Compugen Ltd. (NASDAQ: CGEN) today reported financial results
for the third quarter ending September 30, 2011.
Anat Cohen-Dayag, Ph.D., President and CEO, stated, "These are
exciting times for Compugen, as we aggressively advance our
Pipeline Program, consisting of more than 30 therapeutic
candidates; enhance and expand our cutting edge science and
predictive models; and engage in active discussions with an
increasing number of potential licensees and collaborators. We are
particularly pleased with the ongoing progress in the validation
and early pre-clinical studies of Compugen-discovered B7/CD28-like
proteins and certain other Pipeline Program candidates in the
fields of oncology and immunology. We have also begun the
validation of two additional discovery platforms based on new
approaches and algorithms, which have already predicted several
novel immunomodulatory proteins that are about to enter initial
product candidate validation studies.”
Dr. Cohen-Dayag continued, “With respect to Compugen’s
commercialization activities, in recent months, a significant
portion of our business development efforts has involved potential
arrangements for a number of promising Compugen therapeutic and
diagnostic discoveries not in our main areas of focus. These past
discoveries were made in large part during validation activities
for our various discovery platforms, and our intent is to have them
further developed without the use of additional Compugen resources,
but with us sharing in any future revenues. We are now beginning to
shift these business development efforts to certain Pipeline
Program candidates as they move forward in preclinical related
activities, and to discovery on demand type collaborations."
Dr. Cohen-Dayag concluded, “We look forward to sharing news of
our achievements in these various areas over the coming
months.”
As previously stated, since any revenues in the short-term will
likely result primarily from research fees and initial milestones,
quarterly results are, and will continue to be, subject to
substantial fluctuations due to timing. No revenues were recorded
for either the third quarter of 2011 or the third quarter of 2010.
For the nine months ending September 30, 2011, no revenues were
reported, compared with $925,000 for the same period in 2010.
The net loss for the most recent quarter was $3.6 million
(including a non-cash expense of $587,000 related to stock based
compensation), or $0.10 per share, compared with a net loss of $1.6
million (including a non-cash expense of $435,000 related to stock
based compensation), or $0.05 per share, for the corresponding
quarter of 2010. The increase in net loss for the most recent
quarter resulted in large part from increased research and
development expenses, net, and the effect of exchange rate changes
on our reported financial income (loss), each as more fully
described below, and the increase in non-cash expense as stated
above.
The net loss for the first nine months of 2011 was $7.7 million
(including a non-cash expense of $2.6 million related to stock
based compensation), or $0.22 per share, compared with a net loss
of $5.2 million (including a non-cash expense of $1.8 million
related to stock based compensation), or $0.16 per share, for the
same period in 2010. The increase in net loss for the first nine
months of 2011 compared with the same period in 2010 is due to the
above factors pertaining to the third quarter of 2011 and a $1.3
million one-time non-cash expense charge in the second quarter of
2011 to general and administrative expenses, relating to an
extension of the time period to exercise certain previously
outstanding and vested options.
Research and development expenses, net were $2.1 million for the
third quarter of 2011, compared with $1.2 million for the third
quarter of 2010, and remain the Company’s largest expense. The
growth in research and development expenses, net for the third
quarter of 2011, reflects increasing activities primarily with
respect to manufacturing of molecules and payments to independent
investigators with respect to evaluation studies of product
candidates in the Company’s Pipeline Program, and a decrease in
amounts received from governmental grants, which are presented as a
reduction of research and development expenses. Research and
development expenses, net were $4.9 million for the first nine
months of 2011, compared with $3.7 million for the first nine
months of 2010, which amounts are more indicative of the year to
year increase than are the results for the third quarters of each
of these years.
For the third quarter of 2011, the company recorded a financing
loss of $495,000 compared with financing income of $312,000 for the
third quarter of 2010, in large part due to exchange rate
variations between the US dollar and New Israeli Shekel (“NIS”).
The Company’s cash is maintained in both US dollars and NIS, and
therefore the recent decline in value of the NIS against the US
dollar reduced the value of our NIS deposits in US dollar terms,
which is the currency used for Compugen’s reporting purposes.
As of September 30, 2011, Compugen had $21.7 million in cash and
cash equivalents and short-term bank deposits, compared with $26.8
million as of December 31, 2010, after increasing the reported
amount at yearend 2010 to reflect the receipt in early 2011 of $5.0
million from a research and development funding arrangement signed
in December 2010. These amounts for 2010 and 2011 do not include
the market value of Compugen’s holdings of Evogene shares at such
times. With respect to net cash usage for calendar 2011, the
Company now expects that such net cash usage will be less than its
previous guidance of approximately $10 million.
Conference Call and Webcast Information
The Company will host a live webcast and conference call at
10:00 AM EST on Tuesday, November 8, 2011 to review third quarter
2011 results and to review its therapeutic Pipeline Program.
To access the conference call, please dial 1-888-668-9141 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
through November 11, 2011.
(Tables to follow)
About Compugen
Compugen is a leading therapeutic product candidate discovery
company, currently focused on biologics-based therapy to address
important unmet needs in the fields of immunology and oncology,
either for Compugen or its partners. Unlike traditional high
throughput trial and error experimental based drug candidate
discovery, Compugen’s discovery efforts are based on systematic and
continuously improving in silico (by computer) product candidate
prediction and selection followed by experimental validation, with
selected product candidates being advanced in its Pipeline Program
to the pre-IND stage. Compugen’s in silico predictive models
utilize a broad and continuously growing infrastructure of
proprietary scientific understandings and predictive platforms,
algorithms, machine learning systems and other computational
biology capabilities. The Company’s business model primarily
involves collaborations covering the further development and
commercialization of Compugen-discovered product candidates and
various forms of “discovery on demand” arrangements, in both cases
providing Compugen with potential milestone payments and royalties
on product sales or other forms of revenue sharing. 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
EndedSeptember 30,
Nine Months EndedSeptember
30,
2011Unaudited
2010Unaudited
2011Unaudited
2010Unaudited
Revenues - - - 925 Cost
of revenues - - - 198
Gross profit - -
- 727 Research and development expenses, net 2,112
1,225 4,924 3,675 Marketing and business development expenses 198
168 496 535 General and administrative expenses 797 530 3,489 2,095
Total operating expenses 3,107 1,923
8,909 6,305 Operating loss
(3,107 ) (1,923 ) (8,909
) (5,578 ) Financing income (loss), net (495 )
312 1,017 352 Other income, net - 37 240 37
Net loss
(3,602 ) (1,574 ) (7,652
) (5,189 ) Basic and diluted net loss per
ordinary share (0.10 ) (0.05 ) (0.22 ) (0.16 ) Weighted average
number of ordinary shares outstanding 34,317,515 33,310,959
34,219,308 33,199,059
COMPUGEN LTD. CONDENSED
CONSOLIDATED BALANCE SHEETS DATA
(U.S. dollars, in thousands)
September 30, December 31,
2011
2010
Unaudited Audited ASSETS Current assets
Cash, cash equivalents and short-term bank deposits 21,665 21,824
Restricted cash 94 684 Trade receivables - 21 Accounts receivable
and prepaid expenses 540 548 Receivables from funding arrangement -
5,000
Total current assets 22,299 28,077
Long-term investments Investment in Evogene 4,135
6,227 Long-term prepaid expenses 46 64 Severance pay fund 1,513
1,510
Total long-term investments 5,694 7,801
Property and equipment, net 528 580
Total assets 28,521 36,458
LIABILITIES AND SHAREHOLDERS’ EQUITY Current
liabilities Accounts payable and accrued expenses 1,376 2,441
Total current liabilities 1,376 2,441
Long-term liabilities Research and development funding
arrangement 3,244 4,037 Accrued severance pay 1,700 1,695
Total
long-term liabilities 4,944 5,732 Total
shareholders’ equity 22,201 28,285 Total
liabilities and shareholders’ equity 28,521
36,458
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