Compugen Ltd. (NASDAQ: CGEN) today reported financial results
for the third quarter ending September 30, 2010.
Dr. Anat Cohen-Dayag, Compugen’s president and CEO stated, “Our
business model is to utilize our systematic and broadly applicable
predictive discovery capabilities to provide product candidates to
the drug and diagnostic industries under licensing and other
commercialization arrangements. An extremely important validation
of this model, and of our prediction and selection capabilities,
has been the high level of interest shown during the past two years
by potential partners in collaborations covering Compugen product
candidates at a significantly earlier stage of development than
such companies typically would require.”
Dr. Cohen-Dayag continued, “With this scientific and industry
validation in hand, substantial efforts during 2010 have been
directed to planning and initiating a program to substantially
increase the value of our discoveries by advancing selected
molecules beyond the animal disease model proof of concept,
something we have not previously done. We are currently selecting
the first set of molecules for this new program from those that
have already achieved this stage; additional candidates will be
selected from our validation pipeline and future discovery runs.
Included in the molecules selected to date is CGEN-15001, our
recently announced product candidate for autoimmune diseases, which
has attracted very significant industry interest and continues to
show excellent results in on-going studies.”
“It is anticipated that the candidates selected for these
preclinical activities will be primarily protein, peptide and
monoclonal antibody therapeutics, mainly for use in the fields of
oncology and immunology. As part of our preparation during 2010 for
this expanded development effort, we selected approximately 20
novel molecules to enter our validation pipeline, in addition to
the eight molecules that have already successfully completed animal
disease model or similar therapeutic proof of concept validation
studies,” said Dr. Cohen-Dayag.
“This new program is an important addition as we broaden and
accelerate the implementation of our business model. A further
component of this effort is our ongoing, but previously
undisclosed, collaboration with Flamel Technologies of Lyon, France
to develop therapeutic products to the Investigational New Drug
(IND) stage. The products to be developed under this agreement will
combine selected Compugen discovered molecules with Flamel’s
delivery technology, and will be jointly owned by the two
companies. Also, with respect to other commercialization
activities, we are currently in discussions with various companies
regarding both licensing of certain product candidates and
‘discovery on demand’ collaborations,” Dr. Cohen-Dayag
concluded.
Martin Gerstel, Compugen’s chairman, added, “Successfully
advancing product candidates 12-18 months past animal proof of
concept can increase the value of such molecules by an order of
magnitude or more, particularly in our focus areas of oncology and
immunology. Therefore, with our proven discovery capabilities and
knowledge of industry needs, this is an obvious next step for us to
take in order to maximize the value of certain of our current and
future product candidate discoveries for both the short-term and
long-term financial benefit of our shareholders.”
As previously stated, since current revenues result primarily
from fees and milestones, our quarterly results are, and will
continue to be, subject to substantial fluctuations due to timing.
No revenues were recorded for the third quarter of 2010 or the
third quarter of 2009, with revenues for the nine months ending
September 30, 2010 of $925,000, compared with $225,000 for the
first nine months of 2009.
The net loss for the most recent quarter was $1.6 million
(including a non-cash expense of $435,000 related to stock based
compensation), or $0.05 per share, compared with a net loss of $1.9
million (including a non-cash expense of $460,000 related to stock
based compensation), or $0.06 per share, for the corresponding
quarter of 2009. The net loss for the first nine months of 2010 was
$5.2 million (including a non-cash expense of $1.8 million related
to stock based compensation), or $0.16 per share, compared with a
net loss of $1.8 million (including a non-cash expense of $1.1
million related to stock based compensation), or $0.06 per share,
for the same period in 2009.
The increase in net loss for the first nine months of 2010
compared with the same period in 2009 is due to the sale by
Compugen during the second quarter of 2009 of a portion of its
holdings of Evogene Ltd. shares for approximately $3.6 million,
which is included in “Other income” for the first nine months of
2009.
Research and development expenses for the third quarter of 2010
were $1.5 million compared with $1.4 million for the third quarter
of 2009 and remained the Company’s largest expense. Research and
development expenses for the first nine months of 2010 were $4.5
million compared with $4.4 million for the comparable period in
2009. These amounts are before the deduction of governmental and
other grants, which totaled for the third quarter ended September
30, 2010, $281,000, compared with $180,000 for the corresponding
quarter in 2009, and $805,000 for the first nine months of 2010,
compared with $697,000 for the comparable period in 2009.
As of September 30, 2010, Compugen had $21.4 million in cash and
cash equivalents and short term deposits not including its holding
of 1.15 million Evogene Ltd. shares, which currently have a market
value of approximately $6 million. Net cash usage for 2010 is
currently projected to be approximately $5 million, which is
substantially less than initially projected.
Conference Call and Webcast Information
Compugen will hold a conference call to discuss its third
quarter results today, Tuesday, October 26, 2010, at 10:00 a.m.
EDT. To access the conference call, please dial 1-866-860-9642 from
the US or +972-3-918-0609 internationally. The call will also be
available via live webcast through Compugen’s website, located at
the following link.
A replay of the conference call will be available approximately
two hours after the completion of the live conference call. To
access the replay, please dial 1-888-782-4291 from the US or
+972-3-925-5901 internationally. The replay will be available until
12 noon EDT on October 29, 2010.
(Tables to follow)
About Compugen
Compugen is a leading drug and diagnostic product candidate
discovery company. Unlike traditional high throughput trial and
error experimental based discovery, Compugen’s discovery efforts
are based on in silico (by computer) prediction and selection
utilizing a growing number of field focused proprietary discovery
platforms accurately modeling biological processes at the molecular
level. Compugen’s growing number of collaborations with major
pharmaceutical and diagnostic companies cover both (i) the
licensing of product candidates discovered by Compugen during the
validation of its discovery platforms and in its internal research,
and (ii) “discovery on demand” agreements where existing or new
Compugen discovery platforms are utilized to predict and select
product candidates as required by a partner. In 2002, Compugen
established an affiliate, Evogene
Ltd. (www.evogene.com) (TASE: EVGN), to utilize certain
of the Company’s in silico predictive discovery
capabilities in agricultural biotechnology. For additional
information, please visit Compugen's corporate website
at www.cgen.com.
This press release may contain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements include words such as “may”, “expects”,
“anticipates”, “believes”, and “intends”, and describe opinions
about future events. These forward-looking statements involve known
and unknown risks and uncertainties that may cause the actual
results, performance or achievements of Compugen to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Some of
these risks are: changes in relationships with collaborators; the
impact of competitive products and technological changes; risks
relating to the development of new products; and the ability to
implement technological improvements. These and other factors are
identified and more fully explained under the heading "Risk
Factors" in Compugen's annual reports filed with the Securities and
Exchange Commission.
COMPUGEN LTD. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(U.S. dollars in thousands, except for
share and per-share amounts)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2010Unaudited
2009Unaudited
2010Unaudited
2009Unaudited
Revenues - - 925 225 Cost
of revenues
- - 198
- Research and development
expenses 1,506 1,447 4,480 4,370 Less: governmental and other
grants (281 ) (180 ) (805 ) (697 ) Research and development
expenses, net 1,225 1,267 3,675 3,673 Sales and marketing expenses
168 175 535 660 General and administrative expenses 530 582 2,095
1,570
Total operating expenses *
1,923 2,024 6,305 5,903
Operating loss (1,923 ) (2,024 )
(5,578 ) (5,678 ) Financing income, net
312 181 352 217 Other income (loss) 37 (24 ) 37 3,657
Net loss
from continuing operations (1,574 ) (1,867
) (5,189 ) (1,804 ) Income
(loss) from discontinued operations - 14 -
14 Net loss (1,574 ) (1,853
) (5,189 ) (1,790 ) Basic and
diluted loss per ordinary share from continuing operations (0.05 )
(0.06 ) (0.16 ) (0.06 ) Basic and diluted loss per ordinary share
from discontinued operations - - - - Basic and diluted net loss per
ordinary share (0.05 ) (0.06 ) (0.16 ) (0.06 ) Weighted average
number of ordinary shares outstanding 33,310,959 28,552,927
33,199,059 28,526,084
* Includes stock based
compensation
COMPUGEN LTD. CONDENSED CONSOLIDATED BALANCE
SHEETS DATA
(U.S. dollars, in thousands)
September
30,2010Unaudited
December
31,2009Audited
ASSETS Current assets Cash, cash
equivalents, short term deposits and marketable securities 21,437
15,639 Cash held in favor of other consortium partners 155 161
Receivables and prepaid expenses 690 720 Receivables on account of
shares - 7,790
Total current assets 22,282
24,310 Long-term investments Investment in
Evogene 5,350 3,898 Long-term lease deposits 16 18 Severance pay
fund 1,392 1,224
Total long-term investments 6,758
5,140 Property and equipment, net 626
735 Total assets 29,666 30,185
LIABILITIES AND SHAREHOLDERS’ EQUITY Current
liabilities Trade payables 247 199 Other accounts payable and
accrued expenses 896 1,158 Deferred revenues 69 113
Total
current liabilities 1,212 1,470 Accrued
severance pay 1,596 1,317 Total
shareholders’ equity 26,858 27,398 Total
liabilities and shareholders’ equity 29,666
30,185
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