Compugen Ltd. (CGEN) Earnings Call Transcript & Summary

Hi, everybody. Welcome to the first day of the Morgan Stanley Global Healthcare Conference. I'd like to thank everyone for joining the Compugen fireside chat. My name is Albert Hwang. I'm Managing Director and Co-Head of the Healthcare Group in the Investment Banking division. With me, I will let Anat introduce the management team, but love to get started as soon as I read the disclaimer here. So for important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. So maybe with that, we only have 30 minutes. So love to get started here. Anat, if you could please kick off and introduce who you have with you and maybe give a 5-minute introduction to Compugen for those of the audience here that's new to the story. I think that will be a good way to kick off.

Sure. Thank you, Albert, and thanks, Morgan Stanley, for inviting us. So with me today are Ari Krashin, our CFO and COO, and Henry Adewoye, our CMO. So I'll start with the background and overview of Compugen. We're a therapeutic drug discovery and development company. We discover new drug targets and new biological pathways using a computational discovery platform that we developed for many years in the company. And we develop first-in-class drugs to address these drug targets. We're focused in the field of cancer immunotherapy. And today, we have an innovative portfolio that consists of 3 clinical stage programs in the pipeline and an earlier-stage pipeline that is based on the computational discovery capabilities of the company and the new drug targets that we discovered. We have 3 strategic collaborations with pharma companies, collaborations with Bristol-Myers Squibb, with AstraZeneca and with Bayer. And as I noted in the beginning, we have our own engine, [ computational one ], to feed our own pipeline.

Great. And as we look at the IO companies that you've talked about, obviously, you're differentiated with the 3 pathway hypothesis. Could you talk about that a little bit? Maybe some people are not familiar with the hypothesis? And then to dig in on that, how is that differentiated? And why is it important?

Sure. So with our computational discovery capabilities, we discovered in 2009 the TIGIT pathway. Back then, we were not a drug development company. We sent it to publication. It was actually sent to publication at the same time that it was published by Genentech. When we formed our own pipeline, we actually discovered a new biological pathway that is termed PVRIG. And this pathway, PVRIG/PVRL2, this pathway we found that this -- it is working in parallel and in complement to the TIGIT pathway. So this is a new negative costimulatory receptor, PVRIG, that binds PVRL2 and operate in parallel to TIGIT. The DNAM axis hypothesis is actually taking that the -- when the 2 pathways are operative, you'll actually -- it will not be enough to block only TIGIT, you'll need to block the PVRIG as well because this pathway will continue to stimulate -- to inhibit the immune system. The 2 pathways are actually binding PVR on one hand. TIGIT binds PVR and PVRIG binds PVRL2. When you block these 2 pathways, you release PVR and PVRL2 to stimulate DNAM, which is a positive costimulatory protein. So by blocking TIGIT and PVRIG, you actually block 2 negative costimulatory receptors and you release PVR and PVRL2 to bind DNAM and stimulate DNAM, which is a positive costimulatory protein. And the total effect is actually maximizing the stimulation of the immune system. One more thing that I'll mention so it will be clear what is the 3 pathway hypothesis. What we found out, and this is supported by the scientific literature, is that the PD-1 pathway is also intersecting with DNAM and actually PD-1 is inhibiting DNAM, the positive costimulatory protein. We believe the 3 pathways are actually working together and are present in different dominance in different tumor types and different patient populations. And we believe the different combinations out of these 3 pathways would be required in order to generate antitumor immunity in different patient populations. So this is the DNAM axis hypothesis.

Okay. And maybe just as a follow-up to that. How do you know that it's not just PVRIG and TIGIT and that there's yet another pathway that needs to be inhibited that it's not just 3 pathway, but maybe there's 4 or even 5? How does -- how do you define that side?

So we have data from science, in vitro data, in vivo data, expression profiles and also today, we can also say that the preclinical data that we generated also translates to clinical validation. What we found out is that the 2 pathways, TIGIT, PVRIG, and PD-1 are actually when you block them, you have synergistic effect in vitro. You generate synergistic effect in vivo. And today, we have data clinically that is showing COM701, the anti-PVRIG antibody, showing antitumor activity as monotherapy but also generating antitumor activity with -- in the combination with PD-1 inhibitor with nivolumab. So the data suggests that these 3 pathways are working in parallel and are complementing one and another.

Okay. So speaking about your pipeline specifically then, you have 701 and 902. Can you talk about those a little bit, including, if any of them are partnered and perhaps what's the strategy around the partnering process?

Sure. So with the understanding that this is the 3 pathway hypothesis, we translated the science behind these pathways to clinical strategy. And with that in mind, we developed COM701, a PVRIG antibody, that we tested in monotherapy and also in combinations with TIGIT and with PD-1. COM701 is an antibody that is under clinical collaboration with Bristol-Myers Squibb. Under this collaboration, we get a supply from Bristol-Myers Squibb of nivolumab and also their own TIGIT antibody in order to execute combinations, doublet and triplet combinations with the TIGIT and PD-1. And as part of this collaboration, the program is owned by Compugen and Bristol-Myers Squibb has a right of first negotiation. Under this arrangement, BMS also became an investor in Compugen. So this is the BMS collaboration in COM701. And maybe before I'll go to COM902, I'll relate in a moment to our business development strategy or partnering strategy. In general, we've built our own pipeline based on the computational and discovery capabilities and wish to take the program forward. Having said that, our business model is to partner the assets that we discover at different stages of the research and development process to get some help from partners in the development and also to generate and to retain value as well. As part of this, we entered into different type of collaborations. The Bristol-Myers Squibb represents one type of collaboration, which is a clinical collaboration. We have a development and commercialization arrangement with Bayer, which is also a collaboration that generates milestones and may generate also royalties for Compugen. And we also have a license agreement with AstraZeneca that -- under which we license to AstraZeneca the rights to develop bispecific antibodies to one of the programs in our pipeline. So we're very flexible in the type of business arrangements that we are looking for. We're open for collaborations as long as we -- it helps us advance our programs and helps us retain value for our company. For COM902, this is our TIGIT antibody. We developed a TIGIT antibody actually in order to be able to hold on what we think are the 2 key pathways in this DNAM axis. We wanted to make sure that we extract the full potential of COM701 and therefore, we wanted to have an access to our own TIGIT inhibitor. With that in mind, this program is now in the monotherapy dose escalation. And we recently started a COM701/COM902 combination, a doublet combination that inhibits TIGIT and PVRIG in a PD-1 independent setting. Maybe just to close the loop on the different studies that we have with the 2 assets of COM701 and COM902. We actually performed a COM701 monotherapy study; COM701 PD-1 inhibitor study, a doublet study; another doublet study that is COM701/COM902 PVRIG/TIGIT study; and the triplet study of COM701, PD-1 and TIGIT inhibitor. With that in mind, we are able to -- with these studies, we're able to assess the DNAM axis hypothesis comprehensively and as the only company that has access to PVRIG antibody at the clinical stage, we are actually ahead of the industry. And actually, I'll go back to the question that you were asking me. This is highly differentiating for Compugen.

Given the triple combination using 2 of Bristol's programs, the TIGIT and PD-1, does that partnership limit you from working with other PD-1s or working with your own TIGIT in combination with PD-1s?

So the collaboration is exclusive for COM701 plus PD-1 or PD-L1 inhibitors. And the exclusivity is actually during the execution of the studies plus 6 months or until December 2023. At any point in time, during the exclusivity where BMS has right of first negotiation, at any point in time, we Compugen, can trigger this right to first negotiation. So this is for the PD-1 aspect. With respect to COM902, COM902 is completely out of this collaboration. It is not part of the collaborative arrangement with BMS.

Okay. Got it. Okay. Well, this triple combination here seems to be of interest to other companies. There was another partnership with iTeos and GSK. Can you maybe just talk about how that's validating or not? Or -- and where they are in development relative to you?

Actually, it's even beyond this collaboration between GSK and iTeos. Actually, it starts with the fact that GSK acquired an access to the DNAM axis members and is following the DNAM axis hypothesis that we came up with. So today, GSK has an access through Surface Oncology to their PVRIG antibody, which is at preclinical stage. And now they have the access to TIGIT antibody. And they also have an access to another member of the DNAM axis, which is called CD96. So they are going to check different type of combinations. We believe that the 2 important pathways in the DNAM axis hypothesis is TIGIT and PVRIG. And as you understand, we're already in the clinic testing all the different combinations and wait to see what, how GSK is translating it to the clinic. But for us, it is validating. It is a partner that's really following our DNAM axis strategy.

Okay. And speaking of large caps and validating on the TIGIT side that's been very active, you have not just the iTeos transaction but Gilead. Validating is 1 thing, but differentiation is another. How do you look at your own 902 program is differentiated from all the other TIGITs out there?

So actually, on few levels. First, our clinical strategy is differentiated. We combine it with an anti-PVRIG with COM701. And as I said, we're the only PVRIG antibody in the clinic. So that's 1 differentiation. And it is based on science. We took it all the way from the discovery, understanding the science why these are 2 parallel and complementary pathways. So this is on the clinical strategy front. Also, our molecule is different. Our molecule is actually the anti-TIGIT antibody, is an Fc inactive. The Fc is less competent. It is an IgG4. We designed it to begin with to be an IgG4 because of the concern that it may not only deplete Tregs, which may be beneficial, but it may also deplete CD8-positive T cells, which you don't want to deplete. So we designed it on purpose to be an Fc inert. And the third aspect on the molecule is also there is femtomolar affinity antibody. It is quite different from the other clinical TIGIT benchmarks. So this is our differentiation. But the most -- the strongest one is the fact that we have a differentiated clinical strategy.

Okay. And your partnership with AZ, that's a bispecific using as one head, I guess, your 902. Is that right?

Correct. Correct.

Okay. Maybe just to kind of round out all these programs you talked about, quite a full pipeline here. What are the upcoming milestones for some of these clinical trials? The mono, the double, the triple, the ones without the PD-1. You have quite a few. So what should investors be looking forward to as your next events?

Sure. I'll relate to it. But just 1 remark. I just want to make sure that it's not being seen as AstraZeneca is going to compete with us on the -- because they're using an arm of COM902 of our TIGIT antibody. I just want to make sure that they got a license to develop bispecific antibodies. We kept the rights for monotherapy and combination therapy. We also kept the rights for bispecifics of TIGIT, our COM902 plus PVRL2 and with PVRIG. So we actually monetized an application that we did not plan to push forward. Just to close the loop on this. With respect to milestones on the studies, so we actually presented -- up until today, we presented data on the monotherapy dose escalation and expansion -- a small study of expansion cohorts. And we also presented data on COM701 plus nivolumab dose escalation, okay? The studies that are ongoing now are COM701 plus nivolumab expansion cohort in specific tumor types where we believe PVRIG and PD-1 pathways are dominant. We're also having a study that is testing the triplet combination of COM701, nivolumab and BMS TIGIT inhibitor. This is now at a dose escalation stage and data is anticipated to be presented in Q4 for the dose escalation. We already started -- sorry, we ended the dose escalation. We completed the dose escalation. We already started the expansion cohorts. But the disclosure in Q4 will relate to the dose escalation data. And we also, as I said, we have the COM902 monotherapy dose escalation study. And the data disclosure is anticipated in Q4. We already started the COM902/COM701 doublet study, which is ongoing now. So currently, the data ahead of us is for the triplet dose escalation and COM902 monotherapy dose escalation. But we have multiple expansion cohorts studies that are ongoing with the different combinations. So you can imagine that in the next year and in the next 2 years, we're going to have data rich years ahead of us.

Okay. So for those 2 specific ones that are near term, fourth quarter, dose escalations, both the triple with the 2 Bristol components and then the monotherapy, what are we expecting to see? Or what do you hope to see when the data comes out?

I'll let Henry address it.

Yes. Thank you very much, Anat. I think for those 2 studies that Anat has iterated upon, as you remember, they are Phase I studies. So the most important part of this kind of study will be to figure out what the safety and tolerability of, for example, the combination of COM701 with the BMS TIGIT antibody and also PD-1 nivolumab in this case. This will be the first time this kind of combination will be tested. And therefore, it is important for us to be able to ascertain what the safety profile of this 3 combination -- of this triplet combination will be. And as part of that, we also will be interested in what the preliminary antitumor activity of the combination will be as part of the triplet expansion cohort. Now you'll remember that the expansion cohort for both the combination of COM701 and nivolumab has commonality with some of the expansion cohorts in the triplet and the commonality in terms of the tumors, endometrial cancer and also ovarian cancer. So that will be important for us to know. The other thing that's important for us to know for the COM902 study is to differentiate in terms of what the safety profile of COM902 as monotherapy will be. And also to then be able to ascertain what the dose of COM902 that will be moving forward will be. Anat also already alluded to the fact that we're going to test a PD-1 and a PD-L1 free regimen. And by that means as you meant the combination of COM902 and COM701. Those are the key things that we want to be able to provide answers to with these studies.

Okay. Any biomarker data you're looking for or just purely safety and then upside on efficacy?

Yes. So Anat may want to contribute a little bit more to this, but I'll start off. Yes, we're interested in biomarkers also for the triplet combination. As you remember, Albert, we did present some biomarker data at ASCO earlier on this year of COM701 where we showed a dose proportional in terms of -- dose proportionality in terms of some markers. So for example, interferon gamma between the dosing and the combination -- in combination of COM701 and also nivolumab. So we'll be interested in cytokines, obviously. We'll also be interested in other biomarkers that are of interest to us during the course of the study, but it will not be limited only to the biomarkers that we're collecting peripherally. As you know, during the dose escalation portion of the study, we're also interested in collecting tumor samples in subjects who are able to provide those samples. It is not mandatory during the dose escalation. But during the dose expansion, this will be mandatory. And hopefully, as we start this off, we'll be able to collect some more data on this. And this goes also to both the triplet study and also the COM902 studies.

Yes. I'll just add that on what Henry said, our biomarker strategy is actually looking at 3 layers. One layer is in the periphery PD markers like cytokines immunophenotyping. We're also looking to see changes in the tumor microenvironment, on biopsies. Specifically, we're looking to check the -- to test the expression profile of the DNAM axis members. And we're also applying some advance technologies to do biomarker discovery and use our computational discovery capabilities to do high throughput analysis for biomarker discovery. With that in mind, possibly with the data that we're going to present in Q4, we will try to bring as much as possible PD data, but this is work in progress, and we'll do our best to have it on time.

Okay. Great. Well, we have 2 minutes left. So I just wanted to give you the opportunity to say anything else that you think I may have missed. Anything further, Anat or Henry or Ari from you?

I think I'll just conclude unless Henry and Ari do have anything specific that you want to add. I'll conclude that with the initial data that we presented, which were encouraging both in terms of antitumor activity and also in terms of seeing some immune activation, supporting the mechanism of action of COM701. With this initial data, we decided that we should broadly and comprehensively assess the DNAM axis hypothesis in the clinic. We're testing now different combinations in different type of indications a robust biomarker discovery plan. And the next 2 years, year and the year later, are going to be data-rich years, allowing us to test and hopefully validate this hypothesis and actually bring new treatment solutions to patients. With that in mind, I want everyone to remember that other than COM701, COM902, we have another clinical stage program that is with Bayer. We have now about to start clinical program that is bispecific with our COM902 program together with AstraZeneca and an early-stage pipeline behind it. And I think that's it.

Okay. Well, that's quite a bit. So it looks like there's a lot going on here for people to look forward to. Well, Anat, Henry, Ari, thank you very much for your time today. I think this is very helpful. And for the investors in the audience, thanks for joining the webcast, and this will now conclude our session. Thanks, everybody. Bye-bye.

Thank you.

Thank you.