Compugen Ltd. Reports 2nd Quarter 2015 Financial Results

Compugen Ltd. (NASDAQ: CGEN), a leading predictive drug discovery company, today reported financial results for the second quarter ending June 30, 2015.

Anat Cohen-Dayag, Ph.D., President and Chief Executive Officer of Compugen, stated, “The use of our powerful predictive discovery infrastructure has given rise to a novel immune checkpoint based target portfolio, which we believe provides the basis for a next wave of immuno-oncology drugs. Furthermore, we believe that the data to date from our five highest priority checkpoint programs, in addition to our two partnered programs, indicate that these programs potentially address multiple cancer types and different modes of action.”

Dr. Cohen-Dayag continued, “Our highest priority programs include myeloid specific novel immune checkpoint candidates identified within the tumor microenvironment of multiple cancers. Although in recent years there has been growing recognition of the importance of myeloid cells in cancer immunology, this area still represents an unexplored frontier of cancer immunotherapy. Therefore, we believe our programs could have a significant impact upon the cancer immunology field.”

Dr. Cohen-Dayag concluded, “We believe that our current portfolio of programs, supported by our broadly applicable predictive target discovery infrastructure, has the potential to result in a sustainable and growing pipeline of first-in-class product candidates sequentially reaching the clinic, both by internal development and through early stage collaborations. In this regard, we remain on target to meet our previously stated objective of having at least one IND relating to a Compugen-discovered checkpoint filed during the first half of 2017.”

Revenues for the second quarter of 2015 and six months ending June 30, 2015 were $0.2 million and $0.7 million respectively, compared with $2.0 million and $4.1 million for the comparable periods in 2014. The decrease in revenues is attributable mainly to the milestone payment in the amount of $1.2 million received in the second quarter of 2014 and a reduction in the recognition of the non-refundable upfront payment for the second quarter of 2015 and six months ending June 30, 2015, both under the August 2013 collaboration and license agreement with Bayer.

Net loss for the second quarter of 2015 was $6.8 million, or $0.14 per diluted share, compared with a net loss of $2.3 million, or $0.07 per diluted share, for the comparable period in 2014. Net loss for the six months ending June 30, 2015 was $13.0 million, or $0.26 per diluted share, compared with a net loss of $4.2 million, or $0.09 per diluted share, for the comparable period in 2014. The significant increase in net loss for the comparable periods, largely relates to a decrease in revenues as noted above, and an increase in the Company’s discovery and development activities relating to its Pipeline Program candidates.

As of June 30, 2015, cash, cash related accounts, short-term and long-term bank deposits totaled $95.7 million with no debt compared with $108.4 million as of December 31, 2014. The Company previously estimated gross cash expenditures in 2015 to be in the range of $31 million to $33 million.

Conference Call and Webcast Information

Compugen will hold a conference call to discuss its second quarter 2015 results today, August 4, 2015 at 10:00 a.m. ET. To access the conference call, please dial 1-888-668-9141 from the US or [phone] internationally. The call will also be available via live webcast 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 [phone] internationally. The replay will be available through August 6, 2015.

(Tables to follow)

About Compugen

Compugen is a leading predictive drug discovery company focused on monoclonal antibodies and therapeutic proteins to address important unmet needs in the fields of oncology and immunology. 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 novel drug target candidates, which are then advanced in its Pipeline Program. The discovery and development of monoclonal antibody therapeutic candidates against selected Compugen-discovered novel target candidates is performed by Compugen’s wholly-owned US subsidiary located in South San Francisco. 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. For additional information, please visit Compugen's corporate website at www.cgen.com.

Forward Looking Statement

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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 include: that Compugen’s business model is substantially dependent on entering into collaboration agreements with third parties, which if occur may not be successful in generating revenues, and that the development and commercialization of therapeutic products includes many inherent risks, including failure to progress to clinic or, if progressed, failure to receive regulatory approval. These and other factors are more fully 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 EndedJune 30,

Six Months EndedJune 30,

2015Unaudited

2014Unaudited

2015Unaudited

2014Unaudited

Revenues

        
        
        
        
        
        
          223
        
        
        
        
        
        
        
        
          1,964
        
        
        
        
        
        
        
        
          736
        
        
        
        
        
        
        
        
          4,097
        
        
        
      
      
        
          Cost of revenues
        
        
        
        
        
        
          148
        
        
           
        
        
        
        
        
        
          859
        
        
           
        
        
        
        
        
        
          396
        
        
           
        
        
        
        
        
        
          1,616
        
        
           
        
      
      
        
          

Gross profit

75

1,105

340

2,481

Operating expenses

        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Research and development expenses, net
        
        
        
        
        
        
          5,189
        
        
        
        
        
        
        
        
          3,074
        
        
        
        
        
        
        
        
          10,109
        
        
        
        
        
        
        
        
          6,316
        
        
        
      
      
        
          Marketing and business development expenses
        
        
        
        
        
        
          248
        
        
        
        
        
        
        
        
          109
        
        
        
        
        
        
        
        
          478
        
        
        
        
        
        
        
        
          282
        
        
        
      
      
        
          General and administrative expenses
        
        
        
        
        
        
          1,591
        
        
           
        
        
        
        
        
        
          1,240
        
        
           
        
        
        
        
        
        
          3,028
        
        
           
        
        
        
        
        
        
          2,512
        
        
           
        
      
      
        
          

Total operating expenses

7,028

4,423

13,615

9,110

Operating loss

(6,953

)

(3,318

)

(13,275

)

(6,629

)

        
      
      
        
          Financial income, net
        
        
        
        
        
        
          145
        
        
           
        
        
        
        
        
        
          1,059
        
        
           
        
        
        
        
        
        
          324
        
        
           
        
        
        
        
        
        
          2,472
        
        
           
        
      
      
        
          

Net loss before taxes

(6,808

)

(2,259

)

(12,951

)

(4,157

)

        
      
      
        
          Taxes on income
        
        
        
        
        
        
           
        
        
          -
        
        
        
        
        
        
          

(60

)

        
        
        
        
        
        
           
        
        
          -
        
        
        
        
        
        
          (60
        
        
          )
        
      
      
        
          

Net loss

(6,808

)

(2,319

)

(12,951

        
        
          )
        
        
        
        
        
        
          

(4,217

)

        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Basic net loss per ordinary share
        
        
        
        
        
        
          (0.14
        
        
          )
        
        
        
        
        
        
          (0.05
        
        
          )
        
        
        
        
        
        
          (0.26
        
        
          )
        
        
        
        
        
        
          (0.09
        
        
          )
        
      
      
        
          Weighted average number of ordinary shares used in computing basic 
          net loss per share
        
        
        
        
        
        
          50,405,022
        
        
        
        
        
        
        
        
          48,462,334
        
        
        
        
        
        
        
        
          50,374,993
        
        
        
        
        
        
        
        
          45,970,766
        
        
        
      
      
        
          Diluted net loss per ordinary share
        
        
        
        
        
        
          (0.14
        
        
          )
        
        
        
        
        
        
          (0.07
        
        
          )
        
        
        
        
        
        
          (0.26
        
        
          )
        
        
        
        
        
        
          (0.09
        
        
          )
        
      
      
        
          Weighted average number of ordinary shares used in computing diluted 
          net loss per share
        
        
        
        
        
        
          50,405,022
        
        
        
        
        
        
        
        
          49,796,012
        
        
        
        
        
        
        
        
          50,374,993
        
        
        
        
        
        
        
        
          45,970,766
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
    
    
      
        
          

COMPUGEN LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS DATA

(U.S. dollars, in thousands)

June 30,2015

December 31,2014

(unaudited)

(audited)

ASSETS

Current assets

        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Cash, cash equivalents, short-term bank deposits and restricted cash
        
        
        
        
        
        
          95,653
        
        
        
        
        
        
          73,328
        
      
      
        
          Investment in Evogene
        
        
        
        
        
        
          997
        
        
        
        
        
        
          1,054
        
      
      
        
          Other accounts receivable and prepaid expenses
        
        
        
        
        
        
          1,474
        
        
        
        
        
        
          716
        
      
      
        
          

Total current assets

        
        
        
        
        
        
          98,124
        
        
        
        
        
        
          75,098
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          

Non-current assets

        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Long-term bank deposits
        
        
        
        
        
        
          -
        
        
        
        
        
        
          35,026
        
      
      
        
          Non-current prepaid expenses
        
        
        
        
        
        
          99
        
        
        
        
        
        
          108
        
      
      
        
          Severance pay fund
        
        
        
        
        
        
          2,171
        
        
        
        
        
        
          2,024
        
      
      
        
          Property and equipment, net
        
        
        
        
        
        
          2,863
        
        
        
        
        
        
          2,730
        
      
      
        
          

Total non-current assets

        
        
        
        
        
        
          5,133
        
        
        
        
        
        
          39,888
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          

Total assets

        
        
        
        
        
        
          103,257
        
        
        
        
        
        
          114,986
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities

        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Other accounts payable, accrued expenses and trade payables
        
        
        
        
        
        
          3,990
        
        
        
        
        
        
          4,379
        
      
      
        
          Deferred revenues
        
        
        
        
        
        
          1,053
        
        
        
        
        
        
          1,789
        
      
      
        
          Research and development funding arrangement
        
        
        
        
        
        
          210
        
        
        
        
        
        
          421
        
      
      
        
          

Total current liabilities

        
        
        
        
        
        
          5,253
        
        
        
        
        
        
          6,589
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          

Non-current liabilities

        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Accrued severance pay
        
        
        
        
        
        
          2,590
        
        
        
        
        
        
          2,281
        
      
      
        
          

Total non-current liabilities

        
        
        
        
        
        
          2,590
        
        
        
        
        
        
          2,281
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          

Total shareholders’ equity

        
        
        
        
        
        
          95,414
        
        
        
        
        
        
          106,116
        
      
      
        
          

Total liabilities and shareholders’ equity

        
        
        
        
        
        
          103,257
        
        
        
        
        
        
          114,986
        
      
    
    

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