COMPUGEN LTD

Compugen Ltd. is a clinical-stage therapeutic discovery and development company that leverages its Unigen™ AI/ML-powered computational discovery platform to identify novel drug targets and develop therapeutics in cancer immunotherapy. The company's business model focuses on selectively entering into collaborations for its novel targets and drug product candidates at various stages of research and development under revenue-sharing arrangements, including upfront fees, research funding, milestone payments, license fees, and royalties on product sales. Compugen aims to transform patient lives by developing innovative therapeutics in immuno-oncology, focusing on identifying novel drug targets to address unmet needs in patients non-responsive to current cancer immunotherapies. The company integrates cutting-edge computational capabilities with immuno-oncology research and drug development expertise to inform its target experimental validation, drug development process, mechanism of action, relevant indication/patient population, drug combinations, and potential biomarkers for patient selection.

Compugen's innovative immuno-oncology pipeline consists of four clinical-stage programs: COM701, COM902, rilvegostomig, and GS-0321 (previously COM503). COM701 is an internal lead immuno-oncology program, a humanized antibody binding to PVRIG, a novel immune checkpoint target. Phase 1 clinical trials for COM701 began in September 2018, and a blinded randomized ovarian cancer platform trial (MAIA-ovarian trial) evaluating COM701 as a single agent in maintenance therapy for relapsed platinum-sensitive ovarian cancer was initiated in 2025. An interim analysis for the MAIA-ovarian trial is expected in the first quarter of 2027 ¹. COM902 is a high-affinity, fully human antibody targeting TIGIT, an immune checkpoint discovered computationally by Compugen. Phase 1 clinical trials for COM902 were initiated in March 2020. However, due to recent negative data in the TIGIT field, Compugen currently believes COM902 has limited potential for near-term value and does not plan to initiate new clinical trials with it, a decision that may be revisited pending further data ². Rilvegostomig is a PD-1/TIGIT bispecific antibody with a TIGIT component derived from COM902, being developed by AstraZeneca under an exclusive license agreement. AstraZeneca initiated its first Phase 3 clinical trial in December 2023, and rilvegostomig is currently being evaluated in multiple Phase 3, Phase 2, and Phase 1 clinical trials ³. GS-0321 (previously COM503) is a potential first-in-class high-affinity antibody blocking the interaction between IL-18 binding protein and IL-18. This program is licensed to Gilead and is being developed by Compugen in a Phase 1 clinical trial, with the first patient dosed in January 2025. The trial is designed to assess safety and tolerability as monotherapy and in combination with zimberelimab in up to 200 participants with advanced solid tumors ⁴.

For the fiscal year ended December 31, 2025, Compugen reported revenues of approximately $72.8 million ⁵, a significant increase from $27.9 million in 2024 ⁶. This increase was primarily driven by a $65 million upfront payment from AstraZeneca following an amendment to their license agreement ⁷. Cost of revenues for 2025 was approximately $9.3 million ⁸, compared to $7.9 million in 2024 ⁹. Research and development expenses, net, decreased by 8% to approximately $22.8 million in 2025 ¹⁰ from $24.8 million in 2024 ¹¹, mainly due to lower clinical expenses from winding down prior trials, partially offset by increased expenses for the MAIA-ovarian trial. Marketing and business development expenses decreased by 6% to approximately $0.5 million in 2025 ¹² from $0.6 million in 2024 ¹³. General and administrative expenses decreased by 6% to approximately $8.9 million in 2025 ¹⁴ from $9.4 million in 2024 ¹⁵. Financial and other income, net, decreased by 21% to approximately $4.1 million in 2025 ¹⁶ from $5.2 million in 2024 ¹⁷. Taxes on income were approximately $0.1 million in 2025 ¹⁸, down from $4.5 million in 2024 ¹⁹. The company achieved a net profit of approximately $35.3 million in 2025 ²⁰, a substantial improvement from a net loss of $14.2 million in 2024 ²¹. Net profit per basic and diluted share was 38 cents in 2025 ²², compared to a net loss of 16 cents per basic and diluted share in 2024 ²³. As of December 31, 2025, cash and cash equivalents, short-term bank deposits, and investment in marketable securities totaled approximately $145.6 million ²⁴, up from $103.3 million on December 31, 2024 ²⁵. The company had an accumulated deficit of approximately $453.4 million as of December 31, 2025 ²⁶. Total contractual obligations for operating lease obligations and accrued severance pay amounted to $3.782 million as of December 31, 2025 ²⁷.

Year-over-year, revenues increased significantly by approximately 161% from $27.9 million in 2024 to $72.8 million in 2025, primarily due to the AstraZeneca upfront payment. Research and development expenses decreased by 8% in 2025, while remaining 71% of total operating expenses in both 2025 and 2024. General and administrative expenses saw a 6% reduction. The company transitioned from a net loss of $14.2 million in 2024 to a net profit of $35.3 million in 2025, reflecting improved financial performance. Cash and cash equivalents, short-term bank deposits, and investment in marketable securities increased by approximately 41% from $103.3 million in 2024 to $145.6 million in 2025.

During the reported period, Compugen initiated a blinded randomized ovarian cancer platform trial (MAIA-ovarian trial) evaluating COM701 as a single agent in maintenance therapy in relapsed platinum-sensitive ovarian cancer in 2025. The last patient in the clinical trial evaluating the triple combination treatment of COM701, COM902, and pembrolizumab received the last dose in January 2026. In December 2025, Compugen amended its exclusive license agreement with AstraZeneca, selling a portion of its existing royalty interest in rilvegostomig for a $65 million upfront payment ²⁸ and an additional $25 million to the next milestone payment upon the first acceptance of the Biologics License Application (BLA) ²⁹. The company also dosed the first patient in the Phase 1 clinical trial for GS-0321 (previously COM503) in January 2025. In September 2025, Dr. Anat Cohen-Dayag transitioned from President and CEO to Executive Chair of the Board of Directors, and Dr. Eran Ophir was appointed President and Chief Executive Officer.

Compugen believes that its existing cash and cash equivalents, short-term bank deposits, and investment in marketable securities, totaling approximately $145.6 million as of December 31, 2025 ³⁰, will be sufficient to fund operations into 2029, based on current plans and without considering additional funds from licensing, collaborative agreements, or financings. However, the company notes that if plans change or the burn-rate increases, these cash balances may only be sufficient for a shorter period. Compugen expects to continue incurring net losses for the foreseeable future due to anticipated research, discovery, and development activities costs and expenses. The company's business model primarily relies on establishing collaborations for novel targets and therapeutic product candidates at various stages of research and development to generate potential milestone payments and royalties on product sales or other forms of payments.

A major growth area for Compugen is the continued development of its internal lead immuno-oncology program, COM701, a potential first-in-class anti-PVRIG antibody. The company initiated a blinded randomized ovarian cancer platform trial (MAIA-ovarian trial) in 2025, evaluating COM701 as a single agent in maintenance therapy for relapsed platinum-sensitive ovarian cancer. An interim analysis from this trial is expected in the first quarter of 2027 ³¹. This program targets PVRIG, which is expressed in stem-like memory T cells (TSCM) and PVRL2, expressed in dendritic cells and PD-L1 low less inflamed tumors, suggesting potential activity in patients with less inflamed tumors like ovarian cancer.

Another significant growth area is the advancement of GS-0321 (previously COM503), a potential first-in-class high-affinity antibody licensed to Gilead, which blocks the interaction between IL-18 binding protein and IL-18. Compugen is sponsoring and conducting a Phase 1 clinical trial for GS-0321, which began in January 2025 and is expected to enroll up to 200 participants ³². This program aims to free natural IL-18 activity in the tumor microenvironment to potentiate anti-tumor immune responses, potentially overcoming limitations of systemically administered cytokines. Upon completion of the Phase 1 trial, Compugen is required to transfer development activities to Gilead, which will then have sole responsibility for further development and commercialization. Compugen is eligible to receive up to approximately $758 million in additional milestone payments ³³ and single-digit to low double-digit tiered royalties on worldwide net sales of Licensed Products ³⁴.

Operationally, research and development expenses are expected to remain the major operating expense in 2026. The company's strategy involves continuous evolution of its pipeline programs and a focus on discovering promising drug target candidates and therapeutic product candidates, advancing them through preclinical and clinical studies, and entering into revenue-sharing partnerships. Compugen also plans to continue its biomarker-driven strategy, using its Unigen platform and various cutting-edge technologies to identify biomarkers for patient selection, analyze tumor indications, and measure immune modulation in clinical trials to inform on drug candidates' mechanism of action.

Compugen's capital allocation plans include financing its needs through the issuance of equity securities, potentially through its "at the market offering" (ATM) facility with Leerink Partners LLC, under which it may offer and sell up to $50 million of ordinary shares ³⁵. The company also has a shelf registration statement on Form F-3 allowing it to offer and sell up to $350 million of various securities ³⁶. In 2025, the company sold 4,862,076 ordinary shares ³⁷ through the Sales Agreement for net proceeds of approximately $10.5 million ³⁸.

Management explicitly flagged several structural headwinds and execution risks. The company acknowledges a history of losses and expects to incur future losses, potentially requiring additional funds in the future, which if raised through equity, would dilute existing shareholders. The business model, primarily based on future revenues from collaborations, is challenging to implement and has not yet yielded substantial revenues. Dependence on collaboration agreements with third parties, such as AstraZeneca and Gilead, presents risks including potential termination, inability to comply with obligations, or changes in collaborator business strategy. Specifically, recent negative data in the TIGIT field, including the discontinuation of a Phase 3 study by Arcus and Gilead, has led Compugen to believe COM902 has limited near-term value, and no new clinical trials are planned for it ³⁹. Clinical trials are lengthy, expensive, and uncertain, with high failure rates, and the company has limited experience in conducting trials through to regulatory approval. Patient enrollment in clinical trials, such as the MAIA-ovarian trial and the GS-0321 Phase 1 trial, is subject to various factors including competition from other studies. Manufacturing risks, including reliance on third-party CMOs, could lead to delays or increased costs. The company's Unigen AI/ML platform, while innovative, is not yet fully proven clinically, and there is no guarantee it will lead to commercially valuable products. The focus on immuno-oncology carries risks of industry interest shifts or failure to discover and develop competitive candidates.

Geographic, regulatory, and macro factors also pose constraints. Conditions in Israel and the Middle East, including ongoing conflicts, may adversely affect operations, especially since headquarters and R&D facilities are in Israel and clinical trials are conducted there. Exchange rate fluctuations between the U.S. dollar and the New Israeli Shekel can adversely affect results, as a significant portion of expenses are in NIS. Healthcare policy volatility, including U.S. initiatives like the OBBBA and "TrumpRx" pricing agreements, and foreign regulations in France and Israel, could increase expenses, decrease revenues, and impact reimbursement. Compliance with stringent and changing data privacy and security obligations, including new AI regulations, could lead to enforcement actions and negatively affect operating results.

Compugen faces material risks including a history of losses and expected future losses, with an accumulated deficit of approximately $453.4 million as of December 31, 2025 ⁴⁰, and a need to raise additional funds that could dilute existing shareholders. The business model's reliance on collaboration agreements with third parties, such as AstraZeneca and Gilead, carries risks of termination or non-compliance, which could materially harm financial condition. The company is highly dependent on the success of its four clinical-stage programs (COM701, COM902, rilvegostomig, and GS-0321), and clinical trials are lengthy, expensive, and uncertain, with a high risk of failure to demonstrate safety or efficacy, as evidenced by the decision to halt new COM902 trials due to negative TIGIT field data. Manufacturing risks, including reliance on third-party CMOs, could lead to supply disruptions or increased costs. The Unigen AI/ML platform, while innovative, is not yet fully proven clinically, and its output could be affected by biases, errors, or security weaknesses. The company operates in a highly competitive and rapidly changing industry, facing competition from well-resourced pharmaceutical and biotechnology companies, as well as new AI/ML-focused entities, which could lead to others developing competing products more successfully or earlier. Intellectual property risks include the potential for patents to be narrowed, invalidated, or unenforceable, as demonstrated by ongoing European patent oppositions related to anti-PVRIG antibodies. Operations in Israel are subject to geopolitical instability, including armed conflicts and regional tensions, which could disrupt business, affect personnel availability for military service, and impact the Israeli economy. Exchange rate fluctuations between the U.S. dollar and the New Israeli Shekel, with the dollar depreciating by 12.5% against the NIS in 2025 ⁴¹, can adversely affect financial results. Healthcare policy changes in the U.S., Israel, and France, including drug pricing pressures and reimbursement restrictions, could increase expenses and decrease revenues. Compliance with evolving data privacy and security laws, including new AI regulations, poses risks of government enforcement actions, litigation, and reputational harm.

Management's overall tone emphasizes the company's strategic focus on leveraging its Unigen™ AI/ML powered computational discovery platform to identify novel drug targets and develop innovative therapeutics in cancer immunotherapy. They highlight the integration of cutting-edge computational capabilities with immuno-oncology research and drug development expertise as a key differentiator. The company's strategic priorities for the period ahead include advancing its clinical-stage programs, particularly COM701, with an interim analysis from the MAIA-ovarian trial expected in the first quarter of 2027 ⁴², and GS-0321 (previously COM503) through its Phase 1 clinical trial. Management also prioritizes securing and maintaining revenue-sharing collaborations with pharmaceutical and biotechnology partners, as evidenced by the recent amendment to the AstraZeneca license agreement, which provided a $65 million upfront payment ⁴³ and potential future regulatory and commercial milestones of up to $195 million ⁴⁴. Despite a net profit of approximately $35.3 million in 2025 ⁴⁵, management acknowledges a history of losses and expects to incur future losses, indicating a continued focus on R&D investment. They project that existing cash and cash equivalents, short-term bank deposits, and investment in marketable securities of approximately $145.6 million ⁴⁶ will be sufficient to fund operations into 2029, based on current plans and without considering additional funds from licensing or financings.