Compugen Reports Fourth Quarter and Full Year 2023 Results
- Partnership with Gilead for preclinical immuno-oncology program
- Solid balance sheet and extended cash runway
- Expected catalyst rich 2024 with multiple data readouts
- Significant increase in revenues in 2023
- No debt and sufficient cash to fund operations into 2027
- Increase in research and development expenses
- Net loss reported for the year
Insights
The licensing agreement between Compugen and Gilead, which includes a $60 million upfront payment and an additional $30 million milestone payment, signals a significant influx of capital that can bolster Compugen's financial stability. The potential for a cash runway extension into 2027 suggests a reduced likelihood of near-term dilutive financing, which can be reassuring for current investors. Furthermore, the partnership with a reputable company like Gilead serves as a strong validation of Compugen's computational discovery platform, potentially enhancing investor confidence in the company's prospects and technology.
Examining the financial highlights, the reported revenue increase to $33.5 million in 2023 from $7.5 million in 2022 is noteworthy, reflecting a substantial year-over-year growth. This growth is primarily attributed to the Gilead license agreement and the AstraZeneca milestone payment. However, it's important to consider that these figures are significantly influenced by non-recurring payments, which may not reflect the company's underlying operational performance. Additionally, the company's net profit of $9.7 million in Q4 contrasts with a net loss in the same period last year, indicating a positive trend in profitability, albeit potentially temporary due to the nature of milestone payments.
From a medical research perspective, the progress of Compugen's COM701 in challenging indications such as microsatellite stable colorectal cancer (MSS CRC) and platinum-resistant ovarian cancer is significant. These cancers have historically shown limited response to immunotherapy and the advancement of these trials could potentially open new avenues for treatment if successful. The emphasis on a biomarker-enriched development strategy could lead to more targeted and effective therapies, which is a growing trend in oncology. The rilvegostomig development by AstraZeneca, derived from Compugen's COM902, entering Phase 3 in biliary tract cancer is another critical milestone, as it could further validate Compugen's computational platform and provide future revenue streams through milestone payments and royalties.
Moreover, the initiation of the Phase 1 study of COM503 after IND clearance, with Compugen leading through Phase 1, reflects on the company's strategic focus on early-stage development and potential for future partnerships or out-licensing deals. The success of these clinical programs could have substantial implications for the company's valuation and its position in the immuno-oncology landscape.
From a market perspective, Compugen's strategic collaborations and diversified portfolio position the company favorably within the competitive immuno-oncology space. The focus on novel targets and combination therapies is aligned with current industry trends, which prioritize personalized medicine and combination treatments to overcome resistance to monotherapies. The company's computational discovery platform distinguishes it from competitors by potentially reducing the time and cost of drug development, an advantage that could attract further partnerships and investment.
Looking ahead, the anticipated data readouts in 2024 are likely to be pivotal events that could significantly influence the company's market valuation. Positive results could lead to increased investor interest and potentially drive up the stock price. Conversely, negative results could have an adverse effect. It's also important to note the impact of the 15% withholding tax on payments from Gilead, which affects net income and should be factored into financial projections. Overall, the company's strategic moves and upcoming milestones could have a substantial impact on its future business performance and investor sentiment.
- Partnership with Gilead on preclinical immuno-oncology program further validates Compugen's computational discovery, research, and development capabilities
- Catalyst rich 2024 expected with multiple data readouts and updates planned from Compugen's diversified portfolio
- Solid balance sheet with extended cash runway expected to fund operations into 2027
HOLON,
"Our accomplishments in 2023 position us well for an exciting future," said Anat Cohen-Dayag, Ph.D., President, and CEO of Compugen. "We advance into an expected catalyst rich 2024, with a solid balance sheet, an expected extended cash runway into 2027 and validating partnerships. We believe we have the tools in place to accelerate value creation through advancement of our diversified pipeline portfolio along with our computational discovery platform which is the engine powering our competitive advantage."
Dr. Cohen-Dayag added, "Compugen made significant progress in 2023, including a license agreement with Gilead Sciences for our preclinical potential first-in-class, antibody program against IL-18 binding protein, COM503. The deal, including an upfront payment of
Dr. Cohen-Dayag continued, "In 2023, our partner AstraZeneca continued to make progress advancing rilvegostomig, a PD-1/TIGIT bispecific antibody, the TIGIT component of which is derived from our COM902, into Phase 3 development in biliary tract cancer. AstraZeneca is also advancing rilvegostomig across multiple other indications and combinations and expects data from two of these Phase 2 trials, in the second half of 2024. This partnership provides further validation to our potential best-in-class anti-TIGIT, COM902, and the extensive clinical program being run by AstraZeneca increases our opportunity for obtaining additional non-dilutive financing through expected future milestone payments and royalties."
Upcoming Expected Milestones:
COM701 +COM902 + pembrolizumab proof-of-concept studies
- Microsatellite stable colorectal cancer - data in the first half of 2024
- Platinum resistant ovarian cancer - on track to complete enrolment of at least 20 patients in the first quarter of 2024, and data in the fourth quarter of 2024
COM503 (Licenced to Gilead, Compugen responsible through Phase 1 development)
- IND submission in the second half of 2024 with subsequent initiation of the Phase 1 study following IND clearance
Rilvegostomig (AstraZeneca's PD-1/TIGIT bispecific, TIGIT component derived from COM902)
- Data in the second half of 2024 from Phase 1/2 ARTEMIDE-01 trial in advanced/metastatic NSCLC and Phase 2b GEMINI-HBP trial in hepatobiliary cancer
Fourth Quarter and Full Year 2023 Financial Highlights
Cash: As of December 31, 2023, Compugen had approximately
Revenues: Compugen reported approximately
R&D expenses for the fourth quarter and year ended December 31, 2023, increased to approximately
G&A expenses for the fourth quarter and year ended December 31, 2023, were
Net Income / Loss: During the fourth quarter of 2023, Compugen reported a net profit of
Full financial tables are included below.
Conference Call and Webcast Information
The Company will hold a conference call today, March 5, 2024, at 8:30 AM ET to review its fourth quarter and full year 2023 results. To access the conference call by telephone, please dial 1-866-744-5399 from
About Compugen
Compugen is a clinical-stage therapeutic discovery and development company utilizing its broadly applicable predictive computational discovery capabilities to identify new drug targets and biological pathways for developing cancer immunotherapies. Compugen has developed two proprietary product candidates: COM701, a potential first-in-class anti-PVRIG antibody and COM902, a potential best-in-class antibody targeting TIGIT for the treatment of solid tumors. Compugen also has a clinical stage partnered program, rilvegostomig (previously AZD2936), a PD-1/TIGIT bispecific antibody where the TIGIT component is derived from Compugen's clinical stage anti-TIGIT antibody, COM902, in Phase 3 development by AstraZeneca through a license agreement for the development of bispecific and multispecific antibodies. In addition, Compugen's therapeutic pipeline of early-stage immuno-oncology programs consists of programs aiming to address various mechanisms of immune resistance, of which the most advanced program, in IND enabling studies is COM503, which is licensed to Gilead. COM503 is a potential first-in-class, high affinity antibody which blocks the interaction between IL-18 binding protein and IL-18, thereby freeing natural IL-18 in the tumor microenvironment to inhibit cancer growth. Compugen is headquartered in
Forward-Looking Statement
This press release contains "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended, and the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the current beliefs, expectations, and assumptions of Compugen. Forward-looking statements can be identified using terminology such as "will," "may," "expects," "anticipates," "believes," "potential," "plan," "goal," "estimate," "likely," "should," "confident," and "intends," and similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements include, but are not limited to, statement regarding our expectations regarding IND clearance for COM503, including the timing thereof, and similar statements regarding the initiation, and timing of the Phase 1 study for COM503, statements regarding our expectation that 2024 will be catalyst rich with multiple data readouts and updates planned for Compugen's diversified portfolio, statements suggesting that the unique biology of PVRIG enables anti-PD-1 activity in MSS CRC including patients with liver metastases, and in platinum resistant ovarian cancer, statements regarding our ability to move forward with an enriched development strategy and statements to the effect that our cash and cash-related balances will be sufficient to fund our operating plans into 2027. These forward-looking statements involve known and unknown risks and uncertainties that may cause the actual results, performance, or achievements of Compugen to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Among these risks: the clinical trials of any product candidates that Compugen, or any current or future collaborators, may develop may fail to satisfactorily demonstrate safety and efficacy to the FDA, and Compugen, or any collaborators, may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of these product candidates; Compugen's business model is substantially dependent on entering into collaboration agreements with third parties and Compugen may not be successful in generating adequate revenues or commercializing aspects of its business model; Compugen's approach to the discovery of therapeutic products is based on its proprietary computational target discovery infrastructure, which is unproven clinically; general market, political and economic conditions in the countries in which Compugen operates, including
Company contact:
Yvonne Naughton, Ph.D.
Head of Investor Relations and Corporate Communications
Email: ir@cgen.com
Tel: +1 (628) 241-0071
COMPUGEN LTD. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
( | |||||||
Three Months Ended | Year Ended, | ||||||
December 31, | December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Unaudited | Unaudited | ||||||
Revenues | 33,459 | 7,500 | 33,459 | 7,500 | |||
Cost of revenues | 2,004 | 975 | 2,004 | 975 | |||
Gross profit | 31,455 | 6,525 | 31,455 | 6,525 | |||
Operating expenses | |||||||
Research and development expenses | 10,928 | 7,327 | 34,472 | 30,648 | |||
Marketing and business development expenses | 61 | 191 | 244 | 932 | |||
General and administrative expenses | 2,482 | 2,536 | 9,731 | 10,319 | |||
Total operating expenses | 13,471 | 10,054 | 44,447 | 41,899 | |||
Operating income (loss) | 17,984 | (3,529) | (12,992) | (35,374) | |||
Financial and other income, net | 735 | 495 | 3,208 | 1,738 | |||
Income (loss) before taxes on income | 18,719 | (3,034) | (9,784) | (33,636) | |||
Taxes on income | 9,006 | 58 | 8,970 | 58 | |||
Net income (loss) | 9,713 | (3,092) | (18,754) | (33,694) | |||
Basic and diluted net income (loss) per | 0.11 | (0.04) | (0.21) | (0.39) | |||
Weighted average number of ordinary shares | 88,415,382 | 86,624,643 | 87,633,298 | 86,555,628 | |||
COMPUGEN LTD. | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS DATA | ||||
( | ||||
December 31, | December 31, | |||
2023 | 2022 | |||
ASSETS | ||||
Current assets | ||||
Cash, cash equivalents, short-term bank deposits and restricted cash | 39,308 | 83,708 | ||
Investment in marketable securities | 11,742 | - | ||
Trade receivables | 61,000 | - | ||
Other accounts receivable and prepaid expenses | 2,529 | 2,417 | ||
Total current assets | 114,579 | 86,125 | ||
Non-current assets | ||||
Long-term prepaid expenses | 1,233 | 1,899 | ||
Severance pay fund | 2,977 | 2,794 | ||
Operating lease right to use asset | 1,329 | 1,826 | ||
Property and equipment, net | 1,216 | 1,532 | ||
Total non-current assets | 6,755 | 8,051 | ||
Total assets | 121,334 | 94,176 | ||
LIABILITIES AND SHAREHOLDERS EQUITY | ||||
Current liabilities | ||||
Other accounts payable, accrued expenses and trade payables | 14,485 | 10,981 | ||
Short-term deferred revenues | 11,149 | - | ||
Current maturity of operating lease liability | 632 | 613 | ||
Short-term deferred participation in R&D expenses | - | 325 | ||
Total current liabilities | 26,266 | 11,919 | ||
Non-current liabilities | ||||
Long-term deferred revenues | 25,392 | - | ||
Long-term operating lease liability | 719 | 1,312 | ||
Accrued severance pay | 3,398 | 3,265 | ||
Total non-current liabilities | 29,509 | 4,577 | ||
Total shareholders' equity | 65,559 | 77,680 | ||
Total liabilities and shareholders' equity | 121,344 | 94,176 | ||
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SOURCE Compugen Ltd.
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