by. Welcome to the Compugen’s Second Quarter 2015 Financial Earnings Conference Call. At this time, all participants are in a listen-only mode. An audio webcast of this call is available on Investor section of Compugen’s website at cgen.com/investors. As a reminder, today’s call is being recorded. I will now turn the call over to Hannah Deresiewicz of Stern Investor Relations. Please go ahead.

Good morning and thank you for joining us today. With us today from Compugen are, Mr. Martin Gerstel, Chairman of the Board; Dr. Anat Cohen-Dayag, President and Chief Executive Officer; and Mr. Ari Krashin, Chief Financial Officer. Before we begin, I would like to read the following regarding forward-looking statements. During the course of this conference call, the company may make projections or other forward-looking statements regarding future events or future business outlook, including anticipated progress and Compugen’s pipeline program as well as commercialization efforts. We wish to caution you that such statements reflect only the Company’s current expectations and that actual events or results may different materially. You are kindly referred to the risk factors and cautionary language contained in the documents the Company filed with Securities and Exchange Commission, including the Company’s annual report on Form 20-F, filed March 12, 2015. The Company undertakes no obligation to update any projections or forward-looking statements in the future. I will now turn the call over to Martin Gerstel, Chairman of the Board of Compugen.

Thank you. On behalf of all of us at Compugen, welcome to our second quarter 2015 conference call and thanks for joining us. Please note that I’m participating from Compugen, Inc.’s facility in South San Francisco, while Anat and Ari are at a corporate headquarters in Israel. Hopefully this will not create any communication problems. I became Chairman of Compugen almost 20 years ago and for a most of that time, the Company has followed a very unusual path for a small company in the pharmaceutical industry. Whereas most such companies tried to either develop one or a few drugs which were either discovered in academia or abandoned by big pharma or attempt to develop a technology based platforms for a specific application in drug discovery or development, our primary goal throughout most this long period was to undertake a multidisciplinary effort to identify and obtain deeper understandings of key biological pharma, phenomenon, phenomenon applicable to human health and then to model and integrate those understandings in order to create a broadly applicable predictive discovery infrastructure for biology. For the past several years, Compugen has primarily and very successfully used this powerful predictive discovery infrastructure to discover novel targets for biological drugs such as monoclonal antibodies, antibody drug conjugates and protein therapeutics, and building a very attractive early stage pipeline program, based solely on them. Compugen’s focus on a novel targets has clearly presented a problem for us with respect to market valuation since the financial world values pharmaceutical companies almost exclusively based on their drug and/or clinical candidate portfolio and not on the targets that they are pursuing. Of course in the past, when the industry was focusing on small molecule drugs, this emphasis on drugs where corporate valuation made total sense, since the major problem with pharma R&D…

Thank you, Martin. Our financial results for the second quarter of 2015 released today are in line with our expectations. In general, they reflect our increased activities in both R&D, primarily with respect to high priority immuno-oncology program, and in business development expenses. Revenues for the second quarter of 2015 were $0.2 million compared with $2 million for the second quarter of 2014, reflecting primarily the repeat in the second quarter of 2014 of a milestone payment in the amount of $1.2 million under the cancer immunotherapy collaboration with Bayer Healthcare and to a lesser degree, a lower level of amortization of the $10 million upfront payment for the second quarter of 2015 under that agreement. To-date, we have recognized approximately $8.9 million of this upfront payment. R&D expenses for the second quarter of 2015 totaled $5.2 million compared with $3.1 million in the second quarter of 2014, reflecting previously mentioned substantial growth in cost for high priority programs, particularly at our U.S. subsidiary which moved to larger facilities during 2014. Our net loss for the second quarter of 2015 was $6.8 million or $0.14 per diluted share compared with a net loss of $2.3 million or $0.07 per diluted share in the comparable period of 2014. As of June 30, 2015, our financial position remains strong with approximately $96 million in cash and cash related accounts with no debt compared with approximately $102 million as of March 31, 2015, reflecting a net cash usage for the quarter of approximately $6 million. We previously estimated total cash expenditures for 2015 to be in the range of $31 million to $33 million, without taking into consideration any cash receipt from existing or new collaboration during the year. With that, I will turn the call over to Anat. Anat?

Thank you, Ari. At our recent Analyst and Investor Day, we indicated that we’re primarily focusing our research and early drug development activities on five highest priority target program for immuno-oncology, in addition to the two programs partnered with Bayer Healthcare. These five programs were selected for accelerated research and development from our diversified target pipeline. In my prepared remarks today, I’d be focusing on these five programs, why we selected them, their therapeutic and business potential and with additional focus on the one program among the five that is currently being allocated the most resources. Before discussing the five highest priority immuno-oncology program, I’d like to briefly comment on two other important areas of our R&D activities. These other areas which I will not be addressing further in my prepared remarks today are first, continued enhancement and extension of our broadly applicable predictive discovery infrastructure which provides the company with its key competitive advantage and where we intend to remain an industry leader; and second, further validation of our inventory of novel targets, including targets for immuno-oncology, for ADCs and CGEN-15001, our protein therapeutics program. As the pharmaceutical industry continues to increase its focus on biologics, we view this diversified portfolio as one of the Company’s major assets. With respect to client allocation of our R&D resources, the greatest percentage by far relates to the area of immuno-oncology and within that area, to our five highest priority program. I would like also to say a few words about our Scientific Advisory Board, which we recently hosted at our headquarters in Tel Aviv. As many of you are aware, Professor Drew Pardoll, the Chairman of our SAB, spoke at our recent Analyst and Investor Day in New York. As we advance our immune checkpoint candidate program, we periodically review and…

Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. [Operator Instructions] The first question is from Mike King with JMP Securities. Please go ahead.

Thanks for taking the questions. Just a couple of things. Anat, I know you guys have been talking about the development candidates for a while, 029, 001 et cetera. And I’m just wondering what’s -- is there a disconnect between the timing in the discovery of a novel target and the generation of an antibody to that target? And kind of asking you to clarify one of your formal statements because it seems to me if you got a checkpoint target, you’d want to generate an antibody and put it into in experimental system as rapidly as possible to see what it does and then describe whether that is going to go through the traditional GMP development process to make it into a clinical candidate. So, I am just wondering if you could just clarify that and maybe eliminate a little bit of that part of the process for us. Thanks.

Thank you, Mike. And yes, you are correct with how you stated the process but this is exactly the process that’s being employed for knowing targets. And maybe it’s a good way for us now to exemplify how it is difference with novel targets. So when you are having a novel target, you need first to generate -- the basic thing is to generate reagents. You have nothing on this target, you just predict a sequence out of the computer. You need to come up with the protein itself or a fraction or a segment of the protein in order to be able to even generate antibodies. You have to come up with the antibodies and firstly generate some tool antibodies in order to do some initial studies before you are going to invest a lot of money in generating therapeutic antibodies. And you need to generate [indiscernible] this target in order to be able to generate some in vitro assays in order to be able to generate even some vivo models. So, there is a period, a long period where there is a disconnect, exactly how you stated, from the time that we’re making the discovery to the time that we initiate the therapeutic campaign, therapeutic antibodies. We’re preparing the reagents and we’re building the systems and the data in order to allow us to move forward to therapeutic development. And it takes time, it takes even sometimes more than year, sometimes year and half from the time that we discover until the time that we can allow ourselves to initiate in a noticeable manner that can direct us to the right path of development, the development of the therapeutic antibodies. And it’s just one aspect how novel targets are differentiated from known targets.

This could be something we talk about for hours. I want to also ask you, if the -- I don’t know if you would call it a pivot to the myeloid lineage, but is this an indication that you’re going to deemphasize the prior work on CD28/B7, that target space?

Not at all. And again, I am very happy that you’re asking it because I was wondering whether I should incorporate it to my script and we decided to pass. It is important to state that the current portfolio that we’re having is consisting of a verity of checkpoints, also the subsets that we’ve selected, the five highest programs are actually consist of a variety of targets that either -- set with the different cell types that are different tumor types, T cells, myeloid cells or like different immune cell types. And our intention is to make sure that we are progressing -- and this is why we have selected five because we cannot progress everything forward in parallel. But on the other hand, we would hate giving up on opportunities that can allow us to target different type of immune checkpoints that give rise to possibly different mechanism of actions. We’ve mentioned now the myeloid. It doesn’t mean that we’re not moving ahead with checkpoints on T cells or other immune cells. And the name of the game eventually, even though we see the potential to access mono-therapy, but the name of the game is eventually in this field is combination, either with the current candidates that are already in the markets or currently in clinical trials and will reach the market before us or in between our own checkpoints and targeting different type of -- a variety of immune cells or variety of cell types, not only immune cells, but also cancer cells. This is something that we want to keep as a strength of our portfolio. So, no, the fact that we have discussed today the myeloid doesn’t mean that we gave away the CD8 cells.

Just one or two additional questions. Do you believe that you’ll have any data at any of the upcoming conferences, I am thinking of SITC in November and to the extent that you care to discuss what potential indications these myeloid directed checkpoint targets might be focused on, I would appreciate that? Thanks.

Actually the intention is not to focus only on presenting data on myeloid, the intension is to make sure that we can present data also on the other programs. And yes, it’s a goal for us also to present in conferences. And we’re building the path as to how to present the data without harming our IP but of course it’s a goal and we’ll do it We’ll present in future conferences along the year some data.

The next question is from Peter Welford of Jefferies. Please go ahead.

So, just two quick questions, and firstly just sticking Anat with the R&D and the prioritization of the program. I was wondering if you could comment what -- in discussions you’ve had so far and the work you’ve done, particularly I guess in the area of the myeloid specific immuno-oncology targets, do you think that the more work is needed to be done there by you before you can essentially out-license those programs, given it is an unexplored area. So, partners or potential partners, one greater proof of activity for once the better word, before they are willing to sign or actually is the opposite true? And given this is relatively unexplored area actually you believe those targets are perhaps rare opportunities and therefore potentially more in demand with less need for you to demonstrate effects before you can potentially engage in deals? And then, if I could just ask a quick second one which is when we look at your business portfolio in general, have you shifted the allocation of resources over the last six months or so or has the allocation of resources been generally, I guess as you anticipated at the start of the year, is starting to progress? Thank you.

So, I’ll start with the first question and I’ll answer with respect to the myeloid but I’d like also to give a more general impression. Of course myeloid I guess that people that are in the field of say immuno-oncology, recognize that myeloid cells, as I stated, started to be recognized is very important in the tumor immunology -- in the tumor microenvironment and mainly also the data that was generated for the CSF-1R [ph] and the initial clinical data are also encouraging in this respect. So myeloid cells are of interest. With respect to whether we should do more work before we engage in discussions with pharma or before we could get into collaborations or we can enter collaboration now, I would like to take this question and answer it in a more broad manner and not only with respect to the myeloid. There are two things that I want to explain. One, the R&D here works at Compugen as if there is no deal that is going to be signed. We are moving ahead with work plans to take the program forward. We know what we need to do, we have the money and we’re executing on this. On the other hand, the discussions with pharma are ongoing and this is not -- we don’t feel that there is a need to put more data into the programs in order to conduct this discussion. So, it is not a something that we put in the company as a total linkage. Having said that, of course we have some -- our own insights and to what is it that we want to invest more in before we incorporate into a collaboration and what is it that we are more willing to have discussions around. And I’ll say that before there is a question the basic for this differentiation in the pipeline is not based on the potential of the target. Of course, potential partners would want the same compelling target as Compugen would want for itself to continue to invest and get later stage collaboration. So, this is not because of the targets are less attractive, it relates to additional criteria that we put on the table as to resources that should be invested and systems that should be employed and so and so forth. With respect to your first question, I’m not sure that I’ve got exactly what you were asking but I think that you were asking me whether we have shifted resources in the last six months. Is this correct?

Yes, that’s right. I guess, I was just wondering how dynamic, if you like, your investment decisions need to be or whether you are still at a stage where you basically are investing -- if you like at the stage where essentially a program to allocate the money at the start and that allocation remains for -- on the relatively constant basis?

So, yes, it’s a good question. And the allocation of resources and there are two things that I can say about it. One is that we can allow ourselves to do this allocation of resources because we have multiple targets and we are not the company that have only one program and that we have to stick with path forward. So, we’re playing with this competitive edge. Having said that, we are very focused, this is a sustainable and stable high plan. And we’re considering very, very deeply every decision of resource allocation. Of course there are activities that when you are initiating and you commit resources to them, they are research intensive activities, then the flexibility becomes less -- actually becomes more of a problem. And not in all of the programs, we can place at the same extent. But as a company that has multiple programs, yes, we will take care to shift resources based on data and to make sure that we’re progressing the programs that can take us as faster and successfully to the clinic. So, in the last six months, yes, we did shift some resources in between the programs. Yes.

Given that there has been number of collaborations in the broader immuno-oncology space over the last few months, and I think there have been few more targets disclosed over that time, can I ask, although the targets that you outlined at your Investor Day, have you explored since that time; have any of the targets you identified, they since proven to be not unique and actually someone else has discovered this since actually found the same target, now filed IP or collaborated with a company on that target?

And in fact no, but I will elaborate. What we have identified for this protein is not necessarily that the protein was not known at all or that there were not other linkages of this protein to other areas. What Compugen was able to do, is to link between proteins, sometimes totally new proteins but sometimes known proteins but to do the unique linkage of these proteins to serve as a immune checkpoint. So these proteins could also -- you could find maybe patent applications of others on other things but Compugen was doing this linkage for them to serve as immune checkpoints. So, I just want to make sure that when I’m saying, no, I’m not misleading. There could be other patents out there on these proteins, others could know about these proteins from other sources, but Compugen was doing this linkage. In some cases, we have already also identified the sequence of the protein which is totally novel.

The next question is from Raymond Roche of UBS. [Ph] Please go ahead.

I had a couple of questions relating to the Q&A at this call last year, August 6, 2014. And during the Q&A, under diagnostics with Merck Serono, you indicated you’d release data by 12/31/14 and also on the ADCs, you would share more information on the next quarterly call. I didn’t see anything on the next quarterly call dealing with those items although on the February 10, 2015, call, you indicated that on biomarkers we have unique skills.

Yes, thank you for the question. And I’ll answer in a moment about Merck Serono and about the ADC. But just to make sure that you understand how we see these quarterly calls, usually we try to keep them because we have multiple aspects and the portfolio is diverse and as I mentioned immune checkpoints and ADCs and 15001, we try to -- and as you mentioned Merck Serono, we try to keep the discussion during the quarterly call about the core focus of the Company which is immuno-oncology, but I am happy to answer that. So, with respect to Merck Serono, the Muco [ph] that we have formed did met a milestone, a development milestone based on the biomarkers that we have identified and Muco [ph] have released a press release in January 2015, actually sixth or seventh months ago stating that they have met the development milestone and they are intending to commercialize the diagnostic test in 2016. So, this is the update with respect to Merck Serono. And we consider this achievement as the proof of concept for our technology that we were able to discover biomarkers that could be translated to a diagnostic test or at least get to a development milestone as a diagnostic test. With respect to the ADC, again we did not discuss within our last quarterly call, but we did disclose new data in the Analyst Day, in the presentation that was given by John Hunter. And John was presenting data showing that we have couple of antibodies directed against one of our targets that are showing promising functions as an ADC target and also was presenting some expression for five data on additional targets that we did not disclose prior to this meeting. So, we did not discuss these two specific examples in the quarterly calls because we wanted to be very focused on the core business of the Company but I’m happy to provide more details if needed.

The next question is from Brett Reiss of Janney Montgomery Scott. Please go ahead.

In prior news releases, you had language that you having discussions with respect to potential collaborations, there was no such language in the second quarter release. But from answers to some of the prior calls questioners, I mean am I correct, I mean you’re constantly having inquires and dialog with pharma companies on potential collaborations, am I correct there?

Yes. I think that Martin was relating to it in his remarks but we’re in ongoing discussions with various potential partners. But as we stated in the past, I will repeat it, we’ll not give and we’ll continue not to give specific guidance as of the timing.

Fair enough, but is it the fellow and forgive me, I don’t have his name in hand, the business development guy you hired from Amgen, is he the point guy…

Felix Karim.

I am sorry, say it again.

Felix Karim.

Mr. Karim, I mean is he the point person that feels the call from pharma and is he receiving offers from big pharma but you just basically saying no interest because they’re just unattractive to the Company at this time?

I am not sure that I understand the question but Felix is the person that is responsible for the corporate and business development activities of the Company. I am not sure that I’ve got the second part of the question.

Okay. During the day as he speaking to pharma companies who are having dialog on potential collaborations and -- the offers from the potential pharma companies are just not high enough milestone payments or royalties and you are just basically saying no, thank you.

I think that it is not appropriate for us to get into the details from discussions. I’ll just repeat the statement that we’re in ongoing discussions with various potential pharma partners. And I don’t think that it’s appropriate for us to get into the details of those discussions.

Okay. Thanks for taking the question.

This is Martin. I would also add to that that it’s -- the issue of collaborating on a biological product, particularly one that -- at a relatively early stage, such as most of ours are, is a complex mater. And it’s not a question of somebody sort of calling and spending a couple of days, looking at things and then making an offer. It’s much more a complex. There is a significant due diligence process and discussions ongoing. And also for us of course and due to the fact that we have so many potential checkpoints, we also have to consider whether the type -- we want to be sure that each arrangement that we make, not only it’s good as a standalone arrangement but will not create any problems for us in future agreements with respect to other -- either other checkpoints or even other uses of the same checkpoints. So, it’s a complex process. But we can assure you that there are serious ongoing discussions with a number of pharmaceutical companies. And we are very confident that out of these discussions, collaborations will happen. As Anat said, we will not because we don’t think it’s in anyone’s best interest to give an estimate of when we think they will be finalized. And it would only be an estimate because of course we don’t know either. But whether we thought something was going to happen in next week or next month or we were concerned that may be won’t happen for another year. First, you never know for certain and second, we would say exactly the same thing that we’re not in a position to give any guidance as to when the next collaboration will be signed, just that we have full confidence that there will be collaborations on our existing product candidates and other areas of activity and other products in the company.

There are no further questions at this time. Before I ask Dr. Cohen-Dayag to go ahead with her concluding statement, I would like to remind participants that a replay of this call is scheduled to begin in two hours for a period of 72 hours. In the U.S., please call 1-888-326-9310. In Israel, please call 03-925-5925. Internationally, please call 972-3-925-5925. Dr. Cohen-Dayag, would you like to make a concluding statement?

Thank you. I wish to thank all of our investors for their continued confidence in and support of Compugen. I wish to assure you that we’re committed to the success of our company and look forward to sharing with you our future accomplishments. Thank you.

Thank you. This concludes the Compugen Ltd. second quarter 2015 financial results conference call. Thank you for participation. You may go ahead and disconnect.