Executive Summary / Key Takeaways

• Compugen Ltd. (NASDAQ:CGEN) is a clinical-stage biotechnology company leveraging its proprietary AI/ML-powered Unigen™ platform to discover and develop novel immuno-oncology therapies, positioning it as an innovator in a competitive landscape.
• The company's strategic pivot for COM701, a potential first-in-class anti-PVRIG antibody, to the maintenance setting in platinum-sensitive ovarian cancer addresses a significant unmet medical need, with interim analysis from the MAIA-ovarian trial expected in the second half of 2026.
• Strategic partnerships with AstraZeneca (AZN) for rilvegostomig (PD-1/TIGIT bispecific) and Gilead (GILD) for GS-0321 (anti-IL-18 binding protein) provide substantial non-dilutive funding through milestone payments and future royalties, validating Compugen's discovery capabilities and extending its cash runway into 2027.
• Despite setbacks in the broader TIGIT space, Compugen's commitment to Fc-inactive TIGIT antibodies, exemplified by its COM902 component in rilvegostomig, offers a differentiated approach with potential safety and efficacy advantages that could reshape market sentiment.
• Compugen's financial stability, marked by $93.9 million in cash as of June 30, 2025, and no debt, underpins its ability to advance its pipeline and invest in early-stage research, though current revenues are heavily reliant on milestone recognition.

Compugen's Vision: Pioneering Immuno-Oncology Through AI

Compugen Ltd., established in 1993 and headquartered in Holon, Israel, operates as a clinical-stage therapeutic discovery and development company with a singular focus on immuno-oncology. The company's overarching strategy centers on leveraging its proprietary AI/ML-driven computational discovery platform, Unigen™, to identify novel drug targets and develop first-in-class therapies, often through strategic partnerships. This approach is particularly relevant in the current oncology landscape, where despite the tremendous success of immunotherapies like KEYTRUDA, significant unmet medical needs persist for many cancer patients. The industry is actively shifting towards novel mechanisms of action, innovative combinations, and new modalities to enhance efficacy and safety across various cancer types.

The foundational strength of Compugen lies in its Unigen platform, a proprietary AI/ML-powered computational discovery engine. This technology integrates big data analytics, machine learning, and deep biological insights to predict and identify novel drug targets and new biological pathways that can activate the immune system against cancer. The platform's efficacy is validated by the multiple clinical-stage antibodies it has generated and the successful partnerships it has fostered. Unigen accelerates drug discovery by predicting novel mechanisms, exemplified by its role in yielding PVRIG (COM701) and COM503 (GS-0321). For investors, this technological differentiation translates into a competitive moat, potentially leading to superior efficacy in treating resistant tumors, fostering stronger customer loyalty through innovative partnerships, and driving more robust growth with better capital efficiency by reducing early-stage development risks. The platform's ability to identify under-explored immune regulators offers a more precise solution compared to the broader portfolios of larger pharmaceutical companies.

Competitive Landscape and Strategic Positioning

Compugen occupies a niche as a smaller, research-focused player within the expansive immuno-oncology market, demonstrating emerging influence rather than market dominance. Its growth trajectory, while promising in specialized segments, is moderate compared to the broader market and its larger competitors. Compugen's strengths lie in its innovation and targeted therapies, particularly its agility in developing novel mechanisms and focusing on under-explored immune regulators. However, its clinical-stage status, limited scale, and intensive R&D efforts present inherent weaknesses, often resulting in lower profitability and cash flow compared to established pharmaceutical giants.

When directly comparing Compugen to industry leaders, distinct competitive dynamics emerge. Against Bristol-Myers Squibb (BMY), a large pharmaceutical company with commercialized products like Opdivo, Compugen's specialized, early-stage approach to novel targets offers the potential for greater efficiency in specific tumor types. However, Compugen lags BMY in terms of overall revenue growth, profitability, and cash flow due to BMY's established revenue streams. Similarly, AstraZeneca (AZN), with its broad oncology pipeline including bispecific antibodies like rilvegostomig (which incorporates Compugen's COM902), exhibits stronger revenue growth and cash flow. Compugen, while nimbler in niche innovation, trails AZN in overall financial health and market presence. Merck (MRK), a dominant force with Keytruda, showcases superior cash flow and margins. Compugen's innovative targeting of myeloid and T-cell checkpoints could complement Merck's therapies, but it lags significantly in commercialization speed and scale. Roche (ROG), another major player with a diversified oncology portfolio, also demonstrates superior financial health. Compugen's agility in developing bispecific antibodies and focused advancements in solid tumors offer a contrasting approach to Roche's integrated healthcare solutions.

Indirect competitors include companies developing alternative solutions such as gene therapies and traditional chemotherapy providers. Moreover, the increasing integration of AI in drug discovery across the industry could accelerate competitor R&D, potentially leading to more accessible or cheaper alternatives that offer faster development cycles. This trend could impact Compugen's market share by intensifying competition in pipeline efficiency and affecting financial performance through higher R&D costs or delayed revenue opportunities. Despite these challenges, high R&D costs, stringent regulatory hurdles, and robust intellectual property protections act as significant barriers to entry in the immuno-oncology space, helping Compugen defend its position by limiting new entrants. Compugen's strategic response to this competitive environment involves deep collaborations with major pharmaceutical companies like AstraZeneca (AZN), Gilead (GILD), and Bristol-Myers Squibb (BMY), providing access to critical resources and expanding the reach of its high-potential, early-stage assets.

Advancing a Differentiated Pipeline: Clinical Progress and Operational Focus

Compugen's pipeline is strategically designed to address areas of high unmet medical need, leveraging its Unigen platform to develop potential first-in-class therapies.

COM701: A New Hope in Ovarian Cancer Maintenance

Compugen's wholly-owned, potential first-in-class anti-PVRIG antibody, COM701, is a cornerstone of its pipeline. The company has strategically shifted its development focus for COM701 to the maintenance setting in relapsed platinum-sensitive ovarian cancer. This decision is underpinned by a strong clinical and biological rationale, targeting a patient population of approximately 8,000 to 12,000 women who currently lack standard-of-care treatment options after progressing post-PARP inhibitors and/or bevacizumab. This setting is less competitive and offers a compelling opportunity to demonstrate COM701's potential advantages in terms of durability of response and tolerability.

The first patient in the MAIA-ovarian adaptive platform trial, evaluating COM701 as maintenance immunotherapy, was dosed in July 2025. Compugen aims to share interim analysis from this sub-trial in the second half of 2026. A clinically meaningful outcome is defined as a three-month improvement over the median progression-free survival (PFS) of the placebo arm, which typically stands at around six months. Positive data from this trial could serve as a key catalyst, supporting broader clinical development and facilitating discussions with regulatory authorities for potential single-agent registration. The PVRIG biology is distinct from PD-1 and TIGIT, demonstrating unique activity even in PD-L1 negative patients by driving T-cell activity within the tumor microenvironment. This differentiation is crucial, as traditional PD-1 checkpoint inhibitors have often failed in ovarian cancer settings with insufficient T cells. At ESMO 2025, Compugen plans to present a pooled analysis of its three previously reported Phase I trials of COM701 in heavily pretreated platinum-resistant ovarian cancer, further informing its development strategy.

Partnered Programs: Rilvegostomig and GS-0321

Compugen's strategic collaborations are vital for advancing its pipeline and generating non-dilutive capital.

Rilvegostomig (AstraZeneca Partnership): This Fc-reduced anti-PD-1 TIGIT bispecific antibody, developed by AstraZeneca (AZN), incorporates the TIGIT component derived from Compugen's COM902. AstraZeneca's broad development strategy for rilvegostomig is substantial, with the company initiating its 10th Phase III clinical trial in Q2 2025, expanding into new tumor types such as endometrial cancer. AstraZeneca (AZN) estimates non-risk-adjusted peak year revenues for rilvegostomig could exceed $5 billion. Compugen is eligible for up to an additional $170 million in regulatory and commercial milestone payments, having already received $30.5 million, along with mid-single-digit tiered royalties on future sales. Upcoming data presentations include longer-term follow-up for rilvegostomig monotherapy in non-small cell lung cancer and first data in bladder cancer in combination with Dato-DXd at ESMO in October 2025. AstraZeneca (AZN) also plans to present first rilvegostomig ADC combination data from the Phase 3 TROPION-Lung04 trial and first data from the Phase 2 GEMINI-Hepatobiliary trial at ASCO 2025. Despite past setbacks for Fc-active TIGIT antibodies in the broader landscape, Compugen consistently advocates for Fc-inactive antibodies like COM902, believing they offer a potential safety advantage that could translate into improved efficacy due to patient durability on study treatment. Successful Phase III data from such programs could validate the TIGIT antibody class and open new opportunities for Compugen.

GS-0321 (Gilead Partnership): Formerly known as COM503, GS-0321 is a potential first-in-class anti-IL-18 binding protein antibody licensed to Gilead (GILD). This asset represents a novel approach to harness IL-18 pathway biology for cancer treatment, potentially overcoming the limitations associated with therapeutic cytokine administration. Compugen received a $30 million milestone payment from Gilead (GILD) in Q3 2024 for achieving FDA IND clearance, following an initial $60 million upfront payment. The company is eligible for up to an additional $758 million in future development, regulatory, and commercial milestone payments, plus single-digit to low double-digit tiered royalties on worldwide net sales. The Phase I trial for GS-0321 is progressing as planned, with the first patient dosed in early January 2025, focusing on solid tumors where unique activity within the tumor microenvironment has been observed.

Beyond its clinical-stage programs, Compugen maintains an extensive and differentiated early-stage research pipeline of undisclosed programs. These efforts are a strategic priority, focused on identifying potential first-in-class drugs and novel mechanisms of action to continuously feed its internal development programs, further leveraging the Unigen platform.

Financial Performance and Liquidity: Fueling Future Growth

Compugen's financial performance reflects its stage as a clinical-stage biotechnology company, with revenues primarily driven by milestone payments from its strategic collaborations. For the second quarter of 2025, revenues were approximately $1.3 million, a decrease from $6.7 million in the comparable period of 2024. This fluctuation is largely due to the timing of recognizing portions of upfront and IND milestone payments from the Gilead (GILD) license agreement. Similarly, first-quarter 2025 revenues were approximately $2.3 million, slightly down from $2.6 million in Q1 2024. For the full year 2024, total revenue stood at approximately $27.9 million, a decrease from $33.5 million in 2023, which included portions of the upfront and IND milestone payments from Gilead (GILD) and a $5 million clinical milestone from AstraZeneca (AZN).
The company reported a net loss of approximately $7.3 million in Q2 2025 and $7.2 million in Q1 2025. For the full year 2024, the net loss improved to approximately $14.2 million from $18.8 million in 2023.

Research and development (R&D) expenses were approximately $5.6 million in Q2 2025, compared to $6.2 million in Q2 2024. The decrease in R&D expenses for 2024, which totaled $24.8 million compared to $34.47 million in 2023, was primarily due to the reclassification of GS-0321 expenses to cost of revenues and lower CMC and IND-enabling activities for GS-0321, partially offset by an increase in other clinical expenses.

Compugen's TTM Gross Profit Margin is 62.33%, while its Operating Profit Margin and Net Profit Margin remain negative at -89.46% and -87.45%, respectively, reflecting its significant investment in R&D as a clinical-stage company.

A critical aspect of Compugen's investment thesis is its robust liquidity. As of June 30, 2025, the company held approximately $93.9 million in cash, cash equivalents, short-term bank deposits, and investments in marketable securities. This strong cash position, coupled with no debt, provides a solid financial foundation. Management explicitly guides that this cash runway is expected to fund operating plans into 2027, assuming no further cash inflows. This runway is crucial for advancing the COM701 platinum-sensitive ovarian cancer trial, supporting the progression of GS-0321 in the clinic, and continuing investment in the early-stage pipeline. The cash balance at the end of 2024 notably included a $60 million upfront payment and a $30 million IND milestone payment from Gilead (GILD), alongside $15 million in milestone payments from AstraZeneca (AZN). This financial stability is paramount for a biotechnology company at Compugen's stage, enabling it to pursue its ambitious clinical development programs without immediate concerns of dilution.

Risks and Outlook

While Compugen presents a compelling investment narrative, several risks warrant consideration. The TIGIT antibody class has faced setbacks, with study discontinuations primarily involving Fc-active TIGIT antibodies, leading to skepticism. Although Compugen advocates for its Fc-inactive approach, the success of AstraZeneca's rilvegostomig in Phase III trials is crucial for validating the TIGIT class and unlocking further opportunities for Compugen. Clinical trial outcomes for COM701 in ovarian cancer, including the interim analysis in H2 2026, are inherently uncertain, and any negative results could significantly impact the stock. The company's revenue generation remains heavily reliant on milestone payments from partnerships, making it susceptible to delays or failures in partner programs.

Despite these risks, the outlook for Compugen is characterized by several potential catalysts. The interim analysis of the COM701 MAIA-ovarian trial in H2 2026 is a key near-term event, with positive data potentially paving the way for regulatory discussions and broader clinical development. AstraZeneca's extensive Phase III program for rilvegostomig, with estimated peak year revenues exceeding $5 billion, represents a substantial long-term revenue source for Compugen through milestones and royalties. Upcoming data presentations from AstraZeneca (AZN) at ESMO and ASCO 2025 will provide further insights into rilvegostomig's potential. The ongoing progression of GS-0321 in Phase I, under the Gilead (GILD) partnership, continues to validate Compugen's discovery platform. The recent leadership transition, with Dr. Anat Cohen-Dayag moving to Executive Chair and Dr. Eran Ophir assuming the CEO role, is intended to strengthen the company's strategic focus and execution for its next phase of growth.

Conclusion

Compugen Ltd. stands at a pivotal juncture, leveraging its innovative AI/ML-powered Unigen platform to address significant unmet needs in cancer immunotherapy. The company's strategic focus on its differentiated pipeline, particularly the advancement of COM701 in platinum-sensitive ovarian cancer and the progress of its partnered programs, rilvegostomig and GS-0321, forms the core of its investment thesis. While the inherent risks of clinical development and competitive pressures in the immuno-oncology space are present, Compugen's robust cash position, strategic collaborations, and commitment to novel mechanisms of action position it for potential long-term value creation. The upcoming interim analysis for COM701 in 2026 and the continued progression of AstraZeneca's rilvegostomig program are critical indicators for investors to monitor, as these milestones could significantly shape Compugen's trajectory and validate its technological leadership in the evolving landscape of cancer treatment.