TEL AVIV, ISRAEL, April 27, 2006 - Compugen Ltd. (NASDAQ: CGEN) today reported financial results for the first quarter ended March 31, 2006.
Alex Kotzer, President and CEO, stated, "During the past quarter we concluded our initial biological assessment for more than seventy potential therapeutic proteins and peptides. Twelve of these Compugen discovered candidates with demonstrated functional biological activities have now been selected and prioritized for further assessment. The selected candidates, all from different gene families, are mainly related to the oncology and immunology therapeutic areas. In addition, as of the end of the quarter, our partners for immunoassay diagnostics had selected as product development candidates more than ten Compugen discovered cancer and cardiovascular disease related biomarkers. These accomplishments, along with some exciting progress in our research and discovery unit, were the highlights of a very successful first quarter."
In line with Compugen's evolution to utilizing its scientific know-how and computational biology capabilities for the discovery of potential therapeutic and diagnostic products, revenues from sales of previously developed life science tools and services decreased to $200,000 for the most recent quarter, compared to $481,000 for the first quarter of 2005. The net loss for the quarter was $3.1 million (including non-cash expense of $547,000 related to stock based compensation), or $0.11 per share, compared with a net loss of $3.7 million (including non-cash income of $10,000 related to stock based compensation), or $0.13 per share, for the corresponding quarter of 2005.
Research and development expense of $2.7 million for the most recent quarter compared to $3.5 million for the first quarter of 2005, remains the Company's largest expense. These amounts are before the deduction of governmental and other grants, which totaled $417,000 for the first quarter ended March 31, 2006, compared with $384,000 for the corresponding quarter in 2005.
Update on Financial Status
As of March 31, 2006, Compugen had $33.8 million in cash, cash equivalents, and marketable securities, (including approximately $0.7 million that was received on behalf of, and will be transferred to, research consortium partners), a decrease of $3.0 million from December 31, 2005. The company has projected that net cash usage for the remainder of calendar 2006 will be approximately $9 million, which would result in an estimated $25 million in cash, cash equivalents, and marketable securities as of the beginning of 2007.
The Company has previously stated that its anticipated primary sources of future revenues are milestone and revenue sharing payments from licensing and other arrangements covering the development and marketing of diagnostic and therapeutic products based on the Company's discoveries. Compugen anticipates that it will begin to receive such payments from its existing arrangements by the end of this year or early next year, and these revenues are anticipated to increase substantially in the following years as products based on Compugen discovered molecules progress towards commercialization.
Conference Call and Web Cast Information
Compugen will hold a conference call to discuss its first quarter results on April 27, 2006 at 10:00 am EST. To access the conference call, please dial 1-866-860-9642 from the US or +972 3-918-0610 internationally. A replay of the conference call will also be available approximately two hours after the completion of the live conference call. To access the replay, please dial 1-866-276-1485 from the US or +972 3-925-5901. The replay will be available until 12 noon EST on April 29, 2006.
The call will also be available via live Web cast through Compugen's Website, located at /?Z3PR.
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 www.cgen.com.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include words like "may," "expects," "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; the ability to implement technological improvements; the ability of Compugen to obtain and retain customers. 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