TEL AVIV, ISRAEL, February 9, 2006 - Compugen Ltd. (NASDAQ: CGEN) today reported financial results for the fourth quarter and year-end December 31, 2005.
"During 2005 we completed our evolution from a company providing life science software products and services on a fee basis, to a company that discovers and licenses potential therapeutic and diagnostic products to leading partners under milestone and revenue sharing agreements," stated Alex Kotzer, Compugen's President and CEO. "A primary objective for 2006 will be to substantially increase the number of product candidates moving forward under such agreements in both current and additional areas of focus. In view of our unique multidisciplinary research team, our deeper understandings of important biological phenomena at the molecular level, and our powerful discovery engines, we are confident of our ability to achieve our goals," Mr. Kotzer concluded.
Revenues for the year 2005 were $646,000, compared to $2.6 million for 2004. The net loss for 2005 was $14.0 million (including a non-cash charge of $391,000 for amortization of deferred compensation), or $0.50 per share, compared with a net loss of $13.7 million (including a non-cash charge of $755,000 for amortization of deferred compensation), or $0.50 per share, for 2004.
For the fourth quarter ended December 31, 2005, the Company had no revenues compared to $159,000 for the same quarter in 2004. The net loss for the fourth quarter of 2005 was $3.4 million (including a non-cash charge of $78,000 for amortization of deferred compensation), or $0.12 per share, compared with a net loss of $3.7 million (including a non-cash charge of $155,000 for amortization of deferred compensation), or $0.14 per share, for the corresponding quarter in 2004.
Previously, the Company presented governmental and other grants as part of Revenues and Grants, based on the single step income statement presentation approach. These amounts have been reclassified for all periods presented and are now shown as a deduction from research and development expenses. Governmental and other grants totaled $2.3 million for 2005 compared to $1.4 million for 2004. Governmental and other grants for the fourth quarter ended December 31, 2005 were $800,000, compared with $393,000 for the corresponding quarter in 2004.
2006 Key Objectives
2006 Projected Cash Uses and Balances
Compugen's most important financial consideration is to ensure the availability of the financial resources necessary for the Company to continue to develop until it attains positive cash flow from operations. Therefore, the key short-term financial measurements for Compugen relate to cash balances.
As of December 31, 2005, Compugen had $36.8 million in cash, cash equivalents, and marketable securities, including approximately $834,000 that was received on behalf of, and will be transferred to, research consortium partners. The Company's expectation is that its net cash usage for 2006 will be in the range of $11-13 million, and therefore expects to end 2006 with approximately $24 million.
Conference Call and Web Cast Information
Compugen will hold a conference call to discuss its fourth quarter and year-end results on February 9, 2006 at 10:00 a.m. EST. To access the conference call, please dial 1-866-860-9642 from the US or +972-3-918-0610 internationally. The call will also be available via live web cast through Compugen's Website, located at http://www.cgen.com/?Z3PR.
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 1-877-332-1104 from the US or +972-3-925-5901. The replay will be available until 12 noon EST on February 11, 2006.
Compugen is a biotechnology discovery company focused on therapeutic and diagnostic products. The Company's powerful predictive models and discovery engines enable the discovery of numerous potential therapeutics and diagnostic biomarkers. This capability results from the Company's pioneering and on-going incorporation of ideas and methods from mathematics, computer science and physics into biology, chemistry and medicine. To date, Compugen's discovery efforts have focused mainly on cancer, cardiovascular and immune-related diseases. Product development is pursued both in-house and through collaborative arrangements. The Company's primary business goal is to out-license therapeutic and diagnostic product candidates for commercialization by leading companies under milestone and revenue sharing agreements. Compugen has established an agricultural biotechnology affiliate - Evogene, and a small-molecule drug discovery affiliate - Keddem Bioscience. For additional information, please visit Compugen's corporate Website at http://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.
Chief Financial Officer