Compugen Ltd.
Q3 2015 Earnings Call Transcript

Published: 3 Nov 2015

[Operator:]

Ladies and gentlemen, thank you for standing by. Welcome to the Compugen’s Third Quarter 2015 Financial Earnings Conference Call. At this time, all participants are in a listen-only mode. An audio webcast of this call is available on the Investor section of Compugen’s website at cgen.com/investors. As a reminder, today’s call is being recorded. I will now return the call over to Hannah Deresiewicz of Stern Investor Relations. Please go ahead.

[Hannah Deresiewicz:]

Good morning and thank you for joining us today. With us today from Compugen are, Mr. Martin Gerstel, Chairman of the Board; Dr. Anat Cohen-Dayag, President and Chief Executive Officer; and Mr. Ari Krashin, Chief Financial Officer. Before we begin, I would like to read the following regarding forward-looking statements. During the course of this conference call, the company may make projections or other forward-looking statements regarding future events or future business outlook, including anticipated progress on Compugen’s pipeline program as well as commercialization efforts. We wish to caution you that such statements reflect only the Company’s current expectations and that actual events or results may different materially. You are kindly referred to the risk factors and cautionary language contained in the documents the Company filed with Securities and Exchange Commission, including the Company’s annual report on Form 20-F, filed March 12, 2015. The Company undertakes no obligation to update any projections or forward-looking statements in the future. I will now turn the call over to Martin Gerstel, Chairman of the Board of Compugen.

[Martin Gerstel:]

Thank you. And on behalf of all of us at Compugen welcome to our third quarter 2015 conference call. In our conference call last quarter I focused my introductory remarks on the dramatically changing role novel targets as the pharmaceutical industry moves its research and development efforts more and more towards biological drugs rather than small molecules. With small molecule drugs, the major problem was and is identifying and then synthesizing a molecule with efficacy and sufficient specificity against the target of interest, a task that was very time consuming, costly and most importantly in the vast majority of cases unfortunately ended with failure. Thus novel targets for small molecules for small molecules were interesting, but having one meant you’re still many years away these effort from possibly having a drug candidate. However, with biological drugs, methodologies and technologies now exists is systematically generate therapeutic molecules such antibodies, peptides and proteins. Even though such molecules are may orders of magnitude larger and more complex in small molecule drugs. These methodologies such as recombinant DNA, monoclonal antibodies, ADC, et cetera, are very powerful and multiple companies are showing remarkable results with the respect to their initial usage, particularly in cancer. However, within each modality usually all of the current product candidates are against the same limited group of targets and in general are relevant only for a minority of patients and the disease areas being addressed. Therefore, in order for these powerful methodologies and additional ones that undoubtedly will be developed, to be more broadly applicable in medicine the availability of novel targets for them to address will be key. Already for example, with respect to immuno-oncology, various prominent industry executives and analysts have begun to point out the critical need for new targets for both mono and combination therapies if the very small percentage of cancer patients for which such therapy is currently applicable, is to be substantially expanded. This is where Compugen has positioned itself through its many years of commitment in establishing a broadly applicable and unique predictive discovery capability with a primary focus on novel drug targets. And our success in doing so is demonstrated by the very impressive results from our first two uses of this capability, first in the discovery of target candidates for immuno-oncology, primarily checkpoint proteins and second, in the discovery of target candidates for ADC therapy. These are both areas of high industry interest where the availability of validated targets is very limited. Yet, through this initial use of our discovery capabilities, we now have an attractive early stage target pipeline, particularly in immuno-oncology totally based on Compugen discovered novel targets. Our business strategy is to maximize the value to our shareholders of this unique target discovery capability and the strategy relies on entering collaborations with the industry at various stages of research and development for our growing number of targets and product candidates under milestone and royalty bearing agreements. At present most of our ongoing discussions with potential partners are with respect to collaborations covering our novel immune checkpoint proteins for use in immuno-oncology. However, unlike traditional licensing agreements covering a specific product or products, agreements covering drug targets such as our novel checkpoints, need to address the fact that each of these targets could potentially provide multiple product opportunities, opportunities both currently known and unknown. For example, in our case, our novel checkpoint targets could potentially provide the opportunity not only for several monoclonal antibody product candidates for use in immuno-oncology, but also for possible additional drug candidates in other modalities and even in other fields. Although this adds upside potential for the collaboration, it along with the relatively early and novelty of our checkpoints, also adds additional complexities that must be addressed. However, it is important to note that, in general, reaching agreement on the basic terms and conditions insofar as they relate to this specific monoclonal antibody product or products of primary current interest to our potential partners, has not been a problem and therefore we are confident that these additional complexities will prove to only be a timing issue. After Ari provides some brief comments regarding our financial statements issued today, are not in her prepared remarks, we’ll provide status update with respect to various early stage therapeutic opportunities moving forward in our pipeline program, including following the approval of Bayer HealthCare to do so, the two programs in our collaboration with Bayer. Although we will not be commenting on our predictive discovery infrastructure, which without doubt provide the basis for our competitive advantage in target discovery, please feel free to address this in the Q&A session, which will follow her prepared remarks. This unique predictive capability has already led to a large number of very attractive discoveries, including all of the discoveries leading to the therapeutic opportunities that Anat will be updating. More importantly, with respect to the ongoing industry changes I discussed in these remarks, we continue to extend and enhance the infrastructures already broad applicability to address additional major areas of diagnostic and therapeutic needs. Ari?

[Ari Krashin:]

Thank you, Martin. Our financial results for the third quarter and first nine months of 2015 released today continue to reflect our sharply increased internal and external activities during the current year in R&D primarily with respect to our high priority immuno-oncology programs compared to prior years. Our reported revenues for the third quarter of 2015 were $0.2 million, compared to $1.7 million for the third quarter of 2014. Revenues for both periods relates primarily to non-cash amortization of $10 million upfront payment under our continued therapy collaboration with Bayer HealthCare. To date we have recognized approximately $9.2 million of this upfront payment. Revenues for the nine month period ending September 30, 2015 and ‘14 were $1and $5.8 million respectively. The revenues during 2014 also reflect a receipt of the first milestone payment out of that collaboration in the amount of $1.2 million in the second quarter of 2014. R&D expenses for the third quarter and first nine months of 2015 totaled $5.3 million and $15.4 million respectively, compared with $3.9 million and $10.2 million for the comparable periods in 2014, reflecting the previously mentioned substantial increased activities in support of our high priority IO programs, particularly in our U.S. subsidiary, which moved to a larger facility during 2014. Net loss for the second quarter of 2015 was $6.7 million, or $0.13 per diluted share, compared with a net loss of $5.4 million or $0.11 per diluted share in the comparable period of 2014. Net loss for the nine month period ended September 2015 was $19.7 million or $0.39 per diluted share, compared with a net loss of $9.6 million or $0.20 per diluted share in the comparable period of 2014. In September 30, 2015, our financial positions remained strong with approximately $89 million in cash and cash related accounts with no debt, compared with approximately $96 million as of June 30, 2015, reflecting a net cash usage for the quarter of approximately $7 million. With respect to our expected cash expenditures for 2015, we are currently estimating approximately $96 million to $97 million of gross cash expenditures, compared to $22 million for 2014 and the increase of approximately 20% due to our increased activities that were within the previously disclosed maximum budget for the full year of 2015, which was approximately 31% or $3 million, this lower than expected budget spending for the full year is attributed mainly to the more efficient working process and prioritization activities. With that, I’ll turn the call over to Anat. Anat?

[Anat Cohen-Dayag:]

Thank you, Ari. As mentioned by Martin in my prepared remarks today, I will be focusing on updates with respect to certain early stage therapeutic opportunities advancing in our pipeline program. These include the two programs in our collaboration with Bayer HealthCare and our internal programs all based on novel targets discovered by us using our unique predictive discovery infrastructure. These early stage therapeutic opportunities are for potential use in immuno-oncology, antibody drug conjugate cancer and also immune diseases. With respect to the Bayer collaboration I’m happy to be able to share with you a status update regarding these two programs covering two novel competent discovered immune checkpoint candidates CGEN-15001T and CGEN-15022. As required by the collaboration agreement, this update has been approved by Bayer following our request to share more information with our shareholders. We appreciate Bayer HealthCare’s consent which exemplifies the excellent collaborative spirit between our two companies and the shared excitement around the programs. In August 2015, we entered into an early stage collaboration and license agreement with Bayer for antibody based cancer therapy against the two targets. Since that time, there has been continuous progress on both programs including a growing understanding of the targets biology in addition to the advancement of therapeutic candidates in a joint preclinical research program. The CGEN-1501T antibody program for which US and EU patents has been granted to Compugen is currently more advanced and is demonstrating encouraging functional activity in preclinical models of cancer immunotherapy. Additional data for the CGEN-15022 program, which is currently at an earlier stage than CGEN-1501T, is providing promising support for its ability to modulate immune response. In more recent studies involving antibody candidates a novel mechanism of action has been revealed and is currently being further characterized regarding its role in anticancer immune responses. Bayer and Compugen are pleased with and excited by the potential of the two programs as they progress towards potential novel therapeutics for cancer immunotherapy. Each program presents a distinctive differentiation profile compared to known checkpoints providing potentially different mechanisms of action and extended opportunities for cancer treatment. With expect to our internal immuno-oncology program, which is by far the largest segment of our pipeline program, additional data of change in the past few months continues to indicate that our programs presents distinct therapeutic opportunities possibly offsetting the immune response through various mechanism involving T cells, which is the dominant approach in immuno-oncology, NK cells as well as myeloid cells. Myeloid cells are increasingly been recognized by the industry to have the potential to drive additional treatment options in cancer immunotherapy. We continue to advance CGEN-15022 as our highest priority antibody program and as such we allocated additional resources to this program to advance it towards clinical testing. As part of this effort, we’ve hired a team of preclinical and regulatory consultants which is managed by our new head of preclinical development. We are also in the process of selecting a contract antibody manufacturer and other required service providers to enable production and testing of our clinical candidates which will enable execution of the detailed work plan for identifying [ph] the program. Obviously this is a very exciting time for the company as we expand our development infrastructure and move our first internal program to our IND-enabling activities, with anticipation of having additional programs following thereafter. Given the scope of the current activities we are currently not in a position to either confirm or revive our previous estimation regarding timings for IND filing, however as of now our assessments is, such first filing may require some additional months. We will provide more information as soon as we can. In focusing on CGEN-15022 as our lead program towards IND filing a decision was made with respect to CGEN-15049 to perform additional target validation research to assess a target no deflection [ph] before continuing with antibody development. With respect to an additional disclose target CGEN-15052, we recently presented at the Inaugural International Cancer Immunotherapy Conference in New York City, additional target validation data for this target proteins. As expected from an immune checkpoint protein CGEN-15052 which is found in the tumor microenvironment of multiple cancer such as lung and breast cancer has the ability to inhibit human and mouse T cell activation and to enhance mouse tumor growth in Vivo. These results suggest a promising profile for these novel proteins to serve as an immunotherapeutic target for multiple cancer types and we are continuing with our target validation studies to further explore the potential of these targets for immuno-oncology. The poster presenting CGEN-15052 can be accessed via company website. With respect to our partnering activity at present most of our ongoing collaboration discussions with Big Pharma involve our novel immune checkpoint target candidates for immuno-oncology. In this regard it is important to recognize that concurrent with our ongoing partnering discussions, our scientists in Tel Aviv and South San Francisco continue to advance these programs uncovering new aspects of their unique biology and opportunities to bring new treatments forward thereby enhancing their value. Moving to specific activities relating to our target programs for antibody drug conjugate based on our second focused discovery program, we recently participated in the World ADC Summit in San Diego. At this summit, we provided information concerning our novel target candidates, which are showing significant potential to service targets for ADC, based cancer therapy. At the World ADC Conference, we disclosed for the first time data with respect to our CGEN-15027 program, our most advanced program among our ADC target candidate. CGEN-15027 was initially disclosed as one of the multiple immune checkpoint target candidates we discovered in our first focused discovery program for immune checkpoint candidate. While pursuing CGEN-15027 as an immuno-oncology program the protein was also predicted in our second focused discovery program to be promising ADC targets expressed on multiple tumor types including lung, breast, ovarian and pancreatic cancer. Further evaluation of CGEN-15027 as a novel target for ADC therapy was performed by us in parallel with the evolution of its role as an immune checkpoint target candidate. Using therapeutic antibodies for CGEN-15027 developed by our South San Francisco subsidiary, confident scientists demonstrated the ability of an exemplary ADC to mediate [indiscernible] expressing these protein. The recent expression and functional data suggest first in class clinical opportunities for CGEN-15027 ADC anti-bodies in the treatment of multiple solid tumor types. With this promising experiment to support and the clear unmet need for such targets profile, we decided to focus on CGEN-15027 as an ADC target and limit our our immuno-oncology work on this target. In addition to CGEN-15027 and a second ADC target for which therapeutic antibody discovery activities had been initiated, additional ADC targets are currently at different stages of validation. The candidates in our target portfolio have the potential to address multiple cancer indications providing confidence with a diversified portfolio for this additional promising mode of cancer therapy. The poster presenting competence ADC targets including CGEN-15027 which was presented at the summit can also be accessed via the company’s website. Moving now to the third and last category autoimmune diseases, in view of our focus on oncology here we are concentrating our effort on one lead program CGEN-1501. CGEN-1501was our first execution candidate based on one of our immune checkpoint candidate. Our ongoing research activity with CGEN-1501 almost all of which are outsourced continued to indicate the potential for this molecule to treat auto-immune diseases by potentially inducing immune tolerance. Induction of immune tolerance has the potential to upset the pathogenic mechanisms underlying autoimmunity and thus provide a long-term disease modified effect. Since currently there is no drug for autoimmune diseases based on these promising mechanism of action, we believe the CGEN-1501 has breakthrough potential in this large area of unmet medical need. Next week at the World Premier Rheumatology Conference, we will be presenting for the first time results set out in a joint abstract together with Professor Iain B. McInnes, our SAB member and others showing the effects of CGEN-1501on immune cell derived for rheumatoid arthritis patients and support to the potential to translate the efficacy shown in animal studies to human patients. Although the results to date are encouraging regarding the possible Induction of immune tolerance they’re still early and convincing confirmation of these mode of action can only be achieved through human trials. We are now evaluating various alternatives to move forward with this very attractive opportunity but without compromising our current internal operations commitment to biologic therapeutics for oncology. I hope the status updates of these specific therapeutic opportunities are based on our first [indiscernible] discovery effort has been helpful. In summary, we are convinced that in addition to the uniqueness of this pipeline, which is based solely on Compugen discovered novel targets and related early stage product candidates, it represents one of the most attractive early-stage pipelines in the industry. We’ll now open the call for Q&A.

[Operator:]

Thank you. Ladies and gentlemen at this time we’ll begin the question-and-answer session. [Operator Instructions] The first question is from Mike King of JMP Securities. Please go ahead.

[Mike King:]

Yes, thanks. Good morning, guys, thanks for taking the questions. I wanted just to ask you, Anat, I know you had just talked about the timelines on the INDs, but I’m just wondering if - I guess it’s just in two parts. One is, is there anything on identification of cell lines from manufacturing or other sort of preclinical check the box kind of items that you need to do that are slowing you down? That’s question number one. Question number two is a bit more existential, which is given this additional validation work you have to do on the biology, has it caused you to question the premises that you operate under for your - in clinical [ph] biology? Thank you.

[Anat Cohen-Dayag:]

Yes, okay, thank you, Mike. And I’ll start with the first question. As I stated, we are now in the process of building the exit work plans for - and timelines, specific timelines of the detailed work plan to take the program to IND in 15029, its part of it of course. We are negotiating with a service provider for cell line development, for the manufacturing of the clinical materials and this is part of building the works and this is the reason that we cannot commit or revise now the guideline. We believe that we’ll need some additional months, but this is really in order to build the detailed work plan. We are very encouraged with this program and how it is proceeding in the company. With respect to the validation of biology, I’ll first start by saying that there are a couple of layers for this answer. One is that whether we are confirming that the discoveries that we have made can serve as a new checkpoint and this is the first layer. The second layer is whether this checkpoint can serve a drug target that would be meaningful for cancer immuno therapy and would be able to compete with the drugs that are either currently in development or in the market and what could possibly be in the market when competent drugs will hopefully get to this - eventually get to the market. So this is another layer. And with respect to the first layer, I think that we are very satisfied with our ability to confirm our predictions of proteins that could serve as a new checkpoint based on what we discovered. Of course, we don’t have 100% success rate and we did not expect so and I think that we never stated that we will - but we are happy with the prediction capabilities. The next stage, those proteins should have the right potential to serve a drug in the market eventually. And since we have not only one candidate that we have to stick with and we have to pursue forward and we have multiple candidates, we can allow ourselves until certain stages to be agile and to prioritize and to make sure that we focus our efforts on the right candidates. So, for example, for 15027 where we realize that there is potential to serve as an ADC target because of the expression profile in cancer and in healthy cells that was also an attribute for it to serve as a checkpoint in a way. We realized that it has a better potential as an ADC. So we seeped and we can afford ourselves because we have this opportunity. For 15049, we realized that the therapeutic potential that we sort in the modification [ph] is not the one that we start to see and we started to debate whether it’s the right mechanism of action of the program to take forward and this is why we - when we knew that we have additional programs that have higher probability of success, we came faster to clinical trials. We shifted resources and in this case, we shifted resources from 049 to 029, taking 029 forward and we’re studying that 049. We are going to reassess the mechanism of action before investing more resources on it. So this is more or less, I know that it is a long answer, but it’s really giving you all details of the process that we are conducting here with the programs taking them forward.

[Mike King:]

Thanks for taking the question.

[Operator:]

The next question is from [indiscernible]. Please go ahead.

[Unidentified Analyst:]

Hey, everyone. Thank you so much for taking my questions. I guess I will switch gears a little bit and talk about 027. Can you outline some potential medications that are possibilities for 027 and the specific rationales behind them?

[Anat Cohen-Dayag:]

Yes, sure. So we disclosed that this target is expressed on multiple tumor types. We’ve stated that the expression profile - first as an ADC program, it has to have an expression profile that is very limited on healthy tissues and this is exactly the situation with this. We started making this viable target for the cancer that it does expressed on. So we stated that it’s expressed on the lung, breast, ovarian and pancreatic cancer, but this is not the only thing that we are taking into consideration, of course, the functionality of the anti-bodies bound to the conjugated toxin and it should be taken into consideration in what specific cancers it is active. We did not disclose this information yet, but it is falling within the lines of what I was saying now lung, breast, ovarian and pancreatic. So we do not choose which is the specific cancer, but I think that it gives you the wide perspective of what type of cancer CGEN-15027 can fit.

[Unidentified Analyst:]

Thank you. Yeah, that sounds good. I guess I would just start up with a broader question, now that there are so many candidates that show promise in your main three categories. So other than your partnership of Bayer, are you - are there any new business development activities over the next 12 to 24 months?

[Anat Cohen-Dayag:]

First, the business development activities are always in a situation that we are having ongoing discussions with Pharma and not necessarily only on the immune checkpoints, although this is a core segment of our pipeline. The basic model of the company is to enter collaborations to different stages of development and this is an ongoing work that we do. With respect to specific timing of collaborations we’ve taken that we are not - we cannot provide the exact timing of entering into collaboration, but this is something that we are pursuing and having ongoing discussions for this purpose.

[Unidentified Analyst:]

Okay, that’s understood. Thank you again for taking my questions.

[Operator:]

The next question is from Peter Welford of Jefferies. Please go ahead.

[Peter Welford:]

Hi, thanks for taking the questions. Just two sort of proved ones. One is actually just a clarification. So just on the business development that most of your discussions are focusing on the immuno-oncology, obviously understandable, but equally I’m wondering is that incoming or outgoing if you like, because given you are now expanding increasingly internally in immuno-oncology, would you now perhaps make sense to out license outsource, whatever you want to call it, some of the programs focused on other indications sooner to enable the company itself to invest I guess in a more focused manner internally. And then just a clarification, Ari, on the financials, so I couldn’t catch the point you made on cash burn in the fourth quarter and where you would like to end up for the full year? Thank you.

[Ari Krashin:]

Okay, so I’ll start with the simple answer. Basically what we said that we expect for the full year, according to our expectation for gross cash expenditures would be around $26 million to $27 million. So basically up until the nine months, we used the bulk $90 million, which basically means that it’s going to be roughly additional $7 million for the fourth quarter. That’s more or less where we are expecting the cash burn to be this year, so in total $26 million to $27 million.

[Peter Welford:]

Alight. Just may be make sure that - just to add that’s talking for the fourth quarter, that’s talking in terms of gross expenditures I think for the first nine months you were talking about net - what’s for the first nine months?

[Ari Krashin:]

Expenditure, which is pretty much the same.

[Peter Welford:]

What’s for the first nine months.

[Ari Krashin:]

Yeah, yeah.

[Peter Welford:]

So that’s the gross for the fourth quarter. If we get any types of revenues, it would reduce, so.

[Anat Cohen-Dayag:]

Okay, Peter and with respect to your question about business development and partnering opportunities, we’re prioritizing partnering opportunities. I would say that first within the core area of focus, of course, we are committed to take programs forward and we stated that our business model would consist of early stage and later stage partnering and that we want to take programs to clinical trials. So there are programs in the core area of focus within immuno-oncology that we are not discussing with partners and there are programs that we are discussing with partners and we do this seperation. We have multiple programs, so we can afford ourselves doing this distinction. This is one. Of course, with respect to other areas that I’ve described with respect antibody drug conjugation and autoimmune diseases, this is of course considerations that we are taking - or we are taking this into consideration in August through January specification [ph] where we are having - that we are generating an opportunity for a string of revenues for the company that would allow us to take our own program forward to clinical trials.

[Peter Welford:]

Understood, thank you.

[Operator:]

The next question is from [indiscernible]. Please go ahead.

[Unidentified Analyst:]

Thanks for taking my question. At the outset, I think the company and management should be commended for the impressive scientific progress that you’ve made over the past 18 months with the proliferation of new targets candidate is very exciting and the updates and now that you gave just before it’s very exciting as well. But at the same time, this past 18 months, it’s been a dreadful time to be - have been an owner of the company. Until recently the stocks went down two-thirds from where it was in early 2014 and its still down more than 50%. So my question relates to this glaring and painful and continuing disconnect between what I would call business success and market failure. At your Investor and Analyst Day in New York, the meeting in June I adopted true [indiscernible], the advisory committee spoke of how the level of awareness of Compugen had risen dramatically in the Pharma community. And I think the expressions you used was that his phone was ringing off the hook. Of course this is very exciting on one level, but I think it also poses a conundrum that I want to ask you about. And that conundrum and - sort of been talking around it on this call, is that –as you’re continuing to have more and more discussions with Pharma companies as to collaboration opportunities, are you concerned or are you not concerned that one of or more of these interested companies that is looking at your market cap of just over $300 million of which close to 90 million of cash. And looking at the various complexity that Martin alluding to earlier and the dynamism of the various potential targets, are you not concerned that one or more of these companies might say, why should we cherry pick, why should we try to cherry pick the very best candidate or candidates, when for not more much money than we might pay for a collaboration, we can by the whole ship band [ph]. We can buy all the candidates, we can buy the underlying IP and we can buy the great teen that makes it all happen. In other words that you would acquire the company, so my question to is does this prospect concern you and if so, is there anything you can do about it, anything you can do to prevent an unwanted takeover that would stop you from pursuing your destiny? And if it’s not a concern, why isn’t it? Thanks.

[Martin Gerstel:]

This is Martin. I’ve been in this situation before, a similar situation with a number of companies. If somebody wants to - if a pharmaceutical company was to make a bid for us, there are only two possible outcomes for that pharmaceutical company. One is that they will end up acquiring our company, my guess is though that it would be an amount substantially higher than unknown amount, an amount substantially higher than what they began the process with or that somebody else would acquire and we would be sort of taken off the table. As of now we are not a threat to any pharmaceutical company. We are a provider of the - of a resource and as far as I’m concerned we will be the provider of the key resource for them to continue their business in the future and that’s the novel targets. But as I said, we’re prepared to work with the industry, we’re a provider. You started your statement with a full - your question with the observation that we’re quite well known now in the industry, we are. So you just have to ask yourself, given the current situation and the capabilities that we’ve established here, if a pharmaceutical - if pharmaceutical company A made a bid for us at $500 million or whatever the number would be, why do you take the chances with B that’s another company, another pharmaceutical company, major one, competitive which stepped in and because then as I said, we would be taken off the table. They would not have the availability to work with us. So as I said, I’ve seen in this past and it’s - so it’s not a - it’s not a major concern for us. Also, we don’t own the company [indiscernible]. But the management - the company is owned by the shareholders. If in fact somebody made an offer and I think it would result in a bidding war and if we get sold, we get sold. I mean I wouldn’t like to see that happen, I’d like us to remain an independent company, but that’s not for management to decide.

[Unidentified Analyst:]

Right, my concern is precisely because you have an embarrassment of riches so to speak in terms of the various targets that you’re working at and your market cap is as low as it is. And even if you went off at four times your current market cap in what you called a bidding war, it’s still lunch money for a lot of these companies. And my concern for you and for us as a long time shareholder is that we are - you are vulnerable to such an over showed [ph] given the amount - the number of targets that you are advancing and that’s why I’m asking you if there’s anything that you think you can do about it. You’re saying it will be what it will be, but you don’t sound to be worried that they would have an appetite to go after the company.

[Martin Gerstel:]

I think everything you said is - I would agree with it. The question I would come back to though is why would somebody make a bid for us unless we were in a situation that we were going to be taken out of the game that we wouldn’t be available as a source. So it’s - well, let me lead to that - with your conclusion, I think it’s the best one.

[Unidentified Analyst:]

Well, I’m alluding for you, but I think the reason they would do it is simply because you have so much to offer and again they’re not smart enough to know which one. Since that you’ve said, you thought it might be A and B seems to be more attractive and here comes C, it’s almost like horse race. But the totality of what you have could be prove to be very enticing to a company that’s focused on novel targets.

[Martin Gerstel:]

Keep in mind also though that the history of big companies acquiring small innovative companies in our industry particularly is not a very good one from the standpoint of the innovation continuing. When a big company buys a small company and there are products that you have, they get the products and they move on. But it’s very difficult to maintain a very creative, innovative, fast moving type of capability such as we’ve established here. We’re in a large corporation and most of the Pharmas that would be obvious candidates to make a bid for us are gigantic corporations with enormous research capabilities. How they would ever maintain the creativity long-term is a real question and I’m sure that that is something that they - obviously that they’re fully aware of.

[Unidentified Analyst:]

Okay, thanks a lot.

[Operator:]

At the moment we’re not taking any more questions. Any further questions can be sent to Compugen after the call. Before I ask Dr. Cohen-Dayag to go ahead with his concluding statement, I would like to remind the participants that a replay of this call is scheduled to begin in two hours for a period of 72 hours. In the U.S., please call 1-888-782-4291. In Israel, please call 03-925-5925. Internationally, please call 972-3-925-5925. Dr. Cohen-Dayag, would you like to make a concluding statement?

[Anat Cohen-Dayag:]

Thank you. I wish to thank all of our investors for their continued confidence in and support of Compugen. I wish to assure you that we’re committed to the success of our company and look forward to sharing with you our future accomplishments.

[Operator:]

Thank you. This concludes the Compugen Ltd, third quarter 2015 financial results conference call. Thank you for your participation. You may go ahead and disconnect.