What happened
Shares of Compugen (CGEN 1.05%) rose as much as 18.5% on Thursday. The stock closed at $0.6524 on Wednesday and opened at $0.70 on Thursday, rising to a daily high of $0.77 around 2:30 p.m. EST before coming down quite a bit, to $0.68, at the close. The stock is down more than 83% so far this year.
So what
The biotech company benefited from a good day in the markets for growth stocks. Compugen, which focuses on immuno-oncology therapies to treat cancer, has had promising news this month for COM701, the lead therapy in its pipeline. The drug, which acts as an anti-PVRIG modulator in solid tumor cells, fared well in a phase 1 trial as a combination therapy with nivolumab to treat ovarian cancer patients who have had chemotherapy.
COM701 has also shown potential in early trials as a combination therapy to treat microsatellite stable colorectal cancer.
The whipsaw effect for the day was likely due to Compugen investors seizing an opportunity to unload the stock on a rare up day.
Now what
Compugen's therapies are all in early-stage trials, so it represents the risk that any clinical-stage biotech might have. The company, in its third-quarter report, said it had, through Sept. 30, $88 million in cash, enough to fund operations through the end of 2024. It reported a loss of $11.7 million or $0.14 in earnings per share in the quarter. While Compugen doesn't have any debt, the Israeli company will likely need to borrow money, go into a collaboration agreement with a larger company, or be bought to get its therapies to market.
The company is already benefiting from one collaboration as it is set to receive $7.5 million in a milestone payment from AstraZeneca regarding AZD2936, a bispecific antibody taken from COM902, which is a Compugen pipeline candidate.
