Compugen Q2 2025 Earnings Preview: Is the Biotech's AI-Driven Pipeline Justifying the Downward Revenue Trend?

Compugen (NASDAQ: CGEN) stands at a pivotal juncture as it prepares to release its Q2 2025 earnings on August 6, 2025. The company's financial performance has shown a mixed bag of results, with Q1 2025 revenue declining to $2.3 million from $2.6 million in the same period in 2024. This follows a sharp drop from $17.47 million in Q4 2024, underscoring the volatility of its revenue model, which is heavily reliant on milestone payments from partnerships. However, Compugen's recent clinical and strategic advancements—particularly in immuno-oncology and AI-driven drug discovery—raise critical questions: Can these innovations offset the financial headwinds? And will they catalyze investor confidence ahead of the earnings release?

Revenue Volatility and the Milestone-Driven Model

Compugen's revenue trends highlight the challenges of a biotech firm dependent on partnership milestones. While Q1 2025 revenue fell short of the $17.47 million seen in Q4 2024, the company's cash runway extends into 2027, providing stability for ongoing operations. Analysts project Q2 2025 revenue at $3.95 million, a modest increase from Q1 but still far below the $17.67 million reported in Q3 2024. This volatility is inherent to Compugen's business model, which derives income from upfront payments, milestone achievements, and future royalties from partners like AstraZeneca and Gilead.

The stock has mirrored this uncertainty, with a 9.2% decline from $1.45 in May to $1.39 in July 2025. Despite a “Buy” consensus from analysts and a median price target of $4.00, the 52-week range of $1.13–$2.66 reflects investor skepticism about near-term profitability. The key question is whether Compugen's pipeline can generate the kind of data that justifies such a high price target.

Clinical Progress: A Glimmer of Hope in Immuno-Oncology

Compugen's therapeutic pipeline is its most compelling asset. The initiation of the MAIA-ovarian global adaptive platform trial for COM701 in July 2025 marks a significant milestone. This trial evaluates COM701, a potential first-in-class anti-PVRIG antibody, as maintenance monotherapy in relapsed platinum-sensitive ovarian cancer. Early data from Phase 1 trials showed durable responses, including a patient with an 18-month response to COM701 monotherapy. An interim analysis of this trial is expected in late 2026, which could inform a registration path for COM701.

Simultaneously, the Phase 1 trial for GS-0321 (formerly COM503), a first-in-class anti-IL-18 binding protein antibody licensed to Gilead, is underway. This trial, which began in January 2025, aims to assess safety and efficacy in advanced solid tumors. Compugen's collaboration with Gilead includes $60 million in upfront payments and $30 million in milestone fees, with potential future milestones totaling $758 million.

Strategic Partnerships: AstraZeneca's Expansion and the TIGIT Opportunity

Compugen's partnership with AstraZeneca remains a cornerstone of its strategy. AstraZeneca's rilvegostomig program, a PD-1/TIGIT bispecific antibody derived from Compugen's COM902, has expanded to ten Phase 3 trials across lung, gastrointestinal, and endometrial cancers. Early data from these trials will be presented at ASCO 2025, including results from combinations with Dato-DXd in non-small-cell lung cancer and chemotherapy in biliary tract cancer.

If rilvegostomig demonstrates superiority over existing PD(L)-1 inhibitors, Compugen could benefit from mid-single-digit royalties on future sales and additional milestone payments. This partnership alone could transform Compugen's revenue profile, even if its own clinical candidates take longer to mature.

Financial Resilience and Leadership Transition

Compugen's $103.7 million in cash as of March 2025 provides a buffer to fund operations through 2027, reducing the need for near-term capital raises. This financial stability is critical for advancing its AI/ML-powered Unigen™ platform, which accelerates the discovery of novel immuno-oncology targets.

The leadership transition in September 2025—Anat Cohen-Dayag moving to Executive Chair and Dr. Eran Ophir becoming CEO—signals a strategic shift toward operational execution. Investors will be watching whether this transition strengthens governance and accelerates pipeline progress.

Investor Sentiment: Balancing Optimism and Caution

Despite the clinical and partnership progress, Compugen's stock faces headwinds. The recent Q1 loss of $0.08 per share (missing estimates) and a negative P/E ratio of 60.3x highlight the company's unprofitable status. However, the 6.52% decline in short interest and a healthy short interest ratio of 5.1 suggest improving sentiment.

Analysts remain bullish, with a 158% upside to the $4.00 median target. Yet, the biotech sector's volatility—driven by macroeconomic factors like rising interest rates—means Compugen's stock could remain range-bound until key data readouts.

Conclusion: A High-Risk, High-Reward Play

Compugen's Q2 2025 earnings will be a critical test of its ability to balance financial challenges with clinical progress. While the revenue decline is concerning, the expansion of the AstraZeneca partnership, the MAIA-ovarian trial, and the Gilead collaboration offer long-term upside. Investors should focus on two key metrics:
1. Clinical Data: Positive interim results from the COM701 trial or rilvegostomig's ASCO 2025 presentation could drive a re-rating.
2. Partnership Milestones: Additional payments from AstraZeneca or Gilead would signal confidence in Compugen's platform.

For risk-tolerant investors, Compugen represents a speculative bet on its AI-driven pipeline and strategic alliances. However, those prioritizing near-term stability may prefer to wait for clearer data before committing. As the August 6 earnings call approaches, all eyes will be on whether Compugen can convince the market that its science is worth the wait.