Compugen Ltd.

Ladies and gentlemen, thank you for joining us today. Welcome to CompuGen's second quarter 2023 results conference call. At this time, all participants are in a listen-only mode. As a reminder, today's call is being recorded. An audio webcast of this call will be made available on the investor section of CompuGen's website, www.cgen.com. I would now like to introduce Yvonne Naughton, Head of Investor Relations and Corporate Communications. Yvonne, please go ahead.

Thank you, Operator, and thank you all for joining us on the call today. Joining me for confidant for the prepared remarks are Dr. Anak Cohen-Diag, President and Chief Executive Officer, and Alberta Sessa, Chief Financial Officer. Dr. Henry Adewoye, 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, research and development efforts and their potential outcome, the capabilities of the company's discovery platform, anticipated progress and plans, results and timelines for its programmes, financial and accounting-related matters, including projected financial information, as well as statements regarding the company's future cash position and other results, and the company's future initiatives. 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, which could cause the company's actual results to differ materially from those projected in such forward-looking statements, 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'll turn the call over to Anat.

Thank you, Yvonne. Good morning and good afternoon, everyone, and welcome to our second quarter 2023 update. At Compugen, our goal is to transform the treatment of cancer patients who have no effective treatment options by discovering novel drug targets and developing potential first-in-class drugs. On this front, we were efficiently executing on our differentiated clinical approach to evaluate the benefit of our chemotherapy-free triple cancer immunotherapy combination of COM701, COM902, and pembrolizumab, blocking free pathways of the DYNAM-AXIS, PVRIG, TGIS, and PD-1. At ASCO this year, we were excited to see the positive momentum and interest of the industry and the scientific community in targeting the DYNAM-1-AXIS as a potential novel approach in treating cancer, reflected by our own data and data presented by others. including AstraZeneca, Roche, and Arcus Gilead. Looking at the totality of the data we have presented to date in how to treat cancer patients, there was enthusiasm among those we spoke with regarding responses demonstrated with our triple combination approach in patients with microsatellite stable endometrial cancer who had failed standard of care including prior PEMBRO and lenvatinib treatment. For these patients, there were no other treatment options. In nine patients, we showed an overall response rate of 22% and a disease control rate of 44%. The responses were durable and supported by immune activation better than what one would expect for an anti-PD-1 alone. This endometrial data is consistent with the anti-tumor activity we reported for COM7-1-based combinations in patients with other hard-to-treat tumors, including microsatellite-stable colorectal cancer, platinum-resistant ovarian cancer, and checkpoint-inhibitor-experienced non-small cell and cancer patients. Reflecting on the totality of the data to date in patients typically not responsive to standard of care, including immunotherapy, our data suggests that our COM701-based combinations have the potential to offer a treatment option with a favorable safety profile for how to treat patients across the spectrum of PD-L1 expression levels, in patients who are anti-PD-1 treatment refractory pointing to a potential COM701-mediated mechanism of action. Our immediate focus is on expanding our data into indications, platinum-resistant ovarian cancer and MSS colorectal cancer, while continuing to invest in biomarker discovery, which is important in efficiently setting our development path forward. However, we believe that the therapeutic potential of COM701 as part of the DENM1 axis may be much broader than these two indications. As mentioned earlier, AstraZeneca presented clinical results at ASCO on rilvergostomy, a PD-1-tigit bispecific antibody derived from our COM902, establishing its safety and pharmacokinetic profile, and showing antitumor activity in patients previously exposed to checkpoint inhibitors and usually not responsive to immunotherapy. AstraZeneca continues to advance relvigostomy development in multiple studies, including a Phase II trial in checkpoint inhibitor or naive non-small cell and cancer patients, and a Phase II trial in hepatobiliary cancer, and previously announced plans to initiate a Phase III trial this year. We know that not all anti-TGITs are designed the same, and like COM902, which is an anti-TGIT with reduced epithelial function, Rilvegastamig was engineered to have an inactive FC domain to enhance antitumor activity. Another program in this FC inactive or reduced effector function camp is Arcus Antitigit. At ASCO, Arcus Gilead showed continued improvement in progression-free survival versus blocking PD-1 alone, with a potentially better safety profile to what has been shown to date with FC-active anti-TGIT. Another session that gained great interest at ASCO was Roche TGIT liver cancer data. This is the third randomized trial showing the benefit of adding an anti-TGIT to standard of care. Blocking TGIT resulted in a four times greater overall response rate and a doubling the progression-free survival on top of standard of care. And Roche has initiated a phase three trial in first-line hepatocellular cancer based on these results. We were pleased that the discussions of Roche's presentation highlighted the potential significance of adding PVRLG blockade in hepatocellular cancer. This is another hard-to-treat indication which may serve as a fit for COM701 treatment. The important role of PVRIG was also called out in another ASCO session on novel approaches to checkpoint inhibitors, in which The presenter was intrigued by our data presented by Dr. Mike Uverman from MD Anderson at FITC last year, showing that blocking PVRIG in combination with PD-1 led to responses in unexpected diseases like microsatellite-stable colorectal cancer. It is great to see an increased awareness of PVRIG role in cancer immunotherapy. It is important to highlight COMPIGEN's differentiated approach and how we stand out among all the players. Firstly, we have always said that blocking TIGIT may not be enough and that PVRIG may be needed. Our discovery of PVRIG and the extensive research we have conducted to test the effect of unlocking its biological function as a new drug target in the context of the genome axis supports the need to block it. This belief is consistently being reinforced as we roll out our clinical data across multiple indications. Secondly, we believe we have a potentially best-in-class reduced FC-effector function antitigid. The data available today suggest that FC design of the TGIT antibody may either not matter or it may be better to have a reduced or inactive FC domain as we have. And finally, with COM701 and COM902, our two wholly owned PVRIG and TGIT programs were the leaders in the unique chemotherapy-free triple combination approach of blocking three genome axis immune checkpoints, PVRIG, CGIT, and PD-1, with initial clinical data to support our hypothesis. Along with a very successful ASCO, I would like to refer to additional progress we have made in the first half of the year. We're advancing patient enrollment in our two follow-on proof-of-concept studies, Enrollment in the NSS CRC study is on track to be completed by the end of the year. Enrollment is slower than planned in the platinum-resistant ovarian cancer study, but we believe we can catch up on enrollment with a planned activation of additional sites. As a reminder, the goal of these studies is to obtain more data help us better understand the contribution of components, and build on extensive biomarker work to identify the patients most likely to respond. We believe that this strategy provides the fastest way to efficiently set our development path forward and to potentially de-risk our lead assets, COM701 and COM902, in these two indications. In May of this year, we presented data on our potential first-in-class anti-IL-18 binding protein antibody, CONFIFO3, at the CIMT Conference, Europe's annual immunology conference. We believe there is excitement around our innovative approach leading to the development of this CONFIFO3 program and its potential in addressing immunotherapy resistance. Finally, on the progress in the first half of 2023, we were delighted with the favorable ruling of the European Patent Office to uphold the broad claims in our PDR IG patent. This ruling of the European Patent Office is a win for our innovation. The discovery of PDR IG's role as a novel immune checkpoint and a drug target for cancer. As a company that excels in the discovery of new drug targets, we harness a broad pattern strategy that takes advantage of our novel target discovery capability. Now moving on to what you should expect to see from us over the second half of the year. First, we plan to report initial findings from our ongoing proof of concept studies by the end of the year and final data at a medical conference in 2024. Second, we're expecting to present new translational and initial biomarker data and long-term patient follow-up from our platinum-resistant ovarian cancer studies presented at ECMO-IO last year. as well as additional data from our COM503 preclinical program all by the end of the year. We also plan to present new data from the metastatic breast cancer study of 17 patients treated with COM701 and Evolumab. Patients were enrolled into this cohort regardless of their ER, PR, and HER2 status. These patients were heavily pretreated and had exhausted all available standard treatments, which could include immune checkpoint inhibitors and ADCs. Before handing over to Alberto, I will touch briefly on our finances, and then Alberto will go into the details. We have an expected cash runway for at least the end of 2024, which we believe is sufficient to support all planned operations and reach milestones to potentially de-risk our lead assets, COM701 and COM902. In terms of future funding, non-dilutive funding of our pipeline assets is our priority. On this front, it is worth noting that the trend in immunotherapy is to combine and treat earlier And we believe the profile of our lead assets, COM701 and COM902, make them ideal combination candidates to be used in earlier treatment settings. Additionally, there is increasing excitement around the potential of IL-18 pathway modulation in immuno-oncology. And with COM503, we're happy that we have a differentiated approach to potentially harness this cytokine biology for optimal use in treating cancer. Finally, through our partnership with AstraZeneca, we may become eligible for future milestone payments. And with that, I will hand over to Alberto for the financial update.

Thank you, Annette. I'm happy now to summarize our financial results. I will start with our cash balance. As of June 30, 2023, cash, cash equivalents, and cash investments were approximately $66.5 million, compared with approximately $83.7 million as of December 31, 2022, affirming our focus on capital efficiency while continuing our execution on our Denham One-Axis hypothesis. The company has no debt. We recognize the importance of cash efficiency and we are disciplined in how we deploy our cash resources, ensuring we will focus on reaching key milestones with our available cash runway through at least the end of 2024. Expenses for the second quarter of 2023 were in line with our plans. R&D expenses for the second quarter of 2023 were $7.8 million, up from $6.8 million in the second quarter of 2022. The increase is mainly due to the end of the amortization of deferred participation in R&D expenses on March 31st, 2023, and an increase in preclinical and CMC activities associated with planned COM503 activities, offset by a decrease in clinical trial expenses, headcount, and currency exchange effect. Our G&A expenses for the second quarter of 2023 were $2.4 million, compared to $2.6 million in the second quarter of 2022. For the second quarter of 2023, net loss was $9.3 million, or $0.11 per basic and diluted share, compared to a net loss of $9.1 million, or $0.11 per basic and diluted share in the second quarter of 2022. With that, I will hand back to Anat to summarize.

Thank you, Alberto. To summarize, we continue to execute and deliver on our goals. With our most recent data in microsatellite stable endometrial cancer, we continue to provide evidence supporting a potential COM701-mediated clinical benefit in hard-to-treat patients who are not responding to standards of care and failed prior IO therapy. We're looking forward to presenting new translational and initial biomarker data and long-term patient follow-up from COM7-1 combinations in ovarian cancer, first data in metastatic breast cancer, as well as additional data from our COM543 preclinical program, all by the end of the year. We also plan to share initial findings from our two ongoing studies in microsatellite-stable colorectal cancer and platinum-resistant ovarian cancer evaluating our leading triple combination blockade of PDR-IG, TGIS, and PD-1 with COM-71, COM-902, and Pembrolizumab by the end of the year. The opportunity we have to positively impact the lives of so many motivates every single employee within Compugen every day. With that, I will turn the call over for questions. Operator?

Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please press star 1. If you wish to decline from the polling process, please press star 2. If you are 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 Steven Wiley of Stifle. Please go ahead.

Good morning. Thanks for taking the questions. I guess just with respect to the Phase II platinum-resistant ovarian cancer study, you talked about enrollment, I guess, going a little bit slower than expected. Is that just a function of the kinetics of site activation, or do you now need to bring more sites than originally planned online in order to meet the target enrollment goal, which I believe was about 50% before the end of this year?

Steve, hi. Henry, would you like to address this question?

Yes, Anant. Thank you very much, Stephen. So first let me say that there's a strong interest by the sites and investigators to participate on this study. There's a strong belief in the hypothesis in inhibiting the DLM1 axis with a triple combination of pembrolizumab, COM701 and COM902. And it's based on the results we previously disclosed with the triplets that consisted of COM701, the BMS-tigit antibody, and nivolumab, 20% response rate, as presented at ESMO-IL. What we've observed is that there is a delay as a result of restricted resources at the sites, resources meaning personnel mainly, changing timing of IRB and ethics, community review cycles, and a few computing studies in the platinum-resistant ovarian population also. We are in close contact with the sites, and several additional sites are being considered who are more likely to recruit platinum-resistant ovarian cancer patients, and they're very close to opening now, which should get us back on track.

Okay. And I guess when you think about the year-end update, is there some threshold number of patients, specifically in ovarian, that you want to have enrolled before you try to communicate Something incremental.

So maybe I'll take this one. So in general, we're still guiding to the same guidance that we shared that we hope to enroll up to 20 patients by the end of the year. And that's when Henry's saying that we believe we can catch up, that's what we mean. So we cannot, at this point in time, estimate any deviation from the guidance. But obviously, if there will be any, obviously we'll share that. We believe that we'll be able to share data as planned by the end of the year. I just want to remind that in any case, we indicated that for the two studies, this will be initial data from the study. And that as we enroll additional patients in the ovarian study in 2024, we'll share the full data disclosure.

Okay.

And then maybe just lastly, I guess you talked about having, I guess, these two data sets to present at a medical conference in 2024. Just kind of wondering, internally, is the goal at this point to be able to make some kind of registrational go-forward decision before the end of 2024 on the basis of these two studies? I'm just trying to think about what's kind of the next step here once we get the proof of concept data. Thanks.

Yeah, so maybe I'll start. And Henry, if you would like to add, please chime in. But basically, the goal of the study from the get-go for these two studies was to add more data to the data that we already have in these two indications, which seems promising to us, and to assess some of the contribution of components and to build a path towards building a study that will take us to eventually to build a registration path. So that's the goal, yes. And we need to see as we go with these studies, what is the data, how it looks like. And as we said previously, it's more than the overall response rate. It is the additional parameters that we're evaluating the durability, the safety profile, et cetera, this will allow us to gain the understanding how we move forward. Henry, anything to add on this front?

No, thank you, Annette. You've covered it all.

Okay, thanks.

The next question is from Ashtika Gunwarden of Truist Securities. Please go ahead.

Hey, guys. Good morning. Thanks for taking my questions. I'm going to build on the questions that Steven asked here. So for the updates that we're getting for enzyme-resistant ovarian cancer by year end, I know the expectation is the initial data. Can you just clarify what kind of efficacy data will be seen in that presentation? And is it still right to assume that this is going to be more as an investor update and not a medical meeting update for the presentation of data this year?

It will be an investor update and not a medical conference update from the two new proof of concept studies that we do, yes. We tend to present data in medical conferences from studies that are that are more completed where we have more insights. Yes. Okay.

And then the question about what efficacy data will be in these two updates. Just wanted to try to tease out if there's going to be a confirmed scan or if it's just a preliminary scan or should we set different expectations?

Henry, would you like to address this?

Oh, yes, Annette. Thank you. The earliest lead-out one can get for this patient population will be response rates. We obviously will be interested also in looking at other important clinical endpoints such as duration of response or possibly progression-free survival. Now, that being said, This will depend on enrollment and our ability to catch up like we think we will be able to, we project we will be able to do. But those are the key endpoints, the most important being response rates. Got it.

And then on the issue with the delays, I totally appreciate that there's some personal restrictions and there's some changes to IRBs, et cetera, happening. I'm just wondering, is there any impact of the ADC launch in platinum-resistant ovarian cancer is also maybe causing any delays here? And then, have you seen any delays in recruitment for the colorectal study?

Henry?

Thank you, Astika. In speaking with the investigators and all the sites that we have, we haven't observed or they haven't reported back to us that the ADCs have contributed meaningfully to the delay that was just highlighted. Now, as you recall, Astika, the ADC that we're talking about here is Movetoximab, which has accelerated approval in platinum-resistant ovarian cancer. That has not been the communication we received back. And that accelerated approval is also in a restricted biomarker limited population followed receptor alpha positive patient population. So that has not been a part of the reason for the minimal delay that we've discussed.

Got it. And so, and just also just want to double check, there's been no delays on the colorectal side, right? There's no competing products there, but is that recruiting well as well, guys?

The sites that we have are recruiting well with colorectal cancer. As you know, the patient population with microsatellite stable colorectal cancer is a very underserved one. There are lots of patients, unfortunately, that are in need of newer therapies for microsatellite stable colorectal cancer, and we haven't experienced that much of a significant delay with that population.

Excellent. Thanks so much for taking my questions, guys. I'll jump back in here.

The next question is from Dana Graybosh of Learing Partners. Please go ahead.

Hi, this is Jeff LaRosan for Dana. Thanks for taking our question. Here's the first is, what do you hope to show the breast cancer update that will be supportive of your plans and strategy in ovarian cancer and MSS-CRC? And for the initial, I mean, the updated translational initial biomarker data in PROC with Bristol's TIGIT, how comparable is this data set to your own study with your TIGIT? Any differences there you could point to? And, you know, regarding the ASCO data in HCC, was that a tumor type that you sort of predicted would be amenable to PBRG blockade, and what's your interest in that indication? Thank you.

So, Henry, you start with the breast, and then Aaron will take the biomarker and HCC expression.

Yes. Thank you for the question. With regards to the breast cancer data, all I can see at this point is that the patient population that we've enrolled, a patient population that's heterogeneous, with respect to whether they're ERPR-positive or ERPR-negative or HER2-negative. This is a patient population that have exhausted all available standard of care therapies, including therapies that are approved, such as Tredelzit. Now, the important thing that we're looking for in this patient population is to see a signal of anti-tumor activity And that will confirm to us that there is activity with the combination that we are pursuing with COM701 plus nivolumab. So that's what would be of interest to us, especially in this hard-to-treat patient population that have possibly received several lines of therapy.

yes then for the questions about the biomarker so yes we anticipate that the same biomarkers that would inform or that we learn from in the study of the using the bms digit should be relevant also for the other studies that we are doing both bms digit and our own com902 are fc non-active and in general this that was a study of blocking triple blockade of digit pd1 and pvrig So biologically, it should be very similar to the study that we are currently conducting. And if you will identify some new translational or potential predictive biomarkers in that study, we definitely think it could be and should be relevant also to the follow-up study that we are currently doing. Now about the HCC. So we identified ovarian endometrial as one of the top indications with dominance of the pathway. And that's why we went to these indications, also breast, But ATC is definitely one of the top expressors of the pathway. You know, we couldn't start with all of them, and PVRL2 is quite broadly expressed in many indications. So ATC is definitely an indication in which the pathway is dominant, and it's a target indication that we definitely see a potential in.

And just in terms of whether we're going to test the indication to your specific questions, I think that it is being shown by now that the DVR-ID blockade potential, the COM701 therapeutic potential, is much broader than the two indications that we're focusing right now. We've took to focus on these two indications where we have data and where we believe that additional data that we will expand with these studies may allow us to better design the path forward. But I want to stress that again and again, the therapeutic potential of COM701 is much beyond these two indications, and it includes endometrial cancer and osmosis cancer and HCT, and as we said, we'll present data in breast towards the end of the year. That's very encouraging to us.

Yeah, I think one of the other questions you asked was, if there was any substantive difference between the triplets that we're currently exploring in the organ cancer space, which is the triplet I'm referring to now is COM902 plus COM701 plus nambizumab versus the earlier triplet, which is the triplet with the antibody DMS96207 and nivolumab. We did, as a reminder, we did have a press release when we enrolled the first patient into the current triplet of COM902, COM701, and pembrolizumab. And as part of what we said was that we did not, this is one of the investigators on that study, the initial observation is that this combination, which is the pembrolizumab-containing triplet of COM902, COM701, and pembrolizumab, is very well tolerated as observed, at least in the patient population with microsatellite subcholorectal cancer in the initial study that we enrolled. So there are no differences observed so far, and this is earlier on as we enrolled colorectal patients, microsatellite subcholorectal cancer patients. We do not expect there to be any substantive differences in terms of safety and tolerability. I hope that answers your question.

It does. Thank you all. Appreciate it.

The next question is from Tony Butler of EF Hutton. Please go ahead.

Good morning. I would like to go back to this notion of PVRL2 dominance, at least over PVR, which seems to be a recurring theme in some of the cohorts in which you're attempting to move forward with the triple combination and in particular, of course, 701. And that's back to ASCO where you had some really good data and then the mitral cancer. The cutoff, as I recall, was in April. The two responses and then two patients who had stable disease. And I wondered if there was any additional information on follow-up. That is, were patients actually able to show an additional reduction in tumor size of those responses and or of those patients who had stable disease? Thank you.

Geron, would you like to address the PVRL2 portion?

So the PvrL2 portion, I think that it's not only PvrL2. I mean, in general, it's the PvrGPy3 dominance. PvrL2, obviously, is an important part of it. And this is, again, a measure that we looked at in both endometrial, which have a dominance, and also another indication, as mentioned before.

Henry, anything more to add?

Nothing more to add to what Elena has mentioned.

But anything more on the patients for additional follow-up that were presented at that time?

So we are going to present follow-up data on these patients. Remember that when we shared the data in December, December 22, we had patients that were still on study treatment, responsive patients, and some of them had durability of more than nine months. We are going to present data by year and follow-up data for this patient. So I guess that you'll have answers to some of your questions then.

And I just want to be sure that will include the endometrial patients. That's what I'm focusing on.

Oh, no. It will relate to the ovarian. Sorry. I misheard your question. It will relate to the ovarian. No, we didn't plan yet to have any follow-up on the ovarian cancer, on the endometrial cancer patients.

Okay, thank you.

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