Compugen Strikes $500m Research Pact With Bayer

The two will develop cancer treatments using Israeli firm’s technology.

Shares of Compugen spiked by more than 60% in trading on the Tel Aviv Stock Exchange Monday, after the Israeli drug discovery company signed a licensing and collaboration agreement with Bayer HealthCare that could be worth more than $500 million.

Compugen will receive $10 million up-front and could receive up to $30 million in milestone payments tied to the success of preclinical activities, which will include animal testing. The company could receive up to $500 million if all milestones for two protein research programs are completed. It may also receive royalties of around 7% to 8% on net sales revenue for any product resulting from the partnership.

“Antibody-based immunotherapies are promising approaches in oncology which can stimulate the body’s own immune cells to fight cancer cells,” Bayer executive Andreas Busch said in a statement, adding, “We are looking forward to expanding our portfolio in this area through partnering with Compugen.”

Compugen shares rose to as much as NIS 33 on the TASE Monday before closing at NIS 29.20 for a gain of more than 42% on the day.

Under the agreement, Bayer will use Compugen’s technology to develop antibody-based immunotherapies to fight cancer, with Bayer having the right to develop and market any treatments developed with Compugen technology. Bayer and Compugen will jointly manage a preclinical research program, after which Bayer will have full control over further development and have worldwide commercialization rights for potential cancer therapeutics.

The president and CEO of Compugen, Anat Cohen-Dayag, said the collaboration constitutes additional validation from a leading global pharma company for Compugen's technology. She said the agreement was part of the company's efforts to maintain a balance between its drug development pipeline and company revenues.

The immunotherapy approach aims at combatting cancer by stimulating the body´s own immune cells. The tumor and its environment suppress the ability of cancer patients to develop an effective anti-tumor immune response and in this way protect both tumor growth and survival.

The latest cancer immunotherapies have demonstrated impressive clinical benefit, even for end-stage patients with difficult-to-treat tumors such as metastatic melanoma and non-small cell lung cancer. Unlike conventional cancer therapies, which act by directly targeting the cancer cells, resulting often in only transient clinical responses as cancer cells become resistant, clinical responses to cancer immunotherapy tend to be durable, sometimes resulting in dramatic long term survival and absence of resistance or recurrences.

Compugen has discovered two novel immune checkpoint regulators that potentially play a key role in immunosuppression. Researchers at Compugen are developing specific therapeutic antibodies that are geared to block the immunosuppressive function of these targets and to reactivate the patient`s anti-tumor immune response in order to fight cancer.

With reporting from Reuters.

Bloomberg