Compugen Ltd. (CGEN) surged to the highest in more than nine years after the Israeli biotechnology company agreed to cooperate with Bayer AG (BAYN) on cancer immunotherapy that may yield more than $540 million in payments.
Compugen soared 41 percent to 28.45 shekels at the close in Tel Aviv, the highest price since May 2004, valuing the developer of computational genomic products at 1.08 billion shekels ($304 million). Volume was about 28 times the three-month daily average.
Bayer agreed to pay $10 million upfront in cash to Compugen in excess of $500 million for meeting targets in researching, developing and commercializing cancer therapies, the Tel Aviv-based company said today in a statement. Compugen is also eligible for another $30 million in achieving goals associated with early stage tests, it said.
Drug companies are increasingly looking at immunotherapy, which is designed to combat cancer by stimulating the body’s own immune cells to fight tumors, for their next products. Leverkusen, Germany-based Bayer is also seeking other technology to combat cancer. It signed an agreement in June to use Seattle Genetics Inc. (SGEN:US)’s antibody-drug conjugate process to develop treatments to target tumors without affecting healthy cells.
The Compugen system is based on researchers’ discovery of two immune checkpoint regulators, which potentially play a role in suppressing the immune system and allowing a tumor to grow, the Israeli company said today. Compugen is developing therapeutic antibodies to block those targets and switch on the patient’s antitumor immune response.
Compugen, founded by members of an Israeli army intelligence unit that designed software to break codes, uses computer programs to discover proteins that may have the ability to treat diseases. It then finds partners that pay to develop drugs. The company has never generated a profit since it started trading on the Nasdaq in 2000, according to data compiled by Bloomberg.
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