Ladies and gentlemen, thank you for standing by. Welcome to Compugen's Second Quarter 2019 Results Conference Call. At this time, all participants are in a listen-only mode. An audio webcast of this call is available in the Investors section of Compugen's website, www.cgen.com. As a reminder, today's call is being recorded. I would now like to introduce Elana Holzman, Compugen's Director of Investor Relations and Corporate Communications. Please go ahead.

Thank you, operator. And thank you for joining us today. With me from Compugen are Dr. Anat Cohen-Dayag, President and CEO; Dr. Henry Adewoye, Chief Medical Officer; and Ari Krashin, CFO and COO. 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 and other forward-looking statements regarding future events or future business outlook, anticipated progress on Compugen's pipeline program, and financing and accounting-related matters as well as statements regarding its corporate restructuring and anticipated reduction in expenses and cash savings. We wish to caution you that such statements reflect only the company's current expectations, and that actual events or results may differ materially. You are kindly referred to the risk factors and cautionary language contained in the documents the company filed with the Securities and Exchange Commission, including the company's most recent annual report on Form 20-F filed on March 21, 2019. The company undertakes no obligation to update projections or forward-looking statements in the future. I will now turn the call over to Anat.

Thank you, Elana. Good morning and good afternoon, everyone, and welcome to our second quarter 2019 corporate and financial update. As Elana mentioned, today on the call, I have with me Dr. Henry Adewoye, our Chief Medical Officer, who will provide updates on the clinical progress for our lead candidate, COM701, currently undergoing Phase I clinical studies. We also have Ari Krashin, our CFO and COO, who will review our financial statements and position. Throughout the second quarter of 2019, we continued the strong execution of our clinical program for COM701. This includes the important milestone of first patient dosing in the dose escalation combination arm of our Phase I study with COM701 and Opdivo, which remains on track to complete enrollment this year. Additionally, the COM701 monotherapy dose escalation arm is progressing and we look forward to rapidly advancing COM701 towards the monotherapy expression cohort later this year, which will also valuate our targeted biomarker-driven approach. We're also excited to have our second internally developed asset, COM902, an anti-TIGIT antibody, progressed towards an IND filing later this year. We have reached an important time in our company's development, having advanced findings of our discovery platform into exciting differentiated clinical programs. Out path to this clinical program has been unique. We have relied solely on our internal computational discovery platform to uncover to date three new biological pathways, including the known TIGIT, as important novel target for the development of immunooncology drugs. This target has been characterized with comprehensive preclinical validation, demonstrating the power of our computational capability and our ability to translate these discoveries into clinically meaningful biological targets. We are now well positioned with two therapeutic antibody candidates against our targeting the clinic – COM701 targeting PVRIG, being developed independently, and BAY 1905254 targeting ILDR2 being developed by…

Thank you, Anat. And good afternoon and good morning to everyone. I am pleased to provide you an update on our ongoing Phase I study evaluating the safety, tolerability, PK/PD and clinical activity of COM701 in patients with advanced solid tumors. On the last call, we provided an update that we have ten active sites for the trial, all leading centers with extensive experience in oncology and immunooncology trials. As we previously disclosed, there's a very high level of interest and engagement by the investigators and clinical trial sites. This has enabled us to meet our enrollment goals as the study progresses and support our future enrollment targets. As a reminder, we currently have two trial arms enrolling patients. Arm A, the immunotherapy dose escalation of COM701; and Arm B, the dual combination with escalating doses of COM701 and a fixed dose of Opdivo. Starting with Arm A, as planned, we competed in Q3 the enrollment of patients up to dose level 7, a deducing schedule of COM701 administered every three weeks. We've initiated COM701 dosing at Q3W dosing schedule based on our preclinical data. The clinical data gathered during the course of the clinical trial led us to evaluate a Q four-weekly dosing schedule of COM701 monotherapy and in combination with nivolumab, which is approved with a Q4W dosing schedule. As such, we will enroll patients to allow for such evaluation. The additional information obtained will inform on the safety, tolerability and preliminary anti-tumor activity of COM701 monotherapy and in combination with nivolumab in the patient population, our expectation is that following the completion of the dose escalation with a Q4W dosing schedule, we will enroll patients for the expansion cohorts using the schedule. We do not anticipate any substantive changes to our timeline of conducting the COM701 monotherapy…

Thank you, Ari. Good morning and good afternoon to everyone. Our financial results for the second quarter of released this morning reflect the continued expenses associated with our Phase I study for COM701 as well as the effect of the restructuring process we underwent at the end of the first quarter. The reduction in expenses will continue over the course of 2019, with the full effect of the savings expected to be reflected in 2020. As of June 30, 2019, we had approximately $37 million in cash and cash-related accounts compared with approximately $38 million at the end of the first quarter of 2019. The slight reduction in cash balances is attributed to the reduction of expenses as well as the proceeds from our ATM facility during the quarter. Our R&D expenses for the second quarter of 2019 decreased by almost 40% and totaled $4.9 million compared with $8 million in the comparable period of 2018. The decrease was primarily due to the decrease in preclinical activities related to COM902, most of which were done in 2018, and the cost reduction measures implemented in the first quarter of 2019, offset by an increase in expenses associated with clinical-related activities for the COM701 Phase I trial, as well as expenses associated with the preparation of the IND filing of COM902 planned for later this year. Net loss for the second quarter of 2019 was $6 million or $0.10 per basic and diluted share compared to a net loss of $10.2 million or $0.19 per basic and diluted share for the second quarter of 2018. As we mentioned in the past, we are committed to ensuring the progress of our ongoing Phase I study of COM701 as well as advancing our other programs. Following the recent shares sold through the ATM, we believe that with our current cash resources and the lower level of expenses, we have extended our cash runway to mid-2021. Therefore, we decided to cancel the ATM program. Thank you. And with that, we will now open the call for questions.

Thank you. [Operator Instructions]. The first question is from Mark Breidenbach of Oppenheimer. Please go ahead.

Hey, guys. Thanks for taking the question and congrats on the progress. Just wondering if there's been any internal decision on your part as to when and how to present the initial results from Arm A and Arm B from the ongoing trial. Is this something we could see data from by the end of the year or is 2020 more realistic in terms of your expectations?

So, Mark, thank you for the question. In general, the patients under the monotherapy, the ones that Henry related to under the seven-dose cohort, are still under assessment. And as we promised on this call, we will provide relevant information as they become available. I think that you should just need to understand that not only these are under assessment, Henry updated about the Q4W dosing schedule and the dual combo dose escalation analysis – not only the analysis, but the enrollment is still ongoing. So, in general, we will take care to present data, but we need to feel comfortable that we have the data that is needed to be presented. I also want to put things in perspective just in terms of the dose escalation stages. I understand that there is an excitement to see data, but I just want to ensure that people understand that the data for the monotherapy and the dual combo dose escalation are data for safety and tolerability. And while we will not hold data and we will present data, it is important to state that the biological – mainly in our program, the biological rationale for this program was picked based on scientific understanding. We were picking the indications, we were picking the biomarker strategy, the combination strategy. And I just want to ensure that while we understand the excitement to see data from this trial, which is a completely novel program – we're excited as well. This is the first in class. No one was targeting this target in advance. But I just want to put things in perspective. This is safety and tolerability data and we will take care to present as soon as we can and data is available to us.

Okay. And second question, really focusing on COM902, I'm curious given that this is moving toward the clinic, it sounds like, what are your expectations regarding this first anti-TIGIT and PVRIG combination that will be tested in the clinic? Should we really be thinking of that in terms of COM902 plus COM701 or would you expect this to more likely involve Bristol-Myers Squibb's anti-TIGIT antibody?

So, while the agreement with the BMS, obviously, is designed to allow for additional combinations in those that we discussed in the public, we obviously have our own TIGIT antibody. It is important for us to have the tools to be able to prove the hypothesis that we very much believe in based on the predictions and the preclinical data. So, this is the reason why we keep pushing COM902 into IND studies. And now, IND is on track to be filed this year. And as we stated, we are also planning the clinical path for this program. In terms of the combination, it's a very good question. We are committed to test our hypothesis. So, telling you at this stage what exactly will be, I cannot because we are formulating our planning forward and, obviously, we still need to do the monotherapy dose escalation with our own COM902, but we will share our thinking around this.

Okay. And maybe one last one for Ari, just wanted to make sure, since it sounds like the full effects of the cost reduction measures haven't come into play yet, is it reasonable to expect OpEx numbers will continue to fall in the second half of 2019? Thanks. Thanks for taking the questions.

Hey, Mark. Yes, definitely. First of all, the first half has the full effect of Q1 because the restructuring only took place at the end of the quarter. As we move forward and we are transitioning more people and we are transitioning the operation, I expect this will go down and I believe and assume that next year you'll see the regular run rate. I would also assume that Q2 almost reflects the run rate. It will probably go down slightly next quarter as well.

Okay. Thanks for that clarity. And thanks again for taking the questions.

Thank you.

The next question is from Philippa Gardner of Jefferies. Please go ahead.

Hi there. A couple of questions if I could, please. Are you able to say in terms of the dosing cohort that you've looked at in the monotherapy arm with COM701 and now that you've started the combo, are you able to say what dose cohort that relates to in the combo arm that you've now started? And then, just in terms of some of your comments around sort of expectations, you're looking at some efficacy measures, but do you think it's fair to say that you're expecting in terms of sort of anti-tumor activity that we're more likely to see that in the combo part of the trial rather than perhaps in the monotherapy arm of the plan? And then, my final question, just on R&D spend, can you just give us an idea of what the magnitude of the restructuring costs that are running through your OpEx and in particular R&D are for the second quarter please? Thank you.

Henry, would you like to take the first and maybe even the second question?

Sure, I can, Anat. Thank you very much. So, your first question relates to the dose level for the combo. We've previously reported that we observed no toxicities at dose level 1 for the combo. We haven't disclosed the dose for COM701, but we did not observe any DLTs [indiscernible]. Now, the second question you asked relates to whether we will see anti-tumor activity with COM701 monotherapy or in combination. While we discussed about the DNAM axis where there are three components – DNAM, PVRL2, PVRIG, PVR and TIGIT. We may see some preliminary anti-tumor activity. And by that, as a clinician, anti-tumor activity, to me, includes not just complete responses, partial responses, but also disease control rates, which includes stable disease. So, we will not be surprised to see that. Our expectation is that we will be able to present or show information or data that shows some evidence of that, but based on the axis I elucidated, we probably are going to also see additional anti-tumor activity with a combination with a PD-1 which is enrolled in this case. Philippa, can you just repeat the last question you have please?

Yeah. I was just trying to understand, I guess, what the magnitude of any restructuring costs that they were running through the second quarter. I guess I'm just trying to figure out, I guess, what your underlying R&D spend was.

Understood. Basically, as we stated in Q1, there were kind of I would call it "one-time restructuring expenses," were roughly $1 million and $2 million, not significant. So, right now, it's mostly about the transitioning. So, it's not significant. I would say the run rate currently is about $25 million per year. This is why we feel comfortable today that we have – to say that we have at least cash for the next two years.

Okay, thank you. Henry, can I just come back to my original question? I guess what I was really trying to ask is, I know you haven't disclosed the doses in any of the cohort, but I was just trying to understand, in the combo arm, what dosing cohort that relates to from the monotherapy arm? So, did you start that at the – at cohort 1 like you did in the monotherapy arm or have you started that at a slightly higher dose than you did in the monotherapy?

We set that at a slightly higher dose than the monotherapy COM701.

Perfect. Thank you.

This concludes our Q&A session. I would now like to turn the call back to Compugen's president and CEO. Dr. Cohen-Dayag, would you like to make your concluding statement?

Thank you, operator. Q2 has been marked with continued execution and important progress across our clinical and preclinical pipeline. Our Phase I study for COM701 continues to advance with patient enrollment in both the monotherapy and combination dose escalation arms progressing as planned. We are ready to begin enrollment in the monotherapy extension cohort following the completion of the Q4W dosing schedule and also complete enrollment in the combination dose escalation arm both by year-end. We are also excited with our progress towards IND filing of COM701, on track for later this year, and are enthusiastic to explore the clinical potential of our combination strategy. Our improved cash position has extended our cash runway through mid-2021. We will remain focused on effectively employing our resources to advance our short and long-term objective to ensure our future growth. Thank you all again for joining us today. We look forward to providing timely updates as we continue our progress on all these fronts in order to be transparent to our current and potential investors. Have a great day. Thank you.

Thank you. This concludes the Compugen Ltd. second quarter 2019 financial results conference call. Thank you for your participation. You may go ahead and disconnect.