Breaking Down Compugen Ltd. (CGEN) Financial Health: Key Insights for Investors

If you are looking at clinical-stage biotech, you know the financials are a tightrope walk between burn rate and pipeline potential, and Compugen Ltd. (CGEN) is a defintely a prime example. The recent Q3 2025 results show the inherent volatility of a milestone-driven revenue model, with revenue dropping sharply to just $1.9 million for the quarter, which drove a net loss of approximately $6.98 million. But here's the quick math: the company's cash, cash equivalents, and marketable securities still sit at a solid $86.1 million as of September 30, 2025, which they project will fund operations into the third quarter of 2027, giving them a crucial buffer to advance their lead programs. That stability, plus the over $1 billion in potential milestones from partnerships with Gilead and AstraZeneca, is what truly anchors the valuation, but you need to understand the immediate cash burn against that long-term clinical upside.

Revenue Analysis

You need to look past the top-line number for Compugen Ltd. (CGEN) because their revenue is lumpy, driven by non-recurring collaboration payments, not steady product sales. The direct takeaway is that while Q3 2025 revenue of $1.89 million beat analyst estimates, the year-over-year drop is massive, reflecting the nature of a clinical-stage biotech firm.

Their revenue stream is almost entirely composed of deferred revenue recognition from strategic licensing agreements, not commercial product sales. This is a critical distinction to make when valuing the company. Specifically, the primary sources are portions of the upfront and milestone payments from the license agreement with Gilead Sciences, Inc. for GS-0321 (previously COM503), an anti-IL-18BP antibody.

Here's the quick math on the near-term volatility, which is a major risk for investors who don't defintely understand the biotech business model:

• Q3 2025 Revenue: Reported at approximately $1.89 million.
• Q3 2024 Revenue: Reported at approximately $17.1 million.
• Q3 YoY Change: A steep decline of about 88.96%.

The total revenue for the nine months ended September 30, 2025, was approximately $5.43 million, a sharp decrease from the $26.39 million reported for the comparable period in 2024. This isn't a sign of failure, but a simple accounting reality: they recognized a much larger, one-time clinical milestone payment from AstraZeneca in 2024 that did not recur in 2025.

What this estimate hides is the potential for future, high-value milestones. The partnerships with AstraZeneca and Gilead carry the potential for over $1 billion in future milestone payments and royalties, but those are contingent on clinical and regulatory success, which is years away for the most part. The near-term revenue picture is thus thin, but the long-term opportunity remains significant if their pipeline assets, like COM701, advance successfully.

For a deeper dive into the valuation models that account for these contingent payments, you should read our full analysis at Breaking Down Compugen Ltd. (CGEN) Financial Health: Key Insights for Investors.

The shift in revenue contribution is clear when you look at the quarterly comparison:

The segment analysis is straightforward: Compugen Ltd. is a single-segment company, focused on cancer immunotherapy discovery and development. All revenue, whether from collaborations or grants, is tied to this core activity, meaning there's no diversification from a commercial product segment to offset the R&D costs.

Profitability Metrics

You need to know if Compugen Ltd. (CGEN) is moving toward financial self-sufficiency, but the 2025 nine-month results show a sharp reversal in profitability, largely due to a drop in collaboration revenue. For the nine months ended September 30, 2025, the company reported a negative gross profit and significantly widened operating and net losses. That's a tough picture.

The core issue is a steep decline in top-line revenue from licensing and milestone payments, which are common but inherently volatile in a clinical-stage oncology company. Revenues fell from $26.39 million in the first nine months of 2024 to just $5.43 million for the same period in 2025.

Margin Analysis: 9M 2025 vs. 9M 2024

The shift in revenue mix and scale has dramatically impacted margins. Here's the quick math comparing the nine-month periods for 2025 and 2024 (in thousands of U.S. dollars):

The move from a 72.51% gross profit margin in 2024 to a negative 5.21% in 2025 is the most striking trend. This isn't necessarily a sign of bad cost of goods sold (COGS) management, but rather that the cost of revenues ($5.72 million) now exceeds the much smaller revenue base ($5.43 million). When you're a development-stage biotech, your revenues are lumpy, so your margins will be, too. This is defintely a year where the lump is on the downside.

Operational Efficiency and Industry Context

Operational efficiency is where the rubber meets the road for a company burning cash on research and development (R&D). Compugen Ltd.'s total operating expenses for the nine months ended September 30, 2025, were $24.43 million, a slight decrease from $26.55 million in the comparable 2024 period. This shows some cost management, but it wasn't enough to offset the revenue drop, leading to the massive operating loss.

When you compare Compugen Ltd. to peers, the difference is stark. While clinical-stage biotechs often have negative net margins, the gross margin is key for product-focused companies. For example, a peer like Aspira Women's Health reported a gross margin of 64.1% for the same nine-month period in 2025. Another biotech company, Anbio Biotechnology, shows a gross margin of 71.9% and a positive net margin of 28.99%. This highlights the gap Compugen Ltd. must close with future milestone payments or product commercialization.

• Gross Margin: Compugen's -5.21% is a red flag, contrasting sharply with the industry's typical 60%+ range.
• R&D Spend: R&D expenses saw a minor reduction to $17.21 million in 9M 2025 from $18.90 million in 9M 2024, indicating continued investment in the pipeline despite the revenue crunch.
• Cash Runway: The company reported a cash runway into Q3 2027, which gives them time to execute on their clinical programs like the MAIA-ovarian trial.

The company's profitability hinges entirely on its clinical pipeline and the resulting milestone payments from partners like AstraZeneca and Gilead, which have over $1 billion in potential milestones and royalties. For a deeper dive into the strategic implications of this financial health, check out Breaking Down Compugen Ltd. (CGEN) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

The core takeaway for Compugen Ltd. (CGEN) is simple: they are a zero-debt company. This is a critical point for a clinical-stage biotech, meaning their growth is financed almost entirely through equity and non-dilutive licensing deals, not through traditional borrowing that carries interest rate risk or default risk. It's a very conservative balance sheet strategy.

As of the Q3 2025 report on November 10, 2025, Compugen Ltd. explicitly stated it has no debt, meaning both long-term and short-term debt levels are essentially $0. This is highly unusual in the capital-intensive biotechnology sector, where companies often take on debt to fund expensive clinical trials. Here's the quick math on their capital structure, using the most recent available figures for Q2 2025 Total Shareholders' Equity of approximately $50.26 million (in millions of USD):

• Total Debt (Long-term + Short-term): $0
• Total Shareholders' Equity (Q2 2025): Approximately $50.26 million

This capital structure translates to a Debt-to-Equity (D/E) ratio of near zero. While some financial aggregators show a trailing twelve months (TTM) D/E ratio of 0.07 or 0.06 for the period ending October 2025, this minor figure likely captures non-interest-bearing liabilities like operating lease obligations or other payables, not true interest-bearing debt. The fact is, they carry no bank loans or bonds.

A D/E ratio of 0.07 is dramatically lower than the Biotechnology industry average, which currently hovers around 0.17. This low leverage shows significant financial stability, but it also signals a reliance on equity funding and partnership milestones for cash. This is a trade-off: lower risk, but potentially higher future dilution if clinical trials demand more capital than partnerships can provide. You can dive deeper into who is buying and why at Exploring Compugen Ltd. (CGEN) Investor Profile: Who's Buying and Why?

Since Compugen Ltd. has no debt, there has been no recent debt issuance, credit rating activity, or refinancing to report. Instead, the company has chosen to finance its operational needs and pipeline advancement through equity funding, specifically utilizing an At-The-Market (ATM) facility. This process sells new shares directly into the market over time, managing dilution incrementally.

For example, in January and February 2025, the company sold approximately 3.96 million shares through its ATM, generating net proceeds of about $8.87 million. They continued this in October 2025, selling another approximately 0.8 million shares for net proceeds of about $1.6 million. This equity-centric approach, combined with major non-dilutive licensing deals like the one with Gilead (eligible for up to $758 million in milestone payments), is how Compugen Ltd. balances its funding needs. They are defintely prioritizing a clean balance sheet over the financial engineering of debt.

Liquidity and Solvency

You want to know if Compugen Ltd. (CGEN) has enough cash to keep the lights on and fund its drug pipeline, and the short answer is yes, for the near-term. The company's financial health, as of the end of the third quarter of 2025, is characterized by a strong liquidity position, but it is defintely sustained by a high cash burn rate typical of a clinical-stage biotech.

Their primary strength is the robust cash balance, which management projects will fund operations into the third quarter of 2027. That's a good, clear runway.

Assessing Compugen Ltd. (CGEN)'s Liquidity

Liquidity ratios tell us how easily a company can meet its short-term obligations. For Compugen Ltd. (CGEN), these ratios are excellent, largely because the company has minimal short-term debt and its assets are highly liquid.

• Current Ratio: The Current Ratio for Q3 2025 (Current Assets divided by Current Liabilities) is approximately 4.38 ($88.92 million / $20.28 million). This means Compugen Ltd. has over four dollars in current assets for every dollar of current liabilities. Anything over 2.0 is generally considered very healthy.
• Quick Ratio: The Quick Ratio (or Acid-Test Ratio) is essentially the same at approximately 4.38. This is because the vast majority of their current assets are cash and cash equivalents (approximately $86.1 million), and they carry negligible inventory. It's a rock-solid short-term position.

This strong liquidity translates directly into a high working capital (Current Assets minus Current Liabilities) of approximately $68.64 million as of September 30, 2025. This cushion is critical because, as a clinical-stage company, Compugen Ltd. (CGEN) is not yet generating significant revenue from product sales.

Cash Flow and Working Capital Trends

The trend in working capital is stable, but the cash flow statement shows the real story: this is a cash-consuming business. For the first six months of 2025, Compugen Ltd. (CGEN) had an accumulated negative cash flow from operating activities of approximately $18.564 million. In Q3 2025 alone, the company reported a net loss of approximately $6.98 million.

Here's the quick math on the cash flow activity:

The negative operating cash flow is the key risk, but the company manages it effectively through strategic financing. For instance, in October 2025, they sold approximately 0.8 million shares through their At-The-Market (ATM) facility, bringing in net proceeds of about $1.6 million. This is how a clinical-stage biotech funds its operations-by tapping the equity market.

Liquidity Strengths and Risks

The biggest strength is the balance sheet itself. Compugen Ltd. (CGEN) carries no debt, which is a massive plus for a company facing clinical trial risks. This zero-debt position eliminates interest expense and reduces financial leverage risk. The projected cash runway into Q3 2027 gives them significant time to hit key clinical milestones.

The main risk is the reliance on milestone payments and future financing. The revenue for Q3 2025 was only $1.9 million, a sharp drop from the prior year, meaning their core business is not yet self-sustaining. The cash runway is based on current operating plans and excludes any potential future cash inflows from partnerships like AstraZeneca and Gilead, which carry over $1 billion in potential milestones and royalties. If those milestones hit, the liquidity picture changes dramatically for the better. If you want to dig deeper into who is betting on these milestones, check out Exploring Compugen Ltd. (CGEN) Investor Profile: Who's Buying and Why?.

Your next step should be to monitor the quarterly cash burn rate against the stated $86.1 million cash balance to confirm the Q3 2027 runway remains intact.

Valuation Analysis

The short answer is that Compugen Ltd. (CGEN) is a clinical-stage biotech, so traditional valuation metrics suggest it is currently overvalued based on its book value, but the analyst consensus points to a significant upside based on pipeline potential. You must look past the simple numbers here.

Because the company is focused on research and development (R&D) and has not yet achieved consistent profitability, its trailing 12-month earnings per share (EPS) is negative. This means the Price-to-Earnings (P/E) ratio is not applicable (N/A) for a meaningful comparison, which is typical for a biotech at this stage. It's a growth story, not an earnings story yet.

Here's the quick math on the key ratios using the most recent data from the 2025 fiscal year:

• Price-to-Book (P/B) Ratio: The P/B ratio stands at 3.50. This is high, indicating the market is valuing the company at 3.5 times its net asset value (book value).
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio is also N/A for standard comparison because the company has negative EBITDA. The Last Twelve Months (LTM) EV/EBITDA is approximately -2.9x, reflecting ongoing operational losses as they fund their clinical trials.
• Market Capitalization: Compugen Ltd. has a market cap of about $153.40 million and an Enterprise Value (EV) of $70.26 million, as of November 2025.

Stock Performance and Analyst View

Over the last 52 weeks, the stock price trend has been relatively flat, with a modest increase of +3.15%. The stock has traded in a wide range, from a 52-week low of $1.13 to a high of $2.66, suggesting high volatility. The recent price is around $1.64 per share. This is a classic high-beta stock, meaning it moves with more intensity than the broader market.

Compugen Ltd. does not pay a dividend, so the dividend yield is 0.00% and the payout ratio is N/A. For a company in the clinical-stage biotech space, reinvesting all capital into R&D is the defintely right move to accelerate pipeline development, not paying out cash.

Wall Street analysts are split, but the consensus on the stock valuation is currently a Hold rating. The average consensus price target is $4.00 per share, which implies a significant upside of over 140% from the current trading price. This gap between the current price and the target suggests analysts are pricing in a high probability of success for key pipeline assets like COM701 and the partnered rilvegostomig program. You can dive deeper into the institutional interest in the company by Exploring Compugen Ltd. (CGEN) Investor Profile: Who's Buying and Why?

Risk Factors

You're looking at Compugen Ltd. (CGEN), a clinical-stage biotech, and the core risk is simple: clinical trial outcomes. The company's entire valuation hinges on its pipeline, so any delay or failure hits the stock price hard. You need to be a realist here-this is the nature of the game in cancer immunotherapy (IO).

The financial reports for the third quarter of 2025, released in November, highlight this dependency clearly. While Compugen has a solid cash runway, its revenue has plummeted. The company reported just $1.9 million in revenue for Q3 2025, a massive drop from $17.1 million in the same period a year ago. That revenue drop, combined with ongoing R&D costs, pushed the net loss to approximately $6.98 million for the quarter. This is a crucial number to watch; it shows the immediate need for a significant milestone payment to offset the burn rate.

Here's a quick breakdown of the near-term risks you should map to your investment thesis:

• Clinical Trial Delays: The interim analysis for the MAIA ovarian trial of COM701 has been pushed back to Q1 2027. This delay, from the original H2 2026, signals potential challenges in patient enrollment or event accumulation, which slows the path to market and extends the cash burn.
• Program Safety and Efficacy: Earlier concerns about the safety profile of FC active anti-TIGIT antibodies led to high discontinuation rates in some trials. Though Compugen is focusing on its proprietary FC-reduced anti-TIGIT program, COM902, any negative data from competitors' TIGIT programs can cast a shadow over the entire class.
• Platform Validation: Compugen's computational target discovery platform, Unigen™, is the engine of its pipeline, but its clinical success is still unproven. The entire business model depends on this platform's ability to consistently identify novel, effective drug targets.

To be fair, Compugen is managing its financial risk well for a company at this stage. They ended Q3 2025 with about $86.1 million in cash, cash equivalents, and marketable securities, which the company expects to fund operations into the third quarter of 2027. That's a good buffer, plus they have no debt on the balance sheet. Still, that runway excludes any future cash inflows from partnerships, so a major milestone payment from AstraZeneca or Gilead is defintely needed to avoid future dilution.

The geopolitical situation also presents an external risk. Given Compugen Ltd. is headquartered in Israel, the evolving nature of the recent war in the region is a factor that could impact operations, though the company has not highlighted any direct material impact in its recent filings. You can read more about their long-term vision here: Mission Statement, Vision, & Core Values of Compugen Ltd. (CGEN).

The mitigation strategy is centered on its strong partnerships and differentiated clinical focus. The potential for over $1 billion in milestone payments and royalties from AstraZeneca and Gilead is the primary financial de-risking factor. Strategically, the company is betting on its FC-reduced anti-TIGIT antibody, COM902, as a best-in-class candidate to succeed where others have struggled.

Finance: Watch the quarterly cash burn rate against the stated runway, and track any news on the AstraZeneca and Gilead milestone triggers.

Growth Opportunities

You're looking for the path to value in Compugen Ltd. (CGEN), a clinical-stage biotech, and that path is all about pipeline execution and milestone payments, not near-term sales. Honestly, the growth story here is a binary bet on their differentiated drug candidates, particularly their approach to the TIGIT and PVRIG pathways.

The company's financial trajectory for the 2025 fiscal year still reflects its development-stage status. Analysts project full-year 2025 sales to be around $6.58 million, with an estimated non-GAAP Earnings Per Share (EPS) loss of about ($0.34). This projection is built on collaboration revenues, not product sales. For example, the third quarter of 2025 saw a net loss of approximately $6.98 million, which is typical for a company with its cash focused on clinical trials. The runway, though, is solid: cash is expected to fund operations into the third quarter of 2027.

Here's the quick math: The true near-term opportunity lies in their strategic collaborations, which validate their computational drug target discovery platform (a key competitive advantage). These partnerships with AstraZeneca and Gilead Sciences carry a potential for over $1 billion in milestone payments and tiered royalties on future sales. That's a huge potential catalyst.

Product Innovations and Strategic Partnerships

Compugen's pipeline focuses on two proprietary, clinical-stage assets that are the core growth drivers. The company's competitive edge comes from its pioneering work in computational drug target discovery, which helps them identify novel immune checkpoints (like PVRIG) that other companies missed.

• COM701: This is a potential first-in-class anti-PVRIG antibody. It's currently enrolling patients in the MAIA-ovarian platform trial for maintenance therapy in platinum-sensitive ovarian cancer. The interim analysis for this trial is a critical milestone, now estimated for the first quarter of 2027.
• COM902: This is an anti-TIGIT antibody, a target that has seen some trial failures from competitors. Compugen is focused on an FC reduced anti-TIGIT program, which is designed to potentially avoid the safety and efficacy issues that have plagued some FC active anti-TIGIT antibodies. This is a smart, differentiated approach.
• Rilvegostomig (AstraZeneca): This PD-1/TIGIT bispecific antibody, which uses Compugen's TIGIT component, is now in ten Phase 3 trials by AstraZeneca across lung, gastrointestinal, and endometrial cancers. This is a massive market expansion driven entirely by a partner.
• GS-0321 (Gilead Sciences): This anti-IL18BP antibody is advancing in Phase 1 development under Gilead's license.

The expansion of the rilvegostomig program by AstraZeneca to ten Phase 3 trials is a defintely strong signal of confidence in the underlying science. The clinical progress of these licensed assets is what will trigger those multi-million dollar milestone payments, providing non-dilutive funding for their wholly-owned programs. This dual-track strategy-advancing their own assets while collecting milestones from partners-is a pragmatic, risk-mitigating approach for a biotech of this size.

If you want to dig deeper into who is betting on this strategy, you should read Exploring Compugen Ltd. (CGEN) Investor Profile: Who's Buying and Why?