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COMPUGEN LTD

COMPUGEN LTDCGENEarnings & Financial Report

Nasdaq · biotechnology

Compugen Ltd. is a clinical-stage publicly traded predictive drug discovery and development company headquartered in Israel, with shares traded on the NASDAQ Capital Market and on the Tel Aviv Stock Exchange. Compugen was established as computational drug discovery service provider in 1993. Compugen originally acted as service provider for pharma companies, supplying its software and computational services to predict different types of biological phenomena. It had arrangements with big compan...

What changed in COMPUGEN LTD's 20-F — 2022 vs 2023

Top changes in COMPUGEN LTD's 2023 20-F

669 paragraphs added · 642 removed · 499 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

214 edited+86 added−72 removed354 unchanged
ITEM 3. KEY INFORMATION A. [RESERVED] B. CAPITALIZATION AND INDEBTEDNESS Not applicable. C. REASONS FOR THE OFFER AND USE OF PROCEEDS Not applicable. D. RISK FACTORS An investment in our ordinary shares involves a high degree of risk and many factors could affect our results, financial condition, cash flows and results of operations.
ITEM 3. KEY INFORMATION A. [RESERVED] Not applicable. B. CAPITALIZATION AND INDEBTEDNESS Not applicable. C. REASONS FOR THE OFFER AND USE OF PROCEEDS Not applicable. D. RISK FACTORS An investment in our ordinary shares involves a high degree of risk and many factors could affect our results, financial condition, cash flows and results of operations.
Our business model is primarily based on expected future revenues in various forms, including upfront fees, research funding, in-kind funding, milestone payments, license fees, royalties on product sales and other revenue sharing payments from commercialization of products by third parties, pursuant to various forms of collaborations for our novel targets and related drug product candidates at various stages of research and development.
Our business model is primarily based on expected future revenues in various forms, including upfront fees, research funding, in-kind funding, milestone payments, license fees, royalties on product sales and other revenue sharing payments from development and commercialization of products by third parties, pursuant to various forms of collaborations for our novel targets and related drug product candidates at various stages of research and development.
Mergers and acquisitions in the biopharmaceutical industry could result in even more resources being concentrated among a small number of our competitors or change in potential acquirers’ preferences.
Mergers and acquisitions in the biopharmaceutical industry could result in even more resources being concentrated among a small number of our competitors or a change in potential acquirers’ preferences.
In addition, although we have demonstrated success in validating our predictive computational discovery capabilities with product candidates in human clinical trials, major pharmaceutical companies may be hesitant to enter into early-stage collaborations based on newly discovered targets, more so if discovered by computer prediction and has no or limited published scientific support, as opposed to drug targets backed with human clinical trial data, or product candidates with significant published experimental validation.
In addition, although we have demonstrated success in validating our predictive computational discovery capabilities with product candidates in human clinical trials, major pharmaceutical companies may be hesitant to enter into early-stage collaborations based on newly discovered targets, more so if discovered by computer prediction and has no or limited published scientific support, as opposed to drug targets backed with human clinical trial data, or product candidates with significant published experimental validation and scientific support.
Risks Related to Operations in Israel Conditions in the Middle East and in Israel may adversely affect our operations. Our headquarters and research and development facilities are located in Israel. Accordingly, we are directly influenced by the political, economic and military conditions affecting Israel.
Risks Related to Operations in Israel Conditions in Israel and in the Middle East may adversely affect our operations. Our headquarters and research and development facilities are located in Israel. Accordingly, we are directly influenced by the political, economic and military conditions affecting Israel.
Topics taken into account in such assessments include, among others, the company’s efforts and impacts on climate change and human rights, ethics and compliance with law, and the role of the company’s board of directors in supervising various sustainability issues.
Topics taken into account in such assessments include, among others, the company’s efforts and impacts on climate change and human rights, ethics and compliance with the law, and the role of the company’s board of directors in supervising various sustainability issues.
It is also possible that, even if one or more of our therapeutic product candidates has a beneficial effect, that effect will not be detected during clinical evaluation as a result of one or more of a variety of factors, including the size, duration, design, measurements, conduct or analysis of our clinical trials, patient monitoring, the dosing we choose and other factors. 8 Any inability to successfully complete preclinical and clinical development could result in additional costs to us, or any collaborators and impair our ability to generate revenues from product sales, development, regulatory and commercialization milestones and royalties.
It is also possible that, even if one or more of our therapeutic product candidates has a beneficial effect, that effect will not be detected during clinical evaluation as a result of one or more of a variety of factors, including the size, patient population, duration, design, measurements, conduct or analysis of our clinical trials, patient monitoring, the dosing we choose and other factors. 8 Any inability to successfully complete preclinical and clinical development could result in additional costs to us, or any collaborators, and impair our ability to generate revenues from product sales, development, regulatory and commercialization milestones and royalties.
If we become aware of the existence of third-party intellectual property rights only after we have commenced a particular program, we may have to forgo such project after having invested substantial resources in it or, to the extent such third-party right has not expired, obtain a license which may involve substantial financial resources. 33 In the future, we may need to obtain additional licenses of third-party technology or other rights that may not be available to us or are available only on commercially unreasonable terms, and which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated.
If we become aware of the existence of third-party intellectual property rights only after we have commenced a particular program, we may have to forgo such project after having invested substantial resources in it or, to the extent such third-party right has not expired, obtain a license which may involve substantial financial resources. 33 We may need to obtain additional licenses of third-party technology or other rights that may not be available to us or are available only on commercially unreasonable terms, and which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated.
Events that may prevent successful or timely completion of clinical development include: • inability to generate sufficient preclinical, toxicology, or other scientific data to support the initiation of clinical trials; • lack of authorization from regulators or institutional review boards, or IRBs, or ethics committees to allow us or our investigators to amend a clinical trial or commence a clinical trial or conduct a clinical trial at a prospective trial site or continue such clinical trial; • delays in sufficiently developing, characterizing, or controlling a manufacturing process suitable for clinical trials; • inability to generate sufficient quantities or quality of our drug substance or drug product to support the initiation or continuation of clinical trials; • delays in reaching a consensus with collaborators or regulatory agencies on trial design or trial amendment; • delays in reaching agreement on acceptable terms with prospective CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • imposition of a temporary or permanent clinical hold by the FDA, or a similar delay imposed by foreign regulatory agencies for a number of reasons, including after review of an IND, other application or amendment; (i) as a result of a new safety finding that presents unreasonable risk to clinical trial participants; (ii) a negative finding from an inspection of our clinical trial operations or trial sites; (iii) developments on trials conducted by competitors for related technology that raises FDA concerns about risk to patients of the technology broadly; or (iv) if FDA finds that the investigational protocol or plan is clearly deficient to meet its stated objectives; • clinical trials of any product candidates may fail to show safety or efficacy, produce negative or inconclusive results and we may decide, or regulators may require us, to conduct additional preclinical studies or clinical trials or we may decide to abandon product development programs; • difficulty collaborating with patient groups and investigators; • failure by our CROs, other third parties, or us to adhere to clinical trial and related regulatory requirements; • failure to perform in accordance with the FDA’s Good Clinical Practice, or GCP, requirements, or similar applicable regulatory guidelines in other countries; • failure to perform in accordance with the FDA’s Good Manufacturing Practice, or GMP, requirements, or similar applicable regulatory guidelines in other countries; • the number of patients required for clinical trials of any product candidates may be larger than we anticipate or can financially support, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; • delays in having patients complete their participation in a trial or return for post-treatment follow-up; • occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits; 10 • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; • changes in the standard of care or in the regulatory landscape on which a clinical development plan was based, which may require new or additional trials; • the cost of clinical trials of our product candidates being greater than we anticipate; • clinical trials of our product candidates producing negative or inconclusive results, or early results that will not be repeated in larger or future cohorts, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon product development programs; • choosing the wrong dosing regimen and/or the wrong drug combination; • delays or failure to secure supply agreements with suitable reagent suppliers, or any failures by suppliers to meet our quantity or quality requirements for necessary reagents; and • delays in manufacturing, testing, releasing, validating, or importing/exporting sufficient stable quantities of our product candidates for use in clinical trials or the inability to do any of the foregoing.
Events that may prevent successful or timely completion of clinical development include: • inability to generate sufficient preclinical, toxicology, or other data to support the initiation of clinical trials; • lack of authorization from regulators or institutional review boards, or IRBs, or ethics committees to allow us or our investigators to amend a clinical trial or commence a clinical trial or conduct a clinical trial at a prospective trial site or continue such clinical trial; • delays in sufficiently developing, characterizing, or controlling a manufacturing process suitable for clinical trials; 9 • inability to generate sufficient quantities or quality of our drug substance or drug product to support the initiation or continuation of clinical trials; • delays in reaching a consensus with collaborators or regulatory agencies on trial design or trial amendment; • delays in reaching agreement on acceptable terms with prospective CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • imposition of a temporary or permanent clinical hold by the FDA, or a similar delay imposed by foreign regulatory agencies for a number of reasons, including after review of an IND, other application or amendment; (i) as a result of a new safety finding that presents unreasonable risk to clinical trial participants; (ii) a negative finding from an inspection of our clinical trial operations or trial sites; (iii) developments on trials conducted by competitors for related technology that raises FDA concerns about risk to patients of the technology broadly; or (iv) if FDA finds that the investigational protocol or plan is clearly deficient to meet its stated objectives; • clinical trials of any product candidates may fail to show safety or efficacy, produce negative or inconclusive results and we may decide, or regulators may require us, to conduct additional preclinical studies or clinical trials or we may decide to abandon product development programs; • difficulty collaborating with patient groups and investigators; • failure by our CROs, other third parties, or us to adhere to clinical trial and related regulatory requirements; • failure to perform in accordance with the FDA’s Good Clinical Practice, or GCP, requirements, or similar applicable regulatory guidelines in other countries; • failure to perform in accordance with the FDA’s Good Manufacturing Practice, or GMP, requirements, or similar applicable regulatory guidelines in other countries; • the number of patients required for clinical trials of any product candidates may be larger than we anticipate or can financially support, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; • delays in having patients complete their participation in a trial or return for post-treatment follow-up; • occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits; • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; • changes in the standard of care or in the regulatory landscape on which a clinical development plan was based, which may require new or additional trials; • the cost of clinical trials of our product candidates being greater than we anticipate; • clinical trials of our product candidates producing negative or inconclusive results, or early results that will not be repeated in larger or future cohorts or randomized studies, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon product development programs; • choosing the wrong dosing regimen and/or the wrong drug combination; • delays or failure to secure supply agreements with suitable reagent suppliers, or any failures by suppliers to meet our quantity or quality requirements for necessary reagents; and • delays in manufacturing, testing, releasing, validating, or importing/exporting sufficient stable quantities of our product candidates for use in clinical trials or the inability to do any of the foregoing.
Failure or perceived failure to comply with current or future obligations could lead to government enforcement actions (which could include civil or criminal penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business. • If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical product candidates would be adversely affected. 2 • In the future, we may need to obtain additional licenses of third-party technology or other rights that may not be available to us or are available only on commercially unreasonable terms, and which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated. • We, or potential collaborators and licensees, may infringe third-party rights and may become involved in litigation, which may materially harm our business. • We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful. • Conditions in the Middle East and in Israel may adversely affect our operations. • Our results of operations may be adversely affected by the exchange rate fluctuations between the dollar and the New Israeli Shekel. • We may not be able to meet the continued listing standards of The Nasdaq Stock Market LLC, or Nasdaq, which require a minimum closing bid price of $1.00 per share, which could result in our delisting and negatively impact the price of our ordinary shares and our ability to access the capital markets. • Future sales of our ordinary shares or securities convertible or exchangeable for our ordinary shares may depress our share price. • If we sell ordinary shares in future financings, shareholders may experience immediate dilution and, as a result, our share price may decline. • Our share price and trading volume have been volatile and may be volatile in the future and that could limit investors’ ability to sell our shares at a profit and could limit our ability to successfully raise funds. • If we are a passive foreign investment company, or PFIC, our U.S. shareholders may be subject to adverse U.S. federal income tax consequences.
Failure or perceived failure to comply with current or future obligations could lead to government enforcement actions (which could include civil or criminal penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business. • If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical product candidates would be adversely affected. 2 • We may need to obtain additional licenses of third-party technology or other rights that may not be available to us or are available only on commercially unreasonable terms, and which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated. • We, or potential collaborators and licensees, may infringe third-party rights and may become involved in litigation, which may materially harm our business. • We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful. • Conditions in Israel and in the Middle East may adversely affect our operations. • Our results of operations may be adversely affected by the exchange rate fluctuations between the dollar and the New Israeli Shekel. • We may not be able to meet the continued listing standards of Nasdaq, which require a minimum closing bid price of $1.00 per share, which could result in our delisting and negatively impact the price of our ordinary shares and our ability to access the capital markets. • Future sales of our ordinary shares or securities convertible or exchangeable for our ordinary shares may depress our share price. • If we sell ordinary shares in future financings, shareholders may experience immediate dilution and, as a result, our share price may decline. • Our share price and trading volume have been volatile and may be volatile in the future and that could limit investors’ ability to sell our shares at a profit and could limit our ability to successfully raise funds. • If we are a passive foreign investment company, or PFIC, our U.S. shareholders may be subject to adverse U.S. federal income tax consequences.
These actions may include: • warning letters; • clinical trial holds; • recalls, product seizures or medical product safety alerts; • data lock or order to destroy or not use personal data; • restrictions on, or prohibitions against, marketing such products; • restrictions on importation of such products; • suspension of review or refusal to accept or approve new or pending applications; • withdrawal of product approvals; • injunctions; • civil and criminal penalties and fines; or • debarment or other exclusions from government programs.
These actions may include: • warning letters; • clinical trial holds; • recalls, product seizures or medical product safety alerts; • data lock or order to destroy or not use personal data; • restrictions on, or prohibitions against, marketing such products; • restrictions on importation of such products; 12 • suspension of review or refusal to accept or approve new or pending applications; • withdrawal of product approvals; • injunctions; • civil and criminal penalties and fines; or • debarment or other exclusions from government programs.
Although our approach has resulted in the discovery of several new drug targets and their related potential first-in-class therapeutic product candidates in the field of cancer immunotherapy, they are in early stages of research and development or in clinical stage, with COM701 having entered the clinic in 2018, COM902 which entered the clinic in March 2020 and rilvegostomigwhich entered the clinic in the fourth quarter of 2021.
Although our approach has resulted in the discovery of several new drug targets and their related potential first-in-class or best-in-class therapeutic product candidates in the field of cancer immunotherapy, they are in early stages of research and development or in clinical stage, with COM701 having entered the clinic in 2018, COM902 which entered the clinic in March 2020 and rilvegostomigwhich entered the clinic in the fourth quarter of 2021.
Research and Development, Patents and Licenses – The Israel Innovation Authority.” 40 Being a foreign private issuer exempts us from certain SEC requirements and Nasdaq rules, which may result in less protection that is afforded to investors under rules applicable to domestic issuers. We are a “foreign private issuer” within the meaning of rules promulgated by the SEC.
Research and Development, Patents and Licenses – The Israel Innovation Authority.” Being a foreign private issuer exempts us from certain SEC requirements and Nasdaq rules, which may result in less protection that is afforded to investors under rules applicable to domestic issuers. We are a “foreign private issuer” within the meaning of rules promulgated by the SEC.
The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients that are in line with our inclusions and exclusion criteria and our ability to monitor these patients as required. 7 We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons.
The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients that are in line with our inclusions and exclusion criteria and our ability to monitor these patients as required. We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons.
Furthermore, a manufacturer may possess technology related to the manufacture of our product candidate that such manufacturer owns independently, which would increase our reliance on such manufacturer or require us to obtain a license from such manufacturer in order to have another third-party manufacture our products. 18 Our dependence on collaboration agreements with third parties presents number of risks.
Furthermore, a manufacturer may possess technology related to the manufacture of our product candidate that such manufacturer owns independently, which would increase our reliance on such manufacturer or require us to obtain a license from such manufacturer in order to have another third-party manufacture our products. Our dependence on collaboration agreements with third parties presents number of risks.
We face, for COM701 and COM902, and expect to continue to face for our future therapeutic product candidates, competition from these entities to the extent they develop products that have a function similar or identical to or competing with the function of our therapeutic product candidates in the field of immuno-oncology that may attract our potential collaborators or that may reach the market sooner.
We face, for COM701, COM902, and COM503, and expect to continue to face for our future therapeutic product candidates, competition from these entities to the extent they develop products that have a function similar or identical to or competing with the function of our therapeutic product candidates in the field of immuno-oncology that may attract our potential collaborators or that may reach the market sooner.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time. Patents have a limited lifespan.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. 36 Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time. Patents have a limited lifespan.
To the extent any such funding is based on the sale of equity, our existing shareholders would experience dilution of their shareholdings. • We cannot provide assurance that our business model will succeed in generating substantial revenues. • In the near term, we are highly dependent on the success of COM701 and of COM902.
To the extent any such funding is based on the sale of equity, our existing shareholders would experience dilution of their shareholdings. • We cannot provide assurance that our business model will succeed in generating substantial revenues. • In the near term, we are highly dependent on the success of COM701, COM902 and COM503.
If a third-party accuses us, our collaborator or a potential collaborator and licensee of infringing its intellectual property rights or if a third-party commences litigation against us, our collaborator or a potential collaborator and licensee for the infringement of patent or other intellectual property rights, we may incur significant costs in obtaining a license or defending such action, whether or not we ultimately prevail.
If a third-party accuses us, our collaborators or a potential collaborator and licensee of infringing its intellectual property rights or if a third-party commences litigation against us, our collaborators or a potential collaborator and licensee for the infringement of patent or other intellectual property rights, we may incur significant costs in obtaining a license or defending such action, whether or not we ultimately prevail.
Entering into collaborations with product candidates and targets at an early validation stage or drug discovery stage is significantly more challenging than identifying partnerships for later-stage products that would have a more complete data package to support its clinical and business potential.
Entering into collaborations with product candidates and targets at an early validation stage or drug discovery stage is significantly more challenging than identifying partnerships for later-stage products that would have a more complete data package to support its clinical, business and commercial potential.
Since our competitors develop products that compete with COM701 or COM902 or any future product candidates we develop, our ability to develop and commercialize these product candidates may diminish substantially, which could have a material adverse effect on our business prospects, financial condition, and results of operations.
Since our competitors develop products that compete with COM701, COM902 or COM503 or any future product candidates we develop, our ability to develop and commercialize these product candidates may diminish substantially, which could have a material adverse effect on our business prospects, financial condition, and results of operations.
Climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere could present risks to our operations. For example, we have significant operations in California, where serious drought has made water less available and more costly and has increased the risk of wildfires.
Climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere could present risks to our operations. For example, we have operations in California, where serious drought has made water less available and more costly and has increased the risk of wildfires.
Any decrease in the price of our ordinary shares on one market could cause a decrease in the trading price of our ordinary shares on the other market. 44 If we are a passive foreign investment company, or PFIC, our U.S. shareholders may be subject to adverse U.S. federal income tax consequences.
Any decrease in the price of our ordinary shares on one market could cause a decrease in the trading price of our ordinary shares on the other market. If we are a passive foreign investment company, or PFIC, our U.S. shareholders may be subject to adverse U.S. federal income tax consequences.
We do not currently have, nor do we plan to acquire, the infrastructure or capability internally to manufacture our preclinical and clinical drug supplies for use in the conduct of pre-clinical testing and our clinical trials, and we lack the resources and the capability to manufacture any of our product candidates on a clinical or commercial scale.
We do not currently have, nor do we plan to acquire, the infrastructure or capability internally to manufacture our preclinical and clinical drug supplies for use in the conduct of preclinical testing and our clinical trials, and we lack the resources and the capability to manufacture any of our product candidates on a clinical or commercial scale.
Any such delisting could adversely affect our ability to obtain financing for the continuation of our operations and could result in the loss of confidence by investors, collaborators and employees. Future sales of our ordinary shares or securities convertible or exchangeable for our ordinary shares may depress our share price.
Any such delisting could adversely affect our ability to obtain financing for the continuation of our operations and could result in the loss of confidence by investors, collaborators and employees. 43 Future sales of our ordinary shares or securities convertible or exchangeable for our ordinary shares may depress our share price.
If we are unable to develop, receive marketing approval for and successfully commercialize COM701 and/or COM902, on our own or with any collaborator, or experience delays as a result of any of these factors or otherwise, our business could be substantially harmed.
If we are unable to develop, receive marketing approval for and successfully commercialize COM701, COM902 and COM503, on our own or with any collaborator, or experience delays as a result of any of these factors or otherwise, our business could be substantially harmed.
Any delays in our preclinical or clinical development programs may harm our business, financial condition and prospects significantly. From time to time we publicly disclose preliminary data from our ongoing clinical trials. As more patient data become available the data and the interpretation of the data may change.
Any delays in our preclinical or clinical development programs may harm our business, financial condition and prospects significantly. 10 From time to time, we publicly disclose preliminary data from our ongoing clinical trials. As more patient data become available the data and the interpretation of the data may change.
The laws are not consistent, and compliance in the event of a widespread data breach is costly. Furthermore, California enacted the California Consumer Privacy Act, or the CCPA, which provides for civil penalties for violations, as well as a private right of action for data breaches.
The laws are not consistent, and compliance in the event of a widespread data breach is costly. 28 Furthermore, California enacted the California Consumer Privacy Act, or the CCPA, which provides for civil penalties for violations, as well as a private right of action for data breaches.
Our prospects are substantially dependent on our ability, or that of any existing and future partners, to manufacture, develop, obtain marketing approval for and successfully commercialize COM701 and COM902 as a stand alone or in combination with other drugs.
Our prospects are substantially dependent on our ability, or that of any existing and future partners, to manufacture, develop, obtain marketing approval for and successfully commercialize COM701, COM902 and COM503 as a stand alone or in combination with other drugs.
As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. 36 Intellectual property rights do not necessarily address all potential threats to our business.
As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. Intellectual property rights do not necessarily address all potential threats to our business.
If our existing shareholders or holders of our options or warrants sell, or indicate an intention to sell, substantial amounts of our ordinary shares in the public market, the trading price of our ordinary shares could decline. The perception in the market that these sales may occur could also cause the trading price of our ordinary shares to decline.
If our existing shareholders or holders of our options sell, or indicate an intention to sell, substantial amounts of our ordinary shares in the public market, the trading price of our ordinary shares could decline. The perception in the market that these sales may occur could also cause the trading price of our ordinary shares to decline.
Claims that we have violated individuals’ privacy rights, failed to comply with privacy or security obligations or breached our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend, could result in adverse publicity and could have a material adverse effect on our business, financial condition, results of operations and prospects. 29 If a successful liability claim or other claim for damages or series of claims is brought against us for uninsured liabilities or in excess of insured liabilities, we could be forced to pay substantial damage awards.
Claims that we have violated individuals’ privacy rights or failed to comply with privacy or security obligations, even if we are not found liable, could be expensive and time consuming to defend, could result in adverse publicity and could have a material adverse effect on our business, financial condition, results of operations and prospects. 29 If a successful liability claim or other claim for damages or series of claims is brought against us for uninsured liabilities or in excess of insured liabilities, we could be forced to pay substantial damage awards.
Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business. 46 Environmental, social and governance matters may impact our business and reputation.
Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business. Environmental, social and governance matters may impact our business and reputation.
We may be subject to liability and may be required to comply with new or existing laws and regulations regulating pharmaceuticals or be subject to substantial fines or penalties if we violate any of these laws or regulations. 30 Risks Related to Intellectual Property.
We may be subject to liability and may be required to comply with new or existing laws and regulations regulating pharmaceuticals or be subject to substantial fines or penalties if we violate any of these laws or regulations. Risks Related to Intellectual Property.
These risks, which typically result in very high failure rates even for successful biopharmaceutical companies, include, among others, the possibility that: • our new target candidates will prove to be inappropriate for treatment of cancer; • our new target candidates will prove to be inappropriate targets for therapeutic product candidates; • our new target candidates will prove to be inappropriate targets for immunotherapy; • we will not succeed in selecting the appropriate tumor type, indication or patient population for the therapeutic product candidate; • we will not succeed in choosing the appropriate mAb for these targets, or the appropriate mAb lead or the appropriate mAb isotype; • we will not succeed in identifying or developing a biomarker or companion diagnostic for our therapeutic product candidates; • we will not succeed in choosing the appropriate drug modality for these targets; • our therapeutic product candidates will fail to progress to preclinical studies or clinical trials; • our therapeutic product candidates will be found to be therapeutically ineffective; • we will not choose or have access to the right drug combination for our therapeutic product candidates; • we will not select or find the appropriate dosing regimen; • our therapeutic product candidates will be found to be toxic or to have other unacceptable side effects or negative consequences; • our therapeutic product candidates will be inferior, or not show added value, compared to competing products or the standard of care; • our early-stage development efforts may provoke competition by others; 14 • our products covered by our collaborations may face internal competition from our partners’ internal pipeline; • we or our collaborators will fail to receive required regulatory approvals; • we or our collaborators will fail to manufacture our therapeutic product candidates in the quantity or quality needed for preclinical studies or clinical trials on a large or commercial scale, on time or in a cost-effective manner or with the drug stability required; • the discovery of drug targets and the discovery, development or commercialization of our therapeutic product candidates will infringe third-party intellectual property rights; • the development, marketing or sale of our therapeutic product candidates will fail because of our inability or failure to protect or maintain our own intellectual property rights; • once a product is commercially available, there will be little or no demand for it for a number of possible reasons, including lack of acceptance by the medical community or by patients, lack of or insufficient coverage and payment by third-party payors, inefficient or insufficient marketing and sales activities or as a result of there being more attractive, less risky or less expensive, products available for the same use; and • the product will be withdrawn from the market, or sales limited due to side effects observed in clinical practice.
These risks, which typically result in very high failure rates even for successful biopharmaceutical companies, include, among others, the possibility that: • we will not be able to discover additional drug targets; • our new target candidates will prove to be inappropriate for treatment of cancer; • our new target candidates will prove to be inappropriate targets for therapeutic product candidates; • our new target candidates will prove to be inappropriate targets for immunotherapy; • we will not succeed in selecting the appropriate tumor type, indication or patient population for the therapeutic product candidate; • we will not succeed in developing or choosing the appropriate mAb for these targets, or the appropriate mAb lead or the appropriate mAb isotype; • we will not succeed in identifying or developing a biomarker or companion diagnostic for our therapeutic product candidates; • we will not succeed in choosing the appropriate drug modality for these targets; • our therapeutic product candidates will fail to progress to preclinical studies or clinical trials; • our therapeutic product candidates will be found to be therapeutically ineffective; • we will not choose or have access to the right drug combination for our therapeutic product candidates; • we will not select or find the appropriate dosing regimen; • our therapeutic product candidates will be found to be toxic or to have other unacceptable side effects or negative consequences; • our therapeutic product candidates will be inferior, or not show added value, compared to competing products or the standard of care; • our early-stage development efforts may provoke competition by others or may face competition by others; • our early-stage development efforts will bear significant delays in the development of additional preclinical stage programs; • our products covered by our collaborations may face internal competition from our partners’ internal pipeline; 14 • we or our collaborators will fail to receive required regulatory approvals; • we or our collaborators will fail to manufacture our therapeutic product candidates in the quantity or quality needed for preclinical studies or clinical trials on a large or commercial scale, on time or in a cost-effective manner or with the drug stability required; • the discovery of drug targets and the discovery, development or commercialization of our therapeutic product candidates will infringe third-party intellectual property rights; • the development, marketing or sale of our therapeutic product candidates will fail because of our inability or failure to protect or maintain our own intellectual property rights; • once a product is commercially available, there will be little or no demand for it for a number of possible reasons, including lack of acceptance by the medical community or by patients, lack of or insufficient coverage and payment by third-party payors, inefficient or insufficient marketing and sales activities or as a result of there being more attractive, less risky or less expensive, products available for the same use; and • the product will be withdrawn from the market, or sales limited due to side effects observed in clinical practice.
Many pharmaceutical companies are conducting clinical trials in patients with the disease indications that COM701, COM902 and our future potential drug products may target.
Many pharmaceutical companies are conducting clinical trials in patients with the disease indications that COM701, COM902, COM503 and our future potential drug products may target.
The Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM”) imposes specific requirements on our correspondence with subscribers for email communication. Additionally, laws in all 50 states require businesses to provide notice to parties whose personally identifiable information has been disclosed as a result of a data breach.
As another example, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM”) imposes specific requirements on our correspondence with subscribers for email communication. Additionally, laws in all 50 states require businesses to provide notice to parties whose personally identifiable information has been disclosed as a result of a data breach.
An increasing number of foreign data protection laws may also apply to health-related and other personal data obtained from individuals outside of the United States.
Additionally, an increasing number of foreign data protection laws may also apply to health-related and other personal data obtained from individuals outside of the United States.
Risks Related to Development, Manufacturing, Clinical Trials and Government Regulation In the near term, we are highly dependent on the success of COM701 and of COM902.
Risks Related to Development, Manufacturing, Clinical Trials and Government Regulation In the near term, we are highly dependent on the success of COM701, COM902 and COM503.
In order to develop products, apply for regulatory approvals and commercialize our products, we will need to develop, contract for, or otherwise arrange for access to the necessary manufacturing capabilities.
In order to develop products, apply for regulatory approvals and commercialize our products, we need to develop, contract for, or otherwise arrange for access to the necessary manufacturing capabilities.
In addition, our adoption of certain standards or mandated compliance to certain requirements could necessitate additional investments that could impact our cash position and expected cash runway.
In addition, our adoption of certain standards or mandated compliance to certain requirements could necessitate additional investments that could impact our cash position and expected cash runway. 48
Under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, we carried out an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022, using the criteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
Under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, we carried out an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023, using the criteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
Our ordinary shares are listed on The Nasdaq Global Market. The Nasdaq Stock Market LLC, or the Nasdaq, provides various continued listing requirements that a company must meet in order for its shares to continue trading on the exchange. Among these requirements is the requirement that our shares trade at a minimum bid price of $1.00 per share.
Our ordinary shares are listed on The Nasdaq Capital Market. The Nasdaq Stock Market LLC, or the Nasdaq, provides various continued listing requirements that a company must meet in order for its shares to continue trading on the exchange. Among these requirements is the requirement that our shares trade at a minimum bid price of $1.00 per share.
Our primary strategy for the development and commercialization of products based on our drug target and therapeutic product candidates depends on third parties to carry out and/or finance, the research, development and commercialization of such products, principally by pharmaceutical and biotechnology companies and other healthcare related organizations and CROs, either on their own or in collaboration with us.
Our primary strategy for the development and commercialization of products based on our drug targets and therapeutic product candidates depends on third parties to carry out and/or finance, the research, development and commercialization of such products, principally by pharmaceutical and biotechnology companies and other healthcare related organizations and CROs, either on their own or in collaboration with us.
If we are unable to arrange for alternative third-party manufacturing sources or are unable to reserve another manufacturing slot with our current manufacturers or are unable to do so on commercially reasonable terms or in a timely manner, or are unable to provide backup drug, we may incur additional costs or be delayed in the development or delivery of our current and future product candidates, and even fail to supply drug to patients on study treatment on time or at all, each event of which can cause us material harm.
If we are unable to arrange for alternative third-party manufacturing sources or are unable to reserve another manufacturing slot with our current manufacturers or are unable to do so on commercially reasonable terms or in a timely manner, or are unable to provide backup drug, we may incur additional costs or be delayed in the development or delivery of our current and future product candidates, and even fail to supply drug to patients on study treatment on time or at all, or meet other obligations, each event of which can cause us material harm.
Failure to successfully discover, develop, validate and obtain regulatory clearance or approval for such tests could harm our patients’ selection strategy and may harm our clinical outcome. Companion or complimentary diagnostics are subject to regulation by the FDA and comparable foreign regulatory authorities and may require separate regulatory authorization prior to commercialization.
Failure to successfully discover, develop, validate and obtain regulatory clearance or approval for such tests could harm our patients’ selection strategy and may harm our clinical outcome. Companion or complementary diagnostics are subject to regulation by the FDA and comparable foreign regulatory authorities and may require separate regulatory authorization prior to commercialization.
In addition, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement or imprisonment. We may require companion or complimentary diagnostics and/or biomarkers for our clinical trials, or a portion of our clinical trials, and may be required to have such in order to obtain marketing approval or commercialization of our therapeutic programs.
In addition, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement or imprisonment. We may require companion or complementary diagnostics and/or biomarkers for our clinical trials, or a portion of our clinical trials, and may be required to have such in order to obtain marketing approval or commercialization of our therapeutic programs.
It is impossible to predict when or if any of our programs or those of our collaborators based on our target discoveries will yield products that will be approved for human testing, or, if such testing is proven sufficiently safe and effective to receive regulatory approval for marketing.
It is impossible to predict when or if any of our programs or those of our collaborators based on our target discoveries will yield products that will be approved for human testing, or, if such testing is proven sufficiently safe and effective for further development or to receive regulatory approval for marketing.
Despite the preliminary safety and anti-tumor activity results reported from our ongoing Phase 1 trial for COM701 and COM902 so far, we do not know whether the clinical trials we or our partners may conduct will demonstrate adequate efficacy and safety to result in the further advancement of clinical development or regulatory approval to market of COM701 and/or COM902, or any other of our product candidates when they reach the clinic, in any particular jurisdiction or jurisdictions.
Despite the preliminary safety and anti-tumor activity results reported to date from our ongoing Phase 1 trial for COM701 and COM902, we do not know whether the clinical trials we or our partners may conduct will demonstrate adequate efficacy and safety to result in the further advancement of clinical development or regulatory approval to market of COM701 and/or COM902, or any other of our product candidates when they reach the clinic, in any particular jurisdiction or jurisdictions.
In the United States, numerous federal and state laws and regulations, including federal health information privacy laws, state data breach notification laws, state health information privacy laws and federal and state consumer protection laws, that govern the collection, use, disclosure and protection of health-related and other personal data apply to our operations or the operations of our collaborators.
In the United States, numerous federal, state, and local laws and regulations, including federal health information privacy laws, state data breach notification laws, state health information privacy laws and federal and state consumer protection laws, that govern the collection, use, disclosure and protection of health-related and other personal data may apply to our operations or the operations of our collaborators.
Based on our assessment under that framework and the criteria established therein, our management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2022, in providing reasonable assurance regarding the reliability of the Company’s financial reporting.
Based on our assessment under that framework and the criteria established therein, our management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2023, in providing reasonable assurance regarding the reliability of the Company’s financial reporting.
Furthermore, there may be issued patents or pending patent applications that we are aware of, but that we think are irrelevant to our therapeutic product candidates, but which may ultimately be found to be infringed by the manufacture, sale, or use of such product candidates.
Furthermore, there may be issued patents or pending patent applications that we are aware of, but that we believe are irrelevant to our therapeutic product candidates, but which may ultimately be found to be infringed by the manufacture, sale, or use of such product candidates.
Such attended consequences may interrupt our clinical trials, reduce demand for our product candidates, and delay or negatively impact the development and commercialization of our product candidates and ability to grow and operate our business.
Such attendant consequences may interrupt our clinical trials, reduce demand for our product candidates, and delay or negatively impact the development and commercialization of our product candidates and ability to grow and operate our business.
As a result, we must compete with them for clinical sites, clinicians’ interest and the limited number of patients who fulfill the stringent requirements for participation in clinical trials in general. Also, patient enrollment may be limited due to changes in the regulatory landscape in the indications of interest to us.
As a result, we must compete with these competitors for clinical sites, clinicians’ interest and the limited number of patients who fulfill the stringent requirements for participation in clinical trials in general. Also, patient enrollment may be limited due to changes in the regulatory landscape in the indications of interest to us.
We currently have no products approved for sale and are investing a significant portion of our efforts and financial resources in the clinical development of COM701 and of COM902.
We currently have no products approved for sale and are investing a significant portion of our efforts and financial resources in the clinical development of COM701 and of COM902 and preclinical development of COM503.
Based on our analysis of our estimated income, estimated assets, activities and market capitalization, we believe that we were a PFIC for the taxable year ended December 31, 2022.
Based on our analysis of our estimated income, estimated assets, activities and market capitalization, we believe that we were a PFIC for the taxable year ended December 31, 2023.
Moreover, if we, or any collaborators, are required to conduct additional clinical trials or repeat clinical trials or other testing of our product candidates beyond the trials and testing that we or they contemplate, if we, or they, are unable to successfully complete clinical trials of our product candidates or other testing, or the results of these trials or tests are unfavorable, uncertain or are only modestly favorable, or there are unacceptable safety concerns associated with our product candidates, we, or any collaborators, may: • cease the development of the product candidates; • incur additional unplanned costs; • not obtain approval to proceed to next development phase; • be delayed in obtaining marketing approval for our product candidates; • not obtain marketing approval at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling that includes significant use or distribution restrictions or significant safety warnings, including boxed warnings; • be subject to additional post-marketing testing or other requirements; or • be required to remove the product from the market after obtaining marketing approval.
Moreover, if we, or any collaborators, are required to conduct additional clinical trials or repeat clinical trials or other testing of our product candidates beyond the trials and testing that we or they contemplate, if we, or they, are unable to successfully complete clinical trials of our product candidates or other testing, or the results of these trials or tests are unfavorable, uncertain or are only modestly favorable, or there are unacceptable safety concerns associated with our product candidates, we, or any collaborators, may, among others: • cease the development of the product candidates; • incur additional unplanned costs; • terminate or amend the respective collaboration, if applicable; • not obtain approval to proceed to next development phase; • be delayed in obtaining marketing approval for our product candidates; • not obtain marketing approval at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling that includes significant use or distribution restrictions or significant safety warnings, including boxed warnings; • be subject to additional post-marketing testing or other requirements; or • be required to remove the product from the market after obtaining marketing approval.
Therefore, we cannot assure that our business model to enter into commercialization arrangements for our early-stage novel targets and product candidates will be successful.
Therefore, we cannot assure that our business model to enter into partnering arrangements for our early-stage novel targets and product candidates will be successful.
The focus of our discovery and therapeutic development activities is on mAb therapeutics in the field of immuno-oncology for treatment of cancer. As a result, we are not undertaking internal discovery and development activities in other therapeutic areas or for other drug modalities, and presently we only pursue activities in our area of focus.
The focus of our discovery and therapeutic development activities is on mAb therapeutics in the field of immuno-oncology for treatment of cancer. As a result, we are not undertaking internal discovery and development activities in other therapeutic areas, and presently we only pursue activities in our area of focus.
We manage our operations, including clinical trials and preclinical development activities of our therapeutic candidates with a limited workforce and by using third parties to provide us services that we do not possess in-house. Our personnel, systems and facilities currently in place may not be adequate to support our current activities or future growth.
We manage our operations, including clinical trials and preclinical development activities of our therapeutic candidates with a limited workforce, which is spread globally, and by using third parties to provide us services that we do not possess in-house. Our personnel, systems and facilities currently in place may not be adequate to support our current activities or future growth.
In addition to being traded on The Nasdaq Global Market, our ordinary shares are also traded on the Tel Aviv Stock Exchange, or TASE.
In addition to being traded on The Nasdaq Capital Market, our ordinary shares are also traded on the Tel Aviv Stock Exchange, or TASE.
The existence of third-party intellectual property rights may prevent us from developing our discoveries or require us to expend financial and other resources to be able to continue to do so.
The existence of third-party intellectual property rights may prevent us from developing our discoveries and/or discoveries we licensed to partners, or require us to expend financial and other resources to be able to continue to do so.
A variety of factors may affect the market price of our ordinary shares including: • global or regional macroeconomic developments; • the spread, and resulting actions, of COVID-19 or other global or regional health pandemics or epidemics; • clinical data disclosed by us or our competitors; • massive sell of our shares by a large shareholder; • our success (or lack thereof) in entering into collaboration agreements and achieving certain research and developmental milestones thereunder; • our need to raise additional capital and our success or failure in doing so; • our ability (or lack thereof) to disclose key discoveries or developments due to competitive concerns or need to secure our intellectual property position; • achievement or denial of regulatory approvals by us or our competitors; • announcements of technological innovations or new commercial products by our competitors; 43 • trends in share price of companies in our field or industry; • announcement of corporate transactions, merger and acquisition activities or other similar events by companies in our field or industry; • changes and developments effecting our field or industry; • developments concerning material proprietary rights, including material patents; • developments concerning our existing or new collaborations; • regulatory developments in the United States, Israel and other countries; • changes in the structure of healthcare payment systems; • delay or failure by us or our partners in initiating, completing or analyzing preclinical or clinical trials or the unsatisfactory design or results of such trials; • period to period fluctuations in our results of operations; • changes in estimates by securities analysts; • changes in senior management or the board of directors or changes in the size or structure of the company; • our ability (or lack thereof) to disclose the commercial terms of, or progress under, our collaborations; • our ability (or lack thereof) to show and accurately predict revenues; and • transactions with respect to our ordinary shares by insiders or institutional investors.
A variety of factors may affect the market price of our ordinary shares including: • global or regional macroeconomic developments; • general market, political and economic conditions in the countries in which Compugen operates, including Israel and the effect of the evolving nature of the recent “Swords of Iron” war in Israel; • the spread, and resulting actions, of COVID-19 or other global or regional health pandemics or epidemics; 44 • clinical data disclosed by us or our competitors; • massive sell of our shares by a large shareholder; • our success (or lack thereof) in entering into collaboration agreements and achieving certain research and developmental milestones thereunder; • our need to raise additional capital and our success or failure in doing so; • our ability (or lack thereof) to disclose key discoveries or developments due to competitive concerns or need to secure our intellectual property position; • achievement or denial of regulatory approvals by us or our competitors; • announcements of technological innovations or new commercial products by our competitors; • trends in share price of companies in our field or industry; • announcement of corporate transactions, merger and acquisition activities or other similar events by companies in our field or industry; • changes and developments effecting our field or industry; • developments concerning material proprietary rights, including material patents; • developments concerning our existing or new collaborations; • regulatory developments in the United States, Israel and other countries; • changes in the structure of healthcare payment systems; • delay or failure by us or our partners in initiating, completing or analyzing preclinical or clinical trials or the unsatisfactory design or results of such trials; • period to period fluctuations in our results of operations; • changes in estimates by securities analysts; • changes in senior management or the board of directors or changes in the size or structure of the company; • our ability (or lack thereof) to disclose the commercial terms of, or progress under, our collaborations; • our ability (or lack thereof) to show and accurately predict revenues; and • transactions with respect to our ordinary shares by insiders or institutional investors.
During times of war and other major conflicts, we or the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations.
During times of war and other major conflicts, including the current situation in Israel, we or the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations.
To date, we have not actually received any such tax benefits because we have not yet generated any taxable income. 39 It may be difficult to enforce a U.S. judgment against us, or our officers and directors or to assert U.S. Securities law claims in Israel. We are incorporated under the laws of the State of Israel.
To date, we have not actually received any such tax benefits because we have not yet generated any taxable income. It may be difficult to enforce certain U.S. judgments against us, or our officers and directors or to assert U.S. Securities law claims in Israel. We are incorporated under the laws of the State of Israel.
Many of our competitors have one or more of the following: • much greater financial, technical and human resources than we have at every stage of the discovery, development, manufacture and commercialization process; • more extensive experience in computational discovery, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and in manufacturing and marketing therapeutics; • more extensive experience in oncology and immuno-oncology and in the fields of mAb therapeutics; • accessibility to enhanced technologies that may result in better products; • access to and experience in the development of therapeutic modalities that are competitive to mAb therapeutics; • more extensive experience in oncology and immuno-oncology and in the field of target discovery; • more extensive experience in the research and development of biological or genetic markers to determine response of or responders to therapeutic agents or for patient selection; • greater accessibility to data and proprietary data from patients; • access to internally developed, proprietary technologies for the discovery, research, development, or manufacturing of therapeutic agents; • greater resources and means to compete with us on target discovery and as well as in acquiring or generating technologies complementary to, or necessary for, our programs as well as in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites; 24 • products that have been approved or are in late stages of development and in many cases, PD-1 or PDL-1 inhibitors that are serving or will be serving as the backbone of cancer immunotherapy; • reduced reliance on collaborations or partnerships with third parties in order to further develop and commercialize competitive therapeutic products; and • collaborative arrangements in our target markets with leading companies and research institutions.
Many of our competitors have one or more of the following: • much greater financial, technical and human resources than we have at every stage of the discovery, development, manufacture and commercialization process; • more extensive experience in computational discovery, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and in manufacturing and marketing therapeutics; • more extensive experience in oncology and immuno-oncology and in the fields of mAb therapeutics; • accessibility to enhanced technologies that may result in better products; • access to and experience in the development of therapeutic modalities that are competitive to mAb therapeutics; • more extensive experience in oncology and immuno-oncology and in the field of target discovery; • more extensive experience in the research and development of biological or genetic markers to determine response of or responders to therapeutic agents or for patient selection; • greater accessibility to data and proprietary data from patients; • access to internally developed, proprietary technologies for the discovery, research, development, or manufacturing of therapeutic agents; • greater resources and means to compete with us on target discovery and as well as in acquiring or generating technologies complementary to, or necessary for, our programs as well as in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites; • products that have been approved or are in late stages of development and in many cases, PD-1 or PDL-1 inhibitors that are serving or will be serving as the backbone of cancer immunotherapy; • reduced reliance on collaborations or partnerships with third parties in order to further develop and commercialize competitive therapeutic products; and • collaborative arrangements in our target markets with leading companies and research institutions. 24 Since we are a small company with limited human and financial resources, we are not able to work with a large number of collaborators in parallel and/or advance a large number of drug target or therapeutic product candidates in parallel.
We, and the third parties upon whom we rely, process, collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, processing) proprietary, confidential, and sensitive data, including personal data (such as health-related data), intellectual property, trade secrets and other sensitive data the Company may process (collectively, sensitive information).
We, and the third parties upon whom we rely, process, collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) proprietary, confidential, and sensitive data, including personal data (such as health-related data and clinical trial data), intellectual property, trade secrets and other sensitive data (collectively, sensitive information).
We rely heavily and will continue to rely heavily on these parties for execution of clinical trials for COM701 and COM902 and any other future product candidates we may take to the clinic, and we control only certain aspects of their activities.
We rely heavily and will continue to rely heavily on these parties for execution of clinical trials for COM701 and COM902 and any other future product candidates we may take to the clinic, including COM503 (to the extent we take it to the clinic), and we control only certain aspects of their activities.
Any such failures by third parties could have a material adverse effect on our business, financial condition or results of operations. Moreover, we do not always independently verify the results obtained by such third parties and in some cases, rely upon the data provided by the third-party.
Any such failures by third parties could have a material adverse effect on our business, financial condition or results of operations. Moreover, we do not always independently verify the results obtained by such third parties and in some cases, primarily with respect to clinical data, we have to rely upon the data provided by the third-party.
Our clinical trials may be delayed or terminated due to the inability to enroll enough patients. The delay or inability to meet planned patient enrollment may result in increased costs and delay or termination of our trials, which could have a harmful effect on our ability to develop products.
Our clinical trials may be delayed or terminated due to the inability to enroll enough patients or lack of successful drug performance. The delay or inability to meet planned patient enrollment or successful results may result in increased costs and delay or termination of our trials, which could have a harmful effect on our ability to develop products.
Patient enrollment is affected by many factors including the size and nature of the patient population, the eligibility criteria for the trial, the design of the clinical trial, the size of the patient population required for analysis of the trial’s primary endpoints, the proximity of patients to clinical trial sites, our ability to recruit clinical trial investigators with the appropriate competencies and experience, the number of enrolling clinical sites, our ability to obtain and maintain patient consents, the risk that patients enrolled in clinical trials will drop out of the trials before completion or even before any/sufficient imaging assessment, and competing clinical trials (including other clinical trials that we are conducting or will conduct in the future) and clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to other available therapies, or competing drugs against the same target as well as any new drugs that may be approved for the indications we are investigating.
Patient enrollment is affected by many factors including the size and nature of the patient population, the eligibility criteria for the trial, the design of the clinical trial, the size of the patient population required for analysis of the trial’s primary endpoints, the proximity of patients to clinical trial sites, our ability to recruit clinical trial investigators with the appropriate competencies and experience, the number of enrolling clinical sites, our ability to obtain and maintain patient consents, the risk that patients enrolled in clinical trials will drop out of the trials before completion or even before any/sufficient imaging assessment, the willingness of patients to attend clinic visits given epidemic and pandemic concerns, and competing clinical trials (including other clinical trials that we are conducting or will conduct in the future) and clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to other available therapies, or competing drugs against the same target as well as a changing treatment landscape, including any new drugs that may be approved for the indications we are investigating.
Thus, market and industry-wide fluctuations and political, economic and military conditions in the Middle East, but also in the US may adversely affect the trading price of our ordinary shares, regardless of our actual operating performance.
Thus, market and industry-wide fluctuations and political, economic and military conditions in the Middle East, but also in the United States and worldwide may adversely affect the trading price of our ordinary shares, regardless of our actual operating performance.
If we or our vendors and partners experience (or are perceived to have experienced) a security breach or other incident or disruption, we may experience adverse consequences, including but not limited to, government enforcement actions (e.g., investigations, fines, penalties, audits, and inspections), federal, state and/or foreign data breach notification obligations, additional reporting requirements and/or oversight, restrictions on processing data (including clinical trial data), litigation, indemnification obligations, loss of data (including clinical trial data) or damage to the integrity of that data, negative publicity, reputational harm, monetary fund diversions, interruptions in our operations, financial loss, and other similar harms.
If we or the third parties upon whom we rely experience (or are perceived to have experienced) a security breach or other incident or disruption, we may experience adverse consequences, including but not limited to, government enforcement actions (e.g., investigations, fines, penalties, audits, and inspections), federal, state and/or foreign data breach notification obligations, additional reporting requirements and/or oversight, restrictions on processing data (including clinical trial data and other personal data), litigation, indemnification obligations, loss of data (including clinical trial data and other sensitive information) or damage to the integrity of that data, negative publicity, reputational harm, monetary fund diversions, interruptions in our operations, financial loss, and other similar harms.
All of the above raise a concern as to the stability in the region which may affect the political and security situation in Israel and therefore could adversely affect our business, financial condition and results of operations.
All of the above raise a concern as to the stability in the region which may affect the security, social, economic and political landscape in Israel and therefore could adversely affect our business, financial condition and results of operations.
Moreover, because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before any particular product candidate can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of the patent protection. 31 The process of obtaining patents for inventions that cover our products is uncertain for a number of reasons, including but not limited to: • the patenting of inventions involves complex legal issues relating to intellectual property laws, prosecution and enforcement of patent claims across a number or patent jurisdictions, many of which have not yet been settled; • legislative and judicial changes, or changes in the examination guidelines of governmental patent offices may negatively affect our ability to obtain patent claims to certain biological molecules- and/or use of certain therapeutic targets; • if we are not the first to file a patent application on one of our inventions, we may not be able to obtain a patent on our invention, and may not be able to protect one or more of our therapeutic product candidates; • competition from other biotechnology and pharmaceutical companies who have already sought patent protection relating to proteins and protein based products, as well as therapeutic antibodies or other modulators specifically binding these proteins, and their utility based discoveries that we may intend to develop and commercialize; such prior patents may negatively affect our ability to obtain patent claims on antibodies or certain proteins or other biologic modulators, or may hinder our ability to obtain sufficiently broad patent claims for our inventions, and/or may limit our freedom to operate; • publication of data on gene products or proteins by non-commercial and commercial entities may hinder our ability to obtain sufficiently broad patent claims for our inventions; • even if we succeed in obtaining patent protection, such protection may not be sufficient to prevent third parties from circumventing our patent claims; • even if we succeed in obtaining patent protection, we may face freedom to operate issues; • even if we succeed in obtaining patent claims protecting our inventions and product candidates, our patents could be subject to challenge and litigation by our competitors, and may be partially or wholly invalidated as a result of such legal/judicial challenges and in connection with such challenges; • significant costs that may need to be incurred in registering and filing patents; • insufficient data to support our claims and/or may support others in strengthening their patents; • seeking patent protection at an early stage may prevent us from providing comprehensive data supporting the patent claims and may prevent allowance of certain patent claims or limit the scope of patent claim coverage; • we may not be able to supply sufficient data to support our claims, within the legally prescribed time following our initial filing in order to support our patent claims and this may harm our ability to get appropriate patent protection or protection at all; • our claims may be too broad and not have sufficient enablement, in which case such claims might be rejected by patent offices or invalidated in court; and • we might fail to demonstrate a unique technical feature for our antibodies as compared to existing prior art, in which case our claims might be rejected by the respective patent office, requiring superiority over prior art.
The process of obtaining patents for inventions that cover our products is uncertain for a number of reasons, including but not limited to: • the patenting of inventions involves complex legal issues relating to intellectual property laws, prosecution and enforcement of patent claims across a number or patent jurisdictions, many of which have not yet been settled; • legislative and judicial changes, or changes in the examination guidelines of governmental patent offices may negatively affect our ability to obtain patent claims to certain biological molecules- and/or use of certain therapeutic targets; • if we are not the first to file a patent application on one of our inventions, we may not be able to obtain a patent on our invention, and may not be able to protect one or more of our therapeutic product candidates; • competition from other biotechnology and pharmaceutical companies who have already sought patent protection relating to proteins and protein based products, as well as therapeutic antibodies or other modulators specifically binding these proteins, and their utility based discoveries that we may intend to develop and commercialize; such prior patents may negatively affect our ability to obtain patent claims on antibodies or certain proteins or other biologic modulators, or may hinder our ability to obtain sufficiently broad patent claims for our inventions, and/or may limit our freedom to operate; • publication of data on gene products or proteins by non-commercial and commercial entities may hinder our ability to obtain sufficiently broad patent claims for our inventions; • even if we succeed in obtaining patent protection, such protection may not be sufficient to prevent third parties from circumventing our patent claims; • even if we succeed in obtaining patent protection, we may face freedom to operate issues; • even if we succeed in obtaining patent claims protecting our inventions and product candidates, our patents could be subject to challenge and litigation by our competitors, and may be partially or wholly invalidated as a result of such legal/judicial challenges and in connection with such challenges; • significant costs that may need to be incurred in registering and filing patents; • insufficient data to support our claims and/or may support others in strengthening their patents; • seeking patent protection at an early stage may prevent us from providing comprehensive data supporting the patent claims and may prevent allowance of certain patent claims or limit the scope of patent claim coverage; • we may not be able to supply sufficient data to support our claims, within the legally prescribed time following our initial filing in order to support our patent claims and this may harm our ability to get appropriate patent protection or protection at all; • our claims may be too broad and not have sufficient enablement, in which case such claims might be rejected by patent offices or invalidated in court; and • we might fail to demonstrate a unique technical feature for our antibodies as compared to existing prior art, in which case our claims might be rejected by the respective patent office, requiring superiority over prior art.
There is no assurance that our share price will trade at or above a minimum bid price of $1.00 per share and if we fail to meet minimum listing requirements, there can be no assurance that we will be able to regain compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with other Nasdaq listing criteria.
While currently we are in compliance with the applicable Nasdaq minimum bid price rules, there is no assurance that our share price will trade at or above a minimum bid price of $1.00 per share and if we fail to meet minimum listing requirements, there can be no assurance that we will be able to regain compliance with the applicable minimum bid price rules or will otherwise be in compliance with other Nasdaq listing criteria.
We may seek additional capital due to strategic considerations even if we believe we have sufficient funds for our current and future operating plans. 3 Additional funds, including proceeds from license or collaborative agreements, or from other financings, may not be available to us on acceptable terms, or at all.
We may seek additional capital for various reasons, including for our ongoing operations or strategic considerations, even if we believe we have sufficient funds for our current and future operating plans. Additional funds, including proceeds from license or collaborative agreements, or from other financings, may not be available to us on acceptable terms, or at all.
However, there can be no assurance that we will submit additional INDs, nor if submitted, the actual timing for such submission (including amendments), nor that such submissions will be accepted by the FDA allowing clinical trials to begin or continue.
However, there can be no assurance that we will submit additional INDs, including for COM503, nor if submitted, the actual timing for such submission (including amendments), nor that such submissions will be accepted by the FDA at all or within anticipated timeframe, allowing clinical trials to begin or continue.
As of December 31, 2022, we had an accumulated deficit of approximately $455.8 million and had incurred net losses of approximately $33.7 million in 2022, approximately $34.2 million in 2021 and approximately $29.7 million in 2020, in large part due to the expenditures associated with our ongoing research and development and limited revenues received to date.
As of December 31, 2023, we had an accumulated deficit of approximately $474.5 million and had incurred net losses of approximately $18.8 million in 2023, $33.7 million in 2022 and approximately $34.2 million in 2021, in large part due to the expenditures associated with our ongoing research and development and limited revenues received to date.
We and our vendors and partners may be subject to numerous data privacy and security obligations, such as various federal, state, local and foreign data laws, regulations, guidance, industry standards, external and internal privacy and security policies, contracts, and other obligations that govern the processing of personal data by us and on our behalf.
We and the third parties upon whom we rely may be subject to numerous data privacy and security obligations, such as various federal, state, local and foreign data laws, regulations, guidance, industry standards, external and internal privacy and security policies, contracts, and other obligations that govern the processing of personal data by us and on our behalf.

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Item 4. Mine Safety Disclosures

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Key findings from the poster, with a data cut-off date of November 23, 2022, included: • In 20 patients who had exhausted all standard therapies, with a median number of 6 prior therapies, the dual combination demonstrated: • Encouraging overall response rate of 10%, with 2 partial responses and 1 ongoing at the data cut-off date • Disease control rate of 45% (2 confirmed partial responses, 7 stable disease) • Translational assessment of peripheral blood, showed a pharmacodynamic activation of the immune system • One patient with a partial response supported by increased infiltration of CD8 cells into the tumor microenvironment, had high grade serous adenocarcinoma, 7 prior lines of treatment including best response of progressive disease on the combination of nivolumab and lucitanib (an investigational agent) • Most frequent treatment related adverse events grade 1/2, no grade 4/5 adverse events • 65% of the patients had high-grade serous adenocarcinoma, including the two responders In December 2022, at the European Society of Medical Oncology Immuno-Oncology (ESMO-IO), we presented preliminary data from poster “COM701 ± Nivolumab – preliminary results of antitumor activity from a phase 1 trial in patients with metastatic NSCLC who have received prior PD-1/PD-L1 inhibitor”.
Key findings from the poster, with a data cut-off date of November 23, 2022, included: • In 20 patients who had exhausted all standard therapies, with a median number of 6 prior therapies, the dual combination demonstrated: • Encouraging overall response rate of 10%, with 2 partial responses and 1 ongoing at the data cut-off date • Disease control rate of 45% (2 confirmed partial responses, 7 stable disease) • Translational assessment of peripheral blood, showed a pharmacodynamic activation of the immune system • One patient with a partial response supported by increased infiltration of CD8 cells into the tumor microenvironment, had high grade serous adenocarcinoma, 7 prior lines of treatment including best response of progressive disease on the combination of nivolumab and lucitanib (an investigational agent) • Most frequent treatment related adverse events grade 1/2, no grade 4/5 adverse events • 65% of the patients had high-grade serous adenocarcinoma, including the two responders 53 In December 2022, at the European Society of Medical Oncology Immuno-Oncology (ESMO-IO), we presented preliminary data from poster “COM701 ± Nivolumab – preliminary results of antitumor activity from a phase 1 trial in patients with metastatic NSCLC who have received prior PD-1/PD-L1 inhibitor”.
The process required by the FDA before a biologic may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and animal studies in compliance with the FDA’s GLP or other applicable regulations; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • performance of adequate and well-controlled human clinical trials in accordance with GCPs to establish the safety and efficacy of the product for its intended use; • submission of annual reports to regulatory authorities; • submission to the FDA of a biologics license application, or BLA; 60 • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug or biologic is produced to assess compliance with current Good Manufacturing Practice, or cGMP, to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; and • FDA review and approval of the BLA.
The process required by the FDA before a biologic may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and animal studies in compliance with the FDA’s GLP or other applicable regulations; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • performance of adequate and well-controlled human clinical trials in accordance with GCPs to establish the safety and efficacy of the product for its intended use; • submission of annual reports to regulatory authorities; • submission to the FDA of a biologics license application, or BLA; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug or biologic is produced to assess compliance with current Good Manufacturing Practice, or cGMP, to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; and • FDA review and approval of the BLA.
Key findings from the poster, with a data cut-off date of June 17, 2022, included: • COM701+ nivolumab combination is well tolerated with a favorable safety profile 51 • ORR 2/22 (9%) higher than ORR (1-2%) reported for standard of care - regorafenib or TAS-102 • Encouraging preliminary antitumor activity in the subset of MSS-CRC patients with liver metastases, ORR 2/17 (12%), compared to 0% ORR historically for other immunotherapies in a U.S. patient population • Translational data demonstrated potent TME immune activation, in the majority of patients based on 13 paired biopsies, most notable in responders and consistent with COM701 mechanism of action.
Key findings from the poster, with a data cut-off date of June 17, 2022, included: • COM701+ nivolumab combination is well tolerated with a favorable safety profile • ORR 2/22 (9%) higher than ORR (1-2%) reported for standard of care - regorafenib or TAS-102 • Encouraging preliminary antitumor activity in the subset of MSS-CRC patients with liver metastases, ORR 2/17 (12%), compared to 0% ORR historically for other immunotherapies in a U.S. patient population • Translational data demonstrated potent TME immune activation, in the majority of patients based on 13 paired biopsies, most notable in responders and consistent with COM701 mechanism of action.
Our business could be harmed if those third parties fail to provide us with sufficient quantities of drug product or fail to do so at acceptable quality and quantity levels, prices or timelines.” Government Regulation Regulation of Therapeutic Product Candidates In the United States, the FDA regulates pharmaceutical and biologic products under the Federal Food, Drug, and Cosmetic Act, or FDCA, the Public Health Service Act, other statutes and regulations and implementing regulations.
Our business could be harmed if those third parties fail to provide us with sufficient quantities of drug product or fail to do so at acceptable quality and quantity levels, prices or timelines.” 62 Government Regulation Regulation of Therapeutic Product Candidates In the United States, the FDA regulates pharmaceutical and biologic products under the Federal Food, Drug, and Cosmetic Act, or FDCA, the Public Health Service Act, other statutes and regulations and implementing regulations.
BUSINESS OVERVIEW Summary We are a clinical-stage therapeutic discovery and development company utilizing our broadly applicable predictive computational discovery capabilities to identify novel drug targets and new biological pathways to develop therapeutics in the field of cancer immunotherapy. Our innovative immuno-oncology pipeline consists of three clinical stage programs, targeting immune checkpoints we discovered computationally by COM701, COM902 and rilvegostomig .
BUSINESS OVERVIEW Summary We are a clinical-stage therapeutic discovery and development company utilizing our broadly applicable predictive computational discovery capabilities to identify novel drug targets and new biological pathways to develop therapeutics in the field of cancer immunotherapy. Our innovative immuno-oncology pipeline consists of three clinical stage programs, COM701, COM902 and rilvegostomig, targeting immune checkpoints we discovered computationally.
The TIGIT discovery was published by us in October 2009 in the Proceedings of the National Academy of Sciences (PNAS). Expression studies show that PVRIG and TIGIT, and their respective ligands, are expressed in a broad variety of tumor types, such as breast, endometrial, ovarian, lung, kidney, and head & neck cancers.
The TIGIT discovery was published by us in October 2009 in the Proceedings of the National Academy of Sciences (PNAS). 55 Expression studies show that PVRIG and TIGIT, and their respective ligands, are expressed in a broad variety of tumor types, such as breast, endometrial, ovarian, lung, kidney, and head & neck cancers.
Through these collaborations we seek to create, further develop and commercialize our therapeutic product candidates. Additionally, our discovery capabilities designed to feed our internal pipeline may allow for research and discovery collaborations aimed at harnessing our capabilities towards a potential partner’s pipeline needs.
Through these collaborations we seek to create, further develop and commercialize our therapeutic product candidates. Additionally, our discovery capabilities designed to feed our internal pipeline may allow for future research and discovery collaborations aimed at harnessing our capabilities towards a potential partner’s pipeline needs.
In some countries, we will also have to get pricing approval. Environmental Regulation Some of our research and development activities involve the controlled use of biologic and chemical materials, a small amount of which could be considered to be hazardous.
In some countries, we will also have to get pricing approval. 66 Environmental Regulation Some of our research and development activities involve the controlled use of biologic and chemical materials, a small amount of which could be considered to be hazardous.
We believe that our computational capabilities, and specifically our IO predictive computational discovery capabilities, provide us with a competitive advantage in predicting new protein functions and linking proteins to specific diseases, and as a result, predicting new immune-oncology drug targets.
We believe that our computational capabilities, and specifically our IO predictive computational discovery capabilities, provide us with a competitive advantage in predicting new protein functions and linking proteins to specific mechanisms and diseases, and as a result, predicting new immune-oncology drug targets.
It is unclear how other such challenges and any additional healthcare reform measures of the Biden administration will impact the ACA and the pharmaceutical industry. In addition, other legislative changes have been proposed and adopted since the ACA was enacted.
It is unclear how other such challenges and any additional healthcare reform measures of the Biden administration will impact the ACA and the pharmaceutical industry. 65 In addition, other legislative changes have been proposed and adopted since the ACA was enacted.
We believe this uniquely positions us in the discovery and the development of first-in-class drugs for cancer immunotherapy. In our clinical therapeutic pipeline, our most advanced programs are: • COM701 is our lead immuno-oncology pipeline program.
We believe this uniquely positions us in the discovery and the development of first-in-class drugs for cancer immunotherapy. In our clinical therapeutic pipeline, our most advanced programs are: • COM701 is our internal lead immuno-oncology pipeline program.
Clinical Development In March 2020, we dosed our first patient in the Phase 1 clinical trial of COM902. 53 COM902 Clinical Programs Phase 1 Monotherapy trial evaluated the safety and tolerability of COM902 in patients with advanced malignancies through sequential dose escalations.
Clinical Development In March 2020, we dosed our first patient in the Phase 1 clinical trial of COM902. COM902 Clinical Programs Phase 1 Monotherapy trial evaluated the safety and tolerability of COM902 in patients with advanced malignancies through sequential dose escalations.
We face, and expect to continue to face, ongoing competition from entities that discover novel targets and develop novel products, and that have therapeutic product candidates or products that address the same drug targets or act by similar, or possibly identical, mechanism of action (MOA) as well as by different mechanisms but address the same drug target or unmet clinical need.
We face, and expect to continue to face, ongoing competition from entities that discover novel targets and develop novel products, and that have therapeutic product candidates or products that address the same drug targets or act by similar, or possibly identical, mechanism of action (MOA) as well as by different mechanisms but address the same drug target or patient population or unmet clinical need.
Additionally, we are eligible to receive mid-to-high single digit royalties on global net sales of any approved products under the collaboration. In 2014, we achieved the first and second preclinical milestones and in 2015 we achieved the third preclinical milestone with respect to bapotulimab.
Additionally, we were eligible to receive mid-to-high single digit royalties on global net sales of any approved products under the collaboration. In 2014, we achieved the first and second preclinical milestones and in 2015 we achieved the third preclinical milestone with respect to bapotulimab.
We received a $10 million upfront payment and are eligible to receive up to $200 million in development, regulatory and commercial milestones for the first product as well as tiered royalties on future product sales, out of which we accrued $2 million in 2020 as a preclinical milestone, $6 million in 2021 as a clinical milestone (triggered by the dosing of the first patient in a Phase 1/2 trial evaluating rilvegostomig) and an additional $7.5 million as a clinical milestone (triggered by the dosing of the first patient in its ARTEMIDE Phase 2 trial evaluating rilvegostomig).
We received a $10 million upfront payment and are eligible to receive up to $200 million in development, regulatory and commercial milestones for the first product as well as tiered royalties on future product sales, out of which we accrued $2 million in 2020 as a preclinical milestone, $6 million in 2021 as a clinical milestone (triggered by the dosing of the first patient in a Phase 1/2 trial evaluating rilvegostomig), additional $7.5 million in 2022 as a clinical milestone (triggered by the dosing of the first patient in its ARTEMIDE Phase 2 trial evaluating rilvegostomig) and an additional $10 million in 2023 as a clinical milestone (triggered by the dosing of the first patient in its ARTEMIDE-Bil01 Phase 3 trial evaluating rilvegostomig).
In pre-clinical studies, parallel inhibition of TIGIT and PVRIG, two coinhibitory arms of the DNAM-1 axis, resulted in synergistic effects on effector T cell function and tumor growth inhibition in various model systems that can be further increased with the addition of PD-1 blockade.
In preclinical studies, parallel inhibition of TIGIT and PVRIG, two coinhibitory arms of the DNAM-1 axis, resulted in synergistic effects on effector T cell function and tumor growth inhibition in various model systems that can be further increased with the addition of PD-1 blockade.
Our pipeline strategy for the development of potentially first-in-class cancer immunotherapies is differentiated in the competitive landscape of immuno-oncology in the following manner: • We discover novel drug targets and biological pathways with the potential to address the unmet need of patients non-responsive to current cancer immunotherapies; • We integrate our cutting-edge computational capabilities with our ground-breaking immuno-oncology research and drug development expertise to inform our target discovery and drug development process; and 48 • We identify drug combinations and design biomarker strategy for potential future patient selection.
Our pipeline strategy for the development of potentially first-in-class cancer immunotherapies is differentiated in the competitive landscape of immuno-oncology in the following manner: • We integrate our cutting-edge computational capabilities with our ground-breaking immuno-oncology research and drug development expertise to discover novel drug targets and biological pathways with the potential to address the unmet need of patients non-responsive to current cancer immunotherapies • We harness these capabilities to inform our drug development process; and • We identify drug combinations and design biomarker strategy for potential future patient selection.
The patents issued in the U.S. and Europe for COM701 and COM902 were issued between 2017 and 2022 and should expire no earlier than 2036.
The patents issued in the U.S. and Europe for COM701 and COM902 were issued between 2017 and 2023 and should expire no earlier than 2036.
Our potential competitors are also comprised of companies that discover and develop monoclonal antibody therapies and/or therapeutic proteins to novel targets, and/or cell therapies for oncology diseases.
Our potential competitors are also comprised of companies that discover and develop monoclonal antibody therapies and/or therapeutic proteins to novel targets, and/or other modalities, including cell therapies for oncology diseases.
As of February 1, 2023, we had over 168 pending patent applications that have been filed in the United States, Europe and in other territories as well as pending patent applications that have been filed under the Patent Cooperation Treaty for which we have not yet designated the countries of filing.
As of February 1, 2024, we had over 138 pending patent applications that have been filed in the United States, Europe and in other territories as well as pending patent applications that have been filed under the Patent Cooperation Treaty for which we have not yet designated the countries of filing.
Specifically, in the field of immune checkpoints and myeloid drug targets for cancer immunotherapy, there are several leading pharmaceutical and biotechnology companies as well as smaller biotechnology companies and academic institutions that are developing cancer immunotherapies to enhance immune response towards tumors, some of which may be based on the same targets we have discovered.
Specifically, in the field of immune checkpoints for cancer immunotherapy, there are several leading pharmaceutical and biotechnology companies as well as smaller biotechnology companies and academic institutions that are developing cancer immunotherapies to enhance immune response towards tumors, some of which may be based on the same targets we pursue.
ILDR2 is expressed in lymph nodes, suggesting that bapotulimab exerts its effects on immune cell priming rather than on directly enhancing immune cell killing effects in the tumor microenvironment. In April 2018, Bayer disclosed bapotulimab (formerly known as BAY1905254) a human/monkey/mouse cross-reactive antibody blocking the immunosuppressive activity of ILDR2.
ILDR2 is expressed in lymph nodes, suggesting that bapotulimab exerts its effects on immune cell priming rather than on directly enhancing immune cell killing effects in the tumor microenvironment. 56 In April 2018, Bayer disclosed bapotulimab a human/monkey/mouse cross-reactive antibody blocking the immunosuppressive activity of ILDR2.
Based on the data from the Phase 1 trials and as part of our corporate focus on two specific tumor types for the further clinical evaluation of COM701 and COM902, we intend to initiate two clinical trials evaluating the triple combination treatment of COM701, COM902 and pembrolizumab, one in metastatic microsatellite stable colorectal cancer patients and one in platinum resistant ovarian cancer patients.
Based on the data from the Phase 1 trials and as part of our focus on two specific tumor types for the further clinical evaluation of COM701 and COM902, we initiated in 2023 two clinical trials evaluating the triple combination treatment of COM701, COM902 and pembrolizumab, one in metastatic microsatellite stable colorectal cancer patients and one in platinum resistant ovarian cancer patients.
Potential revenue sources in line with this business model could include upfront fees, research funding, in-kind funding, milestones payments, license fees, royalties and other revenue sharing payments. We may also seek co-development arrangements pursuant to which we would further advance partnered programs under any such partnership in order to retain higher share from future sales revenues.
Potential revenue sources in line with this business strategy could include upfront fees, research funding, in-kind funding, milestones payments, license fees, royalties and other revenue sharing payments. We may also seek co-development arrangements pursuant to which we would further advance partnered programs under any such partnership in order to potentially retain a higher share of proceeds from future collaborations.
Intellectual Property Rights Our intellectual property assets are our principal assets. These assets include the intellectual property rights subsisting in our proprietary know-how and trade secrets underlying our predictive biology capabilities and discovery capabilities, our patents and patent applications, particularly with respect to our discovered proteins, therapeutic and diagnostic product candidates.
These assets include the intellectual property rights subsisting in our proprietary know-how and trade secrets underlying our predictive biology capabilities and discovery capabilities, our patents and patent applications, particularly with respect to our discovered proteins, therapeutic and diagnostic product candidates. We seek to vigorously protect our rights and interests in our intellectual property.
Our agent for service of process in the United States is Compugen USA, Inc., our wholly owned U.S. subsidiary located at 225 Bush Street, Suite 348, San Francisco, CA 94104, which was incorporated in Delaware in March 1997 and is qualified to do business in California.
Our agent for service of process in the United States is Compugen USA, Inc., our wholly owned U.S. subsidiary located at 225 Bush Street, Suite 348, San Francisco, CA 94104, which was incorporated in Delaware in March 1997 and is qualified to do business in California. This subsidiary did not have any significant operations from 2008 to March 2012.
These two pathways intersect with DNAM-1, a costimulatory receptor on T cells and NK cells. The PD-1 pathway also intersects with DNAM-1. In certain tumors, the blockade of both TIGIT and PVRIG may be required to stimulate an antitumor immune response, with or without additional PD-1 pathway blockade.
These two pathways intersect with DNAM-1, a costimulatory receptor on T cells and NK cells. The PD-1 pathway also intersects with DNAM-1. In certain tumors, and in certain patient populations, the simultaneous blockade of these pathways may be required to stimulate an antitumor immune response.
We design our patent strategy to fit the business competitive landscape and continual legislative changes. In addition, we periodically analyze and examine our patent portfolio to align it with our pipeline strategy and business needs. We seek patent protection for certain promising inventions that relate to our therapeutic and diagnostic product candidates.
In addition, we periodically analyze and examine our patent portfolio to align it with our pipeline strategy and business needs. We seek patent protection for certain promising inventions that relate to our therapeutic and diagnostic product candidates.
Following the completion of enrollment of the ovarian cohort in the study and its respective data disclosure we are currently winding down this study and do not plan to further enroll additional patients. 52 Data disclosed from this trial in 2022: In December 2022, at the European Society of Medical Oncology Immuno-Oncology (ESMO-IO), we presented data from poster: “Triple blockade of the DNAM-axis with COM701 + BMS-986207 + nivolumab demonstrates preliminary antitumor activity in patients with platinum resistant OVCA.” Key findings from the poster, with a data cut-off date of November 23, 2022, included: • In 20 patients who had exhausted all standard therapies, with a median number of 4 prior therapies, the triple combination demonstrated: • Encouraging overall response rate of 20%, with 4 confirmed partial responses, out of which 3 are responding for at least 9 months.
Data disclosed from this trial in 2022: In December 2022, at the European Society of Medical Oncology Immuno-Oncology (ESMO-IO), we presented data from poster: “Triple blockade of the DNAM-axis with COM701 + BMS-986207 + nivolumab demonstrates preliminary antitumor activity in patients with platinum resistant OVCA.” Key findings from the poster, with a data cut-off date of November 23, 2022, included: • In 20 patients who had exhausted all standard therapies, with a median number of 4 prior therapies, the triple combination demonstrated: • Encouraging overall response rate of 20%, with 4 confirmed partial responses, out of which 3 are responding for at least 9 months.
Our lead product candidates, COM701, a potential first-in-class anti-PVRIG antibody, and COM902, a potential best-in-class therapeutic anti-TIGIT antibody, are in Phase 1 clinical trials and have been evaluated for the treatment of solid tumors as a monotherapy and in combination of dual (PVRIG/PD-1, PVRIG/TIGIT) and triple (PVRIG/PD-1/TIGIT) blockade.
Two programs that we are pursuing internally, COM701, a potential first-in-class anti-PVRIG antibody, and COM902, a potential best-in-class therapeutic anti-TIGIT antibody, are in Phase 1 clinical trials and have been evaluated for the treatment of solid tumors as a monotherapy and in combination of dual (PVRIG/PD-1, PVRIG/TIGIT) and triple (PVRIG/PD-1/TIGIT) blockade.
Integrating cutting edge computational capabilities with ground-breaking immuno-oncology research and drug development expertise is our differentiator and has enabled the advancement of three drug targets from computer prediction through successful preclinical studies to the clinic and as a result, we believe that we are uniquely positioned to discover and develop potential new, first-in-class treatment options for cancer patients.
Integrating cutting edge computational capabilities with ground-breaking immuno-oncology research and drug development expertise is our differentiator and has enabled the advancement of drug targets from computer prediction through successful preclinical studies to the clinic and as a result, we believe that we are uniquely positioned to discover and develop potential new, first-in-class treatment options for cancer patients. 49 Our Strategy We aim to transform patient lives by developing first-in-class therapeutics in the field of cancer immunotherapy based on our computational target discovery capabilities.
In addition, we may be subject to U.S. federal, U.S. state and foreign laws that require us to report information related to certain payments and other transfers of value to certain health care professionals, as well as ownership and investment interests in our company held by those health care professionals and their immediate family members, and data security and privacy laws that restrict our practices with respect to the use and storage of certain data. 62 Efforts to ensure that our current and future business arrangements with third parties comply with applicable healthcare laws and regulations may involve substantial costs.
In addition, we may be subject to U.S. federal, U.S. state and foreign laws that require us to report information related to certain payments and other transfers of value to certain health care professionals, as well as ownership and investment interests in our company held by those health care professionals and their immediate family members, and data security and privacy laws that restrict our practices with respect to the use and storage of certain data.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. These provisions will take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. These provisions take effect progressively starting in fiscal year 2023.
In addition to our clinical therapeutic pipeline, bapotulimab, an antibody targeting ILDR2, licensed to Bayer, under a research and discovery collaboration and license agreement has been evaluated in Phase 1 clinical trials in naïve head and neck squamous cell carcinoma patients.
In addition to our clinical therapeutic pipeline, bapotulimab, an antibody targeting ILDR2, a drug target discovered by us, which was licensed for further research and development to Bayer, under a research and discovery collaboration and license agreement, the RDCLA. Bapotulimab has been evaluated in Phase 1 clinical trials in naïve head and neck squamous cell carcinoma patients.
Following the completion of enrollment of few cohorts in the study and data disclosure from this completed cohorts, we are currently winding down this study and do not plan to further enroll additional patients.
Following the completion of enrollment of the ovarian cohort in the study and its respective data disclosure we are currently winding down this study and do not plan to further enroll additional patients.
Even if we obtain coverage for a given product, the associated reimbursement rate may not be adequate to cover our costs, including research, development, intellectual property, manufacture, sale and distribution expenses, or may require co-payments that patients find unacceptably high.
Coverage decisions may not favor new products when more established or lower cost therapeutic alternatives are already available. Even if we obtain coverage for a given product, the associated reimbursement rate may not be adequate to cover our costs, including research, development, intellectual property, manufacture, sale and distribution expenses, or may require co-payments that patients find unacceptably high.
The SEC maintains an internet site, http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Neither such internet addresses are a part of this Annual Report.
Our web address is www.cgen.com . Information contained on our website does not constitute a part of this Annual Report. The SEC maintains an internet site, http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Neither such internet addresses are a part of this Annual Report.
To our knowledge, there are no environmental issues that affect our use of the properties that we lease. ITEM 4A. UNRESOLVED STAFF COMMENTS None
To our knowledge, there are no environmental issues that affect our use of the properties that we lease.
For example, there are a significant number of anti-TIGIT antibodies that are currently in advanced clinical studies such as tiragolumab by Roche, vibostolumab by Merck, ociperlimab by Beigene, domvanalimab and AB308 by Arcus, BMS-986207 by Bristol Myers Squibb, GSK4428859A by GSK, and others at earlier stages in development.
For example, there are a significant number of anti-TIGIT antibodies that are currently in advanced Phase 3 clinical studies, such as tiragolumab by Roche, vibostolumab by Merck, rilvegostomig by AstraZeneca, ociperlimab by Beigene, domvanalimab by Gilead/Arcus, and others at earlier clinical stages of development.
As of February 1, 2023, we had a total of 52 issued and allowed patents, of which 14 are U.S. patents, 8 are European patents and additional 30 patents in other territories. Our issued and allowed patents expire between 2028 and 2037.
As of February 1, 2024, we had a total of 61 issued and allowed patents, of which 17 are U.S. patents, 8 are European patents and additional 36 patents in other territories. Our issued and allowed patents expire between 2028 and 2038.
We seek to vigorously protect our rights and interests in our intellectual property. We expect that our commercial success will depend on, among other things, our ability to obtain commercially valuable patents, especially for our therapeutic and diagnostic product candidates, maintain the confidentiality of our proprietary know-how and trade secrets, and otherwise protect our intellectual property.
We expect that our commercial success will depend on, among other things, our ability to obtain commercially valuable patents, especially for our therapeutic and diagnostic product candidates, maintain the confidentiality of our proprietary know-how and trade secrets, and otherwise protect our intellectual property. We design our patent strategy to fit the business competitive landscape and continual legislative changes.
Our early-stage programs were discovered using our discovery capabilities and consists of drug targets with the potential to address various mechanisms of immune resistance and consequently may provide new cancer immunotherapies for patients non-responsive to current cancer therapies.
We believe that the identification of new drug targets and new biological pathways has the potential to broaden the reach of cancer immunotherapies to more types of cancers and many more patients. 57 Our early-stage programs were discovered using our discovery capabilities and consists of drug targets with the potential to address various mechanisms of immune resistance and consequently may provide new cancer immunotherapies for patients non-responsive to current cancer therapies.
In connection with such license agreement, AstraZeneca developed rilvegostomig, a novel PD-/TIGIT bi-specific antibody with a TIGIT component that is derived from our COM902 and entered the clinic in September 2021 and moved to Phase 2 in November 2022.
In connection with such license agreement, AstraZeneca developed rilvegostomig, a novel PD-/TIGIT bi-specific antibody with a TIGIT component that is derived from our COM902 and entered the clinic in September 2021 and initiated Phase 3 with first patient dosing in Phase 3 in December 2023.
Phase 1 trials for COM902 were initiated in March 2020. • Rilvegostomig is a novel PD-1/TIGIT bispecific antibody with a TIGIT component that is derived from COM902 and is being developed by AstraZeneca pursuant to an exclusive license agreement with AstraZeneca. AstraZeneca initiated its Phase 2 trial in patients with advanced or metastatic non-small cell lung cancer in September 2022.
Phase 1 trials for COM902 were initiated in March 2020. • Rilvegostomig is a novel PD-1/TIGIT bispecific antibody with a TIGIT component that is derived from COM902 and is being developed by AstraZeneca pursuant to an exclusive license agreement with AstraZeneca.
Accordingly, our competitors may be more successful than we may be in identifying new drug targets and product candidates, protecting them with patent applications, developing them, accelerating their development process, obtaining FDA and other regulatory approvals and achieving widespread market acceptance. We anticipate that we will face intense and increasing competition as advanced technologies or new therapy modalities become available.
Accordingly, our competitors may be more successful than we may be in identifying new drug targets and product candidates, protecting them with patent applications, developing them, accelerating their development process, obtaining FDA and other regulatory approvals and achieving widespread market acceptance.
Other Healthcare Laws Our current and future business operations, including, among other things, our clinical research activities and our business and financial arrangements and relationships with healthcare providers, physicians and other parties through which we may market, sell and distribute our products, once approved, may be subject to extensive U.S. federal, U.S. state and foreign healthcare fraud and abuse, transparency, and data privacy and security laws.
The FDA does not regulate the behavior of physicians in their choice of treatments, but the FDA does restrict manufacturer’s communications on the subject of off-label use of their products. 64 Other Healthcare Laws Our current and future business operations, including, among other things, our clinical research activities and our business and financial arrangements and relationships with healthcare providers, physicians and other parties through which we may market, sell and distribute our products, once approved, may be subject to extensive U.S. federal, U.S. state and foreign healthcare fraud and abuse, transparency, and data privacy and security laws.
We believe that our computational approach integrated with robust experimental validation is a key differentiator from others employing computational discovery approaches. 55 Our broadly applicable predictive drug target discovery capabilities employ a suite of cloud-based computational solutions and purpose-built algorithms to sort through both public and proprietary datasets encompassing genomics, single cell and spatial transcriptomics, proteomics and machine learning based analysis of IHC images.
Our broadly applicable predictive drug target discovery capabilities employ a suite of cloud-based computational solutions and purpose-built algorithms to sort through both public and proprietary datasets encompassing genomics, single cell and spatial transcriptomics, proteomics and machine learning based analysis of IHC images.
However, we anticipate that Congress, state legislatures, and third-party payors may continue to review and assess alternative healthcare delivery and payment systems and may in the future propose and adopt legislation or policy changes or implementations effecting additional fundamental changes in the healthcare delivery system. We also expect ongoing legislative and regulatory initiatives to increase pressure on drug pricing.
We cannot predict what healthcare reform initiatives may be adopted in the future. However, we anticipate that Congress, state legislatures, and third-party payors may continue to review and assess alternative healthcare delivery and payment systems and may in the future propose and adopt legislation or policy changes or implementations effecting additional fundamental changes in the healthcare delivery system.
Clinical Development - Bristol Myers Squibb Collaboration In October 2018, we entered into the MCTC with Bristol Myers Squibb to evaluate the safety and tolerability of COM701 in combination with Bristol Myers Squibb’s PD-1 immune checkpoint inhibitor Opdivo ® (nivolumab).
COM701 is in a Phase 1 clinical trial in patients with advanced solid tumors, to evaluate in combination therapy with PD-1 inhibitor + TIGIT inhibitor. 51 Clinical Development - Bristol Myers Squibb Collaboration In October 2018, we entered into a master clinical trial collaboration agreement, or the MCTC, with Bristol Myers Squibb to evaluate the safety and tolerability of COM701 in combination with Bristol Myers Squibb’s PD-1 immune checkpoint inhibitor Opdivo ® (nivolumab).
Under the terms of the Bayer Collaboration, we received an upfront payment of $10 million, and, following the return of the CGEN 15022 program to us, we were eligible to receive an aggregate of over $250 million in potential milestone payments for bapotulimab (formerly known as BAY1905254) (an antibody against CGEN 15001T/ILDR2), not including aggregate milestone payments of approximately $23 million received to date.
Bayer Collaboration On August 5, 2013, we entered into a collaboration with Bayer, or the Bayer Collaboration, for the research, development, and commercialization of antibody-based therapeutics against two novel Compugen-discovered immune checkpoint regulators, CGEN 15001T/ILDR2 and CGEN 15022. 59 Under the terms of the Bayer Collaboration, we received an upfront payment of $10 million, and, following the return of the CGEN 15022 program to us, we were eligible to receive an aggregate of over $250 million in potential milestone payments for bapotulimab (formerly known as BAY1905254) (an antibody against CGEN 15001T/ILDR2), not including aggregate milestone payments of approximately $23 million received to date.
The Budget Control Act of 2011, triggered automatic reduction to several government programs, including reductions to Medicare payments to providers, which went into effect in April 2013 and will remain in effect until 2031, unless additional congressional action is taken.
The Budget Control Act of 2011, triggered automatic reduction to several government programs, including reductions to Medicare payments to providers, which went into effect in April 2013 and will remain in effect until 2032, unless additional congressional action is taken. Additionally, there has been increasing legislative and enforcement interest in the United States with respect to drug pricing practices.
In February 2023, AstraZeneca announced that it plans to initiate a Phase 3 trial for rilvegostomig and that expanded Phase 2 for rilvegostomig is in development. • Bapotulimab (formerly known as BAY1905254) – a therapeutic antibody targeting CGEN-15001T/ILDR2 Bapotulimab (formerly known as BAY1905254, an antibody to ILDR2 (formerly CGEN-15001T), a novel immune checkpoint target discovered by Compugen, was developed with Bayer pursuant to a research and discovery collaboration and license agreement signed in August 2013.
In addition, AstraZeneca is also running several Phase 1 and 2 trials with rilvegostomig in additional indications. • Bapotulimab (formerly known as BAY1905254) – a therapeutic antibody targeting CGEN-15001T/ILDR2 Bapotulimab (formerly known as BAY1905254, an antibody to ILDR2 (formerly CGEN-15001T), a novel immune checkpoint target discovered by Compugen, was developed with Bayer pursuant to a research and discovery collaboration and license agreement signed in August 2013.
Data disclosed from this arm in 2022: In November 2022, at the 37 th Annual Meeting of the Society for Immunotherapy of Cancer (SITC), we presented preliminary data in a poster titled “PVRIG, a novel T cell checkpoint, is preferentially expressed in TLS on stem-like memory T cells, potentially inhibiting their expansion”.
Following the completion of enrollment of few cohorts in the study and data disclosure from completed cohorts, we are currently winding down this study and do not plan to further enroll additional patients. 52 Data disclosed from this arm in 2022: In November 2022, at the 37 th Annual Meeting of the Society for Immunotherapy of Cancer (SITC), we presented preliminary data in a poster titled “PVRIG, a novel T cell checkpoint, is preferentially expressed in TLS on stem-like memory T cells, potentially inhibiting their expansion”.
Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product does not undergo unacceptable deterioration over its shelf life. 61 United States Review and Approval Processes The results of product development, nonclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests, proposed labeling, and other relevant information are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications.
United States Review and Approval Processes The results of product development, nonclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests, proposed labeling, and other relevant information are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications.
Based on similar considerations the division considers the claimed subject-matter insufficiently disclosed in the patent. In January 2023, another opposition was filed by GSK, requesting revocation of our granted European patent relating to method of screening for inhibitors of the binding association of PVRIG polypeptide with PVRL2. We plan to timely respond to this opposition.
In January 2023, another opposition was filed by GSK, requesting revocation of our granted European patent relating to method of screening for inhibitors of the binding association of PVRIG polypeptide with PVRL2 and we already responded to this opposition.
The indications for the combination therapy expansion cohort, ovarian, breast, endometrial and colorectal cancers were selected based on preclinical biomarker assessments and based on emerging clinical data from the dose-escalation cohorts of the trial.
In June 2021, we announced that the first patient in the combination expansion cohort of this Phase 1 Arm B clinical has been dosed. The indications for the combination therapy expansion cohort, ovarian, breast, endometrial and colorectal cancers were selected based on preclinical biomarker assessments and based on emerging clinical data from the dose-escalation cohorts of the trial.
Competition The biotechnology and pharmaceutical industries are highly competitive and characterized by the rapid evolution of new technologies and the adoption of new therapies. Additionally, the oncology therapeutic space, and in particular the immuno-oncology or cancer immunotherapy subsector, represents the therapeutic area with, what we believe to be one of the highest industry focus and investment.
Additionally, the oncology therapeutic space, and in particular the immuno-oncology or cancer immunotherapy subsector, represents the therapeutic area with what we believe to be one of the highest industry focus and investment.
Human clinical trials are typically conducted in three sequential phases that may overlap or be combined: • Phase 1: The product candidate is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion.
Protocols detail, among other things, the objectives of the study, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety and determine efficacy. 63 Human clinical trials are typically conducted in three sequential phases that may overlap or be combined: • Phase 1: The product candidate is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion.
Furthermore, our data show that similar to TIGIT, PVRIG is expressed in stem-like memory T cells (TSCM) and PVRL2 is expressed in both dendritic cells and tertiary lymphoid structures, as well as in PD-L1low less inflamed tumors. TSCM cells, dendritic cells and tertiary lymphoid structures have all been shown to be important in clinical response to checkpoint inhibitors.
Furthermore, our data show that, PVRIG is expressed in stem-like memory T cells (TSCM) and PVRL2 is expressed in both dendritic cells and tertiary lymphoid structures, as well as in PD-L1 low less inflamed tumors.
Under the collaboration agreement, bapotulimab was previously evaluated by Bayer in a Phase 1 expansion trial in combination with Keytruda, in head and neck cancer that has returned or is discovered to be metastatic and is expressing PDL1 to evaluate the combination treatment. 54 On November 29, 2022, Bayer notified us that it has resolved to terminate, effective as of February 27, 2023, our 2013 research and development collaboration and license agreement.
Under the collaboration agreement, bapotulimab was previously evaluated by Bayer in a Phase 1 expansion trial in combination with Keytruda, in head and neck cancer that has returned or is discovered to be metastatic and is expressing PDL1 to evaluate the combination treatment.
This subsidiary did not have any significant operations from 2008 to March 2012. 47 Principal Capital Expenditures In the years ended December 31, 2022, 2021 and 2020, our capital expenditures were $0.4 million, $0.4 million and $0.1 million, respectively. As of December 31, 2022, we had no significant commitments for capital expenditures. B.
Principal Capital Expenditures In the years ended December 31, 2023, 2022 and 2021, our capital expenditures were $0.2 million, $0.4 million and $0.4 million, respectively. As of December 31, 2023, we had no significant commitments for capital expenditures. B.
Our Predictive Computational Discovery Approach Our target discovery is a predictive, proprietary computational process that we initiate based on a clinical need. The unmet clinical need and the therapeutic strategy dictate the target discovery approach, the appropriate tools and most relevant data to be employed.
The unmet clinical need and the therapeutic strategy dictate the target discovery approach, the appropriate tools and most relevant data to be employed.
Compugen USA, Inc., our wholly owned subsidiary, was incorporated in Delaware in March 1997 and is qualified to do business in California. D. PROPERTY, PLANTS AND EQUIPMENT In December 2015, we moved to new facilities in Holon, Israel where we leased an aggregate of approximately 35,250 square feet of office, biology laboratory facilities and warehouse.
PROPERTY, PLANTS AND EQUIPMENT In December 2015, we moved to new facilities in Holon, Israel where we leased an aggregate of approximately 35,250 square feet of office, biology laboratory facilities and warehouse.
These patients with MSS-CRC and platinum resistant ovarian cancer will receive study treatment with COM902 + COM701 + pembrolizumab. • Rilvegostomig - a therapeutic PD-1/TIGIT bi-specific antibody with a TIGIT component that is derived from our COM902 Rilvegostomig is a novel PD-1/TIGIT bi-specific antibody with a TIGIT component that is derived from our COM902 being developed by AstraZeneca pursuant to an exclusive license between us and AstraZeneca.
In June 2023 we announced the dosing of the first patient in platinum resistant ovarian cancer cohort in this trial. • Rilvegostomig - a therapeutic PD-1/TIGIT bi-specific antibody with a TIGIT component that is derived from our COM902 Rilvegostomig is a novel PD-1/TIGIT bi-specific antibody with a TIGIT component that is derived from our COM902 being developed by AstraZeneca pursuant to an exclusive license between us and AstraZeneca.
In Israel, the Council on Animal Experimentation has regulatory and enforcement powers, including the ability to suspend, change or withdraw approvals, among other powers.
In Israel, the Council on Animal Experimentation has regulatory and enforcement powers, including the ability to suspend, change or withdraw approvals, among other powers. To our knowledge, we and the third-party service providers we work with, as applicable, substantially comply with these regulatory requirements.
Until the conclusion of the wind down of the combination studies with Bristol Myers Squibb, Bristol Myers Squibb continues to supply at no cost Opdivo® for the dual combination trial and supplies both Opdivo® and its investigational antibody targeting TIGIT known as BMS-986207 at no cost, for the triple combination trial. 50 COM701 Clinical Programs In September 2018, we dosed our first patient in the Phase 1 clinical trial of COM701.
See “Business Strategy and Partnerships - Bristol Myers Squibb Collaboration” below. Until the conclusion of the wind down of the combination studies with Bristol Myers Squibb, Bristol Myers Squibb continues to supply at no cost Opdivo® and its investigational antibody targeting TIGIT known as BMS-986207 for the triple combination trial.
A patient population with similar eligibility criteria as enrolled for the dose escalation cohorts in Arm A was enrolled for this part of the trial and enrollment was completed during 2020. In June 2021, we announced that the first patient in the combination expansion cohort of this Phase 1 Arm B clinical has been dosed.
Phase 1 Arm B of the trial evaluated the safety and tolerability and preliminary antitumor activity of COM701 in combination with a PD-1 inhibitor (nivolumab). A patient population with similar eligibility criteria as enrolled for the dose escalation cohorts in Arm A was enrolled for this part of the trial and enrollment was completed during 2020.
If approved, such cancer immunotherapy products would compete with our product candidates for commercialization or approved products in the respective fields.
Antibodies for IL-18BP are also being developed in Lassen Therapeutics (LASN-500) in the discovery stage.If advanced or approved, such cancer immunotherapy products would compete with our product candidates for commercialization or approved products in the respective fields.
On November 29, 2022, Bayer notified us that it has resolved to terminate, effective as of February 27, 2023, our 2013 research and development collaboration and license agreement.
On November 29, 2022, Bayer notified us that it has resolved to terminate, effective as of February 27, 2023, our 2013 research and development collaboration and license agreement. In accordance with the terms of said agreement, we obtained from Bayer such rights necessary to allow us to continue the development and commercialization of bapotulimab, should we choose to do so.
Coverage and Reimbursement Market acceptance of products is dependent on the extent to which coverage and reimbursement is available from third-party payors. Significant uncertainty exists as to the coverage and reimbursement status of any products for which we may obtain regulatory approval. Coverage decisions may not favor new products when more established or lower cost therapeutic alternatives are already available.
We also expect ongoing legislative and regulatory initiatives to increase pressure on drug pricing. Coverage and Reimbursement Market acceptance of products is dependent on the extent to which coverage and reimbursement is available from third-party payors. Significant uncertainty exists as to the coverage and reimbursement status of any products for which we may obtain regulatory approval.
If in development stage, such cancer immunotherapy products would compete with our product candidates for entering into strategic partnerships with pharmaceutical and biotechnology companies which form the basis of our business model. 58 Our discovery program depends, in large part, on our computational discovery capabilities in integration with our immune-oncology experimental capabilities and drug development capabilities as well as our proprietary data to make inventions and establish intellectual property rights in our drug target candidates and product candidates.
Our discovery program depends, in large part, on our computational discovery capabilities in integration with our immune-oncology experimental capabilities and drug development capabilities as well as our proprietary data to make inventions and establish intellectual property rights in our drug target candidates and product candidates.
Our competitors include biotechnology and pharmaceutical companies both small and large, the research and discovery groups within pharmaceutical companies, computational discovery and development companies, academic and research institutions, newly founded companies and governmental and other publicly funded agencies.
Our competitors include biotechnology and pharmaceutical companies both small and large, the research and discovery groups within pharmaceutical companies, computational discovery and development companies, academic and research institutions, newly founded companies and governmental and other publicly funded agencies. 60 Any product candidates that we successfully develop will compete with currently approved therapies and new therapies that may become available in the future.
Our therapeutic pipeline of early-stage immuno-oncology programs consists of programs aiming to address various mechanisms of immune resistance. Our most advanced early-stage program, COM503, is a potential first-in-class high affinity antibody, which blocks the interaction between IL-18 binding protein and IL-18, thereby releasing the natural IL-18 into the tumor microenvironment to inhibit cancer growth.
We have the right to continue the development and commercialization of bapotulimab, should we choose to do so. In our preclinical therapeutic pipeline, our most advanced program is: • COM503 is a potential first-in-class high affinity antibody, which blocks the interaction between IL-18 binding protein and IL-18, thereby freeing natural IL-18 in the tumor microenvironment to inhibit cancer growth.
Rilvegostomig, a novel anti PD-1/TIGIT bispecific antibody with a TIGIT-specific component that is derived from our COM902 antibody, is being developed by AstraZeneca pursuant to an exclusive license agreement between us and AstraZeneca and is in Phase 2 clinical trial in patients with advanced or metastatic non-small cell lung cancer and locally advanced or metastatic gastric cancer.
Rilvegostomig, a novel anti PD-1/TIGIT bispecific antibody with a TIGIT-specific component that is derived from our COM902 antibody, is being developed by AstraZeneca pursuant to an exclusive license agreement between us and AstraZeneca and is being evaluated in multiple clinical trials, including in Phase 3 clinical trial in patients with biliary tract cancer who will be randomized to receive rilvegostomig or placebo with investigator choice chemotherapy as adjuvant treatment after resection with curative intent.
ITEM 4. INFORMATION ON THE COMPANY A. HISTORY AND DEVELOPMENT OF THE COMPANY History Our legal and commercial name is Compugen Ltd. We were incorporated on February 10, 1993, as an Israeli corporation and operate under the Israeli Companies Law, 5759-1999, as amended together with all regulations promulgated thereunder, or the Companies Law.
ITEM 4. INFORMATION ON THE COMPANY A. HISTORY AND DEVELOPMENT OF THE COMPANY History Our legal and commercial name is Compugen Ltd. We were incorporated on February 10, 1993, as an Israeli corporation and operate under the Companies Law. Our principal offices are located at 26 Harokmim Street, Holon 5885849, Israel, and our telephone number is +972-3-765-8585.
In February 2023, AstraZeneca announced that it plans to initiate a Phase 3 trial for rilvegostomig and that expanded Phase 2 for rilvegostomig is in development. 56 Subject to termination rights for material breach, bankruptcy or by us for patent challenge by AstraZeneca, the term of the license agreement continues until the expiration of the last Royalty Term in the Territory, each as defined in the license agreement.
Subject to termination rights for material breach, bankruptcy or by us for patent challenge by AstraZeneca, the term of the license agreement continues until the expiration of the last Royalty Term in the Territory, each as defined in the license agreement. In addition, AstraZeneca may terminate the agreement for convenience upon prior written notice.
The patient population enrolled in the dose escalation was all comers and included patients who have failed prior therapies including other checkpoint inhibitors and have no other available approved therapies. Phase 1 Arm B of the trial evaluates the safety and tolerability and preliminary antitumor activity of COM701 in combination with a PD-1 inhibitor.
We completed the enrollment to both the dose escalation and expansion cohorts. The patient population enrolled in the dose escalation was all comers and included patients who have failed prior therapies including other checkpoint inhibitors and have no other available approved therapies.
This research and discovery collaboration and license agreement expired on February 27, 2023, and we are currently in the process of obtaining certain rights from Bayer to allow us to continue the development and commercialization of bapotulimab, should we choose to do so.
On November 29, 2022, Bayer notified us that it has resolved to terminate, effective as of February 27, 2023, our 2013 research and development collaboration and license agreement. In accordance with the terms of said agreement, we obtained from Bayer such rights necessary to allow us to continue the development and commercialization of bapotulimab, should we choose to do so.
Our multi-omics data analysis is designed to identify first-in-class drug target candidates, which are generally difficult to identify using traditional experimental approaches.
Our multi-omics data analysis is designed to identify first-in-class drug target candidates, which are generally difficult to identify using traditional experimental approaches. We believe that our cutting-edge computational capabilities integrated with our ground-breaking immuno-oncology research and drug development expertise is a key differentiator from others employing computational discovery approaches.
It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry.
On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges. It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

94 edited+29 added−21 removed51 unchanged
Research and development expenses, as a percentage of total operating expenses, were 73% in 2022 compared to 71% in 2021. Marketing and Business Development Expenses . Marketing and business development expenses increased by 11% and totaled in approximately $0.9 million in 2022 compared with approximately $0.8 million in the comparable period of 2021.
Research and development expenses, as a percentage of total operating expenses, were 73% in 2022 compared to 71% in 2021. Marketing and Business Development Expenses . Marketing and business development expenses increased by 11% and totaled approximately $0.9 million in 2022 compared with approximately $0.8 million in the comparable period of 2021.
The offer and sale of our ordinary shares, if any, will be made pursuant to the our shelf registration statement on Form F-3, as supplemented by the prospectus supplement filed on January 31, 2023. Pursuant to the said prospectus supplement, we may offer and sell up to $50 million of our ordinary shares.
The offer and sale of our ordinary shares, if any, will be made pursuant to our shelf registration statement on Form F-3, as supplemented by the prospectus supplement filed on January 31, 2023. Pursuant to the said prospectus supplement, we may offer and sell up to $50 million of our ordinary shares.
Background We are a clinical-stage therapeutic discovery and development company utilizing our broadly applicable predictive computational discovery capabilities to identify novel drug targets and new biological pathways to develop therapeutics in the field of cancer immunotherapy. Our innovative immuno-oncology pipeline consists of three clinical stage programs, targeting immune checkpoints we discovered computationally by COM701, COM902 and rilvegostomig .
Background We are a clinical-stage therapeutic discovery and development company utilizing our broadly applicable predictive computational discovery capabilities to identify novel drug targets and new biological pathways to develop therapeutics in the field of cancer immunotherapy. Our innovative immuno-oncology pipeline consists of three clinical stage programs, COM701, COM902 and rilvegostomig, targeting immune checkpoints we discovered computationally.
We believe that our future success will depend, in large part, on our ability to discover promising drug target candidates and therapeutic product candidates and to successfully advance the research and development of certain of our product candidates under our internal pipeline towards preclinical and clinical studies and to successfully enter into revenue-sharing partnering agreements with pharmaceutical companies with respect to our product candidates at the various development stages.
We believe that our future success will depend, in large part, on our ability to discover promising drug target candidates and therapeutic product candidates and to successfully advance the research and development of certain of our product candidates in our internal pipeline towards preclinical and clinical studies and to successfully enter into revenue-sharing partnering agreements with pharmaceutical companies with respect to our product candidates at the various development stages.
In addition, we granted the underwriters a 30-day option to purchase up to 1,250,000 additional ordinary shares at the public offering price, less the underwriting discounts and commissions. 69 In this underwritten public offering we issued a total of 8,816,339 ordinary shares (including the shares issued upon exercise of the underwriters’ option) at said $9.00 price per share.
In addition, we granted the underwriters a 30-day option to purchase up to 1,250,000 additional ordinary shares at the public offering price, less the underwriting discounts and commissions. In this underwritten public offering we issued a total of 8,816,339 ordinary shares (including the shares issued upon exercise of the underwriters’ option) at said $9.00 price per share.
Additional sources of cash may include proceeds generated from agreements with collaborators and other third parties with respect to our novel targets and therapeutic drug candidates and proceeds from issuance of ordinary shares as a result of exercise of options, warrants and shares pursuant to our employee share purchase plan and/or from financing transactions.
Additional sources of cash may include proceeds generated from agreements with collaborators and other third parties with respect to our novel targets and therapeutic drug candidates and proceeds from issuance of ordinary shares as a result of exercise of options, issuance of ordinary shares pursuant to our employee share purchase plan and/or from financing transactions.
However, subject to such limitation, we did identify certain trends that may have an effect on us, some of which are as specified below, and as covered in the risk factors set forth under “Item 3. Key Information - D. Risk Factors”.
However, subject to such limitation, we did identify certain trends that may have an effect on us, some of which are as specified below, and as covered in the risk factors set forth under “Item 3. Key Information - D.
We have not elected to implement the 2011 Amendment and we do not currently have any Preferred Enterprises. 68 In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which includes Amendment 73 to the Law, or Amendment 73, was published.
We have not elected to implement the 2011 Amendment and we do not currently have any Preferred Enterprises. In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which includes Amendment 73 to the Law, or Amendment 73, was published.
However, these benefits may not be applied to reduce the U.S. federal tax rate for any income that our U.S. subsidiary may generate. In April 2005, substantive amendments to the Investment Law came into effect.
However, these benefits may not be applied to reduce the U.S. federal tax rate for any income that our U.S. subsidiary may generate. 70 In April 2005, substantive amendments to the Investment Law came into effect.
Integrating cutting edge computational capabilities with ground-breaking immuno-oncology research and drug development expertise is our differentiator and has enabled the advancement of three drug targets from computer prediction through successful preclinical studies to the clinic and as a result, we believe that we are uniquely positioned to discover and develop potential new, first-in-class treatment options for cancer patients. 65 A.
Integrating cutting edge computational capabilities with ground-breaking immuno-oncology research and drug development expertise is our differentiator and has enabled the advancement of drug targets from computer prediction through successful preclinical studies to the clinic and as a result, we believe that we are uniquely positioned to discover and develop potential new, first-in-class treatment options for cancer patients. A.
In addition, we expect to continue to expand our discovery infrastructure and capabilities which provide us with the underlying engine for the discovery of promising drug targets for our therapeutic pipeline. Research and Development Grants We have participated in programs offered by the IIA that support research and development activities. See Note 7b to our 2022 consolidated financial statement.
In addition, we expect to continue to expand our discovery infrastructure and capabilities which provide us with the underlying engine for the discovery of promising drug targets for our therapeutic pipeline. Research and Development Grants We have participated in programs offered by the IIA that support research and development activities. See Note 7b to our 2023 consolidated financial statement.
In December 2020 the program under the exclusive license agreement with AstraZeneca achieved a preclinical milestone and in September 2021 and in November 2022 such program achieved clinical milestones and in connection with such milestones, we recognized revenues in an amount of $2 million, $6 million and $7.5 million, in the years 2020, 2021 and 2022, respectively, in accordance with the criteria prescribed under ASC 606.
In December 2020 the program under the exclusive license agreement with AstraZeneca achieved a preclinical milestone and in September 2021, November 2022 and December 2023 such program achieved clinical milestones and in connection with such milestones, we recognized revenues in an amount of $2 million, $6 million, $7.5 million and $10 million, in the years 2020, 2021, 2022, and 2023, respectively, in accordance with the criteria prescribed under ASC 606.
The decrease during 2022 was attributed mostly to decrease in D&O insurance premium costs (that effected our industry) and non-cash stock option related expenses. General and administrative expenses, as a percentage of total operating expenses, were 25% in 2022 compared to 27% 2021. Financial Income (loss), Net.
The decrease during 2022 was attributed mostly to decrease in D&O insurance premium costs (that effected our industry) and in non-cash stock option related expenses. General and administrative expenses, as a percentage of total operating expenses, were 25% in 2022 compared to 27% in 2021. Financial and Other Income, Net.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion of our operating and financial review and prospects should be read in conjunction with our consolidated financial statements and related notes, prepared in accordance with U.S. GAAP as of December 31, 2022, and with any other financial data included elsewhere in this Annual Report .
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion of our operating and financial review and prospects should be read in conjunction with our consolidated financial statements and related notes, prepared in accordance with U.S. GAAP as of December 31, 2023, and with any other financial data included elsewhere in this Annual Report .
License Agreement AstraZeneca License Agreement On March 30, 2018, the Company and AstraZeneca, entered into an exclusive license agreement to enable the development of bi-specific and multi-specific immuno-oncology antibody products based on the Company’s monospecific antibodies that bind to TIGIT, including COM902, pursuant to which the Company received an upfront payment of $10 million and is eligible to receive up to $200 million in development, regulatory and commercial milestones for the first product as well as tiered royalties on future product sales, out of which we accrued $2 million in 2020 as a preclinical milestone, $6 million in 2021 as a clinical milestone (triggered by the dosing of the first patient in a Phase 1/2 trial evaluating rilvegostomig) and additional $7.5 million as a clinical milestone (triggered by the dosing of the first patient in its ARTEMIDE Phase 2 trial evaluating rilvegostomig).
License Agreement AstraZeneca License Agreement On March 30, 2018, we and AstraZeneca, entered into an exclusive license agreement to enable the development of bi-specific and multi-specific immuno-oncology antibody products based on the Company’s monospecific antibodies that bind to TIGIT, including COM902, pursuant to which the Company received an upfront payment of $10 million and is eligible to receive up to $200 million in development, regulatory and commercial milestones for the first product as well as tiered royalties on future product sales, out of which we accrued $2 million in 2020 as a preclinical milestone, $6 million in 2021 as a clinical milestone (triggered by the dosing of the first patient in a Phase 1/2 trial evaluating rilvegostomig), $7.5 million in 2022 as a clinical milestone (triggered by the dosing of the first patient in its ARTEMIDE Phase 2 trial evaluating rilvegostomig) and $10 million in 2023 as a clinical milestone (triggered by the dosing of the first patient in its ARTEMIDE-Bil01 Phase 3 trial evaluating rilvegostomig).
For example, for the year ended December 31, 2021, assuming a 10% devaluation of the dollar against the NIS, we would have experienced an increase in our net loss of approximately $1.4 million, while assuming a 10% appreciation of the dollar against the NIS, we would experience a decrease in our net loss of approximately $1.1 million.
For example, for the year ended December 31, 2023, assuming a 10% devaluation of the dollar against the NIS, we would have experienced an increase in our net loss of approximately $1.4 million, while assuming a 10% appreciation of the dollar against the NIS, we would experience a decrease in our net loss of approximately $1.1 million.
The Company accrues costs for pre-clinical and clinical trial activities based upon estimates of the services received and related expenses incurred that have yet to be invoiced by the contract research organizations or other pre-clinical or clinical trial vendors that perform the activities.
The Company accrues costs for preclinical and clinical trial activities based upon estimates of the services received and related expenses incurred that have yet to be invoiced by the contract research organizations or other preclinical or clinical trial vendors that perform the activities.
As of December 31, 2022, 46 of our employees were engaged in research and development on a full-time basis. This represents approximately 70% of our entire work force at that time.
As of December 31, 2023, 46 of our employees were engaged in research and development on a full-time basis. This represents approximately 70% of our entire work force at that time.
Under Israeli law, these net operating losses may generally be carried forward indefinitely and offset against certain future taxable income. As of December 31, 2022, the net operating loss carry-forward of our U.S. subsidiary for federal income tax purposes amounted to approximately $0.7 million.
Under Israeli law, these net operating losses may generally be carried forward indefinitely and offset against certain future taxable income. As of December 31, 2023, the net operating loss carry-forward of our U.S. subsidiary for federal income tax purposes amounted to approximately $3.0 million.
The growth of this class has driven a large number of companies to invest in new technologies (e.g., bi-specific monoclonal antibodies, multi-specific antibodies, antibody fragments) and new approaches to fully exploit the potential of this class.
The growth of this class has driven a large number of companies to invest in new technologies (e.g., bi-specific monoclonal antibodies, multi-specific antibodies, antibody fragments, T cell engagers) and new approaches to fully exploit the potential of this class.
The Company recognizes revenue in accordance with ASC 606 - “Revenue from Contracts with Customers”. As such, the Company analyzes its collaborative and license agreements to assess whether they are within the scope of ASC 606.
The Company recognizes revenue in accordance with ASC 606 - “Revenue from Contracts with Customers.” As such, the Company analyzes its collaborative and license agreements to assess whether they are within the scope of ASC 606.
As such, it is not possible for us to predict with any degree of accuracy any significant trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net loss, liquidity or capital resources, or that would cause financial information to not necessarily be indicative of future operating results or financial condition.
As such, it is not possible for us to predict with a reasonable degree of accuracy any material trends, uncertainties, or other events that are reasonably likely to have a material effect on our net loss, liquidity or capital resources, or that would cause financial information to not necessarily be indicative of our future operating results or our financial condition.
Share-based compensation expense recognized under ASC 718 was approximately $4.3 million, $4.3 million and $2.8 million for the years ended December 31, 2022, 2021 and 2020, respectively. Revenue Recognition Our revenues are generated mainly from collaborative and license agreements. In the agreements, revenues are typically derived mainly from upfront payment and contingent payments related to milestone achievements.
Share-based compensation expense recognized under ASC 718 was approximately $3.6 million, $4.3 million and $4.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. Revenue Recognition Our revenues are generated mainly from collaborative and license agreements. In the agreements, revenues are typically derived mainly from upfront payment and contingent payments related to milestone achievements.
During the year ended December 31, 2022, the Company had approximately $1.0 million in cost of revenues compared with approximately $0.7 million cost of revenues in the comparable period of 2021. Cost of revenues for the years ended December 31, 2022 and 2021, represents milestone and royalty payments in connection with our revenues. 66 Research and Development Expenses.
During the year ended December 31, 2022, the Company had approximately $1.0 million in cost of revenues compared with approximately $0.7 million cost of revenues in the comparable period of 2021. Cost of revenues for the years ended December 31, 2022 and 2021, represent milestone and royalty payments in connection with our revenues. 69 Research and Development Expenses.
As of December 31, 2022, we received grants from the IIA in the principal amount of approximately $7.3 million.
As of December 31, 2023, we received grants from the IIA in the principal amount of approximately $7.3 million.
We expect that in 2023 our research and development expenses will continue to be our major operating expense.
We expect that in 2024 our research and development expenses will continue to be our major operating expense.
Public Offering On March 11, 2020, we entered into an underwriting agreement with SVB Securities LLC (previously known as SVB Leerink LLC) and Stifel, Nicolaus & Company, Incorporated, as representatives of the several underwriters named therein, for the issuance and sale in a public offering of 8,333,334 of our ordinary shares at a price to the public of $9.00 per share.
Public Offering On March 11, 2020, we entered into an underwriting agreement with Leerink Partners LLC, or Leerink, and Stifel, Nicolaus & Company, Incorporated, as representatives of the several underwriters named therein, for the issuance and sale in a public offering of 8,333,334 of our ordinary shares at a price to the public of $9.00 per share.
Sales Agreement with SVB Securities LLC On January 31, 2023, we entered into a Sales Agreement, or the Sales Agreement with SVB Securities LLC, or SVB, as sales agent, pursuant to which we may offer and sell, from time to time through SVB, our ordinary shares.
Sales Agreement with Leerink Partners LLC On January 31, 2023, we entered into a Sales Agreement, or the Sales Agreement with Leerink, as sales agent, pursuant to which we may offer and sell, from time to time through Leerink, our ordinary shares.
Quantitative And Qualitative Disclosures About Market Risk – Interest Rate Risk.” Trend Towards Biologics Biologics (monoclonal and bispecific antibodies, ADCs, enzymes and pegylated proteins) represent one of the fastest growing segments in the drug industry, making up 29% of FDA approved drugs in 2022.
Quantitative And Qualitative Disclosures About Market Risk – Interest Rate Risk.” 77 Trend Towards Biologics Biologics (monoclonal and bispecific antibodies, ADCs, enzymes and pegylated proteins) represent one of the fastest growing segments in the drug industry, making up 31% of FDA approved drugs in 2023.
Based on the data from the Phase 1 trials and as part of our corporate focus on two specific tumor types for the further clinical evaluation of COM701 and COM902, we intend to initiate two clinical trials evaluating the triple combination treatment of COM701, COM902 and pembrolizumab, one in metastatic microsatellite stable colorectal cancer patients and one in platinum resistant ovarian cancer patients.
Based on the data from the Phase 1 trials and as part of our focus on two specific tumor types for the further clinical evaluation of COM701 and COM902, we initiated in 2023 two clinical trials evaluating the triple combination treatment of COM701, COM902 and pembrolizumab, one in metastatic microsatellite stable colorectal cancer patients and one in platinum resistant ovarian cancer patients.
Amortization of participation in research and development expenses for the years ended December 31, 2022, 2021 and 2020 were approximately $6.0 million, $1.3 million and $0.8 million, respectively. Recent Accounting Pronouncements See Note 2s to our 2022 consolidated financial statement.
Amortization of participation in research and development expenses for the years ended December 31, 2023, 2022 and 2021 were approximately $0.3 million, $6.0 million and $1.3 million, respectively. Recent Accounting Pronouncements See Note 2t to our 2023 consolidated financial statement.
In connection with the issuance of the ordinary shares, we also issued warrants to purchase up to approximately 4.3 million additional ordinary shares. The warrants have an exercise price of $4.74 per share and have a term of five years from the date of issuance.
In connection with the issuance of the ordinary shares, we also issued warrants to purchase up to approximately 4.3 million additional ordinary shares. The warrants had an exercise price of $4.74 per share and had a term of five years from the date of issuance and therefore already expired.
Therefore, a company may be required to record deferred tax liability with respect to such tax-exempt income, which would have an adverse effect on its results of operations. Additional amendments to the Investment Law became effective in January 2011 and were further amended in August 2013, or the 2011 Amendment.
Therefore, a company may be required to record deferred tax liability with respect to such tax-exempt income, which would have an adverse effect on its results of operations. Additional amendments to the Investment Law became effective in January 2011, or the 2011 Amendment.
Therefore, our contingent obligation for royalties, net of royalties already paid or accrued in the sum of approximately $2.0 million, along with the accumulated LIBOR interest to date of approximately $4.3 million, totaled to approximately $9.6 million as of December 31, 2022.
Therefore, our contingent obligation for royalties, net of royalties already paid or accrued in the sum of approximately $3.0 million, along with the accumulated LIBOR interest to date of approximately $4.7 million, totaled to approximately $9.0 million as of December 31, 2023.
We account for forfeitures as they occur. The value of the pro-rata portion of the award, assuming no forfeiture, is recognized in our consolidated statement of comprehensive loss as an expense over the requisite service periods. Upon forfeiture the expense is adjusted so that expense is recognized for the portion of the award that actually vested.
The value of the pro-rata portion of the award, assuming no forfeiture, is recognized in our consolidated statement of comprehensive loss as an expense over the requisite service periods. Upon forfeiture the expense is adjusted so that expense is recognized for the portion of the award that actually vested.
Liquidity and Capital Resources.” Years Ended December 31, 2022 and 2021 Revenues. Revenues for the year ended December 31, 2022, were $7.5 million, compared with $6.0 million in the comparable period of 2021. The revenues for 2022 and 2021 reflect clinical milestones from the license agreement with AstraZeneca. Cost of Revenues.
Revenues for the year ended December 31, 2022, were $7.5 million, compared with $6.0 million in the comparable period of 2021. The revenues for 2022 and 2021 reflect clinical milestones from the license agreement with AstraZeneca. Cost of Revenues.
Changes in net cash during the years are affected by the level of cash in the Company over the years which are deposited or withdrawn from bank deposits based on the cash needs to fund our operating activities.
Changes in net cash during the years are affected by the level of cash in the Company over the years which are deposited or withdrawn from bank deposits, or invested or received from maturity of marketable securities based on the cash needs to fund our operating activities.
OPERATING RESULTS Overview Since our inception, we have incurred significant losses and, as of December 31, 2022, we had an accumulated deficit of $455.8 million. We expect to continue to incur net losses for the foreseeable future.
OPERATING RESULTS Overview Since our inception, we have incurred significant losses and, as of December 31, 2023, we had an accumulated deficit of $474.5 million. We expect to continue to incur net losses for the foreseeable future.
During 2021, the Company issued and sold 89,557 ordinary shares underlying 89,557 warrants (with proceeds of approximately $0.4 million). As of December 31, 2022, 297,469 warrants remained outstanding.
During 2021, the Company issued and sold 89,557 ordinary shares underlying 89,557 warrants (with proceeds of approximately $0.4 million). As of December 31, 2023, no warrants remained outstanding.
Access to Additional Funds Should we need to secure additional sources of liquidity, we believe that we could finance our needs through the issuance of equity securities, including through our Sales Agreement with SVB, debt securities or other arrangements.
Risk Factors.” 76 Access to Additional Funds Should we need to secure additional sources of liquidity, we believe that we could finance our needs through the issuance of equity securities, including through our Sales Agreement with Leerink, debt securities or other arrangements.
In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, the Company performs the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when, or as, we satisfy a performance obligation.
In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, the Company performs the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when, or as, we satisfy a performance obligation. 78 The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.
Any dividends distributed to “foreign companies”, as defined in the Law, deriving from income from the Technological Enterprises will be subject, under certain conditions, to tax at a rate of 4%. As of December 31, 2022, our net operating loss carry-forward for Israeli tax purposes amounted to approximately $398.1 million.
Any dividends distributed to “foreign companies”, as defined in the Law, deriving from income from the Technological Enterprises will be subject, under certain conditions, including holding at least 90% of the share capital, to tax at a rate of 4%. As of December 31, 2023, our net operating loss carry-forward for Israeli tax purposes amounted to approximately $401.1 million.
As of January 1, 2014, dividends distributed from Preferred Income would subject the recipient to a 20% tax (or lower, if so provided under an applicable tax treaty), which would generally be withheld by the distributing company, provided however that dividends distributed from ‘Preferred Income’ from one Israeli corporation to another, would not be subject to tax .
As of January 1, 2014, dividends distributed from Preferred Income would subject the recipient to a 20% tax (or lower, if so provided under an applicable tax treaty, subject to the receipt in advance of a valid tax certificate from the Israel Tax Authority allowing for a reduced tax rate), which would generally be withheld by the distributing company, provided however that dividends distributed from ‘Preferred Income’ from one Israeli corporation to another, would not be subject to tax.
The portion of the Bristol Myers Squibb $12.0 million investment in 2018 over the fair market value of the shares issued in the amount of approximately $4.1 million and the portion of the Bristol Myers Squibb $20.0 million investment in 2021 over the fair market value of the shares issued in the amount of $5.0 million were considered as deferred participation of Bristol Myers Squibb in research and development expenses which is amortized over the period of the clinical trial based on the progress in the research and development, in accordance with ASC 808 “Collaborative Arrangements”, see Note 1f and Note 8b to our 2022 consolidated financial statements.
Payments made in advance of the performance of the related services are recorded as prepaid expenses until the services are rendered. 79 The portion of the Bristol Myers Squibb $12.0 million investment in 2018 over the fair market value of the shares issued in the amount of approximately $4.1 million and the portion of the Bristol Myers Squibb $20.0 million investment in 2021 over the fair market value of the shares issued in the amount of $5.0 million were considered as deferred participation of Bristol Myers Squibb in research and development expenses which was amortized over the period of the clinical trial based on the progress in the research and development, in accordance with ASC 808 “Collaborative Arrangements”, see Note 1f and Note 8b to our 2023 consolidated financial statements.
Our lead product candidates, COM701, a potential first-in-class anti-PVRIG antibody, and COM902, a potential best-in-class therapeutic anti-TIGIT antibody, are in Phase 1 clinical trials and have been evaluated for the treatment of solid tumors as a monotherapy and in combination of dual (PVRIG/PD-1, PVRIG/TIGIT) and triple (PVRIG/PD-1/TIGIT) blockade.
Two programs that we are pursuing internally, COM701, a potential first-in-class anti-PVRIG antibody, and COM902, a potential best-in-class therapeutic anti-TIGIT antibody, are in Phase 1 clinical trials and have been evaluated for the treatment of solid tumors as a monotherapy and in combination of dual (PVRIG/PD-1, PVRIG/TIGIT) and triple (PVRIG/PD-1/TIGIT) blockade.
In such circumstances, the nonrefundable advance payments are deferred and capitalized, even when there is no alternative future use for the research and development, until related goods or services are provided. Payments made in advance of the performance of the related services are recorded as prepaid expenses until the services are rendered.
In such circumstances, the nonrefundable advance payments are deferred and capitalized, even when there is no alternative future use for the research and development, until related goods or services are provided.
During the year ended December 31, 2021, the Company had approximately $0.7 million in cost of revenues compared with approximately $0.1 million cost of revenues in the comparable period of 2020. Cost of revenues for the year ended December 31, 2021, represents milestone and royalty payments in connection with our revenues. Research and Development Expenses.
During the year ended December 31, 2023, the Company had approximately $2.0 million in cost of revenues compared with approximately $1.0 million cost of revenues in the comparable period of 2022. Cost of revenues for the years ended December 31, 2023 and 2022, represent milestone and royalty payments in connection with our revenues. Research and Development Expenses.
Governmental Policies that Materially Affected or Could Materially Affect Our Operations Our income tax obligations consist of those of Compugen Ltd. in Israel and of Compugen USA, Inc. in its taxing jurisdictions. 67 The corporate tax rate in Israel was 23% in 2022, 2021 and 2020.
The taxes on income represent state income taxes of our U.S. subsidiary. Governmental Policies that Materially Affected or Could Materially Affect Our Operations Our income tax obligations consist of those of Compugen Ltd. in Israel and of Compugen USA, Inc. in its taxing jurisdictions. The corporate tax rate in Israel was 23% in 2023, 2022 and 2021.
Research and Development, Patents and Licenses.” The above table also does not include contingent contractual obligations or commitments that may enter into effect in the future, such as contractual undertakings to pay royalties subject to certain conditions occurring.
For more information, see “Item 5. Operating and Financial Review and Prospects - C. Research and Development, Patents and Licenses.” The above table also does not include contingent contractual obligations or commitments that may enter into effect in the future, such as contractual undertakings to pay royalties subject to certain conditions occurring.
Under the R&D Law, research and development projects which are approved by the Research Committee of the IIA are eligible for grants, in exchange for payment of royalties from revenues generated by the products developed within the framework of such approved project and subject to compliance with certain requirements and restrictions under the R&D Law as detailed below, which must generally continue to be complied with even following full repayment of all IIA grants.
Under the R&D Law, research and development projects which are approved by the Research Committee of the IIA are eligible for grants, in exchange for payment of royalties from revenues generated by the products and/or services developed within the framework of such approved project and subject to compliance with certain requirements and restrictions under the R&D Law as detailed below, which must generally continue to be complied with even following full repayment of all IIA grants (as adjusted for fluctuation in the USD/NIS exchange rate), with applicable interest. 75 We received grants from the IIA for several projects and may receive additional grants in the future.
Payments due by period (US$ in thousands) Total Less than 1 year 1-3 years 3-5 years More than 5 years Operating Lease Obligations (1) 2,091 699 1,278 114 - Accrued Severance Pay, net (2) 471 - - - 471 Total 2,562 699 1,278 114 471 (1) Consists of operating leases for our facilities and for motor vehicles.
Payments due by period (US$ in thousands) Total Less than 1 year 1-3 years 3-5 years More than 5 years Operating Lease Obligations (1) 1,436 690 746 - - Accrued Severance Pay, net (2) 421 - - - 421 Total 1,857 690 746 - 421 (1) Consists of operating leases for our facilities and for motor vehicles.
In addition, if we choose to do so, we may generate proceeds from sales of our shares pursuant to the Sales Agreement. Net Cash Used in Operating Activities Net cash used in operating activities was approximately $28.3 million in 2020, approximately $22.8 million in 2021 and approximately $34.5 million in 2022.
In addition, if we choose to do so, we may generate additional proceeds from sales of our ordinary shares pursuant to the Sales Agreement. Net Cash Used in Operating Activities Net cash used in operating activities was approximately $22.7 million in 2021, approximately $34.1 million in 2022 and approximately $35.9 million in 2023.
The results of our estimates form the basis for our management’s judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
The results of our estimates form the basis for our management’s judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We focus our efforts on the development of our discovery capabilities and related technologies, and the discovery and validation of our drug targets and the preclinical and clinical development of the respective therapeutic product. Our pipeline programs continuously evaluate our computationally predicted drug target candidates and are advancing selected drug target programs into preclinical and clinical development of therapeutic products.
We focus our efforts on the development of our discovery capabilities and related technologies, and the discovery and validation of our drug targets and the preclinical and clinical development of the respective therapeutic product. Our pipeline programs are continuously evolving and we are working to advance selected drug target programs through research into preclinical and clinical development of therapeutic products.
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES We invest heavily in research and development. Research and development expenses were our major operating expenses representing approximately 70% of total operating expenses in 2022, 2021 and 2020. Our research and development expenses, net, were approximately $30.6 million in 2022, compared to approximately $28.7 million in 2021 and approximately $22.8 million in 2020.
C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES We invest heavily in research and development. Research and development expenses were our major operating expenses representing approximately 74% of total operating expenses in 2023, 2022 and 2021. Our research and development expenses, net, were approximately $34.5 million in 2023, approximately $30.6 million in 2022 and approximately $28.7 million in 2021.
Includes the first five-year option period of the lease of the Israeli facility. The first option was exercised during 2020. (2) Severance pay obligations to our Israeli employees. For more information please see “Item 6. Directors, Senior Management and Employees – D.
Includes the first five-year option period of the lease of the Israeli facility. The first option was exercised during 2020. (2) Severance pay obligations to our Israeli employees. For more information, see “Item 6. Directors, Senior Management and Employees – D. Employees.” The above table does not include royalties that we may be required to pay to the IIA.
Actual results may differ from these estimates under different assumptions or conditions. 74 Share Based Payments We account for stock-based compensation in accordance with ASC 718, “Compensation - Stock Compensation”, or ASC 718, which requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model.
Share Based Payments We account for stock-based compensation in accordance with ASC 718, “Compensation - Stock Compensation”, or ASC 718, which requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. We account for forfeitures as they occur.
Our research and development expenses are expected to continue to be our major operating expense in 2023, expected to account for approximately 75% of our expected total 2023 operating expenses. Our research and development expenditures have always comprised a significant portion of our total cash expenditures, and they are expected to remain in 2023 at similar level compared to 2022.
Our research and development expenditures have always comprised a significant portion of our total cash expenditures, and they are expected to remain in 2024 at a similar level compared to 2023.
The principal source of cash provided by financing activities in 2021 were the Bristol Myers Squibb investment and proceeds received from stock-based awards exercises. Net Liquidity Liquidity refers to the liquid financial assets available to fund our business operations and pay for near-term obligations.
The principal source of cash provided by financing activities in 2022 was proceeds received from stock-based awards exercises. Net Liquidity Liquidity refers to the liquid financial assets available to fund our business operations and pay for near-term obligations. These liquid financial assets mostly consist of cash and cash equivalents as well as short-term bank deposits and investment in marketable securities.
These grants do not bear any royalty obligations, but as the R&D Law applies to these programs, the restrictions on transfer of know-how or manufacturing outside of Israel, as detailed below, do apply. The R&D Law requires that the manufacture of IIA Products will be carried out in Israel, unless the IIA provides its approval to the contrary.
These grants do not bear any royalty obligations, but as the R&D Law applies to these programs, the restrictions on transfer of know-how or manufacturing outside of Israel, as detailed below, do apply.
The increase during 2021 was attributed mostly to increased D&O insurance premium costs (that effected our industry) and non-cash stock option related expenses. General and administrative expenses, as a percentage of total operating expenses, were 27% in 2021 compared to 29% 2020. Financial Income (loss), Net.
The decrease during 2023 was attributed mostly to decrease in D&O insurance premium costs and in non-cash stock option related expenses. General and administrative expenses, as a percentage of total operating expenses, were 22% in 2023 compared to 25% in 2022. Financial and Other Income, Net.
For more information regarding exchange rate risk please see “Item 11. Quantitative And Qualitative Disclosures About Market Risk – Interest Rate Risk.” Interest rate A significant portion of our cash and cash equivalents is invested in bank deposits and bear interest. The Company’s financial income is therefore subject to interest rate risk.
Quantitative And Qualitative Disclosures About Market Risk – Interest Rate Risk.” Interest rate A significant portion of our cash and cash equivalents is invested in bank deposits or in marketable securities and bear interest or yield that depend on the interest rate. The Company’s financial income is therefore subject to interest rate risk.
We expect to continue to incur net losses for the foreseeable future due in part to the costs and expenses associated with our research, development and discovery activities.
We incurred net losses of approximately $34.2 million in 2021, approximately $33.7 million in 2022 and approximately $18.8 million in 2023. We expect to continue to incur net losses for the foreseeable future due in part to the costs and expenses associated with our research, discovery and development activities.
While we currently have only one collaboration with AstraZeneca, our business model primarily involves establishing collaborations for our novel targets and therapeutic product candidates at various stages of research and development providing us with potential milestone payments and royalties on product sales or other forms of revenue sharing payments.
While we currently have two collaborations, our business model primarily involves establishing collaborations for our novel targets and therapeutic product candidates at various stages of research and development providing us with potential milestone payments and royalties on product sales or other forms of revenue sharing payments. 68 Our research and development expenses are expected to continue to be our major operating expense in 2024, expected to account for approximately 80% of our expected total 2024 operating expenses.
Marketing and business development expenses, as a percentage of total operating expenses, were 2% in 2021 compared to 3% in 2020. General and Administrative Expenses. General and administrative expenses during 2021 increased by 11% and totaled approximately $10.9 million in 2021 compared with approximately $9.8 million in the comparable period of 2020.
The decrease is mainly due to headcount reduction. Marketing and business development expenses, as a percentage of total operating expenses, were 1% in 2023 compared to 2% in 2022. General and Administrative Expenses. General and administrative expenses during 2023 decreased by 6% and totaled approximately $9.7 million in 2023 compared with approximately $10.3 million in the comparable period of 2022.
Research and development expenses, as a percentage of total operating expenses, were 71% in 2021 compared to 68% in 2020. Marketing and Business Development Expenses . Marketing and business development expenses were approximately $0.8 million in 2021 compared with approximately $0.9 million in the comparable period of 2020.
Research and development expenses, as a percentage of total operating expenses, were 78% in 2023 compared to 73% in 2022. Marketing and Business Development Expenses . Marketing and business development expenses decreased by 74% and totaled in approximately $0.2 million in 2023 compared with approximately $0.9 million in the comparable period of 2022.
The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration will only be included in the transaction price when it is not considered constrained. We use assumptions to determine the standalone selling price of each performance obligation identified in the contract.
Variable consideration will only be included in the transaction price when it is not considered constrained. We use assumptions to determine the standalone selling price of each performance obligation identified in the contract. We then allocate the total transaction price to each performance obligation based on the estimated standalone selling prices of each performance obligation.
Although we have sufficient cash and cash equivalents and short-term bank deposits that we believe will enable us to fund our operations through at least the end of 2024, our ability to fund our capital needs depends on our ongoing ability to generate cash from existing and future collaborations and from our ability to raise additional funds. C.
Although we have sufficient cash, cash equivalents, short-term bank deposits and investment in marketable securities that we believe will enable us to fund our operations into 2027 based on our different expectations and assumptions specified above, our ability to fund our capital needs depends on our ongoing ability to generate cash from existing and future collaborations and from our ability to raise additional funds.
Net Cash Provided by (used in) Investing Activities Net cash used by investing activities was approximately $82.2 million in 2020, compared with net cash provided in investing activities of approximately $6.6 million in 2021 and $37.1 million in 2022.
Net Cash Provided by Investing Activities Net cash provided by investing activities was approximately $6.6 million in 2021, $37.1 million in 2022 and $35.5 million in 2023.
After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events. Any change in the transaction price is allocated to the performance obligations on the same basis as at contract inception.
We recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied. After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events.
For a discussion regarding the effects of the grants we received from the IIA on our business, see “Item 3. Key Information – D. Risk Factors - Risks Related to Operations in Israel - We received grants from the IIA that may expose us to payment of royalties and restrict the transfer of know-how that we develop.” D.
Key Information – D. Risk Factors - Risks Related to Operations in Israel - We received grants from the IIA that may require us to payment of royalties and restrict the transfer of know-how that we develop.” D. TREND INFORMATION We are unable to predict with a reasonable degree of accuracy the outcome of our research and development efforts.
Net Cash Provided by Financing Activitie s Net cash provided by financing activities was approximately $108.5 million in 2020, approximately $16.8 million in 2021 and approximately $0.4 million in 2022. The principal source of cash provided by financing activities in 2022 was proceeds received from stock-based awards exercises.
Net Cash Provided by Financing Activitie s Net cash provided by financing activities was approximately $16.8 million in 2021, approximately $0.4 million in 2022 and approximately $3.1 million in 2023. The principal source of cash provided by financing activities in 2023 was proceeds received sale of ordinary shares through the Sales Agreement with Leerink.
We will continue to assess global and regional conflicts and any impact they may have on our ability to access additional funds. 73 Unfavorable Global or Domestic Political or Economic Conditions The global economy continues to experience significant volatility, and the economic environment may continue to be, or become, less favorable than that of past years.
However, we cannot guarantee that we will be able to obtain financing through the issuance of any of the above arrangements on reasonable terms. Unfavorable Global or Domestic Political or Economic Conditions The global economy continues to experience significant volatility, and the economic environment may continue to be, or become, less favorable than that of past years.
Exchange rates can be volatile and a substantial change of foreign currencies against the dollar could increase or reduce the Company’s expenses and net loss and impact the comparability of results from period to period. The appreciation (devaluation) of the dollar against the NIS was 13.2%, (3.3%) and (7.0%) in 2022, 2021 and 2020, respectively.
The Company is therefore subject to non-U.S. currency risks and non-U.S. exchange exposure, especially the NIS. Exchange rates can be volatile and a substantial change of foreign currencies against the dollar could increase or reduce the Company’s expenses and net loss and impact the comparability of results from period to period.
We have discovered three new targets through computational prediction with three different product candidates being clinically evaluated, supporting the power and validity of our computational capabilities. In 2013 we entered into our first collaboration based on novel targets identified by us. Under the Bayer Collaboration, we jointly worked with Bayer on the preclinical development of bapotulimab.
We have discovered new targets through computational prediction with three different product candidates currently being clinically evaluated, supporting the power and validity of our computational capabilities.
Rilvegostomig, a novel anti PD-1/TIGIT bispecific antibody with a TIGIT-specific component that is derived from our COM902 antibody, is being developed by AstraZeneca pursuant to an exclusive license agreement between us and AstraZeneca and is in Phase 2 clinical trial in patients with advanced or metastatic non-small cell lung cancer and locally advanced or metastatic gastric cancer.
Rilvegostomig, a novel anti PD-1/TIGIT bispecific antibody with a TIGIT-specific component that is derived from our COM902 antibody, is being developed by AstraZeneca pursuant to an exclusive license agreement between us and AstraZeneca and is being evaluated in multiple clinical trials, including in Phase 3 clinical trial in patients with biliary tract cancer who will be randomized to receive rilvegostomig or placebo with investigator choice chemotherapy as adjuvant treatment after resection with curative intent.
In addition, many countries across the globe, including the United States and Israel, are seeing an increase in inflation. An extended period of economic disruption, including a continued market downfall, could materially affect our ability to secure additional funds and could further materially affect our business, strategy, results of operations and financial condition.
While these downgrades do not have an immediate nor direct impact on us, an extended period of economic disruption, including a continued market downfall, in Israel, the United States or any other major market in which we or our partners operate, could materially affect our ability to secure additional funds and could further materially affect our business, strategy, results of operations and financial condition.
The COVID-19 pandemic, including the variants to COVID-19 and government actions implemented as a result thereof, together with the ongoing Russia and Ukraine conflict and other global economic factors, have caused a negative impact on the outlook for the global economy and created significant volatility and disruption of financial markets.
However, the “Swards of Iron” war in Gaza and the hostility around Israel and the ongoing Russia and Ukraine conflict and other global economic factors, have caused a negative impact on the outlook for the global economy and created significant volatility and disruption of financial markets.
Although we believe that we have sufficient cash and cash equivalents and short-term bank deposits in order to sustain our operations at least through the end of 2024, based on our current plans, we may seek additional capital or strategic considerations.
Although we believe that we have sufficient cash, cash equivalents, short-term bank deposits and investment in marketable securities in order to sustain our operations at least into 2027, based on our different expectations and assumptions as specified above, nevertheless, we may seek additional capital or various reasons, including for our ongoing operations.
Financial and other income decreased to approximately $0.9 million in 2021 from approximately $1.8 million in 2020. The decrease is attributed mainly to decreased interest income due to lower interest rates in the market and lower level of cash and deposits balances.
Financial and other income increased by 85% to approximately $3.2 million in 2023 up from approximately $1.7 million in the comparable period of 2022. The increase is attributed mainly to increased interest income due to higher interest rates in the market offset by a lower level of cash and deposits balances. Taxes on Income.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Our Articles provide that, subject to the provisions of the Companies Law, we may indemnify any of our Office Holders for all liabilities and expenses incurred by them arising from or as a result of any act (or omission) carried out by them as Office Holders of the Company, including as follows: • For any monetary liabilities or obligations imposed on our Office Holder in favor of another person pursuant to a court judgment, including a compromise judgment or an arbitrator’s decision approved by a court; • For any payments which our Office Holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Securities Law and expenses the Office Holder incurred in connection with a proceeding under Chapters H’3, H’4 or I’1 of the Securities Law, including reasonable litigation expenses, including attorney’s fees, or in connection with Article D of Chapter Four of Part Nine of the Companies Law; • For reasonable litigation expenses, including attorney’s fees, incurred by the Office Holder in consequence of an investigation or proceeding instituted against the Office Holder by an authority that is authorized to conduct such investigation or proceeding, and which was concluded without filing of an indictment against the Office Holder and without imposing on the Office Holder a financial obligation in lieu of criminal proceedings, or which was concluded without filing of an indictment against the Office Holder but with imposing on such Office Holder a financial obligation in lieu of criminal proceedings in respect of an offense that does not require proof of criminal intent or in connection with a financial sanction; For the purposes hereof: (i) “a proceeding that concluded without filing an indictment in a matter in respect of which an investigation was conducted”; and (ii) “financial obligation in lieu of a criminal proceeding”, shall have the meanings specified in Section 260(a)(1A) of the Companies Law; • For reasonable litigation expenses, including attorney’s fees, incurred by the Office Holder or which the Office Holder is ordered to pay by a court, in a proceeding filed against the Office Holder by the Company or on its behalf or by another person, or in a criminal action of which the Office Holder is acquitted, or in a criminal action in which the Office Holder is convicted of an offense that does not require proof of criminal intent; • For expenses incurred by our Office Holder in connection with a proceeding under Chapter G’1, of the Restrictive Trade Law, including reasonable litigation expenses, including attorney’s fees; and • For any other liability, obligation or expense indemnifiable or which our Officer Holders may from time to time be indemnifiable by law.
Our Articles provide that, subject to the provisions of the Companies Law, we may indemnify any of our Office Holders for all liabilities and expenses incurred by them arising from or as a result of any act (or omission) carried out by them as Office Holders of the Company, including as follows: • For any monetary liabilities or obligations imposed on our Office Holder in favor of another person pursuant to a court judgment, including a compromise judgment or an arbitrator’s decision approved by a court; • For any payments which our Office Holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Israeli Securities Law and expenses the Office Holder incurred in connection with a proceeding under Chapters H’3, H’4 or I’1 of the Israeli Securities Law, including reasonable litigation expenses, including attorney’s fees, or in connection with Article D of Chapter Four of Part Nine of the Companies Law; • For reasonable litigation expenses, including attorney’s fees, incurred by the Office Holder in consequence of an investigation or proceeding instituted against the Office Holder by an authority that is authorized to conduct such investigation or proceeding, and which was concluded without filing of an indictment against the Office Holder and without imposing on the Office Holder a financial obligation in lieu of criminal proceedings, or which was concluded without filing of an indictment against the Office Holder but with imposing on such Office Holder a financial obligation in lieu of criminal proceedings in respect of an offense that does not require proof of criminal intent or in connection with a financial sanction; For the purposes hereof: (i) “a proceeding that concluded without filing an indictment in a matter in respect of which an investigation was conducted”; and (ii) “financial obligation in lieu of a criminal proceeding”, shall have the meanings specified in Section 260(a)(1A) of the Companies Law; • For reasonable litigation expenses, including attorney’s fees, incurred by the Office Holder or which the Office Holder is ordered to pay by a court, in a proceeding filed against the Office Holder by the Company or on its behalf or by another person, or in a criminal action of which the Office Holder is acquitted, or in a criminal action in which the Office Holder is convicted of an offense that does not require proof of criminal intent; • For expenses incurred by our Office Holder in connection with a proceeding under Chapter G’1, of the Restrictive Trade Law, including reasonable litigation expenses, including attorney’s fees; and • For any other liability, obligation or expense indemnifiable or which our Officer Holders may from time to time be indemnifiable by law.
Our Articles provide that, subject to the provisions of the Companies Law, we may enter into contracts to insure the liabilities of our Office Holders for any liabilities or expenses incurred by or imposed upon them as a result of any act (or omission) carried out by them as our Office Holders, including with respect to any of the following: • a breach of duty of care to us or to another person; • a breach of duty of loyalty to us, provided that the Office Holder acted in good faith and had reasonable grounds to assume that such act would not prejudice our interests; • monetary liabilities or obligations imposed upon him or her in favor of another person; • A payment which the Office Holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Israel Securities Law, 5728-1968, or the Securities Law, and expenses that the Office Holder incurred in connection with a proceeding under Chapters H’3, H’4 or I’1 of the Securities Law, including reasonable litigation expenses, including attorney’s fees, or in connection with Article D of Chapter Four of Part Nine of the Companies Law; and • Expenses incurred by the Office Holder in connection with a proceeding under Chapter G’1, of the Israel Restrictive Trade Practices Law, 5748-1988, or Restrictive Trade Law, including reasonable litigation expenses, including attorney’s fees.
Our Articles provide that, subject to the provisions of the Companies Law, we may enter into contracts to insure the liabilities of our Office Holders for any liabilities or expenses incurred by or imposed upon them as a result of any act (or omission) carried out by them as our Office Holders, including with respect to any of the following: • a breach of duty of care to us or to another person; • a breach of duty of loyalty to us, provided that the Office Holder acted in good faith and had reasonable grounds to assume that such act would not prejudice our interests; • monetary liabilities or obligations imposed upon him or her in favor of another person; • A payment which the Office Holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Securities Law, and expenses that the Office Holder incurred in connection with a proceeding under Chapters H’3, H’4 or I’1 of the Securities Law, including reasonable litigation expenses, including attorney’s fees, or in connection with Article D of Chapter Four of Part Nine of the Companies Law; and • Expenses incurred by the Office Holder in connection with a proceeding under Chapter G’1, of the Israel Restrictive Trade Practices Law, 5748-1988, or Restrictive Trade Law, including reasonable litigation expenses, including attorney’s fees.
Board Committees Audit Committee The Companies Law requires public companies such as ours to appoint an audit committee, the responsibilities of which include, among other things: (i) identifying flaws in the management of the company’s business, among other things, in consultation with the company’s internal auditor or external auditor, and making recommendations to the board of directors as to how to correct them, (ii) reviewing and considering certain related party transactions and certain actions involving conflicts of interest (as well as deciding whether certain actions specified in the Companies Law are considered material or non-material and whether certain transactions are considered exceptional or ordinary), (iii) establishing procedures to be followed with respect to related party transactions with a “controlling shareholder” (where such are not extraordinary transactions), which may include, where applicable, the establishment of a competitive process for such transaction, under the supervision of the audit committee, or individual, or other committee or body selected by the audit committee, in accordance with criteria determined by the audit committee, (iv) determining procedures for approving certain related party transactions with a “controlling shareholder”, which were determined by the audit committee not to be extraordinary transactions, but which were also determined by the audit committee not to be negligible transactions, (v) reviewing the internal auditor’s work program performance, examining the company’s internal control structure and processes and determining whether the internal auditor has the requisite tools and resources required to perform his or her role, (vi) examining the external auditor’s scope of work as well as the external auditor’s fees and providing its recommendations to the appropriate corporate organ, (vii) overseeing the accounting and financial reporting processes of the Company, and (viii) providing arrangements regarding employee complaints with respect to flaws in the management of the Company’s business.
Board Committees Audit Committee The Companies Law requires public companies such as ours to appoint an audit committee, the responsibilities of which include, among other things: (i) identifying flaws in the management of the company’s business, among other things, in consultation with the company’s internal auditor or external auditor, and making recommendations to the board of directors as to how to correct them, (ii) reviewing and considering certain related party transactions and certain actions involving conflicts of interest (as well as deciding whether certain actions specified in the Companies Law are considered material or non-material and whether certain transactions are considered exceptional or ordinary), (iii) establishing procedures to be followed with respect to related party transactions with a “controlling shareholder” (where such are not extraordinary transactions), which may include, where applicable, the establishment of a competitive process for such transaction, under the supervision of the audit committee, or individual, or other committee or body selected by the audit committee, in accordance with criteria determined by the audit committee, (iv) determining procedures for approving certain related party transactions with a “controlling shareholder”, which were determined by the audit committee not to be extraordinary transactions, but which were also determined by the audit committee not to be negligible transactions, (v) reviewing the internal auditor’s work program performance, examining the company’s internal control structure and processes and determining whether the internal auditor has the requisite tools and resources required to perform his or her role, (vi) examining the external auditor’s scope of work as well as the external auditor’s fees and providing its recommendations to the appropriate corporate organ, (vii) overseeing the accounting and financial reporting processes of the Company, and (viii) providing arrangements regarding employee complaints with respect to flaws in the management of the Company’s business and the protection to be provided to such employees.
These statutes and provisions and additional Israeli labor law provisions cover a wide range of subjects and provide certain minimum employment standards, including the length of the workday and work week, minimum wages, travel expenses, contributions to a pension fund, insurance for work-related accidents, determination of severance pay, annual and other vacations, sick pay and other conditions of employment.
These statutes and provisions and additional mandatory Israeli labor law provisions cover a wide range of subjects and provide certain minimum employment standards, including the length of the workday and work week, minimum wages, travel expenses, contributions to a pension fund, insurance for work-related accidents, determination of severance pay, annual and other vacations, sick pay and other conditions of employment.
However, we are subject to certain labor related statutes and to certain provisions of expansion orders the Israeli Minister of the Economy has given to collective bargaining agreements between the Histadrut (General Federation of Labor in Israel) and the Coordinating Bureau of Economic Organizations and/or the Industrialists’ Association, which are applicable to our Israeli employees.
However, we are subject to certain labor related statutes and to certain provisions of expansion orders the Israeli Minister of the Economy has given to collective bargaining agreements between the Histadrut (General Federation of Labor in Israel) and the Coordinating Bureau of Economic Organizations and/or the Industrialists’ Association, which are applicable to the employment of our Israeli employees.
The duty of care includes a duty to use reasonable means to obtain: • information regarding the business advisability of a given action brought for the Office Holder’s approval or performed by the Office Holder by virtue of his or her position; and • all other information of importance pertaining to the aforesaid actions. 93 The duty of loyalty requires an Office Holder to act in good faith and for the benefit of the company and includes the duty to: • refrain from any act involving a conflict of interest between the fulfillment of his or her position in the company and the fulfillment of any other position or his or her personal affairs; • refrain from any act that is competitive with the business of the company; • refrain from exploiting any business opportunity of the company with the aim of obtaining a personal gain for himself or herself or for others; and • disclose to the company all relevant information and provide it with all documents relating to the company’s affairs which the Office Holder obtained due to his or her position in the company.
The duty of care includes a duty to use reasonable means to obtain: • information regarding the business advisability of a given action brought for the Office Holder’s approval or performed by the Office Holder by virtue of his or her position; and • all other information of importance pertaining to the aforesaid actions. 97 The duty of loyalty requires an Office Holder to act in good faith and for the benefit of the company and includes the duty to: • refrain from any act involving a conflict of interest between the fulfillment of his or her position in the company and the fulfillment of any other position or his or her personal affairs; • refrain from any act that is competitive with the business of the company; • refrain from exploiting any business opportunity of the company with the aim of obtaining a personal gain for himself or herself or for others; and • disclose to the company all relevant information and provide it with all documents relating to the company’s affairs which the Office Holder obtained due to his or her position in the company.
Such benefits and perquisites may include, to the extent applicable to the respective Covered Office Holder, bonuses, payments, contributions and/or allocations for savings funds, pension, severance, vacation, car or car allowance, medical insurances and benefits, risk insurance (e.g., life, disability, accident), phone, convalescence pay, payments for social security, tax gross-up payments and other benefits and perquisites consistent with the Company’s policies. 4) Amounts reported in this column represent the expense recorded in our financial statements for the year ended December 31, 2022, with respect to options to purchase our ordinary shares granted to our Covered Office Holders.
Such benefits and perquisites may include, to the extent applicable to the respective Covered Office Holder, bonuses, payments, contributions and/or allocations for savings funds, pension, severance, vacation, car or car allowance, medical insurances and benefits, risk insurance (e.g., life, disability, accident), phone, convalescence pay, payments for social security, tax gross-up payments and other benefits and perquisites consistent with the Company’s policies. 4) Amounts reported in this column represent the expense recorded in our financial statements for the year ended December 31, 2023, with respect to options to purchase our ordinary shares granted to our Covered Office Holders.
Anat Cohen-Dayag will be entitled to participate in the ESPP or any other employee share purchase plan(s) that may be adopted by the Company from time to time until the end of 2023, as long as the fair market value of the benefit provided to her under such employee share purchase plan(s) (determined by the Company at the beginning of the respective offering period) in any given twelve (12) month period does not exceed ten percent (10%) of her annual base salary.
Anat Cohen-Dayag will be entitled to participate in the ESPP or any other employee share purchase plan(s) that may be adopted by the Company from time to time until the end of 2026, as long as the fair market value of the benefit provided to her under such employee share purchase plan(s) (determined by the Company at the beginning of the respective offering period) in any given twelve (12) month period does not exceed ten percent (10%) of her annual base salary.
For each fiscal year, our board of directors determines the maximum target bonus for each of our Office Holders, including our chief executive officer. 83 Compensation Paid to our Non-Executive Directors (other than Mr.
For each fiscal year, our board of directors determines the maximum target bonus for each of our Office Holders, including our chief executive officer. Compensation Paid to our Non-Executive Directors (other than Mr.
Under the Nasdaq Listing Rules, a foreign private issuer may generally follow its home country practices for corporate governance in lieu of the comparable Nasdaq Global Market requirements, except for certain matters such as composition and responsibilities of the audit committee and the SEC-mandated standards for the independence of its members. We currently comply with all the above-mentioned requirements.
Under the Nasdaq Listing Rules, a foreign private issuer may generally follow its home country practices for corporate governance in lieu of the comparable Nasdaq Capital Market requirements, except for certain matters such as composition and responsibilities of the audit committee and the SEC-mandated standards for the independence of its members. We currently comply with all the above-mentioned requirements.
Zweifach was a Certified Public Accountant (US) for Coopers & Lybrand and held various investment banking positions focusing on biotech. He received his B.A. in Biology from UC San Diego and an M.S. in Human Physiology from UC Davis. 78 Alberto Sessa joined Compugen in November 2022 as Chief Financial Officer.
Zweifach was a Certified Public Accountant (US) for Coopers & Lybrand and held various investment banking positions focusing on biotech. He received his B.A. in Biology from UC San Diego and an M.S. in Human Physiology from UC Davis. 82 Alberto Sessa joined Compugen in November 2022 as Chief Financial Officer.
Board Diversity Matrix as of February 15, 2023 Total Number of Directors 7 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 2 4 1 Part II: Demographic Background African American or Black Alaskan Native or Native American Asian Hispanic or Latinx Native Hawaiian or Pacific Islander White 2 3 Two or More Races or Ethnicities 1 LGBTQ+ 1 Did Not Disclose Demographic Background 1 Directors Under the Companies Law - General A nominee for service as a director in a public company may not be elected without submitting a declaration to the company, prior to his or her election, specifying that he or she has the requisite qualifications to serve as a director, an external director or an independent director, as applicable, and the ability to devote the appropriate time to performing his or her duties as such.
Board Diversity Matrix as of February 20, 2024 Total Number of Directors 7 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 2 4 1 Part II: Demographic Background African American or Black Alaskan Native or Native American Asian Hispanic or Latinx Native Hawaiian or Pacific Islander White 2 3 Two or More Races or Ethnicities 1 LGBTQ+ 1 Did Not Disclose Demographic Background 1 Directors Under the Companies Law - General A nominee for service as a director in a public company may not be elected without submitting a declaration to the company, prior to his or her election, specifying that he or she has the requisite qualifications to serve as a director, an external director or an independent director, as applicable, and the ability to devote the appropriate time to performing his or her duties as such.
From 2001 to 2009, he was the Senior Vice President, Global Head Drug Regulatory Affairs at Novartis. Math received his B.S. and Ph.D. honors degrees in Biology and Biochemistry from the University of Nijmegen, the Netherlands. 77 Gilead Halevy joined Compugen’s Board of Directors in June 2018. Mr.
From 2001 to 2009, he was the Senior Vice President, Global Head Drug Regulatory Affairs at Novartis. Math received his B.S. and Ph.D. honors degrees in Biology and Biochemistry from the University of Nijmegen, the Netherlands. 81 Gilead Halevy joined Compugen’s Board of Directors in June 2018. Mr.
From 1998 to 2001, Mr. Halevy practiced law at White & Case LLP. Mr. Halevy was also a founding member of the White & Case Israel practice group during that time. Mr. Halevy currently serves as chairman of board of directors of Carmel Wineries; Continuity Software Ltd., Zriha Hlavin Industries Ltd. and a director of S. AL Holdings. Mr.
From 1998 to 2001, Mr. Halevy practiced law at White & Case LLP. Mr. Halevy was also a founding member of the White & Case Israel practice group during that time. Mr. Halevy currently serves as chairman of board of directors of Carmel Wineries; Continuity Software Ltd., Zriha Hlavin Industries Ltd. and a director of S.
Directors, Senior Management and Employees - A. Directors and Senior Management” are Office Holders. In addition to those persons listed in the table under Item 6.A, there were two additional individuals who were Office Holders of the Company as of December 31, 2022. An Office Holder’s fiduciary duties consist of a duty of care and a duty of loyalty.
Directors, Senior Management and Employees - A. Directors and Senior Management” are Office Holders. In addition to those persons listed in the table under Item 6.A, there were two additional individuals who were Office Holders of the Company as of December 31, 2023. An Office Holder’s fiduciary duties consist of a duty of care and a duty of loyalty.
Accordingly, the appointment of our external auditor is approved by our shareholders at the audit committee’s recommendation and its compensation for audit and non-audit services is approved by the board of directors following the audit committee’s recommendation. 91 We have adopted a charter for the audit committee, which sets forth the purpose and responsibilities of such committee.
Accordingly, the appointment of our external auditor is approved by our shareholders at the audit committee’s recommendation and its compensation for audit and non-audit services is approved by the board of directors following the audit committee’s recommendation. 95 We have adopted a charter for the audit committee, which sets forth the purpose and responsibilities of such committee.
Cohen-Dayag shall be granted options to purchase up to 150,000 Ordinary Shares, or Equity Framework, in each of these years, as shall be determined by the compensation committee and board of directors with respect to each such year.
Cohen-Dayag shall be granted options to purchase up to 300,000 Ordinary Shares, or Equity Framework, in each of these years, as shall be determined by the compensation committee and board of directors with respect to each such year.
Cohen-Dayag will be entitled to a special termination payment (in addition to the Termination Payment) in an amount equal to six (6) monthly salaries. 86 In addition, upon Dismissal, or in the event of a “change of control”, all outstanding unvested options granted to Dr.
Cohen-Dayag will be entitled to a special termination payment (in addition to the Termination Payment) in an amount equal to six (6) monthly salaries. 90 In addition, upon Dismissal, or in the event of a “change of control”, all outstanding unvested options granted to Dr.
Zweifach serves as an Executive Chairman of the Board of Directors of Kaerus Bioscience, Chairman of the Board of Directors of Carisma Therapeutics, Inc., Acting President and Chair of the Business Advisory Board of IMIDomics, S.L. and as a member of the Board of Directors of Essa Pharma, Inc. Earlier in his career, Mr.
Zweifach serves as an Executive Chairman of the Board of Directors of Kaerus Bioscience, Chairman of the Board of Directors of Carisma Therapeutics, Inc., President, CBO and Chair of the Business Advisory Board of IMIDomics, S.L. and as a member of the Board of Directors of Essa Pharma, Inc. Earlier in his career, Mr.
All amounts reported in the table reflect the cost to the Company, as recognized in our financial statements for the year ended December 31, 2022. We refer to the five individuals for whom disclosure is provided herein as our “Covered Office Holders”.
All amounts reported in the table reflect the cost to the Company, as recognized in our financial statements for the year ended December 31, 2023. We refer to the five individuals for whom disclosure is provided herein as our “Covered Office Holders”.
The audit committee composition requirements referred to under Section 115 of the Companies Law are not applicable to the Company as our board of directors, as part of its decision to opt out of the requirement to elect external directors pursuant to the relief available under the Alleviation Regulations, also adopted relief from such composition requirements on the basis that the Company complies, and will continue to comply, with the U.S.
The audit committee composition requirements referred to under Section 115 of the Companies Law are not applicable to the Company as our board of directors, as part of its decision to opt out of the requirement to elect external directors pursuant to the relief available under the Alleviation Regulations, also opted out of such composition requirements on the basis that the Company complies, and will continue to comply, with the U.S.
However, as our shares are listed on The Nasdaq Global Market, pursuant to the Alleviation Regulations, we may also classify directors who qualify as independent directors under the relevant non-Israeli rules, as ‘independent directors’ under the Companies Law.
However, as our shares are listed on The Nasdaq Capital Market, pursuant to the Alleviation Regulations, we may also classify directors who qualify as independent directors under the relevant non-Israeli rules, as ‘independent directors’ under the Companies Law.
Cohen-Dayag, please see “Item 6 - Directors, Senior Management and Employees - B. Compensation - Compensation to our President and Chief Executive Officer.” 89 Board of Directors Diversity The table below provides certain information regarding the diversity of our board of directors.
Cohen-Dayag, please see “Item 6 - Directors, Senior Management and Employees - B. Compensation - Compensation to our President and Chief Executive Officer.” 93 Board of Directors Diversity The table below provides certain information regarding the diversity of our board of directors.
In addition to each person listed in the table under “Item 6. Directors, Senior Management and Employees - A. Directors and Senior Management”, two other individuals have been Office Holders as of December 31, 2022.
In addition to each person listed in the table under “Item 6. Directors, Senior Management and Employees - A. Directors and Senior Management”, two other individuals have been Office Holders as of December 31, 2023.
Mr. Perry is also the co-founder and board member of several pharmaceutical companies including Musli Thyropeutics, ICD Pharma, Seanergy Dermatology, Follicle Pharma and Upstream Bio. Mr. Perry also serves on the board of directors of MyBiotics Pharma and Noon Aesthetics.
Mr. Perry is also the co-founder and board member of several pharmaceutical companies including ICD Pharma, Seanergy Dermatology, Follicle Pharma and Upstream Bio. Mr. Perry also serves on the board of directors of MyBiotics Pharma and Noon Aesthetics.
In accordance with our Compensation Policy, approved by our shareholders at the 2020 AGM, we are currently entitled to hold directors’ and officers’ liability insurance policy for the benefit of our Office Holders with insurance coverage of up to $100 million and with such annual premium reflecting market terms and not having a substantial effect on our profitability, assets or obligations. 87 Our Office Holders’ Indemnification.
In accordance with our Compensation Policy, approved by our shareholders at the 2023 AGM, we are currently entitled to hold directors’ and officers’ liability insurance policy for the benefit of our Office Holders with insurance coverage of up to $100 million and with such annual premium reflecting market terms and not having a substantial effect on our profitability, assets or obligations. 91 Our Office Holders’ Indemnification.
Each compensation committee member must also be deemed by our board of directors to meet the enhanced independence requirements for members of the compensation committee under the Nasdaq Listing Rules, which requires, among other things, that our board of directors considers the source of each such committee member’s compensation in considering whether he or she is independent. 92 The compensation committee composition requirements referred to under Section 118A of the Companies Law are not applicable to the Company as our board of directors, as part of its decision to opt out of the requirement to elect external directors pursuant to the relief available under the Alleviation Regulations, also adopted relief from such composition requirements on the basis that the Company complies, and will continue to comply, with the Nasdaq majority board independence requirement and with US Securities Law and Nasdaq Listing Rules concerning the composition of the compensation committee.
Each compensation committee member must also be deemed by our board of directors to meet the enhanced independence requirements for members of the compensation committee under the Nasdaq Listing Rules, which requires, among other things, that our board of directors considers the source of each such committee member’s compensation in considering whether he or she is independent. 96 The compensation committee composition requirements referred to under Section 118A of the Companies Law are not applicable to the Company as our board of directors, as part of its decision to opt out of the requirement to elect external directors pursuant to the relief available under the Alleviation Regulations, also opted out of such composition requirements on the basis that the Company complies, and will continue to comply, with the Nasdaq majority board independence requirement and with US Securities Law and Nasdaq Listing Rules concerning the composition of the compensation committee, as described above.
These matters are in addition to the requirements of The Nasdaq Global Market and other relevant provisions of U.S. securities laws applicable to us.
These matters are in addition to the requirements of The Nasdaq Capital Market and other relevant provisions of U.S. securities laws applicable to us.
EMPLOYEES The following table sets out the number of our full-time employees engaged in specified activities, at the end of the fiscal years 2022, 2021 and 2020 (the numbers include employees of our wholly owned U.S. subsidiary Compugen USA, Inc.): December 31, 2022 December 31, 2021 December 31, 2020 Research & Development 46 51 45 Administration, Accounting and Operations 21 21 21 Marketing and Business Development 2 1 2 Total 69 73 68 95 In addition to the headquarters in Holon, Israel, we maintain a subsidiary in South San Francisco, California.
EMPLOYEES The following table sets out the number of our full-time employees engaged in specified activities, at the end of the fiscal years 2023, 2022 and 2021 (the numbers include employees of our wholly owned U.S. subsidiary Compugen USA, Inc.): December 31, 2023 December 31, 2022 December 31, 2021 Research & Development 46 46 51 Administration, Accounting and Operations 21 21 21 Marketing and Business Development 1 2 1 Total 68 69 73 99 In addition to the headquarters in Holon, Israel, we maintain a subsidiary in San Francisco, California.
Variable Compensation and Annual Cash Bonuses of Office Holders . The Companies Law requires that all variable compensation of directors and chief executive officers be based on measurable criteria, with the exception of a non-substantial portion of up to 3 monthly salaries, which should take into consideration the applicable Office Holder’s contribution to the company.
The Companies Law requires that all variable compensation of directors and chief executive officers be based on measurable criteria, with the exception of a non-substantial portion of up to 3 monthly salaries, which should take into consideration the applicable Office Holder’s contribution to the company.
Sharon Cohen is not an employee, affiliate or Office Holder of the Company, or affiliated with the Company’s external auditor. Fiduciary Duties and Approval of Related Party Transactions Under Israeli Law Fiduciary Duties of Office Holders The Companies Law codifies the fiduciary duties that Office Holders owe to a company. All persons listed in the table under “Item 6.
Tali Yaron is not an employee, affiliate or Office Holder of the Company, or affiliated with the Company’s external auditor. Fiduciary Duties and Approval of Related Party Transactions Under Israeli Law Fiduciary Duties of Office Holders The Companies Law codifies the fiduciary duties that Office Holders owe to a company. All persons listed in the table under “Item 6.
As of December 31, 2022, there were a total of 4,312,624 outstanding options to purchase ordinary shares that were held by our Directors and Senior Management listed in Item 6.A. 80 Individual Compensation of Covered Office Holders The table below outlines the compensation granted to our five most highly compensated Office Holders (as such term is defined in the Companies Law - see below under “Approvals Required for Office Holders Terms of Employment”) with respect to the year ended December 31, 2022.
As of December 31, 2023, there were a total of 4,506,624 outstanding options to purchase ordinary shares that were held by our Directors and Senior Management listed in Item 6.A. 84 Individual Compensation of Covered Office Holders The table below outlines the compensation granted to our five most highly compensated Office Holders (as such term is defined in the Companies Law - see below under “Approvals Required for Office Holders Terms of Employment”) with respect to the year ended December 31, 2023.
Except as set forth in the table below, none of the directors or executive officers beneficially owns ordinary shares and/or ordinary shares underlying options amounting to 1% or more of the outstanding ordinary shares. The following table sets forth certain information as of February 9, 2023, regarding the beneficial ownership by our directors and senior management.
Except as set forth in the table below, none of the directors or executive officers beneficially owns ordinary shares and/or ordinary shares underlying options amounting to 1% or more of the outstanding ordinary shares. The following table sets forth certain information as of February 20, 2024, regarding the beneficial ownership by our directors and senior management.
For information concerning our liability for severance pay, see Note 2m to our 2022 consolidated financial statements. Our employees are not represented by a labor union. We have written employment contracts (including signed offers of employment) with each of our employees. E.
For information concerning our liability for severance pay, see Note 2n to our 2023 consolidated financial statements. Our employees are not represented by a labor union. We have written employment contracts (including signed offers of employment) with each of our employees. E.
Since our board of directors determined to opt out of the requirement to elect and have external directors and composition criteria of the audit committee and compensation committee under the Companies Law pursuant to the relief available under the Alleviation Regulations, as further detailed in this Item below under “Board Practices - External Directors and Independent Directors Under the Companies Law”, we are not subject to such bulletins or staff position statements.
Since our board of directors determined to opt out of the requirement to elect and have external directors and composition criteria of the audit committee and compensation committee under the Companies Law pursuant to the relief available under the Alleviation Regulations, as further detailed in this Item below under “Board Practices - External Directors and Independent Directors Under the Companies Law”, we are not subject to such bulletins or staff position statements. 86 Variable Compensation and Annual Cash Bonuses of Office Holders .
Cohen-Dayag will be made on such date in 2021, 2022 and 2023 on which the board of directors approves the respective year’s annual option grants to management Office Holders in such year. 85 The compensation committee and the board of directors may nevertheless determine that as part of an annual equity grant, they wish to issue Dr. Cohen-Dayag Other Equity.
Cohen-Dayag will be made on such date in 2024, 2025 and 2026 on which the board of directors approves the respective year’s annual option grants to management Office Holders in such year. The compensation committee and the board of directors may nevertheless determine that as part of an annual equity grant, they wish to issue Dr. Cohen-Dayag Other Equity.
F. DISCLOSURE OF A REGISTRANT’S ACTION TO RECOVER ERRONEOUSLY AWARDED COMPENSATION. Not applicable.
F. DISCLOSURE OF A REGISTRANT’S ACTION TO RECOVER ERRONEOUSLY AWARDED COMPENSATION.
Eran Ophir, Ph.D. joined Compugen in 2015 and was appointed Vice President of Research and Drug Discovery in March 2020 and became a Senior Vice President, of Research and Drug Discovery in March 2022. In his role, Dr.
Eran Ophir, Ph.D. joined Compugen in 2015 and was appointed Vice President of Research and Drug Discovery in March 2020 and became a Senior Vice President, Research and Drug Discovery in March 2022 and Chief Scientific Officer in May 2023. In his role, Dr.
The Companies Law provides that a company may not insure, exempt or indemnify an Office Holder for any breach of his or her liability arising from any of the following: • a breach by the Office Holder of his or her duty of loyalty, except that the company may enter into an insurance contract or indemnify an Office Holder if the Office Holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; • a breach by the Office Holder of his or her duty of care if such breach was intentional or reckless, but unless such breach was solely negligent; 88 • any act or omission done with the intent to derive an illegal personal benefit; or • any fine, civil fine, financial sanction or monetary settlement in lieu of criminal proceedings imposed on such Office Holder.
The Companies Law provides that a company may not insure, exempt or indemnify an Office Holder for any breach of his or her liability arising from any of the following: • a breach by the Office Holder of his or her duty of loyalty, except that the company may enter into an insurance contract or indemnify an Office Holder if the Office Holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; • a breach by the Office Holder of his or her duty of care if such breach was intentional or reckless, but unless such breach was solely negligent; • any act or omission done with the intent to derive an illegal personal benefit; or • any fine, civil fine, financial sanction or monetary settlement in lieu of criminal proceedings imposed on such Office Holder. 92 Administrative Enforcement The Israeli Securities Law includes an administrative enforcement procedure that may be used by the Israeli Securities Authority, to enhance the efficacy of enforcement in the securities market in Israel.
All numbers quoted in the table are inclusive of options to purchase shares that are exercisable within 60 days after February 9, 2023.
All numbers quoted in the table are inclusive of options to purchase shares that are exercisable within 60 days after February 20, 2024.
Options to purchase 4,319,106 ordinary shares under the 2010 Plan have previously been exercised through December 31, 2022, at a weighted average exercise price of approximately $4.92. As of December 31, 2022, outstanding options granted by the Company pursuant to the 2010 Plan expire between January 2023 and November 2032 (subject to terms of the plan).
Options to purchase 4,319,106 ordinary shares under the 2010 Plan have previously been exercised through December 31, 2023, at a weighted average exercise price of approximately $4.92. As of December 31, 2023, outstanding options granted by the Company pursuant to the 2010 Plan expire between February 2024 and October 2033 (subject to terms of the plan).
DIRECTORS AND SENIOR MANAGEMENT The following table sets forth information with respect to Compugen’s directors and senior management as of February 9, 2023: Name Age Positions Paul Sekhri (3) 64 Chairman of the Board of Directors (Chairman of the Nomination and Corporate Governance Committee) Anat Cohen-Dayag, Ph.D. 56 President and Chief Executive Officer, Director Mathias Hukkelhoven, Ph.D. 69 Director Gilead Halevy (2) 56 Director (Chairman of the Audit Committee) Kinneret Livnat Savitzky, Ph.D.
DIRECTORS AND SENIOR MANAGEMENT The following table sets forth information with respect to Compugen’s directors and senior management as of February 20, 2024: Name Age Positions Paul Sekhri (3) 65 Chairman of the Board of Directors (Chairman of the Nomination and Corporate Governance Committee) Anat Cohen-Dayag, Ph.D. 57 President and Chief Executive Officer, Director Mathias Hukkelhoven, Ph.D. 70 Director Gilead Halevy (2) 57 Director (Chairman of the Audit Committee) Kinneret Livnat Savitzky, Ph.D.
In accordance with the Alleviation Regulations, we, as an Israeli public company with no controlling shareholder (within the meaning of the Companies Law), whose shares are listed on The Nasdaq Global Market, may exempt ourselves from the requirement of having external directors on our board of directors and related requirements concerning the composition of the audit and compensation committees of the board of directors, provided that we continue to comply with the U.S. securities laws and Nasdaq Listing Rules applicable to U.S. domestic issuers regarding the independence of the board of directors and the composition of the audit and compensation committee.
In accordance with the Alleviation Regulations, we, as an Israeli public company with no controlling shareholder (within the meaning of the Companies Law), whose shares are listed on The Nasdaq Capital Market, may opt out from the requirement of electing and having external directors on our board of directors and related requirements concerning the composition of the audit and compensation committees of the board of directors, provided that we do not have a controlling shareholder, we continue to comply with the U.S. securities laws and Nasdaq Listing Rules applicable to U.S. domestic issuers regarding the independence of the board of directors and the composition of the audit and compensation committee, or the Opt Out Criteria.
Assumptions and key variables used in the calculation of such amounts are discussed in Note 2m to our 2022 consolidated financial statements set forth elsewhere in this report. 5) Dr.
Assumptions and key variables used in the calculation of such amounts are discussed in Note 2o to our 2023 consolidated financial statements set forth elsewhere in this report.
During 2022, we granted to our Directors and Senior Management listed in Item 6.A a total of 907,500 options to purchase ordinary shares. These options are exercisable at an average exercise price of $2.67 per share, and generally expire ten years after their respective dates of grant.
During 2023, we granted to our Directors and Senior Management listed in Item 6.A a total of 690,000 options to purchase ordinary shares. These options are exercisable at an average exercise price of $1.30 per share, and generally expire ten years after their respective dates of grant.
Livnat Savitzky holds a B.Sc. in Biology from The Hebrew University of Jerusalem, and an M.S.c and Ph.D. with distinction in Human Genetics from Tel Aviv University. Eran Perry joined Compugen’s Board of Directors in July 2019.
Livnat Savitzky held various R&D management positions at BioLineRX and Compugen. Dr. Livnat Savitzky holds a B.Sc. in Biology from The Hebrew University of Jerusalem, and an M.S.c and Ph.D. with distinction in Human Genetics from Tel Aviv University. Eran Perry joined Compugen’s Board of Directors in July 2019.
Mathias (Math) Hukkelhoven joined Compugen’s Board of Directors in March 2022. Dr. Hukkelhoven has a wealth of experience in global regulatory affairs and drug development, evidenced by his contribution to more than 50 NCEs and hundreds of new indications and line extensions over his career to date. Dr.
Hukkelhoven has a wealth of experience in global regulatory affairs and drug development, evidenced by his contribution to more than 50 NCEs and hundreds of new indications and line extensions over his career to date. Dr.
Oliver Froescheis retired from his position on February 10, 2023. 76 Paul Sekhri joined Compugen’s Board of Directors as its Chairman in October 2017. Mr. Sekhri serves as the President and Chief Executive Officer of vTv Therapeutics Inc. Prior to joining vTv Therapeutics Inc., from January 2019 until April 2022, Mr.
Henry Adewoye retired from his position on February 29, 2024. 80 Paul Sekhri joined Compugen’s Board of Directors as its Chairman in October 2017. Mr. Sekhri serves as the President and Chief Executive Officer of vTv Therapeutics Inc. Prior to joining vTv Therapeutics Inc., from January 2019 until April 2022, Mr.
Anat Cohen-Dayag’s employment agreement (and in accordance with the approval of her updated compensation terms at the 2020 AGM), as the chief executive officer of the Company she is entitled to a gross monthly salary of NIS 134,125 (approximately $39,920 according to the Representative Rate). Dr.
Anat Cohen-Dayag’s employment agreement (and in accordance with the approval of her updated compensation terms at the 2023 AGM), as the chief executive officer of the Company she is entitled to a gross monthly salary of NIS 150,000 (approximately $40,650 according to the Representative Rate). Dr.
Our Compensation Policy for office holders was originally approved by our shareholders in September 2013, with the most recent amendment adopted at the 2020 Annual General Meeting of Shareholders.
Our Compensation Policy for office holders was originally approved by our shareholders in September 2013, with the most recent amendment adopted at the 2023 Annual General Meeting of Shareholders held on September 20, 2023, or the 2023 AGM.
In accordance with the Companies Law, an Israeli public company’s compensation policy and any amendments thereto must be approved by the board of directors, after considering the recommendations of the compensation committee, and by a special majority of our shareholders, or a Special Majority , which should include (i) at least a majority of the shareholders who are not controlling shareholders and who do not have a personal interest in the matter, present and voting (abstentions are disregarded), or (ii) the non-controlling shareholders and shareholders who do not have a personal interest in the matter who were present and voted against the matter hold two percent or less of the voting power of the company .
The Company believes that it therefore must offer compensation terms, both to its executives and to its directors that are competitive with the compensation standards that exist in the companies with whom it competes for such talents. 85 In accordance with the Companies Law, an Israeli public company’s compensation policy and any amendments thereto must be approved by the board of directors, after considering the recommendations of the compensation committee, and by a special majority of our shareholders, or a Special Majority, which should include (i) at least a majority of the shareholders who are not controlling shareholders and who do not have a personal interest in the matter, present and voting (abstentions are disregarded), or (ii) the non-controlling shareholders and shareholders who do not have a personal interest in the matter who were present and voted against the matter hold two percent or less of the voting power of the company.
Oliver Froescheis retired from his position on February 10, 2023. 81 Compensation Policy Under the Companies Law we are required to adopt a compensation policy, which sets forth company’s policy regarding the terms of office and employment of office holders, including compensation, equity awards, severance and other benefits, exemption from liability and indemnification.
Compensation Policy Under the Companies Law we are required to adopt a compensation policy, which sets forth company’s policy regarding the terms of office and employment of office holders, including compensation, equity awards, severance and other benefits, exemption from liability and indemnification.
Ms. Sharon Cohen of Brightman, Almagor, Zohar & Co., a member firm of Deloitte Touche Tohmatsu, has served as our internal auditor since 2019 (replacing a different partner at Brightman Almagor Zohar & Co., a member firm of Deloitte Touche Tohmatsu). Ms.
Ms. Tali Yaron of Brightman, Almagor, Zohar & Co., a member firm of Deloitte Touche Tohmatsu, has served as our internal auditor since 2023 (replacing a different partner at Brightman Almagor Zohar & Co., a member firm of Deloitte Touche Tohmatsu during 2023). Ms.
On December 31, 2020, 58 of our employees were located in Israel, nine were located in the United States and 1 employee was located in Europe, on December 31, 2021, 58 of our employees were located in Israel, 12 were located in the United States and 3 employees were located in Europe and on December 31, 2022, 57 of our employees were located in Israel, 8 were located in the United States and 4 employees were located in Europe.
On December 31, 2021, 58 of our employees were located in Israel, 12 were located in the United States and 3 employees were located in Europe; on December 31, 2022, 57 of our employees were located in Israel, 8 were located in the United States and 4 employees were located in Europe; and on December 31, 2023, 58 of our employees were located in Israel, 7 were located in the United States and 3 employees were located in Europe.
Zurit Levine Senior VP, Technology Innovations 205,381 140,316 178,097 523,794 1) All Covered Office Holders listed in the table were full-time officers of the Company during their term of service in 2022. 2) Cash compensation amounts denominated in currencies other than the dollar were converted into dollars at an exchange rate of NIS 3.3596= $1.00, which reflects the average conversion rate for 2022, or the Representative Rate. 3) Amounts reported in this column include benefits and perquisites, including those mandated by applicable law.
Zurit Levine Senior VP, Technology Innovations 188,631 167,207 176,426 532,264 1) All Covered Office Holders listed in the table were full-time officers of the Company during their term of service in 2023. 2) Cash compensation amounts denominated in currencies other than the dollar were converted into dollars at an exchange rate of NIS 3.6897= $1.00, which reflects the average conversion rate for 2023, or the Representative Rate. 3) Amounts reported in this column include benefits and perquisites, including those mandated by applicable law.
The maximum number of ordinary shares a Participant may purchase during any calendar year shall be that whole number of ordinary shares determined by dividing $40,000 by the Purchase Price. 97 The maximum number of shares available for issuance under the ESPP in the aggregate is 600,000.
The maximum number of ordinary shares a Participant may purchase during any calendar year shall be that whole number of ordinary shares determined by dividing $40,000 by the Purchase Price. 101 The maximum number of shares that were available for issuance under the ESPP upon its approval was 600,000.
As of December 31, 2022, options to purchase 8,157,749 ordinary shares at a weighted average exercise price of approximately $5.43 per share were outstanding (i.e., were granted but not canceled, expired nor exercised) under the 2010 Plan and 1,918,297 ordinary shares remained available for future grant under the 2010 Plan.
As of December 31, 2023, options to purchase 8,373,745 ordinary shares at a weighted average exercise price of approximately $4.65 per share were outstanding (i.e., were granted but not canceled, expired nor exercised) under the 2010 Plan and 1,202,301 ordinary shares remained available for future grant under the 2010 Plan.
Halevy holds a B.A. in Humanities (multidisciplinary program for exceptional students) and an LL.B. (Magna Cum Laude) both from the Hebrew University of Jerusalem. Dr. Kinneret Livnat Savitzky joined Compugen’s Board of Directors in June 2018. Dr. Livnat Savitzky currently serves as a managing partner at Team8 and Director at Team8 Health, Partner 1 GP Ltd. Dr.
AL Holdings Ltd., Plas-Fit Ltd. and A.A. Politiv Ltd. Mr. Halevy holds a B.A. in Humanities (multidisciplinary program for exceptional students) and an LL.B. (Magna Cum Laude) both from the Hebrew University of Jerusalem. Dr. Kinneret Livnat Savitzky joined Compugen’s Board of Directors in June 2018. Dr. Livnat Savitzky currently serves as an entrepreneur in residence at Team8 Dr.
Cohen-Dayag, and (ii) 973,750 shares subject to options that are exercisable within 60 days after February 9, 2023, with a weighted average exercise price of $6.18 per share, and which expire between September 2023 and March 2032.
Cohen-Dayag, and (ii) 970,000 shares subject to options that are exercisable within 60 days after February 20, 2024, with a weighted average exercise price of $6.47 per share, and which expire between March 2024 and March 2032.
COMPENSATION Aggregate Executive Compensation During 2022, the aggregate compensation paid or accrued by us to all persons listed in Item 6.A above (Directors and Senior Management), as well as one director (Dr. Jean-Pierre Bizzari) and one member of Senior Management (Mr. Ari Krashin) who ceased to serve before the end of 2022, was approximately $6.0 million.
COMPENSATION Aggregate Executive Compensation During 2023, the aggregate compensation paid or accrued by us to all persons listed in Item 6.A above (Directors and Senior Management) and one member of senior management (Dr. Oliver Froescheis) who ceased to serve before the end of 2023, was approximately $5.4 million.
Out of these outstanding options: (i) options to purchase 889,375 ordinary shares, with a weighted average exercise price of $6.18 per share, were exercisable as of December 31, 2022; and (ii) options to purchase 350,625 ordinary shares, with a weighted average exercise price of $6.60 per share, had not vested as of December 31, 2022.
Out of these outstanding options: (i) options to purchase 932,500 ordinary shares, with a weighted average exercise price of $6.35 per share, were exercisable as of December 31, 2023; and (ii) options to purchase 487,500 ordinary shares, with a weighted average exercise price of $3.20 per share, had not vested as of December 31, 2023.
The information in this table is based on 86,624,643 ordinary shares outstanding as of February 9, 2023. Beneficial Owner Amount Owned Percent of Class Anat Cohen-Dayag (1) 1,029,872 1.2 % All directors and executive officers as a group (14 persons) (2) 2,996,117 3.3 % ___________________ (1) Includes (i) 56,122 shares held by Dr.
The information in this table is based on 89,530,193 ordinary shares outstanding as of February 20, 2024. 100 Beneficial Owner Amount Owned Percent of Class Anat Cohen-Dayag (1) 1,026,122 1.1 % All directors and executive officers as a group (13 persons) (2) 3,143,964 3.4 % (1) Includes (i) 56,122 shares held by Dr.
On June 7, 2018, our board of directors determined to opt out of the requirement to elect and have external directors and composition criteria of the audit committee and compensation committee under the Companies Law pursuant to the relief available under the Alleviation Regulations, since at that time (and since that time) we have not had a controlling shareholder and as we have been complying with the Nasdaq majority board independence requirement, and with the Nasdaq and SEC audit and compensation committee composition requirements, or the Opt Out Criteria.
On June 7, 2018, our board of directors determined to opt out of the requirement to elect and have external directors and of the rules governing composition of the audit committee and compensation committee under the Companies Law pursuant to the relief available under the Alleviation Regulations, since at that time (and since that time) we have complied and continue to comply with the Opt Out Criteria.
In addition to the discussion below, see Note 8 to our 2022 consolidated financial statements. Compugen 2010 Share Incentive Plan On July 25, 2010, our board of directors adopted the 2010 Plan which was also approved by our shareholders on May 12, 2011.
Compugen 2010 Share Incentive Plan On July 25, 2010, our board of directors adopted the 2010 Plan which was also approved by our shareholders on May 12, 2011.
In any event, at least 30% of the value of any annual equity grant to Dr. Cohen-Dayag shall be based on either (i) options granted with fair market value exercise price; or (ii) Other Equity which vesting is based on both time and performance criteria, as shall be determined by the compensation committee and board of directors.
Cohen-Dayag shall be based on either (i) options granted with fair market value exercise price; or (ii) Other Equity which vesting is based on both time and performance criteria, as shall be determined by the compensation committee and board of directors. 89 The options granted in each respective year shall be subject to the terms and conditions applicable to options granted under the 2010 Plan (or any other option plan adopted by the Company).
Independent Directors Under the Nasdaq Listing Rules In addition to the requirements of the Companies Law as described above, since our shares are listed on The Nasdaq Global Market, pursuant to the Nasdaq Listing Rules, a majority of our directors must be independent (as defined under the Nasdaq Listing Rules).
Anat Cohen-Dayag, who also serves as our chief executive officer, meets the ‘independent directors’ criteria under the Companies Law. 94 Independent Directors Under the Nasdaq Listing Rules In addition to the requirements of the Companies Law as described above, since our shares are listed on The Nasdaq Capital Market, pursuant to the Nasdaq Listing Rules, a majority of our directors must be independent (as defined under the Nasdaq Listing Rules).
Equity In addition to the cash compensation detailed above, each non-executive director is entitled to a yearly grant of options to purchase the Company’s ordinary shares, so that in the first year of service as a director, each non-executive director shall be entitled to a one-time grant of 35,000 options, or Initial Option Grant, and, in addition, to a yearly grant of 10,000 options in each of the following years of service, or the Annual Option Grant, as detailed below.
Equity In addition to the cash compensation detailed above, each non-executive director is entitled to a yearly grant of options to purchase the Company’s ordinary shares, so that in the first year of service as a director, each non-executive director shall be entitled to a one-time grant of 35,000 options, or Initial Option Grant, and, in addition, to a yearly grant of 10,000 options in each of the following years of service, or the Annual Option Grant, as detailed below. 87 The grant date of each Initial Option Grant is the date of appointment for service as director, whether initially appointed by the Board or by the general meeting of shareholders, with an exercise price equal to the closing price of the Company’s ordinary shares on the Nasdaq on the last trading day prior to the date of their initial appointment to serve on the Board.
Of the unvested options on December 31, 2022, options to purchase 163,125 ordinary shares are expected to vest during 2023, options to purchase 112,500 ordinary shares are expected to vest during 2024 and options to purchase the remaining 75,000 ordinary shares are expected to vest during the period between March 31, 2025, and March 31, 2026.
Of the unvested options on December 31, 2023, options to purchase 206,250 ordinary shares are expected to vest during 2024, options to purchase 140,625 ordinary shares are expected to vest during 2025 and options to purchase the remaining 140,625 ordinary shares are expected to vest during the period between March 31, 2026, and September 30, 2027.
Ophir joined Compugen’s immuno-oncology group as a senior scientist and has since held various positions in the Research and Development department, with increasing responsibilities. Dr. Ophir received a B.Sc. in Bioinformatics from Tel Aviv University and a Ph.D. in Biology from the Weizmann Institute of Science. Pierre Ferre, Ph.D. joined Compugen in April 2021 as Vice President Preclinical Development. Dr.
Dr. Ophir received a B.Sc. in Bioinformatics from Tel Aviv University and a Ph.D. in Biology from the Weizmann Institute of Science. 83 Pierre Ferre, Ph.D. joined Compugen in April 2021 as Vice President Preclinical Development. In his role, Dr.
However, in special circumstances the compensation committee and then the board of directors may nonetheless approve such compensation even if such compensation was not approved by the shareholders, following a further discussion and for detailed reasoning. 82 Compensation for Office Holders who are Directors or Chief Executive Officers.
Shareholder approval is also required if the compensation of such officer is not in accordance with such policy. However, in special circumstances the compensation committee and then the board of directors may nonetheless approve such compensation even if such compensation was not approved by the shareholders, following a further discussion and for detailed reasoning.
The provisions relating to vesting, acceleration and exercise period applicable to options, as specified above, shall apply to Other Equity that may be granted, mutatis mutandis . 84 Compensation to the Company’s Chairman of the Board of Directors, a Non-Executive Director On October 19, 2017, our shareholders approved, following previous resolutions made by our audit committee (then sitting as a compensation committee) and the board of directors, and consistent with our Compensation Policy, the following compensation for our non-executive Chairman of the Board, Mr.
Compensation to the Company’s Chairman of the Board of Directors, a Non-Executive Director On October 19, 2017, our shareholders approved, following previous resolutions made by our audit committee (then sitting as a compensation committee) and the board of directors, and consistent with our Compensation Policy, the following compensation for our non-executive Chairman of the Board, Mr.
For purposes of all matters related to external directors, a shareholder is presumed to be a controlling shareholder if the shareholder holds 50% or more of the voting rights in the company or has the right to appoint the majority of the directors of the company or its chief executive officer. 90 Under the Companies Law, an ‘independent director’ is either an external director or a director appointed or classified as such who meets the same non-affiliation criteria as an external director, as determined by the company’s audit committee, and who has not served as a director of the company for more than nine consecutive years.
Under the Companies Law, an ‘independent director’ is either an external director or a director appointed or classified as such who meets the same non-affiliation criteria as an external director, as determined by the company’s audit committee, and who has not served as a director of the company for more than nine consecutive years.
Cohen-Dayag as the Company’s chief executive officer through the last day of the calendar year with respect to which the annual cash bonus is proposed to be paid. Additionally, at the 2020 AGM, our shareholders approved an annual equity grant plan for Dr. Cohen-Dayag for each of the calendar years 2021, 2022 and 2023, according to which Dr.
Cohen-Dayag as the Company’s chief executive officer through the last day of the calendar year with respect to which the annual cash bonus is proposed to be paid. The same terms were approved at the 2023 AGM with respect to the calendar years 2024, 2025 and 2026.
(2) Includes (i) a total of 76,259 ordinary shares held by directors and executive officers, and (ii) a total of 2,919,858 shares subject to options that are beneficially owned by directors and executive officers that are exercisable within 60 days after February 9, 2023, with a weighted average exercise price of $5.43 per share and which expire between July 2023 and March 2032. 96 Share Incentive Plan and Employee Share Purchase Plan We currently maintain one active share incentive plan, which is our 2010 Share Incentive Plan, or the 2010 Plan.
(2) Includes (i) a total of 76,259 ordinary shares held by directors and executive officers, and (ii) a total of 3,067,705 shares subject to options that are beneficially owned by directors and executive officers that are exercisable within 60 days after February 20, 2024, with a weighted average exercise price of $5.48 per share and which expire between February 2024 and November 2032.
Sekhri is currently a member of the Board of Directors of vTv Therapeutics Inc., eGenesis, Inc., Veeva Systems Inc., Ipsen S.A., Oryn Therapeutics, LLC, Axcella Health Inc. and Spring Discovery and Chairman of the Board of Directors of Pharming N.V. and of Longboard Pharmaceuticals, Inc. Additionally, Mr.
Sekhri is currently a member of the Board of Directors of vTv Therapeutics Inc., eGenesis, Inc., Veeva Systems Inc., and Spring Discovery and Chairman of the Board of Directors of Longboard Pharmaceuticals, Inc. Additionally, Mr. Sekhri is the Chairman of the Board of the Young Concert Artists (YCA), and a member of Boards of The Metropolitan Opera. Mr.
Sekhri is the Chairman of the Board of the Young Concert Artists (YCA), and a member of Boards of The Metropolitan Opera. Mr. Sekhri is also an active member of the Patrons Council of Carnegie Hall, where he established the Life Sciences Council of Carnegie Hall. Anat Cohen-Dayag, Ph.D. joined Compugen’s Board of Directors in February 2014. Dr.
Sekhri is also an active member of the Patrons Council of Carnegie Hall, where he established the Life Sciences Council of Carnegie Hall. Anat Cohen-Dayag, Ph.D. joined Compugen’s Board of Directors in February 2014. Dr. Anat Cohen-Dayag has over 25 years of experience in the biotech industry, both in R&D and executive leadership roles.
Froescheis holds a Diploma in Chemistry and a Ph.D. in Analytical Chemistry, both from the University of Ulm, Germany. Zurit Levine, Ph.D. was appointed as Senior Vice President, Technology Innovation in 2018, responsible for leading and advancing the Company’s computational innovation towards new discovery fields and areas. In this capacity, Dr.
Adewoye has initial board certifications by the American Board of Internal Medicine in Medical Oncology, Hematology and Internal Medicine. Zurit Levine, Ph.D. was appointed as Senior Vice President, Technology Innovation in 2018, responsible for leading and advancing the Company’s computational innovation towards new discovery fields and areas. In this capacity, Dr.
Ferre has two decades of experience in all aspects of clinical and non-clinical drug development in oncology and immuno-oncology. Dr.
Ferre leads the preclinical development, CMC and drug supply management, clinical biomarker operations, and project management team and activities across the Company. Dr. Ferre has two decades of experience in all aspects of clinical and non-clinical drug development in oncology and immuno-oncology. Dr.
Sekhri and all options granted which shall be vested as of the date of final termination of office as a director of the Company may be exercised within one year following such termination date.
Sekhri and all options granted which shall be vested as of the date of final termination of office as a director of the Company may be exercised within one year following such termination date. 88 At the 2020 AGM, our shareholders approved, following previous resolutions made by our compensation committee and the board of directors, and consistent with our Compensation Policy, that Mr.
During her tenure, BioLineRX signed a strategic collaboration with Novartis as well as licensing agreements with Merck (MSD), Genentech and others. Prior to being appointed CEO of BioLineRX, Dr. Livnat Savitzky held various R&D management positions at BioLineRX and Compugen. Dr.
From 2010 to 2016, Dr. Livnat Savitzky served as CEO of BioLineRX Ltd., a Nasdaq-listed drug development company focused on oncology and immunology. During her tenure, BioLineRX signed a strategic collaboration with Novartis as well as licensing agreements with Merck (MSD), Genentech and others. Prior to being appointed CEO of BioLineRX, Dr.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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The address of the principal business office of BMS is 430 East 29th Street, New York, NY 10016. 98 B. RELATED PARTY TRANSACTIONS Other than as set forth below and transactions related to compensation of our executive officers and directors as described under “Item 6. Directors, Senior Management and Employees - B.
The address of the principal business office of BMS is 430 East 29th Street, New York, NY 10016. B. RELATED PARTY TRANSACTIONS Other than as set forth below and transactions related to compensation of our executive officers and directors as described under “Item 6. Directors, Senior Management and Employees - B.
Our ordinary shares are traded on the Nasdaq Global Market in the United States and on the TASE in Israel. A significant portion of our shares are held in “street name”, therefore we cannot determine who our shareholders are, their geographical location or how many shares a particular shareholder owns.
Our ordinary shares are traded on the Nasdaq Capital Market in the United States and on the TASE in Israel. A significant portion of our shares are held in “street name”, therefore we cannot determine who our shareholders are, their geographical location or how many shares a particular shareholder owns.
Compensation,” since January 1, 2022, we have not entered into any material related party transaction. Indemnification and Exemption Agreements Our Articles permit us to exculpate, indemnify and insure our Office Holders to the fullest extent permitted by the Companies Law.
Compensation,” since January 1, 2023, we have not entered into any material related party transaction. Indemnification and Exemption Agreements Our Articles permit us to exculpate, indemnify and insure our Office Holders to the fullest extent permitted by the Companies Law.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. MAJOR SHAREHOLDERS The following table sets forth share ownership information as of February 15, 2023 (unless otherwise noted below) with respect to each person who is known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. MAJOR SHAREHOLDERS The following table sets forth share ownership information as of February 20, 2024 (unless otherwise noted below) with respect to each person who is known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares.
Our Office Holders are also covered by directors’ and officers’ liability insurance. For more information see “Item 6. Directors, Senior Management and Employees - B. Compensation - Insurance, Indemnification and Exemption.” C. INTERESTS OF EXPERTS AND COUNSEL Not applicable. ITEM 8 . FINANCIAL INFORMATION A.
Our Office Holders are also covered by directors’ and officers’ liability insurance. For more information see “Item 6. Directors, Senior Management and Employees - B. Compensation - Insurance, Indemnification and Exemption.” C. INTERESTS OF EXPERTS AND COUNSEL Not applicable.
Total “Number of Ordinary Shares Beneficially Owned” in the table below include shares that may be acquired by any of the below entities upon the exercise of options or warrants known to us, that are either currently exercisable or will become exercisable within 60 days of February 15, 2023.
Total “Number of Ordinary Shares Beneficially Owned” in the table below include shares that may be acquired by any of the below entities upon the exercise of options or warrants known to us, that are either currently exercisable or will become exercisable within 60 days of February 20, 2024. 102 The shareholders listed below do not have any different voting rights from any of our other shareholders.
As of February 15, 2023, there were a total of 35 holders of record of our ordinary shares, of which 22 were registered with addresses in the United States. Such United States holders were, as of such date, the holders of record of approximately 99 % of our outstanding ordinary shares.
As of February 20, 2024, there were a total of 36 holders of record of our ordinary shares, of which 23 were registered with addresses in the United States. Such United States holders were, as of such date, the holders of record of more than 99.0 % of our outstanding ordinary shares.
The shareholders listed below do not have any different voting rights from any of our other shareholders. Reporting Beneficial Owner Number of Ordinary Shares Beneficially Owned Percent of Ordinary Shares Beneficially Owned (1) Bristol-Myers Squibb Company (2) 4,757,058 5.5 % (1) Based upon 86,624,643 ordinary shares issued and outstanding as of February 15, 2023.
Reporting Beneficial Owner Number of Ordinary Shares Beneficially Owned Percent of Ordinary Shares Beneficially Owned (1) Bristol-Myers Squibb Company (2) 4,757,058 5.3 % (1) Based upon 89,530,193 ordinary shares issued and outstanding as of February 20, 2024. (2) Based upon information provided by the shareholder in its Form 13G filed with the SEC on November 19, 2021.
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(2) Based upon information provided by the shareholder in its Form 13G filed with the SEC on November 19, 2021.
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CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION Consolidated Financial Statements Our consolidated financial statements are included beginning on page F-1 of this Annual Report. See also “Item 18.
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Financial Statements.” Legal Proceedings Currently, we are not a party to any legal or arbitration proceedings, including governmental proceedings, that are pending or known to be contemplated, that our management believes, individually or in the aggregate, may have, or have had in the recent past, a significant effect on our financial position or profitability, nor are we party to any material proceeding in which any director, member of our senior management or affiliate is a party adverse to us or our subsidiary or has a material interest adverse to us or our subsidiary.
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Dividend Distribution Policy We have never paid any cash dividends on our ordinary shares, and we do not intend to pay cash dividends on our ordinary shares in the foreseeable future. Our current policy is to retain any earnings we have (if any) for use in our business.
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In the event that we decide to pay a cash dividend from income that is tax exempt under our Benefiting Enterprises program, we would be required to pay the applicable corporate tax that would otherwise have been payable on such income which would be in addition to the tax payable by the dividend payee.
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See Note 9 to our 2022 consolidated financial statements and “Item 10. Additional Information - E. Taxation.” B. SIGNIFICANT CHANGES Not applicable. 99

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