The partners will jointly carry out preclinical research, and Bayer will have full control over further development and commercialisation of the resulting products.
Compugen will receive an upfront payment of $10m, up to $500m in potential milestone payments, and mid to high single-digit royalties on global net sales.
The announcement of the partnership caused the value of Compugen’s shares to rise by 45%.
The biotech company has discovered two immune checkpoint regulators that potentially play a key role in a tumour’s suppression of the host immune response.
Its researchers are developing specific therapeutic antibodies to block the action of these targets, reactivating the patient’s immune response to the tumour.
Bayer executive Andreas Busch commented: “Antibody-based immunotherapies are promising approaches in oncology which can stimulate the body’s own immune cells to fight cancer cells.”
The biopharmaceutical approach to cancer treatment is increasingly a focus for partnerships between biotech companies with unique drug development platforms and pharma corporations with the capability to validate, manufacture and sell new therapies on a global basis.