Why Shares of Compugen Jumped 9.27% on Tuesday

What happened

Compugen (CGEN 0.52%), a clinical-stage cancer immunotherapy company, saw its shares rise 9.27% on Tuesday. The stock closed at $0.9518 on Monday and then opened on Tuesday at $0.96. The stock rose to as high as $1.11 a share in the early afternoon before falling to $1.04 at the close. So far this year, the stock is down 75%, and it has a 52-week low of $0.51 and a 52-week high of $7.48.

So what

The move up was connected to a rise for Zymeworks on Monday. That company has a licensing deal with Jazz Pharmaceuticals regarding Zanidatamab, which is a HER2-targeted bispecific antibody (BsAbs) that is being tested against certain cancers. The connection is that Compugen also has a BsAbs therapy, AZD2936, that it is developing with AstraZeneca to treat solid tumors. A bispecific antibody is a molecule that can recognize two different antigens (a protein marker) and can be used to engage tumor-fighting T cells to kill malignant B cell cancer cells.

The other connection is that Compugen mentioned on Monday that it plans to announce third-quarter finances on Nov. 14. As the company doesn't have any marketed drugs yet, it doesn't have much revenue, but in the same announcement, the company said it will discuss clinical trial data. The company plans to present the data at the Annual Meeting of the Society for Immunotherapy of Cancer, held from November 8 through 12 in Boston.

The optimistic view is the company may have some positive news to announce regarding its early-stage clinical trials. Compugen uses computer analysis to find new drug targets and biological pathways for cancer immunotherapies. The company has two of its own potential products, COM701, an anti-PVRIG antibody and COM902, an antibody targeting TIGIT, an immune receptor present on some T cells and natural killer cells (NK), to treat solid tumors.

Now what

Compugen, like any clinical-stage biotech stock, presents a lot of risk. The company's stock has been below $1 a share since mid-September, so delisting is a potential concern. At this point, the financial success of Zymeworks may or may not matter much to Compugen, other than to show that bispecific antibodies have potential as oncology therapies.

In its second-quarter report, Compugen said it has lost $18.8 million so far this year and has $97.3 million in cash, so at least it has enough money to fund operations another year at its current burn rate.