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Compugen Abandons Nascent PGx Service to Focus on Drug Discovery

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With revenue diminishing and cash reserves dwindling, bioinformatics company Compugen has quietly abandoned a nascent pharmacogenomics service that sought to combine SNP and haplotype data with information from millions of case histories.

The program, which Compugen began building in 2001 and planned to launch last summer, was to become a kind of clinical sounding board for biopharmas, which would use it to better select patients for clinical trials.

Called Predictive Drug Response, the service would have included SNPs and haplotypes from Compugen’s LEADS platform — which itself is being phased out — and would have comprised 15 years’ worth of medical records and independent physician opinions about diagnoses, genetic tests, various clinical images, prescription histories, and hospitalizations collected from some five million patients.

Compugen killed the program earlier this year after deciding to focus its resources on its early-stage pipeline of therapeutic proteins. “We had to make the decision to terminate this project,” said Michal Preminger, vice president of therapeutic proteins at the Tel Aviv, Israel-based company. “It’s a shame. Within [Compugen’s] complete strategy, we had to prioritize … and shift resources.”

Preminger, who works out of Compugen’s Jamesburg, NJ, offices, was previously vice president of new research directions. She had been spearhading the PDR project.

In principle, biopharmas would use the PDR service to help them pick individuals to enroll into clinical trials, to invigorate mediocre drugs in post-marketing studies, or to revive drug candidates with less than favorable adverse-event profiles — all cornerstone goals of pharmacogenomics.

Though a handful of companies now occupy a portion of this space — Genaissance applies its haplotype database to help pharmas chase targeted therapeutics, and bioinformatics firm AnVil has partnered with health-care companies to mine and analyze data for pharmas — Compugen’s stance would have been a novel option thanks to the information in its LEADS platform.

“Compugen … would have naturally gone into the direction of pharmacogenomics, but given the fact that our core competence is in taking computational technologies and merging them with the [other] disciplines, I thought we could come up with a stronger advantage,” Preminger said last April. “I know there’s a good opportunity for service there.”

As it stood, the platform, which includes data from common ailments such as diabetes and heart disease, had four components, the first two of which were patient data and data analysis. Because they are not collected from trials, these data are unencumbered by the narrowly focused clinical information currently used by most drug makers, said Preminger. “It’s real people in real life,” she said. “There’s no exclusion/inclusion criteria.”

The goal was “to combine all of this data … with certain molecular analyses that will complement the picture and come up with reliable predictions about things like drug response and disease progression,” Preminger said last year. “The heart of this is to predict a patient’s response or disease progress based on history.”

To arrive at the data in the PDR platform, Compugen would have analyzed a patient’s medical records to create a homogeneous sub-population characterized by a particular response — for instance, drug resistance, non-response, or adverse reaction. Drug companies could have used the product of these analyses to better select patients for certain studies or even make early efficacy or adverse-event predictions. Saving money on costly late-stage clinical trials is a drug maker’s holy grail, and knowing which patients to enroll is one significant way to save tens of millions of dollars per drug candidate.

The remaining two components were computational molecular analysis and experimental analysis. In the former, Compugen planned to use technologies in its computational biology platforms — especially from the SNPs and haplotypes found in its LEADS platform — “to design and analyze molecular experiments” to extract additional predictive information. In the latter, which was still under development as of last April, Compugen would search for “novel methodologies,” in particular protein analysis.

In the long run, though, Preminger said that the first two points “are our strongest. If we didn’t have that then we would probably remain unwilling to enter this field at all.”

“When we decided to get into this field, we felt that there were two good reasons for that,” she told Pharmacogenomics Reporter over lunch last year. “With our combined business model … we thought it was a good idea to provide services that are more downstream.

“Our traditional markets are in the discovery side, and we felt it was very important for us to be able to provide services which are closer to the end product, and which allow the benefits to be presented in the shorter term than in the discovery phase,” she said.

Not any more. Decreasing revenues, increasing losses, and two years worth of cash in the bank has forced Compugen to quietly scuttle the service and focus all of the company’s resources on drug discovery [see chart, this page].

Writing in its fourth-quarter earnings report Feb. 4, Compugen said that in order to support its therapeutic protein drug development, the company “has reallocated certain internal resources.”

Compugen went on to say that “in the past … revenues have been generated from licensing platforms and tools, and providing services, all of which incorporate certain of the company’s technologies and capabilities.

“Looking to the future, the key revenue sources for Compugen are expected to result from the development and commercialization by licensees and marketing partners of therapeutic and diagnostic products based on the company’s discoveries,” Compugen said.

Lastly: “Compugen’s most important financial consideration is to ensure the availability of the financial resources necessary … to continue to develop until it reaches positive cash flow from operations.”

The decision to fold PDR “was announced by elimination, and “was part of the company’s focus on the pipeline,” Preminger said this week. Compugen’s decision was not accompanied by lay-offs, she added.

Revenue at Compugen has been gradually declining and losses have been mounting in recent quarters. For the three months ended March 31, for instance, total receipts fell to $1.5 million from $2.6 million year over year. R&D spending has also been cut, to $2.9 million from $3.2 million in the year-ago quarter, and net losses have widened to $3 million in the first quarter 2004 from $2.3 million one year ago. Plus, with $20 million in cash, equivalents, short-term deposits, and marketable securities as of March 31, the company can hope to survive two years at its existing burn rate, chairman Martin Gerstel told BioInform, Pharmacogenomics Reporter’s sister publication in April.

Compugen is now focusing all of its resources on drug discovery, which includes its flagship candidate, a small molecule that targets the CD40 pathway, which plays a role in autoimmune diseases and organ transplantations. A similar molecule for the same indications developed by Biogen and Idex had failed after researchers linked it to certain thromboembolic complications, Preminger said. However, she said Compugen is confident its CD40 candidate will “evade” this adverse event because it works through a different mechanism.

—KL

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