Compugen Ltd. (CGEN) Earnings Call Transcript
May 15, 2023
Earnings Call Speaker Segments
Ladies and gentlemen, thank you for joining us today. Welcome to Compugen's First Quarter 2023 Results Conference Call. [Operator Instructions] An audio webcast of this call is available in the Investors section of Compugen's website, www.cgen.com. As a reminder, today's call is being recorded. 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 Compugen for the prepared remarks are Dr. Anat Cohen-Dayag, President and Chief Executive Officer; and Alberto Sessa, Chief Financial Officer; Dr. Henry Adewoye, Chief Medical Officer; and Dr. Eran Ophir, Senior Vice President, Research and Drug Discovery, 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, development efforts and their potential outcome, the company's discovery platform, anticipated progress and plans, results and timelines for its programs, 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 20-F 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 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 with the right immunotherapy combination. Compugen has always believed that in certain patients and in certain tumor types, blocking the 3 pathways of the genomes access PVRIG, TIGIT and PD-1 may be needed to enhance antitumor immunity. We have always said that blocking TIGIT, in addition to PD-1 may not be enough, a concept that is now increasingly reflected in the consistent move of larger pharma players to add an additional drug to the TIGIT PD-1 drug combinations in various indications. Given the potential of PVRIG inhibition to sensitize tumors to PD-1 and TIGIT blockade, we believe the biological and mechanistic rationale support the addition of an anti-PVRIG to the anti-PD-1 TIGIT mix. And we have the initial clinical and translational data to support our hypothesis. We are the leaders in the unique chemotherapy-free triple combination approach of blocking the 3 genome access immune checkpoint PVRIG, TIGIT and PD-1, and we are focused on maintaining this leadership. We have initiated 2 follow-on proof-of-concept studies in indications not typically responding to immunotherapy, microsatellite stable colorectal cancer and platinum-resistant ovarian cancer. The former is enrolling patients and the latter is open for screening of eligible patients. In these difficult-to-treat indications refractory to standard of care, we have previously demonstrated encouraging clinical benefit including in patients refractory to anti-PD-1 and in patients whose tumors were immune desert. 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 route in building a pass-through registration and derisk our lead assets, COM701 and COM902, in these 2 indications. In the first quarter of the year, we executed on our promises. Firstly, we initiated enrollment in our microsatellite colorectal cancer study, and we're 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 anti-TIGIT and nivolumab in patients with recurrent metastatic microsatellite stable endometrial cancer. This will include data on antitumor activity and safety in 9 patients. Patients with advanced microsatellite stable endometrial cancer have limited treatment options. In a similar population of patients, dostarlimab showed an overall response rate of approximately 15%. The data we will present for our triple combination at ASCO serves as an additional support for COM701 mediated antitumor activity in another tumor type, in patients refractory standard of care. For now, we remain focused on our proof-of-concept studies in MSS-CRC in platinum-resistant ovarian cancer using our own TIGIT COM902 in combination with our own anti-PVRIG COM701 and pembrolizumab 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 COM701 combination goes beyond these 2 indications. 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 COM503, which utilizes a novel approach to harness cytokine biology to potentially treat cancer. We presented preclinical data showing that COM503 binds with high affinity to IL-18 binding protein, freeing endogenous IL-18 and restoring natural killer and T cell activity. We also showed that blocking IL-18 binding protein prevents tumor growth and release IL-18 to activate immunity in murine tumor microenvironment without affecting peripheral immunity in tumor models. Our approach is unique and different from recombinant cytokines targeting this pathway or from other pathways that were already 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, COM503 is an antibody and not a cytokine. And this antibody works by freeing the body's own interleukin-18, where it is mostly up-regulated 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 tolerant 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 derisk our lead assets, COM701 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 3 potential first or best-in-class unrestricted assets with the possibility to address a significant unmet need in immuno-oncology.
Thank you, Anat. 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 DNAM-1 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 key 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 potential milestones payment from our collaborators, 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 payments of $2 million, $6 million and $7.5 million for achieving a preclinical milestones and for dosing the first patient in Phase I and Phase II studies, respectively. Compugen is entitled to receive an aggregate of up to $200 million in development, regulatory and commercial milestones for the first products. 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&A expenses for the first quarter 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 hand back to Anat to summarize.
Thank you, Alberto. To summarize, we are on track to present initial findings from 2 studies evaluating our leading triple combination blockade of PVRIG, TIGIT and PD-1 by the end of this year. These studies are building on prior data suggesting that blocking PVRIG may sensitize tumors to respond to PD-1 and TIGIT blockade and could turn cold tumors hot potentially offering a chemotherapy-free option 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. With that, I will turn the call over for questions. Operator?
[Operator Instructions] The first question is from Mark Breidenbach of Oppenheimer.
Congrats on the quarter. Just a couple of 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 2 focus areas that you're pursuing development in colorectal and ovarian? And then the second question is just on COM503. If you could give us like a rough time line until this product candidate enters the clinic, that would be appreciated?
Okay. Thank you, Mark. And I think that I understand what you meant with your question and I'll answer is not just -- and just to quickly answer me again -- bringing the question, again. So first on the endometrial cancer and we said, we will publish the data at ASCO and we gave some insights. This is a small cohort, and we'll be able to show anti-tumor activity and also a safety data. From our perspective, as I said in the prepared remarks, this is a 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, with the program. And then later in the year, we will be able to share preliminary findings from the 2 studies that we're pursuing now. As I said, the CRC is already enrolling with the platinum-resistant ovarian cancer study is screening patients for enrolling, and we will share data towards the end of the year. We aim to complete 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'll share data whatever we'll have at that point in time and then the rest in 2024. And with respect to your question about COM503, I&D is 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 they will look at it and Henry please, timing. I think that we look at it as -- on 1 hand, as indication by indication. So data in one indication is not predictive of success in a different indication. But I think that the totality of the data definitely point to strengthening the view that we have on COM701 that the clinical responses but also the mechanism of action behind this antibody that we see and that's very important for us. So -- and that's my view. Henry, would you like to share anything else on this front?
No, no. Thank you, Anat. You've answered it, in general. The thing to remember, Mark, is that like Anat said, it will be based on indication by indication. The since -- one of the things to consider is that for all these indications, the prior therapies are also different. 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 coming to both of these tumor types as they're microsatellite stable. And that's one of the commonalities for those 2 indications. But 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 have asked about.
The next question is from Stephen Willey of Stifel.
I guess just with respect to endometrial cancer and ASCO, should we assume that these 9 patients will mostly be IO experienced? 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 on treatment biopsies and/or peripheral markers.
I think that on the translation, and I'll take it and then Henry will answer about the patient population. In thinking on the translational data in general, and we're doing a lot of work not only covered the endometrial, which is at the end of the day, it's 9 patients, but on prior studies and also on the current studies that are planned to have an extensive biomarker work. We're harnessing all our capabilities, computational, experimental working with basic pre-treatment, on treatment, [indiscernible] from patients pre-treatment and on treatment few times in order to be able to assess the [indiscernible] potential biomarkers and also biomarker discovery that we could do. So we aim to present at the same point in time this data probably per indication. And we will we present translational -- very preliminary translational data for endometrial, but I think that biomarker work is still probably towards the end of the year and in 2024. Henry, would you like to discuss the patient population?
Yes. So I think it's only the titles of the abstracts that are currently available now. 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 to be one of the things that we will be interested in assessing and seeing the -- will contribute to the assessment of antitumor activity. 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 1 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 at the time of the presentation also.
Okay. And then can you just remind us what the scan frequencies in the 2 triple cohorts? I guess I'm just trying to think about the amount of response evaluable patient data that you might be able to show us before the end of this year?
Right. So you're referring to the triplet of COM701 nivolumab and BMS-986207. The scan frequency is every 2 cycles. So a cycle is 4 weeks so every 8 weeks for the first 6 months.
Henry, I think that it relates to the MSS-CRC and the platinum-resistant ovarian cancer studies, but it's the same, basically. Right, Henry? It's the same frequency, same before for the...
For the MSS-CRC, yes. Yes, for the MSS-CRC. 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 is -- the schedule is every 4 weeks. So every -- at the end of every 2 cycles. Does that make sense? Is it clear?
He passed on. The next question is from Asthika Goonewardene of Truist Securities.
First off, I'd like to get an idea to report meaningful efficacy data from the CRC and the platinum-resistant ovarian cancer cohort. How much minimum follow-up do you think you will need per patient?
Henry, would you like to address the question?
I think -- so there was a little bit of a background. But were you asking specifically for microsatellite stable colorectal cancer?
Yes, Henry, sorry, that was my little puppy barking in the background there. Yes, for both CRC as well as platinum-resistant ovarian cancer, what do you think the minimum follow-up is actually needed per patient to have a good view on what the efficacy is?
I think the minimal follow-up is probably something that's secondary. For those 2 tumor types you mentioned, what would be important would be what the antitumor activity is. So the earliest benchmark to look at or endpoint will be responses or durable clinical or disease control rate, right? So stable disease, prospection response or plus the CR, what about the case may be in these patient populations. That's a good benchmark to look at. Remember, this is a Phase I study with very few patient population. So that benchmark is probably the most appropriate to look at. The other benchmark to look at will be the depth of responses that we're observe in these patient populations. But the -- because it's a small number, sometimes it can be a little bit challenging to interpret the median duration of follow-up you 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 like 5% confidence in about that things will be more conservative.
Okay. So maybe to put it another way, Henry. When we see the data that you announced later this year, we won't be able to get a good idea of duration -- durability of response. It's really going to be disease control rate and depth of response, that's going to be, what's going to be in the other key to look on the data later this year, right?
Largely, the antitumor activity, partial response in stable disease and in the unfortunate instance, patients who haven't responded to these therapies, yes, those are the things that we look at. Because it's a short period of time, it really would be difficult if you haven't been able to 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 that are enrolled onto the study until the time that they reach an endpoint for the study either progression or in the unfortunate event, under the hard endpoint like that? So that's much longer. So...
I think Asthika, I'll just add, and thank you, Henry. I think that's exactly what -- how we look at it, but I think this I'll just add that it really depends on the environment 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 even if we were involved in the full cohort, some of the patients may not be enough time on study treatment and data will be limited.
Got it. I 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 PVRIG programs and your TIGIT program?
Maybe I'd put it in perspective, and Eran, if you want to add, please do so. I'll put it just in perspective that and biomarker work for programs in the case of cancer immunotherapy. I think this honestly understands that it's not trivial at all. In all these [indiscernible] if this is not a target that is addressing a specific mutation or a specific target that is for A, B, C, et cetera. This is really, really hard to come up with. And over the years, we ended with what with PD-L1 and TMB and MSI-high. TMB made the MSI-high. I think that the work that we're doing, which is extensive and is addressing all possible venues on these assets that we're working on. I think that we increased the chances of success -- and we feel comfortable to say that we're doing this work and when we'll have data that we think is relevant to disclose, we will disclose it. But I just want to make sure that everyone understands that this is not result. If there is a biomarker there, I think this Compugen has a good chance to identify it, but it's not given that there will be a biomarker there. And I think that will work to meet the goal, if it can be identified. Eran?
I mean just to add that, again, as Anat mentioned, most people are using PD-L1 as a biomarker. And this is because PD-1 reflects an immune microenvironment feasible, most checkpoints are working. Luckily, we see responses in PD-L1-negative patients. And the biology of PVRIG shows that probably we could tackle these indications also patients which are immune desert, patients which are PD-L1 negative. So until now and also this with triple, where you quite extensively saw responses in patients who are PD-L1 negative, so while we continue to follow PD-L1 for PVRIG combination probably will not the one. And then you have all the usual aspects and on the nonusual aspects, as we are doing extensive work sequencing and computationally really trying to identify it and we do it -- 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 Anat mentioned.
The next question is from Daina Graybosch of SVB Securities.
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, on which programs, which data points do they emphasize and do you spend the most time on?
Thank you, Daina. I relate to this one. And while we're not discussing specifically any partnering discussions that we have or do not have, I am trying to give some kind of about the opportunities that we have in the pipeline and 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 COM701, COM902, COM503. We also have earlier-stage opportunities that are not in the public domain. But we're sticking with unrestricted assets. And they are presenting opportunity in the field of cancer immunotherapy that I believe brings a new treatment options, first-in-class or best-in-class. And I think that for COM701, COM902 and COM701, you're aware of the fact that it is unrestricted since August. I think that for COM701, the real opportunity is what we're saying for quite a long time that TIGIT PD-1 will not be enough. And I also relate it to [indiscernible] in the prepared comments and companies are now thinking about the third agent to combine. We're saying for quite some time. PVRIG needs to be combined with this in order to enable, in order to allow for the PD-L1 and low patient populations or tumor type to respond. We need to deal with the fact that people are judging TIGIT PD-1 combination based on only TIGIT PD-1 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 study will allow us to extend and strengthen this signal. So this is important in terms of how a potential external partners may look at it and in order to further clarify and extend the DNAM-1 axis hypothesis that we have. In general, as we're showing now in endometrial and intestinal cancer indication, but also in the specific tumor types that we selected to focus on in the ovarian cancer and colorectal cancer. So that's important for us to pursue not only in order to speak with the FDA about a path forward, but also in potential partnering discussions. So that's 1 thing that is key. I guess that also how TIGIT will perform,[indiscernible] is also important like others and we're looking into it. On the cost side for I'll say that I think that analysts are probably aware of it and from I aware of it, there is a reminiscing to the fill the IL-18 pathway. There is a lot of excitement out there. Small biotech companies have been formed, and we're really differentiated on this front as much as we're differentiated with the patent 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're addressing it is actually handling the narrow traffic window of cytokines. So we bring something new to the table. And with the excitement that is out there, that is the right time with the right assets. So that's what I can say on potential partnering discussions.
Let me ask 1 more follow-up then because you bring it up as your focus is non-dilutive financing in your prepared remarks. How can investors and us have confidence on the timing of that kind of event you talked 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 competence of that happening?
So I think that -- it's a fair question. And I think that with respect to COM503, we don't see any pending will decide to enter into partnerships. We don't see any data points that I'm missing. We have a great package to show exactly what we're saying about this asset. So that's one. I think that on the COM701 and COM902 I'll say, there is 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 going well. Definitely, this is not our goal to partner everything and stay without a clinical stage pipeline. So that's -- we're putting our priorities in place and we'll deal with the internal external milestones and with potential discussions. So we believe that a -- that the assets that we have has the potential to generate additional cash inflows for the company in order to support our end financial within status.
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 Competence Scientific Advisory Board. Drew was the first to propose blockade of PD-1 for cancer immunotherapy, and his research led the clinical development of the first anti-PD-1 antibody. Drew is also a world expert in the genome axis and I think you will really enjoy his views on why blocking the 3 pathways in the genome axis, PVRIG, TIGIT and PD-1 has the potential to generate the next immunotherapies for cancer patients. Thank you for participating today. You may go ahead and disconnect.
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