Compugen Ltd. (NASDAQ:CGEN) Q3 2019 Earnings Conference Call November 11, 2019 8:30 AM ET
Elana Holzman - Director of Investor Relations & Corporate Communications
Anat Cohen-Dayag - President & Chief Executive Officer
Henry Adewoye - Chief Medical Officer
Ari Krashin - Chief Financial Officer & Chief Operating Officer
Conference Call Participants
Mark Breidenbach - Oppenheimer
Reni Benjamin - JMP Securities
Lucy Codrington - Jefferies
Ladies and gentlemen, thank you for standing by. Welcome to Compugen's Third Quarter 2019 Results Conference Call. At this time, all participants are in a listen-only mode. An audio webcast of this call is available in the Investors section of Compugen's website www.cgen.com. As a reminder, today's call is being recorded.
I would now like to introduce Elana Holzman, Compugen's Director of Investor Relations and Corporate Communications. Please, go ahead.
Thank you, operator, and thank you for joining us today. With me from Compugen are Dr. Anat Cohen-Dayag, President and CEO; Dr. Henry Adewoye, Chief Medical Officer; and Ari Krashin, CFO and COO.
Before we begin, I would like to read the following regarding forward-looking statements. During the course of this conference call, the company may make projections and other forward-looking statements regarding future events or future business outlook, our development efforts and their outcome, our discovery platform, anticipated progress and time line for our existing and pipeline programs and financing and accounting-related matters, as well as statements regarding our cash position.
We wish to caution you that such statements reflect only the company's current expectations, and the actual events or results may differ materially. You are kindly referred to the risk factors and cautionary language contained in the documents the company filed with the Securities and Exchange Commission, including the company's most recent Annual Report on Form 20-F filed on March 21, 2019. The company undertakes no obligation to update projections or forward-looking statements in the future.
I will now turn the call over to Anat. Anat?
Thank you, Elana. Good morning and good afternoon, everyone, and welcome to our third quarter 2019 corporate and financial update. As Elana mentioned, today on the call, I'm joined by Dr. Henry Adewoye, our Chief Medical Officer, who will provide updates on the clinical progress of COM701, our lead immuno-oncology candidate currently undergoing Phase I clinical studies; and Ari Krashin, our CFO and COO, who will review our financial statements and position.
I'd like to start today's call highlighting an incredibly important milestone for Compugen, our first-ever presentation of preliminary clinical data. We're very proud to have advanced COM701, our first internally developed asset, to a preliminary clinical readout and are encouraged by the emerging safety profile and the initial signs of antitumor activity observed.
These findings were presented at the Annual Meeting of the Society for Immunotherapy of Cancer a few days ago. Henry will walk you through this data in more detail later in the call, but before that, I'd like to provide a brief overview of COM701 and our preliminary results.
COM701 is a clinical stage monoclonal antibody, targeting PVRIG, which was internally discovered using our computational discovery platform. To our knowledge, with this discovery add COM701 is the only PVRIG inhibitor currently in clinical testing, providing us the opportunity to deliver a first-in-class drug.
Our preclinical work demonstrated that this new PVRIG pathway is working in parallel and in complementary to the already known TIGIT pathway and that together they serve as part of the DNAM axis, which we believe holds great potential for developing new cancer immunotherapy treatments.
Moving now to what we are most excited to share, the initial clinical data recently disclosed. I will first start with the trial demographics. The patients who participated in the monotherapy arm of our ongoing Phase I dose escalation study of COM701, are among the most challenging to treat.
The all-comers trial arm enrolled patients, who were heavily pretreated and mostly refractory to prior anticancer therapies. It consisted of patients having had, in some cases, up to 15 prior treatments. In addition, not by design almost half of the patients in our study had metastatic colorectal cancer, all of which were confirmed as microsatellite stable status. These patients are typically considered among the least likely to respond to cancer immunotherapies and in general, have very limited therapeutic options.
The primary objective of this study, first and foremost is to assess the safety and tolerability of COM701 and we were more than pleased with the results in this regard. We have not observed any dose-limiting toxicities.
Next, touching upon antitumor activity. Our initial results are encouraging. 69% of the 13 patients in the study had best time point response of stable disease and 83% of the microsatellite stable colorectal cancer patients had best time point response of stable disease.
In addition, we observed the trend in dose-response relationship, demonstrating the potential for durable responses at a high range of the doses. To put these results into context, let me remind you that this is an all-comers trial rather than a study limited to the indications we prioritized as the most likely to respond to COM701.
Also in a dose escalation setting, the first patients received very low doses of COM701 to see initial signs of activity as a monotherapy in this challenging setting and hard-to-treat patient population supports our belief that COM701 can have real potential to impact patient outcomes.
We're currently making considerable progress advancing COM701 through its next phases of development, progressing through the dose escalation arm of the combination therapy of COM701 and Opdivo and completing enrollment in the monotherapy dose escalation arm, which will allow us to initiate our monotherapy expansion cohort.
We're excited by the cohort expansion as it utilizes a biomarker-driven strategy by which we have selected specific tumor types, lung, breast, ovarian and endometrial based on our PVRL2 expression data. By focusing on indications that have high PVRL2 expression, we believe we will target the patient population most likely to benefit from COM701.
We have also made significant progress with COM902, our anti-TIGIT antibody and second internally developed asset. The preclinical data for COM902, we presented at SITC, showed broad expression of TIGIT and PVRIG ligands in a wide range of solid tumors as well as various in vivo cancer models, providing additional evidence that the two pathways are complementary and that our drug combination approach has the potential to expand the cancer immunotherapy landscape.
Last week we announced the FDA clearance of our IND for the COM902 program. Including our Bayer collaboration program targeting ILDR2, this marks the third program based on new drug targets we discovered to be evaluated in the clinic.
Under this IND, we intend to initiate a Phase I trial designed to evaluate the safety, tolerability, pharmacokinetics, pharmacodynamics and preliminary efficacy of COM902 in patients with advanced malignancies who are not responsive to standard-of-care therapy. Site selection activities are currently underway for this multisite trial and we expect the trial to begin in early 2020.
Testing the safety and tolerability of COM902 in a monotherapy dose escalation study will enable the testing of combination treatment with COM701 and further evaluate our clinical hypothesis beyond our currently ongoing COM701 Phase I study. We're extremely proud of this important milestone and look forward to beginning our second clinical trial evaluating an internally developed candidate. We anticipate sharing with you more information about the design of our COM902 clinical study as we progress.
We have reached an important time in our company's development with three programs based on new drug targets we discovered to be evaluated in the clinic in 2020.
All three are addressing drug target discovered internally by our computer predictions platform and we're beginning to see how internal discovery platform can translate to differentiated clinical programs that may expand the cancer immunotherapy treatment options for patients unresponsive or refractory to existing therapies. We appreciate your continued support and look forward to providing timely and transparent updates across our programs in the coming months and into 2020.
With that, I would now like to turn the call over to Henry for a detailed update on our clinical progress with COM701. Henry?
Thank you, Anat and a good day to everyone. These are exciting times here at Compugen. We dosed our first patients with COM701 in September last year hopeful that the preclinical data of tumor growth inhibition with COM701 will be observed in our Phase I study as antitumor activity in patients with advanced solid tumors.
I am delighted to inform you that we and the clinical trial investigators thought leaders in the field of immuno-oncology are encouraged by the initial data we reported at SITC from the dose escalation stage of the study specifically the safety and tolerability profile of COM701 and the preliminary signal of antitumor activity.
At SITC, we marked a significant milestone when we presented initial clinical data in the first 13 patients enrolled in Arm A the COM701 monotherapy dose escalation arm in the ongoing Phase I study.
The data clearly demonstrated the safety and tolerability of COM701 monotherapy across all seven dose cohorts. We're dosing up to 10 milligrams per kilogram every three weeks with no dose-limiting toxicities and reported signals of anti-tumor activity with signs of dose response relationship.
We also presented another booster under the category of Trials in Progress disclosing up-to-date enrollment information on the study including Arms A and B that is COM701 in combination with Opdivo. I'll go into more detail about the study design study results and conclusions. The key primary objectives of the study are to evaluate the safety and tolerability of COM701 as monotherapy and also in combination with Opdivo as well as to characterize the PK profile of COM701.
Key secondary and exploratory objectives are to evaluate the preliminary antitumor activity of COM701 monotherapy and the pharmacodynamic activity of COM701 monotherapy.
We reported that COM701 was well-tolerated with no patients discontinuing study treatment due to safety concerns. In addition no dose-limiting toxicities were reported. The majority of the adverse events reported were grid one and two with fatigue being the most frequent adverse event reported.
The emerging safety and tolerability profile of COM701 monotherapy supports the potential for combination with other immune checkpoint inhibitors and standard-of-care therapies. The patients enrolled were all-comers who had exhausted all available treatment options.
As such, they had all been previously heavily pretreated with anti-cancer therapies. The range is two to 15 prior therapies with a median of seven prior therapies. Of the 13 patients enrolled, eight or 62% were treatment-refractory to their last therapy consisting of multiple regimens prior to enrollment in our study.
In other words, the best response we have to their last therapy was progressive disease. In this patient population, we reported antitumor activity of COM701 in five of these eight patients or 63% as the best time point response of stable disease. The demonstrated early signals of monotherapy antitumor activity in this patient population is encouraging.
As Anat mentioned, colorectal cancer was the most common tumor type enrolled in 6 out of 13 patients, with all having microsatellite stable status or MSS. In addition, three of the patients also had kras mutation. Both these confer a category of colorectal cancer that antitumor activity with any currently approved agent is least likely to be observed.
In our study, the best time response was five out of six patients or 83% in patients with CRC and MSS status. All three patients with CRC-kras mutation had a best time point response of stable disease with two than having confirmed stable disease in a repeat CT scan.
The pharmacokinetic data was supportive of IV dosing every three weeks. And importantly, we reported target coverage PVRIG receptor occupancy beginning at the COM701 one milligram one kilogram IV Q3 weeks dose consistent with our projections.
I would now like to provide an update on progress for the rest of the trial. As a reminder, we currently have two trial arms enrolling patients, Arm A, the immunotherapy dose escalation of COM701; and Arm B, the drug combination with escalating doses of COM701 and a fixed dose of Opdivo.
In Arm A, we are currently enrolling our eighth dose cohort at a higher dose of 20 milligrams per kilogram on a Q4 weekly dosing schedule. On our last call, we explained that our clinical data combined with a dosing schedule of Opdivo informed our decision to switch to this dosing schedule for our next monotherapy escalation cohort. After completion of the dose escalation with a Q4 weekly dosing schedule, we plan to select the recommended dose for expansion and then begin enrolling patients on a Q4 weekly schedule.
We believe that these changes had no impact on our time line for beginning the COM701 monotherapy dose expansion cohort and project that we will initiate the screening of patients into this expansion cohort before the end of this year.
Moving next to an update on Arm B of the trial, our dual combination study evaluating escalating doses of COM701 with a fixed dose of Opdivo. I am pleased to report that as our Trials in Progress post the presentation at SITC no DLTs have been reported up to the third dose level and enrollment is on track for the fourth dose level. We have worked incredibly hard and the dedication of our team along with a very high interest of the investigators in our clinical study and clinical study personnel has enabled us to advance COM701 in our ongoing Phase 1 study to a patient population with advanced solid tumors and with no available treatment options We fund the patients participating in this clinical study and their families.
This is an exciting time at Compugen. We have demonstrated initial signals of antitumor activity of a first-in-class immune checkpoint inhibitor and a well-tolerated safety profile with the potential for combination with other checkpoint inhibitors, and standard-of-care therapies. We look forward to continuing this important work of advancing COM701 in our ongoing clinical study.
I will turn the call over to Ari for a financial review. Ari?
Thank you, Henry. Good morning and good afternoon to everyone. Our financial results for the third quarter of 2019 released this morning demonstrate a solid financial position obtained through the reduction of expenses following our restructuring process announced in the first quarter coupled with our increased cash position. As of September 30, 2019, we had approximately $48 million in cash and cash-related accounts compared with approximately $37 million at the end of the second quarter of 2019. The net increase in cash balances is attributed to the proceeds obtained through our ATM facility during the third quarter in the amount of approximately $15.5 million offset by our ongoing cash expenditures.
Our R&D expenses for the third quarter of 2019 decreased by approximately 45% and totaled $4.3 million compared with $7.8 million in the comparable period of 2018. The decrease was primarily due to reduced preclinical activities related to COM902 most of which were completed in 2018 and the cost reduction measures implemented in the first quarter of 2019.
Net loss for the third quarter of 2019 was $6.5 million or $0.10 per basic and diluted share compared to a net loss of $3.1 million or $0.05 per basic and diluted share for the third quarter of 2018. It is worth noting that the net loss for the third quarter of 2018, include the revenues recognized that quarter in the amount of $7.8 million related to the milestone achieved from Bayer.
We look forward to advancing our COM701 Phase I trial, as well as advancing COM902 to the clinic early next year. We believe that based on our current clinical plans our current cash resources are sufficient to support our activities through the second quarter of 2021 without taking into consideration any additional potential cash inflows to the company.
Thank you. We will now open the call for questions.
[Operator Instructions] The first question is from Mark Breidenbach of Oppenheimer. Please go ahead.
Hey guys. Congrats on all the progress and especially on your SITC presentation. We enjoyed seeing them. Maybe two that are probably both directed towards Henry. First of all, do you anticipate any protocol amendments to the ongoing trial of COM701 particularly with respect to expansion cohorts in the light of the initial dose escalation data that you presented at SITC? So that's the first question.
And the second question is if you can give us a little bit more color on the design of your COM902 trial. Maybe more specifically do you plan to start dose escalating in combination with COM701 in parallel with COM902 monotherapy dose escalation sort of as you're doing now in the COM701 trial? Thank you for taking the question.
Mark, thank you very much for your questions. So I'll address the first one. Probably premature to start enumerating whether we'll have an amendment to the protocol for the expansion cohort. We're very well aware of the data we've presented and we currently have embedded within the protocol the ability to test certain tumor indications. So I'll leave it at that.
With regards to your second question for the study design for COM902 this is still a work in progress, but in general it will be a standard rules-based design essentially meaning a combination of a hybrid single subject design and 3 plus 3 as is done in the industry. So that's what we anticipate for COM902.
Now it will be premature at this stage since we really do not know what the safety profile of COM902 in humans will be to indicate when we'll be able to combine COM701 with COM902.
Okay fair enough.
Mark I will just say -- I will relate -- I will just add a little bit more color on the two questions that you were asking. So I guess the first question related specifically to what we have seen with the colorectal MSS. And obviously, while we designed the study based on the preclinical understanding and our scientific understanding of the PVRIG/PVRL2 access -- sorry pathway within the DNAM axis, we're not going to lead ourselves only based on preclinical data as we move ahead. Obviously, the clinical data is also and maybe even more a pointer at a point in time when you see some signs of antitumor activities. And we will take into consideration all these parameters as we move forward. But I echo what Henry was saying is that we're moving ahead with the protocol that we have. We'll take into consideration this data. And when we will have more information to share we will obviously share.
With respect to the combination with COM701 and doing stuff in parallel, obviously we'll first need to -- as Henry said, we first need to see the safety profile of COM902 and then make decisions. But we're a small company and we need to be urgent on pushing forward this program.
Our working assumption by the way and I think that it will be good for everyone to -- listening to the call to be aware of this is that there are others that are working on the PVRIG antibody since the time that we started to discuss it or at a certain point in time following our discussions of PVRIG in the public domain.
So we will keep urgency on this program but we also have to be careful and design our plans moving forward in a very responsible way. So the answer is that we'll be very, very urgent on pushing forward this program. That's it.
Okay. I appreciate the color. Thank you.
The next question is from Reni Benjamin of JMP Securities. Please go ahead.
Hi, good morning. Thanks for taking the questions and congrats on the progress. I guess just a couple for me. Can you comment on the duration of the clinical benefit that you're seeing with these patients who obtained the ST? And in those patients, do you know if they had prior I-O treatment? Any sort of I-O treatment?
Sure. I can provide you that Mr. Benjamin. So as we noted in the aps -- in the post ap presentation, nine patients out of 13 patients had the best end point response of stable disease, essentially a disease control rate of nine over 13, 69%. So what is peculiar about this category of patients like we've said in our prepared comments is most of them also had prior treatment refractory disease.
So to be able to observe a disease control rate this high in this patient population is certainly something that is intriguing. Now with regards to the duration of response of the patients who had stable disease, we had the duration of response ranging from about 85 days in some patients to 370 days in some other patients, so a very wide range. But most of the patients tolerated study treatment for approximately 127 days for some patients and like I said the maximum 370 days in some patients.
Now I will elaborate a little bit about the patients that we have with colorectal cancer. As you understand, we had six patients with colorectal cancer on the study. All of them had microsatellite stable disease and three of those patients also had kras mutation. For those patients in the higher dose cohorts two of them actually had prior treatment refractory disease.
Now for the patients who have prior treatment refractory disease which are about half of those patients with colorectal cancer, we had them with stable disease all captured like Anat said in our prepared comments and in my prepared comments also. So for example, in the 10 milligram per kilogram body weight with dose cohort, where we had two patients with treatment-refractory colorectal cancer, we had one patient and it's on the streamers plot had a progressive disease at the 85 and the second patient is still ongoing as at the time of the presentation at SITC.
The other patients had a duration of treatment from 127 days to much longer to 160 days in the case of some of the patients. Now here is the interesting thing about the data that we've been able to acquire. If you remember, for patients who have colorectal cancer and microsatellite stable disease and kras mutation, typically, they progress within about a month or two of statin therapy. So, to actually have patients stay on monotherapy with COM701, this lung is something that is interesting, and like we've indicated in the prepared comments, that we probably will likely to explore further.
Now the other thing to consider is that typically, because these patients with microsatellite stable disease do not respond to immunotherapy that is they have cold tumors, to actually have them be on monotherapy after having received multiple lines of prior therapy without a response is something that is worthy of note that, we've captured on the trial. So that's the context of the interpretation of the data that we've had. There are – obviously there are other patients on this study. There's a patient who had a cystic carcinoma that's been on study now for about a year. There's a patient with pancreatic cancer, who had stable disease as of this first time assessment. And, as you know, most patients with pancreatic cancer have kras mutation, almost the overwhelming majority of them, and so on. So that's the context of interpretation of the data.
Got it. And then just as a follow-up, do you have any biomarker or biopsy data that shows that might indicate that some of these cold tumors are becoming hot or – how exactly COM701 might be benefiting these patients from a biological perspective?
No. We – on this study, because this is dose escalation part of the study, the biopsy – pre-treatment biopsy was optional. So we currently do not have any biopsies acquired from these patients. But certainly, it's something of interest to us and the treating investigators, and the thought leaders to try and figure out exactly what the mechanism is, and even if these patients express high levels of PVRL2. Because as you may recall, we actually did not test – this is not a test population that we thought will respond. We – in the expansion cohort, we had lung cancer, ovarian cancer, breast cancer and endometrial cancer as those tumor types expressing high PVRL2. So to actually see the data in colorectal cancer is something that's very interesting.
Now we might, we're still looking at the data more closely to see, if we might acquire the pretreatment biopsies in some of these patients, who didn't have any treatment before they came on – who had biopsies before they came on our study, but these are probably going to be very few. And most of the patients did – it was not a prerequisite on the study to have pretreatment biopsies.
On the expansion cohorts, this will be different. In the expansion cohorts pretreatment biopsies are mandatory, and there will be on-treatment biopsies obtained for patients. So, maybe looking at those biopsies, we'll be able to assess what the tumor microenvironment is, expression of biomarkers like PVRL2, including other biomarkers of interest like PD-L1 et cetera, and tumor CMD as a biomarker.
And Reni, I'll just – I’ll just add with – from the scientific preclinical data that we have because as Henry said obviously, we do not have yet any clinical data to answer your question. But from the preclinical perspective, you remember that actually we are activating – we believe that we're activating T cells in the tumor macro environment, but more than that it's not only the PVRIG is expressed on the T cells, but the PVRL2 is expressed on antigen-presenting cells myeloid cells the tumor cells. So – and we're actually – we believe that we release PVRL2 to stimulate DNAM, which is a customary toro protein. We think that we're actually affecting the tumor micro environment in this – with this type of inhibition, and later combining with the TIGIT blocker and PD-1 blocker, we're able to even more affect the tumor macro environment. So that's our assumption. But obviously, you were asking a very good question that we will need to test tumor biopsies and have some additional biomarker work in order to better assess what's going on with the tumor macro environment to support the model that we were putting in place through preclinical data.
Yes, great. Thanks very much for taking the questions.
Next question is from Lucy Codrington of Jefferies. Please go ahead.
Hi, there. Thank you for taking my questions. Just a couple. I was just wondering if you could remind us what the underlying reason was for the choice of the indications for the dose expansion cohorts and also whether you could give us an indication as to how many, if any, of the non-colorectal cancer patients were from these indications? And then secondly, just whether there's any update on the BioProject? Thank you.
So, thank you, Lucy. So, with respect to the reason of selecting the expansion cohorts and as you know, we -- based on our data testing the access members expression profile PVR, PVRL2 and PD-L1 in tumor specimens and some computational data, we reached to the belief that the four cancer indications, ovarian, endometrial, breast and non-small cell lung cancer, are actually expressing high levels of this pathway. And therefore patients that are having -- that are suffering from these tumor types are actually most likely to benefit the COM701 treatment.
With that, I will say, and specifically relating to colorectal, it's not that this pathway is not expressed in other solid tumors and specifically in colorectal cancer patients this is -- this pathway is expressed as well. It was not selected as the top priority based on the intensity of the expression profile.
But seeing the data now, clinically that's something that we're going to take into consideration. Now with respect to your question, I'll let Henry answer. I believe that we had one ovarian and one non-small cell lung cancer, but Henry – that’s it. But Henry may probably recall better and know also the doses that were. Okay.
Yes. So in addition to the six patients that we already described with colorectal cancer, we had -- in the poster we have subsets of patients with non-small -- patients with non-small cell lung cancer, other patients with pancreatic cancer, patients with cancer of non-primary also, pleural mesothelioma in the study and also pancreatic cancer. So it's all enumerated in the poster. So these are the other patient populations that we have.
Now let me just refer back to Reni's question, which I think I failed to give a response to. Reni asked if there were some patients who had received prior PD-1 therapy. Now we had two patients who had received prior PD-1 therapy. There was a patient with ovarian cancer, who had received prior Pembrolizumab. This patient had also received a PARP inhibitor.
This patient prior to our study had treatment-refractory disease. That means they progressed thoroughly through the last prior therapy before they came on to our study. This patient was -- this patient had stable disease on our study and was on study treatment for 145 days. Okay?
The second patient that received a PD-L1 inhibitor was the patient with pleural mesothelioma. The patient had a partial response before they came on to our study, progressed through that and had a 25% reduction in the tumor SLD as some of the longitudinal dimensions on the tumor by RECIST. So, almost a near -- closely partial response is 30% by RECIST version 1.1. So, this patient had a prior exposure to durvalumab. The patient was on study treatment for 105 days and that's also documented in the poster.
But I think Lucy I'll just add that it will be fair to say that we didn't get a chance to test our hypothesis in the monotherapy dose escalation with respect to the specific indications that our top priority that we prioritized as those that are going to benefit from COM701 treatment. So, the jury is still out and we're really excited to push forward this program.
Okay. Thanks very much.
This concludes our question-and-answer session. I will now turn the call back to Compugen's President and CEO, Dr. Cohen-Dayag, would you like to make your concluding statement?
Thank you, operator. We continue to execute well in 2019 and we're pleased with the important milestones we have achieved, most notably the initial data readout from our COM701 Phase I monotherapy dose escalation arm and the IND clearance for COM902 allowing us to initiate a Phase I study for a second internally developed program.
We're proud of the progress the company has made having three programs addressing targets we discovered through computer predictions reach clinical evaluation. This is a remarkable achievement and one which we hope to replicate with our computational discovery capabilities.
Thank you for joining us today and we look forward to continue updating you on our progress. Have a great day.
Thank you. This concludes the Compugen Ltd. third quarter 2019 financial results conference call. Thank you for your participation. You may go ahead and disconnect.