Compugen Ltd. (CGEN) Q2 2025 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for joining us today. Welcome to the Compugen Ltd. Second Quarter 2025 Financial Results Conference Call. [Operator Instructions] An audio webcast of this call is available in the Investors section of Compugen's website, www.cgen.com. As a reminder, today's call is being recorded. I would now like to introduce Yvonne Naughton, Vice President, Head of Investor Relations and Corporate Communications.

Thank you, operator, and thank you all for joining us on the call today. Joining me from Compugen for the prepared remarks are Dr. Anat Cohen-Dayag, President and Chief Executive Officer; and David Silberman, Chief Financial Officer. Dr. Michelle Mahler, Chief Medical Officer; and Dr. Eran Ophir, Chief Scientific Officer, will join us for the Q&A. Before we begin, we would like to remind you that during this call, the company may make projections or forward-looking statements regarding future events, business outlook, development efforts and their potential outcome, the company's discovery platform, anticipated progress and plans, results and time lines for our programs, financial and accounting-related matters as well as statements regarding our cash position and cash runway. We wish to caution you that such statements reflect only the company's current beliefs, expectations and assumptions, but actual results, performance or achievements of the company may differ materially. These statements are subject to known and unknown risks and uncertainties, and we refer you to our SEC filings for more details on these risks, including the company's most recent annual report on Form 20-F. The company undertakes no obligation to update projections and forward-looking statements in the future. With that, I'll turn the call over to Anat.

Thank you, Yvonne, and a warm welcome to everyone joining our call today. Today marks my last quarterly call as President and CEO of Compugen, and I could not be prouder or more confident as I pass the leadership reins into the exceptional hands of Eran. I'm excited at the opportunity to take on the newly created position of Executive Chair, where my focus will be on Compugen's corporate strategy and strategic collaborations. We believe this leadership combination provides a strong foundation for the company's next phase of growth. Before I provide an update on our progress in this quarter, I'd like to first share some high-level reflections on the current landscape and why we believe Compugen is well positioned for future growth. Immunotherapy has been tremendously successful and is extending the lives of many cancer patients with KEYTRUDA standing out as the top-selling drug. However, significant unmet medical needs persist with many patients still lacking effective treatment options. As a result, we're seeing a shift in how immunotherapy is being approached, driven by a focus on novel mechanisms of actions, innovative combinations and new modalities aimed at enhancing efficacy and safety across multiple cancer types. This is precisely where Compugen's differentiated approach aims to create significant value. We're leveraging Unigen, a validated AI/ML-powered computational target discovery platform to identify novel mechanisms to activate the immune system against cancer. In addition, we're advancing our pipeline of differentiated immuno-oncology therapies with the goal to transform patient outcomes and deliver meaningful clinical and commercial impact. In the clinic, we have our potential first-in-class immune checkpoint inhibitor, COM701, in addition to validating partnerships with the potential for a total of over $1 billion in milestone payments and tiered royalties on future sales with both AstraZeneca on bispecific rilvegostomig and Gilead on anti-IL-18 binding protein GS-0321. We have a solid balance sheet with $93.9 million in cash at the end of June 2025 and expected cash runway into 2027. With our leadership expansion, a strategically differentiated pipeline and operational focus, we believe that Compugen is well positioned to capitalize on potential growth opportunities ahead. Now turning to the progress we have made this quarter. We continue to advance our immuno-oncology clinical and early-stage pipeline programs, starting with our potential first-in-class anti-PVRIG antibody COM701. The first patient was dosed in MAIA- ovarian, our maintenance immunotherapy trial in platinum-sensitive ovarian cancer. We continue to make progress opening sites across the U.S. and Israel, and we aim to share interim analysis from this sub-trial in the second half of 2026. As a reminder, this is the first sub-trial of our adaptive platform trial comparing COM701 maintenance therapy to placebo in 60 patients with relapsed platinum- sensitive ovarian cancer. There is an unmet medical need with no standard of care treatment options for this patient population progressing post PARP inhibitors and/or bevacizumab or who are not candidates for such treatments. We have observed increased competition in this space, primarily from drug candidates evaluated in the platinum-resistant ovarian cancer setting. This reflects the recognized and significant need to improve treatment options for these patients. In this earlier-stage population, platinum-sensitive ovarian cancer, safety becomes an even more critical consideration along with efficacy, which in the maintenance setting aims specifically on delaying time to disease progression. We believe that advancing COM701 in the maintenance setting of platinum-sensitive ovarian cancer represents a compelling opportunity to demonstrate its potential advantage in terms of durability of response and tolerability. As previously communicated, we view a 3-month improvement over the median progression-free survival of the placebo as clinically meaningful. Positive data from this trial could support a broader clinical development program aimed at addressing a significant unmet medical need. At ESMO this year, we plan to present a pooled analysis of our 3 previously reported Phase I trials, reflecting clinical benefit of COM701 as monotherapy and in combination in patients with heavily pretreated platinum-resistant ovarian cancer. This data form part of our rationale to advance COM701 in our ongoing platinum-sensitive ovarian cancer adaptive platform trial. Moving next to the TIGIT landscape. Despite failures in the TIGIT space, it is notable that some companies are advancing differentiated TIGIT programs. For example, Arcus Gilead is advancing an Fc inactive anti-TIGIT program. In addition, AstraZeneca is advancing rilvegostomig, which is an Fc-reduced anti-PD-1 TIGIT bispecific, the TIGIT component of which is derived from Compugen's COM902. AstraZeneca has specifically designed and engineered rilvegostomig with a unique mechanism of action to harness cooperative binding of both PD-1 and TIGIT to drive enhanced immune responses. We've consistently advocated that Fc inactive antibodies may serve as the better antibody format for targeting TIGIT by providing a potential safety advantage in certain patient populations, which could support a potential efficacy advantage due to patient durability on study treatment. We believe that successful Phase III data would validate TIGIT antibodies as a drug class, change the market sentiment and open new opportunities for Compugen as one of the few companies that have an Fc inactive clinical stage TIGIT antibody COM902. Clinically, we continue to believe that TIGIT PD-1 blockade in combination with the PVRIG inhibitor may expand the use of TIGIT PD-1 to less inflamed PD-L1 low tumors and positive TIGIT PD-1 data may present additional opportunities for us. In addition, earlier this year, our partner, AstraZeneca, initiated their 10th Phase III clinical trial with rilvegostomig. At ASCO this year, AstraZeneca presented encouraging early data from trials evaluating rilvegostomig in combination with the ADC, Dato-DXd in non-small cell lung cancer, and in combination with chemotherapy in hepatobiliary cancer. This data, along with the data presented at the World Conference of Lung Cancer and ESMO last year, highlights rilvegostomig as a potential IO backbone to future drug combinations. Coming up at ESMO this October, AstraZeneca plans to present longer-term follow-up data evaluating rilvegostomig monotherapy in non-small cell lung cancer as a poster presentation and first data in bladder cancer in combination with Dato-DXd as a mini oral session. The potential commercial opportunity for rilvegostomig is substantial with AstraZeneca estimating non-risk-adjusted peak year revenues target of more than $5 billion. AstraZeneca's broad development strategy for rilvegostomig to replace existing PD-1, PD-L1 inhibitors represents a significant potential revenue source for us as we're eligible for both future milestone payments and mid-single-digit tiered royalties on future sales. To date, we have received milestone payments of $30.5 million and remain eligible to receive up to $170 million in regulatory and commercial milestone payments. Moving next to GS-0321, formerly known as COM503, our potential first-in-class anti-IL-18 binding protein antibody licensed to Gilead. GS-0321 represents a novel approach to harness IL-18 pathway biology for the treatment of cancer, potentially overcoming the limitations presented by administration of therapeutic cytokines. The Phase I trial is progressing as planned. Finally, beyond our clinical stage programs, we remain committed to advancing our extensive and differentiated early-stage pipeline focused on potential first-in-class drugs and novel mechanisms of actions designed to activate the immune system against cancer. With a diverse pipeline and strong focus on execution in 2025, we believe Compugen is well positioned for growth. Of course, none of this would be possible without our highly committed talented team here at Compugen, who continuously performs at the highest levels of excellence. With that, I will hand over to David for the financial update before we open the floor for Q&A.

Thank you, Anat. I am pleased to say that we are advancing in 2025 with a solid balance sheet. Cash runway, assuming no further cash inflows is expected to fund our operating plans into 2027, and we anticipate using this runway to advance our COM701 platinum- sensitive ovarian cancer trial and to support the progression of GS-0321 in the clinic together with continued investment in our early- stage pipeline. Going into the details, I will start with our cash balance. As of June 30, 2025, we had approximately $93.9 million in cash, cash equivalents, short-term bank deposits and investments in marketable securities. Revenues for the second quarter of 2025 were approximately $1.3 million compared to approximately $6.7 million of revenue for the comparable period in 2024. The revenues for the second quarter of 2025 reflect the recognition of portions of both the upfront payments and the IND milestone payment from the license agreement with Gilead, while in the second quarter of 2024, they reflect portion of the upfront payment from the license agreement with Gilead and the clinical milestones from the license agreement with AstraZeneca. Expenses for the second quarter of 2025 were in line with our plans. R&D expenses for the second quarter of 2025 were approximately $5.6 million compared to approximately $6.2 million in the second quarter of 2024. Our G&A expenses for both the second quarters of 2025 and 2024 were approximately $2.2 million. For the second quarter of 2025, our net loss was approximately $7.3 million or $0.08 per basic and diluted share compared to a net loss of approximately $2.1 million or $0.02 per basic and diluted share in the second quarter of 2024. With that, I will hand over to the operator to open the call for questions.

[Operator Instructions] The first question will be from Stephen Willey from Stifel.

This is [ Toby ] on for Steve. So we just have 2 from us. The first one is related to platinum-sensitive ovarian cancer trial. Can you please just briefly like more like overall general comment on the ongoing dynamics of patient enrollment? And I don't remember if you guys have actually communicated how many sites you guys are planning to activate. And I guess what I'm trying to ask you is that what may be like what proportion of those sites are currently active so far? And second question is related to the ESMO presentation. I understand that you guys are planning on presenting a pooled data analysis. What do you think investors should focus on that presentation? And would you -- would this presentation actually include any biomarker data analysis?

Thank you. Michelle, would you like to take this question?

Yes, I will be happy to answer those questions. So at this point in time, we have not disclosed the number of sites that we are using for the trial, but we have opened sites in both the U.S. and in Israel. And we are actively enrolling with a high level of investigator enthusiasm. And we do have aggressive -- we have aggressive time lines and plans, and we are working to continue to meet those. Regarding the question on what should be focused on with respect to our presentation at ESMO. The -- one of the things that we were trying to focus on was understand deeper about the patients that have had a response on our prior studies. So by pulling it, it gives us the opportunity to try and characterize more about the efficacy and the safety and more of that information will be presented during ESMO.

Okay. Stephen, are you with us? The next question is from Leland Gershell from Oppenheimer.

Congrats on all the progress. Anat, just wanted to ask, as we look forward to the upcoming reveal on the TROPION-PanTumor 03 in bladder, which would be potentially opening that as another development indication for further advancement. Do you know what we expect to see? Will it be complete response data, durability data? What do you envision as the potential for the program to maybe move into further development? And I have a follow-up.

Thank you, Leland. Actually, AstraZeneca did not guide into what they're going to present at ESMO for this study or for the other studies. So obviously, we cannot comment on their behalf. I'd just remind, as you know, at ASCO, they presented data for non-small cell lung cancer and also for hepatobiliary tract. The data was showing -- it was encouraging to see the potential for rilvegostomig to serve an IO backbone as part of combination. The data in bladder is going to be in combination with ADC. We're waiting as well. We're looking forward to see the data. But we cannot have guidance instead of AC.

Got it. Okay. Look forward to that. And then if you could just remind us of what you see as a market opportunity in the platinum- sensitive maintenance setting for [indiscernible].

Michelle, would you like to do that?

Yes. So the initial opportunity is based on patients who are in second line or third line requiring maintenance. The study is requiring patients who have not -- who have received previously at least 2 prior lines of platinum chemotherapy. And those patients who are eligible for PARP inhibitors or bev must have received those to be able to come on to the clinical trial. So this brings us to a mix between both patients who would be eligible for maintenance in both second and third line, and that's approximately 8,000 to 12,000 patients based on epidemiology data that's available. I think the other point to highlight is in the event that single-agent 701 works in maintenance, it opens an avenue for us to also combine with other combinations and go after a much broader ovarian cancer patient population. So I think the initial opportunity might seem limited, but the steps that we take -- that we are taking gives potential for the broader population.

Next question will be from Daina Graybosch from Leerink Partners.

Bill on for Daina. Just a couple for me. So what expectations do you have from Merck's successful Phase III in ovarian? And how does that change your current approach? And the second question is your current clinical assets provide pretty good validation of Unigen platform's ability to identify targets. Can you give us a sense of what's coming down the pipeline and when we may expect to hear some details?

Yes, I ask Michelle to take the first one and then Eran will relate to the second question.

Okay. Great. So for the Merck study, it's exciting that they were able to demonstrate that with adding a checkpoint inhibitor to patient's regimen that there's both a PFS and overall survival advantage. Of course, we haven't seen the data. What I would like to highlight though is the Merck study is focused in platinum-resistant patients. So it gives us some hints to potential activity or seeing activity in the earlier lines of treatment. But keep in mind, it is a different patient population to where we are going because the patients that we're evaluating in our study are platinum sensitive. So it doesn't specifically change our approach at this point in time. It's just -- it's nice to see that there is still potential for checkpoint inhibitors in the right kind of patient population and the right kind of combination. I hand back to Anat and Eran about the other question.

Thanks, Michelle. So for the early pipeline, so indeed, we're using Unigen, our validated traditional platform that yielded PVRIG and COM503, and we work hard to bring more assets. For many reasons, including competitive ones, we prefer not to disclose too many details to keep the assets for ourselves at this point in time. But definitely, this is work ongoing and our [indiscernible] platform, which is validated by the assets related to growth is -- we are working hard to bring more assets in different ways in immuno- oncology.

Next question will be from [ Charles Wallace ] from HCW.

On COM701 in the global maintenance ovarian study, can you provide some more color on the interim analysis that you have planned for the second half of '26? And do you expect at this time that the study will be fully enrolled?

Okay. So just to explain again, so the study is an adaptive trial design. And because we're looking for a 3-month improvement, we still believe that the interim analysis would happen as we've already previously guided in terms of second half of 2026. Yes, the study will be fully enrolled. And the interim analysis is to evaluate for futility and also allow us to characterize the magnitude of effect size for COM701.

Okay. This concludes the Q&A session and Compugen's investor conference call. Thank you for your participation. You may go ahead and disconnect.