Compugen Ltd. (NASDAQ: CGEN) today reported financial
results for the second quarter ending June 30, 2012.
Anat Cohen-Dayag, Ph.D., President and CEO of Compugen, stated,
"Among our notable achievements during this past quarter was the
initiation of operations at Compugen Inc., our South San Francisco
subsidiary established for the development of monoclonal antibody
therapeutic candidates (mAbs) against Compugen's novel
pre-clinically validated targets."
Dr. Mary Haak-Frendscho, Chairperson of Compugen Inc., added,
"In less than four months we have established our South San
Francisco operation in a purpose built facility, recruited an
exceptional team with extensive industry experience in therapeutic
mAbs, and leveraged our development capabilities by incorporating a
fully human mAb display technology. In parallel, we prioritized mAb
targets discovered through the use of Compugen’s industry leading
predictive platform and initiated mAb programs against several
B7/CD28-like immune checkpoint molecules. In biopharma, where novel
targets are scarce, it is rare to have an abundance of compelling
targets from which to choose. We are enthusiastically prosecuting
these programs, beginning with an emphasis on those for treatment
of solid tumors, where there is a high unmet medical need."
Dr. Cohen-Dayag continued, "A key reason for the selection of
B7/CD28-like molecules as our first focused discovery effort is
that these membrane immune checkpoint proteins are of very high
pharmaceutical industry interest for addressing unmet medical needs
and provide the potential to not only serve as targets for
monoclonal antibody therapy in oncology, but also as the basis for
the development of Fc-fusion proteins for the treatment of various
autoimmune diseases, such as rheumatoid arthritis and multiple
sclerosis."
Dr. Cohen-Dayag concluded, "With respect to our Fc-fusion
product candidates, in parallel with our ongoing commercialization
discussions with potential collaborators and licensees, Compugen is
moving forward in its Pipeline Program a number of these fusion
proteins which are also based on Compugen-discovered B7/CD28-like
molecules. To date, five out of six Fc-fusion product candidates
based on our B7/CD28-like molecules have been shown to be
efficacious in relevant autoimmune disease models, representing an
extraordinary rate of early stage success in comparison with
industry experience. This is a clear demonstration of Compugen's
outstanding predictive discovery capabilities, which also help us
focus on the most promising discoveries at a very early stage."
With respect to Compugen’s financial results, no revenues were
recorded for the second quarter or six months ending June 30,
2012 and June 30, 2011.
Net loss for the most recent quarter was $626,000 (after
reflecting non-cash expense of $527,000 related to stock based
compensation and non-cash financial income of $2.6 million related
to the accounting for certain research and development funding
arrangements as further described below) or $0.02 per share,
compared with net loss of $2.2 million (after reflecting non-cash
expense of $1.7 million related to stock based compensation and
non-cash financial income of $909,000 related to the research and
development funding arrangements) or $0.06 per share, for the
corresponding quarter of 2011. 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.
Net loss for the first six months of 2012 was $4.7 million
(after reflecting non-cash expense of $1.1 million related to stock
based compensation and non-cash financial income of $1.3 million
related to the research and development funding arrangements), or
$0.13 per share, compared with net loss of $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 related to
the research and development funding arrangements), or $0.12 per
share, for the same period in 2011.
Research and development expenses, net, for the second quarter
of 2012 were $1.9 million, compared with $1.2 million for the
second quarter of 2011, and remained the Company’s largest expense.
The growth in research and development expenses, net, reflects
establishment and initiation of activities at the South San
Francisco operation as well as increasing levels of activity in 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 June 30, 2012 and 2011, the liability related to the
"Research and development funding arrangements" amounted to $4.8
million and $3.3 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 derivative instruments resulting from the right of
the investor under both arrangements to waive his right to receive
potential future payments in exchange for Compugen ordinary
shares.
As of June 30, 2012, cash and cash related accounts totaled
$21.9 million, compared with $22.4 million at December 31, 2011.
Both the June 30, 2012 and December 31, 2011 balances do not
include either the market value of Compugen’s holdings of Evogene
shares at the end of each such period, or the $6.0 million to be
received during the remainder of 2012 under the payment schedule
for the December 2011 Baize research and development funding
arrangement, as amended. Subsequent to June 30, 2012, $1.0 million
of the $6.0 million was received by Compugen from Baize pursuant to
such revised payment schedule.
Conference Call and Webcast Information
Compugen will hold a conference call to discuss its second
quarter 2012 results today, August 7, 2012 at 10:00 a.m. EDT. 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 1-888-326-9310
from the US or +972-3-925-5904 internationally. The replay will be
available through August 10, 2012.
About Compugen
Compugen is a leading therapeutic product discovery company
focused on therapeutic proteins and monoclonal antibodies to
address important unmet needs in the fields of immunology and
oncology. Unlike traditional high throughput trial and error
experimental based discovery, Compugen 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 to the pre-IND stage. The Company's business model
primarily involves collaborations covering the further development
and commercialization of 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-discovered drug targets. 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”,
“projects” “anticipates”, “believes”, and “intends”, and describe
opinions about future events. Forward-looking statements in this
press release include, but are not limited to, the potential for
molecules discovered by the Company, including, without limitation,
those in the Company’s Pipeline Program such as those based on
B7/CD28-like molecules, to provide the basis for either fc-fusion
proteins or monoclonal antibodies useful in the treatment of
medical conditions, including without limitation, various
autoimmune disorders, such as rheumatoid arthritis or multiple
sclerosis, or oncology. 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,
including without limitation, corporate partners or licensees; the
impact of competitive products and technological changes; risks
relating to the development of new products in general; risks
relating to the research, development, regulatory approval,
manufacturing or marketing of new therapeutic or diagnostic
products; the ability to implement technological improvements and
risks related to obtaining necessary resources, including, without
limitation capital. 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 COMPREHENSIVE
INCOME
(U.S. dollars in thousands, except for
share and per-share amounts)
Three Months EndedJune 30,
Six Months EndedJune 30,
2012Unaudited
2011Unaudited
2012Unaudited
2011Unaudited
Operating expenses Research and development expenses, net
1,947 1,169 4,047 2,812 Marketing and business development expenses
156 150 351 298
General and administrative expenses
*
855 2,049 1,679 2,692
Total operating expenses *
2,958 3,368 6,077 5,802
Operating loss (2,958 ) (3,368 )
(6,077 ) (5,802 )
Financing income, net **
2,332 1,218 1,332 1,512 Other income - - - 240
Net loss
(626 ) (2,150 ) (4,745 )
(4,050 ) Basic and diluted net loss per ordinary
share (0.02 ) (0.06 ) (0.13 ) (0.12 ) Weighted average number of
ordinary shares outstanding 35,965,615 34,246,190 35,628,390
34,169,391 Unrealized gain (loss) for the period on Investment in
Evogene
(20 ) (909 ) 569
(1,349 ) Total comprehensive loss
(646
) (3,059 ) (4,176 )
(5,399 )
* Includes non-cash stock based compensation.
** Includes non-cash income due to change in fair value
of exchange option and embedded derivatives within research and
development arrangements of approximately $2,560 and $1,313 for the
most recent quarter and for the first six months of 2012,
respectively, and $909 and $733 for the comparable periods of
2011.
COMPUGEN LTD. CONDENSED
CONSOLIDATED BALANCE SHEETS DATA
(U.S. dollars, in thousands)
June 30,2012Unaudited
December 31,2011Audited
ASSETS Current assets Cash, cash equivalents and
short-term bank deposits 21,894 22,371 Restricted cash 91 92 Other
accounts receivable and prepaid expenses 650 546
Total current
assets 22,635 23,009 Long-term
investments Investment in Evogene 4,662 4,093 Long-term lease
deposits 68 17 Severance pay fund 1,527 1,465
Total long-term
investments 6,257 5,575 Long-term
prepaid expenses 400 - Property and
equipment, net 696 497 Total assets
29,988 29,081 LIABILITIES AND SHAREHOLDERS’
EQUITY Current liabilities Accounts payable and accrued
expenses 1,542 1,707
Total current liabilities 1,542
1,707 Long-term liabilities Research and
development funding arrangements 4,793 6,150 Accrued severance pay
1,766 1,643
Total long-term liabilities 6,559
7,793 Total shareholders’ equity 21,887
19,581 Total liabilities and shareholders’ equity
29,988 29,081
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