Compugen Q1 2023 Earnings Call Transcript

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May 15, 2023

There are 9 speakers on the call.

Operator

Ladies and gentlemen, thank you for joining us today. Welcome to Compugen's First Quarter 2023 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.seagen.com. As a reminder, today's call is being recorded.

Operator

I would now like to introduce Yvonne Naughton, Head of Investor Relations and Corporate Communications. Yvonne, please go ahead.

Speaker 1

Thank you, operator, and thank you all for joining us on the call today. Joining me for Compugen for the prepared remarks are Doctor. Anat Cohen Diak, President and Chief Executive Officer and Alberto Sessa, Chief Financial Officer Doctor. Henry Adewoye, Chief Medical Officer and Doctor. Eran O'Fuhrer, Senior Vice President, Research and Drug Discovery will join us for the Q and A.

Speaker 1

Before we begin, we would like to remind you that during this call, The company will make projections or forward looking statements regarding future events, business outlook, development efforts and their potential outcome, The company's discovery platform anticipates a progress in plans, results and timeline for its programs, financial and accounting related matters, as well as statements regarding the company's future cash position. We should 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 20F filed with the SEC on February 28, 2023. The company undertakes no obligation to update projections and forward looking statements in the future. And now, I turn the call over to

Speaker 2

Anal. Thank you, Yvonne. Good morning and good afternoon, everyone, And welcome to our Q1 2023 update. At Compugen, we are advancing a differentiated clinical Evaluating a drug combination that was never tested before in a space where there is a significant unmet need and potential opportunity to transform the lives of cancer patients with the right immunotherapy combination. Compugen has always believed that in certain patients and in certain tumor types, Blocking the 3 pathways of the genome access, PVRIG, TIGIT and PD-one may be needed to enhance anti tumor immunity.

Speaker 2

We have always said that blocking TIGIT in addition to PD-one may not be enough, a concept that is now increasingly reflected in the consistent move of larger pharma players to add an additional drug the PD-one drug combinations in various indications. Given the potential of PVRIG inhibition To sensitize tumors to PD-one and TEG blockade, we believe the biological and mechanistic rationale support the addition of an anti PVRIG to the anti PD-one TIGIT mix and we have the initial clinical Frustrational data to support our hypothesis. We are the leaders in the unique chemotherapy free triple combination approach of blocking the 3 genome access immune checkpoint PVR ID, TIGIT and PD-one and we are focused on maintaining this leadership. We have initiated 2 follow on proof of concept studies in indications not typically responding to immunotherapy, microsatellite stable colorectal cancer and platinum resistant ovarian cancer. The former is enrolling patients and the latter is open for screening of eligible patients.

Speaker 2

In these difficult to treat indications refractory to standard of care, We have previously demonstrated encouraging clinical benefits, including in patients refractory to anti PD-1s and in patients whose tumors were immune desert. These data are supported by immune activation that aligns with the COM701 mechanism of action. The goal of the following clinical studies is to strengthen the evidence, help us better understand the contribution of components and build on the extensive biomarker work to identify the patients most likely to respond. We believe that this strategy provides the fastest route in building a path to registration and derisk our lead assets COM701 and COM902 in these two indications. In the Q1 of the year, we executed on our promises.

Speaker 2

Firstly, we initiated enrollment in our microsatellite colorectal for cancer study and we're excited to be on track to report initial findings by the end of the year with final data in 2024. Secondly, at the annual ASCO conference in June, we will present encouraging data showing the preliminary anti tumor activity of COM701 in combination with BMS anti TIGIT and ebolumab in patients with recurrent metastatic phosphatidylated endometrial cancer. This will include data on antitumor activity and safety in 9 patients. Patients with advanced microsatellite stable endometrial cancer have limited treatment options. In a similar population of patients, dostarumab shows an overall response rate of approximately 15%.

Speaker 2

The data we will present for our triple combination at ASCO serves as an additional support for COM701 mediated anti tumor activity in another tumor type in patients' refractory standard of care. For now, we remain focused on our proof of concept studies in NSF TRC and plaquenoidistant ovarian cancer Using our own TIGIT COM902 in combination with our own anti PVRIG COM701 and pembrolizumab with a goal to strengthen the evidence in these indications by enlarging the number of patients. However, our data suggests that the treatment potential for COM701 combination goes beyond these two indications. And thirdly, We continue to feed our own pipeline, leveraging our pioneering computational discovery platform. Earlier this month, we gave an oral presentation at CIMT Europe Cancer Immunotherapy Meeting on our lead potential 1st in class preclinical asset, COMFHYP43, which utilizes a novel approach to harness cytokine biology to potentially treat cancer.

Speaker 2

We presented preclinical data showing that COM-five zero three binds with high affinity to IL-eighteen binding protein, freeing endogenous IL-eighteen and restoring natural killer and T cell activity. We also showed that blocking IL-eighteen binding protein prevents tumor growth and release IL-eighteen to activate immunity in the tumor microenvironment without affecting peripheral immunity in urine tumor models. Our approach is unique and different from recombinant cytokines targeting this pathway or from other pathways that were already tested in the clinic. These are given systemically to patients and are associated with safety challenges. The potential advantage of our approach is that our drug COM53 is an antibody and not a cytokine And this antibody works by freeing the body's own interleukin-eighteen, where it is mostly upregulated in the tumor microenvironment to stimulate the immune system to hide cancer.

Speaker 2

Consequently, we believe that it has the potential advantage of avoiding the typical pharmacokinetic and systemic tolerance limitation associated with cytokine administration. Regarding our finances, we have an Effective cash runway at least through the end of 2024 to support operations, reach milestones and derisk our lead assets COM701 and COMML2. In terms of future funding, Non dilutive funding of our pipeline assets is our priority. We see this as a big opportunity having 3 potential 1st or best in class unmet need in immuno oncology. With that, I will hand over to Alberto for the financial update.

Speaker 3

Thank you, Anat. I'm happy to summarize our financial results. I will start with our cash balance. As of March 31, 2023, we had approximately $74,300,000 in cash compared with approximately 80 $3,700,000 as of December 31, 2022, affirming our focus On capital efficiency, while continuing our bold execution on our DIN number 1 axis hypothesis. The company has no debt.

Speaker 3

We recognize the importance of cash efficiency and we are disciplined In how we deploy our cash resources, making sure we will focus on reaching key microphones with our available cash runway at least through the end of 2024. It is important to emphasize that this does not include Any potential cash inflows, including potential milestone payment from

Speaker 4

our collaborator

Speaker 3

AstraZeneca. The timing of milestones payment will depend on the progress of studies run by AstraZeneca. For contractual reasons, we cannot provide a breakdown of the milestones payment. To remind you, To date, Compugen received development milestones payment of $2,000,000 $6,000,000 $7,500,000 For achieving a preclinical milestones and for dosing the 1st patient in Phase 1 and Phase 2 studies, respectively. Compugen is entitled to receive an aggregate of up to $200,000,000 in development, regulatory and commercial milestones for the first product.

Speaker 3

Expenses for the Q1 of 2020 3 were in line with our plans. R and D expenses for the Q1 of 2023 were $7,400,000 compared to $7,200,000 in the Q1 of 2022. Our G and A expenses for the Q1 of 2023 were $2,600,000 compared to $2,600,000 in the Q1 of 2022. For the Q1 of 2023, net loss was $9,300,000 or $0.11 per basic and diluted share compared to a net loss of $9,700,000 or $0.11 per basic and diluted share in the Q1 of 2022. With that, I will hand back to Ana to summarize.

Speaker 2

Thank you, Alberto. To summarize, we are on track to present initial findings from 2 studies evaluating our leading triple combination blockade of PVRIG, TIGIT and PD-one by the end of this year. These studies are building on prior data suggesting that blocking PVRIG may sensitize tumors to respond to PD-one and CD blockade and could turn call tumors up, potentially offering a chemotherapy free option For tumors, most competitors are not targeting metastatic MSS CRC and platinum resistant ovarian cancer. This is a real potential opportunity to transform the lives of patients with the right immunotherapy combination. With that, I will turn the call over for questions.

Speaker 2

Operator?

Operator

Thank you. Ladies and gentlemen, at this time, we will begin the question and answer Please stand by while we poll for your questions. The first question is from Mark Breidenbach of Oppenheimer. Please go ahead.

Speaker 5

Hey, thanks for taking the questions and congrats on the quarter. Just a couple of quick ones from me. I was wondering if you could comment on any potential read through Between observations you'll be presenting at ASCO in endometrial cancer to the 2 focus areas That you're pursuing development in colorectal and ovarian. And then the second question is just on COM503. If you could give us like a rough timeline until This product candidate enters the clinic, that would be appreciated.

Speaker 5

Thank you.

Speaker 2

Okay. Thank you, Mark. I think that I understand what you meant with your question and I'll answer it's not just And just to quickly answer me again answer the question again. So first on the endometrial And sir, as we said, we published the data at Alcon. We gave some insights.

Speaker 2

This is a small cohort and will be able show antigen work activity and also safety data. From our perspective, as I said in the prepared remarks, This is a way for us to show again the potential of COM701 in different indication and by the way, that we were predicting through our computational discovery capability to begin with the program. And then later in the year, we will be able to share preliminary findings from the 2 studies that And they were pursuing now, as I said, the CRC is already enrolling. The platinum resistant ovarian cancer study It's a screening patient for enrolling and we will share data towards the end of the year. We Aim to complete enrollment of active 20 patients of the CRC study.

Speaker 2

So Then from one front, we may have data from I don't believe that it would be the full cohort that will aim to complete enrollment. And on the ovarian, we aim to complete enrollment of 20 patients out of the 40 in the triplet study And we share data of whatever we'll have at that point in time and then the rest in 2024. And with respect to your question about the contract for free, R and D schedules for next year.

Speaker 5

Okay. Just touching back on the first question, I guess what I was asking is if we should reasonably expect the Lessons or observations from endometrial cancer to directly apply to either colorectal or ovarian cancer.

Speaker 2

I think that we look at it and Henry, please chime in. I think that we look at it as on one hand Indication by indication, so data in one indication is not predictive of success in a different indication, but I think that the totality of the data definitely points to strengthening the view that we have on ComfThera alone, The clinical responses, but also the mechanism of action behind this antibody that we see. And that's very important for us. So that's my view. Henry, would you like shared anything there on this front?

Speaker 6

No. Thank you, Anant. You've answered it in general. The thing to remember, Mark, is that like Anat said, it will be based on indication by indication. One of the things to consider is that for all these indications, the prior therapies are Also different.

Speaker 6

The number of prior therapies are different also. So it's probably best to look at each in the question. So for example, microsatellite Cancer is a bit harsh from endometrial cancer. I think maybe the only thing that's common to both of these tumor types are that the Michael, it's Stavros. And that's one of the commonalities for those 2 indications.

Speaker 6

But in general, we'll have to look Ask the results separately in order to make a full determination of potential read throughs for the indications that you've asked about.

Speaker 5

Okay, got it. Thanks guys.

Operator

The next question is from Stephen Willey of Stifel. Please go ahead.

Speaker 7

Yes, good morning. Thanks for taking the questions. I guess just with respect to endometrial cancer and ASCO, Should we assume that these 9 patients will mostly be IO experience? And then, In terms of supporting the mechanism of action, can you speak to any biomarker data that you might be able to present? And I guess whether or not that's on treatment biopsies and or peripheral markers?

Speaker 2

I think that on the translational I'll take it and then Han will answer about the patient population. I think on the translational data in general, And we're doing a lot of work and not only covers the endometrial, which is at the end of the day some patients, But on prior studies and also on the current studies that I plan to have extensive biomarker work. We are harvesting all our capabilities, Computational experimentally working with biopsy pre treatment on treatment, blood sample strong from patient pre treatment and on treatment few times In order to be able to access the DRAMX, it's a potential biomarkers and also biomarkers discovery that we could do. So we aim to present at the same point in time this data, Patient we recognize translational very preliminary translational data for endometriosis, but we think the biomarker work is This is probably towards the end of the year, ending 2024. And Henry, would you like to Is that the patient population?

Speaker 6

Yes. So, I think it's only the titles of the abstracts That are currently available now. And so we'll have to wait to see the details of the presentation for endometrial. And of course, one of the things that the question you've asked will be one of the things that we will be interested in Assessing and seeing if will contribute to the assessment of antitumor activity. So not just that, But also what will be important is the kinds of therapies that patients have received also, what Performance status of all the stations are and also what the prior response to some of the therapies that these patients have I've received in particular for endometrial cancer.

Speaker 6

So all these parameters, including the one that you've asked Specifically about the things that we will look at and we'll be able to discuss further once the full abstracts are closed at the time of the presentation also.

Speaker 7

Okay. And then can you just Remind us what the scan frequency is in the 2 triple cohorts? I guess, I'm just trying to think about the amount of Response to the IVO patient data that you might be able to show us before the end of this year? Thanks.

Speaker 6

Right. So you're referring to the triplet of COM701 701 nivolumab BMS-nine eighty six-two zero seven, the scan frequency is every 2 cycles. So, a cycle is 4 weeks or every each week for the 1st 6 months.

Speaker 2

And we are seeing the date It was the MSS CRC and the platinum resistant development in cancer studies, but it's the same.

Speaker 8

Right, Henry? It's the same frequency. For the MSS CRC, yes.

Speaker 6

Yes, for the MSS CRC.

Speaker 7

Okay, great. Thanks,

Speaker 6

Right. But do remember that for the endometrial cancer cohort that we are going to disclose, it's also the same scan frequency, Because the legal dose is scheduled is every 4 weeks. So, every at the end of every 2 cycles. Does that make sense? Is it clear?

Operator

He passed on. The next question is from Asthika Zunwarden of Truist Securities. Please go ahead.

Speaker 8

Hi, good morning and good afternoon. Thanks for taking my questions. First up, I'd like to get an idea to report meaningful efficacy data from the CRC and the platinum resistant ovarian cancer's ovarian cohort.

Speaker 2

How much

Speaker 8

minimum follow-up do you think you will need per patient?

Speaker 2

Andrew, would you like to address the first

Speaker 6

I think so there was a little bit of background, but were you asking specifically for microspectase in colorectal cancer?

Speaker 8

Yes, Henry. Sorry, that was my thought

Speaker 2

in the background there.

Speaker 8

Yes, for both CRC as well as What is the minimum follow-up you said that you need per patient to have a good view on what the efficacy is?

Speaker 6

I think the follow-up is probably something like secondary. For those tumor types you've mentioned, What will be important will be what the antitumor activity is. So the earliest benchmark Look at our endpoint will be responsive or durable clinical or disease control rate, right. So Stable disease, postpartum response or cluster CR, whatever the case may be in this patient population. That's a good benchmark to look at.

Speaker 6

Remember, this is a Phase 1 study with very few patient population. So that benchmark is probably the most appropriate to look at. The other benchmark to look at will be the depth of responses that we observe in these patient But the because it's a small number, sometimes it can be a little bit challenging to interpret The implication of follow-up during in a patient population like this, for example, if you have 20 patients, That's a little bit more challenging as opposed to much larger patient population where you have 95% confidence in about that, they need to be more Conservative.

Speaker 8

Okay. So, maybe to put it another way, Henry, when we see the data that you're updating this year, We won't be able to get a good idea of duration or durability of response. It's really going to be the control rates and Depth of response, that's going to be what's going to be the key to look at the data later this year,

Speaker 6

right? Largely, the As I said to more activity, partial response in the stable disease and in the unfortunate immune stance patients who haven't responded to these therapies, Yes. Those are the things I will look at. Because it's a short period of time, it really will be difficult if you haven't been able to Follow-up on how long those responses are for to be able to disclose The duration of responses. Duration of follow-up also can be challenging because remember the duration of follow-up includes from the time point patients are enrolled on to the study until the time that they reach an endpoint for the study, either progression Or in your fortunate event, another hard endpoint like that.

Speaker 6

So that's much longer.

Speaker 1

I think I'll speak out just and

Speaker 2

thank you, Van Buren. I think that's exactly what how we look at it. But I think that I'll just add That it really depends on the enrollment rate and the more data we will have that To share that we think that it's meaningful, we'll try to give as much clarity as possible. But we need to take into consideration That even if we enroll the full cohort, some of the patients may not be enough time on study treatment and they will be dealing with it.

Speaker 8

Got it. Thanks a lot. Appreciate that. And then just my last question is, how confident are you That you will have enough data in house in hand to see a potential biomarker For both your 3 big programs and your 2G program. Thank you.

Speaker 2

Maybe I'll put it in perspective and Eran, You want to add, please do so. I'll put it just in perspective that biomarker works For programs in the field of cancer immunotherapy, I think the ability to understand that it's not trivial at all. In all these things, if this is not a target that is addressing a specific mutation or a specific target that is for A, B, C, etcetera. This is Really, really hard to come up with. In all the years, we ended with what?

Speaker 2

With CDF-one and TMB and FSI High, Maybe an fMRI. So that's really hard. I think Yes. The work that we're doing, which is extensive and is addressing all possible Thank you on this asset that we're working on. I think that we increase the chances of success And we feel comfortable to say that we're doing this work and when we'll have data that we think is very much to disclose, but we'll disclose it.

Speaker 2

But I just want to make sure that everyone understands This is not this is not trivial. If there is a biomarker there, I think this Compugen and has good chance to identify it, but in certain given that there will be a biomarker there And I think that we're well equipped to meet the goal if it can be identified, Iran.

Speaker 4

I mean, just to add that again, as Anat mentioned, most people are using PD L1 as a biomarker and this is because PD L1 reflects an immune microenvironment, this is where most checkpoints are working. Luckily, we see responses in PD-one negative patients. And the biology of PBRG shows That's probably we could tackle these indications, also patients which are Mendeza, which are PD-one negative. So until now and also this occupied, we were quite Expensively so responsive, in fact, we were PD L1 negative. So while we continue to follow PD L1 for PVRG combination, Probably will not be the one and then you have all the usual suspects and the non usual suspects and we're doing extensive work sequencing and computationally Really trying to identify it and we do it for and maybe a bit related to the question before, we do it per indication and across indications And this is work ongoing with all

Speaker 6

the challenges that Anat mentioned.

Speaker 8

Great. Thanks, Anat. Thanks, Henry, and thanks, Anat.

Operator

The next question is from Diana Grebach of SVB Securities. Please go ahead.

Speaker 1

Hi. Thanks for answering my question. I wonder if you could help us understand More about the partnering conversations or licensing conversations you have going on. I'm interested in specifically What the potential partners are most interested in? Which programs, which data points do they emphasize and do you spend the most time on?

Speaker 1

Thank you.

Speaker 2

Thank you, Dana. I'll relate to this one. While we're not Specifically, Louis, any partnering discussions that we have or do not have, I'll try to give some color about the opportunities that we have in the pipeline and how this could be seen. And I think that in general, we are now exceeding with a pipeline that is quite rich that has Different partnering opportunities in the form of Continental 1, Comenor 2, Compile In the field of cancer immunotherapy that I believe brings new treatment options 1st in class or best in class, I think that for COM701 comment too, and COM701, you are aware of the fact that it is And restricted since August, I think it's how comfortable the real opportunity is what will take for quite a long time The TDP-one will not be enough. And I also related to it in the prepared comments and companies are now thinking about a third agent to combine.

Speaker 2

We're saying for quite some time, PVRIG needs to be combined with this in order to enable, in order to allow for the PD L1 low Patient population is 31 times to respond. We need to deal with the fact that people are judging TGC1 a combination based on only TEGS-one combination without our preferred assets. And we have only our own data Extend this signal. So this is important in terms of how potential external partners may look at In order to further clarify and extend the beatamaxi hypothesis that we have, In general, as we're joined now in endometrial and in visional cancer indications, but also in the specific tumor types that we selected to focus on in ovarian cancer and colorectal cancer. So that's important for us to pursue not only in order to Speak with the FDA about the path forward, but also in potential partnering discussions.

Speaker 2

So That's one thing that is key. I guess that also how Tivic will perform out there is also important by others and we're looking at it. On the contract for free, I'll say that I think that Ana is probably aware of it and some are aware of it. There is a remittance in the Phase II gene pathway. There is a lot of excitement out there, small asset companies are being formed and We're really differentiated on this front.

Speaker 2

As much as we're differentiated with the patent that we bring to the table And we're addressing this cytokine biology and this pathway in a totally different way than others. And we believe that the way that we're addressing is actually handling the neuro targeting window of cytokine. So we bring something new to the table and with the excitement there is out there and it's the right time with the right assets. So That's what I can say on the on the potential pipeline this second. Let me ask one

Speaker 1

more follow-up then, because you bring it up as your focus of non dilutive financing in your prepared remarks. How can investors and us have confidence on the timing of that kind of event? Can you talk about maybe certain data points that You think you're going to be more important to reach that value beyond the attributes of your pipeline, which you will Right. What else can we have in terms of the expenses that are happening?

Speaker 2

So I think that it's a fair question and I think that when we expect To COM-five zero three, we don't see any pending with the time to enter into partnership, we don't see any And data points that are missing, we have a great package to show exactly what we're saying about these assets. So that's one. I think that on the conference call on IMEI-two, I was saying that it's a fair question because I think that it depends On the internal data that we already have, on internal data that we will generate and it doesn't mean that we needed to get to the end of 2020 In order to be able to share data that is very much from the internal perspective, it also depends on external And on expense drivers, and it's not a given that and I don't think that it's our goal as well. And definitely, this is also our goal to partner everything and stay without a closed at paid pipeline. So That's we're putting our priorities in place and we'll deal with the internal exam last month and with potential discussion.

Speaker 2

So we believe that the assets that we have and also potential to generate additional cash inflow for the company in order to support our instrument scheduling status. Okay. Thank you.

Speaker 6

Thank you.

Operator

This concludes the Q and A session. I will now hand over the call to Anat for a final remark. Anat, please go ahead.

Speaker 2

Thank you, operator. Before we end the call, I will take this opportunity to remind you of an investor event we are hosting On Tuesday, May 23, Rudolf Pradahl, a pioneer in cancer immunotherapy and a Chairman of Compugen Scientific Advisory Board. Drew was the first to propose Blockade of PD-one for cancer immunotherapy and his research led the clinical development of the first NTP-one antibody. Drew is also a world expert in the genome access And I think you will really enjoy this view on why blocking the 3 pathways in the renal acid, PVRIG TIGIT MD1 has the potential to generate the next immunotherapies for cancer patients. Thank you for participating today.

Speaker 2

You may go ahead and disconnect.

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