Compugen Ltd (CGEN) 2024 Q1 法說會逐字稿

Ladies and gentlemen, thank you for joining us today. Welcome to Compugen's first quarter 2024 results conference call. (Operator Instructions) 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 Compugen with prepared remarks are Dr. Anat Cohen-Dayag, President and Chief Executive Officer; and Alberto Sessa, Chief Financial Officer. Dr. Michelle Mahler, Chief Medical Officer; and Dr. Eran Ophir, Chief Scientific Officer, will join us for the Q&A.

Before we begin, we would like to remind you that during this call, the company may make projections of forward-looking statements regarding future events, business outlook, development efforts under 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.

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 with a question which we frequently get asked in Compugen, an AI company. And the answer is yes, Compugen is a pioneer in computation and 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 target, 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 bill on COM503, highlights the most recent assets discovered through our computational discovery capabilities.

Our discovery platform is a validated AI ML power 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 fit 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'll move to the focus of today's call.

In the first quarter of the year, we again executed on our promises. Firstly, in 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 reticent 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 anti-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 paper 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 PD and PD-1. And additionally, data supporting the potential of our high affinity potential first-in-class anti-IL18 binding protein antibody, COM503, showing its activities localized to the tumor macro environment, with the potential advantage of a wider therapeutic window than systemically delivered cytokine.

Finally, in the first quarter of 2024, our partner AstraZeneca continue to rapidly advance the development of rilvegostomig. We're delighted that they are initiating a second Phase 3 trial, TROPION-Lung10, in non-squamous cancer. The study will assess rilvegostomig as monotherapy, and in combination with Dato-DXd, a Trop2 directed ADC being developed in collaboration with Daiichi 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 3 study of the first indication, biliary tract cancer. Under this agreement, we're eligible to retain development milestone payments for the first and second indication. The progress into a second Phase 3 trial addressing a major indication such as non-squamous, non-small cell lung cancer, reinforces our partnering strategy to growth and opportunity for our pipeline, and brings us closer to realizing the additional future milestone payments and royalties. As a reminder, the TIGIT component of rilvegostomig is derived from our potential best-in-class anti-TIGIT COM902 in both with rilvegostomig and COM902, fall in the Fc reduced inactive function cancer.

Moving on now towards plan 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 triple-IO combination of COM701, COM902, and pembrolizumab. NSCLC, and in particular, such patients with liver metastasis, represents significant unmet medical need in the hard-to-treat patient population.

As seen in 2022, we presented data from our first cohort of 22 patients, treated with the dual combination of COM701 and pembrolizumab, 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 new activation supporting PVRIG biology and COM701 mechanism of action.

Although this indication was not initially selected based on dominant PVRIG pathway expression level, following this encouraging clinical data, and with an aim to assess the strength from findings in liver metastasis patients in a larger cohort, we initiated our ongoing study in 20 patients with NSCLC, and added our anti-TIGIT COM902 to the drug combination, to see if we could improve on the response as seen with the dual combination.

(inaudible) was rapid, reflecting the significant unmet need and we enrolled the last patient in September '23. The data will be presented at the upcoming ASCO on June 1 with a data cut update of April 5, '24 and remains supportive of COM701 mediated activity and safety, with some patients continuing treatment at the data cutoff date. However, with the totality of the data we have in hand, we believe that an IO approach is not the way forward in this notoriously IO-resistant patient population of NSCLC with liver metastasis. Yet, the total clinical activity observed to date in the two evaluated cohorts, suggest the effects are COM701 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 replacement for 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 15 months, which is favorable, considering median duration of response for single-agent chemotherapy is around three to four months, and in ADC is around 6.9 months.

Responses were achieved in the hard-to-treat high-grade serous adenocarcinoma patients and with a 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 COM701 monotherapy activity in a patient with ovarian cancer, whose tumor microenvironment was (inaudible) These patients had a partial response of more than 18 months.

For the ongoing study, we plan present data in the fourth quarter of the year, including the data and characteristics, safety, overall response rate, disease control rate, preliminary data on duration of responses, and potentially biomarker data. They're showing clinical benefit in platinum-resistant ovarian cancer is expected to allow us to pursue the next study towards a path to registration, which depending on data may employ a predictive biomarker enrichment strategy.

In addition, we are also on track to submit the IND for COM503 in the second half of this year, and expect this IND clearance for which we're eligible for a $30 million milestone payment from Gilead will be achieved in 2024. With that expectation, we are in advanced stages of planning the Phase 1 study.

Finally, in the second half of this year, AstraZeneca expects data from their Phase 1/2 ARTEMIDE-01 trial in non-small cell in cancer in the frontline setting.

Before passing over to Alberto to go through the financials I would like to take this opportunity to wholly 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 reign from Alberto as Chief Financial Officer effective August 15. 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 unmet need in immuno-oncology. In addition, we have two strong validating strategic pharma partners, Gilead and AstraZeneca on rilvegostomig and COM503, respectively, and from whom, we are eligible to receive future milestone and royalty payments.

With that, I will hand over to Alberto for the financial update.

Thank you, Anat. 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 31, 2023. This cash balance includes $60 million upfront payment from Gilead related to the licensing of COM503 and $10 million milestone payment from AstraZeneca on dosing the first patient in the Phase 3 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 key milestones. With a cash our way into 2027, taking into account the expected milestone payment of $30 million from Gilead for COM503 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.

Revenues 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, Compugen stands out as the clinical stage immuno-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 COM701, COM902 triple combination at ASCO in MSS-CRC, as well as data from our platinum-resistant ovarian cancer at the end of the year.

We are planning to submit COM503 for IND in the second half of this year and are advancing our planning for the initiation of Phase 1 for this program. With the pipeline that is being advanced internally and by our partners, this is an exciting time for Compugen, and we believe they will have the fundamentals in place to bring value to our shareholders and cancer patients.

I am proud of what we are achieving here at Compugen. I would like to thank all our competent 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?

(Operator Instructions) Stephen Willey, Stifel.

Hi, guys. This is [Julie Ann] on for Steve. Thank you for taking my questions and congrats on the progress. We just have two questions on our end. The first one is related to colorectal trial. So I know that ASCO abstracts will be available this week. But when it comes to the actual presentation, how much additional incremental detail should we expect in the actual presentation versus abstracts and following this presentation, what would be path forward for this study?

And the second question would be related to COM503. Do you think you will disclose any clinical data following the IND submission for this asset? Thank you.

So maybe -- thank you. I'll start with the second question for COM503. This decision of disclosing clinical data from a Phase 1 study will be taken in collaboration with Gilead, as this is an asset that was licensed to Gilead, and I cannot commit on their behalf, and we'll give some guidance when we will know. But obviously, before that will need to file the IND 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 June 1 for Compugen. It will be a 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've already stated, the data is supporting of antitumor activity of COM701, supportive of COM701 mechanism infection, PVRIG biology that 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 when the decision that we've already took, is that we believe that IO only combinations would not be the right way to target MSS-CRC with liver met population, which, as you know, in this time 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 met maybe in other combinations. So maybe even in earlier lines, we're not taking this path forward at this point in time.

Thank you.

Thank you.

Asthika Goonewardene, Truist Securities.

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 Eran to comment on what do you think is missing here, it sounds like you're resilient that 701 biology is active, but maybe you can help us understand what lead more immune activation and less -- maybe less checkpoint blockade, but maybe more debulking. What was the missing link here given that would be 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 there next priority to maybe revive efforts to CRC, but with a different combination to maybe address what's missing? Or have you identified another tumor site that you would like to take this into? Thanks.

Okay. Thanks, Asthika. I'll start by saying that we can get really to the specifics of the data and maybe this discussion will be worth to be taken following the presentation in June 1. Maybe Eran wants to add. But I'll just say that with IO-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 PVRIG and what you have seen previously, definitely with the activity in places where normally check points are not working in MSS-CRC, with liver 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 what we see in the pure IO combination of the triplet, in this very difficult and not immunogenic indication, what you have seen is not enough to convince ourself to move forward as is.

And yes, I've discussed maybe not at this point in time, but there are other rational based combination that could be employed to increase IO activity in this kind of difficult indication. It is something to consider for the future, but again, not at the point in time.

And then actually takes me to your second question about additional tumor types. I think that with the data that we have in hand on COM701 activity in non-inflamed tumor types across indications where PD-1 is really not the populations and not responsive to PD-1 inhibition or very -- or responses to a very low extent. We have data across indications and COM701 is active and 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, we really have a make decision about how to move forward there.

I think that the field is open for us for different type of path. In the noninflamed indications, also in the inflamed indications, obviously, we've never tested inflamed indications and we had the reason why we didn't do it, PVRIG biology gave us an ad in this noninflamed indications, and we could do COM701 activity in combination, in single studies without asking the question, is it PD-1 inhibition that is generating this activity. And we could do all the work and show in (inaudible) that this is comfortable on mechanical infection.

And also another path is to combine within 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 -- will just add that what we're focusing on at the moment, you pre-identify a few indications with dominant PVRIG pathway. Ovarian is one of those. But there are other indications, for example, like non-small cell lung cancers, and I've mentioned more inflamed settings. So definitely there are multiple opportunities and combining this with the 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.

Daina Graybosch, Leerink.

Hi. Thank you for the question. I'm going to continue this line of discussion on your strategy for PVRIG 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, 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 it's a different kind of study.

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 -- specific path you would see among cancer should we get to that point? Thank you.

Thank you, Daina. I'll start and Eran, 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 this 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'll 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 standard 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 the cytotoxic agent and also from the safety profile as Eran mentioned to Asthika. 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, Michelle, as 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 met, is a profile that we saw that at this time we shouldn't focus on total resources, but still this door is open to being pursued in the future. So that's for CRC.

Anat, I didn't ask about CRC. I asked about non-small cell lung cancer. What would be potential for there?

Sorry.

That's okay.

Sorry. And this is correct that we planned at a certain point in time to move based on the data that we had that Eran 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 lung cancer with chemotherapy as a small study.

The reason that we decided to focus on the noninflamed indications at the end of the day was the fact that we were with the cash 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 COM701 combinations. Single arm, small study that we can tease out the contribution of COM701 quickly and move forward. And 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-small cell lung cancer combinations?

Go ahead. I was just going to emphasize again what you were saying, Anat, because when we look across the indications that we've presented data in, we definitely do see a effect driven by COM701. So I think that there are opportunities even within other indications like endometrial, breast 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 at this point in time, we're focusing on the pure IO. 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 and are 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, the unique biology of PVRIG, the ability to prime new T-cells is there is a rationale to combine with ADCs of chemotherapy with the enhanced immunogenicity enhanced. There's rationale to combine with BEV with the effects of T-cell infiltration. So moving forward, we definitely consider the data, the indication, and other rational-based indications that we may consider in the future.

Great. Thanks.

Tony Butler, Rodman & Renshaw.

Good morning and thank you. Anat, 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 for Eran, have you 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 of single agent? Thank you very much. Oh, and one last point. Is 20% the hurdle rate that for which we should be looking toward or forward toward the fourth quarter for that data set? Thanks.

Thank you, Tony. So I'll let Michelle answer the first question. I'll start with what you asked about the biomarker and let Eran relate to the H 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 depending on data, the work in progress now and with the data that we have in hand, we present what we have in hand.

I will say, before I let Eran relate to the H score, I will say that we will look at the data and 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 have in hand, but we are not really going to 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 have in hand.

And Eran, do you want to take the H score one?

Yeah. Tony, remember it correctly. This is a very important observation from our previous study in which we showed that the patient who responded had clinical benefit from the treatment of the COM701 combination had higher H score of PVRL2 and this opened the door for a potential biomarker, yes, to enrich for this patient to have long, durable responses and then, of course, to move the 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 BEV?

Yeah, Michelle, go ahead.

Yeah, so 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 onto the PARP inhibitors as second line, or sometimes they'll do it the other way around.

But generally are not repeated. 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.