Compugen(CGEN) - 2024 Q4 - Annual Report

Executive Summary & Corporate Update Compugen achieved significant 2024 progress, positioning for 2025 growth with a diverse pipeline, positive clinical data, and strong financial outlook CEO Commentary & Strategic Highlights Compugen's CEO highlights significant 2024 progress, positioning for 2025 growth with a diverse pipeline, key advancements, and continued AI/ML platform acceleration - Compugen is well-positioned for growth, building on significant progress in 2024 with a diverse and innovative pipeline and a strong focus on execution in 2025[3] - Clinical data supports advancing COM701 as a potential first-in-class anti-PVRIG for maintenance treatment in platinum-sensitive ovarian cancer, with an adaptive platform trial scheduled for Q2 2025[3] - AstraZeneca presented promising rilvegostomig data in 2024, expanded to seven Phase 3 trials, and plans to share early data for rilvegostomig in combination with ADCs in 2025, representing a significant potential revenue source through milestone payments and mid-single digit tiered royalties[3] - A solid financial position with cash runway into 2027 supports advancing the clinical and early-stage pipeline, including GS-0321 (licensed to Gilead) for which a $30 million IND clearance milestone was received in 2024, with the Unigen™ AI/ML platform continuing to accelerate research[4] Key Corporate Highlights The company achieved several key milestones in Q4 and full year 2024, including positive clinical data for COM701, initiation of the first-in-human Phase 1 trial for GS-0321, expansion of AstraZeneca's rilvegostomig program, and maintaining a strong financial position with cash runway into 2027 - Clinical data presented at SITC 2024 supports further development of COM701, a potential first-in-class anti-PVRIG antibody[5] - On track to initiate a randomized adaptive platform trial of COM701 maintenance therapy in patients with platinum-sensitive ovarian cancer, scheduled to start in Q2 2025[5] - The first patient was dosed in Q1 2025 in the first-in-human Phase 1 solid tumor trial of GS-0321 (previously COM503), a potential first-in-class anti-IL18BP antibody licensed to Gilead[5] - Partner AstraZeneca reported promising rilvegostomig data in 2024, expanded the program to seven Phase 3 trials, and plans to share early data for rilvegostomig in combination with ADCs in 2025[5] - Solid financial position with cash runway expected to fund operations into 2027[5] Financial Performance Highlights This section details Compugen's 2024 financial performance, covering cash, revenue, costs, operating expenses, and net income/loss Cash Position & Runway As of December 31, 2024, Compugen held approximately $103.3 million in cash and equivalents, including significant milestone payments from Gilead and AstraZeneca, and expects its current cash to fund operations into 2027 with no debt Cash, Cash Equivalents, Short-term Bank Deposits and Investment in Marketable Securities (in millions) | As of December 31, 2024 | | :---------------------- | | 103.3 | - Cash balance includes $60 million upfront payment and $30 million IND milestone payment from Gilead, and $15 million milestone payments from AstraZeneca[6] - In January and February 2025, approximately 3.96 million shares were sold through the ATM facility, contributing net proceeds of approximately $8.87 million[7] - Compugen expects its current cash to be sufficient to fund operating plans into 2027 and has no debt[8] Revenue & Cost of Revenue Analysis Revenues for Q4 and full year 2024 significantly decreased compared to 2023, primarily due to the timing of milestone payments, while cost of revenues also decreased due to reclassification and a royalty reversal Revenues (in millions) | Period | 2024 | 2023 | | :-------- | :---- | :---- | | Q4 | $1.5 | $33.5 | | Full Year | $27.9 | $33.5 | - 2024 revenues include portions of upfront and IND milestone payments from Gilead and a $5 million clinical milestone from AstraZeneca, while 2023 revenues reflect a portion of Gilead's upfront payment and a $10 million clinical milestone from AstraZeneca[9] Cost of Revenues (in millions) | Period | 2024 | 2023 | | :-------- | :--- | :--- | | Q4 | $0.7 | $2.0 | | Full Year | $7.9 | $2.0 | - Cost of revenues in 2024 includes IND and Phase 1 activities and royalty payments, offset by a royalty reversal due to an exemption from the Israeli Innovation Authority for IL-18BP related income[10] Operating Expenses Research and Development (R&D) expenses decreased in 2024 due to reclassification and lower activities, partially offset by increased clinical expenses, while General and Administrative (G&A) expenses remained relatively stable Research and Development (R&D) Expenses (in millions) | Period | 2024 | 2023 | | :-------- | :---- | :---- | | Q4 | $5.9 | $10.9 | | Full Year | $24.8 | $34.5 | - The decrease in R&D expenses in 2024 was mainly due to the classification of GS-0321 expenses to cost of revenues and lower CMC and IND enabling activities for GS-0321, partially offset by an increase in clinical expenses[11] General and Administrative (G&A) Expenses (in millions) | Period | 2024 | 2023 | | :-------- | :--- | :--- | | Q4 | $2.2 | $2.5 | | Full Year | $9.4 | $9.7 | Net Income/Loss & EPS Compugen reported a net loss of $6.1 million for Q4 2024, a shift from a net income of $9.7 million in Q4 2023, with the full year 2024 net loss improving to $14.2 million from $18.8 million in 2023 Net Income (Loss) and Basic & Diluted EPS | Metric | Q4 2024 | FY 2024 | Q4 2023 | FY 2023 | | :------------------------------ | :------ | :------ | :------ | :------ | | Net Income (Loss) (in millions) | $(6.1) | $(14.2) | $9.7 | $(18.8) | | Basic and Diluted EPS (cents) | $(0.07) | $(0.16) | $0.11 | $(0.21) | Financial Statements This section presents Compugen's condensed consolidated statements of operations and balance sheets for the specified periods Condensed Consolidated Statements of Operations The condensed consolidated statements of operations provide a detailed breakdown of Compugen's financial performance for the three months and full year ended December 31, 2024, compared to the same periods in 2023, covering revenues, costs, operating expenses, and net profit/loss COMPUGEN LTD. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except for share and per share amounts) | | Three Months Ended | | Year Ended, | | | :---------------------------------------------------------------- | :----------------- | :--- | :----------- | :--- | | | December 31, | | December 31, | | | | 2024 | 2023 | 2024 | 2023 | | | Unaudited | Unaudited | | | | Revenues | 1,471 | 33,459 | 27,864 | 33,459 | | Cost of revenues | 675 | 2,004 | 7,930 | 2,004 | | Gross profit | 796 | 31,455 | 19,934 | 31,455 | | Operating expenses | | | | | | Research and development expenses | 5,911 | 10,928 | 24,810 | 34,472 | | Marketing and business development expenses | 167 | 61 | 576 | 244 | | General and administrative expenses | 2,201 | 2,482 | 9,439 | 9,731 | | Total operating expenses | 8,279 | 13,471 | 34,825 | 44,447 | | Operating profit (loss) | (7,483) | 17,984 | (14,891) | (12,992) | | Financial and other income, net | 1,370 | 735 | 5,182 | 3,208 | | Profit (loss) before taxes on income | (6,113) | 18,719 | (9,709) | (9,784) | | Tax expense | 4 | 9,006 | 4,522 | 8,970 | | Net profit (loss) | (6,117) | 9,713 | (14,231) | (18,754) | | Basic and diluted net earnings (loss) per ordinary share | (0.07) | 0.11 | (0.16) | (0.21) | | Weighted average number of ordinary shares used in computing basic | | | | | | and diluted net earnings (loss) per share | 89,538,891 | 88,415,382 | 89,528,031 | 87,633,298 | Condensed Consolidated Balance Sheets Data The condensed consolidated balance sheets data presents Compugen's financial position as of December 31, 2024, and 2023, detailing assets (current and non-current), liabilities (current and non-current), and total shareholders' equity COMPUGEN LTD. CONDENSED CONSOLIDATED BALANCE SHEETS DATA (U.S. dollars, in thousands) | | December | December | | :---------------------------------------- | :------- | :------- | | | 31, | 31, | | | 2024 | 2023 | | ASSETS | | | | Current assets | | | | Cash and cash equivalents | 18,229 | 13,890 | | Restricted cash | - | 365 | | Short-term bank deposits | 61,397 | 25,053 | | Investment in marketable securities | 23,629 | 11,742 | | Trade receivables | - | 61,000 | | Other accounts receivable and prepaid expenses | 2,742 | 2,529 | | Total current assets | 105,997 | 114,579 | | Non-current assets | | | | Restricted long-term bank deposit | 343 | - | | Long-term prepaid expenses | 1,888 | 1,233 | | Severance pay fund | 3,072 | 2,977 | | Operating lease right to use asset | 2,843 | 1,329 | | Property and equipment, net | 852 | 1,216 | | Total non-current assets | 8,998 | 6,755 | | Total assets | 114,995 | 121,334 | | LIABILITIES AND SHAREHOLDERS EQUITY | | | | Current liabilities | | | | Other accounts payable, accrued expenses and trade payables | 10,080 | 14,485 | | Short-term deferred revenues | 9,632 | 11,149 | | Current maturity of operating lease liability | 448 | 632 | | Total current liabilities | 20,160 | 26,266 | | Non-current liabilities | | | | Long-term deferred revenues | 34,045 | 25,392 | | Long-term operating lease liability | 2,464 | 719 | | Accrued severance pay | 3,412 | 3,398 | | Total non-current liabilities | 39,921 | 29,509 | | Total shareholders' equity | 54,914 | 65,559 | | Total liabilities and shareholders' equity | 114,995 | 121,334 | Company Information & Outlook This section outlines Compugen's future milestones, company overview, and important forward-looking statements Next Planned Milestones Compugen has outlined several key upcoming milestones, including the initiation of a randomized adaptive platform trial for COM701 in Q2 2025, AstraZeneca's plan to share early data for rilvegostomig in combination with ADCs in 2025, and projected interim analysis data for single agent COM701 in H2 2026 - Q2 2025: Initiation of a randomized adaptive platform trial comparing COM701 maintenance therapy to placebo in 60 patients with relapsed platinum-sensitive ovarian cancer[14] - 2025: Compugen's partner, AstraZeneca, plans to share early data for rilvegostomig in combination with their ADCs[14] - H2 2026: Data from projected interim analysis of single agent COM701 sub-trial 1 as maintenance therapy in relapsed platinum-sensitive ovarian cancer[14] About Compugen Compugen is a clinical-stage therapeutic discovery and development company that utilizes its predictive computational discovery platform (Unigen™) to identify novel drug targets for cancer immunotherapies, with a pipeline including proprietary and partnered programs - Compugen is a clinical-stage therapeutic discovery and development company focused on cancer immunotherapies[16] - The company leverages its broadly applicable predictive computational discovery platform (Unigen™) to identify new drug targets and biological pathways[16] - Proprietary product candidates in Phase 1 development include COM701 (anti-PVRIG antibody) and COM902 (anti-TIGIT antibody)[16] - Partnered programs include Rilvegostomig (PD-1/TIGIT bispecific antibody, AstraZeneca, Phase 3) and GS-0321 (anti-IL-18 binding protein antibody, Gilead, Phase 1)[16] Forward-Looking Statements This section serves as a cautionary statement, highlighting that the press release contains forward-looking statements based on current beliefs and expectations, outlining various known and unknown risks and uncertainties that could cause actual results to differ materially - The press release contains forward-looking statements based on current beliefs, expectations, and assumptions, identifiable by terms like 'will,' 'expects,' 'potential,' and 'intends'[17] - These statements involve known and unknown risks and uncertainties that may cause actual results to differ materially, including clinical trial failures, dependence on collaboration agreements, and the unproven nature of the computational target discovery infrastructure[17] - Risks are more fully discussed in Compugen's most recent Annual Report on Form 20-F filed with the SEC[17]