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Bristol-Myers Squibb makes $12 million investment in Compugen, sets up research partnership

New trials will evaluate the safety and tolerability of Compugen’s COM701 in combination with Bristol-Myers' immune checkpoint inhibitor Opdivo in patients with advanced cancerous tumors
cancer in a headline
Oppenheimer analyst Mark Breidenbach says the partnership showcases the worth of COM701, which was discovered using Compugen's in-house technology platform

US pharmaceutical giant Bristol-Myers Squibb (NYSE:BMY) has agreed to make a $12 million investment in Compugen Ltd (NASDAQ:CGEN), the Israeli drug developer, as part of a new partnership between the companies, which also involves shared cancer trials.

The new trials will evaluate the safety and tolerability of Compugen’s COM701, an anti-PVRIG monoclonal antibody being developed to treat various types of cancer, in combination with Bristol Myers Squibb’s immune checkpoint inhibitor Opdivo (nivolumab) in patients with advanced solid tumors.

Compugen will retain sponsorship of the first two-part Phase 1 trial, which will examine how effective the two drugs are in fighting four separate tumor types – non-small cell lung, ovarian, breast and endometrial cancer.

The collaboration is also structured to address potential future drug combinations.

Oppenheimer analyst weighs in

In a note to investors, Oppenheimer research analyst Mark Breidenbach predicts the tie-up could evolve to include the evaluation of the triple combination of COM701, Opdivo and BMS-986207, a clinical-stage anti-TIGIT antibody. (TIGIT is a protein expressed on T cells in many different types of cancer.)

Keeping an Outperform rating on Compugen with a $9 price target, Breidenbach goes onto say that the partnership showcases the worth of COM701, which was discovered using Compugen’s in-house technology platform. 

READ: Oppenheimer repeats 'outperform' on Compugen as the Israeli biotech has two candidates cleared for clinic

“Compugen’s core competency lies in the discovery of previously unknown or underappreciated immune checkpoints, which feeds the company’s oncology/ autoimmune-focused pipeline and provides an engine for partnership opportunities,” explained Breidenbach.

In the next year to 18 months, Breidenbach predicts Compugen is poised to generate clinical proof-of-concept in one or more PVRIG-expressing cancers.

As part of the deal, Bristol-Myers will make a $12 million investment in Compugen, which is comprised of 2.424 million shares of Compugen stock purchased at $4.95 per share, which represents a more than 50% premium to Compugen’s closing price on the Nasdaq on Wednesday of $3.25. The investment is expected to close on or about October 12, subject to closing conditions.

The investment from Bristol-Myers will extend Compugen’s cash runway into the second half of next year, according to Oppenheimer.

Contact Ellen Kelleher at [email protected]

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