Compugen - Earnings Call - Q4 2024
March 4, 2025
Transcript
Operator (participant)
Ladies and gentlemen, thank you for joining us today. Welcome to Compugen's fourth quarter and full year 2024 results conference call. At this time, all participants are in a listen-only mode. An audio webcast of this call is available in the investor 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. Yvonne, please go ahead.
Yvonne Naughton (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 the potential outcome. The company's discovery platform anticipated progress and plans, results and timelines 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 the 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.
Anat Cohen-Dayag (CEO)
Thank you, Yvonne, and a warm welcome to everyone joining our call today. On today's call, I will highlight some of our key achievements in 2024 and outline our strategic priorities for 2025, starting with our potential first-in-class anti-PVRIG COM701. In 2024, we presented data showing the treatment with a triple blockade of PVRIG, TIGIT, and PD-1 with COM701, COM902, and pembrolizumab in platinum-resistant ovarian cancer patients who typically do not respond to immunotherapy, resulted in encouraging durable responses and was well tolerated. As of mid-February 2025, a few patients remained on study treatment. The data from this study is important because it is consistent with data we previously presented and further demonstrates COM701 is active, results in durable responses, and has a good tolerability profile.
Based on the totality of the data we've presented to date, including monotherapy and combination data, and with the support from ovarian cancer experts, we announced at the end of 2024 that we would advance development of COM701 as a maintenance treatment option for patients with platinum-sensitive ovarian cancer. We believe that advancing COM701 in this maintenance setting of platinum-sensitive ovarian cancer has a strong clinical and biological rationale and represents a less competitive landscape. As part of our 2025 strategic priorities, we are on track to initiate in the second quarter of 2025 an adaptive platform trial, starting with a randomized double-blinded subtrial. The first subtrial will evaluate single-agent COM701 as a maintenance therapy versus placebo in a total of 60 patients with platinum-sensitive ovarian cancer who are not candidates for bevacizumab or PARP inhibitors.
The primary endpoint will be median progression-free survival, where the placebo benchmark is expected to be approximately six months. We believe that showing a three-month improvement over the median progression-free survival of the placebo would be clinically meaningful. We expect to share interim analysis from this subtrial in the second half of 2026. Positive data may allow us to both engage in discussions with the regulatory authorities on a path for COM701's registration as a single agent and to extend the opportunity for COM701 to serve as a backbone for future drug combinations. Moving next to the TIGIT landscape. In 2024, there have been several setbacks for the TIGIT antibody class, resulting in study or program discontinuations, which led to skepticism about the benefit that TIGIT blocker combinations could bring. These study discontinuations occurred with Fc-active TIGIT antibodies.
Setting aside the importance of selecting the appropriate tumor type and patient populations that in some cases might not have been an ideal fit for TIGIT blockers assessment, we consistently have advocated that Fc-inactive antibodies may serve as the better antibody format for targeting TIGIT. In line with this, current clinical trials suggest that Fc-inactive anti-TIGIT may have a safety advantage in certain patient populations, which could ultimately support a potential efficacy advantage due to the patient's durability on study treatment. We therefore believe that the current Phase 3 trials conducted with Fc-inactive TIGIT antibodies are important to confirm or refute the benefit that TIGIT blocker combinations could bring. If success is achieved by one of these upcoming Phase 3 trials, it could validate TIGIT antibodies as a drug class and open new opportunities for Compugen based on our TIGIT antibody.
We're one of the few companies with a clinical stage Fc-inactive TIGIT antibody, COM902. We differentiate ourselves not only by the unique properties of COM902, but also by our clinical strategy. We continue to believe that blocking TIGIT in combination with PD-1 blockers may be effective in certain PD-L1 high tumors, but we also believe that TIGIT PD-1 blockade may need to be combined with a PVRIG inhibitor to expand their use to less inflamed PD-L1 low tumors. In addition, our partner AstraZeneca has most recently initiated their seventh Phase 3 clinical trial with rilvegostomig, their PD-1 TIGIT bispecific, the TIGIT component of which is derived from our COM902.
Since we last reported in November 2024, AstraZeneca has initiated two Phase 3 trials evaluating rilvegostomig combinations versus standard of care, with one trial in first-line squamous non-small cell lung cancer expressing PD-L1 and the other trial as first-line treatment in HER2-positive gastric cancer. AstraZeneca's broad development strategy for rilvegostomig to replace existing PD-1 or PD-L1 inhibitors represents a significant potential revenue source for Compugen, as we're eligible for both future milestone payments and mid single-digit tiered royalties on future sales. In 2024, AstraZeneca presented promising rilvegostomig data at the World Conference on Lung Cancer and ESMO, showing promising efficacy and a manageable safety profile in both lung and gastrointestinal cancer. In 2025, AstraZeneca plans to share early data on the combination of rilvegostomig with their ADCs. Moving next to GS0321, previously named COM543.
As a reminder, GS0321, a potential first-in-class anti-IL-18 binding protein antibody licensed to Gilead, represents a novel way to harness IL-18 pathway biology for the treatment of cancer by using an antibody against IL-18 binding protein and therefore potentially avoiding the challenges presented by administration of therapeutic cytokines. The license by Gilead of GS0321 further validates our computational discovery, research, and drug development capabilities. It is also a testament to the differentiation of our antibody program targeting the IL-18 binding protein. In 2024, we also made great progress on GS0321. In the third quarter of 2024, we received a $30 million milestone payment from Gilead for achieving the FDA IND clearance. In the fourth quarter of 2024, we initiated the Phase 1 trial for GS0321, and the first patient was dosed in early January 2025.
As part of our strategic priorities in 2025, we're focused on the efficient execution of the GS0321 Phase 1 trial. Finally, beyond our clinical stage program, our talented teams are working on multiple innovative undisclosed research programs. These efforts leverage computational predictions to identify novel ways to activate anti-tumor immunity. This work is powered by CGEN, our computational prediction discovery platform, already validated by our multiple clinical stage potential first and best-in-class antibodies, as well as our partnerships with AstraZeneca and Gilead. It is a strategic priority for us to advance our programs to continue to feed our own pipeline. With a diverse pipeline and strong focus on execution in 2025, we believe Compugen is well positioned for growth.
Cash runway, assuming no further cash inflows, is expected to last into 2027, and we anticipate using this runway to advance the projected COM701 single-agent subtrial interim analysis and to support the progression of GS0321 in the clinic, together with continuing investment in our early-stage research pipeline. Of course, none of this would be possible without our extraordinary team here at Compugen, who continuously performs at the highest level of excellence. I'm excited for 2025 to be another year of advancing our efforts to make a meaningful impact on cancer patients' lives. With that, I will hand over to David for the financial update before we open the floor for Q&A.
David Silberman (CFO)
Thank you, Anat. I'm delighted to say that we're advancing into 2025 with a solid balance sheet, with no debt, and with a cash runway to support our operating plans into 2027. Going into the details, I will start with our cash balance. As of December 31, 2024, we had approximately $103.3 million in cash, cash equivalents, short-term bank deposits, and investments in marketable securities. The cash balance at the end of 2024 includes the $60 million upfront payment from Gilead for the licensing of GS0321 in December 2023 and the $30 million milestone payment for its IND clearance in 2024, after withholding taxes at source on those payments, in addition to $15 million in milestone payments from AstraZeneca on dosing the first patient in the first and second major indications for rilvegostomig in Phase 3 trials.
Our cash runway takes into account the planned development of our clinical assets and continued investment in our early innovative pipeline. On the revenues front, we reported approximately $1.5 million in revenues for the fourth quarter of 2024 and approximately $27.9 million for the year ended December 31, 2024, compared to approximately $33.5 million in revenues for each of the comparable periods in 2023. Revenues for 2024 include the portion of the upfront payment and the IND milestone payment from the license agreement with Gilead and the $5 million clinical milestone payment from AstraZeneca. Moving to expenses. R&D expenses for the fourth quarter of 2024 and for the year ended December 31, 2024, were approximately $5.9 million and $24.8 million, respectively, compared with approximately $10.9 million and $34.5 million for the comparable periods in 2023.
The decrease in 2024 was mainly due to the classification of expenses related to GS0321 to cost of revenues and to lower CMC and IND enabling activities related to GS0321, partially offset by an increase in clinical expenses. Our G&A expenses for the fourth quarter of 2024 and for the year ended December 31, 2024, were approximately $2.2 million and $9.4 million, respectively, compared with approximately $2.5 million and $9.7 million for the comparable periods in 2023. Finally, on net loss. For the fourth quarter of 2024, we reported a net loss of approximately $6.1 million or approximately $0.07 per basic and diluted share, compared to a net income of approximately $9.7 million or approximately $0.11 per basic and diluted share in the comparable period of 2023.
Net loss for the year ended December 31, 2024, was approximately $14.2 million or approximately $0.16 per basic and diluted share, compared with a net loss of approximately $18.8 million or approximately $0.21 per basic and diluted share in the comparable period in 2023. With that, I will hand over to the operator to open the call for questions.
Operator (participant)
Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please press star one. If you wish to decline from the polling process, please press star two. If you're using speaker equipment, kindly lift the handset before pressing the numbers. Please stand by while we poll for your questions. The first question is from Asthika Goonewardene of Truist Securities. Please go ahead.
Karina Rabayeva (VP)
Hi, this is Karina from Truist. I had a question on AstraZeneca's recent, they announced the initiation of Phase 3 endometrial study for the B7-H4 ADC program. They're evaluating it in the Phase 1/2 study as a monotherapy and in combo with the rilvegostomig. Can you confirm whether rilvegostomig will be included in the Phase 3 study design?
Anat Cohen-Dayag (CEO)
Hi, Karina. Actually, we cannot relate to anything that AstraZeneca did not put in the public domain, so I think that we cannot address this question. We're very happy with the seven pivotal trials that they opened, the cross-indications. As you know, they stated that they will open up to 10 trials. They're really moving forward fast, aggressively testing rilvegostomig with ADCs, with chemo, as a standalone. We just need to wait and see.
Karina Rabayeva (VP)
Okay. I had a follow-up. Can we expect any near-term data from them that could clarify contribution to efficacy for the TIGIT part?
Anat Cohen-Dayag (CEO)
They were in a minute, I'll relate to contribution of efficacy, but they stated that they will present data during 2025 from the combination of rilvegostomig with ADCs. This is expected. I don't know to say more about the contribution of rilvegostomig as part of the ADCs, but they did present data from rilvegostomig in non-small cell lung cancer and in gastric cancer. I think that the data is showing promising efficacy and safety profile.
Karina Rabayeva (VP)
Okay. A follow-up is, which of the ongoing Phase 3 trials is expected to read out first and the anticipated timeline for that?
Anat Cohen-Dayag (CEO)
Again, AstraZeneca did not share any information about this. If you look at their deck from the investor call, they are referring to the Phase 3 trials as beyond 2026, but we cannot relate to more than that.
Karina Rabayeva (VP)
Okay. Thank you so much.
Anat Cohen-Dayag (CEO)
Thank you.
Operator (participant)
The next question is from Daina Graybosch of Leerink. Please go ahead.
Daina Graybosch (Senior Managing Director)
Hi. Thanks for the question. I wonder if you could talk more about your design of the ovarian study. Understand that it's randomized in 20 patients. Can you help us understand what its power to show in terms of PFS hazard ratio? Given it's small, how are you going to ensure you have balance between the two arms? not go for a larger study to help ensure baseline balance? Thank you.
Anat Cohen-Dayag (CEO)
Michelle?
Michelle Mahler (CMO)
Sure. Hi, Diana. The design of the study is still an exploratory Phase 1b study, so it's not powered to detect an improvement in terms of a full pivotal trial. It's designed to be able to allow us to evaluate the single-agent activity of COM701 so that we will be able to outline or accelerate a pathway to an approval. The design that we're using is used quite frequently at this point in time in Phase 2 drug development or Phase 1b, Phase 2 drug development with an adaptive trial design, and we're using Bayesian statistics to be able to evaluate what the probability is of improvement by more than three months when you compare the active arm to the placebo.
Anat Cohen-Dayag (CEO)
Dana, I'll just add with respect to a larger study. Obviously, if we will see we anticipate to have the interim analysis in the second half of 2026, if we will see that there is a reason for us to add more patients and turn into a larger study, that's also something that we can do. We decided that we'll focus our resources on trying to see if what we believe should work in platinum-sensitive maintenance setting is delivering the data that we expect to see.
Daina Graybosch (Senior Managing Director)
If you talk about how you're going to help both arms be balanced, and maybe I'll add on a second question to this, you said the patients can be not eligible for Bev and not eligible for PARP. How does that bias this patient group to performance status or any other sort of clinical disease or patient characteristics with that particular criteria? And are there benefits and risks to that?
Michelle Mahler (CMO)
Okay. The study is going to enroll patients who are already in a PR or CR following their platinum chemotherapy and they're patients who would not be recommended to get standard of care maintenance. If they are eligible to get Bev, they will get Bev beforehand. If not, they won't be seeing Bev. Similarly, if they meet the criteria per the label and guidelines to get PARP inhibitors, they will. This effectively captures what would be considered the third-line patient population. By virtue of the fact that they've been able to tolerate chemotherapy, you're already selecting for a more well-patient population. We do have a stratification factor when we randomize. That is how we will achieve balance between the arms. Even though there's a two-to-one randomization, the stratification is for PARP inhibitor use.
Patients who have not seen PARP inhibitors are placed differently in terms of the analysis. Let me know if I've answered all the questions you had on this. That's happy to keep going.
Daina Graybosch (Senior Managing Director)
Got it. I guess just one more follow-up. Why prior PARP as your stratification versus anything else?
Michelle Mahler (CMO)
Because the biology is slightly different among the patients who have PARP inhibitor use, and that has the potential to result in an imbalance at the time of analysis. Patients who have PARP inhibitors can often be the ones that remain platinum-sensitive with multiple reactions more often than patients who have seen bevacizumab or who have not been treated at all with their full PARP.
Daina Graybosch (Senior Managing Director)
Great. Thank you.
Operator (participant)
The next question is from Leland Gershell of Oppenheimer. Please go ahead.
Leland Gershell (Managing Director)
Hey, good morning. Thanks for the update and for taking our questions. Just one from us. Just on GS0321, just curious, in addition to studying this in advanced solid tumors, just wondering if there's interest in evaluating this asset in hematologic malignancies and/or with maybe combination with products like rituximab, just given other campaigns in the past along the IL-18 axis that have looked at those candidates in such settings. Thank you.
Anat Cohen-Dayag (CEO)
Yeah. This is an interesting question. I'll just say, obviously, I'll let Eran relate to it from the biology perspective and what could be done. Obviously, we cannot go beyond what's written in clinicaltrials.gov in the description of the study with the solid tumors, but Eran, go ahead.
Eran Ophir (CSO)
Yeah. It's an interesting question. Obviously, it's right that in the past, IL-10 has shown some combination with rituximab. For us, we're focusing now on solid tumors. This is where we did most of our research. This is where we saw the observations of this unique activity specifically inside the tumor microenvironment and not the periphery. Hematological could be interesting, but as Anat mentioned, the focus now is solid tumors. We think we have an edge there versus other IL-10 agents. Yeah, this is where we go first. Great. Thanks. And then just with respect to the study in platinum-sensitive, if you could just remind us, it's an adaptive platform trial, just what the adaptive nature of that design is. Thank you.
Michelle Mahler (CMO)
Sure. It is adaptive because we declare upfront that we would add additional arms to the study, or after our interim analysis, there is an opportunity, as Anat alluded to, that we could also increase the sample size. Those are the adaptations, and it allows us to be able to be much more flexible in terms of what our next steps will be pending the interim analysis data.
Leland Gershell (Managing Director)
Okay. I guess just to follow on to the earlier question, have you indicated what sample size you may be looking to raise the trial to?
Michelle Mahler (CMO)
No. It will be dependent on the magnitude of effect size that we get at the interim analysis.
Leland Gershell (Managing Director)
Got it. Great. Thanks very much.
Operator (participant)
The next question is from Tony Butler of Rodman and Renshaw. Please go ahead.
Tony Butler (Senior Managing Director)
Michelle, just one or two follow-ups on the same topic. One is, what are your expectations for rate of enrollment? Importantly, when do you think you could reach roughly 60 patients in total? The second is, in a real-world setting, what's the rough percentage of patients that actually don't see bevacizumab or PARP in the platinum-sensitive setting? Thank you.
Michelle Mahler (CMO)
Okay. In terms of I'll take the first question. Wait, the percentage of patients sorry. I'm going to take the second question first, and I'm going to ask you to repeat the first question. I apologize. The percentage of patients is PARP inhibitors. If a patient is eligible for a PARP inhibitor, meaning that they have one of the mutations associated with the response, they're absolutely treated. That's really driven by the underlying genetics of the patient population. Offhand, I think it's about a third of patients that have the mutation. Among the patients who are eligible for bevacizumab, there's a lot of different factors that will be taken into consideration.
However, in the clinical trials, patients that had a very high-risk disease and high risk for disease progression, they had when they did the clinical trials, the progression-free survival with adding bevacizumab was improved, except for the patient population that had high-risk features, there was not an improvement in overall survival. There are a group of patients that are not always treated upfront in the first-line setting with bevacizumab, and there are investigators who elect to hold off treatment until the patient has platinum-resistant disease. I'm not so clear exactly what percentage of patients that is, but it tends to be a smaller percent than what we would expect. We know that in the third-line patient population, about 40% of those patients who relapse off the second line remain platinum-sensitive. The rest become platinum-resistant.
Tony Butler (Senior Managing Director)
Thank you. The first question was rate of enrollment in the study.
Michelle Mahler (CMO)
Oh, yes. Okay. So we.
Tony Butler (Senior Managing Director)
Anticipated.
Michelle Mahler (CMO)
Yes. From all the investigators that are in touch with us with respect to participation, there's a lot of support for the study to enroll rapidly. One of the reasons being is that there aren't too many other clinical trials right now open for this specific patient population. It would appear that we should have a pretty fast rate of enrollment. As we have stated before, our plan is to have an interim analysis on the next year.
Tony Butler (Senior Managing Director)
Thanks, Michelle.
Operator (participant)
The next question is from Stephen Willey of Stifel. Please go ahead.
Stephen Willey (Managing Director)
Yeah. Good morning. Thanks for taking the questions. Maybe just to follow up on the sub-study one question. Can you speak to what specifically triggers the interim analysis that will be conducted in this study? Is it an event-rate-driven analysis? I guess, is there also a predefined futility threshold that will be evaluated at time of this interim?
Michelle Mahler (CMO)
Yes. There is a futility rate based on the assumption that after nine months of follow-up, after we enroll the last patient in, we will evaluate because we know—let me take a step back and explain. Because we know that the patients who don't get maintenance treatment from the literature, the median progression-free survival, when you look across all the big registration studies and big clinical cooperative group studies, the median progression-free survival is approximately six months. Okay? There are some outliers in that approximation. There is one study where it was 8.4 months and one study where it was 3.8 months. When you put all the data together, it is approximately six months. We are looking for a three-month improvement, and we do have a futility—we do have a futility boundary.
The way we will analyze this using Bayesian statistics will be to say, what is the probability of seeing an improvement of three months at the time that we look at the interim analysis? We will also follow the event. If we are hitting an event-driven improvement before we get to the planned interim analysis, we will then potentially also consider unblinding the study at that point. That is why we will have an independent data review committee who will be looking at the data as the study progresses.
Stephen Willey (Managing Director)
Okay. The interim's triggered by PFS event rate, not by some pre-specified event rate?
Michelle Mahler (CMO)
It's a combination. We have the event rate, and we also are triggering it based on follow-up. Once we know that we've gone according to the particular follow-up and the hypothesis, we will then look at potentially cutting the data. If we meet either the futility boundary or we exceed it from the point of view that we are positive with the greater than 80% chance of that observation, we will consider that the study is positive or at least the interim analysis is positive and then take additional steps to move forward.
Stephen Willey (Managing Director)
Okay. Got it. Just quickly on the 0321 dose escalation study, can you speak to whether pre or post-treatment biopsies are mandatory? Just what PD data will you be collecting both in the tumor and, I guess, also the periphery to confirm on-target activity? Thanks.
Michelle Mahler (CMO)
Okay. I can't speak to all the minute details within that question. I can only speak to what we have in clinicaltrials.gov. That just suffices that we do have certain—we do have certain cohorts that we will obtain on treatment biopsies so that we will be able to look more deeply into some of the pharmacodynamic properties of the compound.
Stephen Willey (Managing Director)
Okay. Thanks for taking the questions.
Operator (participant)
Thank you. This concludes the Q&A session in Compugen's investor relations conference call. Thank you for your participation. You may go ahead and disconnect.