Compugen Ltd.

Ladies and gentlemen, thank you for joining us today. Welcome to Compugen's first quarter 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, 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 from Comfygen for the prepared remarks are Dr. Anak Cohen-Dyack, President and Chief Executive Officer, and Alberta Sessa, Chief Financial Officer. Dr. Michelle Mallard, Chief Medical Officer, and Dr. Irwan Uffir, 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 outlooks, development efforts and their potential outcome, the company's discovery platform, anticipated progress and plans, results and timelines for our programmes, 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 20S. The company undertakes no obligation to update projections and forward-looking statements in the future. With that, I now turn the call over to Anat.

Thank you, Yvonne, and thank you, everyone, for joining us on our first quarter 2024 call. Today, I will cover the significant progress we have made across our pipeline in the first quarter of this year, and I will then move to our planned catalysts through the rest of 2024. But before I go there, I thought I would start on a question which we frequently get asked. Is Compugen an AI company? And the answer is yes. Compugen is a pioneer in computational discovery of novel drug targets, and not just in theory, but in practice. which is a significant differentiator. We successfully moved our newly discovered drug targets from computer prediction to drug discovery to preclinical and clinical trials, continuously feeding our own pipeline with potential significant opportunities to address cancer immunotherapy resistance. The Gilead deal on CON543 highlights the most recent assets discovered through our computational discovery capabilities. Our discovery platform is a validated AI ML-powered platform. This platform is the engine fueling our competitive advantage and pipeline and has already delivered multiple fully-owned clinical programs, multiple validating strategic partnerships, and multiple early stage undisclosed assets, which are expected to feed our future pipeline and the opportunity to deliver long-term value creation. We plan to speak more on our discovery platform at future events, so now I will move to the focus of today's call. In the first quarter of the year, we again executed on our promises. Firstly, At the annual ASCO conference in June, we will present preliminary antitumor activity of COM701 in combination with COM902 and pembrolizumab in patients with MSS-CRC and liver metastasis from our ongoing proof-of-concept study. Secondly, we completed enrollment of more than 20 patients in our platinum reticence ovarian cancer study, and we're on track to report initial findings in the fourth quarter of this year. Thirdly, the progress we have made unlocking novel biology of new drug targets and in diversifying our approach to address cancer immunotherapy resistance was reflected by our presentations at the Keystone Symposium and the American Association of Cancer Research Conference in March and April this year along with the publication of our COM503 and PVRIG papers in cancer immunology research. At both conferences, we presented data supporting the unique biology of PVRIG, suggesting its role in sensitizing tumors to the other immune checkpoints, TG10PD1, and additionally, data supporting the therapeutic potentials of our high-affinity potential first-in-class antialiating binding protein antibody, COM543, showing its activity is localized to the tumor macroenvironment with the potential advantage of a wider therapeutic window than systemically delivered cytokines. Finally, in the first quarter of 2024, our partner AstraZeneca continue to rapidly advance the development of rilvagastamig. We're delighted that they are initiating a second phase 3 trial, tropion lung 10, in non-squamous, non-small-cell and cancer. The study will assess rilvagastamig as monotherapy and in combination with DATO-DXD, a TROP2-directed ADC being developed in collaboration with Daichi Sankyo, compared to pembrolizumab as first-line treatment for patients with advanced or metastatic non-squamous lung cancer with high PD-L1 expression. As a reminder, we recently received a $10 million smartphone payment upon dosing of the first patient in the phase three study of the first indication, biliary tract cancer. Under this agreement, we're eligible to receive development milestone payments for the first and second indication. The progress into a second phase three trial addressing a major indication such as non-squamous non-small cell and cancer reinforces our partnering strategy to broaden opportunities for our pipeline and brings us closer to realizing additional future milestone payments and royalties. As a reminder, The TGIT component of relvagastamig is derived from our potential best-in-class anti-TGIT COM902, and both relvagastamig and COM902 fall in the FC-reduced inactive function camp. Moving on now to what's planned for the rest of the year. 2024 is planned to be a catalyst-rich year for us, with multiple data readouts and updates expected from our diversified portfolio. At ASCO in June, we plan to present data from our ongoing proof-of-concept study in MSS-CRC patients, including those with liver metastasis, who have been treated with the IIIO combination of COM701, COM902, and pembrolizumab. MSS-CRC, and in particular, such patients with liver metastasis, represents significant unmet medical need and the hard-to-treat patient population. At CITIC in 2022, we presented data from our first cohort of 22 patients treated with a dual combination of COM701 and Evolumab, and we were the first and only company to report responses to IO in this population of patients with liver metastasis. reporting a 12% overall response rate and stable disease in addition to immune activation supporting PVRIG biology and COM701 mechanism of action. Although this indication was not initially selected based on dominant PVRIG pathway expression levels, following this encouraging clinical data, and with an aim to assess the strength of our findings in liver metastasis patients in a larger cohort, we initiated our ongoing study in 20 patients with MSS CRC and added our anti-TGIC COM902 to the drug combination to see if we could improve on the responses seen with a dual combination. Recorded was rapid, reflecting the significant unmet needs and we enrolled the last patient in September 23. The data will be presented at the upcoming ASCO on June 1st, with a data cutoff date of April 5th, 24, and remains supportive of COM71-mediated activity and safety, with some patients continuing treatment as the data cutoff date. However, With the totality of the data we have in hand, we believe that an IO-IO approach is not the way forward in this notoriously IO-resistant patient population of MSS CRC with liver metastasis. Yet, the total clinical activity observed to date in the two evaluated cohorts suggest the effects are COM71-mediated and due to the unique biology of PVRIG, may warrant further evaluation of COM701 with other agents in MSS-CRC. Therefore, the door remains open for other COM701 combinations in this patient population. However, this will not be the focus of our internal resources at this time. It is important to note that observations made in tumors which are biologically distinct from each other, such as MSS-CRC and platinum-resistant ovarian cancer, are not considered indicative of each other. With this, I will remind you that we have reported more dominant PVRIG pathway expression levels in ovarian cancer. This brings us to our next catalyst. The next catalyst for our triple combination will be the presentation of our data in platinum-resistant ovarian cancer for which we have completed enrollment. Data presentation is on track for the fourth quarter of 2024 and our plan is to present this data at a medical conference. We believe the totality of the data we have reported to date in platinum-resistant ovarian cancer patients is encouraging compared to the current standard of care. Based on the data we reported at ESMO-IO in December 2022 from the first cohort of 20 platinum-resistant ovarian cancer patients treated with triple combination, investigators were excited to report durable shrinking or stabilization of tumors in some of their 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 median duration of response for single-agent chemotherapy is around three to four months, and in ADCs, is around 6.9 months. Responses were achieved in the hard-to-treat high-grade serous adenocarcinoma patients along with the favorable safety profile. We also presented preliminary biomarker data showing an association between PVRL2 expression and clinical benefit. Of note, we also previously presented data showing COM7-1 monotherapy activity in a patient with ovarian cancer whose tumor microenvironment was immune desert. This patient had a partial response of more than 18 months. For the ongoing study, we plan to present data in the fourth quarter of the year, including the baseline characteristics, safety, overall response rate, disease control rate, preliminary data on duration of responses, and potentially biomarker data. Data showing clinical benefit in platinum-resistant ovarian cancer is expected to allow us to pursue the next studies towards a path to registration, which, depending on data, may employ a predictive biomarker enrichment strategy. In addition, we're also on track to submit the IND for COM503 in the second half of this year and expect that IND clearance for which we're eligible for $30 million maximum payments from Gilead, will be achieved in 2024. With that expectation, we're in advanced stages of planning the Phase 1 study. Finally, in the second half of this year, AstraZeneca expects data from their Phase 1 to Artemide 1 trial in non-small cell cancer in the frontline setting. Before passing over to Alberto to go through the financials, I would like to take this opportunity to warmly thank him for his commitment and leadership since he joined us in 2022. Alberto has been a great partner to me and the rest of the team here at Compugen. David Silverman will take over the reins from Alberto as Chief Financial Officer effective August 15th. David has experience in the healthcare industry as chief financial officer of a biotech company traded on the NASDAQ, and I'm looking forward to introducing you to David when he joins. I also want to emphasize that while benefiting from our solid cash position to enhance and advance CompuGen to additional milestones, we're also financially disciplined. We have two potential first- or best-in-class unrestricted assets, along with multiple undisclosed early-stage assets, with the possibility to address a significant admin need in immuno-oncology. In addition, we have two strong validating strategic pharma partners, Gilead and AstraZeneca, on rilvogastamig and COM503, respectively, and from whom were eligible to receive future milestone and royalty payments. With that, I will hand over to Alberto for the financial update.

Thank you, Annette. I'm happy to summarize our financial results. I will start with our cash balance. As of March 31, 2024, we had approximately $101.3 million in cash compared with approximately $51.1 million as of December 31st, 2023. This cash balance includes $60 million up from payment from Gilead related to the licensing of COM503 and $10 million milestones payment from AstraZeneca on dosing the first patient in the phase three trial in biliary tract cancer. We recognize the importance of cash efficiency and we are disciplined in how we deploy our cash reserves while making sure we focus on reaching K milestones. We have a cash runway into 2027 taking into account the expected milestones payment of $30 million from Gilead for COM 503 IND clearance expected in the second half of 2024. It is important to emphasize that this does not include any additional potential cash inflow from our partners. I remind you that the company has no debt. Revenue for Q1 2024 were approximately $2.6 million compared to no revenue for the comparable period in 2023. The revenue reflects recognition of a portion of the upfront payment from the license agreement with Gilead. Expenses for the first quarter of 2024 were in line with our plans. R&D expenses for the first quarter of 2024 were $6.4 million, reduced from $7.4 million in the first quarter of 2023. Our G&A expenses for the first quarter of 2024 were $2.4 million, compared to $2.6 million in the first quarter of 2023. For the first quarter of 2024, net loss was $7.3 million, or $0.08 per basic and diluted share, compared to a net loss of $9.3 million, or $0.11 per basic and diluted share, in the first quarter of 2023. With that, I will hand back to Anat to summarize.

Thank you, Alberto. To summarize, Competence stands out as a clinical stage immune oncology 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 first-in-class pipeline. We're on track to deliver a catalyst-rich 2024 across our diversified pipeline and planning to present data for our COM-71, COM-902 triple combination at ASCO in MSS-CRC, as well as data from our platinum-resistant ovarian cancer at the end of the year. We're planning to submit COM-503 for IND in the second half of this year and are advancing our planning for the initiation of Phase I for this program. With a 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 am proud of what we're achieving here at Compugen. I would like to thank all our Compugen colleagues for their collaborative spirit and daily dedication resulting in a well-executed first quarter of the year and setting us up for future success. 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 speaking... 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 Stifel. Please go ahead.

Hi, guys. This is Tulian for Steve. Thank you for taking my question, and congrats on the progress. We just have two questions on our end. The first one is related to colorectal trials. I know that ASCO abstracts will be available this week, but when it comes to the actual presentation, how much additional incremental details should we expect in the actual presentation versus abstract? And following this presentation, what would be a path forward for this study? And the second question would be related to COM503. Do you think you will disclose any clinical data following IND submission for these assets. Thank you.

So maybe, thank you. And maybe I'll start with the second question for COM 503. This decision of disclosing clinical data from a Phase I study will be taken in collaboration with Gilead. This is an asset that was licensed to Gilead. And I cannot commit on their behalf, and we'll give some guidance when we'll know. But obviously, before that, we'll need to file the INV and initiate the study, which filing is expected in the second half of this year. And for the CRC data, yes, the abstract is going to be out this week. And the presentation of data will be in June 1st for Compugen. It will be data worth of 20 patients enrolled. And we share the antitumor activity, durability, translational data, safety, et cetera, and obviously patient baseline characteristics. And as we continue, As we've already stated, the data is supportive of antitumor activity of COM701, is supportive of COM701 mechanism of action, PVRID biology. We believe, based on the data, and this is the guidance that we shared today, it was important for us to share the guidance at the time that we know what is the decision that we've already took, is that we believe that IO-IO only combinations would not be the right way to target MSS CRC with liver mass population, which as you know in this line consists of 70% of the patient population. We believe that that's not the right path, and we decide that while there could be a path forward for COM701 in MSS CRC with liver mass, maybe in other combinations, or maybe even in earlier lines, we're not taking this path forward at this point in time.

Thank you. Thank you.

The next question is from Astika Goodwardhan of Truist Securities. Please go ahead.

Hi, guys. Good morning, and thanks for taking my question. So maybe I want to just dig in a little bit more here on colorectal, and I'd like for maybe you and Naran to comment on what do you think is missing here. It sounds like you're resilient that 701 biology is active, but maybe it can help us understand what did you need more immune activation and less maybe less checkpoint blockade, but maybe more debulking. What exactly was the missing link here given given the encouraging activity we saw earlier for this approach. And then beyond ovarian for 701.902, how should we think about the other avenues that you're going to pursue this combination? Is your next priority to maybe revive efforts in CRC, but with a different combination to maybe address what's missing? Or have you identified another tumor type that you would like to take this into. Thanks.

Okay, thanks, Esteta. I'll start by saying that, look, we can't get really to the specifics of the data, and maybe this discussion will be worth to be taken following the presentation in June 1st. Maybe Iran wants to add, but I'll just say that with ILO only, we believe that what we see is not enough in order to pursue. But maybe, Eran, do you want to say anything about it more than that?

Yeah, so with the unique biology of PVRG and what we have seen previously, definitely we see activity in places where normally checkpoints are not working. In MSS-CRC, we live in metastasis, immune modulation, increasing T-cells, But we've seen it in part of the patients, right? And eventually to move forward, you need to have sufficient activity in sufficient amount of the patients to really consider to go towards approval. And as you understand with what we see in a pure IO combination of the triplets, in this very difficult and not immunogenic indication, what we have seen is not enough to convince ourselves to move forward as is. And yes, as discussed, maybe not at this point in time, but there are other rational-based combinations that could be employed to increase IO activity in this kind of difficult indication, and this is something to consider for the future, but again, not at this point in time.

And then, actually, it takes me to your second question about additional tumor types. I think that, you know, with the data that we have in hand on COM71 activity in non-inflamed tumor types across indications where PD-1 is really not, the populations are not responsive to PD-1 inhibition or very, or responsive to a very low extent We have data across indications, and COM71 is active. Other than putting the resources and focusing now on platinum-resistant ovarian cancer, which we really have a package of data and additional 20 or more than 20 patients' worth of data will really help us make decisions about how to move forward there. I think that the field is open for us for different type of paths. In the non-inflamed indications, also in the inflamed indications, obviously we've never tested inflamed indications, and we had a reason why we didn't do it. PVRIG Biology gave us an ad in this non-inflamed indications, and we could prove COM701 activity in combination, in single-arm studies, without asking the question, is it still one inhibition that is generating this activity? And we could do all the work and show in biases that this is a concept of one mechanism of action. And also another path is to combine with the non-IO combinations. But really, we are now at the stage that we're focusing in platinum-resistant ovarian cancer, And we will make the decisions during the year how we move forward in this indication.

And maybe I would add that. So maybe I would just add that in addition to what we're focusing on at the moment, you know, you pre-identify a few indications with dominant fever at the pathway. Ovarian is one of those, but there are other indications, for example, like non-spot cell anchors are not mentioned, more inflamed settings. So definitely there are multiple opportunities, and combining this with a safety profile of COM701 that really will enable us safe combinations, maybe in other indications, maybe in early lines. So again, the opportunities are there, and there are quite a few, but we are focusing now on the ovarian cancer, which we have seen until now quite promising data.

Thanks, guys. The next question is from Dana Graybosh of Learing. Please go ahead.

Hi. Thank you for the question. I'm going to continue this line of discussion on your strategy for PVRID going forward. And in ovarian in particular, I wonder how you're considering combining with other standard of care agents like chemotherapy or VEGF, Bevacizumab, and just reflecting on the path In colorectal, you know, there's one path that is seeing if you can get a pure IO therapy to work, and there's another path others have taken in these difficult tumors to do combination. And, of course, to get that signal, that takes a different kind of study. And I wonder how you're considering that. And it reminds me that at one point you had planned a chemo combination, I think, in lung cancer. And I'm not sure you ever started enrolling that. So, again, remind us why you didn't start enrolling that and what a path, a specific path you would see among cancer should we get to that point. Thank you.

Thank you, Dana. I'll start, and Ron and Michelle, feel free to chime in. I'll start with the ovarian. First, I'll say that you've asked us about combinations, and first I'll say that we're focused on these sets. IO combination that we're pursuing now, and with the package of data that we have, with the initial biomarker correlations, we feel that if data will repeat itself, we see clinical benefits, and there is a path forward for us targeting different types of patient populations, those that are progressing on ADCs and those that are, or standards of care, And those that are ineligible, having said that, it is true that combination with chemo, VEGF, ADCs may be relevant. And this is really based on the mechanism of action of PVRIG being combined with a cytotoxic agent. And also from the safety profile, as Eran mentioned, to STICA. So this is on the ovarian front, and while we will focus on ovarian and get the data from this study, we can decide how we move forward, taking into consideration the competitive landscape, obviously, in ovarian cancer. With CRC, and as I said, I'll let Eran and Michelle add if they want on each of the indications, But in CRC, I think that while we see a possibility of moving forward in this indication in combination with standard of care, again, here mechanistically and safety-wise or in earlier lines, I think that the risk profile, and this is for this stage of the company, the risk profile in MSS CRC with liver mass And it's a profile that we saw that at this time we shouldn't focus and put our resources, but still this door is open to being pursued in the future. So that's for CRC.

And not, I didn't ask about CRC. I asked about non-small cell lung cancer. What would be potential .

That's okay. Sorry. Yes. And this is correct that we planned at a certain point in time to move, based on the data that we had that Aran mentioned, data in patients that already experienced checkpoint blockade. We had very nice data, seven patients though, but very nice data. And we thought of pursuing non-small cell cancer with chemotherapy as a small study. The reason that we decided to focus on the non-inflamed indications at the end of the day was the fact that we were, with the test limitations that we had at that time, we decided to focus on indications where we will not need large studies in order to prove the activity of COM71 combinations. Single arm, small studies that we can tease out the contribution of COM71 quickly and move forward. This is still on the table. And as I said, as a company in general, we're thinking about indications that we can pursue internally by ourselves and indications that we may pursue, as I was saying all the time, partnering is also a priority for us. and larger indications that could be pursued in partnerships. And Eran, Michelle, anything to add in ovarian and non-mostellar cancer combinations?

Oh, go ahead. I was just going to emphasize again what you were saying, Anant, because when we look across the indications that we've presented data in, we definitely do see an effect driven by COM701. So I think that there are opportunities even within other indications like endometrial breath where we've presented data before and we are considering a lot of different options to have a more robust sort of strategy moving forward.

And I think, you know, at this point in time, we're focusing on the pure IO. You know, we have strong data from preclinical to clinical. This is really strong immune-modulating regime that have an excellent safety profile. It's chemo-free. It's really attractive. And the data we've seen until now in ovarian and some of the other indications really pushes us to continue and explore this IO pure combination. But again, doing other combinations if we need, or maybe in some indication in which we'll need it, is definitely an approach, and there's a rationale for that. I mean, with the unique biology of PVRIG, the ability to prime new T cells, there is a rationale to combine with ADCs of chemotherapy with the enhanced immunogenicity decay enhanced. There's a rationale to combine with BEV with the effects of T cell infiltration. So moving forward, we definitely consider the data, the indication, another rational-based indication that we may consider in the future.

Great. Thank you.

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

Good morning, and thank you. Annette, with respect to the ovarian cancer data set that's forthcoming, will data also include patients who are actually segmented by positivity with PVRL2? That's part A of that question. Number two is, you mentioned a biomarker strategy, I believe, for moving forward with a larger potentially registrational trial. Have you settled on, and this may be far on, I'd be settled on an H score. As I recall, those individuals who had clinical benefit had H scores that were, I guess, relatively high, 300 or so. And then the third point is, while I assume all ovarian cancer patients will have had BEV, is there a reason why they would not want to stay on BEV, even if, in fact, it has marginal activity, certainly a single agent? Thank you very much. Oh, and one last point. Is 20% the hurdle rate for which we should be looking toward or forward toward the fourth quarter for that data set? Thanks.

Thank you, Tommy. So I'll let Michel answer the best question. I'll start with what you asked about the biomarker and later on relate to the age score. First, I'll say that in terms of the data, yes, we present data that relates to the activity, to the efficacy, the durability, translational, the data that we'll have in hand. We also anticipate to share PVRL2 or biomarker data, obviously pending on data. The work in progress now and with the data that we have in hand will present what we have in hand. I will say, before I later on relate to the ACE score, I will say that we will look at the data and the different bars of data will allow us to make a decision. Do we go with or without the biomarker? We're not limiting ourselves to a biomarker. This is an enrichment strategy that may help It will depend on the data that we'll have in hand, but we're not ruling out a study that will not be biomarker-driven. Maybe a study that will still continue to assess the biomarker findings. It really depends on the data that we'll have in hand. Aram, do you want to take the ACE score one?

Yes. So, yeah, Tony, you remembered correctly. Indeed, a very important observation for our previous study in which we showed that the patient who responded had clinical benefit from the treatment of the COM7-1 combination had higher age score of PVRL2, and this opened the door for a potential biomarker, yes, to enrich for these patients who have long, durable responses, and then, of course, to move to registration faster and all the benefits of having a biomarker. So this work is ongoing also in this study. To define the cutoff, obviously, we need to show also in this study that the phenomena repeats itself. We need to really define looking, and now we have much more patients combining the studies together, we can really look at the totality of the data, the response rate, the correlation to the ACE score, and then to define the actual cutoff if and when we will move forward with a biomarker-selected study. So this is ongoing, yeah.

Do you want me to comment on the birth? Yeah, Michelle, go ahead. Yeah, so, you know, in the initial lines of treatment in these patients, they do get bevacizumab together with platinum. Platinums are basically the mainstay of therapy in the ovarian cancer population. Generally, if a patient does relapse following a full regimen, which includes bevacizumab maintenance, they may get put on to the PARP inhibitors as second line, or sometimes they'll do it from the other way around. But generally, they might repeat BEV, But it's really more repeating the platinum agents until the patient becomes resistant. So that's defined by a platinum-free interval of six months or less. And the patients that have been enrolled on our studies so far are the platinum-resistant patient population.

Thank you very much.

This concludes the Q&A session and Compugen's investor conference call. Thank you for your participation. You may go ahead and disconnect.