Compugen Ltd. (CGEN): 5 FORCES Analysis [Nov-2025 Updated]

You're looking to cut through the noise on Compugen Ltd., and honestly, the late 2025 picture is tight: their novel AI-driven pipeline is promising, but the competitive reality is brutal. We need to see if their proprietary platform can withstand the intense rivalry in immuno-oncology and the massive leverage held by Big Pharma customers, especially when Q3 revenue hit just $1.9 million against a $6.98 million net loss. This Five Forces breakdown maps exactly where the pressure points are-from supplier costs in AI talent to the high threat of established substitutes like PD-1 inhibitors-giving you the clear, unvarnished view you need to assess their near-term risk profile. Find the full analysis below.

Compugen Ltd. (CGEN) - Porter's Five Forces: Bargaining power of suppliers

You're running a clinical-stage biotech like Compugen Ltd., and the suppliers you rely on-from CROs to specialized talent-can really dictate your pace and burn rate. Honestly, in this environment, the power dynamic shifts significantly depending on what you're buying.

Reliance on specialized Clinical Research Organizations (CROs) for trials

For Compugen Ltd., the bargaining power of CROs is definitely elevated because your key programs, like the MAIA-ovarian platform trial, are running across multiple geographies, including the U.S., Israel, and France. Managing global, complex trials requires deep, specialized expertise that only top-tier CROs can reliably provide. While the overall global Biomedical CRO market is projected to hit about $30.6 billion in 2025, this doesn't mean every CRO has equal leverage; sponsors like Compugen Ltd. are seeking integrated partners, which concentrates power among the best players. Still, there are some headwinds for CROs; for instance, R&D spending growth from Big Pharma is slowing to an expected 2.2% in 2025 for 13 major players, which might slightly ease demand pressure on CROs in general, but specialized biotech needs remain acute.

Here's a quick look at the broader CRO landscape that informs your contracting strategy:

Your ability to negotiate terms for your ongoing Phase 1 trial of GS-0321 and the COM701 trial is heavily influenced by the CRO's specialized capacity, not just their price.

High cost and scarcity of top-tier AI/ML computational biology talent

Compugen Ltd. is a pioneer in predictive computational target discovery, powered by its Unigen AI/ML platform. This means your internal reliance on highly specialized talent-the people who build, maintain, and interpret those models-is very high. The market for top-tier computational biology and AI/ML experts remains fiercely competitive, driving up salary and retention costs significantly. While we don't have Compugen Ltd.'s specific salary data, the general trend suggests this talent commands a premium, which contributes to operating expenses. For context, Compugen Ltd.'s estimated cash burn was roughly $18.8 million during the first half of 2025, and retaining this core scientific engine is a non-negotiable cost center.

The power of these specialized talent suppliers is high because:

• Unigen platform success depends on this expertise.
• Scarcity drives compensation demands upward.
• High switching costs for internal knowledge transfer.

Low power from commoditized lab consumables and reagents

When it comes to the basic inputs for your lab work-the standard reagents, solvents, and consumables-the supplier power here is low. This is standard for the industry; these items are largely commoditized. You can switch suppliers for basic pipette tips or standard buffers without major disruption to your science or trial timelines. Your leverage comes from volume purchasing, though as a smaller clinical-stage company, your aggregate spend might not move the needle for the largest distributors. Still, the threat of substitution is high for these inputs.

Manufacturing is outsourced, limiting leverage from raw material suppliers

Like most biotechs at your stage, Compugen Ltd. outsources the actual manufacturing of drug substance and drug product, meaning you don't directly manage the raw material suppliers for active pharmaceutical ingredients (APIs) or excipients. This pushes the supplier bargaining power upstream to your Contract Development and Manufacturing Organizations (CDMOs). Your leverage over the raw material suppliers is therefore indirect and limited; it's the CDMO that negotiates the bulk purchase. The key risk here is that a disruption at a critical raw material supplier could impact your CDMO's ability to deliver, giving the CDMO leverage over you, even if you have low direct leverage over the initial material provider. Finance: draft a sensitivity analysis on CDMO lead times versus cash runway by next Wednesday.

Compugen Ltd. (CGEN) - Porter's Five Forces: Bargaining power of customers

You're looking at Compugen Ltd. (CGEN) through the lens of customer power, and honestly, the picture is dominated by a few very large players. In the biopharma world, when you are a clinical-stage company like Compugen, your 'customers' are the big pharmaceutical partners who license your assets. For Compugen, this means the bargaining power held by Big Pharma partners like AstraZeneca and Gilead is definitely very high.

This power stems directly from the structure of Compugen's business model. Compugen's revenue is heavily dependent on partner-driven milestone payments, not steady product sales yet. This dependency gives the partners significant leverage in negotiations over terms, timelines, and future development rights. Think about the scale: Compugen is essentially selling its discovery platform's output to these giants.

The financial reality of late 2025 underscores this dynamic. For the third quarter of 2025, Compugen reported revenue of just $1.9 million. To put that in perspective, that was a sharp drop from the $17.1 million reported in the third quarter of 2024. When revenue is that low, it signals that the timing and achievement of those partner milestones-which are controlled by the partners' progress and decisions-are the primary revenue drivers. Low, lumpy revenue definitely increases customer leverage; they know you need that next payment to keep the lights on.

We can map out the key customer relationships to see the concentration of this power. These partnerships represent the near-term financial lifeblood for Compugen, which, as of September 30, 2025, had a cash balance of approximately $86.1 million, expected to fund operations into Q3 2027.

The potential for over $1 billion in combined milestone payments and royalties shows you just how much of Compugen's future value is tied up in these partners successfully advancing the licensed assets. If a partner like AstraZeneca decides to slow down the expansion of the rilvegostomig program, which is in Phase 3 development across ten trials, it directly impacts Compugen's potential cash inflow and valuation narrative.

Now, looking beyond the direct partners to the ultimate end-users-payers and hospitals-their power is exerted indirectly but powerfully on the partners, which then filters down to Compugen. Payers and hospitals demand compelling efficacy data to justify novel drug pricing. This means that Compugen's partners are under pressure to deliver best-in-class clinical results for assets like COM701 or GS-0321 to command premium pricing. If the data isn't strong enough to support a high price point, the partner has less incentive to push hard or pay large commercial milestones.

Here are the key leverage points for customers/partners:

• Dependence on milestone payments for revenue.
• Large deal sizes mean high stakes for partners.
• Partners control clinical trial progression and timelines.
• Need for compelling data to support future pricing.

The low Q3 2025 revenue of $1.9 million compared to $17.1 million in Q3 2024 is a clear signal that the customer/partner payment schedule dictates the short-term financial reality for Compugen. Finance: draft 13-week cash view by Friday.

Compugen Ltd. (CGEN) - Porter's Five Forces: Competitive rivalry

You're looking at a sector where the noise level is deafening, and the capital burn is real. The competitive rivalry in the immuno-oncology (IO) space for Compugen Ltd. is, frankly, extremely intense.

The financial pressure is evident in the recent figures. For the third quarter of 2025, Compugen Ltd. reported a net loss of approximately $6.98 million, translating to a loss of $0.07 per basic and diluted share. This contrasts sharply with the net profit of approximately $1.28 million seen in the third quarter of 2024. That shift reflects the high R&D pressure you see in this industry. Revenue for Q3 2025 was only about $1.9 million, a significant drop from the $17.1 million reported in the comparable period of 2024. Research and Development expenses for Q3 2025 were approximately $5.8 million.

Differentiation isn't just a buzzword here; it's survival. Compugen Ltd. is leaning heavily on its potentially first-in-class anti-PVRIG antibody, COM701, which is a novel target computationally discovered by the company. Still, the TIGIT space presents direct, immediate competition.

Here's a quick look at where Compugen Ltd.'s proprietary assets stand against key rivals in the TIGIT arena as of late 2025:

The advancement of rival TIGIT assets, particularly from Arcus Biosciences partnered with Gilead Sciences, increases the market risk for Compugen Ltd. Arcus Biosciences reported Q3 2025 R&D expenses of $141 million, showing a much higher level of investment pressure in the immediate competitive set. Compugen Ltd.'s strategy must focus on proving the superiority of its assets, especially COM701, to justify the ongoing R&D spend.

The competitive landscape involves several key players and their pipeline progression:

• Roche discontinued its anti-TIGIT MAb, tiragolumab, after clinical study failures.
• Arcus/Gilead's domvanalimab is one of just two key remaining anti-TIGITs in development.
• Arcus/Gilead's Edge-Gastric study reported mOS of 26.7 months for the triplet in first-line gastroesophageal adenocarcinomas.
• Compugen Ltd. has potential over $1 billion in potential milestones and royalties from its partnerships with AstraZeneca and Gilead.
• Compugen Ltd. expects its cash balance of approximately $86.1 million as of September 30, 2025, to fund operations into the third quarter of 2027.

Compugen Ltd. (CGEN) - Porter's Five Forces: Threat of substitutes

The threat of substitutes for Compugen Ltd. (CGEN)'s pipeline assets, particularly those targeting immune checkpoints, is substantial, coming from both incumbent therapies and next-generation modalities. You see this pressure clearly when you map the existing market scale against the potential for disruption.

High threat from established, multi-billion dollar PD-1/PD-L1 inhibitors.

The current standard of care in immuno-oncology represents a massive, entrenched substitute. These established checkpoint inhibitors, including agents like pembrolizumab and nivolumab, anchor first-line protocols across major indications like non-small cell lung cancer, which alone generated 42.53% of PD-1/PD-L1 inhibitor volume in 2024. The sheer size of this market underscores the hurdle for any new entrant or next-generation approach. The global PD-1 & PD-L1 inhibitors market size touched USD 62.15 billion in 2025, with projections reaching USD 53.91 billion in 2025 by another estimate. The industry is forecast to grow to USD 120.44 billion by 2030.

Rilvegostomig's goal to replace PD-1/PD-L1 shows the high substitution pressure.

Compugen Ltd. (CGEN)'s key partnership asset, rilvegostomig, a PD-1/TIGIT bispecific antibody licensed to AstraZeneca, is designed to compete directly within this space, aiming for differentiation. The fact that rilvegostomig is already in Phase 3 development for indications like non-small-cell lung cancer and gastrointestinal cancers signals the industry's belief that next-generation checkpoint combinations can displace current monotherapies. AstraZeneca presented promising results from two Phase 2 trials (NSCLC and bladder cancer) at ESMO 2025. The differentiation hinges on the Fc-reduced format, which is posited to preserve beneficial T cells, potentially offering an improved efficacy and safety profile over Fc-active anti-TIGITs.

To put the competitive landscape into perspective, here is a look at the scale of the primary substitute markets as of 2025:

The data shows that while chemotherapy still represents a multi-billion dollar market, the growth rates for novel modalities like Cell and Gene Therapy are significantly higher, pointing to future substitution risk.

Cheaper, traditional treatments like chemotherapy remain viable options.

Despite the rise of targeted immunotherapies, conventional chemotherapy remains a major substitute, especially given cost pressures. The global Chemotherapy Drugs market size is projected to be around USD 10.24 billion in 2025 or US$ 56.1 Bn in 2025. This segment accounts for approximately 21% share of the global oncology drugs market. For Compugen Ltd. (CGEN), which is still clinical-stage and not yet generating product revenue, the cost-effectiveness of established chemotherapy regimens in certain patient populations or geographies acts as a constant pricing and adoption constraint for its pipeline candidates.

• North America held an estimated 40% share of the 2025 chemotherapy drugs market.
• The Alkylating Agents drug class is expected to generate a 28% share in 2025.
• Lung cancer is anticipated to account for 13% of the market share in 2025.

Emerging, novel modalities like cell and gene therapies are defintely long-term substitutes.

Looking further out, cell and gene therapies represent a high-growth, high-disruption substitute, particularly for hard-to-treat solid tumors where Compugen Ltd. (CGEN) focuses. This market expanded from USD 16.65 billion in 2024 to USD 19.47 billion in 2025, with projections to reach USD 71.38 billion by 2032. The cell therapy segment, which includes CAR T approaches, accounted for 86.76% of total therapy revenue in 2024. The FDA expects 10 to 20 new therapies to be approved annually by 2025, showing strong institutional support for this class. While these are long-term threats, their high projected growth rates suggest they will capture significant future market share from current small molecule and antibody-based approaches.

For context on Compugen Ltd. (CGEN)'s current operational standing against these market dynamics, as of September 30, 2025, the company reported approximately $86.1 million in cash, cash equivalents, short-term bank deposits, and investment in marketable securities, with a refined cash runway expected to fund operations into Q3 2027.

Compugen Ltd. (CGEN) - Porter's Five Forces: Threat of new entrants

The threat of new entrants for Compugen Ltd. in the clinical-stage immuno-oncology (IO) space is generally low. Entering this arena requires overcoming substantial, upfront financial commitments that act as a defintely high barrier to entry for newcomers.

Consider the operational burn rate. Compugen Ltd.'s Research & Development expenses for the third quarter of 2025 were approximately $5.8 million. This level of sustained investment is necessary just to keep ongoing clinical programs moving, let alone discover and validate new targets. Furthermore, as of September 30, 2025, Compugen Ltd. held approximately $86.1 million in cash, cash equivalents, short-term bank deposits, and investment in marketable securities. Even with this balance, the company projects its cash runway to fund operating plans only into the third quarter of 2027, assuming no additional cash inflows. New entrants face the immediate need to secure similar, if not larger, financing rounds to reach even the mid-stage clinical validation Compugen Ltd. is currently pursuing.

The regulatory environment and the inherent risk in clinical timelines further deter new entrants. For instance, Compugen Ltd.'s lead proprietary candidate, COM701, has an interim analysis expected in the first quarter of 2027 for its MAIA-ovarian platform trial. That is a multi-year, high-risk timeline before even reaching the next major inflection point, which requires deep pockets and regulatory navigation expertise.

Here's a quick look at the scale of investment and commitment required to operate at Compugen Ltd.'s current stage:

The proprietary Unigen™ AI/ML discovery platform represents a significant, non-replicable barrier. Compugen Ltd. has been actively enhancing this platform, for example, by integrating Ultima Genomics' single-cell sequencing technology in early 2025 to gain deeper insights into tumor biology. This platform is described as a flexible-loop system that integrates multi-omics and spatial omics data to predict novel drug targets. Building such a sophisticated, data-rich, and continuously enriched computational engine takes years and massive data aggregation, which is not easily duplicated.

Finally, established intellectual property shields key assets. Compugen Ltd. successfully maintained the broad claims of its European patent covering anti-PVRIG antibodies in July 2023 against opposition from GSK and a third party. Furthermore, a Japanese patent covering the triple combination use of anti-PVRIG, TIGIT, and PD-1 antibodies is expected to expire no earlier than June 2038. This established, defended IP portfolio around novel targets like PVRIG creates a clear moat against new entrants trying to pursue similar mechanisms.

• Proprietary Unigen™ platform integrates multi-omics and spatial omics data.
• Anti-PVRIG patent claims upheld against GSK opposition in July 2023.
• Cash reserves projected to fund operations into Q3 2027.