Compugen Ltd. (NASDAQ: CGEN) is a clinical-stage, data-science-driven drug discovery biotech firm that is working on therapeutics in cancer immunotherapy. To achieve its goal, the company utilizes computational discovery to identify new drug targets. It aims to untangle the complexity of IO target and biomarker discovery.
CGEN Stock Soars 200%+
On Tuesday, December 19, 2023, CGEN stock soared 200%+ during trading hours. The stock closed 173.9726% higher at $2.00 per share. It has since gained 7% during premarket trading. Year-to-date, the stock has gained 181.69% and 207.69% in the past month.
The massive gain came after Compugen announced that it had reached an agreement with Gilead Sciences worth up to $848 million. On the same day, it announced it was eligible for a $10 million milestone payment from AstraZeneca.
Compugen and Gilead Sciences Deal
In the deal, Compugen agreed to license its pre-clinical trial immunotherapy program exclusively to Gilead Sciences. In return, Gilead will make an upfront payment of $60 million and $30 million in near-term milestone payments.
Additionally, Compugen is eligible for another $758 million in future payments, bringing the total value of the deal to $848 million. The agreement will also see Compugen eligible for single-digit and low double digital royalties on global net sales.
Milestone Payment from AstraZeneca
On Tuesday, December 19, 2023, Compugen revealed that it was eligible for a $10 million milestone payment from AstraZeneca. The payment will be triggered when AstraZeneca begins trials on rilvegostomig, derived from Compugen’s clinical-stage antibody. AstraZeneca’s randomized trial will recruit 750 candidates with biliary tract cancer from over 20 countries.
Compugen Is In a Strong Financial Position
According to the company’s Q3 earnings report, the company burned through $ 10.62 million in the quarter ending September. That might seem concerning for a company with a market cap of $176.654 million and no profits.
However, after the latest cash injection from AstraZeneca and Gilead, any worries that investors had about its sustainability have disappeared. With over $850 million in commitments and planned milestone payments, the company is in a healthy financial situation.
Stock Forecast
The confidence in its financial situation is reflected in its performance YTD. While the S&P 500 Health Care Index has lost 0.85% YTD, CGEN stock has gained 181.69%. Based on its strong performance, stock analysts have given CGEN stock a strong buy rating.
It means they expect it to continue outperforming the market in the coming months. They give it a high target of $13 and a low of $050. Their average target for CGEN is $5.70, which is a 185% upside based on its last price.
Should You Invest in CGEN Stock?
In its last reported quarter, Compugen had $57.5 million in cash. At the time, it forecasted that it had enough funds to continue operating until the end of 2024. Following the latest cash injection, the company will be operationally viable for the next few years.
Additionally, it has been working with industry giant AstraZeneca, which provides it with an easy path to market if drug trials are successful. Based on all the facts, the strong buy rating for CGEN stock is accurate.
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