Earnings call transcript: Compugen Q2 2025 sees revenue miss, EPS surprise

Compugen Ltd. reported its second-quarter earnings for 2025, revealing a mixed financial performance. The company posted an earnings per share (EPS) of -$0.08, which was below the forecast of -$0.06, resulting in a 33.33% negative surprise. Meanwhile, revenue fell significantly short of expectations, coming in at $1.26 million against a forecast of $3.31 million, marking a revenue surprise of -61.93%. Following these results, the company’s stock experienced a pre-market decline of 1.37%, with the price dropping from $1.46 to $1.44. According to InvestingPro analysis, the company maintains a "FAIR" overall financial health score of 2.5 out of 5, and current indicators suggest the stock may be undervalued at current levels.

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Key Takeaways

• Compugen’s Q2 2025 revenue fell short by 61.93%, with a notable decline from the previous year.
• The company reported a larger-than-expected EPS loss, surprising by 33.33%.
• Stock price dropped 1.37% in pre-market trading following the earnings announcement.
• Compugen continues to advance its pipeline with new trials and innovations.
• Strategic partnerships and potential milestone payments remain a focus.

Company Performance

Compugen’s overall performance in Q2 2025 reflected a challenging environment, primarily driven by a substantial drop in revenue compared to the same period last year. The company’s focus continues to be on innovation and expanding its clinical trials, with significant efforts in the development of COM701 and GS-zero three two one. Despite the financial setback, Compugen maintains a robust cash position, with a balance of $93.9 million, ensuring its operations are funded into 2027. InvestingPro data shows the company holds more cash than debt on its balance sheet, with a strong current ratio of 4.74, indicating solid short-term financial stability.

Financial Highlights

• Revenue: $1.26 million, down from $6.7 million in the same quarter of 2024.
• Earnings per share: -$0.08, compared to -$0.02 in Q2 2024.
• Research and development expenses: $5.6 million, down from $6.2 million in 2024.
• Net loss: $7.3 million, compared to $2.1 million in Q2 2024.

Earnings vs. Forecast

Compugen’s Q2 2025 earnings per share of -$0.08 was below the forecasted -$0.06, marking a 33.33% negative surprise. This deviation indicates a more significant loss than analysts had anticipated. The revenue miss was even more pronounced, with actual revenue of $1.26 million falling short of the $3.31 million forecast by 61.93%.

Market Reaction

Following the earnings release, Compugen’s stock experienced a 1.37% decline in pre-market trading. The stock price fell from $1.46 to $1.44. This movement reflects investor concerns over the substantial revenue miss and larger-than-expected EPS loss. The stock is currently trading closer to its 52-week low of $1.13, indicating cautious market sentiment. InvestingPro analysis reveals analyst targets ranging from $4 to $13, suggesting potential upside, though the stock’s beta of 2.62 indicates higher volatility than the market average.

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Outlook & Guidance

Looking forward, Compugen is focusing on advancing its early-stage pipeline and aims to share interim analysis of the COM701 trial in 2026. The company plans to present pooled phase one trial data at the European Society for Medical Oncology (ESMO) and continues to explore first-in-class drugs with novel mechanisms.

Executive Commentary

Anat Cohen Dayarc, CEO, emphasized the company’s innovative approach, stating, "We’re leveraging UniGen, a validated AI/ML-powered computational target discovery platform to identify novel mechanisms to activate the immune system against cancer." CFO David Sivulman reassured investors about the company’s financial stability, noting, "Cash runway, assuming no further cash inflows, is expected to fund our operating plans into 2027."

Risks and Challenges

• Revenue volatility: The significant revenue miss highlights potential challenges in revenue generation.
• Competitive market: Increasing competition in the ovarian cancer treatment space.
• Financial losses: Continuous net losses may impact investor confidence.
• Operational risks: Expanding clinical trials and maintaining innovation require substantial resources.
• Market conditions: Broader economic factors could affect funding and market opportunities.

Q&A

During the earnings call, analysts inquired about the ongoing patient enrollment in the ovarian cancer trial and the broader market opportunity in the platinum-sensitive maintenance setting. Executives also discussed the potential applications of COM701 and the platform’s capability to identify novel targets, showcasing the company’s strategic focus on innovation.

Full transcript - Compugen Ltd (CGEN) Q2 2025:

Conference Operator: Ladies and gentlemen, thank you for joining us today. Welcome to the Compugen Ltd. Second Quarter twenty twenty five Financial 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 Yvonne Norton, vice president, head of investor relations and corporate communications.

Yvonne Norton, Vice President, Head of Investor Relations and Corporate Communications, Compugen: Thank you, operator, and thank

Conference Operator: you all for joining us on the call today. Joining me from Competence for the prepared remarks are doctor Anat Cohen Dayarc, president and chief executive officer and David Sivulman, Chief Financial Officer. Doctor. Michelle Malare, Chief Medical Officer and Doctor. Arana O’Fear, Chief Scientific Officer, will join us for the Q and A.

Before we begin, we’d like to remind you that during this call, the company may make projections or forward looking statements regarding future events, business outlook, development efforts and their potential outcome, the company’s discovery platform, anticipated progress and plans, results and timelines for our programs, financial and accounting related matters, as well as statements regarding our cash position and cash runway. We wish to caution you that such statements reflect only the company’s current beliefs, expectations and assumptions, but actual results, performance or achievements of the company may differ materially. These statements are subject to known and unknown risks and uncertainties, and we refer you to our SEC filings for more details on these risks, including the company’s most recent annual report on Form 20 F. The company undertakes no obligation to update projections and forward looking statements in the future. With that, I’ll turn the call over to Anat.

Thank you, Yvonne, and a warm welcome to everyone joining our call today. Today marks my last quarterly call as president and CEO of Configen, and I could not be prouder or more confident as I passed the leadership reigns into the exceptional hands of Iran. I’m excited at the opportunity to take on the newly created position of executive chair where my focus will be on competence corporate strategy and strategic collaborations. We believe this leadership combination provides a strong foundation for the company’s next phase of growth. Before I provide an update on our progress in this quarter, I’d like to first share some high level reflections on the current landscape and why we believe Competent is well positioned for future growth.

Immunotherapy has been tremendously successful and is extending the lives of many cancer patients with KEYTRUDA standing out as the top selling drug. However, significant unmet medical need persists with many patients still lacking effective treatment options. As a result, we’re seeing a shift in how immunotherapy is being approached driven by a focus on novel mechanisms of action, innovative combination, and new modalities aimed at enhancing the frequency and safety across multiple cancer sites. This is precisely where Competent’s differentiated approach aims to create significant value. We’re leveraging UniGen, a validated AIML powered computational target discovery platform to identify novel mechanisms to activate the immune system against cancer.

In addition, we’re advancing our pipeline of differentiated immuno oncology therapies with the goal to transform patient outcomes and deliver meaningful clinical and commercial impact. In the clinic, we have our potential first in class immune checkpoint inhibitor COM701, in addition to validating partnerships with the potential for a total of over $1,000,000,000 in milestone payments and tiered royalties on future sales with both AstraZeneca on bisphosphate grade megastomy and Gilead on anti IL-eighteen binding protein g s zero three two one. We have a solid balance sheet with $93,900,000 in cash at the June 2025 and expected cash run rate into 2027. With our leadership expansion, a strategically differentiated pipeline, and operational focus, we believe that Competent is well positioned to capitalize on potential growth opportunities ahead. Now turning to the progress we have made this quarter.

We continue to advance our immuno oncology clinical and early stage pipeline programs, starting with our potential first in class anti PVRIG antibody COM701. The first patient was dosed in my ovarian, our maintenance immunotherapy trial in platinum sensitive ovarian cancer. We continue to make progress opening sites across The US and Israel, and we aim to share interim analysis from this sub trial in the 2026. As a reminder, this is the first sub trial of our adaptive platform trial comparing COM701 maintenance therapy to placebo in sixty patients with relapsed platinum sensitive ovarian cancer. There is an unmet medical need with no standard of care treatment options for this patient population, progressing post PARP inhibitors and or bevacizumab, or who are not candidates for such treatments.

We have observed increased competition in this space, primarily from drug candidates evaluated in the platinum resistant ovarian cancer setting. This reflects the recognized and significant need to improve treatment options for these patients. In this earlier stage population, platinum sensitive ovarian cancer, safety becomes an even more critical consideration along with efficacy within the maintenance setting aimed specifically on delaying time to disease progression. We believe that advancing COM701 in the maintenance setting of platinum sensitive ovarian cancer represents a compelling opportunity to demonstrate its potential advantage in terms of durability of response and tolerability. As previously communicated, we view a three month improvement over the median progression free survival of the placebo as clinically meaningful.

Positive data from this trial could support a broader clinical development program aimed at addressing a significant unmet medical need. At ESMO this year, we plan to present a pooled analysis of our three previously reported phase one trials, reflecting clinical benefit of COM701 as monotherapy and in combination in patients with heavily pretreated platinum resistant ovarian cancer. This data form part of our rationale to advance COM701 in our ongoing platinum sensitive ovarian cancer adaptive platform trial. Moving next to the TIGIT landscape. Despite failures in the TIGIT space, it is notable that some companies are advancing differentiated TIGIT programs.

For example, AlcoGilead is advancing an anti TIGIT program. In addition, AstraZeneca is advancing ribogastomy, which is an anti reduced anti p d one TIGIT bispecific, the t g component of which is derived from Competence COM902. AstraZeneca has specifically designed and engineered ribogastomy with a unique mechanism of action to harness cooperative binding of both p one and TIGIT to drive enhanced immune responses. We’ve consistently advocated that anti inactive antibodies may serve as the better antibody format for targeting TIGIT by providing a potential safety advantage in certain patient populations, which could support a potential efficacy advantage due to patient durability on study treatment. We believe that successful phase three data would validate TIGIT antibodies as a drug class, change the market sentiment, and open new opportunities for Compugen as one of the few companies that have an active inactive clinical stage kidney antibody coming on to.

Clinically, we continue to believe that tgp one blockade in combination with the PVRIG inhibitor makes pending use of tgpd1 to less inflamed PD L1 low tumor, and positive tgpd1 data may present additional opportunities for us. In addition, earlier this year, our partner AstraZeneca initiated their tenth phase three clinical trial with ribogastomy. And after this year, AstraZeneca presented encouraging early data from trials evaluating ribogastomy in combination with the ADC data GHD in non small cell lung cancer and in combination with chemotherapy in hepatobiliary cancer. This data, along with the data presented at the World Conference of Lung Cancer and ESMO last year, highlights ribogastomy as a potential IO backbone to future drug combinations. Coming up at ECMO this October, AstraZeneca plans to present longer term follow-up data evaluating ribogastomy monotherapy in non small cell cancer as a poster presentation and first data in bladder cancer in combination with data ZXD as a mini oral session.

The potential commercial opportunity for rinsagastamir is substantial with AstraZeneca estimating non risk adjusted p q revenues target of more than $5,000,000,000. AstraZeneca’s broad development strategy for ribogastinib to replace existing p d one, p d l one inhibitor represents a significant potential revenue source for us as we’re eligible for both future milestone payments and mid single digit tiered royalty from future sales. To date, we have received milestone payments of $30,500,000 and remain eligible to receive up to $170,000,000 in regulatory and commercial milestone payments. Moving next to g s zero three two one, formerly known as COM five zero three, a potential first in class anti IL-eighteen binding protein antibody licensed to deal with. D s zero three two one represents a novel approach to harness silencing pathway biology for the treatment of cancer, potentially overcoming the mutations presented by administration of therapeutic cytokines.

The phase one trial is progressing as planned. Finally, beyond our clinical stage programs, we remain committed to advancing our extensive and differentiated early stage pipeline focused on potential first in class drugs and novel mechanisms of action designed to activate the immune system against cancer. With a diverse pipeline and strong focus on execution in 2025, we believe Competent is well positioned for growth. Of course, none of this would be possible without our highly committed talented team here at Competent, who continuously perform at the highest levels of excellence. With that, I will hand over to David for the financial update before we open the floor for q and a.

Anat Cohen Dayarc, President and CEO, Compugen: Thank you, Anat. I am pleased to say that we are advancing in 2025 with a solid balance sheet. Cash runway, assuming no further cash inflows, is expected to fund our operating plans into 2027, and we anticipate using this runway to advance our COM701 platinum sensitive ovarian cancer trial and to support the progression of GS-three twenty one in the clinic together with continued investment in our early stage pipeline. Going into the details, I will start with our cash balance. As of 06/30/2025, we had approximately $93,900,000 in cash, cash equivalents, short term bank deposits and investments in marketable securities.

Revenues for the 2025 were approximately $1,300,000 compared to approximately $6,700,000 of revenue for the comparable period in 2024. The revenues for the 2025 reflect the recognition of portions of both the upfront payment and the IND milestone payment from the license agreement with Gilead, while in the 2024, they reflect portion of the upfront payment from the license agreement with Gilead and the clinical milestone from the license agreement with AstraZeneca. Expenses

David Sivulman, Chief Financial Officer, Compugen: for

Anat Cohen Dayarc, President and CEO, Compugen: the 2025 were in line with our plans. R and D expenses for the 2025 were approximately $5,600,000 compared to approximately $6,200,000 in the 2024. Our G and A expenses for both the 2025 and 2024 were approximately $2,200,000 For the 2025, our net loss was approximately $7,300,000 or $08 per basic and diluted share compared to a net loss of approximately $2,100,000 or $02 per basic and diluted share in the 2024. With that, I will hand over to the operator to open the call for questions.

Conference Operator: Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please press 1. If you wish to decline from the polling process, please press 2. If you are using speaker equipment, kindly lift the handset before pressing the numbers.

Please stand by while we poll for your questions. The first question will be from Keaton Wiley from Stifel. Please go ahead.

Yvonne Norton, Vice President, Head of Investor Relations and Corporate Communications, Compugen: Good morning. This is Toby on for Steve. Thank you for taking our questions. So we we just have two from us. The first one is related to plasma sensitive ovarian cancer trial.

Can you please just briefly, like, more of, like, a overall general comment on the ongoing dynamics of patient enrollment? And I don’t remember if you guys have actually communicated how many sites you were planning to activate. And I guess what I’m trying to ask you is that what maybe, like, what portion of those sites are currently active so far? And second question is related to the small presentation. I understand that you guys are planning on presenting a proof data analysis.

What do you think investors should focus on that presentation? And would you would this presentation actually include any biomarker data analysis? Thank you.

Conference Operator: Thank you, Michelle. Would you like to ask the correct question?

Yvonne Norton, Vice President, Head of Investor Relations and Corporate Communications, Compugen: Yes. I will be happy to answer those questions. So at this point in time, we have not disclosed the number of sites that we are using for the trial, but we have open sites in both The US and in Israel. And we are actively enrolling with a high level of investigator enthusiasm. And we do have aggressive you know, we have aggressive timelines and and plans, and we are working to continue to meet those.

Regarding the question on what should be focused on with respect to our presentation at ESMO, The one of the things that we were trying to focus on was understand deeper about the patients that had had a response on our prior study. So by pulling it, it gives us the opportunity to try and characterize more about the efficacy and the safety and, you know, more of that information will be presented during Admiral. Okay. Susan, are you with us?

Anat Cohen Dayarc, President and CEO, Compugen: Hello?

Conference Operator: Yes, please. The is from next Leland Gershell from Oppenheimer. Go ahead, please.

David Sivulman, Chief Financial Officer, Compugen: Hey. Thanks for taking my questions. Congrats on all the progress. Manav, just just wanted to ask because we look forward to the upcoming reveal on the troponin ten two m r o three in bladder, which would be, you know, potentially opening that as a another development indication for further advancement. Do you know what we expect to see?

Will it be complete response data, durability data? What what do you envision as the potential for the program to maybe move into further development? Kind of a follow-up. Thank you.

Conference Operator: Thank you, Dylan. And, actually, AstraZeneca did not guide into what they’re going to present the test mode for this study or for the other studies. So, obviously, we cannot comment on their behalf. I’ll just remind that, you know, and ASCO they presented data for nonstop lung cancer and also for hepatovidia. It’s just the data was showing that, you know, it it was encouraging to see that the potential for brinzogastinib to serve an iodexolone as part of the combination.

The data and letter is going to be in combination with the AC. We’re waiting as well. We’re looking forward to see the data. But we cannot have guidance sent instead of AC.

David Sivulman, Chief Financial Officer, Compugen: Alright. Okay. We look forward to to that. And then if you could just remind us of what you see as as a market opportunity in the platinum sensitive maintenance setting for platinum. Thank you.

Conference Operator: Yeah. Michelle, would you like to do that?

Yvonne Norton, Vice President, Head of Investor Relations and Corporate Communications, Compugen: Yeah. So the initial opportunity is based on patients who are in second line or third line requiring maintenance. The study is requiring patients who have who have received previously at least two prior lines of platinum chemotherapy, and those patients who are eligible for PARP inhibitors or BEV must have received those to be able to come on to the clinical trial. So this brings us to a mix between both patients who would be eligible for maintenance in both second and third line, and that’s approximately eight to 12,000 patients based on, you know, epidemiology data that’s available. I think the other point to highlight is in the event that single agent seven zero one works in maintenance, it opens an avenue for us to also combine with other combinations and go after a much broader ovarian cancer patient population.

So I think the initial opportunity might seem limited, but the steps that we will take that we are taking gives potential for the broader population.

David Sivulman, Chief Financial Officer, Compugen: Perfect. Great. Thank you for taking my question.

Conference Operator: Next question will be from Dana Gravesh from Leerink Partners.

David Sivulman, Chief Financial Officer, Compugen: Hey, guys. Thanks for the question. You got Bill on for Dana. Just a couple for me. So what expectations do you have from Merck’s successful Phase III in ovarian?

And how does that change your current approach? And the second question is your current clinical assets provide pretty good validation of your your platform’s ability to identify targets. Can you give us a sense of what’s coming down the pipeline and when we may expect to hear some details? Thank you.

Conference Operator: Yeah. I guess I’m I guess we have to take the first one and then around the relation the second person.

Yvonne Norton, Vice President, Head of Investor Relations and Corporate Communications, Compugen: Okay. Great. So for the Merck study, it’s exciting that they were able to demonstrate that with adding a checkpoint inhibitor to patients’ regimen that this both appears as an overall survival advantage. Of course, we haven’t seen the data. What I would like to highlight though is the Merck study is focused in platinum resistant patients.

So it gives us some hint to potential activity or seeing activity in the earlier lines of treatment. But keep in mind, it is a different patient population to where we are going because the patients that we’re evaluating in our study are patent sensitive. So it doesn’t specifically change our approach at this point in time. It’s just it’s nice to see that there is still potential for checkpoint inhibitors in in the right kind of patient population and the right kind of combination. I hand back to Anat and Mehran about the other question.

David Sivulman, Chief Financial Officer, Compugen: Thank you, Michelle. So for the early pipeline, so in these words, using our unigenvalidate protection platform that yielded the the p ver g and and compile of three, and we work hard to bring more assets. For many reasons, including competitive ones, we prefer not to disclose too many details to keep that as far as that at this point in time. But, definitely, this is the work on knowing and our traditional platform, which is validated as assets growth It’s working hard to bring more assets in different ways in the new oncology. Got it.

Thank you.

Conference Operator: Next question will be from Charles Wallace from HCW. Go ahead, Charles.

David Sivulman, Chief Financial Officer, Compugen: Hi. Thanks for taking my question. On COM701 and the global maintenance ovarian study, can you provide some more color on the interim analysis that you have planned for the ’26? And do you expect at this time that the study will be fully enrolled?

Conference Operator: Thank you. Okay. So just to explain again, so this the

Yvonne Norton, Vice President, Head of Investor Relations and Corporate Communications, Compugen: study is is a adaptive trial design. And because we’re looking for a three month improvement, we still believe that the interim analysis would happen as we’ve already previously guided in terms of 2026. Yes. The study will be fully enrolled, and the interim analysis is to evaluate for futility and also allow us to characterize magnitude of effect size for code seven zero one.

David Sivulman, Chief Financial Officer, Compugen: Alright. Thanks for taking my question.

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