CGEN Compugen Ltd

Compugen Ltd. (NASDAQ: CGEN) today reported financial results for the third quarter ended September 30, 2005. As previously announced, effective September 1, 2005, Alex Kotzer assumed the position of President and Chief Executive Officer. "I am delighted to join Compugen at this point in time as the company focuses on developing and commercializing its many potential biomarkers and therapeutic proteins. These potential products are resulting from our pioneering research efforts in predictable methods of discovery," stated Mr. Kotzer. Martin Gerstel, Compugen's Chairman added, "Alex brings to Compugen many years of relevant experience and a proven track record in managing biotech operations in his previous positions at Serono and InterPharm. His background makes him ideal to lead Compugen as we move forward with the development and commercialization of our diagnostic and therapeutic product candidates as well as to continue to advance our predictive research capabilities and the unique discovery engines based on these capabilities." Revenues and governmental and other grants for the third quarter of 2005 were $761,000 (including $666,000 from governmental and other grants), compared to $971,000 (including $326,000 from governmental and other grants) for the third quarter of 2004. The net loss for the quarter was $3.6 million (including a non-cash expense of $332,000 for amortization of deferred compensation), or $0.13 per share, compared with a net loss of $3.6 million (including a non-cash expense of $231,000 for amortization of deferred compensation), or $0.13 per share, for the corresponding quarter of 2004. Revenues and governmental and other grants for the nine months ended September 30, 2005 were $2.1 million (including $1.5 million from governmental and other grants), compared to $3.5 million for the same period in 2004 (including $1 million from governmental and other grants). The net loss for the first nine months of 2005 was $10.6 million (including a non-cash expense of $313,000 for amortization of deferred compensation), or $0.38 per share, compared with a net loss of $10.0 million (including a non-cash expense of $600,000 for amortization of deferred compensation), or $0.36 per share, for the same period in 2004. As of September 30, 2005, Compugen had $38 million in cash, cash equivalents, and marketable securities, a decrease of $3 million from June 30, 2005. Conference Call and Web Cast Information Compugen will hold a conference call to discuss its third quarter results on November 2nd, 2005 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 November 4th, 2005. The call will also be available via live Web cast through Compugen's Website, located at www.cgen.com. About Compugen Compugen is a drug and diagnostic discovery company incorporating ideas and methods from mathematics, computer science, and physics into biology, chemistry, and medicine. The Company's powerful predictive models and discovery engines are both advancing the understanding of important biological phenomena and enabling the discovery of numerous potential therapeutic products and diagnostic markers. The Company has an early stage in-house pipeline consisting of selected therapeutic protein candidates discovered by the Company; additional discoveries have been out-licensed for development. Among Compugen's customers and partners are leading pharmaceutical and diagnostic companies, such as Abbott Laboratories, Diagnostic Products Corporation, Novartis, and Ortho-Clinical Diagnostics, a Johnson & Johnson company. Compugen has established a small-molecule drug discovery affiliate - Keddem Bioscience, and an agricultural biotechnology affiliate - Evogene. 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 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. -0- *T COMPUGEN LTD. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except for share and per-share amounts) Three Months Ended Nine Months Ended September 30, September 30, -------------------------------------------- 2005 2004 2005 2004 Unaudited Unaudited Unaudited Unaudited -------------------------------------------- Revenues 95 645 646 2,471 Governmental and other grants 666 326 1,454 1,004 Total revenues and grants 761 971 2,100 3,475 Cost and Expenses Cost of revenues 72 292 148 1,018 Research and development expenses 2,974 2,762 9,547 8,570 Sales and marketing expenses 417 644 1,324 2,063 General and administrative expenses 731 812 2,039 2,374 Amortization of deferred compensation 332 231 313 600 Total operating expenses 4,526 4,741 13,371 14,625 Operating loss (3,765) (3,770) (11,271) (11,150) Financing income, net 160 245 472 1,075 Other income 52 57 168 250 Capital loss - (154) - (154) Net loss (3,553) (3,622) (10,631) (9,979) Basic and diluted net loss per ordinary share (0.13) (0.13) (0.38) (0.36) Weighted average number of ordinary shares outstanding 27,779,670 27,547,239 27,770,852 27,401,795 *T -0- *T COMPUGEN LTD. CONDENSED CONSOLIDATED BALANCE SHEETS DATA (U.S. dollars, in thousands) September 30, December 31, 2005 2004 Unaudited Audited -------------------------- ASSETS Current assets Cash, cash equivalents, short-term cash deposits, and marketable securities 29,954 20,574 Receivables and prepaid expenses 788 1,545 Total current assets 30,742 22,119 Long-term investments Marketable securities 8,097 27,854 Other assets 1,682 1,641 Property and equipment, net 3,465 3,739 Total assets 43,986 55,353 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses 2,049 3,107 Deferred revenues 200 276 Total current liabilities 2,249 3,383 Long-term liabilities Accrued severance pay 1,797 1,878 Other long-term liabilities 60 60 Excess of losses over investment in Evogene 466 466 Total long-term liabilities 2,323 2,404 Total shareholders' equity 39,414 49,566 Total liabilities and shareholders' equity 43,986 55,353 *T