Earnings Call Transcript - CGEN Q2 2021

Operator, Operator

Ladies and gentlemen, thank you for joining us today. Welcome to Compugen's Second Quarter 2021 Results Conference Call. At this time, all participants are in a listen-only mode. An audio webcast of this call is available on 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, Head of Investor Relations and Corporate Communication.

Yvonne Naughton, Head of Investor Relations and Corporate Communication

Thank you, operator, and thank you for joining us on the call today. Joining me to present prepared remarks are Anat Cohen-Dayag, President and CEO; and Ari Krashin, CFO and COO. For the Q&A session, we will also be joined by Henry Adewoye, CMO; and Eran Ophir, Vice President, Research and Drug Discovery. Before we begin, I would like to remind you that during this call, the company may make projections or forward-looking statements regarding future events or business outlook, our development efforts and their outcome, our discovery platform, anticipated progress, results, and timelines for our programs, financial and accounting-related matters as well as statements regarding our cash position. Such statements represent only the company's current beliefs, expectations and assumptions, while actual results, performance or achievements of the company may differ materially. These statements involve 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 report on Form 20-F filed on February 25, 2021. The company undertakes no obligation to update projections or forward-looking statements in the future. With that, I will turn the call over to Anat.

Anat Cohen-Dayag, President and CEO

Thank you, Yvonne. Good morning and good afternoon everyone, and welcome to our second quarter 2021 update. Our continued progress through 2021 has been strong with steady execution, solidifying our leading position in the DNAM axis and differentiating us in the TIGIT space as the only company targeting in a clinical setting, PVRIG, TIGIT and PD-1 as part of our three-pathway hypothesis. On today's call, I'm pleased to have the opportunity to remind you of our strategy, provide perspectives on our most recent data, our views on important developments in the field and what's to come for the remainder of 2021. We believe that the foundation that underlies our success at Compugen is our science and our people. We were the first to identify PVRIG and ILDR2 as novel checkpoints and we published on TIGIT the same year as Genentech. Both PVRIG and TIGIT are key parallel and complementary inhibitory pathways in the DNAM axis, which also intersect with the well-established PD-1 pathway. While TIGIT and PVRIG pathways share similarities, we observed key differences between the two with respect to their expression pattern and their ligand expression pattern on immune cells and tumor types. Furthermore, our recent data shows that PVRIG is expressed similarly to PD-1 and TIGIT in stem cell-like memory and exhausted T cells, an important cell population with the potential role in mediating antitumor effects. However, recently Eran Ophir, our VP of Research and Drug Discovery, presented scientific data showing that PVRIG has a more dominant expression pattern on early differentiated stem-like memory T-cells than TIGIT and PD-1, further pointing to the possibility that PVRIG may act differently. We believe that the future of immuno-oncology will be driven by combination approaches. Research from Compugen suggests that the PVRIG, TIGIT and PD-1 pathways have different dominance in different tumor types in patients, implying that to induce effective immune antitumor responses, certain patient populations may require the blockade of different combinations of these three pathways. To test this hypothesis, Compugen has established a biomarker and biology-informed clinical program which aims to evaluate different combinations of these axis members across tumor types. We are focused on maintaining our first-mover advantage in the clinic as the only company with monotherapy, doublet and triplet combination clinical studies evaluating the DNAM axis players PVRIG and TIGIT as well as PD-1. We believe these programs anchored by our first-in-class anti-PVRIG antibody COM701 uniquely position Compugen with innovative and potential first to market doublet and triplet therapies. Our most recent data from the Phase 1 dose escalation and expansion cohorts of COM701 as monotherapy and in combination with nivolumab presented at ASCO this year are important for several reasons. These preliminary data show durable responses and disease control in patients who exhausted all prior treatment options, which may have a meaningful effect. Notably, these responses were in tumor types typically not responding to immune checkpoint inhibitors. COM701 in combination with nivolumab resulted in a disease control rate of 67%. This included a complete response in a patient with anal squamous cell carcinoma who had prior treatment with nivolumab and a partial response in a patient with microsatellite stable colorectal cancer. These are tumor types typically unlikely to respond to checkpoint inhibitors, and at the time of reporting, we show responses up to and beyond one year. Moreover, our potential differentiation comes through the addition of an anti-TIGIT antibody to this doublet regimen in our ongoing triplet combination study and combining anti-PVRIG with anti-TIGIT in our newly initiated anti-PD-1 independent study. These data are also important as they demonstrate signals of antitumor activity in a COM701 monotherapy setting in patients who have exhausted all available standard therapies and in tumor types typically not responding to immune checkpoint inhibitors. COM701 resulted in a disease control rate of 47%, including one partial response. It is also important to note that COM701 was well tolerated with no dose-limiting toxicities with monotherapy or in combination with nivolumab. This is a critical component of our ability to move forward with our differentiated combination approach. These preliminary data are also important as they included our first initial pharmacodynamic biomarker data which indicated treatment with COM701 leads to immune activation. We also showed that antitumor activity was observed in selected PD-1 low, PVRL2 positive patients suggesting COM701 treatment may drive antitumor immunity even in patients with less inflamed tumor microenvironments. I will come back to this data in a broader biomarker strategy later in the call. Compugen execution in the clinic has been impressive. In a short time, we have gone from our first clinical launch in data presentation to a comprehensive clinical program with the opportunity to truly differentiate us in the DNAM and TIGIT space, including the ongoing cohort expansion of COM701 in combination with nivolumab, the triplet study of COM701 with nivolumab and Bristol-Myers Squibb TIGIT inhibitor for which we just announced initiation of the cohort expansion study. The dose escalation of COM902 to our wholly owned TIGIT inhibitor and the recently initiated doublet study of COM902 and COM701 initially evaluating the safety and tolerability of the combination at both of the recommended doses for expansion in patients who have exhausted all available standard of care therapies. Once this is completed, an expansion cohort of both study drugs will be initiated in patients with PD-1 refractory or relapsed non-small cell lung cancer and head and neck squamous cell carcinoma as well as colorectal cancer. Having completed the dose escalation of the triplet study and initiated the triplet cohort expansion study, we continue to evaluate strategies to maintain our fast execution and first mover advantage. We are considering removing randomization from the ovarian arm of the triplet study as historical data for nivolumab in ovarian cancer already exist and we know these patients have low response rates to nivolumab. In addition, we are considering adding an inflamed indication, possibly head and neck cancer to broadly assess the full blockade of this axis in a tumor type that unlike most of the other tumor types we evaluate has an inflamed histology but still presents a low response rate to immunotherapy. And finally, our plan for the triplet includes starting the basket study when we have additional data aiming to support the link between PVRL2 expression and treatment response. Coming back to our biomarker strategy on which we received a lot of questions, I thought I would take this opportunity to summarize our approach. Firstly, we use biomarkers to select the tumor types for inclusion in our cohort expansion studies. This was driven by our computational discovery prediction and validated in the lab on DNAM axis members expression in tumor samples along with our initial clinical results from the dose escalation studies of COM701. Our focus in the various expansion cohort studies we initiated is on tumor types with a high level of both PVRIG and PVRL2 in the tumor types in which we saw initial signals of antitumor activity in the dose escalation studies. Such antitumor activity further supports our biomarker-informed approach and predictive discovery capabilities. The second part of our biomarker strategy is the identification of biomarkers for future patient selection. To achieve this goal, we are currently evaluating the correlation between the expression of the PVRIG pathway with clinical response, as well as other exploratory biomarker identification approaches. This work is being done in our ongoing cohort expansion studies and each tumor biopsy is collected pre and on-treatment. And thirdly, we have a pharmacodynamic biomarker approach where we measure immune modulation induced by COM701 and combinations in peripheral and tumor patient samples obtained before and during treatment. Our first presentation of our preliminary biomarker results at ASCO provided initial clinical evidence for the potential immune-mediated mechanism of action with COM701. After one treatment cycle, patients with COM701 monotherapy showed a trend of increased proliferation of effector memory CD8+ memory T cells. This is an important cell population, particularly given its high expression of PVRIG and role in driving antitumor activity. In addition, we saw a significant proliferation of NK-T cells, which also plays a role in antitumor activity. From a cytokine perspective, levels of interferon gamma, a cytokine that plays a key role in antitumor activity, were upregulated following combination treatment of COM701 plus nivolumab. Interestingly, these results showed a dose response trend with increasing doses of COM701 and fixed doses of nivolumab suggesting that the observed increase in cytokines is derived from the combination regimen and not nivolumab alone. We're excited to present a case study at ASCO, which included archival biopsy data from a patient with platinum-resistant MSS primary peritoneal cancer. This patient with a confirmed partial response who was on treatment for 18 months was PD-L1 negative prior to treatment with PVRL2 expression on both tumor and endothelial cells and an immune desert phenotype. Peripheral blood assessment in this patient showed immune activation as measured by immune cell proliferation and interferon gamma induction prior to tumor shrinkage. This biopsy and peripheral blood biomarker case study together with our recent finding of PVRIG expression profile on stem cell-like memory T cells and its ligand on dendritic cells suggest a potential mechanism of action of COM701 in driving tumor shrinkage likely through immune activation in a patient with an immune desert non-inflamed tumor microenvironment. These immune desert non-inflamed patients are those who are typically considered least likely to respond to checkpoint inhibitors and we're encouraged by these initial results which provide the first translational indication that targeting the DNAM axis may expand the reach of immunotherapy to patients who typically do not benefit from these treatments. Our steady execution over the past year has propelled us to a unique first mover advantage as the only company with wholly owned clinical stage assets for both PVRIG and TIGIT. Recent developments in the field are providing important validation of our three-way hypotheses with considerable interest growing in pursuing similar approaches in evaluating the dual and triple blockade of DNAM axis members PVRIG and TIGIT along with PD-1. We believe the growing interest in the field endorses our overall strategy from target discovery and validation through to our clinical strategy and while others are looking to advance candidates targeting PVRIG into clinical studies, we remain ahead with clinical evaluation of monotherapy, dual and triple combination regimens already in progress with COM701. Part of the growing interest in the DNAM axis includes a debate regarding the role of the Fc domain and its relevance for antitumor activity for immune checkpoint inhibitors in general and TIGIT antibodies specifically. And while the debate for TIGIT antibodies is ongoing, which was a point of discussion at the recent SITC symposium on TIGIT, the consensus is that it is unclear if preclinical results from mice or in vitro studies support Fc active TIGIT antibodies will translate to the clinic. COM701 and COM902 were both perfectly designed by Compugen to have reduced Fc effector function as we believe this best positions us for success in the clinic. Antibodies with Fc effector function carry the risk of depleting CD8+ T cells, which are crucial for driving antitumor activity in the solid tumor setting. Our strategy is to avoid the risk of depleting this important cell population and our clinical data support this decision with preliminary activity in the clinic with COM701. In addition, the recent developments in the field indicating promising Phase 2 randomized descriptive data with an Fc-silent anti-TIGIT are in line with our Fc reduced function approach. So far, 2021 has been a year of execution for Compugen and we plan to continue this execution through the second half of the year with several milestones still expected to come. Among these milestones will be preliminary data from our leading Phase 1/2 triple combination study evaluating the safety, tolerability and preliminary antitumor activity of COM701 in combination with Bristol-Myers Squibb TIGIT antibody and nivolumab. We remain on track to report initial data from this study in the fourth quarter of the year which tests our triple blockade hypothesis that blocking the three intersecting PVRIG, TIGIT and PD-1 pathways has the potential to synergistically enhance antitumor immune responses in selected patient populations not responsive or refractory to PD-1 blockade. This is a key differentiator for Compugen in the competitive TIGIT space. Our progress with the triple combination study continues with the recently announced initiation of the expansion cohort of this study. Moving next to COM902. The COM902 monotherapy dose escalation study is important as it enables us to select the dose to independently evaluate multiple combination approaches with COM902 in the clinic. We expect to provide initial data from the COM902 dose escalation in the fourth quarter of this year. We also strengthened our track record of executing in the clinic with on-schedule initiation of our clinical study of COM902 in combination with COM701. This study as the first clinical evaluation of the dual blockade of PVRIG and TIGIT is again a key differentiator for Compugen in the competitive TIGIT space. As we know, we also have an ongoing collaboration with Bayer and we are pleased with their commitment in advancing our ILDR2 program. Like PVRIG, ILDR2 was first discovered by Compugen. Bayer has full responsibility for development of bapotulimab, which is a novel first-in-class anti-ILDR2 monoclonal antibody. We're pleased to be able to say that enrollment is accelerating in the Phase 1 cohort expansion study, which is focused on treating patients with first line ioniv head and neck squamous cell carcinoma. We look forward to sharing additional updates on the progress of this collaboration in the future subject to Bayer's communication policy. We are proud of our remarkable progress, excited for what's to come and remain committed to pioneering the science and clinical studies that have the potential to expand the reach of immunotherapies to patient populations who are unresponsive or refractory to current treatment. Before turning the call over to Ari, I would like to thank the team at Compugen, our partners, investigators, shareholders and patients. I am incredibly proud of their ongoing commitment and dedication which has enabled our impressive execution. And with that, I will turn the call over to Ari to review the financials.

Ari Krashin, CFO and COO

Thank you, Anat. Good morning and good afternoon to everyone. Our financial results for the second quarter of 2021 released this morning continue to show our strong financial position as we execute across our growing clinical programs. Research and development expenses for the second quarter of 2021 were $6.8 million compared with $4.4 million for the same period in 2020. The increase in expenses reflects the continued execution and expansion of the various clinical trials, Phase 1 programs. Net loss for the second quarter of 2021 was $9.5 million or $0.11 per basic and diluted share, compared with a net loss of $6.2 million or $0.08 per basic and diluted share for the same period in 2020. As of June 30, 2021, we had approximately $111 million in cash and cash-related accounts compared with approximately $119 million as of March 31, 2021. The Company has no debt. As a reminder, we expect our gross cash expenditures for 2021 to be in the range between $40 million to $42 million without taking into consideration any potential cash inflows for the Company from existing and new collaborations. Thank you and with that, we will now open the call for questions.

Operator, Operator

Our first question is from Mark Breidenbach of Oppenheimer.

Mark Breidenbach, Analyst

Congrats on the progress. So let me maybe start with the kind of science you've won. We certainly appreciated Eran's presentation showing the fraction of TCF7 positive cells is important for response to checkpoint therapy, and that there's expression of PVRIG in stem-like T cells. I guess I'm wondering if you see TCF7 as a potential biomarker for patients who walk in, would you expect there to be many patients in your Phase 1 dose escalation trials who still have stem-like T cells? And is that the kind of thing that can be simply monitored from peripheral blood without needing biopsies?

Eran Ophir, Vice President, Research and Drug Discovery

Mark, so I think it's an interesting notion, which is not relevant only to PVRIG but to the field at all, the expansion of TCF1. I think it might be challenging biomarker in terms of its prevalence, an expression in TME but we are looking in addition to the obvious aspects in DNAM pathway, etc. We are looking quite broad in terms of exploratory biomarker identification, obviously, TCF7 is one of them and peripheral blood, I'm not sure it's correlated enough to the presence of the cells in blood compared to tumor.

Mark Breidenbach, Analyst

Okay, fair enough. And just in terms of what we should be expecting as far as patient numbers for the upcoming readouts from the triple combination dose escalation study and COM902 monotherapy dose escalation study and also might we see additional kind of translational biomarker data compared to archival biopsies for any of these patients or will the focus really be more on safety and efficacy in the fourth quarter?

Anat Cohen-Dayag, President and CEO

So just, I'll let Henry relate to it but just for the translational data, we're accumulating data, we're working on translational data generation from our studies. When we will have the data, we'll present, not sure that this will be ready for the Q4 or maybe we'll have only very initial data. And as for the expectations, I'll let Henry relate to it.

Henry Adewoye, CMO

Yes, thank you for your question. It will be similar to the previous subjects we were engaged in regarding dose escalation, so we anticipate approximately 15 to 20 patients for the dose escalation.

Mark Breidenbach, Analyst

And that's for both the triple combination and for COM902 as well?

Henry Adewoye, CMO

Yes. That is correct, Mark.

Operator, Operator

The next question is from Chris Howerton of Jefferies.

Chris Howerton, Analyst

Congratulations on the progress and look forward to the end of the year here. So maybe just a couple of questions from me. One is maybe just more of a theoretical question in terms of some of the checkpoint axes, obviously, the DNAM axis is the focus for your team, but there's also been some activity with VISTA in the associated macrophage lineage. So I guess I'd be curious to hear your thoughts on how those may or may not synergize or work together. I mean, then the second question I have is I know Anat, you were mentioning around the good strategy and the hypotheses that you have around the Fc domain of your antibodies. There was a recent update from Arcus. Obviously, a little scant on details but curious to hear your thoughts as to how that reads through to your programs. Thank you.

Eran Ophir, Vice President, Research and Drug Discovery

For your first question, I'm not sure which specific business you are referring to, but if you mean MIALU checkpoints in general, we began exploring this a few years back. We believe that MIALU is significant in immune suppression within tumor microenvironments, and we have early programs focused on this area. We are assessing its efficacy, particularly in combination with our current pipelines and assets.

Anat Cohen-Dayag, President and CEO

And for the Fc domain question and the Arcus data. So obviously, we were not surprised to see this descriptive positive descriptive data. We're waiting to see the data itself. But remember that this is an approach that we were taking ourselves and we believe in this approach, we selected an IgG4 purposely. So it was encouraging for us to say that we were expecting it.

Chris Howerton, Analyst

Yes, okay. And then maybe if I may just one other quick question with respect to kind of the tumor microenvironment that you're describing like head and neck where it was inflamed but not necessarily responding to immunotherapy. I guess what is the mechanistic hypothesis there in terms of specifically what the checkpoints are and how is it inflamed, yet no appreciable immune response to the actual tumor?

Eran Ophir, Vice President, Research and Drug Discovery

We are exploring multiple fronts and assessing different hypotheses regarding the expression of PVRIG in stem-like T cells and PVRL2 in dendritic cells. This leads us to believe that PVRIG could serve as a major checkpoint for improving T cell priming and expansion, which may also allow us to target patients with less inflamed tumor microenvironments. At ASCO, we presented preliminary data showing early signs of antitumor activity in patients with PD-L1 low and less inflamed tumor types. Generally, we expect that every checkpoint would be more effective in a more inflamed tumor microenvironment since T cells are already present there, requiring less effort to achieve efficacy. Tumors like those in head and neck regions and others that are more inflamed may benefit from PVRIG by enhancing and expanding the existing T cells and potentially releasing another checkpoint if PD-1 is insufficient. Indications such as head and neck and non-small cell lung cancers show strong expression of the PVRL2 pathway and others. Therefore, we are implementing a clinical strategy that involves testing multiple indications based on various hypotheses rooted in the shared biology of PVRIG and PVRL2 and their role in T cell expansion.

Operator, Operator

The next question is from Reni Benjamin of JMP Securities.

Reni Benjamin, Analyst

Congratulations on all the clinical progress. I guess just sticking with the TIGIT theme, we've seen some significant BD activity most recently, I guess with BMS and Agenus. And I just wanted to get your thoughts as to, I guess, how we should be thinking about your own BD discussions and your thoughts regarding the potential to partner or is there something that you really want to keep in-house? And sticking with the TIGIT theme, when I think about, I think, I know you had made some comments about how the strategy with having an inactive or slightly less functioning Fc effector prevent CD8 T cell depletion. I always thought about the Fc regions mainly impacting NK cells. Is there something that I'm missing there or something you can help educate me on in regards to T cells and Fc receptors?

Anat Cohen-Dayag, President and CEO

I'll relate to the business front and then Eran can take the Fc, NK relationship. So first, COM902 was developed at Compugen in order to ensure that we extract the full potential of COM701. So we're still on this path and we want to make sure that we remain competitive on this front and that we remain flexible owning the two arms of this DNAM axis. And as you know, we just started the COM701, COM902 study. Having said that, we're obviously open to discuss collaborative arrangements. This should allow us to continue to extract the potential of COM701 and to generate some differentiation for our pipeline. So we're open to discuss collaborative arrangements. It will allow us to keep what we need for our own pipeline.

Eran Ophir, Vice President, Research and Drug Discovery

There are several reasons why preclinically people believe that TIGIT is more effective when it has Fc binding. A key reason is that it enhances NK cell activity. When using an antibody that can bind to Fc receptors, several mechanisms are activated that ultimately lead to the depletion of the cells expressing the targeted TIGIT. NK activation is particularly significant, especially in mice. In the human tumor microenvironment, there are fewer NK cells than in mice. Additionally, some claim that this approach can lead to the depletion of TIGIT-positive cells, which is desirable since TIGIT is highly expressed in regulatory T cells. However, TIGIT is also expressed on CD8 T cells, which are the same cells we want to activate from TIGIT's inhibitory effects. Therefore, if we deplete cells, we also risk depleting CD8 T cells along with Tregs. This is why we and others have opted to focus on non-Fc binders to mitigate the risk of depleting effector CD8 T cells due to enhanced NK activity or other T cell depletion mechanisms in the tumor microenvironment. Does this address your question?

Reni Benjamin, Analyst

Yes, it does. Following up on 902, we're anticipating the data from the monotherapy in the fourth quarter and you've already initiated the combination study. What is the recommended dose for 902, or have you begun at the lower end of the range when combining with 701 and/or are you escalating?

Henry Adewoye, CMO

Yes, Reni, thank you very much for your question. Yes, we did start at the low end of the range for COM902 during dose escalation. The disclosure will identify what the recommended dose for expansion for COM902 will be.

Reni Benjamin, Analyst

Sorry, Henry, I just want to make sure. So in the fourth quarter, we'll know what the recommended...

Henry Adewoye, CMO

That's correct.

Operator, Operator

The next question is from Asthika Goonewardene of Truist Securities.

Asthika Goonewardene, Analyst

So Anat, you mentioned about the cut-offs that PVRL2 and PVRIG expression as selection criteria to some of the expansion cohorts. Can you tell us what was the level of expression you are looking for inclusion? And can you maybe just clarify for me please which studies you're going to be applying this inclusion criteria?

Eran Ophir, Vice President, Research and Drug Discovery

So we are still studying it. We're following samples, we are following patients' correlation to response and this is exactly the goal of what we are trying to do to define in this stage retrospectively, what is the expression level cut-off, which could be a percentage of PVRIG in the tumor microenvironment, it could be PVLR2 on the tumor cells on MI ALU cells, I mean as other shown for other. So we're looking at all of it correlating to response and of course, looking for the right cut-off. So this is yet to be defined and it will be defined based on data and correlations.

Asthika Goonewardene, Analyst

Got it. In our last call, you mentioned that you might be looking to present more biomarker data at a conference later in 2021. Are you still on track for that, or should we expect it more in 2022?

Eran Ophir, Vice President, Research and Drug Discovery

We didn't disclose when exactly we'll present the data. I can only comment that we are actively and aggressively pursuing sample acquisition and correlation and then we'll present the data in the future. Ideally, we'd like to present it in scientific conferences, we still didn't disclose when.

Asthika Goonewardene, Analyst

I would like to follow up on Reni's question about Bristol from a different perspective. Considering that Bristol may have acquired an asset related to PVRIG through the Agenus bispecific antibody deal, could you clarify how involved and committed they are to collaborating with you on data exploration, or is this something you are managing on your own?

Anat Cohen-Dayag, President and CEO

There are a few important points to note. This licensing includes the TIGIT bispecific, and the identity of the second arm is currently unknown, as it could target various other options. It's important to recognize this as a distinct product opportunity separate from TIGIT. Additionally, this reflects the growing interest of BMS in the TIGIT area. However, the decision-making and priority lie with them. It's worth mentioning that BMS is conducting their own studies with their TIGIT, which are separate from our studies. They remain committed to our collaboration, with us sponsoring the triplet study and driving it forward, which is crucial for us since COM701 is the leading program in our pipeline and we aim to take charge of its execution. Ultimately, there are investments in this TIGIT program, and there is no competition with the bispecific.

Operator, Operator

The next question is from Daina Graybosch of SVB Leerink.

Daina Graybosch, Analyst

A couple of questions from me. First, on the triplet, I wonder if you can clarify what cohort you're starting to enroll in the expansion. I think initially you had plan to enroll a tumor agnostic based on PVRL2 expression with Eran's comments just now, I wonder if you wouldn't be ready to start to enroll that patient set yet. And so could you just clarify exactly which one do you start to enroll and you'll bring on other cohorts over time? And then with that how much is BMS involved in making these clinical development strategic decisions?

Henry Adewoye, CMO

So for the second part of the question, I'll defer to Anat to answer. For the first part of the question, as you recall for the expansion cohort, we have cohorts of patients with ovarian cancer. So that includes patients with fallopian tube cancer, that includes patients with primary peritoneal cancer and patients with epithelial ovarian cancer. The other cohort of patients in the expansion cohorts are patients with relapsed endometrial cancer. So those cohorts are open through enrollment and those are the ones that we're currently exploring right now.

Anat Cohen-Dayag, President and CEO

In response to your question about decision making, we are making joint decisions with Bristol-Myers Squibb. We are leading this program and reviewing every aspect of it, while also collaborating closely with Bristol-Myers Squibb. Our relationship is strong, we maintain open communication, and we are making decisions that benefit the program together. This is how our collaboration is being implemented.

Henry Adewoye, CMO

There is no strategic change. As we stated, we decided that due to the low response rate and the historical data we have, we will continue to rely on historical data and will not do the randomization. We will add head and neck as an inflamed tumor type and will proceed with the endometrial study as planned. These are the three changes regarding the basket arm. We are still in the planning phase, and we are continuing to collect data that will correlate the PVRIG pathway with treatment response. Once we have enough data to define the cut-off for enrollment, we will initiate this bucket arm. Therefore, there are no changes in plans on this front.

Operator, Operator

The next question is from Stephen Willey of Stifel.

Stephen Willey, Analyst

Maybe just to follow up on the Bristol collaborative question, so is your ability to pursue a triplet regimen, whether it's I guess either with or without nivo using your TIGIT COM902, is that somehow constrained by the existing Bristol collaboration? I'm just kind of curious if you see an interesting signal emerging out of the triplet, how quickly can you start to think about swapping in 902 for the Bristol TIGIT?

Anat Cohen-Dayag, President and CEO

COM902 is completely separate from the collaboration with Bristol. It is an independent asset. The situation with the triplet is more complicated because, under our collaboration with Bristol-Myers Squibb, there is an exclusivity for COM701 combined with PD-1 inhibitors for a set timeframe. We will need to factor that into our considerations, but COM902 is entirely independent of the Bristol collaboration.

Stephen Willey, Analyst

Okay. So I guess your ability to pursue a triplet that would include COM701, COM902, and a PD-1 inhibitor overlaps with the fact that you have exclusivity to nivo tied to COM701, is that the correct way of understanding it?

Anat Cohen-Dayag, President and CEO

There are some ways for us to do it with marketed PD-1 inhibitors. So that could be done.

Stephen Willey, Analyst

And then I guess you've talked on the biomarker side about doing this retrospective look, whether it's a function of evaluating PVRIG expression in the tumor microenvironment and/or PVRL2, I guess on various immune cell subsets. I know that Roche had kind of previously commented that I think in their - in one of their TIGIT presentations that they didn't believe that PVR, which is the - I guess one of the TIGIT ligands, wasn't a great surrogate biomarker in the sense that it's kind of broadly expressed on a variety of different cell types. Is PVRL2 akin to PVR in the sense that it has that same broad pattern of expression?

Eran Ophir, Vice President, Research and Drug Discovery

PVR and PVRL2 show similar expression patterns, particularly in normal tissues. However, both are upregulated in tumor microenvironments, with some tumors exhibiting higher levels of PVRL2 and others showing higher levels of PVR. There may be publications related to PVR's role in enhancing tumor invasion mechanisms. Additionally, data from Genentech has indicated a correlation between PVR and worse prognosis, particularly in non-small cell lung cancer, suggesting that it may not correlate the same way with PVRL2. We are currently evaluating PVRL2 ourselves, but we need to consider why PVRL2 might behave differently than PVR.

Operator, Operator

The next question is from Tony Butler of Roth Capital.

Charles Butler, Analyst

I have three brief questions that relate to each other. In ClinTrials.GOV regarding the triple combination, you've made comments today about the basket cohort or cohort three. Am I correct in understanding that the definition of high expression PVRL2 is still unknown? That's my first question. If it can be elaborated, that would be great. Secondly, does high PVRL2 expression correlate with PD-L1 being positive or negative? Are there tumors that are negative for both markers? For my third question, which ties back to the SITC presentation, is there a true correlation between peripheral effector memory CD8s and NK-Ts with their presence in the tumor? Is there a direct correlation that might alleviate the need for a biopsy in the future? Thank you.

Eran Ophir, Vice President, Research and Drug Discovery

For the first question regarding what constitutes high PVRL2, we are currently working to determine the cut-off score, whether that be 100 or 200, or the percentage of immune cells expressing PVRL2 and other members of the DNAM axis, to identify what correlates best with the response. This will be established retrospectively and then prospectively tested in clinical settings. Concerning PVRL2 versus PD-L1, this is a significant topic as PVRL2 is not induced by inflammation, allowing for high PVRL2 levels to be present in both PD-L1 positive and negative tumor types. We have pre-identified cancer types such as ovarian and endometrial where PD-L1 expression is not notably high and the response to PD-1 is also low, but the PVRIG pathway is prominently active, which is why we are targeting these tumors. Regarding effector memory and NK-T cells, there is a correlation between the proliferation of effector memory cells in the periphery and specific effector clones within the tumor microenvironment. However, we cannot solely depend on peripheral measurements; hence, we conduct biopsies during the expansion phase of our trials to investigate the tumor microenvironment as well. We often observe specific clones that proliferate both peripherally and within tumors. While there are fewer NK-T cells in the tumor microenvironment, studies indicate that their presence is usually associated with better prognoses. I am not aware of extensive research correlating peripheral and intratumoral expansion of NK-T cells, but it's worth mentioning that the significant proliferation indicates that our drug COM701 is functioning as expected, possibly enhancing immune cell activity and interferon gamma levels, which serves as a surrogate marker for drug efficacy alongside direct observations from the tumor microenvironment. Additionally, this pharmacodynamic change can also occur with other drugs, particularly in early-stage trials involving heavily pre-treated patients, and may not always correlate directly to treatment responses.

Charles Butler, Analyst

One follow-up if I may though, this is back to the second part of PVRL2 and PD-L1, but if you were able, post-therapy, if in fact you actually drive PD-L1 expression, even in PD-L1 minus tumors, when you look at a tumor initially having been treated with something else that is in fact relapse or a relapsed patient or a resistant patient, a PD-L1 minus patient and in fact then treated with COM701, for example, would drive PD-L1 expression. Is that true?

Eran Ophir, Vice President, Research and Drug Discovery

If indeed and as mentioned before, the biology of PVRIG and PVRL2, if we will be able to drive and expand this in the tumor microenvironment, then potentially, we'll increase the inflammatory status of the tumor microenvironment and then potentially PD-L1 could be upregulated as well as a marker to indicate and again this is one of the reasons PD-L1 is a biomarker for PD-L1 activity while it reflects that is more inflamed and has more T cells inside.

Operator, Operator

This concludes our Q&A session. I will now turn the call back to Compugen's President and CEO, Dr. Cohen-Dayag. Would you like to make your concluding statement?

Anat Cohen-Dayag, President and CEO

Thank you. To conclude, we're excited about what's to come and are proud of our remarkable progress. As always, we will seek to continue to drive the science to uncover important insights into the biology and mechanism of our candidate and we remain uniquely positioned to unlock the promise of these potentially foundational immunotherapy candidates in the clinic across patient populations typically considered unresponsive to current treatment. Thank you for joining us today and your continued support. Stay safe and healthy.

Operator, Operator

Thank you. This concludes Compugen Limited second quarter 2021 financial results conference call. Thank you for your participation. You may go ahead and disconnect.