Q1 2023 Compugen Ltd Earnings Call

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and thank you for joining us today. Welcome to Compugen's first quarter 2023 results conference call. At this time, all participants are in a listen only mode. An audio webcast of this call is available in the 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 for Compagen for the prepared remarks are Dr. Anakon Diag, President of Joint Services and Global Health.

The company may make projections or forward-looking statements regarding future events, business outlook, development efforts and their potential outcome, the company's discovery platform, anticipated progress and plans, results and timelines for its programmes, financial and accounting related matters, as well as statements regarding the company's future 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 20F.

Files with the SEC on February 28, 2023.

The company undertakes no obligation to update projections and forward-looking statements in the future. And now I turn the call over to Anat. Thank you, Yvonne.

Good morning and good afternoon everyone and welcome to our first quarter 2023 update. At CompuGen, we are advancing a differentiated clinical strategy evaluating a drug combination that was never tested before in a space where there is a significant unmet need and potential opportunity to transform the lives of cancer patients.

have always said that blocking Tidet in addition to PD1 may not be enough. A concept that is now increasingly reflected in the consistent move of larger farmer players to add an additional drug to the Tidet PD1 drug combinations in various indications.

Given the potential of PVRIG inhibition to sensitize tumors to PD-1 and TG blockade, we believe the biological and mechanistic rationale support the addition of an anti-PVRIG to the anti-PD-1 TG mix.

And we have the initial clinical translational data to support our hypothesis.

We are the leaders in the unique EMP3 triple combination approach of blocking the three genome accessing UNCHEC points, PVRIG.

TGIT and PD-1, and we are focused on maintaining this leadership.

We have initiated two follow-on proof-of-concept studies in indications not typically responding to immunotherapy, microsatellite-stable colorectal cancer and platinum-resistant ovarian cancer. The former,

enrolling patients and the latter is open for screening of eligible patients.

In these difficult to treat indications, refractory to standards of care, we have previously demonstrated encouraging clinical benefit, including in patients refractory to anti-PD-1s and in patients whose tumors were immune-desired. These data....

are supported by immune activation that aligns with the COM701 mechanism of action.

The goal of the following clinical studies is to strengthen the evidence, help us better understand the contribution of components.

and build on the extensive biomarker work to identify the patients most likely to respond.

We believe that this strategy provides the fastest routes in building a past registration and de-risk our lead assets, Com71 and Com92, in these two indications.

In the first quarter of the year, we executed on our promises.

Firstly, we initiated enrollment in our microsatellite colorectal cancer study and were excited to be on track to report initial findings by the end of the year with final data in 2024.

Secondly, at the annual ASCO conference in June , we will present encouraging data showing the preliminary antitumor activity of COM701 in combination with BMS antitigid and E-VolumeUp and the antibody-based antibody. And finally, we will present the results of the antibody-based antibody in combination with the BMS antitigid.

in patients with recurrent metastatic microsatellite-stable endometrial cancer.

This will include data on anti-tumor activity and safety in nine patients.

Patients with advanced microsatellite stable endometrial cancer have limited treatment options. In a similar population of patients, Dostalimab showed an overall response rate of approximately 15 percent.

The data we will present for our triple combination at ASCO serves as an additional support for a COM701 mediated anti-tumor activity in another tumor type in patients' refractory standards of care.

For now, we remain focused on our proof-of-concept studies in MSS CRC and platinum-resistant ovarian cancer using our own TGED COM902 in combination with our own anti-PVRIG COM701 and PEMPROLITUMab.

with a goal to strengthen the evidence in these indications by enlarging the number of patients. However, our data suggests that the treatment potential for COM71 combinations goes beyond these two indications. signaling and such phenomena And thirdly…

We continue to feed our own pipeline, leveraging our pioneering computational discovery platform.

Earlier this month, we gave an oral presentation at CIMT, Europe's Cancer Immunotherapy Meeting, on our lead potential first-in-class preclinical asset, COM543, which utilizes a novel approach to harness cytokine biology to potentially treat cancer. We presented preclinical data

to activate immunity in the tumor microenvironment without affecting peripheral immunity in urine tumor models.

tested in the clinic. These are given systemically to patients and are associated with safety challenges. The potential advantage of our approach is that our drug, CON-503, is an antibody and not a cytokine and this

works by freeing the body's own interleukin-18, where it is mostly upregulated in the tumor microenvironment to stimulate the immune system to fight cancer. Consequently, we believe that it has the potential advantage of avoiding the typical pharmacokinetic and systemic tolerance limitations

associated with cytokine administration.

Regarding our finances, we have an expected cash runway at least through the end of 2024 to support operations, reach milestones, and de-risk our lead assets COM71 and COM902.

In terms of future funding, non-dilutive funding of our pipeline assets is our priority. We see this as a big opportunity, having three potential first or best-in-class unrestricted assets with the possibility to address a significant and met need in immuno-oncology.

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

Thank you, Anna. I'm happy to summarize our financial results.

Thank you, Anna. I'm happy to summarize our financial results. I will start with our cash balance.

As of March 31, 2023, we had approximately $74.3 million in cash compared with approximately $83.7 million as of December 31, 2022, affirming our focus.

on capital efficiency while continuing our bold execution on our DIN M1 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, making sure we will focus on reaching K milestones with our available cash runway at least through the end of 2024. It is important to emphasize that this does not include any potential cash inflows including the number of dollars, loans, expenses, financial clarity with a single added PhotovoltaicTy revealed an example of a struggle within K ArchResearch?ew and one called Because life day is very hot

potential milestones payment from our collaborator, AstraZeneca. The timing of milestones payment will depend on the progress of studies run by AstraZeneca.

For contractual reasons, we cannot provide the breakdown of the milestones payment. To remind you, to date, CompuGen received development milestones payment of $2, $6, and $7.5 million for achieving a preclinical milestone and for dosing the first patient in Phase I.

and Phase 2 studies, respectively.

Expenses for the first quarter of 2023 were in line with our plans. R&D expenses for the first quarter of 2023 were $7.4 million compared to $7.2 million in the first quarter of 2022. Our G&E expenses for the first quarter of 2023 were $2.6 million compared to $2.6 million in the first quarter of 2022.

For the first quarter of 2023, net loss was $9.3 million, or $0.11 per basic and diluted share, compared to a net loss of $9.7 million, or $0.11 per basic and diluted share, in the first quarter of 2022.

With that, I will end back to announce, to summarize. Thank you Alberto. To summarize, we are on track to present initial findings from two studies evaluating our leading triple combination blockade of PBRIG, TDIT and PD-1 by the end of this year.

These studies are building on prior data suggesting that blocking PVR-IG may sensitize tumors to respond to PD-1 and TG blockade and could turn cold tumors hot, potentially offering a chemotherapy-free option in hepatitis B to T as well as other rare Arterial Cancers.

For tumors, most competitors are not targeting metastatic MSS CRC and platinum-resistant ovarian cancer.

This is a real potential opportunity to transform the lives of patients with the right immunotherapy combination.

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 Mark Breidenbach of Oppenheimer. Please go ahead.

Hey, thanks for taking the questions and congrats on the quarter. Just a couple quick ones from me. I was wondering if you could comment on any potential read-through between observations you'll be presenting at ASCO in endometrial cancer to the two focus areas that you're considering.

pursuing development in colorectal and ovarian. And then the second question is just on COM 503. If you could give us like a rough timeline until this product candidate enters the clinic, that would be appreciated. Thank you.

Okay, thank you, Mark. I think that I understand what you meant with your question and I'll answer it. It's not just to quickly answer me again. Send me the question again. So first of all, thank you for listening. I'm very, very happy to be here. I'm very happy to be

As I said in the prepared remarks, this is the way for us to show, again, the potential of COM701 in a different indication, and by the way, an indication that we were predicting through our computational discovery capabilities to begin with the program.

And then later in the year, we will be able to share preliminary findings from the two studies that we're pursuing now. As I said, the CRC is already enrolling. The platinum-resistant ovarian cancer study is the screening patient for enrolling.

And we would share data towards the end of the year. We aim to complete an enrollment of up to 20 patients of the CRC study. So that's on one front. We may have data from...

I don't believe that it would be the full cohort, but we'll aim to complete enrollment. And on the ovarian, we aim to complete enrollment of 20 patients out of the 40 in the triplet study, and we share data of whatever we'll have at that point in time. And then the rest in 2024.

And with respect to your question about the COM503, I'd be scheduled for next year.

Okay. Just touching back on the first question, I guess what I was asking is if we should reasonably expect the lessons or observations from endometrial cancer to directly apply to either colorectal or ovarian cancer. I think that we look at it, and, Henry, please chime in. I think that we look at it as on the one hand, as a clinical trial. I think

the view that we have on concept of the clinical responses, but also the mechanism of action behind this antibody that we see. That's very important for us. So

And that's my view Henry, would you like to share anything else on this from?

No, thank you, Annette. You've answered it in general. The thing to remember, Mark, is that like Annette said, it will be based on indication for indication. One of the things to consider is that for all these indications, the prior therapies are also different. And I think the number of prior therapies are different also.

So it's probably best to look at each indication. So for example, microsatellite colorectal cancer separate us from endometrial cancer. I think maybe the only thing that's common to both of these tumor types are that they're microsatellite stable. And that's one of the commonalities for those two indications.

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

In general, we'll have to look at the results separately in order to make a full determination of potential read-throughs for the indications that you've asked about. Okay, got it. Thanks, guys.

and ASCO. Should we assume that these nine patients will mostly be IO experience? And then in terms of supporting the mechanism of action, can you speak to any biomarker data that you might be able to present and I guess whether or not that's a good way to go?

on treatment biopsies and or peripheral markers. I think that on the translation, and then Henry you'll answer about the patient population. I think that on the translational data in general, we're doing a lot of work and not only covered in a lot of the data, but also in the data that we're doing.

We're harnessing all our capabilities, computational, experimental, working with biopsies, pretreatment, untreated blood samples thrown from patients, pretreatment and untreated a few times in order to be able to assess the data maps, potential biomarkers and also biomarker discoveries that we could do. For more information, visit www.ottobock.com

So we aim to present at a certain point in time this data, probably per indication. We will present translational, very preliminary translational data for endometrials, but I think the biological work is still probably towards the end of the year.

And so we'll have to wait to see the details of the presentation for endometrial. And of course, one of the things that the question you've asked will be one of the things that we will be interested in assessing and seeing if it contributes to the assessment of anti-tumor activity. Thank you.

So not just that, but also what will be important is the kinds of therapies that patients have received also, what the performance status of all these patients are, and also what the prior response to some of the therapies that these patients have received, in particular for endometrial cancer. So all these parameters...

including the one that you've asked specifically about, the things that we will look at and we'll be able to discuss further once the full abstracts are disclosed and at the time of the presentation also.

Okay, and then can you just remind us what the scan frequency is in the two triple cohorts? I guess I'm just trying to think about the amount of response of the eligible patient data that you might be able to show us before the end of this.

Thanks. Right. So you're referring to the triplets of COM 701, Nivolumab, and BMS 986207. The scan frequency is every two cycles. So a cycle is four weeks or every eight weeks for the first six months.

I think that relates to the MSSCRC and the Platinum Resistance for

Basically right anyway, it's the same for example. Same for the MSCRP. Yes, for the MSCRC.

basically. Right Henry? It's the same for the MSSPRC.

Right, but do remember that for the endometrial cancer cohort that we are going to disclose, it's also the same scanning frequency because the Nivo dose, the schedule is every four weeks. We'll be right back after this. assuming this is allathy to the next panel.

So at the end of every two cycles. Does that make sense?

at the end of every two cycles. Does that make sense? Is it clear?

He passed on. The next question is from Astika Gunwarden of Truist Securities. Please go ahead.

Hi, good morning and good afternoon. Thanks for taking my question. First up, I'd like to get an idea to report meaningful efficacy data from the CRC and the Platinum Resistant Over-encance cohort. How much minimum follow-up do you think you will need per patient? As far as many cases are concerned, that would include other cases.

Henry, would you like to address the question? I think I – so there was a little bit of background, but were you asking specifically for microsatellites that we call rectal cancer? Yeah, Henry, sorry. That was my little copybop in the background there.

Yeah, for both CRC as well as that resistant ovarian cancer, what do you think the minimum follow up is that you need per patient to have a good view on what the efficacy is?

Oh, I think the minimum follow-up is probably something that's secondary. For those two tumor types you mentioned, what would be important would be what the anti-tumor activity is. So, the earliest benchmark to look at or endpoint would be responses. Would be able to truly remind us those cases without contact as such and to you know impact and what makes a clear case.

or a durable clinical or disease control risk, right? So, stable disease for spatial response or plus CR, whatever case it needs to be in this patient population. That's a good benchmark to look at. Remember, this is a face one study with very few patient populations.

sometimes it can be a little bit challenging to interpret the median duration of follow-up you'll need in a patient population like this. For example, if you have maybe 20 patients, that's a little bit more challenging as opposed to a much larger patient population where you have a 95% confidence interval that they need to do 20 follow-up schedules a week.

more conservative. Okay, so maybe to put it another way, Henry, when we see the data that you wrote later this year, we won't be able to get a good idea of duration, or durability of response. It's really gonna be the control rate and just depth of response. That's gonna be what's gonna be the key to get a look at the data later this year, right?

Largely, the anti-tumor activity, partial responses, stable disease, and in the unfortunate instance, patients who haven't responded to these therapies, yes, those are the things I will look at. Because it's a short period of time, it really would be difficult if you haven't been able to articulate that some of these processes, several of which I think are really useful to, I think, find new ways to use the One Volston

follow up on how long those responses are for to be able to disclose the duration of responses. The duration of follow up also can be challenging because remember the duration of follow up includes from the time point patients are enrolled onto the study until the time that they reach an end point for the study. The progression is

or in your fortunate event, another hard endpoint like that.

So that's much longer. I think I speak as – and thank you, Henry. I think that's exactly what – how we look at it. But I think that I'll just add that it really depends on the involvement rate. And the more data we will have –

to share that we think that is meaningful, we'll try to give as much clarity as possible. But needs to take into consideration that some, that even if we enroll the full cohort, some of the patients may not be enough time on study treatment and data will be limited. Got it, thanks, and I'd appreciate that. And then just my last question is,

How confident are you that you will have enough data in-house, in-hand, to see a potential biomarker for both your favorite programs and your TV program?

you will have enough data in hand to see a potential biomarker for both your favorite programs and your strategic programs. Thank you.

Maybe I'll put it in perspective, and Erran, if you want to add, please do so. I'll put it just in perspective that biomarker works for programs in the field of cancer and neurotherapy. I think that all of you understand that it's not trivial at all. In all these fields, if this is not a target...

that is addressing a specific mutation or a specific target that is for ABC, etc. This is really, really hard to come up with. In all of the years, we ended with what? With PD-L1 and PMB and NSI high, PMB, maybe, and NSI high. So that's really hard.

I think that the work that we're doing, which is extensive and is addressing all possible values on this asset that we're working on, I think that we increase the chances of success and we feel comfortable to say that we're doing this work.

good chance to identify it, but it's not a given that there will be a biomarker there and I think that will work to meet the goal if it can be identified around.

I mean, just to add that again, as I mentioned, most people are using PD-L1 as a biomarker, and this is because PD-L1 reflects on the immune microenvironment since most check points are working.

Luckily, we see responses in PD-1 negative patients. And the biology of PVOG shows that probably we could tackle these indications, also patients which are immune-desert, patients which are PD-1 negative. So until now, and also this will probably be quite extensively so responses in patients who are PD-1 negative.

So while we continue to follow PD-L1 for PV-IG combination, probably will not be the one and then you have all the usual suspects and the non-usual aspects and we're doing extensive work sequencing and computationally really trying to identify it and we do it for and maybe a bit related to the question before we do it per indication and across indications and this is work ongoing with all the challenges that I have mentioned.

Great. Thanks, Arun. Thanks, Henry, and thanks, Arun. The next question is from Diana Greba of SVB Securities. Please go ahead. Hi. Thanks for answering.

I wonder if you could help us understand more about the partnering conversations or licensing conversations you have going on. I'm interested in specifically what the potential partners are most interested in. So which programs, which data points do they emphasize and do you spend the most time on? Thank you.

Thank you, Dana. And I'll relate to this one. While we're not discussing specifically any partnering discussions that we have or do not have, I'll try to give some color about the opportunities that we have in the pipeline and now, you know, we are talking about self-Hungarian scale trends. So that the cyber scams are very betrayable. But, we all know how most of the partners ofplaying therianNE with moroccan issues.

how this could be seen. And I think that in general, we're now sitting with a pipeline that is quite rich, that has different partnering opportunities in the form of COM 701, COM 902, COM 543. We also have earlier stage opportunities that are not in the public domain, but we're sitting with...

And COM71, you're aware of the fact that it is unrestricted since August . I think that for COM71, the real opportunity is what we're saying for quite a long time, that TDP-1 will not be enough. And I also related to it in the prepared comments. And companies are now thinking about a third...

people are judging TGP1 combination based on only TGP1 combination without our third asset. And we have only our own data to show that our third asset is adding to it. And hopefully the larger studies will allow us to extend and strengthen these signals. So this is important in terms of how...

potential external partners may look at it in order to further clarify and extend the dynamastic hypothesis that we have in general, as we're showing now in endometrial and in additional cancer indications, but also in the specific tumor types that we selected.

So that's one thing that is key. I guess that also how TV will perform out there is also important by others, and we're looking at it on the call site for free.

I'll say that I think that analysts are probably aware of it and some are aware of it. There is a renaissance in the sense of analyzing pathways. There is a lot of excitement out there. Small value companies are being formed. And we are...

we're really differentiated on this front as much as we're differentiated with the patterns that we bring to the table. And we're addressing this cytokine biology and this pathway in a totally different way than others. And we believe that the way that we address it is actually handling the neuro-therapeutic window of cytokines.

So we bring something new to the table and with the excitement there is out there, and it's the right time with the right assets. So that's what I can say on potential partnering discussions.

bring something new to the table. And with the excitement, there is out there, that's the right time with the right assets. So that's what I can say on potential partner discussions. Thank you for having me.

Because you bring it up as your focus, this non-dilutive financing in your prepared remarks.

How can investors and us have confidence on the timing of that kind of event? You talk about maybe certain data points that you think are going to be more important to reach that value. Beyond the attributes of your pipeline, which you well described, what else can we have in terms of the confidence of that happening? I think that it's a fair question.

Two, I was saying that it's a fair question because I think that it depends on the internal data that we already have.

on internal data that we will generate, and it doesn't mean that we need to get to the end of 2024 in order to be able to share data that is relevant from the internal perspective, but it also depends on external drivers.

And it's not a given that, and I don't think that it's our goal as well. Definitely, this is not our goal to partner everything and stay without a clinical stage pipeline. So, we're putting our priorities in place and we deal with the internal external milestones.

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

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

Thank you, operator. Before we end the call, I will take this opportunity to remind you of an investor event we are hosting on Tuesday, May 23, with Drew Pardoll, a pioneer in cancer immunotherapy and a chairman of the Compugent Scientific Advisory Board. Drew was the first to propose blockage of PD-1s for cancer immunotherapy.

therapies for cancer patients.

Thank you for participating today. You may go ahead and disconnect.