Bristol-Myers Squibb Co. is collaborating with Compugen Ltd. to evaluate the Israeli company's investigational cancer medicine in an early stage clinical trial.

Compugen stocks were up 12.31% following the news to $3.65 per share as of 9:41 a.m. ET on Oct. 11, 2018.

The study will evaluate the safety and tolerability of Compugen's COM701 with Bristol-Myers' blockbuster cancer drug Opdivo to treat solid tumors. Opdivo is designed to use the body's immune system to fight cancer, while COM701 is meant to target a protein pathway in the body to enhance the immune response against the tumor.

Compugen said it will sponsor the ongoing two-part phase 1 trial, which includes the evaluation of the combination in four tumor types, including non-small cell lung, ovarian, breast and endometrial cancer.

As part of the agreement, Bristol-Myers will also make a $12 million investment in Compugen by buying 2,424,243 shares of the company at $4.95 apiece. The investment is expected to close Oct. 12.

Compugen will retain ownership and commercial rights to COM701 while Bristol-Myers will have first negotiation rights over licensing the therapy in any territory, subject to conditions.

The collaboration is also designed to address potential future combinations.

The development of COM701, an antibody, was put on hold after the U.S. Food and Drug Administration had requested more information about the medicine in April before it could approve it for use in clinical trials. However, the U.S. government's clinical trials database shows a study of the medicine is actively recruiting participants across the country.