|
26 Harokmim Street
|
Holon 5885849, Israel
|
(Address of Principal Executive Offices)
|
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, 2018 and December 31, 2017; (ii) consolidated statements of comprehensive loss for the six months ended June 30, 2018 and 2017; (iii) consolidated statements of changes in shareholders’ equity for the six months ended June 30, 2018 and the year ended December 31, 2017; (iv) consolidated statements of cash flows for the six months ended June 30, 2018 and 2017; 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 1, 2018
|
By:
|
/s/
Donna Gershowitz
|
|
|
|
Donna Gershowitz
General Counsel
|
|
1. |
Amendment
.
Exhibit 1.50 of the Agreement is hereby deleted and replaced with
Exhibit 1.50-1
, attached. All references to Exhibit 1.50 in the Agreement will now mean this Exhibit 1.50-1.
|
2. |
Full Force and Effect
.
Except as set forth in this Amendment, in all other respects the Agreement remains unchanged and in full force and effect.
|
3. |
Counterparts; Execution
.
This Amendment may be executed in counterparts, each of which will be deemed an original and both of which will together be deemed to constitute one agreement. The Parties agree that the execution of this Amendment by industry standard electronic signature software and/or by exchanging PDF signatures shall have the same legal force and effect as the exchange of original signatures.
|
MEDIMMUNE, LIMITED | COMPUGEN LTD | ||
By:
|
By:
|
||
Name:
|
Name:
|
||
Title:
|
Title:
|
||
Date:
|
Date:
|
· |
Investigational new drug (IND) application for COM701, a first-in-class therapeutic antibody targeting PVRIG, cleared by the U.S. Food and Drug Administration (FDA). First patient dosing in Phase 1 study for COM701 expected in early fall 2018.
|
· |
IND application for BAY 1905254, a first-in-class therapeutic antibody targeting ILDR2 being developed under license by Bayer AG, cleared by the FDA. First patient dosing in Phase 1 study for BAY 1905254 expected in 2018 and will trigger a milestone payment to Compugen.
|
· |
A registered direct offering with net proceeds of approximately $19.8 million concluded.
|
· |
Three new board members appointed to the Company’s Board of Directors.
|
COMPUGEN LTD.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(U.S. dollars in thousands, except for share and per share amounts)
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
|
||||||||||||||||
Revenues
|
-
|
-
|
10,000
|
-
|
||||||||||||
Cost of revenues
|
-
|
-
|
350
|
-
|
||||||||||||
Gross profit
|
-
|
-
|
9,650
|
-
|
||||||||||||
|
||||||||||||||||
Operating expenses
|
||||||||||||||||
Research and development expenses
|
8,027
|
7,063
|
15,095
|
13,793
|
||||||||||||
Marketing and business development expenses
|
319
|
283
|
697
|
609
|
||||||||||||
General and administrative expenses
|
1,988
|
1,911
|
4,077
|
3,638
|
||||||||||||
Total operating expenses
|
10,334
|
9,257
|
19,869
|
18,040
|
||||||||||||
|
||||||||||||||||
Operating loss
|
(10,334
|
)
|
(9,257
|
)
|
(10,219
|
)
|
(18,040
|
)
|
||||||||
Financial and other income, net
|
141
|
79
|
130
|
155
|
||||||||||||
Loss before taxes on income
|
(10,193
|
)
|
(9,178
|
)
|
(10,089
|
)
|
(17,885
|
)
|
||||||||
Taxes on income
|
-
|
-
|
-
|
-
|
||||||||||||
Net loss
|
(10,193
|
)
|
(9,178
|
)
|
(10,089
|
)
|
(17,885
|
)
|
||||||||
|
||||||||||||||||
Basic and diluted net loss per ordinary share
|
(0.19
|
)
|
(0.18
|
)
|
(0.19
|
)
|
(0.35
|
)
|
||||||||
Weighted average number of ordinary shares used in computing basic and diluted net loss per share
|
52,512,259
|
51,131,541
|
52,147,364
|
51,131,538
|
COMPUGEN LTD.
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS DATA
|
||||||||
(U.S. dollars in thousands)
|
||||||||
June 30,
|
December 31,
|
|||||||
|
2018
|
2017
|
||||||
Unaudited
|
Audited
|
|||||||
ASSETS
|
||||||||
|
||||||||
Current assets
|
||||||||
Cash, cash equivalents, short-term bank deposits and restricted cash
|
43,090
|
30,438
|
||||||
Other accounts receivable and prepaid expenses
|
1,282
|
741
|
||||||
Total current assets
|
44,372
|
31,179
|
||||||
Non-current assets
|
||||||||
Long-term prepaid expenses
|
136
|
110
|
||||||
Severance pay fund
|
2,563
|
2,810
|
||||||
Property and equipment, net
|
3,967
|
4,647
|
||||||
Total non-current assets
|
6,666
|
7,567
|
||||||
|
||||||||
Total assets
|
51,038
|
38,746
|
||||||
|
||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
|
||||||||
Current liabilities
|
||||||||
Other accounts payable, accrued expenses and trade payables
|
7,497
|
6,194
|
||||||
Total current liabilities
|
7,497
|
6,194
|
||||||
|
||||||||
Non-current liabilities
|
||||||||
Accrued severance pay
|
2,994
|
3,255
|
||||||
Total non-current liabilities
|
2,994
|
3,255
|
||||||
|
||||||||
Total shareholders' equity
|
40,547
|
29,297
|
||||||
Total liabilities and shareholders' equity
|
51,038
|
38,746
|
Page
|
|
F-2 - F-3
|
|
F-4
|
|
F-5
|
|
F-6
|
|
F-7 - F-18
|
June 30,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
Unaudited
|
||||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
10,305
|
$
|
25,470
|
||||
Restricted cash
|
634
|
1,050
|
||||||
Short-term bank deposits
|
32,151
|
3,918
|
||||||
Other accounts receivable and prepaid expenses
|
1,282
|
741
|
||||||
Total
current assets
|
44,372
|
31,179
|
||||||
NON-CURRENT ASSETS:
|
||||||||
Long-term prepaid expenses
|
136
|
110
|
||||||
Severance pay fund
|
2,563
|
2,810
|
||||||
Property and equipment, net
|
3,967
|
4,647
|
||||||
Total
non- current assets
|
6,666
|
7,567
|
||||||
Total
assets
|
$
|
51,038
|
$
|
38,746
|
Six months ended
June 30,
|
||||||||
2018
|
2017
|
|||||||
Unaudited
|
||||||||
Revenues
|
$
|
10,000
|
$
|
-
|
||||
Cost of revenues
|
350
|
-
|
||||||
Gross profit
|
9,650
|
-
|
||||||
Operating expenses:
|
||||||||
Research and development expenses
|
15,095
|
13,793
|
||||||
Marketing and business development expenses
|
697
|
609
|
||||||
General and administrative expenses
|
4,077
|
3,638
|
||||||
Total
operating expenses
|
19,869
|
18,040
|
||||||
Operating loss
|
(10,219
|
)
|
(18,040
|
)
|
||||
Financial and other income, net
|
130
|
155
|
||||||
Loss before taxes on income
|
(10,089
|
)
|
(17,885
|
)
|
||||
Taxes on income
|
-
|
-
|
||||||
Net loss
|
$
|
(10,089
|
)
|
$
|
(17,885
|
)
|
||
Basic and diluted net loss per share
|
$
|
(0.19
|
)
|
$
|
(0.35
|
)
|
||
Other comprehensive loss:
|
||||||||
Unrealized gain arising during the period from foreign currency derivative contracts
|
$
|
- |
$
|
477
|
||||
Realized gain arising during the period from foreign currency derivative contracts
|
$
|
(17
|
)
|
$
|
(158
|
)
|
||
Total comprehensive loss
|
$
|
(10,106
|
)
|
$
|
(17,566
|
)
|
||
Weighted average number of ordinary shares used in computing basic and diluted net loss per share
|
52,149,380
|
51,131,538
|
Ordinary
shares
|
Additional paid-in
|
Accumulated other comprehensive
|
Accumulated
|
Total shareholders'
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
Income
|
deficit
|
equity
|
|||||||||||||||||||
Balance as of January 1, 2017
|
51,131,534
|
$
|
140
|
$
|
334,337
|
$
|
7
|
$
|
(270,965
|
)
|
$
|
63,519
|
||||||||||||
Options exercised
|
161,536
|
(
|
*)
|
201
|
-
|
-
|
201
|
|||||||||||||||||
Stock-based compensation relating to options issued to non-employees
|
-
|
-
|
23
|
-
|
-
|
23
|
||||||||||||||||||
Stock-based compensation relating to options issued to employees and directors
|
-
|
-
|
2,610
|
-
|
-
|
2,610
|
||||||||||||||||||
Changes in other comprehensive income (loss) from foreign currency derivative contracts
|
-
|
-
|
-
|
10
|
-
|
10
|
||||||||||||||||||
Cumulative effect adjustment from adoption of ASU 2016-09
|
-
|
-
|
211
|
-
|
(211
|
)
|
-
|
|||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(37,066
|
)
|
(37,066
|
)
|
||||||||||||||||
Balance as of December 31, 2017
|
51,293,070
|
140
|
337,382
|
17
|
(308,242
|
)
|
29,297
|
|||||||||||||||||
Options exercised
|
587,502
|
2
|
543
|
-
|
-
|
545
|
||||||||||||||||||
Issuance of
ordinary
shares
and warrants
, net
of issuance cost
|
5,316,457
|
15
|
19,744
|
-
|
-
|
19,759
|
||||||||||||||||||
Stock-based compensation relating to options issued to non-employees
|
-
|
-
|
157
|
-
|
-
|
157
|
||||||||||||||||||
Stock-based compensation relating to options issued to employees and directors
|
-
|
-
|
895
|
-
|
-
|
895
|
||||||||||||||||||
Changes in other comprehensive income (loss) from foreign currency derivative contracts
|
-
|
-
|
-
|
(17
|
)
|
-
|
(17
|
)
|
||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(10,089
|
)
|
(10,089
|
)
|
||||||||||||||||
Balance as of June 30, 2018 (unaudited)
|
57,197,029
|
157
|
358,721
|
-
|
(318,331
|
)
|
40,547
|
Six months ended
June 30,
|
||||||||
2018
|
2017
|
|||||||
Unaudited
|
||||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(10,089
|
)
|
$
|
(17,885
|
)
|
||
Adjustments required to reconcile net loss to net cash used in operating activities:
|
||||||||
Stock-based compensation
|
1,052
|
1,271
|
||||||
Depreciation
|
721
|
820
|
||||||
Increase in severance pay, net
|
(14
|
)
|
80
|
|||||
Loss from property and equipment disposal
|
52
|
-
|
||||||
Decrease (increase) in interest receivables from short-term bank deposits
|
(27
|
)
|
114
|
|||||
Decrease (increase) in other accounts receivable and prepaid expenses
|
(558
|
)
|
39
|
|||||
Decrease (increase) in long-term prepaid expenses
|
(26
|
)
|
52
|
|||||
Increase in trade payables and other accounts payable and accrued expenses
|
1,
040
|
447
|
||||||
Net cash used in operating activities
|
(7,
849
|
)
|
(15,062
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Proceeds from maturity of short-term bank deposits
|
10,900
|
35,561
|
||||||
Investment in short-term bank deposits
|
(39,106
|
)
|
(13,000
|
)
|
||||
Purchase of property and equipment
|
(
128
|
)
|
(240
|
)
|
||||
Proceeds from sales of property and equipment
|
2
|
-
|
||||||
Net cash provided by (used in) investing activities
|
(28,
332
|
)
|
22,321
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of ordinary shares
and warrants
, net
|
20,055
|
-
|
||||||
Proceeds from exercise of options
|
545
|
-
|
||||||
Net cash provided by financing activities
|
20,600
|
-
|
||||||
Increase
(decrease)
in cash, cash equivalents and restricted cash
|
(15,581
|
)
|
7,259
|
|||||
Cash, cash equivalents and restricted cash at the beginning of the period
|
26,520
|
10,702
|
||||||
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
10,939
|
$
|
17,961
|
||||
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||
Changes in receivables from foreign currency derivative contracts
|
$
|
(17
|
)
|
$
|
319
|
|||
Purchase of property and equipment
|
$
|
-
|
$
|
23
|
||||
Proceeds from issuance of ordinary shares and warrants, net
|
$
|
296
|
-
|
a. |
Compugen Ltd. (The "Company") is a clinical-stage cancer immunotherapy company and a leader in predictive target discovery
utilizing its broadly applicable predictive discovery infrastructure to discover novel drug targets and develop first-in-class therapeutics in the field of cancer immunotherapy. The Company's therapeutic pipeline consists of immuno-oncology programs against novel drug targets it has discovered, including T cell immune checkpoints and myeloid target programs. The Company's business model is to selectively enter into collaborations for its novel targets and related drug product candidates at various stages of research and development.
|
b. |
The Company is headquartered in Holon, Israel, with research & development facilities located in both Holon and South San Francisco. At the U.S. facilities, therapeutic monoclonal antibodies are discovered and developed against the Company's novel target candidates.
|
c. |
The Company has incurred losses in the amount of $10,089 million during the six month ended June 30, 2018, has an accumulated deficit of $318,331 as of June 30, 2018 and has accumulated negative cash flow from operating activities amounted to $7,882 for the six month ended June 30, 2018. The Company expects to continue incurring losses and negative cash flows from operations. These conditions raise substantial doubts about the Company's ability to continue as a going concern. The Company's ability to continue to operate is dependent upon raising additional funds to finance its activities and commercialization of its products through collaborations agreements. There are no assurances, however, that the Company will be successful in obtaining an adequate level of financing needed for the long-term development and commercialization of its products. The financial statements do not include any adjustments with respect to the carrying amounts of assets and liabilities and their classification that might be necessary should the Company be unable to continue as a going concern.
|
d. |
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.
|
e. |
Effective March 30, 2018, the Company entered into an exclusive license agreement with MedImmune, Limited to enable the development of bi-specific and multi-specific immuno-oncology antibody products. Under the terms of the agreement, Compugen provided an exclusive license to MedImmune for the development of bi-specific and multi-specific antibody products derived from a Compugen pipeline program. MedImmune has the right to create multiple products under this license and will be solely responsible for all research, development and commercial activities under the agreement. Compugen received a $10 million upfront payment 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. If additional products are developed, additional milestones and royalties would be due to Compugen.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES
|
a. |
These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2017. The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2017, are applied consistently in these interim consolidated financial statements, except for the Company's adoption of the new revenue standard which is discussed below.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
c. |
Revenue recognition:
|
• |
Identification of the contract, or contracts, with a customer
|
• |
Identification of the performance obligations in the contract
- At contract inception, the Company assesses the goods or services promised in a contract with a customer and identifies those distinct goods and services that represent a performance obligation. A promised good or service may not be identified as a performance obligation if it is immaterial in the context of the contract with the customer, if it is not separately identifiable from other promises in the contract (either because it is not capable of being separated or because it is not separable in the context of the contract), or if the performance obligation does not provide the customer with a material right.
|
• |
Determination of the transaction price
- The Company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer. 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, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.
|
• |
Allocation of the transaction price to the performance obligations in the contract
- If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance obligations based on the relative standalone selling prices. The relative selling price for each deliverable is estimated using objective evidence if it is available. If objective evidence is not available, the Company uses its best estimate of the selling price for the deliverable.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
• |
Recognition of revenue when, or as, the Company satisfies a performance obligation
-
Revenue is recognized when, or as, the Company satisfies a performance obligation by transferring a promised good or service to a customer. An asset is transferred when, or as, the customer obtains control of that asset, which for a service is considered to be as the services are received and used.
|
d.
|
Recently adopted accounting pronouncements:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
e.
|
Recently issued accounting pronouncements, not yet adopted:
|
f.
|
Basic and diluted loss per share:
|
NOTE 3:- |
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE 4:- |
DERIVATIVE INSTRUMENTS
|
NOTE 5:- |
FAIR VALUE MEASUREMENTS
|
NOTE 5:- |
FAIR VALUE MEASUREMENTS (Cont.)
The Company's financial assets (liabilities) measured at fair value on a recurring basis, consisted of the following types of instruments as of the following dates:
|
December 31, 2017
|
||||||||||||||||
Fair value measurements
|
||||||||||||||||
Description
|
Fair value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Foreign currency derivative contracts
|
$
|
17
|
$
|
-
|
$
|
17
|
$
|
-
|
||||||||
Total financial assets
|
$
|
17
|
$
|
-
|
$
|
17
|
$
|
-
|
NOTE 6:- |
INVESTMENT IN AFFILIATES
|
NOTE 7:- |
COMMITMENTS AND CONTINGENCIES
|
a. |
The Company and Compugen USA, Inc. lease their respective facilities and motor vehicles under various operating lease agreements that expire on various dates.
|
December 31,
|
||||
2018
|
873
|
|||
2019
|
1,707
|
|||
2020
|
1,677
|
|||
2021
|
436
|
|||
4,693
|
b. |
The Company provided bank guarantees in the amount of $ 627 in favor of its offices' lessor in Israel and credit card security for its U.S. subsidiary.
|
c. |
Under the
office of the
Israel Innovation
Authority of the Israeli Ministry of Industry, Trade and Labor, formerly
known as the Office of the Chief Scientist
, ("IIA"),
the Company is not obligated to repay any amounts received from the IIA 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.
The
Company received $ 500 under the BIRD plan in the period between December 2005 and March 2012. As of June 30, 2018, the Company does not expect any income to be generated from the outcome of the funded research BIRD plan and, therefore, 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, 2018, the Company had not incurred any obligation for such Contingent Fees.
|
f. |
On May 9, 2012, the Company entered into an 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 agreement, the Advisor is entitled to at least 4% of the cash consideration that may be received by the Company under such transactions.
|
g. |
Effective as of January 5, 2018, the Company entered into a Commercial License Agreement (CLA) with a European cell line development company. Under the agreement the Company is required to pay an annual maintenance fee, certain amounts upon the occurrence of specified milestones events, and 1% royalties on annual net sales with respect to each commercialized product manufactured using the company’s cell line. Royalties due under the CLA are creditable against the annual maintenance fee. In addition, the Company may at any time prior to the occurrence of a specific milestone event buy-out the royalty payment obligations in a single fixed amount.
|
NOTE 8:- |
SHAREHOLDERS' EQUITY
|
a. |
Issuance of Shares:
|
b. |
Stock based compensation:
|
Six months ended
June 30,
|
||||||||
2018
|
2017
|
|||||||
Unaudited
|
||||||||
Volatility
|
53%-55%
|
49%-50%
|
||||||
Risk-free interest rate
|
2.6%-2.8%
|
1.8%-2.1%
|
||||||
Dividend yield
|
0%
|
0%
|
||||||
Expected life (years)
|
4.9-5
|
4.7-6
|
Six months ended
June 30,
|
||||||||
2018
|
2017
|
|||||||
Unaudited
|
||||||||
Interest income
|
$
|
164
|
$
|
293
|
||||
Exchange rate differences and other
|
(34
|
)
|
(138
|
)
|
||||
Financial and other income, net
|
$
|
130
|
$
|
155
|
June 30,
2018
|
December 31,
2017
|
|||||||
Unaudited
|
||||||||
Trade payables (a)
|
$
|
109
|
$
|
78
|
Six months ended
June 30,
|
||||||||
2018
|
2017
|
|||||||
Unaudited
|
||||||||
Amounts charged to:
|
||||||||
Research and development expenses (a)
|
$
|
167
|
$
|
243
|
(a) |
For the six-month periods ended June 30, 2018 and 2017, the Company incurred expenses for research and development services provided by related parties for cancer studies in animal models, and breeding and maintenance of animals (mice) to support such studies.
|