Welcome to the Compugen’s First 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 Investor section of Compugen website at www.cgen.com/investors. As a reminder, today’s call is being recorded. I would now like to introduce, Hannah Deresiewicz of Stern Investor Relations. Please go ahead.

Good morning and welcome. A press release of the company’s first quarter 2015 financial earnings became available at 8 o’clock a.m. Eastern Time today and can be found on Investors section of the company’s website at cgen.com/investors. Before we begin, I would like to remind callers that this call maybe contain statements concerning Compugen’s future prospects that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of terminology such as will, may, expects, anticipates, believes, and intends, and describe opinions about future events. These forward-looking statements involve known and unknown risks and uncertainties that may cause the actual results, performance or achievements of Compugen to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Some of these risks include, that Compugen’s business model is substantially dependent on entering into collaboration agreements with third parties and may not be successful in generating revenues, and that the development and commercialization of therapeutic products includes many inherent risks, including failure to receive regulatory approval. These and other factors are more fully discussed in the Risk Factors section of Compugen’s most recent annual report on Form 20-F as filed with the Securities and Exchange Commission, as well as other documents that may be subsequently filed by Compugen from time to time with the Securities and Exchange Commission. In addition, any forward-looking statements represent Compugen’s views only as of the date of this call and should not be relied upon as representing its views as of any subsequent date. Compugen does not assume any obligation to update any forward-looking statements unless required by law. We will begin with prepared comments from Compugen and then we will open the call for your questions. With us on the line today are, Mr. Martin Gerstel, Chairman of the Board; Dr. Anat Cohen-Dayag, President and Chief Executive Officer; and Ari Krashin, Chief Financial Officer. I would now like to turn the call over to Mr. Martin Gerstel.

Thank you very much. On behalf of all of us at Compugen welcome to our first quarter 2015 conference call. Thank you very much for joining with us today. More than a decade ago, Compugen had its IPO in the United States at $10 per share. Currently, our shares are trading at not much more than half of that IPO price. However, we all are aware that with respect to the drug industry, the financial world in general focuses on either or both specific products and development usually clinical development and/or financial results. In contrast for almost 15 years Compugen has been pursuing very aggressively and fortunately very successfully a long-term mission to establish a unique and much needed broadly applicable discovery capability, the capability that would -- without have extensive and lasting value. In considering our current share price, we fully appreciate that evaluating the potential for success of such a long-term effort to establish infrastructure capabilities in a highly challenging field of scientific endeavor and a field where there were so many well-publicized prior failures by others is exceedingly difficult and generally require substantial external expert validation. Therefore, we are extremely grateful to shareholders who through their long-term support have nonetheless believes in the value of our mission and our ability to succeed and have thereby provided us with the ability to continue our efforts and achieve our current very attractive position in our industry. In our prepared remarks today, Anat will focus our most exclusively on the status of our immuno-oncology programs based on novel immune checkpoint which were discovered by Compugen in its first focused discovery program. Following this first discovery program, we successfully establish and then more recently significantly expanded and enhanced the development capabilities at both our previously existing Israeli and newly established San…

Thank you, Martin. Our financial results for the first quarter of 2015 released today are in line with our expectations. However, there are few items that deserve further discussions. With respect to revenues, during the first quarter of 2015, revenues in the amount of $0.5 million as well as the $2.1 million reported for the first quarter of 2014 were both substantially attributable to the amortization of the $10 million upfront payment from our cancer immunotherapy collaboration with Bayer Healthcare. A reminder, our revenues from the upfront license payment are recognized according to the proportional performance method over the course of services period for the portion of the activities performed by Compugen. The decrease in reported revenues in the first quarter of 2015 compared with the first quarter of 2014 reflects the progress achieved in the two programs and the gradual shifting of the workload from Compugen to Bayer as the programs advanced. Today we recognize approximately $8.7 million, of this $10 million upfront payment and we expect the balance in the amount of $1.3 million shown as deferred revenues to be recognized over the next few quarters. R&D expenses for the first quarter of 2015 totaled $4.8 million compared with $3.2 million in the first quarter of 2014. This increase reflected previously projected substantial growth in our marked business and development activities for our pipeline program, in large part of our U.S. subsidiary which moved to larger facilities due in 2014 and increased its activities. Financial income for the first quarter of 2015 was approximately $0.2 million reflecting mostly interest income for our cash deposit, compared with $1.4 million in the first quarter of 2014, substantially related to non-cash valuation of the Baize agreement which was terminated in August 2014. As a result of all of the above, our net loss for the first quarter of 2015 were $6.1 million or $0.12 per diluted share compared with the net loss of $1.9 million or $0.04 per diluted share in the comparable period of 2014. As of March 31, 2015, we had approximately $101 million in cash and cash related accounts compared with $108 million at the begin of this year. The net use of cash during the first quarter was approximately $7 million and it is in line with our expectations. It largely reflects the continuing increase in expenditures in support of our pipeline candidate. As a reminder, we estimated our total cash expenditures for 2015 to be in the range of $31 million to $33 million without taking into consideration any cash received from the existing or new collaboration. With that, I would turn the call over to Anat.

Thank you Ari. Today, I will be focusing my prepared remarks on our 11 internally discovered novel immune checkpoint target candidate in definitive immune-oncology and the progress we have made during the first quarter of 2015. The enhanced and expanded infrastructure we’ve established over the past year or so in terms of personnel and experimental system is allowing us to generate a large amount of additional knowledge concerning our immune checkpoint target candidate and thereby to differentiate among the candidates so that they can address the current and future market landscape of immune checkpoints which is still targeting on the instruction of the cancer patient. As we have indicated in past calls and like most companies in the immuno-oncology field, which focus on non-immune checkpoint target and face much potential future competition, our B7/CD28-like targets are novel to the extent that they are not characterized in literatures as potential immune checkpoint. These therefore -- these rise to the opportunity to generate first-in-class therapeutics which could increase respond rates or extend the range of cancer indications treated and provide a thought for second drug combination. Hence first-in-class product have significant commercial and regulatory advantages in our highly desired by pharma companies. On the other hand, novelty demands significantly greater R&D efforts early on involving validation of the biology of our targets in order to address the right path to therapeutics. This is where the various scientific operations and mainly the John Hopkins collaboration greatly assist our company in driving our target program forward. This would be achieved by the way of target characterization and differentiation as well as evaluation of the therapeutic potential of our antibodies as monotherapies and combination therapies. It is also here that our recently obtained rights to use certain biological systems and material developed by NIH will…

[Operator Instructions] The first question is from Mike King of JMP. Please go ahead.

Sorry I was on mute. Good morning, guys. Thanks for taking the questions. I wonder if you could talk about how Compugen plans to fit in within ever-increasingly complicated immune-oncology landscape. And what I mean is that you’ve got for just an example recently Celgene partnering with AstraZeneca for MEDI4736 in malignancy. How does your focus on novel checkpoint inhibitor square with the activity that’s going on in what I would call the more validated checkpoint inhibitor landscape? Does it get more and more complicated and expensive for you to figure out where the Compugen’s checkpoint inhibitors would fit in with this landscape?

Thank you, Mike. And it is a very good question. And I am happy that you outfit this because this is -- it’s a key point. So just to make sure that people on the line understand how we see our checkpoints, they are not fast forward. So immune checkpoints I think is the backbone of cancer immunotherapy. And I think that people that are looking everywhere on the clinical trials that are being done in the big pharma companies, the clinical trials are focused on checkpoints as the backbone. Currently the backbone consists of the anti-PD-1 drugs that are in the market and those that are in clinical trials. And most of them are targeting the same key targets. Was Compugen is bringing as a new opportunity, are novel targets that are addressing normal pathways that are not related to PD-1 or PDL-1, and also not to the public known checkpoint. And with that, we believe that we will be able to answer additional unmet needs for patients and this would be -- could potentially be for new patient population that are not currently addressed and may not be addressed by the current candidates that additional checkpoints that are in clinical trials. It may offer a possibility for those patients that are responding but not generating a long-lasting response. It could target different cancer indications and it would also be a possibility to target, drive different drug combinations. So as the backbone of the cancer immunotherapy, industry would probably be in checkpoints. Compugen sees its novel candidate as a unique opportunity to get with totally different solutions to these peers.

Now I understand. But I guess are you saying that that these are PD-1, PD-L1 or TIM-3, LAG-3 etcetera independent checkpoints so that the environment is not subject to -- the TIM environment is not subject to I guess targeting through any of the known pathways?

So yes, the checkpoints that we have in our portfolio are not TIM-3 and LAG-3 and PD-1, PD-L1 and these are different proteins and different targets that we predict that should service in checkpoints. And we believe that they have the potential to target different mechanism of faction and not working the same path. Whether they will target the same patient population or not this we will see in future clinical trials. But the idea is that because these are different proteins, they should work. And based on the initial data of course that we have and based on the competition and predictions that we have, they should target different cancer populations.

The next question is from Brett Reiss of Janney Montgomery Scott. Please go ahead.

Hi. I have got a number of questions from people with the same thing in mind. In the second paragraph, you mentioned we expect that this strategy, which we are now aggressively pursuing with an expanded business development team, will provide in the short-term meaningful external commercial validation. What is your definition of short-term? Is it within the next year, six months, months, tomorrow morning, what is short-term?

The reason we have selected the short-term statement is in order not to get into this specific timelines and I will relate to what we have stated in the call in the last quarter. We did not want to provide specific indications, whether we are going to get into a collaboration during 2016. Having said that -- and not because I’ve said under a pressure to get into this collaboration from all of the different aspects, taking into consideration the external assessment not only from the investment perspective but having said that, we did say that we are pursuing discussions forward and that we are discussing additional collaboration option. So this is the reason we selected a short-term and we are not going to provide more details about this.

Fair enough. But just -- there’s a lot of frustration with -- just we had the Bayer collaboration in the summer of 2013 and it’s really been nothing material since then. And it’s just a sense of -- I know what you’re doing is very difficult but maybe not a question. But I’m just -- as a friend of the company, there is a high level of frustration that I’m hearing that we just haven’t had concrete collaboration since that summer of 2013.

Actually, I’d like to relate to it. I think that in general looking at Compugen, of course the business model is to collaborate and we have made a decision on equity shares with investors in the beginning of 2014, then we are going to select programs in advance and forward to future clinical trials. This is the right idea to make sure that we balance between early stage and late stage. And following the collaboration with Bayer, this was also even more reinforcing the company. We’ve got more data on our programs. We have multiple programs. We got more data and we got the excitement of our Scientific Advisory Board. We got the cash that is required and we stated that we are not going to invest more in our program. And validation is not only in terms of the collaboration but it’s also in terms -- and we did stated that we had discussions with potential partners but the validation is also in assessing the programs forward. So, I just want to make sure that it is balanced with the perspective of the company, that is not only looking forward for the early stage collaborations but is actively pursing the programs forward in order to generate higher value for collaboration. Martin, do you want to add?

I’d like to comment, Anat. The statement was made that market is really frustrated by the lack of progress or achievements or whatever. I don’t recall exactly the wording that we chose, but the frustration since the Bayer agreement was signed. First, I understand the frustration. The frustration is because we haven’t announced any collaboration since that time. If you look at the approximate two years since we signed the Bayer agreement, I would make the following statements. One, these two years have by far been the most significant years in the history of the company with respect to the achievements that we’ve made on the research side, on the development side, on almost any aspects of the science or the pipeline. These two years, we have been absolutely phenomenal. Internally, we understand that that’s doesn’t help. It doesn’t deal with the frustration because we just talk about it in generalities. The other comments that I will make is that with respect to collaborations in general, I don’t mean just the signing. I know that your collaboration strategy involves having people who know what they are doing in business development, involves having packages of material ready to be reviewed. It involves having good validation, information, et cetera. It involves a relationship with multiple companies in the industry and a respect of those companies -- the company’s potential collaborators has to build a respect and confidence in your capabilities, et cetera, et cetera, et cetera. Therefore, I would make a similar statement with respect to our collaboration activity. I would say that in the last two years, we have done more with respect to moving forward our collaboration activity than we did probably in all of the years up until that -- I wouldn’t say probably. We’ve done more since the Bayer agreement with respect to moving forward our collaboration activity than we did in the entire history of the company, including the Bayer agreement up until that point in time. So, I understand the frustration. But again, look at what the company is saying that it is doing. If you and just ask yourself if you believe us then there is a very significant potential and very positive future that we’re looking at.

All right. Fair enough.

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

Hi. Yes. Thanks for taking my questions. I’ve got a couple please. Firstly, just on the prioritization effort. I just wondering if you could highlight, is the plan still to move program into the clinic during the early part of 2017 you previously outlined. And are the original two programs that you were targeting in that timeframe, are those still within the five can I ask or was one of them exclusive on the prioritization? And equally are those two still planned to move forward, I guess, as originally thought. And then just secondly, I was hoping you could reiterate the details of the R&D Day, I guess, you speak perhaps, so we lost that part of the transmission, it would be great, we could just hear that? Thank you.

Okay. Yes. Sure. So just with respect to the two programs that we’ve discussed last quarterly call and you were asking about the objectives that were relating with respect to the programs. In general the programs are being advanced at the company and with respect to what we’ve stated with our company objectives to deeply selection in during 2015 we are still committed to it. And with respect to your second question that has to do with a five trend and which are included, we are not disclosing the specific programs that are in these five and we are not disclosing not only on these five, how we split it or which are split it between the first and the second tier. In general these two tiers are progressing as I’ve explained the top tiers get more resources internally in the company and the second tier more getting resources and advancement based on external -- through external collaborations. And as I have stated with a scientific collaboration working on our programs, Hopkins is a major collaboration. He is working on the two tiers. And just you were asking a question about the Analyst Day, and of course, we’ll have an invite, but just to repeat the formation, the meeting will be held in New York on the morning of June 8th. And yes, and I forgot also to mention that the guest speaker will be Professor Drupal Doll.

That's great. Thank you. And can I just ask one more follow-up which is, with regards to and I guess, it’s greatly relates to a question that's been asked already, but with regard to collaborations, you mentioned you’d be very careful in sharing the data to preserve the noble nature obviously and as a priority programs? Would you be amenable to do a sort of clinical trial or preclinical, perhaps, trial looking at combinations of some other companies have done of immune territories or would you be very much of the view mostly, I am thinking more for the low priority programs here, those programs you want the pharma company if you like to put up or shut up and must they put money on the table and actually license the drug, you really wouldn’t be interested in a sort of R&D sharing type arrangement, given you would potentially be giving away even for the low priority programs, some of the novelty?

No. This is not distinct between the two tiers and this is the objective for collaborations as we have discussed in the previous call is to make sure that we advance as fast as possible multi programs and this is the reason why collaborations are made past year and but the idea is to make sure that we derive value for the company from these programs and that we take part in the downstream activities in order to make sure that we derive more value for the programs. It’s not really related to the first and the second tier. With respect to the combination strategy or monotherapy, I am not sure that I got specifically your question, but I’ll just take and make sure that this is clear, of course, as all the other companies that are out there we are -- we have an interest to pursue our programs not only as monotherapy because they are unique and could generate a potential for monotherapy, but also as a combination therapy and yes, in thinking about collaborations, combination is also part of the criteria that is taking into consideration.

That's great. I guess, what I was wondering is, if a company was came to you and said they were willing to finance perhaps a preclinical or the study looking at one of your low priority programs really to do as a combination, would you be amenable to that sort of arrangement or does the company really have to perform due diligence and then license the target outright for you to be willing to give up access to that program at all?

In general, we are open to consider different structures and this will have to do with whether we are in a situation to this type of an agreement is blocking from us of doing generating the write value from the programs. So this would be the interest of the company. But in general we are very open to discuss different structures.

That's great. Thank you.

The next question is from Arlinda Lee of MLV. Please go ahead.

Hey guys. Can you help me maybe clarify for the -- for bringing a compound into the clinic? Is that going to be in 2016 or ‘17?

So we’ve stated in the last call that we aim to hit list selection in 2016 and for one program within 24 months to get to IND.

Within 24 months to get to the IND so that's ‘17, okay.

Yes. And of course this does not -- this relates to our internal program. It has nothing to do with a partnered programs that are under the collaboration with Bayer.

Okay, excuse me. And then maybe can you talk more broadly about the criteria that you‘d like to use that you are using in the prioritization of these different programs both internally and versus the target that you are thinking about or in compounds that you are thinking about out licensing. Thank you.

Sure. So as much as I can relay to the prioritization criteria related to the tumor -- the link to tumor immunology. And how we candidate our vote with different immune cell side and different cancer populations with different cancer sub types and what’s the landscape of the immune checkpoint competition currently and what it would be expected in the future based on what we know. And this will always be continue to be a set, also a perspective about monotherapies and combinations with other drug. This were the criterias that we used.

The next question is from [Steve Barron] [ph]. Please go ahead.

Hi. I’ve been an investor in Compugen since 2006. And I was hoping you could comment of what if anything is different now than in the past with regard to the potential of the targets and checkpoints. And why you have confidence that things will work out this time as opposed to the past going back to at least 2006. There’ve been a lot of a very positive and exciting announcements about collaborations and validations of proteins and targets and over expression on cancer cells and et cetera, et cetera. And we have with that deals with Teva, Roche, Baizer and others. Relatively recently we licensed Bioline, and those proteins were even validated in in vivo mouse model, Seattle Genetics. None of those went anywhere. And I’m just curious what’s different now why they’re so much confident now that the algorithms are working and this is all going to work out when none of those really seems to have worked out?

It’s a very good question. And I think it does need a very thorough answer. So, in January, you have defined the collaboration that Compugen has entered in the path of being unsuccessful and I would like to challenge this. And yes, this collaborations were not moving ahead but -- and not small portion of this collaboration, we were successful with what we have transferred to this collaboration. They didn’t forward for different reason. Yes, for some of them the biology didn’t work. But on other -- but on others that predictive discovery and the specific candidate that we have predicted were correct. So yes they did not move ahead through a more meaningful test. And this was part of the reason that we have decided in 2010 to come up with the different strategies for their organization. And yes that that this model has stayed at such that we are entering into collaboration in order to advance our program. But we are doing it at various stages of development of the product candidates. And I’ll explain what did with do since 2010. And mainly this collaboration together with the internal evidences that we had here in the company has made us been convince that we have the critical mass and we had the ability to generate our own pipeline. And not to partner this candidate at the stage that they are very early in terms of validation but invest more in them. And in 2010, we focus the company on the fields of immuno-oncology. With time, we focused it more and more on the fields of immuno-oncology and I don’t need to explain why, I guess that everybody understands that. And we have generated totally on our own discovery capabilities, our own pipeline based on novel target. In the…

I would like to make additional comment on that. From the standpoint that all of the arrangements that you’ve mentioned and all of those early discoveries were discoveries that we made in the building of our infrastructure, they were not discoveries that we said let’s build the capability internally to understand the certain feel, the certain modality, and let’s collaborate them, because we didn’t have the complete or enough of an infrastructure to do that. But the only way you can validate the discovery infrastructure is by making discoveries. That’s the only way you can prove that it works. And so up until 2010, essentially all of that discoveries that we made came out of this validation -- out of the infrastructure validation efforts. And as we say the first time in the area of immune checkpoints and immunology and oncology, this is the first area where we actually have built an internal capability and then proceeded with the focus discovery program based on it. I would also just mention just as an example of one of the things that are not referenced with respect to I think all of the companies that we’ve worked with, we are very impressed with our capabilities. As a matter of fact, I believe that it was made public that, I mean we have this joint venture now with Merck Serono. We had an earlier agreement with Merck Serono, where they decided not to go ahead with the program, but they were so impressed with our capabilities, they came back to us and said let’s set up the joint venture. So I wouldn’t draw any conclusions about our capability, will have to be made after you see the results with respect to this first discovery -- the immune checkpoints. Everything prior to that, as I said, was really -- was not in anyway reflective of the ability of the company to discover product candidates.

Thank you. I appreciate that.

There are no further questions at this time. Before I ask Dr. Cohen-Dayag to go ahead with their closing statement, I would like to remind 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 1-888-295-2634. 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?

Thank you very much for joining us today. We are very pleased with the progress made during the first quarter of 2015. And we look forward to providing you with detail concerning additional advances over the coming months. Thank you.

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