Compugen Ltd. (NASDAQ: CGEN) today reported its results for the
second quarter ending June 30, 2011.
Dr. Anat Cohen-Dayag, Compugen’s president and CEO, stated, “As
previously disclosed, Compugen is focusing its discovery and
development efforts towards unmet medical needs in the fields of
oncology and immunology. With respect to our heightened
commercialization efforts in these fields of focus, it is clear
that the validation results we are obtaining for our recently
discovered product candidates in areas of high industry interest
and potential, such as the B7/CD28 family molecules, has led to a
substantial increase in industry recognition of our Company.
Therefore, we were pleased to see progress during the past quarter
with respect to certain ongoing discussions as well as initiation
of new discussions covering both current product candidates and
discovery capabilities.”
Dr. Cohen-Dayag continued, “A third area where significant
progress was made this past quarter relates to some very promising
past discoveries, both therapeutic and diagnostic, that are outside
our current area of focus, having been made during the development
and validation activities for our predictive platforms. During the
past quarter we entered into discussions with various organizations
to advance certain of these earlier discoveries, largely without
the need for further Compugen financial resources.”
As previously stated, since current revenues result primarily
from research fees and milestones, quarterly results are, and will
continue to be, subject to substantial fluctuations due to timing.
No revenues were recorded for either the second quarter of 2011 or
the six months ending June 30, 2011, compared with $800,000 and
$925,000 for the same respective periods in 2010. Reported revenues
for all periods do not include amounts received from governmental
grants, which are accounted for by Compugen as a reduction of
research and development expenses, and not as revenues.
Total operating expenses for the second quarter of 2011 were
$3.4 million, including a non-cash expense of $1.7 million related
to stock based compensation, compared with $1.5 million, including
a non-cash expense of $412,000 related to stock based compensation
for the second quarter of 2010. Included in the non-cash expense of
$1.7 million for the second quarter of 2011 was a $1.3 million
one-time charge to general and administrative expenses, relating to
an extension of the time to exercise certain previously outstanding
and vested options.
Research and development expenses were $1.6 million for the
second quarter of 2011, compared with $1.3 million for the second
quarter of 2010, and remain the Company’s largest expense, not
taking into account the non-cash expense included in general and
administrative expenses, as discussed above. The growth in research
and development expenses for 2011 relates primarily to increased
activities under the Company’s Pipeline Program. Research and
development expenses are before the deduction of governmental
grants, which totaled $455,000 for the second quarter ending June
30, 2011, compared with $524,000 for the corresponding quarter in
2010.
Financing income, net, was $1.2 million for the second quarter
of 2011, compared with $41,000 for the second quarter of 2010.
Included in the $1.2 million reported for the most recent quarter
was non-cash income of $909,000 related to the re-measurement to
fair value of the research and development funding arrangement
signed in late 2010 in support of the Pipeline Program, that, as
previously disclosed, for reporting purposes is being accounted for
as a liability. These re-measurements to fair value will no longer
apply on the earlier of June 2013 or, in the event that the
investor elects to exchange his participation rights for Compugen
shares, the date of such election.
Net loss for the most recent quarter was $2.2 million (after
reflecting the non-cash expense of $1.7 million related to stock
based compensation and non-cash financial income of $909,000, both
as described above) or $0.06 per share, compared with net loss of
$896,000 (including a non-cash expense of $412,000 related to stock
based compensation), or $0.03 per share, for the corresponding
quarter of 2010. The net loss for the first six months of 2011 was
$4.1 million (including a non-cash expense of $2.0 million related
to stock based compensation and non-cash financial income of
$733,000), or $0.12 per share, compared with net loss of $3.6
million (including a non-cash expense of $1.3 million related to
stock based compensation), or $0.11 per share, for the same period
in 2010.
As of June 30, 2011, Compugen had $23.7 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 the research and development funding arrangement
signed in December 2010 as mentioned above. These amounts for 2010
and 2011 do not include the market value of Compugen’s holdings of
Evogene shares at such times. The Company’s previous guidance for
expected net cash usage for calendar year 2011 was approximately
$10 million; such net cash usage for the first six months of 2011
was $3.1 million
Conference Call and Webcast Information
The Company will host a live webcast and conference call at
10:00 AM EDT on Tuesday, August 2, 2011 to review second quarter
2011 results and to review current commercialization
activities.
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 1-888-782-4291 from the US or
+972-3-925-5927 internationally. The replay will be available
through August 5, 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 EndedJune 30,
Six Months Ended June 30,
2011Unaudited
2010Unaudited
2011Unaudited
2010Unaudited
Revenues - 800 - 925 Cost of
revenues - 198 - 198
Gross profit - 602
- 727 Research and development expenses 1,624 1,339
3,315 2,974 Less: governmental and other grants (455 ) (524 ) (503
) (524 ) Research and development expenses, net 1,169 815 2,812
2,450 Marketing and business development expenses 150 179 298 367
General and administrative expenses* 2,049 545 2,692 1,565
Total
operating expenses ** 3,368 1,539 5,802
4,382 Operating loss (3,368 )
(937 ) (5,802 ) (3,655 )
Financing income, net 1,218 41 1,512 40 Other income, net - - 240 -
Net loss (2,150 ) (896 )
(4,050 ) (3,615 ) Basic and diluted net
loss per ordinary share (0.06 ) (0.03 ) (0.12 ) (0.11 ) Weighted
average number of ordinary shares outstanding 34,246,190 33,272,718
34,169,391 33,142,182
* Includes non-cash expenses related to stock based compensation
($1.4 million for the most recent quarter and $130,000 for the
corresponding quarter of 2010; $1.6 million for the first six
months of 2011 and $739,000 for the same period of 2010)
** Includes non-cash expenses related to stock based
compensation ($1.7 million for the most recent quarter and $412,000
for the corresponding quarter of 2010; $2.0 million for the first
six months of 2011 and $1.3 million for the same period of
2010)
COMPUGEN LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS DATA (U.S. dollars,
in thousands)
June 30,2011Unaudited
December 31,2010Audited
ASSETS Current assets Cash, cash equivalents and
short-term bank deposits 23,720 21,824 Restricted cash 102 684
Trade receivables - 21 Accounts receivable and prepaid expenses
1,260 548 Receivables from funding arrangement - 5,000
Total
current assets 25,082 28,077 Long-term
investments Investment in Evogene 4,885 6,227 Long-term prepaid
expenses 73 64 Severance pay fund 1,615 1,510
Total long-term
investments 6,573 7,801 Property and
equipment, net 522 580 Total assets
32,177 36,458 LIABILITIES AND SHAREHOLDERS’
EQUITY Current liabilities Accounts payable and accrued
expenses 1,255 2,441
Total current liabilities 1,255
2,441 Long-term liabilities Research and
development funding arrangement 3,304 4,037 Accrued severance pay
1,802 1,695
Total long-term liabilities 5,106
5,732 Total shareholders’ equity 25,816
28,285 Total liabilities and shareholders’ equity
32,177 36,458
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