Compugen Ltd. (NASDAQ: CGEN) today reported financial results
for the fourth quarter and year-ending December 31, 2010.
Dr. Anat Cohen-Dayag, president and CEO, stated, “Compugen’s
long-term commitment to pioneering predictive drug discovery
continues to provide the basis for the development of unique and
powerful discovery capabilities in areas of high industry interest
and unmet medical needs. For example, during 2010 we announced the
development of three additional discovery platforms: the Protein
Family Members Discovery Platform, the Protein-Protein Interaction
Blockers Discovery Platform, and the Intracellular Drug Delivery
Discovery Platform. In addition, during the past few months, field
extension modules were added to our previously disclosed monoclonal
antibody (mAb) target discovery capability.”
Dr. Cohen-Dayag continued, “Antibody therapeutics comprise the
fastest growing drug field and are now yielding improved
therapeutics to treat many life-threatening and debilitating
diseases. Although significant progress has been made in recent
years, one of the key challenges in the mAb therapeutic field
remains the identification and validation of novel targets that are
overexpressed in a particular disease state or involved in the
modulation of the disease. Such targets allow the development of
antibody-based therapeutic molecules which can either specifically
destroy these cells - while sparing normal and healthy tissues - or
modulate the course of the disease.”
Dr. Cohen-Dayag continued, “With the recently added field
extension modules, Compugen’s mAb target discovery capability has
been expanded beyond the initial focus on various solid tumors such
as lung, ovarian, breast, colorectal and hematological cancers,
which had resulted in the discovery of a number of drug target
candidates for antibody-based therapy, including the previously
disclosed CGEN-928, a drug target candidate for treatment of
multiple myeloma, and CGEN-671, a drug target candidate for
treatment of epithelial cancers. The new capabilities are now
enabling the discovery of drug targets involved in drug response,
metastatic stage cancer, and additional cancers such as melanoma,
renal, liver, and pancreatic. Utilizing these new modules, we have
already added five additional product candidates to our Pipeline
Program, bringing the current total to more than 30 candidate
protein therapeutics, peptide therapeutics and targets for mAb
therapy at various stages of validation. With respect to the
overall Pipeline Program, we are extremely pleased by our progress
to date and look forward to disclosing additional information
regarding specific molecules during the coming months.”
As previously stated, since current revenues result primarily
from fees and milestones, our results are, and will continue to be,
subject to substantial fluctuations due to timing. Revenues for the
fourth quarter of 2010 were $190,000 compared with $25,000 for the
comparable period of 2009, and revenues for calendar 2010 were $1.1
million compared with $250,000 for calendar 2009.
The net loss for the most recent quarter was $2.0 million
(including a non-cash expense of $343,000 related to stock based
compensation), or $0.06 per share, compared with a net loss of $2.0
million (including a non-cash expense of $440,000 related to stock
based compensation), or $0.07 per share, for the corresponding
quarter of 2009. The net loss for calendar 2010 was $7.2 million
(including a non-cash expense of $2.1 million related to stock
based compensation), or $0.22 per share, compared with a net loss
of $3.8 million (including a non-cash expense of $1.5 million
related to stock based compensation), or $0.13 per share, for
2009.
The increase in net loss for calendar 2010 compared with
calendar 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 a gain of approximately $3.6 million, which is included in
“Other income” for 2009.
Research and development expenses for the fourth quarter of 2010
were $1.8 million, compared with $1.6 million for the fourth
quarter of 2009 and remained the Company’s largest expense.
Research and development expenses for calendar 2010 were $6.2
million compared with $6.0 million for 2009. These amounts are
before the deduction of governmental and other grants, which
totaled $205,000 for the fourth quarter of 2010, compared with
$247,000 for the corresponding quarter in 2009, and $1.0 million
for calendar 2010, compared with $944,000 for 2009.
At year-end 2010, the asset “Receivables from financing
arrangement” in the amount of $5.0 million (which was subsequently
collected by the Company in full in early 2011) and the liability
“Research and development funding arrangement” in the amount of
$4.0 million both relate to the research and development funding
arrangement signed in December of 2010. The $4.0 million liability
is an estimated value of the instrument for accounting purposes
resulting from the right of the investor to waive his right to
receive potential future payments in exchange for 833,334 Compugen
ordinary shares.
As of December 31, 2010, cash and cash related accounts totaled
$21.8 million compared with $23.4 million at December 31, 2009
(including for 2009 remaining receivables from the equity offering
completed in late December 2009). These amounts do not include
either the market value of Compugen’s holdings of Evogene shares at
each such year-end, or for 2010, the $5.0 million received in early
2011 from a research and development funding arrangement signed
prior to year-end 2010 referred to in the prior paragraph. For
calendar 2011, the Company anticipates an increase in gross cash
expenditures to approximately $10 million due primarily to
increased activities under its expanded Pipeline Program. Such
estimated gross cash expenditures will be offset by revenues and
other cash sources in calculating net cash flow for the year.
Conference Call and Webcast Information
Compugen will hold a conference call to discuss its fourth
quarter and year-end results on Tuesday, February 15, 2011 at 10:00
a.m. EST. To access the conference call, please dial 1-888-407-2553
from the US or 972-3-918-0610 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 1-888-295-2634 from the US or
972-3-925-5921 internationally. The replay will be available until
12 noon EST on February 18, 2011.
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) product candidate prediction
and selection utilizing a broad and continuously growing
infrastructure of proprietary scientific understandings and
predictive platforms, algorithms, machine learning systems and
other computational biology tools to address important unmet
therapeutic and diagnostic needs – both for Compugen and its
partners. Compugen's growing number of collaborations covering the
further development and commercialization of Compugen-discovered
product candidates provides Compugen with potential milestone
payments and royalties on product sales or other forms of revenue
sharing. These collaborations may be entered into before product
candidate discovery is undertaken pursuant to "discovery on demand"
type arrangements, or with respect to existing product candidates,
collaborations can be initiated prior to or at the proof of concept
stage, or after additional preclinical activities have been
undertaken by Compugen. In 2002, Compugen established an affiliate,
Evogene Ltd. (www.evogene.com) (TASE: EVGN.TA), 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 EndedDecember
31,
Year Ended December
31,
2010 2009
2010 2009 Revenues
190 25 1,115 250 Cost of revenues 26 - 224 -
Gross profit
164 25 891 250 Research and
development expenses 1,757 1,625 6,237 5,995 Less:
governmental and other grants (205) (247) (1,010) (944)
Research and development expenses, net 1,552 1,378 5,227 5,051
Marketing and business development expenses 98 21 633 681
General and administrative expenses 814 577 2,909 2,147
Total operating expenses *
2,464 1,976 8,769 7,879
Operating loss (2,300) (1,951) (7,878)
(7,629) Financing income (loss), net (111) (152) 241
65 Other income 397 64 434 3,721
Net loss from
continuing operations (2,014) (2,039)
(7,203) (3,843) Gain (loss) from
discontinued operations - (2) - 12
Net loss (2,014) (2,041) (7,203)
(3,831) Basic and diluted loss per ordinary share
from continuing operations (0.06) (0.07) (0.22) (0.13) Basic
and diluted loss per ordinary share from discontinued operations -
- - - Basic and diluted net loss per ordinary share (0.06)
(0.07) (0.22) (0.13) Weighted average number of ordinary
shares outstanding 33,536,120 28,852,335 33,284,017 28,608,317
* Includes stock based compensation
COMPUGEN LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
DATA
(U.S. dollars, in thousands)
December
31,2010
December
31,2009
ASSETS Current assets Cash, cash
equivalents and short-term bank deposits 21,824 15,639 Restricted
cash 684 161 Trade receivables 21 - Accounts receivables and
prepaid expenses 548 720 Receivables from financing arrangements
5,000 7,790
Total current assets 28,077 24,310
Long-term investments Investment in Evogene 6,227
3,898 Long-term prepaid expenses 64 18 Severance pay fund 1,510
1,224
Total long-term investments 7,801 5,140
Property and equipment, net 580 735
Total assets 36,458 30,185
LIABILITIES AND SHAREHOLDERS’ EQUITY Current
liabilities Accounts payable and accrued expenses 2,441 1,357
Deferred revenues - 113
Total current liabilities
2,441 1,470 Long-term liabilities
Research and development funding arrangement 4,037 - Accrued
severance pay 1,695 1,317
Total long-term liabilities
5,732 1,317 Total shareholders’ equity
28,285 27,398 Total liabilities and shareholders’
equity 36,458 30,185
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