Compugen Q2 2024 Earnings Call Transcript

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Provided by Quartr
August 6, 2024

There are 10 speakers on the call.

Operator

Ladies and gentlemen, thank you for joining us today. Welcome to Compugen's 2nd Quarter 2024 Results Conference Call. An audio webcast of this call is available in the Investors section of Compugen's website, www. Cgen.com. As a reminder, today's call is being recorded.

Operator

I would now like to introduce Yvonne Naughton, Head of Investor Relations and Corporate Communications. Yvonne, please go ahead. Thank you, Yoni, and thank you all for joining us

Speaker 1

on the call today. Joining me from Compugen for the prepared remarks are Doctor. Anatko Undaiaq, President and Chief Executive Officer and Alberto Sessa, Chief Financial Officer Doctor. Michel Malera, Chief Medical Officer and Doctor. Iran O'Fear, Chief Scientific Officer 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 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. 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. And with that, I now turn the call over to Anat.

Speaker 2

Thank you, Yvonne, and thank you, everyone, for joining us on our Q2 2024 call. I'm delighted to start this call by congratulating our team for the excellent execution on the high quality COM-five forty three IND submission, resulting in FDA clearance for initiation of a Phase I trial. COMFAT43 is our differentiated approach to harness cytokine biology to treat cancer, and I'll come back to this later in the call. There have been many developments in the TIGIT landscape in the last few months and more are expected by the end of this year. Therefore, I thought it is appropriate to begin by sharing with you how we think about the field.

Speaker 2

We believe that Compugen is uniquely positioned and differentiated in the pursuit of the DNAM1 axis as part of our COM701, COM902 triple combination. I will then cover the progress we have made in the Q2 of this year and move to our planned milestones through the rest of 2024. Starting with the TIGIT competitive landscape, what have we learned so far? First, the benefit of adding TD blockade to PD-one compared to PD-one demonstrated in several Phase 2 randomized clinical trials and TIGIT blockade added a 6 month survival benefit in a Phase 3 interim analysis. 2nd, the benefit of TIGIT blockade was observed mostly in PD L1 high patient population.

Speaker 2

3rd, the nature of the TIGIT antibody matters. The use of an Fc enabled antibody may not be tolerable in patients with early stage of disease due to potential immune mediated safety concerns. And finally, a third component may be needed to be added to TD10PD1 blockade to maximize the effect. Some companies are adding chemo or ADC, which may be an option for patients who can tolerate this combination. Compugen data consistently suggest that PD LIG co blockade provides added benefit.

Speaker 2

We believe an advantage of this choice is the favorable safety profile of IO combination and the prolonged immune benefit that one might expect to achieve. We therefore therefore believe that the success of the next strategic studies will be determined by several factors. Firstly, clinical strategy employed, which includes choice of patient population and combinations used and secondly, the choice of an anti tigid, eptinezive versus active. Now elaborating more on why the clinical strategy matters. Led by our innovative research of the PVRIG pathway as part of the access, competence hypothesis has always been that blocking TIGIT plus PD-one alone may not be sufficient and that a third component PDTRD may be needed to optimize the potential of TD10 PD-one blockade in certain tumor types and patient population.

Speaker 2

Compugen's data suggest that unlike anti TIGIT, anti PVRIG may function across PD L1 expression levels and may also extend the response to the PD-one piggy to non responsive tumor types in patient populations. We're therefore currently pursuing a triple combination strategy blocking PD-ray TIGIT and PD-one and we pursue this drug combination in tumor types and patient populations that are not responsive to PD-one. This strategy helped us to directly prove a COM701 preveraging driven effect of a triple combo, even though we employ small single arm studies. By assessing non responsive tumor types, our data will not be attributed to a PD-one effect, but we also recognize that the signals that we may see in these very hard to treat tumor types will not be very high. Of course, this triple combination is also expected to add benefit in inflamed PD-one responsive settings.

Speaker 2

In addition, our partner AstraZeneca is advancing development of risagostamix, their PD-one ticket bispecific, providing a peak revenue target of greater than $5,000,000,000 reflecting the potential of these assets. As the TIGI component of risagostamane is derived from COMFIDENCE COM-nine zero two, this is a potential significant revenue generating opportunity for Compugen. Elaborating more on the choice of anti TIGIT, not all anti TIGIT are the same. Our common L2 anti TIGIT antibody is an IDG4 antibody and so it is naturally in mind. We have always said that the Fc activity of the antibody should be disabled.

Speaker 2

The reason for this is simple. TIGIT is highly expressed on CD8 plus T cells and NK cells, cells that are key for anti tumor activity and you therefore want to avoid depleting them. In addition, acetylent anti TIGIT avoids peripheral Treg depletion that can lead to immune related adverse effects. Notably, recent data may suggest that an anti anti anti treated antibody may not be tolerable in patients with early stage of disease due to immune mediated safety concern. Moving now to the progress we have made in the Q2 of the year, continuing our track record in delivering our plans, we again executed on our promises.

Speaker 2

Firstly, we're delighted that the FDA has cleared the IND application to initiate a Phase I trial for COMF-five forty three, our potential 1st in class high affinity anti IL-eighteen binding protein antibody licensed to Gilead. ID clearance, which triggered a right to a $30,000,000 milestone payment from Gilead further strengthens our balance sheet with an expected cash runway into 2027. We're well advanced in our planning and currently on track to initiate the Phase I trials for COMFACT 03 in solid tumors in the Q4 of 2024. Advancing COMFACT43 to Phase 1 adds to the multiple clinical programs discovered through our predictive computational discovery platform where we unlock the to clinical trial. Secondly, we are on track to report data from our COM701, COM902 and pembrolizumab triple combination proof of concept study in patients with platinum resistant ovarian cancer in the Q4 of this year, and I will come back to this shortly.

Speaker 2

Finally, in the quarter of 2024, we were excited to see that our partner AstraZeneca announced the further advancement of the development of rilzagastamine, the PD-one TIGIT bispecific where the TIGIT component is derived from COMPGENTCOM-nine zero two into its 3rd Phase 3 trial, DESTINY BPC, which will assess with the gastaminib and the ADC and HER2, first the standard of care chemotherapy and the anti PD L1 durvalumab for 1st line locally advanced or metastatic HER2 expressing biliary tract cancer. As a reminder, the other Phase III trials initiated by AstraZeneca are in lung cancer as part of an IO ABC regimen and in advanced biliary breast cancer. We believe these advancements reinforce our partnering strategy designed to expand the opportunity for our pipeline program, including COM902. This brings us closer to potential additional milestone payments in an aggregate amount of up to $200,000,000 and future mid single digit tiered royalties presenting together a significant potential revenue source for our company. To date, we have received around $40,000,000 in upfront payment and milestone payments.

Speaker 2

Moving on now to what is planned for the rest of the year. And coming back to the presentation of ovarian cancer, which is on track for the Q4 of 2024 and our plan to present these data at a medical conference. We believe that the totality of the data we have reported to date in platinum resistant ovarian cancer patients is encouraging. In the prior cohort of patients, our investigators were excited to report durable shrinking or stabilization of tumors in some of the patients who had previously progressed on all available treatment options. We presented a 20% overall response rate with some patients responding for over 16 months, which is favorable considering the median duration of response for chemotherapy is around 3 to 4 months and ADC is around 6.9 months.

Speaker 2

Responses were also achieved in the hard to treat high grade serous adenocarcinoma patients along with a favorable safety profile. To remind you, ovarian cancer was pre identified using our computational capabilities even before we treated patients as high priority target indication for PVRIG blockade. Of note, we also presented data showing COM701 monotherapy activity in a patient with ovarian cancer whose tumor macro environment was immune desert. This patient had a partial response of more than 18 months. In the Q4, we plan to present the baseline characteristics, safety, overall response rate, disease control rate, initial biomarker data if any and preliminary data on duration of responses for COM701, COM902 and pembrolizumab combination.

Speaker 2

In relation to baseline characteristics, these platinum resistant ovarian cancer patients were heavily pretreated exhausting all other treatment options and the number of patients where ADC experience reflecting the changing treatment landscape and the hard to treat patient population. Given that the only other treatment option for these patients would have been chemotherapy, we believe that it is the most relevant benchmark. As we have previously communicated, our goal is to assess whether we can demonstrate a similar clinical benefit to what we observed in the prior cohort. We believe repeating it in a larger total number of patients would confirm COM701 combinations are active. There is a significant unmet medical need for women with ovarian cancer who could benefit from alternative potentially safe, efficacious and durable treatment options.

Speaker 2

We intend to share our plans or next test for our COM701 combination at the time of data presentation. Finally, in the second half of this year, our partner, Sildenica, anticipate data from Phase onetwo ARTEMITE-one trial and the poster presentation from Phase 2 GEMINY gastric trial, which was accepted at ESMO 2024. 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 June 30, 2024, we had approximately $92,300,000 in cash and cash related compared with approximately $51,100,000 as of December 31, 20 23. We recognize the importance of cash efficiency and we are disciplined in how we deploy our cash resource, while making sure we focus on reaching K milestones.

Speaker 3

We have a cash runway expected to fund our operation into 2027, taking into account the expected milestones payment of $30,000,000 from Gilead, which we are now eligible to receive, following the successful IND clearance for Comp 503 last month. The company has no debts. Revenue for Q2 twenty $700,000 compared with no revenue for the comparable period in 2023. The revenues reflects recognition of a portion of the upfront payment from the license agreement with Gilead and the milestone payment from AstraZeneca on the dosing of the first patient in their 2nd Phase 3 trial with rivialgosimic in non small cell lung cancer. Expenses for the Q2 of 2024 were in line with our plans.

Speaker 3

R and D expenses for the Q2 of 2024 were $6,200,000 compared to $7,800,000 in the Q2 of 2023. Our G and A expenses for the Q2 2024 were $2,200,000 compared to $2,400,000 in the Q2 of 2023. For the Q2 of 2024, net loss was $2,100,000 or $0.02 per basic and diluted share compared to a net loss of $9,300,000 or 0 point $1

Speaker 2

target discovery pioneer. We're differentiated by our validated discovery platform, which is powered by the mix of human expertise with AI and machine learning to fuel our 1st in class pipeline. There has been many developments in the TIGIC landscape with more data readouts expected this year. And we believe we stand out as differentiated both in terms of our clinical strategy and our differentiated programs, including our potential best in class anti PD COM902 and 1st in class anti PVRT COM701. Also, our partner AstraZeneca is advancing the development of risagastomate, the TD PD-one bispecific, the stated component of which is derived from COM902.

Speaker 2

AstraZeneca has set a target for more than $5,000,000,000 in non risk adjusted peak revenues reflecting potential of these assets and the potential significant revenue generating opportunity for Compugen. Our achievement is successfully gaining FDA IND clearance for COM-five zero three is a clear reflection for our continuous ability to execute. We're on track to deliver data from our COM701, COM902 pembro triple combination study in patients with platinum resistant ovarian cancer at the end of the year, a disease where there is a significant unmet medical need to alternative treatment options. With the pipeline that is being advanced internally and by our partners, this is an exciting time for Compugen and we believe that we have the fundamentals in place to bring value to our shareholders and cancer patients. I would like to thank all competent colleagues for their collaborative spirit and daily dedication resulting in a well executed Q2 of the year and setting us up for future success.

Speaker 2

Finally, I would like to say a special word of thanks to Alberto as this is his last conference call with Compugen. And welcome David, who has already joined us and will take over from Alberto on August 15 after transition period. With that, I will turn the call over to the operator for questions.

Speaker 4

Thank

Operator

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

Speaker 5

Yes, good morning. Thanks for taking the questions. Anat, is there anything that you can say about your confidence in the totality of clinical evidence that you'll have in hand when you make a decision on the triplet regimen in ovarian. You have data from 1 heavily pretreated dose expansion cohort that was generated with a different digit antibody. You'll soon have data from a slightly less pretreated expansion cohort generated with COM902.

Speaker 5

Just curious about your thoughts here in the totality of evidence that you'll have at hand? And then I just have a follow-up.

Speaker 2

Sure. Thank you, Steve. And I'm happy to elaborate on this. First, I'll just say that the totality of the data that we have is pointing to COM701 driven effect and monotherapy effect over response rate that is added to this combined with durability, safety profile and clearly from our perspective as I was saying in the prepared remarks that the need is there for safe, efficacious, durable treatment. And we believe that if we can repeat the clinical benefit that have seen up until now, there is a need.

Speaker 2

Now with respect to the differences in the studies, I can say the following. I believe that since we use the TIGIT antibody, there is actually disabled even though it was not COM902. We believe this will be comparable. We do think that we have a best in class potential best in class treated antibody, but we believe that the data may be comparable. We use nivo as compared to pembro.

Speaker 2

So we believe that this triplets that we use now may have the chance to at least repeat the benefits that we saw. And with respect to the differences in the treatment, I want to say that at the end of the day, the patient characteristics are more or less the same and we believe that we would be able to compare between the different the 2 different cohorts.

Speaker 5

Okay. That's helpful. And then I might have missed this, but did I interpret your commentary, I guess, regarding the update at the end of the year to suggest that you may not have biomarker data to present in conjunction with the safety and efficacy data?

Speaker 2

We did not say whether we will have or not. What we said is that we present data if we have the data. And I think that it's fair to say we're saying that we have the initial data, it looks supportive of position with clinical benefit. We also stated few times that we recognize the challenges in generating biomarkers in IO and mainly with small number of patients. We are affecting the biomarkers, the expression level and we share

Speaker 6

what we have at the

Speaker 2

time that we have it.

Speaker 5

Okay. And so in terms of being able to articulate articulate a potential path forward year before the end of the year in conjunction with data, should we then expect that you will be communicating either the use of or the absence of a patient selection and enrichment strategy in terms of access?

Speaker 2

So in general, we were preparing ourselves to 2 scenarios from the get go. Obviously, we had initial biomarker data and enrichment strategy on the table. But we also recognize the fact, as I said, that this is very challenging and we may not have enough supporting data and we had to prepare ourselves to a situation where there is no enrichment strategy. But I will say that we will always be data driven as we've been up until today and we'll continue to do so. We will focus pending the data.

Speaker 2

We will focus where we believe we have the competitive edge, where we can give our triplets combo the best chance to impact the appropriate patient population and we'll take everything into consideration. So we're not saying no, we're not saying yes, we're assessing and we see what we have and we take the steps accordingly.

Speaker 5

Okay. Thanks for taking the questions.

Speaker 2

Thank you.

Operator

The next question is from Ashtega Gunwarden of SunTrust. Please go ahead.

Speaker 7

Hi, good morning guys. Thanks for taking my questions. I'll clarify from Truist, no longer SunTrust. I just want to dig into this on the platinum resistant ovarian cancer day that's coming up. I think you mentioned in your prepared comments that you have patients who have seen prior ADC.

Speaker 7

And I wanted maybe contrast between the previous data set. What proportion of patients are you expecting to have prior ADTs is going to be considerably more than the previous data set? And how do you expect exposure to the ADC, particularly the vaccine payload to alter the patient's T cells, is there any opportunity for this patient to be conditioned a way that they might actually respond better or worse to immunotherapy, such as FIGRIG and TIGIT, etcetera? And then I have a follow-up.

Speaker 2

Sure. Thank you, Aspiga. Michelle, do you want to take this one?

Speaker 4

Yes, sure. So I can't comment on the exact amount of patients who received ADCs at this point since we're not ready to disclose the data. However, what I can say is when you look at the different timing of when the studies were enrolled, the one study enrolled before a good amount of conditions were enrolled before the ADCs really became forward and before they recently got approved, whereas the current study is ongoing. So we naturally have captured a certain amount of patients that have previously seen ABCs. I can hypothesize with you on what we think may occur once patients are exposed to ADCs, and that there is potential for cell death with increased antigen presentation.

Speaker 4

However, at this point in time, I can't share any data with you. And I think the other thing to be aware it's all the totality of data and coming back

Speaker 2

to the ADCs in terms of

Speaker 4

the prior lines of treatment also matter in terms of how patients are in terms of their overall condition and the immunogenicity of their response to them.

Speaker 2

Yes. I'll just add sorry, Tika. I'll just add that mechanistically, while it makes sense, I want to emphasize that we enrolled somewhat more than 20 patients and with small number 16, it is going to be hard to get any specifics with respect to ADCs plus IO in our study, but I believe that the potential is there.

Speaker 7

And do you think you'll actually report the 2 data points? I mean, would that be sort of a breakout like the subgroup analysis of patients who've seen prior to VTE versus not? Is that do you have enough numbers to really do

Speaker 2

that? I think that in 20 patients cohorts doing any subgroup analysis, that was my point of their remark. I don't think that the numbers we support specific conclusions based on this.

Speaker 7

Got it. Okay. That's helpful. And then a quick one for Alberto. I want to wish you all the best in your next endeavors.

Speaker 7

I just want to ask, can you maybe give us a little bit more color on the cash burn guidance? I'm curious to know, does it anticipate starting off any follow on studies with COM701, 902 potential registration enabling studies, etcetera? Thanks.

Speaker 3

Yes. I think, thank you for the wishes. So as we said, we have cash into 2027. And this take into consideration a certain amount of cash that should be used for the next trial. So even if I mean,

Speaker 7

we did not we don't have plans and we will have plans only once the data will be out. But yes, we have some

Speaker 3

reserve for additional

Speaker 7

trials that we may or may not start

Speaker 3

going forward.

Operator

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

Speaker 6

Hi, thanks guys. Another question from me on the platinum resistant ovarian cancer data. You mentioned that this is a very difficult to treat patient population based on their prior lines and prior therapies. And that because PD-one has little activity alone, it's a very good place for signal seeking. To me, when I hear that, it feels like you're guiding to pretty modest overall response rate and duration of response.

Speaker 6

But I wonder if you could put actual quantification on that. So what kind of range in a 20 patient cohort specifically are you looking for that you think the activity is not only giving you a signal of PVRG and contingent contribution, but also is attractive enough to move forward?

Speaker 2

So I'll start and then Michel, if you want to actually say, please go ahead. It's a very good question. And as I explained, we were seeking to go into areas where we could show in single arm studies, small single arm studies that this is a COM701 PVRD driven effect. And we believe that what we show the cross indication with the different studies that we've done that this is a COM701 drug effect. And right now in terms of looking at the guidance, what we did say today that we are looking to repeat the clinical benefit that we have shown in the prior cohort in order to make a decision, okay, with this amount of patients that accumulated data of the 2 cohorts, we believe that COM701 is active.

Speaker 2

Then the question is, where do we have the competitive edge in which we should use this combination where the data that it showed up until now that we had big durable in the prep cohorts, big durable and safe profile and where do we give it the best chance to impact the appropriate patient population. But basically, it will be from our perspective, we're picking the same clinical benefit.

Speaker 6

Can you remind us the clinical benefit you observed in the first cohort? I don't think you've given the numbers on the call.

Speaker 2

Sure. So we other than presenting some monotherapy activity, which was in a different study, in the prior triplet study, we were having 20% of our response rate with deep responses, patients that were responsive, some of them had durability of more than 16 months and it was the combination was safe and tolerable. And we have initial biomarker data supporting some association with clinical benefit.

Speaker 6

And then in the data set you're going to have this year, how much follow-up will you have? Will you be able to observe a confirmation of that durability?

Speaker 2

And then how many patients? I'll let Michelle address it. We will not have the 16 months and durability time to do monitoring for 16 months. But Michel, do you want to say anything about that? Yes.

Speaker 4

So what I can say is we did decide to cut the data a little bit earlier so that we can present data by the end of the year. So it may not be as mature as the prior data set. However, a number of our patients on the study have already been on the study for a minimum of 6 months. So it is starting to get to a point where we will be able to observe durability.

Operator

The next question is from Tony Butler of Rodman and Renshaw. Please go ahead.

Speaker 8

Thank you very much for the opportunity. I just wanted to follow on with the last question and I guess it intersects with the first as well and that is

Speaker 7

the I'm going to call

Speaker 8

it hurdle rate that you would like to see at least as it or maybe we would all like

Speaker 5

to see as it pertains

Speaker 8

to the Q4 data in ovarian cancer. So if 20% is that hurdle, if that's correct, the question becomes, are will patient is there are 2 parts. 1 is, will there be some look at if they're only 6 months in duration, for example, per Michelle's comments, then that seems perfectly fine, I guess. But there is a question as to whether or not there are late responders. So for example, if a patient's been on for on triple therapy for X number of months that they respond later, is there evidence from the previous trial that, that is the case?

Speaker 8

That's point 1. And number 2 is, if all the response rates were PRs, does that matter to you? I mean, that's really great for these women for sure. But is there are there any PR conversions that you had seen in the And then I have a follow-up. Thank you.

Speaker 2

Nishad?

Speaker 4

Yes. So I can speak to that they are and it is also described in the immunotherapy literature in ovarian cancer that yes, there are some patients who can develop a later response, so they can be sitting at stable disease for a long period of time and then stable disease over a period of time will become partial response. Again, I can't speak to all the details on the current data set. And in the prior data set, as you're aware, we did have 2 partial responders that maintained response beyond 16 months. I don't remember what the exact time to response was in those 2 patients.

Speaker 4

But we had a number of therapies with these patients as well who were on the study for quite some time.

Speaker 2

So I feel like

Speaker 4

I'm not completely answering your question, but I think that's as best as I can get to you right now.

Speaker 8

Yes. But I guess to some degree, did any stable disease patients in the previous trial convert to PRs? That was sort of part 2.

Speaker 4

So offhand, I don't recall. I just know that there were 2 partial responders. Like I said, I'm not 100% sure what the time to response was. I'm aware of any late conversion from stable disease to partial response. Although like I said, that has been described in the oncology immuno oncology

Speaker 2

literature. But I think, Tony, I'll just add and I if I understand where you're leading to, I'll just add that the guidance that we shared with repeating the same clinical benefit would be relevant for the time that we will also share our plans based on the data. As I said, we'll always be data driven. But so that maybe gives you some clarity about our guidance.

Speaker 8

Thank you, Anat. And maybe the last question, totally different, but in COM503, you make reference to harness from cytokine biology. And I guess the question antibodies for which you may bring forth in the future? In other words, something beyond 503? Thank you.

Speaker 2

Eran, do you want to take it?

Speaker 9

Yes. So overall, we use our computational AI driven platform to identify novel targets. We arrived to IL-ten binding protein as a target not because we looked for a cytokine target, because we looked for resistant mechanism in the tumor microenvironment computationally. So it's a very different target for PP. RTG, for example, and this indeed took us to harness an antibody to unleash natural IL-ten activity in the tumor co environment.

Speaker 9

So we definitely have a variety of other early assets all coming from our computational discovery platform. And they are across different modalities and different MOAs, all coming from it's not an it's kind of MOA agnostic and more patient centric approach, looking into the tumor environment of patients and unleashing additional resistance mechanism.

Operator

This concludes

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Key Takeaways

  • FDA clearance for COM503 IND triggers a $30 million milestone from Gilead, raising cash to ~$92 million and securing runway into 2027.
  • Prior platinum‐resistant ovarian cancer cohort showed 20% overall response rate with durable responses >16 months and favorable safety, and Q4 2024 readout is on track for the COM701/COM902/pembrolizumab triple combo.
  • Compugen’s DNAM1‐axis strategy combines Fc‐disabled anti‐TIGIT, anti‐PVRIG and anti‐PD‐1 blockade to maximize efficacy across PD‐L1 levels while avoiding immune cell depletion.
  • AstraZeneca partnership advancing a PD‐1/TIGIT bispecific (from COM902) into three Phase 3 trials with >$5 billion peak revenue potential and up to $200 million in milestones plus royalties.
  • Q2 2024 results: $0.7 million revenue, R&D and G&A expense declines, net loss of $2.1 million, no debt and disciplined milestone‐driven spend.
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Earnings Conference Call
Compugen Q2 2024
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