Compugen Ltd Q3 FY2025 Earnings Call

Ladies and gentlemen, thank you for joining us today for the third quarter 2025 results conference call. At this time, all participants are in a listen-only mode. 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, VP Head of Investor Relations and Corporate Communications. Yvonne, please go ahead.

Thank you, Operator, and thanks everyone for joining us today. Here with me from the Compugen team are Eran Ophir, new President and CEO, and David Silberman, our Chief Financial Officer. Michelle Mahler, our Chief Medical 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 timelines for our programs including disclosures of clinical data, 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 Eran. Thanks, Yvonne.

Good morning and good afternoon everyone. I'm delighted to speak with you today as Compugen's new President and CEO. I'm really energized stepping into this role at such a pivotal time for our company. Having led our scientific strategy in my former position as CSO, I've seen firsthand how our science has evolved and I believe we can deliver significant value for patients. So where do we stand today? Our fundamentals are strong, and our strategy is clear. We are pioneers in computational drug target discovery. And we believe that our deep expertise in tissue biology is now gaining clinical momentum. I think that now is a great time to highlight what makes us different in the TIGIT drug development space, and why you should be paying close attention to our differentiated Fc reduced anti-TIGIT programs and their advantages over Fc active anti-TIGIT antibodies. Reflecting on the history of drug development, one can appreciate that indeed choosing the right therapeutic target for Crohn's disease is critically important. But choosing the right drug format which fits that specific target is just as important. We know that anti-TIGIT antibodies with the Fc active format have not lived up to expectations. And most of these programs were discontinued. However, this did not surprise us because Fc Active anti-TIGITs can deplete TIGIT positive effector T cells and Tregs. This is not desired because, one, on efficacy. Three digits present on effector T cells, similar to the action of anti-PD-1, you run the risk of reinvigorating these exhausted cells and avoid their depletion. On safety, digits present on Tregs depleting peripheral Tregs could result in immune-mediated side effects. Fc reduced anti-TIGITs like our own COM902, in contrast, preserve and reinvigorate the effector T cells, avoid depletion of peripheral Tregs, and therefore have the potential for improved immune activation and a better safety profile. It is notable that as early as Phase II trials, with Fc active anti-TIGIT, safety was a concern with high rates of discontinuation due to adverse events. This was also even more evident in the Phase III trial. For example, during a recent ESMO meeting, the presenter highlighted that in the SCRISPRAPER seven trial, adding Fc active TIGIT to Atezo resulted in these patients only receiving a median number of doses of 12 versus 17 in the Atezo only arm. As a result, the patients receiving TIGIT PD-L1 combination received 30% less of the PD-1 antibody versus control. So safety really impacted the ability to administer treatment and therefore probably impacted the outcome. We've always advocated for the Fc reduced formats and we believe that the data is starting to support our convention. Not all anti-TIGIT antibodies are the same. And we believe the market is missing this. We believe our assets are positioned to capture the upside as new data emerges with readouts anticipated from 2026. Provided our conviction proves correct. This moves us to our strategy. Which is rooted in science and focused on patients. We have five key value drivers. Starting with Fc Reduced TIGIT programs. COM902 is one of the only two clinical stage Fc reduced anti-TIGIT monoclonal antibodies currently in clinical development. And importantly, it's fully owned by Compugen. Positive Phase III data from Arcus Gilead, the only other known Fc reduced anti-TIGIT monoclonal antibody, is expected in 2026, and could be a real catalyst for COM902. Notably, recent overall survival data from their Phase II frontline gastric cancer study, which is the same setting as the Arcus Gilead ongoing PET-3 trial, was presented at ESMO recently and showed a median overall survival of twenty-seven months versus fifteen months or less for benchmarks. A meaningful signal for the Fc reduced class. Next is Rilfrogostomab, our partner AstraZeneca's Fc reduced anti-PD-1 TIGIT bispecific. With the TIGIT components derived from our Fc reduced high affinity COM902. Interestingly, cooperative bispecific binding might provide even further efficacy into PD-1 and TIGIT blockade, while in addition potentially supporting an easier regulatory path. The potential commercial opportunity for Rilfrogostomab is substantial, with AstraZeneca estimating a non-risk adjusted peak year revenue target of more than $5 billion. We understand that AstraZeneca's ambition is for Rilfrogostomab to replace PD-1 PD-L1 therapies and to serve as the backbone for future combination treatment. Their broad development program spanning 11 Phase III trials across lung, gastrointestinal, and endometrial cancers represents a potential significant value driver for Compugen as we're eligible for regulatory and commercial milestones and mid-single digit tiered royalties payment. Moving to Fc reduced PVRIG, COM701. Fully owned and the only Fc reduced monoclonal anti-PVRIG antibody in the clinic, which again, we believe is the right Fc format. The biology here is truly differentiated from PD-1 and TIGIT, providing advantages that we believe could translate into clinical benefit for patients with platinum-sensitive ovarian cancer. Positive data from our ongoing MYO ovarian platform trial could support a broader clinical development program aimed at addressing a significant unmet medical need. And finally, to our cool and smart potential first in class antibody program, addressing cytokine biology. GS GS0321, previously COMPAB03, is a potential first in class anti-IL binding protein antibody licensed to Gilead. GS031 represents a novel antibody approach to harness IL-10 fatty biology for the treatment of cancer, potentially overcoming the limitations presented by the administration of therapeutic cytokines. This program is another potential value driver for Compugen, as we're eligible to receive $758 million in milestone payments and single digit to low double digit tiered royalties. This program is the most recent example of how our AIML Power Discovery Engine is delivering new opportunities. And behind this, we have an early pipeline of what we believe to be truly innovative research programs. As pioneers in the field, we are committed to delivering real breakthroughs, not just incremental therapies. And real innovation is never easy. It takes time, persistence, and a willingness to tackle the toughest scientific challenges. I believe deeply in what we are doing here and we have the best talent and great tools to do this. I'm truly excited about the potential of our early-stage programs. Next, turning to the progress we have made this quarter. The team was at ESMO in Berlin in October, where we presented a pooled analysis of our three previously reported Phase I trials reflecting the clinical benefits of COM701 as monotherapy and in combination in patients with heavily pretreated platinum-resistant ovarian cancer. The pooled analysis demonstrated that COM701 was well tolerated and showed consistent, durable responses in patients with heavily pretreated platinum-resistant ovarian cancer, particularly in those without liver metastasis, representing patients with lower disease burden and a potentially less immunosuppressive tumor co-environment. The results of the analysis support the rationale for the ongoing randomized MYO ovarian platform trial evaluating COM701 as maintenance therapy in early lines of treatment. The MYO ovarian platform trial is progressing. Sites have been activated across the U.S., Israel, and France, including major academic centers and multiple sites from the French oncology cooperative group Arcadia Genico, renowned for several recent platinum-sensitive ovarian cancer trials. We now estimate the interim analysis in Q1 2027. We believe MYO ovarian is a significant opportunity to address an unmet need for maintenance therapy in platinum-sensitive ovarian cancer. Next, our partner AstraZeneca which presented new RILVA data at ESMO, as part of two mini oral sessions. The AUTOMAT zero one follow-up showed that RILVA was well tolerated with promising efficacy, confirming its potential in checkpoint naive non-small cell lung cancer. Notably, the drug-related discontinuation rate of only three percent further supports differentiation of the Fc reduced BOMA. The Tropion pan tumor03 evaluating the combination of RILVA with DATOA shows promising efficacy and manageable safety, underscoring the potential of next-generation IO bispecifics plus ADC. Moving next to GS0321, our novel antibody approach with Gilead that leverages cytokine biology. The phase one trial is progressing as planned, and we presented the trial design at SITC last week. We have strong conviction in our fully owned programs. We are validating partnerships with AstraZeneca and Gilead providing potential for over $1 billion in milestone plus royalties. Of course, none of this would be possible without our highly committed and talented team here at Compugen who continuously performs at the highest level of excellence. With that, I will hand over to David for the financial update before we open up the floor for Q&A. Thanks, Eran.

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. We anticipate using this runway to advance our COM701 platinum ovarian cancer trial MYO ovarian and to support the progression of GS0321 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 September 30, 2025, we had approximately $86 million in cash, cash equivalents, short-term bank deposits, and investment in marketable securities. In October 2025, subsequent to the financial results for the quarter ended 09/30/2025, a total of approximately 800,000 shares were sold through the company's ATM facility contributing to net proceeds of approximately $1.6 million. Revenues for 2025 were approximately $1.9 million compared to approximately $17.1 million of revenue for the comparable period in 2024. The revenues for 2025 and 2024 reflect the recognition of respective portions of both the upfront payment and the IND milestone payment from the license agreement with Gilead. Expenses for 2025 were in line with our plan. R&D expenses for 2025 were approximately $5.8 million compared to approximately $6.3 million in 2024. Our G&A expenses for 2025 were approximately $2.2 million and approximately $2.6 million for the same period in 2024. Our net loss for 2025 was approximately $6.98 million or $0.07 per basic and diluted share compared to a net profit of approximately $1.28 million or $0.01 per basic and diluted share in 2024. With that, I will hand over to the operator to open the call for questions.

Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you wish to decline from the polling process, please press 2. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Please stand by while we pull for your questions. The first question is from Stephen Willey of Stifel. Please go ahead.

Yes, good morning. Thanks for taking the question. Just curious, the extension of the MYO interim analysis from 2026 into '27. Is that just predicated on enrollment timelines and kind of what you're seeing from an accrual perspective? Does that have anything to do with the accumulation of PFS events in the study that may be required to trigger the interim? Just curious as to what's happening behind the scenes there. Thanks.

Sure. Thanks, Steve. So overall, as we know, there are a few factors that determine the initial readout of clinical trials. It's opening the sites, the actual enrollment rates, and finally the actual accumulation of events along the trial. And we saw the trial by giving estimations and the more the trial develops the kinetics, and you optimize your prediction. This is exactly what we are doing here. I can say today that we opened most of the sites, including major academic U.S. centers and the French Arcadia Genico Group. It took a bit more time to open, particularly with the academic centers, but we are glad to have them on board, and now again, most of them are open. And now we expect while opening the sites, and again, and the French site was also done because they showed interest and to support the aggressive enrollment rate that we anticipate. And now this is the time for the start enrollment and see the actual ramp up. Michelle, if you want to add something to provide some color?

No. You covered everything. So effectively, we had selected a number of sites. We've had additional academic sites wanting to participate. Those do tend to take a bit longer to open. In addition to that, we had also been consulting with Arcadia in France when they asked to participate as well. We're trying to reflect our best estimates. I think there are a lot of different factors that impact when one has an interim analysis and we still believe that we will be able to meet the aggressive timelines that we have.

And finally, we also will disclose today that we have cash runway into Q3 2027, so we also have the cash to support taking into account this shift in Q1. So we're in a good position to continue with the MYO trial and to bring value for patients because we think and we believe in this study.

Thanks for taking the question.

The next question is from Daina Graybosch of Leerink Partners. Please go ahead.

Hi, thank you for the question. I wonder if we could talk about the upcoming Arcus Gilead readout with Rilfroben in gastric because it could come early next year. I want to know what you're looking for. Of course, if successful, then that validates your ingrained hypothesis. But is there anything you would see in the outcomes of that trial that would reduce your confidence in your own TIGIT and more importantly in the bispecific Rilfrogostomab?

Thanks, Daina. It's a very good question. So this will be the first Phase III readout for an Fc reduced TIGIT antibody. The data enabled promising, but it was a single-arm study, not many patients, but doubling almost doubling the overall survival versus control was reassuring. And now is the time to see how it evolves in the Phase III and this is of course to be very meaningful for us. But it is only one trial. So, obviously, if it's successful, this reflects directly on the Fc reduced and what we're saying about the Fc active, the safety issues, potential reduced efficacy issues, and this will show directly that Fc reduced is active in Phase III results. But even if this trial fails, Arcus Gilead themselves had additional Phase III trials and AstraZeneca has two additional advantages over just a single monoclonal Fc reduced. One is they showed that they are bispecific. It has potential more activity. And actually, they showed up in a very nice ex vivo patient-derived material system. They have a cooperative binding that allows cooperative blockade of PD-1 and TIGIT on the same cell. The result was in that relatively translational system that it is more active than just PD-1 and TIGIT blockade. And then, also in some of the trials, there are potential regulatory advantages as the way we see it, looking just at the side of all the accumulating Phase III trials. For example, in one of the trials in the AUTOMATE biliary group, they are comparing Rilfroben plus chemotherapy. Because it's a bispecific, nobody can ask for a contribution of components. As far as we understand it, therefore you don't need to show that TIGIT is active. Yes, we believe TIGIT is active and they have the Fc reduced antibody, even if the activity is not sufficient in this case, has imposed enhanced efficacy due to the bispecific format. And just using it as an alloy safe backbone to combine with chemotherapy to compare versus chemotherapy. This is definitely an advantage of the bispecific. There are some other trials doing the same. They also have some trials doing directly head to head versus Pembrolizumab, and we believe and think that they should have a win there as well, but so they have multiple shots on goal with some advantages of the bispecific indeed.

The next question is from Leland Gershell of Oppenheimer. Please go ahead.

Hey, good morning. Thanks for the update and taking our question. Just wondering, as we look forward to the interim update from MYO ovarian, could you remind us of any internal threshold or bar you're looking for from that interim with respect to efficacy? Thank you.

Thank you. So I will start and then over to Michelle. Again just to remind everyone, we talk about a study that has forty patients treated with COM701 in maintenance settings compared to twenty patients in placebo. We're relying on solid historical control and internal control. Comparing to placebo. This is not a registration trial. However, we are looking we think this trial is well built to allow us to understand if COM701 has a monotherapy signal in this patient population after seeing a signal in the last line platinum-resistant setting. Upon success, this adaptive trial design will allow us to build and to continue to move forward either to adding more arms or to potential third approval. And Michelle, please add some color on that.

Okay. So the clinical trial is an exploratory study to allow us to determine the magnitude of the effect size of COM701. It is very desirable for us to be able to demonstrate single-agent activity. An improvement of up to three months above the placebo would be very clinically meaningful. But at the same time, we are looking forward to the totality of the data to be able to determine what next best steps would be.

Good morning, Yaron and David. Thanks for taking my questions. A couple of quick questions. One is when we look at the tolerability profile of COM701, how does that influence its potential use in combination therapies, especially in some of the less immune-inflamed tumors? And the other question is, when you saw the data from the pooled analysis presented at ESMO, there were some grade three or higher treatment adverse events about sixteen point seven percent or so. So how do you plan to improve that safety in combination therapies?

Sure. So firstly, the tolerability of COM701 as a monotherapy is extremely well tolerated. In fact, we had no discontinuations due to adverse events in that pooled analysis when COM701 was used as a single agent. In the triplet combination groups, in the pooled analysis, the adverse events that were seen that were grade three were in keeping with the same frequency seen in the respective labels for both nivolumab and pembrolizumab. Given the tolerability of COM701 on its own, we believe that it is well set up for being able to be used as a monotherapy or as a combination with standard of care agents or with other novel agents that are coming through the landscape.

Thank you for taking the questions.

This concludes the Q&A session for Compugen's Investor Conference Call. Thank you for your participation. You may go ahead and disconnect.