|
26 Harokmim Street
|
Holon 5885849, Israel
|
(Address of Principal Executive Offices)
|
Exhibit
Number
|
Description of Exhibit
|
10.1* | First Amendment, dated February 5, 2014, to the Research and Development Collaboration and License Agreement by and between the Company and Bayer Pharma AG. |
10.2* | Second Amendment, dated July 27, 2015, to the Research and Development Collaboration and License Agreement by and between the Company and Bayer Pharma AG. |
10.3* | Third Amendment, dated April 17, 2016, to the Research and Development Collaboration and License Agreement by and between the Company and Bayer Pharma AG. |
99.1 | Unaudited interim consolidated financial statements as of June 30, 2016 and December 31, 2015 and for the six months ended June 30, 2016 and 2015. |
99.2 | Operating and Financial Review and Prospects as of and for the six months ended June 30, 2016 and June 30, 2015. |
101 | The following financial information from Compugen Ltd.’s Report on Form 6-K, formatted in XBRL (eXtensible Business Reporting Language): (i) consolidated balance sheets at June 30, 2016 and December 31, 2015; (ii) consolidated statements of comprehensive loss for the six months ended June 30, 2016 and 2015; (iii) consolidated statements of changes in shareholders’ equity for the six months ended June 30, 2016 and the year ended December 31, 2015; (iv) consolidated statements of cash flows for the six months ended June 30, 2016 and 2015; and (v) notes to the consolidated financial statements . |
* | Confidential treatment with respect to certain portions of this exhibit has been requested from the Securities and Exchange Commission. Omitted portions have been filed separately with the Securities and Exchange Commission. |
|
|||
|
COMPUGEN LTD.
|
||
|
|||
Date: August 9, 2016
|
By:
|
/s/
Donna Gershowitz
|
|
|
|
Donna Gershowitz
General Counsel
|
|
1. | The parties agree to replace Exhibit 1.3 of the Agreement by Exhibit 1.3 attached to this Amendment, describing the “Bayer Development Process”. |
2. | This Amendment shall become retroactively effective as of 5 August 2013. |
3. | All capitalized terms used herein shall have the meaning set forth in the Agreement. Except as expressly amended pursuant to this Amendment, all other terms and conditions of the Agreement shall remain in force unchanged and apply to this Amendment. |
SIGNED for and on behalf of
Bayer Pharma AG
|
SIGNED for and on behalf of
Compugen Ltd
|
Date:
February 3, 2014
|
Date:
February 5, 2014
|
___________________________
ppa.
|
/s/ Anat Cohen-Dayag
President and CEO
|
___________________________
i.V.
|
1. | The parties agree to amend the Agreement as set forth below. |
2. | Section 2.3.7.2 of the Agreement is hereby amended to read as follows: |
(a) | Notwithstanding Section 2.3.7.1, Bayer shall not be entitled to [***] Protein Controls to any [***] of Bayer who are [***] (as described in the next sentence) on behalf of Bayer. Bayer and its [***] may use such [***] Protein Controls solely for performance of the [***] or otherwise specifically [***] as tasks involving the use of such [***] Protein Controls. |
(b) | Bayer shall not, and shall ensure that its Affiliates, contractors and collaborators shall [***] the [***] Protein Controls or use [***] Confidential Information regarding the [***] and/or regarding other [***] of the [***] Protein Controls nor any other Confidential Information regarding the [***] Protein Controls provided by Compugen on a need-to-know basis or [***] or a [***] , to [***] any other [***] of a Target, without the prior express written consent of Compugen in each case. Information regarding Target [***] Proteins [***] in the [***] Approved [***] Protein Controls or Approved [***] Protein Controls under the rights granted above will be deemed Confidential Information of Compugen for purposes of this Agreement; |
(c) | Bayer shall not, and shall ensure that its Affiliates, contractors and collaborators shall not, [***] or otherwise [***] to any Third Party results of their use of the [***] Protein Controls, without Compugen’s prior written consent; and |
(d) | Bayer shall within reasonable time, but in any case within [***] days, after becoming aware thereof, [***] to Compugen [***] with respect to Target [***] Proteins, their use or their production (in each case including, without limitation, [***] thereof), that are conceived and/or reduced to practice by Bayer, its Affiliates, contractors and/or collaborators, [***] Compugen or its Affiliates in the performance of work using a [***] Protein Control (“ [***] Protein Invention”). Any such [***] Protein Invention, whether made by Bayer, any of its Affiliates or any of its contractors or collaborators, solely by Compugen or an Affiliate of Compugen, or jointly by any of the above, shall be [***] . Bayer and its Affiliates [***] , and Bayer shall cause its contractors and collaborators [***] , any and all of their [***] in and to any and all [***] Protein Inventions to Compugen, and any [***] Protein Invention [***] to Bayer, is [***] by Bayer to Compugen. Upon Compugen’s request and at Compugen’s expense, Bayer shall [***] and [***] that any relevant Affiliate, contractor and collaborator [***] as Compugen deems [***] , in its [***] , to enable Compugen to [***] with respect to any of the foregoing. Bayer will, and shall ensure that its Affiliates, contractors and collaborators will, at Compugen’s request, provide [***] and [***] , as [***] to [***] . Bayer is [***] that its Affiliates, contractors and collaborators [***] , and [***] by its Affiliates of, the provisions of this Section 2.3.7.2(d). Bayer shall ensure that its contractors and collaborators are [***] of this Section 2.3.7.2(d) by [***] to which Compugen is [***] , prior to [***] to [***] Protein Controls or any Confidential Information of Compugen related to Target [***] Proteins. |
3. | The Parties agree to replace Exhibit 1.21 of the Agreement by Exhibit 1.21 attached to this Amendment, describing the “CGEN-15022 Workplan”. |
4. | All capitalized terms used herein shall have the meaning set forth in the Agreement. Except as expressly amended pursuant to this Amendment. All other terms and conditions of the Agreement shall remain unchanged and in full force and effect. |
Bayer Pharma AG
By: ppa____________________ Name: Title:
By: i.V.____________________
Name: Title: |
Compugen Ltd.
By:
/s/ Dr. Anat Cohen-Dayag_________________
Name: Dr. Anat Cohen-Dayag
Title: President and CEO
|
1. | The Parties agree to replace Exhibit 1.3 of the Agreement by Exhibit 1.3 attached to this Third Amendment, describing the “Bayer Development Process”. |
2. | The following language shall be added to the end of Section 6.2.1.1: |
3. | The following language shall be added to the end of Section 6.2.1.2: |
4. | This Third Amendment shall become effective on the date this Agreement is signed by the last of the Parties to sign it. |
5. | All capitalized terms used herein shall have the meaning set forth in the Agreement. Except as expressly amended pursuant to this Third Amendment, all other terms and conditions of the Agreement shall remain in force unchanged and apply to this Third Amendment. |
SIGNED for and on behalf of
Bayer Pharma AG
|
SIGNED for and on behalf of
Compugen Ltd
|
Date: April 17, 2016
|
Date: April 17, 2016
|
___________________________
ppa.
|
/s/ Anat Cohen-Dayag
Dr. Anat Cohen-Dayag
(President & CEO)
|
___________________________
i.V.
|
Page
|
|
2 - 3
|
|
4
|
|
5
|
|
6
|
|
7 - 14
|
June 30,
|
December 31,
|
|||||||
2016
|
2015
|
|||||||
Unaudited
|
||||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
19,325
|
$
|
10,777
|
||||
Restricted cash
|
992
|
1,077
|
||||||
Short-term bank deposits
|
53,761
|
69,567
|
||||||
Investment in marketable securities
|
104
|
426
|
||||||
Trade receivable
|
400
|
7,800
|
||||||
Other accounts receivable and prepaid expenses
|
1,332
|
1,352
|
||||||
Total
current assets
|
75,914
|
90,999
|
||||||
NON-CURRENT ASSETS:
|
||||||||
Long-term prepaid expenses
|
96
|
101
|
||||||
Severance pay fund
|
2,281
|
2,179
|
||||||
Property and equipment, net
|
6,169
|
6,028
|
||||||
Total
non- current assets
|
8,546
|
8,308
|
||||||
Total
assets
|
$
|
84,460
|
$
|
99,307
|
Six months ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Unaudited
|
||||||||
Revenues
|
$
|
589
|
$
|
736
|
||||
Cost of revenues
|
167
|
396
|
||||||
Gross profit
|
422
|
340
|
||||||
Operating expenses:
|
||||||||
Research and development expenses, net
|
12,237
|
10,109
|
||||||
Marketing and business development expenses
|
471
|
478
|
||||||
General and administrative expenses
|
3,593
|
3,028
|
||||||
Total
operating expenses
|
16,301
|
13,615
|
||||||
Operating loss
|
(15,879
|
)
|
(13,275
|
)
|
||||
Financial and other income, net
|
666
|
324
|
||||||
Loss before taxes on income
|
(15,213
|
)
|
(12,951
|
)
|
||||
Taxes on income
|
20
|
-
|
||||||
Net loss
|
$
|
(15,233
|
)
|
$
|
(12,951
|
)
|
||
Basic and diluted net loss per share
|
$
|
(0.30
|
)
|
$
|
(0.26
|
)
|
||
Weighted average number of Ordinary shares used in computing basic and diluted net loss per share
|
50,724,004
|
50,374,993
|
||||||
Net loss
|
$
|
(15,233
|
)
|
$
|
(12,951
|
)
|
||
Unrealized loss arising during the period on investment in marketable securities
|
$
|
(56
|
)
|
$
|
(57
|
)
|
||
Realized gain arising during the period on investment in marketable securities
|
$
|
(277
|
)
|
$
|
-
|
|||
Realized gain arising during the period from foreign currency derivative contracts
|
$
|
(24
|
)
|
$
|
(91
|
)
|
||
Unrealized gain arising during the period from foreign currency derivative contracts
|
$
|
84
|
$
|
145
|
||||
Total comprehensive loss
|
$
|
(15,506
|
)
|
$
|
(12,954
|
)
|
Ordinary
shares
|
Additional
paid-in
|
Accumulated
other
comprehensive
|
Accumulated
|
Total
shareholders'
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
income
|
deficit
|
equity
|
|||||||||||||||||||
Balance as of January 1, 2015
|
50,254,492
|
137
|
324,053
|
1,222
|
(219,296
|
)
|
106,116
|
|||||||||||||||||
Options exercised
|
317,752
|
1
|
971
|
-
|
-
|
972
|
||||||||||||||||||
Stock-based compensation relating to options issued to non-employees
|
-
|
-
|
299
|
-
|
-
|
299
|
||||||||||||||||||
Stock-based compensation relating to options issued to employees and directors
|
-
|
-
|
3,474
|
-
|
-
|
3,474
|
||||||||||||||||||
Changes in other comprehensive income from marketable securities
|
-
|
-
|
-
|
(641
|
)
|
-
|
(641
|
)
|
||||||||||||||||
Changes in other comprehensive income from foreign currency derivative contracts
|
-
|
-
|
-
|
(160
|
)
|
-
|
(160
|
)
|
||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(20,163
|
)
|
(20,163
|
)
|
||||||||||||||||
Balance as of December 31, 2015
|
50,572,244
|
138
|
328,797
|
421
|
(239,459
|
)
|
89,897
|
|||||||||||||||||
Options exercised
|
336,210
|
1
|
1,374
|
-
|
-
|
1,375
|
||||||||||||||||||
Stock-based compensation relating to options issued to non-employees
|
-
|
-
|
85
|
-
|
-
|
85
|
||||||||||||||||||
Stock-based compensation relating to options issued to employees and directors
|
-
|
-
|
1,282
|
-
|
-
|
1,282
|
||||||||||||||||||
Changes in other comprehensive income from marketable securities
|
-
|
-
|
-
|
(333
|
)
|
-
|
(333
|
)
|
||||||||||||||||
Changes in other comprehensive income from foreign currency derivative contracts
|
-
|
-
|
-
|
60
|
-
|
60
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(15,233
|
)
|
(15,233
|
)
|
||||||||||||||||
Balance as of June 30, 2016 (unaudited)
|
50,908,454
|
$
|
139
|
$
|
331,538
|
$
|
148
|
$
|
(254,692
|
)
|
$
|
77,133
|
Six months ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Unaudited
|
||||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(15,233
|
)
|
$
|
(12,951
|
)
|
||
Adjustments required to reconcile net loss to net cash used in operating activities:
|
||||||||
Stock-based compensation
|
1,367
|
1,713
|
||||||
Depreciation
|
704
|
482
|
||||||
Increase in severance pay, net
|
131
|
162
|
||||||
Gain from sale of marketable securities
|
(277
|
)
|
-
|
|||||
Amortization of the cash consideration of research and development funding arrangement
|
-
|
(211
|
)
|
|||||
Realized gain from foreign currency derivative contracts
|
(24
|
)
|
(91
|
)
|
||||
Decrease (increase) in interest receivables from short-term bank deposits
|
367
|
(384
|
)
|
|||||
Decrease in trade receivable
|
7,400
|
-
|
||||||
Decrease (increase) in other accounts receivable and prepaid expenses
|
251
|
(599
|
)
|
|||||
Decrease in long-term prepaid expenses
|
5
|
9
|
||||||
Decrease in deferred revenues
|
(189
|
)
|
(736
|
)
|
||||
Decrease in trade payables and other accounts payable and accrued expenses
|
(2,233
|
)
|
(389
|
)
|
||||
Net cash used in operating activities
|
(7,731
|
)
|
(12,995
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Proceeds from maturity of short-term bank deposits
|
54,000
|
12,000
|
||||||
Investment in short-term bank deposits
|
(38,561
|
)
|
(15,000
|
)
|
||||
Changes in restricted cash
|
85
|
(3
|
)
|
|||||
Purchase of property and equipment
|
(701
|
)
|
(615
|
)
|
||||
Proceeds from sales of marketable securities
|
266
|
-
|
||||||
Net cash provided by (used in) investing activities
|
15,089
|
(3,618
|
)
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from exercise of options
|
1,190
|
551
|
||||||
Net cash provided by financing activities
|
1,190
|
551
|
||||||
Increase (decrease) in cash and cash equivalents
|
8,548
|
(16,062
|
)
|
|||||
Cash and cash equivalents at the beginning of the period
|
10,777
|
25,643
|
||||||
Cash and cash equivalents at the end of the period
|
$
|
19,325
|
$
|
9,581
|
||||
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||
Receivables from exercise of options
|
$
|
185
|
$
|
-
|
||||
Receivables from foreign currency derivative contracts
|
$
|
84
|
$
|
145
|
||||
Purchase of property and equipment
|
$
|
144
|
$
|
-
|
a. | Compugen Ltd. (The “Company”) is a leading therapeutic discovery company utilizing its broadly applicable predictive discovery infrastructure to identify novel drug targets and develop first-in-class biologics. The Company’s current pipeline primarily consists of early-stage immuno-oncology programs aimed at harnessing the immune system to fight cancer. The Company’s pipeline’s focus is on immune checkpoint target candidates discovered by the Company, which are predicted to serve as promising drug targets for cancer immunotherapies addressing various cancer types and patient populations, both as monotherapy and in combination with other drugs. The Company’s business model relies on extracting the commercial value of the Company’s systematic discovery capability by entering into various forms of revenue-sharing collaborations for the Company’s novel drug target candidates and therapeutic product candidates at various stages of research and development. |
b. | On August 5, 2013, the Company entered into a Research and Development Collaboration and License Agreement ("Bayer Agreement") with Bayer Pharma AG ("Bayer") for the research, development, and commercialization of antibody-based therapeutics for antibody based therapeutics against two novel, Compugen-discovered immune checkpoint regulators. |
NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES |
a. | The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2015 are applied consistently in these financial statements . |
b. | Concentration of credit risks: |
c. | In March 2016, FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in this update change the accounting for certain stock-based compensation transactions, including the income tax consequences and cash flow classification for applicable transactions. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company is currently evaluating the impact that this amendment will have on its consolidated financial statements. |
NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
NOTE 3:- | UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 4:- | DERIVATIVE INSTRUMENTS |
NOTE 4:- | DERIVATIVE INSTRUMENTS (Cont.) |
NOTE 5:- | FAIR VALUE MEASUREMENTS |
June 30, 2016
(Unaudited)
|
||||||||||||||||
Fair value measurements
|
||||||||||||||||
Description
|
Fair value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Investment in marketable securities
|
$
|
104
|
$
|
104
|
$
|
-
|
$
|
-
|
||||||||
Foreign currency derivative contracts
|
41
|
-
|
41
|
-
|
||||||||||||
Total financial assets
|
$
|
145
|
$
|
104
|
$
|
41
|
$
|
-
|
December 31, 2015
|
||||||||||||||||
Fair value measurements
|
||||||||||||||||
Description
|
Fair value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Investment in marketable securities
|
$
|
426
|
$
|
426
|
$
|
-
|
$
|
-
|
||||||||
Total financial assets
|
$
|
426
|
$
|
426
|
$
|
-
|
$
|
-
|
December 31, 2015
|
||||||||||||||||
Fair value measurements
|
||||||||||||||||
Description
|
Fair value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Foreign currency derivative contracts
|
$
|
(19
|
)
|
$ |
-
|
$ |
(19
|
)
|
$ |
-
|
||||||
Total financial liabilities
|
$
|
(19
|
)
|
$
|
-
|
$
|
(19
|
)
|
$
|
-
|
a.
|
The Company and Compugen
USA,
Inc. lease their facilities and motor vehicles under various operating lease agreements that expire on various dates.
|
December 31,
|
||||
2016
|
$
|
647
|
||
2017
|
1,374
|
|||
2018
|
1,028
|
|||
2019
|
754
|
|||
2020 and after
|
804
|
|||
$
|
4,607
|
b.
|
The Company provided bank guarantees in the amount of $ 992 in favor of its offices' lessor in Israel, foreign currency derivative contracts and credit card security for its U.S. subsidiary. In addition, Compugen USA, Inc. provided a check deposit in the amount of $ 74 in favor of its offices' lessor in California, U.S.
|
c. | Under the OCS royalty-bearing programs, the Company is not obligated to repay any amounts received from the OCS if it does not generate any income from the results of the funded research program(s). |
d. | Under the Israel-U.S. Binational Industrial Research and Development (" BIRD") plan, the Company is not obligated to repay any amounts previously received from BIRD if it does not generate any income from the outcome of the funded research program. As of June 30, 2016 the Company accounted for proceeds under BIRD plan in total aggregate amount of approximately $ 500, received in the period between December 2005 and March 2012. As of June 30, 2016 the Company does not expect any income to be generated from the outcome of the funded research BIRD plan and as such no obligation was recorded. |
e. | On June 25, 2012 the Company and its U.S subsidiary entered into an Antibodies Discovery Collaboration Agreement (the "Antibodies Discovery Agreement") with a U.S. antibody technology company ("mAb Technology Company"), providing an established source for fully human mAbs. Under the Antibodies Discovery Agreement the mAb Technology Company will be entitled to certain royalties that could be eliminated, upon payment of certain one-time fees (all payments referred together as "Contingent Fees"). As of June 30, 2016 the Company did not incur any obligation for such Contingent Fees. |
f.
|
On May 9, 2012, the Company entered into agreement (the "May 2012 Agreement") with a U.S. Business Development Strategic Advisor ("Advisor") for the purpose of entering into transactions with Pharma companies related to selected Pipeline Program Candidates. Under the
May 2012 Agreement
the Advisor shall be entitled to at least 4% of the cash considerations that may be received under such transactions.
|
NOTE 7:- | SHAREHOLDERS' EQUITY |
Six months ended
June 30,
|
||||
2016
|
2015
|
|||
Unaudited | ||||
Volatility
|
50%-52%
|
51%-60%
|
||
Risk-free interest rate
|
1.10%-1.30%
|
1.43%-1.77%
|
||
Dividend yield
|
0%
|
0%
|
||
Expected life (years)
|
4.8-5.9
|
4.8-6.0
|
Six months ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Unaudited | ||||||||
Interest income
|
$
|
377
|
$
|
406
|
||||
Income from sales of marketable securities
|
277
|
-
|
||||||
Exchange rate differences and other
|
12
|
(82
|
)
|
|||||
Financial and other income, net
|
$
|
666
|
$
|
324
|
June 30,
2016
|
December 31,
2015
|
|||||||
Unaudited
|
|
|||||||
Trade payables (a)
|
$
|
-
|
$
|
15
|
|
Six months ended
June 30,
|
|||||||
2016
|
2015
|
|||||||
Unaudited
|
||||||||
Amounts charged to:
|
||||||||
Research and development expenses (a)
|
$
|
72
|
$
|
119
|
a. | For the six-month period ended June 30, 2016 and 2015 the Company received research and development services related with cancer studies in animal models, and breeding and maintenance of animals (mice) to support such studies. |
b. |
For the six-month period ended June 30, 2015 the Company recognized revenues from research and development services in consideration for pre-scheduled determined fees in accordance with a research collaboration and license agreement entered into in June 2012.
|