Tel Aviv-based Compugen, a drug discovery company focused on therapeutic proteins and monoclonal antibodies to address unmet needs in immunology and oncology, is getting $10 million at the start of a major collaboration and license agreement with Bayer HealthCare.

Their joint preclinical research program aims to research, develop and commercialize antibody-based therapeutics for cancer immunotherapy against two novel “immune checkpoint regulators” discovered by Compugen.

Immunotherapy aims to stimulate the body’s own immune cells to better fight cancerous tumors. Compugen researchers are developing specific therapeutic antibodies that block the immunosuppressive function of checkpoint targets they discovered, and to reactivate the natural anti-tumor immune response.

Compugen President and CEO Anat Cohen-Dayag noted at a press conference that her most critical decision as CEO since 2010 was selecting which of many potential areas on which to focus the company’s predictive technology. Based on her experience as a member of the research team since 2002, and later as head of R&D, she chose immunology and oncology.

“These appear to have been excellent strategic decisions,” she said. “We were also fortunate that during the period that these decisions were made, the specific area of immune human checkpoints for cancer immunotherapy has been further recognized by the medical community and the industry for their potential to revolutionize treatment. So we are very excited to initiate this collaboration with Bayer, a leading global life science company.”

Bayer will control further development and hold worldwide commercialization rights for potential cancer therapeutics. Compugen is eligible to receive more than $500 million in potential milestone payments for both programs, not including up to $30 million associated with preclinical activities as well as royalties on global net sales of any resulting products.

Compugen Chairman of the Board Martin Gerstel noted that more than a decade of research was devoted to the company’s unique approach, which initially was met with skepticism by most big pharma executives. Since then, the company has signed collaboration deals with Pfizer and Merck Serono as well as Bayer.

Gerstel also chairs Rehovot-based Evogene, a novel plant genomics company that in 2011 began a joint research collaboration with Bayer CropScience AG, a Bayer subsidiary, to improve wheat through the application of advanced breeding techniques.