Exhibit 99.1
FOR IMMEDIATE RELEASE
Compugen Reports Second Quarter 2024 Results
| • |
FDA clearance of COM503 IND in July 2024 triggered a $30 million milestone payment from Gilead
|
| • |
On track to present data from COM701 + COM902 + pembrolizumab, platinum resistant ovarian cancer study in Q4 2024
|
| • |
Partner, AstraZeneca, advanced development of rilvegostomig, and provided a non-risk adjusted peak year revenue target of over $5 billion, reflecting the potential of the asset. Compugen is eligible for future milestones and
mid-single-digit tiered royalty payments, presenting a significant potential revenue source for the Company
|
| • |
Solid balance sheet with cash runway expected to fund operations into 2027
|
HOLON, ISRAEL, August 6, 2024 - Compugen Ltd. (Nasdaq: CGEN) (TASE: CGEN) a clinical-stage cancer immunotherapy company and a pioneer in computational target discovery, today announced financial results for the second
quarter ended June 30, 2024, and provided a corporate update.
“Continuing our track record in delivering on our plans, we have executed well in the second quarter of 2024,” said Anat Cohen-Dayag, Ph.D., President and Chief Executive Officer of Compugen. “We achieved FDA IND
clearance for COM503, a differentiated antibody approach to harness cytokine biology for cancer therapeutics, triggering a right to receive a $30 million milestone payment from our partner Gilead. We are on track to initiate a Phase 1 clinical trial
for COM503, as monotherapy and in combination with the anti-PD1 zimberelimab in advanced solid tumors, in the fourth quarter of 2024.”
Dr. Cohen-Dayag continued, “We are also on track to present data from our COM701 + COM902 + pembrolizumab study in platinum resistant ovarian cancer in the fourth quarter of 2024. There is a significant unmet medical
need for women with ovarian cancer who could benefit from potentially safe, efficacious and durable alternative treatment options. We previously demonstrated encouraging data in this patient population, including monotherapy activity, overall
response rate of 20% and durable responses with some patients benefiting from treatment for over 16 months comparing favorably to standard of care. We believe showing data consistent with what we have previously reported in this indication, will once
again confirm that COM701 combinations are active. We plan to share next steps for COM701 combinations at the time of data presentation in the fourth quarter of 2024."
Dr. Cohen-Dayag added, “Our partner, AstraZeneca, is advancing development of rilvegostomig, their PD-1/TIGIT bispecific, and provided a non-risk-adjusted peak year revenue target of more than $5 billion for this asset,
reflecting the potential of rilvegostomig. Compugen is eligible for future milestones and mid-single-digit tiered royalty payments, presenting a significant potential revenue source for the Company.”
Upcoming Expected Milestones
COM701 +COM902 + pembrolizumab proof-of-concept study
| • |
Platinum resistant ovarian cancer - data presentation in the fourth quarter of 2024
|
COM503 (licensed to Gilead; Compugen leads through Phase 1 development)
| • |
Initiation of COM503 Phase 1 trial in the fourth quarter of 2024
|
Rilvegostomig (AstraZeneca’s PD-1/TIGIT bispecific, TIGIT component derived from COM902)
| • |
AstraZeneca anticipates data from Phase 1/2 ARTEMIDE-01 trial in the second half of 2024; poster presentation from Phase 2 GEMINI-Gastric trial accepted at ESMO 2024
|
Second Quarter 2024 Financial Highlights
Cash: As of June 30, 2024, Compugen had approximately $92.3 million cash, cash equivalents, short-term bank deposits, restricted cash and short-term bank deposit, and cash
investments, compared with approximately $51.1 million as of December 31, 2023. Compugen expects that its cash and cash-related balances together with the additional expected $30 million milestone payment on COM503 IND clearance achieved in July,
which is subject to a 15% withholding tax, will be sufficient to fund its operating plans into 2027. The Company has no debt.
Revenues: Compugen reported approximately $6.7 million in revenues for the second quarter ended June 30, 2024, compared to no revenues for the comparable period in 2023. The
revenues reported reflect recognition of a portion of the upfront payment from the license agreement with Gilead and the clinical milestone from the license agreement with AstraZeneca in the amount of $5 million.
R&D expenses for the second quarter of 2024 were approximately $6.2 million compared with approximately $7.8 million for the comparable period in 2023.
G&A expenses for the second quarter of 2024 were approximately $2.2 million, compared with approximately $2.4 million for the comparable period in 2023.
Net loss for the second quarter of 2024 was approximately $2.1 million, or $0.02 per basic and diluted share, compared with a net loss of approximately $9.3 million, or $0.11 per
basic and diluted share, in the second quarter of 2023.
Full financial tables are included below.
Conference Call and Webcast Information
Compugen will hold a conference call today, August 6, 2024, at 8:30 AM ET to review its second quarter 2024 results. To access the live conference call by telephone, please dial 1-866-744-5399 from the U.S., or
+972-3-918-0644 internationally. The call will be available via live webcast through Compugen’s website, located at the following link. Following the live webcast, a replay will be available on Compugen’s website.
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 two proprietary product candidates in Phase 1 development: 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. Rilvegostomig, a PD-1/TIGIT bispecific antibody where the TIGIT component is derived from Compugen’s clinical stage anti-TIGIT antibody, COM902, is in Phase 3 development by AstraZeneca through a license agreement for the development of
bispecific and multispecific antibodies. In addition, the Company’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,
COM503, a potential first-in-class, high affinity anti-IL-18 binding protein antibody, which has been granted IND clearance from the FDA, is licensed to Gilead. Compugen is headquartered in Israel, with offices in San Francisco, CA. Compugen’s shares
are listed on Nasdaq and the Tel Aviv Stock Exchange under the ticker symbol CGEN.
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, statements relating to our expectation to present data from our ongoing trials and the relevant timing thereof; statements relating to potential of rilvegostomig and
potential long-term revenue source for Compugen thereof; statements relating to our expectation that our cash is expected to fund operations into 2027; statements relating to receipt of a milestone payment from Gilead; statements regarding our
expectation to initiate a Phase 1 study for COM503, as monotherapy and in combination with the anti-PD1 zimberelimab in advanced solid tumors, in fourth quarter of 2024; statements regarding our belief that showing data in platinum resistant ovarian
cancer consistent with what we have previously reported in this indication, will once again confirm that COM701 combinations are active; and statements regarding our plans to share next steps for COM701 and timing thereof; and statements relating to
data presentations from different rilvegostomig clinical trials. These and other 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: 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; Compugen does not know whether it will be able to discover and develop additional potential product candidates or products of commercial value; the general market, political and economic conditions in the
countries in which Compugen operates, including Israel; and the effect of the evolving nature of the recent war in Israel, and the related evolving regional conflicts. These and other risks are more fully discussed in the “Risk Factors” section of
Compugen’s most recent Annual Report on Form 20-F as filed with the Securities and Exchange Commission (SEC) as well as other documents that may be subsequently filed by Compugen from time to time with the SEC. While we believe that we have a
reasonable basis for each forward-looking statement contained in this press release, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot
be certain. In addition, any forward-looking statements represent Compugen’s views only as of the date of this release and should not be relied upon as representing its views as of any subsequent date. Compugen does not assume any obligation to
update any forward-looking statements unless required by law.
Company contact:
Yvonne Naughton, Ph.D.
VP, Head of Investor Relations and Corporate Communications
Email: ir@cgen.com
Tel: +1 (628) 241-0071
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COMPUGEN LTD.
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|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(U.S. dollars in thousands, except for share and per share amounts)
|
| |
|
Three Months Ended
|
|
|
Six Months Ended,
|
|
| |
|
June 30,
|
|
|
June 30,
|
|
| |
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
| |
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
6,702
|
|
|
|
-
|
|
|
|
9,261
|
|
|
|
-
|
|
|
Cost of revenues
|
|
|
1,552
|
|
|
|
-
|
|
|
|
3,654
|
|
|
|
-
|
|
|
Gross profit
|
|
|
5,150
|
|
|
|
-
|
|
|
|
5,607
|
|
|
|
-
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
|
6,183
|
|
|
|
7,761
|
|
|
|
12,593
|
|
|
|
15,206
|
|
|
Marketing and business development expenses
|
|
|
157
|
|
|
|
49
|
|
|
|
248
|
|
|
|
165
|
|
|
General and administrative expenses
|
|
|
2,222
|
|
|
|
2,404
|
|
|
|
4,670
|
|
|
|
4,977
|
|
|
Total operating expenses
|
|
|
8,562
|
|
|
|
10,214
|
|
|
|
17,511
|
|
|
|
20,348
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(3,412
|
)
|
|
|
(10,214
|
)
|
|
|
(11,904
|
)
|
|
|
(20,348
|
)
|
|
Financial and other income, net
|
|
|
1,300
|
|
|
|
889
|
|
|
|
2,528
|
|
|
|
1,697
|
|
|
Loss before taxes on income
|
|
|
(2,112
|
)
|
|
|
(9,325
|
)
|
|
|
(9,376
|
)
|
|
|
(18,651
|
)
|
|
Tax benefit (expense)
|
|
|
(11
|
)
|
|
|
49
|
|
|
|
(14
|
)
|
|
|
36
|
|
|
Net loss
|
|
|
(2,123
|
)
|
|
|
(9,276
|
)
|
|
|
(9,390
|
)
|
|
|
(18,615
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per ordinary share
|
|
|
(0.02
|
)
|
|
|
(0.11
|
)
|
|
|
(0.10
|
)
|
|
|
(0.21
|
)
|
|
Weighted average number of ordinary shares used in computing basic and diluted net loss per share
|
|
|
89,531,937
|
|
|
|
87,182,839
|
|
|
|
89,518,778
|
|
|
|
86,903,741
|
|
|
COMPUGEN LTD.
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CONDENSED CONSOLIDATED BALANCE SHEETS DATA
|
|
(U.S. dollars, in thousands)
|
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
2024
|
|
|
2023
|
|
| |
|
Unaudited
|
|
|
|
|
| |
|
|
|
|
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ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
11,877
|
|
|
|
13,890
|
|
|
Restricted cash
|
|
|
-
|
|
|
|
365
|
|
|
Short-term bank deposits
|
|
|
47,439
|
|
|
|
25,053
|
|
|
Restricted short-term bank deposit
|
|
|
333
|
|
|
|
-
|
|
|
Investment in marketable securities
|
|
|
32,688
|
|
|
|
11,742
|
|
|
Trade receivables
|
|
|
5,000
|
|
|
|
61,000
|
|
|
Other accounts receivable and prepaid expenses
|
|
|
4,796
|
|
|
|
2,529
|
|
|
Total current assets
|
|
|
102,133
|
|
|
|
114,579
|
|
| |
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
Long-term prepaid expenses
|
|
|
922
|
|
|
|
1,233
|
|
|
Severance pay fund
|
|
|
3,023
|
|
|
|
2,977
|
|
|
Operating lease right to use asset
|
|
|
3,061
|
|
|
|
1,329
|
|
|
Property and equipment, net
|
|
|
1,028
|
|
|
|
1,216
|
|
|
Total non-current assets
|
|
|
8,034
|
|
|
|
6,755
|
|
| |
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
110,167
|
|
|
|
121,334
|
|
| |
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Other accounts payable, accrued expenses and trade payables
|
|
|
13,068
|
|
|
|
14,485
|
|
|
Short-term deferred revenues
|
|
|
11,252
|
|
|
|
11,149
|
|
|
Current maturity of operating lease liability
|
|
|
449
|
|
|
|
632
|
|
|
Total current liabilities
|
|
|
24,769
|
|
|
|
26,266
|
|
| |
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
Long-term deferred revenues
|
|
|
21,028
|
|
|
|
25,392
|
|
|
Long-term operating lease liability
|
|
|
2,580
|
|
|
|
719
|
|
|
Accrued severance pay
|
|
|
3,450
|
|
|
|
3,398
|
|
|
Total non-current liabilities
|
|
|
27,058
|
|
|
|
29,509
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
58,340
|
|
|
|
65,559
|
|
| |
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
|
110,167
|
|
|
|
121,334
|
|
Exhibit 99.3
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
Six months ended June 30, 2024 and 2023
Revenues. Revenues for the first six months of 2024 were approximately $9.3 million, compared with no revenues in the comparable
period of 2023. The revenues for 2024 include the portion of the upfront payment from the license agreement with Gilead Sciences, Inc. (“Gilead”) allocated to the IND research and development activities and the clinical milestone from the license
agreement with AstraZeneca in the amount of $5 million.
Cost of Revenues. Cost of revenues for the first six months of 2024 were approximately $3.7 million, compared with no cost of
revenues in the comparable period of 2023.
Cost of revenues for the first six months of 2024 represents royalty payments in connection with our revenues and costs of the IND research and development activities.
Research and Development Expenses. Research and development, or R&D expenses decreased by approximately 17% to approximately
$12.6 million for the first six months of 2024 from approximately $15.2 million for the comparable period of 2023. The decrease is mainly due to the classification of the IND research and development activities to cost of revenues and the
classification of the set-up activities related to the COM503 Phase 1 clinical trial to prepaid expenses, offset by an increase in clinical trial expenses in the first six months of 2024. R&D expenses, as a percentage of total operating
expenses, decreased to 72% for the first six months of 2024 from 75% for the comparable period of 2023.
Marketing and Business Development Expenses. Marketing and business development expenses amounted to approximately $0.2 million for
the first six months of 2024 and 2023. Marketing and business development expenses, as a percentage of total operating expenses, were 1% for the first six months of 2024 and 2023.
General and Administrative Expenses. General and administrative expenses decreased by approximately 6% to approximately $4.7 million
for the first six months of 2024 from approximately $5.0 million for the comparable period of 2023. The decrease is mainly due to a reduction in the cost of our D&O insurance premium. General and administrative expenses, as a percentage of
total operating expenses, increased to 27% for the first six months of 2024 from 24% for the comparable period of 2023.
Financial and other Income, Net. Financial and other income, net, were approximately $2.5 million for the first six months of 2024
compared with approximately $1.7 million for the comparable period of 2023. The increase is mainly due to increased interest income due to a higher level of cash, deposit balances and marketable securities.
LIQUIDITY AND CAPITAL RESOURCES
Net Cash Provided By (Used in) Operating Activities. Net cash provided by operating activities was approximately $39.7 million in
the first six months of 2024 compared with net cash used in operating activities of approximately $18.6 million in the comparable period of 2023. The higher net cash provided by operating activities during the first six months of 2024 is mainly due
to the collection of the $61 million trade receivables during the first six months of 2024 from the upfront payment of Gilead pursuant to the license agreement therewith and milestone payment from AstraZeneca pursuant to the license agreement
therewith.
Net Cash Provided by (Used in) Investing Activities. Net cash used in investing activities during the first six months of 2024 was
approximately $42.3 million compared with net cash provided by investing activities of approximately $23.5 million in the comparable period of 2023. Changes in net cash provided by investing activities is mainly due to changes in the level of cash
deposited or withdrawn from bank deposits and due to net investments in marketable securities. Net cash provided by (used in) investing activities is dependent on capital raising, cash needs to fund our operating activities and changes in the level
of the Company’s cash and cash equivalents.
Net Cash Provided by Financing Activities. Net cash provided by financing activities was $0.6 million in the first six months of
2024 compared with $1.4 million in the comparable period of 2023. The lower net cash provided in the first six months of 2024 is due to lower net proceeds received from sales of ordinary shares in the first six months of 2024 under the Company’s
existing at the market offering facility pursuant to a sales agreement with Leerink Partners.
Net Liquidity. Liquidity refers to liquid financial assets available to fund the Company’s business operations and pay for near-term
obligations. These liquid financial assets mostly consist of cash and cash equivalents, as well as short-term bank deposits and investment in marketable securities. As of June 30, 2024, the Company had total cash, cash equivalents, restricted
hort-term bank deposit, short-term bank deposits and investment in marketable securities of approximately $92.3 million.
GENERAL
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6 Months Ended |
Jun. 30, 2024 |
|---|
| GENERAL [Abstract] |
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| GENERAL |
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a. |
Compugen Ltd. (the “Company”) is a clinical-stage therapeutic discovery and development company utilizing its broadly applicable predictive computational discovery capabilities to identify novel drug targets and new biological pathways to develop therapeutics in the field of cancer immunotherapy. The Company’s innovative immuno-oncology pipeline consists of three clinical stage programs, COM701, COM902 and rilvegostomig, targeting immune checkpoints the Company discovered computationally. Two programs that are pursued internally, COM701, a potential first-in-class anti-PVRIG antibody, and COM902, a potential best-in-class therapeutic anti-TIGIT antibody, are in Phase 1 clinical trials and have been evaluated for the treatment of solid tumors as a monotherapy and in combination of dual (PVRIG/PD-1, PVRIG/TIGIT) and triple (PVRIG/PD-1/TIGIT) blockade. Rilvegostomig, a novel anti PD-1/TIGIT bispecific antibody with a TIGIT specific component that is derived from the Company’s COM902 antibody, is being developed by AstraZeneca pursuant to an exclusive license agreement between the Company and AstraZeneca and is being evaluated in multiple clinical trials, including in Phase 3 clinical trials. The Company’s therapeutic pipeline of early-stage immuno-oncology programs consists of programs aiming to address various mechanisms of immune resistance. The Company’s most advanced early-stage program, COM503, was licensed to Gilead Sciences, Inc. (“Gilead”) in December 2023, see also Note 12. 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. The Company’s business model is to selectively enter into collaborations for our novel targets and drug product candidates at various stages of research and development under various revenue-sharing arrangements.
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b. |
The Company is headquartered in Holon, Israel.
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c. |
The Company has incurred losses in the amount of $9,390 during the six months ended June 30, 2024, has an accumulated deficit of $483,917 as of June 30, 2024, and has an accumulated negative cash flow from operating activities in the amount of $39,703 for the six months ended June 30, 2024. The Company believes that its existing capital resources will be adequate to satisfy its expected liquidity requirements at the current level of yearly expenditures at least twelve months from the reporting date.
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d. |
On August 5, 2013, the Company entered into a Research and Development Collaboration and License Agreement (“Bayer Agreement”) with Bayer Pharma AG (“Bayer”) for the research, development, and commercialization of antibody-based therapeutics against two novel Compugen-discovered immune checkpoint regulators.
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| |
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Under the terms of the Bayer Agreement, the Company received an upfront payment of $10,000, and additional aggregate milestone payments of approximately $23,000.
On November 29, 2022, Bayer notified the Company that it had resolved to terminate, effective as of February 27, 2023, the Bayer Agreement.
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e. |
Effective March 30, 2018, the Company entered into an exclusive license agreement with MedImmune Limited, the global biologics research and development arm of AstraZeneca (“AstraZeneca”) to enable the development of bi-specific and multi-specific immuno-oncology antibody products. Under the terms of the agreement, Compugen provided an exclusive license to AstraZeneca for the development of bi-specific and multi-specific antibody products derived from COM902. AstraZeneca has the right to create multiple products under this license and is solely responsible for all research, development and commercial activities under the agreement. In connection with such license agreement, AstraZeneca developed rilvegostomig, a novel PD-/TIGIT bi-specific antibody with a TIGIT component that is derived from our COM902. Rilvegostomig entered the clinic in September 2021, initiated a Phase 3 with first patient dosing in the first indication Phase 3 study in December 2023, and first patient dosing in the second indication Phase 3 study in May 2024. Compugen received a $10,000 upfront payment and received or accrued $30,500 milestone payments out of up to $200,000 that the Company is eligible to receive in development, regulatory and commercial milestones for the first product as well as tiered royalties on future product sales. If additional products are developed, additional milestones and royalties would be due to Compugen for each product.
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| |
f. |
On October 10, 2018, the Company entered into a Master Clinical Trial Collaboration Agreement (the “Master Clinical Agreement”) with Bristol Myers Squibb Company (“Bristol Myers Squibb”) to evaluate the safety and tolerability of Compugen’s COM701 in combination with Bristol Myers Squibb’s PD-1 immune checkpoint inhibitor Opdivo® (nivolumab), in patients with advanced solid tumors.
Pursuant to the Master Clinical Agreement, as amended from time to time, Compugen sponsored the trials, which included the evaluation of the combination of COM701 and Opdivo® ± Bristol Myers Squibb investigational anti-TIGIT, BMS-986207. Bristol Myers Squibb and Compugen each supplies its own compound(s) for the studies.
In conjunction with the signing of the Master Clinical Agreement, Bristol Myers Squibb made a $12,000 investment in Compugen, see Note 7a.
Among several amendments to the Master Clinical Agreement, on November 10, 2021, the agreement was further amended and in conjunction with the signing of the amendment to the Agreement, Bristol Myers Squibb made a $20,000 investment in Compugen, see Note 7a.
On August 3, 2022, the Company and Bristol Myers Squibb entered into a letter agreement pursuant to which the Master Clinical Agreement, as amended from time to time, was terminated as of such date.
|
| |
g. |
On December 18, 2023, the Company entered into an exclusive license agreement (the “License Agreement”) with Gilead Sciences, Inc. (“Gilead”), pursuant to which the Company granted Gilead an exclusive license under the Company’s pre-clinical antibody program against IL-18 binding protein and all intellectual property rights subsisting therein, to use, research, develop, manufacture and commercialize products, including the Company’s COM503 product candidate (“COM503 License”), and additional products that may be so developed by Gilead (together with COM503, the “Licensed Products”).
Pursuant to the License Agreement, Gilead paid the Company a one-time, upfront payment of $60 million in January 2024. The Company has continued to develop COM503 during the initial development term, which included conducting activities defined within the agreement to advance COM503 through the clearance of an investigational new drug application (“IND”). The Company is eligible to receive from Gilead $30 million in the form of a milestone payment upon clearance of the IND for COM503, see also Note 12. The Company is also eligible to receive up to approximately $758 million in additional milestone payments upon the achievement of certain development, regulatory and commercial milestones. The Company is further eligible to receive single-digit to low double-digit tiered royalties on worldwide net sales of Licensed Products.
The Company will be responsible for conducting a Phase 1 clinical trial for COM503, including handling the regulatory matters in connection therewith, and will bear the costs of such trial (including the COM503 drug supply), with Gilead providing at no cost an anti- PD-1/PD-L1 antibody for such trial. In certain circumstances, Gilead may assume the role of conducting the Phase 1 clinical trial.
Upon completion of the Phase 1 clinical trial for COM503, the Company will initiate the transfer of development activities related to COM503 to Gilead, following which, Gilead will have sole responsibility to develop and commercialize the Licensed Products.
During the term of the License Agreement, the Company is prohibited from researching, developing, making, and commercializing any compounds, molecules, products or treatment methods that are directed to IL-18 or any companion diagnostics for an IL-18 product.
Unless terminated early by a party pursuant to its terms, the License Agreement will continue in effect on a Licensed Product-by-Licensed Product and country-by-country basis until the expiration of the last royalty term in such country.
Gilead withheld at source 15% from the upfront payment amount paid to the Company in January 2024 and is expected to continue and withhold at source all taxes required by law from all payments payable to the Company under the License Agreement.
The License Agreement contains customary representations, warranties, covenants, and terms governing the prosecution and enforcement of certain intellectual property and issues related to technology transfer, manufacturing transfer, provisions with respect to establishment of joint steering committee and its governance covenants with respect change of control and others.
|
|
SHAREHOLDERS' EQUITY
|
6 Months Ended |
Jun. 30, 2024 |
|---|
| Stockholders' Equity Note [Abstract] |
|
| SHAREHOLDERS' EQUITY |
| NOTE 7:- |
SHAREHOLDERS' EQUITY
|
On June 14, 2018, the Company entered into an agreement in connection with a registered direct offering (the “Offering”) of an aggregate of 5,316,457 Ordinary Shares (the “RD Shares”) of the Company at a purchase price of $3.95 per RD Share. In connection with the issuance of the RD Shares, the Company also issued warrants to purchase an aggregate of up to 4,253,165 additional Ordinary Shares (the “Warrants”). The Warrants were exercisable at a price of $4.74 per Ordinary Share and had a term of five years from the date of issuance. The Offering was made pursuant to the Company’s Registration Statement. Proceeds from the Offering were $19,767 (net of $1,233 issuance expenses).
During the period from January 1, 2021 through June 30, 2023, warrants to purchase an aggregate of 3,955,696 Ordinary Shares were exercised with proceeds of approximately $18,750, and the remaining warrants to purchase up to 297,469 Ordinary Shares expired in June 2023.
On October 10, 2018, the Company entered into a Master Clinical Trial Collaboration Agreement with Bristol Myers Squibb to evaluate the safety and tolerability of the Company’s COM701 in combination with Bristol Myers Squibb’s PD-1 immune checkpoint inhibitor Opdivo® (nivolumab), in patients with advanced solid tumors. In conjunction with the Master Clinical Agreement, Bristol Myers Squibb made a $12,000 equity investment in the Company.
Under the terms of the securities purchase agreement, Bristol Myers Squibb purchased 2,424,243 ordinary shares of the Company at a purchase price of $4.95 per share. The share price represented a 33% premium over the average closing price of the Company’s ordinary shares for twenty (20) Nasdaq trading days prior to the execution of the securities purchase agreement. The investment closed on October 12, 2018.
The premium over the fair market value in the amount of $4,121 represents the relative fair value of deferred participation of Bristol Myers Squibb in R&D expenses which are amortized over the period of the clinical trial based on the progress in the R&D, in accordance with ASC 808 “Collaborative Arrangements” and $7,788 (net of $91 issuance expenses) were considered equity investment.
In conjunction with the signing of the amendment to the Master Clinical Agreement in November 2021, Bristol Myers Squibb made a $20,000 investment in the Company, purchasing 2,332,815 ordinary shares of the Company at a purchase price of $8.57333 per share. The share price represented a 33% premium over the closing price of Company’s ordinary shares on the last Nasdaq trading day immediately prior to the execution of the securities purchase agreement.
The premium over the fair market value in the amount of $5,000 represents the relative fair value of deferred participation of Bristol Myers Squibb in R&D expenses (which are amortized over the period of the clinical trial, based on the progress in the R&D, in accordance with ASC 808 “Collaborative Arrangements”) and $14,958 (net of $42 issuance expenses) were considered equity investment.
In March 2020, the Company entered into an underwriting agreement with SVB Leerink LLC and Stifel, Nicolaus & Company, Incorporated, as representatives of the several underwriters relating to the issuance and sale in a public offering of 8,333,334 of the Company’s ordinary shares at a price to the public of $9.00 per share (and a price of $8.46 per share to the underwriters). Such shares were issued on March 16, 2020. In addition, the Company granted the underwriters a 30-day option to purchase additional ordinary shares at the price set forth above. On April 14, 2020, the Company issued and sold, pursuant to that underwriting agreement an additional 483,005 ordinary shares pursuant to the underwriters’ option specified above. The Company sold a total of 8,816,339 ordinary shares in the offering with proceeds of $74,147 (net of $5,200 issuance expenses).
On January 31, 2023, the Company entered into a Sales Agreement with Leerink Partners LLC (previously known as SVB Securities LLC) (“Leerink Partners”), as sales agent, pursuant to which the Company may offer and sell, from time to time through Leerink Partners, its ordinary shares through an “at the market offering” (ATM). The offer and sale of our ordinary shares, if any, will be made pursuant to the Company’s shelf registration statement on Form F-3, as supplemented by a prospectus supplement. Pursuant to the applicable prospectus supplement, the Company may offer and sell up to $50,000 of its ordinary shares. As of June 30, 2024, 2,905,550 shares were issued and sold through the ATM, with proceeds of approximately $3,643 (net of $530 issuance expenses).
Transactions related to the grant of options to employees, directors and non-employees under the Company’s 2010 Share Option Plan, as amended, during the six-month period ended June 30, 2024, were as follows:
| |
|
Number of options
|
|
|
Weighted average exercise
price
|
|
|
Weighted average remaining contractual life
|
|
|
Aggregate intrinsic
value
|
|
| |
|
|
|
|
$
|
|
|
Years
|
|
|
$
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options outstanding at beginning of year
|
|
|
8,373,745
|
|
|
|
4.65
|
|
|
|
6.61
|
|
|
|
1,912
|
|
|
Options granted
|
|
|
40,500
|
|
|
|
2.08
|
|
|
|
|
|
|
|
|
|
|
Options exercised
|
|
|
(1,744
|
)
|
|
|
0.84
|
|
|
|
|
|
|
|
|
|
|
Options forfeited
|
|
|
(282,455
|
)
|
|
|
4.55
|
|
|
|
|
|
|
|
|
|
|
Options expired
|
|
|
(140,000
|
)
|
|
|
8.08
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options outstanding at end of year
|
|
|
7,990,046
|
|
|
|
4.58
|
|
|
|
6.19
|
|
|
|
1,205
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at end of year
|
|
|
5,245,345
|
|
|
|
5.68
|
|
|
|
4.99
|
|
|
|
124
|
|
During the six-month period ended June 30, 2024, the Company’s Board of Directors granted 40,500 options to purchase ordinary shares of the Company to employees. The exercise prices for such options range from $1.80 to $2.09 per share, with vesting to occur in up to four years.
The following table presents the assumptions used to estimate the fair value of the options granted in the periods presented:
| |
|
Six months ended
June 30,
|
|
| |
|
2024
|
|
|
2023
|
|
| |
|
Unaudited
|
|
| |
|
|
|
|
|
|
|
Volatility
|
|
|
92.7%-95.9
|
%
|
|
|
75.9%-76.4
|
%
|
|
Risk-free interest rate
|
|
|
3.9%-4.5
|
%
|
|
|
3.3%-4.2
|
%
|
|
Dividend yield
|
|
|
0
|
%
|
|
|
0
|
%
|
|
Expected life (years)
|
|
|
4.02
|
|
|
|
5.0-5.1
|
|
Weighted average fair value of options granted during the six-month periods ended June 30, 2024 and 2023 were $1.41 and $0.53, respectively.
During the six-month periods ended June 30, 2024 and 2023, the Company recorded share based compensation related to stock options in a total amount of $1,633 and $1,782, respectively.
As of June 30, 2024, the total unrecognized estimated compensation cost related to non-vested stock options granted prior to that date was $3,405 which is expected to be recognized over a weighted average period of approximately 1.85 years.
For the six months ended June 30, 2024 and 2023, the total weighted average number of shares related to outstanding options and warrants excluded from the calculations of diluted net loss per share were 8,002,799 and 7,460,568, respectively.
The stock-based compensation expenses related to stock options and ESPP are included as follows in the expense categories:
| |
|
Six months ended
June 30,
|
|
| |
|
2024
|
|
|
2023
|
|
| |
|
Unaudited
|
|
| |
|
|
|
|
|
|
|
Research and development expenses
|
|
$
|
805
|
|
|
$
|
1,002
|
|
|
Marketing and business development expenses
|
|
|
43
|
|
|
|
(41
|
)
|
|
General and administrative expenses
|
|
|
785
|
|
|
|
821
|
|
| |
|
|
|
|
|
|
|
|
|
Financial and other income, net
|
|
$
|
1,633
|
|
|
$
|
1,782
|
|
|