Implementing expansion and acceleration
campaign for Pipeline Program
Focus on multiple cancer targets with five
programs now advancing in parallel
Compugen Ltd. (NASDAQ: CGEN) today reported financial results
for the first quarter ended March 31, 2014.
Anat Cohen-Dayag, PhD, President and CEO of Compugen, stated,
“In addition to our ongoing research and development activities and
collaboration discussions for our leading product candidates and
with the additional resources available from our recent share
offering in the US, we are undertaking substantial efforts to
expand and accelerate the advancement of additional novel
discoveries within our Pipeline Program. This includes broadening
our internal research and development capabilities and activities,
primarily in the field of immuno-oncology, to enable parallel
advancement of multiple candidates toward additional potential
collaborations, as well as preparing for future human clinical
trials of selected candidate programs in the field of cancer
immunotherapy.”
Dr. Cohen-Dayag continued, “Our South San Francisco subsidiary,
established two years ago to lead therapeutic monoclonal antibody
(mAb) discovery and development for Compugen discovered targets in
both the immuno-oncology and antibody drug conjugate therapeutic
areas, is a key component of our Pipeline Program. At present, five
mAb programs are advancing in parallel at this site and a sixth is
expected to begin in the fourth quarter of 2014. As part of our
expansion program, the South San Francisco subsidiary will move to
larger facilities next month.”
Revenues for the first quarter of 2014 were $2.1 million,
compared with $162,000 for the comparable period in 2013. Revenues
for the current quarter consisted primarily of the portions of the
non-refundable upfront payment received under the August 2013
collaboration and license agreement with Bayer Pharma AG, that were
recognizable during the quarter in accordance with US GAAP revenue
recognition accounting.
Cost of revenues for the first quarter of 2014 were $757,000,
compared with $150,000 for the comparable period in 2013. This
increase reflects, in large part, research and development expenses
attributed to our ongoing collaboration agreements.
Research and development expenses, net, for the first quarter of
2014 were $3.2 million compared with $2.7 million for the
comparable period in 2013. As stated above, research and
development expenses do not include such expenses incurred in
support of ongoing collaborations which are accounted for as cost
of revenues. The growth in research and development expenses for
the first quarter reflects increased activities resulting in large
part from the Company’s ongoing campaign to expand and accelerate
product candidate throughput in its Pipeline Program.
Compugen’s net loss for the first quarter of 2014 was $1.9
million (after reflecting non-cash stock-based compensation of
$957,000), or $0.04 per basic and diluted share, compared with a
net loss of $3.4 million (after reflecting non-cash stock-based
compensation of $675,000), or $0.09 per basic and diluted share,
for the comparable period in 2013. The decrease in net loss for the
first quarter of 2014, compared with the same period in 2013,
resulted from an increase in revenues recognized for the quarter,
partially off-set by the increased corporate activities primarily
relating to research and development.
As of March 31, 2014 and December 31, 2013, the liability
related to the "Research and development funding arrangements"
amounted to $14.1 million and $13.2 million, respectively,
resulting from the accounting for the Baize research and
development funding arrangements signed in December 2011 and
December 2010, as amended. These noncash liability balances, which
increase or decrease based on changes in the market value of
Compugen ordinary shares, are primarily related to the estimated
fair values of the embedded derivative instruments resulting from
the right of the investor, under the amended agreement, to waive
its right to receive potential future payments in exchange for
Compugen ordinary shares.
As of March 31, 2014, cash and cash related accounts totaled
$118.6 million compared with $46.8 million at December 31, 2013.
This increase of $71.8 million for the first quarter of 2014
resulted primarily from the net proceeds of $68 million from the
Company's underwritten public offering of ordinary shares completed
in March 2014. With respect to calendar 2014, and without taking
into consideration potential cash receipts, Compugen has budgeted
total cash uses of approximately $24 million.
Conference Call and Webcast Information
Compugen will hold a conference call to discuss its first
quarter results today, May 19, 2014 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 1-888-269-0005 from the US or
+972-3-925-5940 internationally. The replay will be available
through May 21, 2014.
About Compugen
Compugen is a leading drug discovery company focused on
therapeutic proteins and monoclonal antibodies to address important
unmet needs in the fields of immunology and oncology. The Company
utilizes a broad and continuously growing integrated infrastructure
of proprietary scientific understandings and predictive platforms,
algorithms, machine learning systems and other computational
biology capabilities for the in silico (by computer) prediction and
selection of product candidates, which are then advanced in its
Pipeline Program. The Company's business model includes
collaborations covering the further development and
commercialization of product candidates at various stages from its
Pipeline Program and various forms of research and discovery
agreements, in both cases providing Compugen with potential
milestone payments and royalties on product sales or other forms of
revenue sharing. Compugen’s wholly-owned U.S. subsidiary located in
South San Francisco is developing oncology and immunology
monoclonal antibody therapeutic candidates against its drug
targets. 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, including statements related to the anticipated continuing
research, development and commercialization through potential
collaborations and otherwise of discoveries within Compugen’s
Pipeline Program, including advancing a sixth mAb candidate program
beginning in the fourth quarter of this year at the South San
Francisco subsidiary, and budgeted total cash uses of approximately
$24 million for 2014. Forward-looking statements can be identified
by the use of terminology such as “will,” “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
inability to reach mutually agreeable terms and conditions with
respect to potential new collaborations; 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 discussed
in the "Risk Factors" section of Compugen’s most recent Annual
Report on Form 20-F as filed with the Securities and Exchange
Commission as well as other documents that may be subsequently
filed by Compugen from time to time with the Securities and
Exchange Commission. In addition, any forward-looking statements
represent Compugen’s views only as of the date of this release and
should not be relied upon as representing its views as of any
subsequent date. Compugen does not assume any obligation to update
any forward-looking statements unless required by law.
COMPUGEN LTD. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except for
share and per-share amounts)
Three Months EndedMarch
31,
2014
2013 Unaudited
Revenues 2,133 162 Cost of revenues
757
150
Gross profit 1,376 12
Operating expenses Research and development expenses, net
3,242 2,739 Marketing and business development expenses 173 195
General and administrative expenses
1,272
1,042 Total operating expenses
4,687 3,976 Operating loss
(3,311) (3,964) Financial income, net
1,413 590 Net loss
1,898) (3,374) Basic
and diluted net loss per Ordinary share (0.04) (0.09) Weighted
average number of Ordinary shares used in computing basic and
diluted net loss per share 43,451,513 37,283,753
COMPUGEN LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
DATA
(U.S. dollars, in thousands)
March
31,2014
December
31,2013
(unaudited)
(audited)
ASSETS Current assets Cash, cash equivalents and
short-term bank deposits 118,561 46,766 Investment in Evogene 2,161
4,565 Other accounts receivable and prepaid expenses 784 1,885
Receivables on account of shares
344 -
Total current assets 121,850
53,216 Non-current investments Severance
pay fund
2,162 2,129 Total non-current
investments 2,162 2,129
Non-current prepaid expenses 127
158 Property and equipment, net
1,602 1,208 Total assets
125,741 56,711 LIABILITIES AND
SHAREHOLDERS’ EQUITY Current liabilities Other accounts
payable, accrued expenses and trade payables 4,409 2,421 Deferred
revenues
3,962 5,318 Total current
liabilities 8,371 7,739
Non-current liabilities Research and development funding
arrangement 14,151 13,189 Deferred revenue 797 1,454 Accrued
severance pay
2,471 2,441 Total
non-current liabilities 17,419 17,084
Total shareholders’ equity 99,951
31,888 Total liabilities and shareholders’
equity 125,741 56,711
Compugen Ltd.Tsipi HaitovskyGlobal Media
Liaison+972-52-598-9892tsipih@netvision.net.il
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