Compugen Ltd. (NASDAQ: CGEN) today reported financial results
for the fourth quarter and year ended December 31, 2012 and
disclosed its primary objectives for 2013.
Dr. Anat Cohen-Dayag, president and CEO of Compugen, stated,
“During the past three years, we have successfully established one
of the most impressive discovery pipelines in the biopharma
industry. This accomplishment has both validated our long-term
research commitment to the creation of a unique predictive
discovery infrastructure and provided the Company with broad
opportunities for initial commercialization and ongoing growth.
Accordingly, included in our objectives for 2013 are the
following:
- Enter into collaboration arrangements
covering the development and commercialization of two or more of
the Company's Pipeline candidates.
- Choose one or more Pipeline candidates
for further development through initial human clinical trials by
the Company.
- Undertake process development towards
GMP manufacture of one of our lead Fc fusion protein
candidates.
- Advance in our Pipeline Program the
next wave of “immune checkpoint” based product candidates from our
initial focused discovery program and initiate our second focused
discovery program.
- Conduct initial validation studies of
monoclonal antibodies generated by our South San Francisco
subsidiary against at least three Compugen oncology targets and
have active programs for at least five monoclonal antibody programs
by yearend.
- Develop a new platform to enhance
predictive discovery of product candidates within the area of
protein-protein interactions, a complex area of high industry
interest."
Martin Gerstel, chairman of Compugen, added, “Our primary
corporate objectives for 2013 clearly demonstrate that this past
year represented an important inflection point for our Company.
During 2012, the first wave of therapeutic product candidates in
our Pipeline Program successfully reached the stage where we now
have the ability to choose, on a product by product basis, which
products should move forward under early stage commercialization
and licensing arrangements, and which should continue to be
developed through initial human clinical trials on our own. In this
regard, the high level of interest being expressed by leading
companies in the industry as we now pursue possible collaboration
arrangements provides us with further confirmation and confidence
with respect to the potential medical and commercial value of these
product candidates and the power of our unique predictive discovery
capabilities."
Compugen’s net loss for calendar 2012 was $13.6 million (after
reflecting non-cash items of $3.1 million consisting of an expense
of $2.5 million related to stock based compensation and a non-cash
financial loss of $588,000 related to the accounting for certain
research and development funding arrangements), or $0.38 per share,
compared with a net loss of $12.0 million (after reflecting
non-cash items of $3.5 million consisting of an expense of $3.4
million related to stock based compensation and a non-cash
financial loss of $113,000 related to the accounting for certain
research and development funding arrangements), or $0.35 per share,
for 2011. The increase in net loss for calendar 2012, compared with
the same period in 2011, resulted in large part from increased
research and development expenses, net, as further discussed
below.
Research and development expenses, net, for the fourth quarter
of 2012 were $2.6 million, compared with $1.9 million for the
fourth quarter of 2011, and remained the Company’s largest expense.
Research and development expenses, net, for calendar 2012 were $9.4
million, compared with $6.8 million for 2011. The growth in
research and development expenses, net, for the fourth quarter and
full year, reflects establishment and initiation of activities at
the South San Francisco operation as well as increasing levels of
activity in support of the Company’s Pipeline Program, and a
decrease in governmental and other grants, which are deducted from
research and development expenses in calculating research and
development expenses, net.
As of December 31, 2012 and 2011, the liability related to the
"Research and development funding arrangements and others" amounted
to $7.9 million and $6.4 million, respectively, resulting from the
accounting for the Baize research and development funding
arrangements signed in December 2011 and December 2010. The
liability balances are primarily related to the estimated fair
values of the embedded derivative instruments resulting from the
right of the investor, under both arrangements, to waive its right
to receive potential future payments in exchange for Compugen
ordinary shares.
As of December 31, 2012, cash and cash related accounts totaled
$19.6 million compared with $22.4 million at December 31,
2011, representing a net decrease in cash and cash related accounts
of $2.8 million for calendar year 2012. For calendar year 2013,
Compugen anticipates gross cash expenditures of approximately $16
million, compared with gross cash expenditures of approximately $13
million for calendar 2012, without taking into account any revenues
or other cash sources in either year. With respect to such revenues
and other cash sources, Compugen currently anticipates the total
such amount to be received during 2013 to be at least equal to the
total amount received in 2012. The cash and cash related accounts
at both December 31, 2012 and December 31, 2011 do not include the
market value of Compugen’s holdings of Evogene shares on such dates
and the final installment due to Compugen at the end of April 2013
under the December 2011 Baize research and development funding
arrangement, as amended.
Conference Call and Webcast Information
Compugen will hold a conference call to discuss its fourth
quarter and yearend results today, February 20, 2013 at 10:00 a.m.
EST. To access the conference call, please dial 1-888-668-9141 from
the US or +972-3-918-0609 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
+972-3-925-5904 internationally. The replay will be available
through February 23, 2013.
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 selected product candidates 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. In
2012, Compugen established operations in California for the
development of oncology and immunology monoclonal antibody
therapeutic candidates against Compugen 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. These statements, which include Compugen’s corporate
objectives and expectations regarding revenues and other cash
sources for 2013, 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
discussed in the "Risk Factors" section of Compugen’s Annual Report
on Form 20-F for the year ended December 31, 2011 as filed 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 EndedDecember
31,
Year EndedDecember
31,
2012 2011
2012 2011
Revenues 134 - 242 - Cost of revenues* 168 - 201 -
Gross profit
(loss) (34 ) - 41 - Research
and development expenses, net 2,608 1,854 9,442 6,778 Marketing and
business development expenses 186 114 684 610 General and
administrative expenses 1,013 1,102 3,457 4,591
Total operating expenses**
3,807 3,070 13,583 11,979 Operating
loss (3,841 ) (3,070 )
(13,542 ) (11,979 )
Financing loss, net***
(1,532 ) (1,323 ) (86 ) (306 ) Other income - 41 - 281
Net
loss (5,373 ) (4,352 )
(13,628 ) (12,004 ) Basic and diluted
net loss per ordinary share (0.15 ) (0.13 ) (0.38 ) (0.35 )
Weighted average number of Ordinary shares
used in computing basic net loss per share
36,125,109 34,446,993 35,844,496 34,276,697
Weighted average number of Ordinary shares
used in computing diluted net loss per share
36,125,109 34,446,993 36,249,262 34,276,697
* Three months ended December 31, 2012 amount reflects an
adjustment from prior quarter; all amounts include non-cash stock
based compensation.
** Includes non-cash stock based compensation.
*** Includes non-cash loss due to required periodic
re-measurement of fair value of exchange option and embedded
derivatives within research and development arrangements of
approximately $1,843 and $588 for the most recent quarter and for
the year ended December 31, 2012, respectively, and $906 and $113
for the comparable periods of 2011.
COMPUGEN LTD. CONDENSED CONSOLIDATED BALANCE SHEETS
DATA
(U.S. dollars, in thousands)
December
31,2012
December
31,2011
ASSETS Current assets Cash, cash equivalents and
short-term bank deposits 19,589 22,371 Restricted cash 96 92
Investment in Evogene 5,196 - Accounts receivables and prepaid
expenses 690 546
Total current assets 25,571
23,009 Non-current investments Investment in
Evogene - 4,093 Long-term lease deposits 59 17 Severance pay fund
1,728 1,465
Total non-current investments 1,787
5,575 Long-term prepaid expenses 301
- Property and equipment, net 1,250
497 Total assets 28,909 29,081
LIABILITIES AND SHAREHOLDERS’ EQUITY Current
liabilities Accounts payable and accrued expenses 1,384 1,423
Total current liabilities 1,384 1,423
Non-current liabilities Research and development funding
arrangements and others 7,872 6,434 Accrued severance pay 1,981
1,643
Total non-current liabilities 9,853
8,077 Total shareholders’ equity 17,672
19,581 Total liabilities and shareholders’ equity
28,909 29,081
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