Compugen Ltd. Reports Fourth Quarter and Calendar 2014 Results

Compugen Ltd. (NASDAQ: CGEN) today reported financial results for the fourth quarter and year ended December 31, 2014.

Anat Cohen-Dayag, PhD, President and CEO of Compugen, stated, “A number of achievements last year resulted in a significant increase in our corporate strength and confidence. In particular, the promising data of our early stage immuno-oncology candidates, the achievement of two milestones in our joint preclinical work under the Bayer collaboration, the substantial increase in our throughput capabilities and expertise, and the availability of substantial additional capital, have allowed us to begin 2015 with much greater opportunities for accelerated growth. Also, we selected two potentially first-in-class immuno-oncology programs, CGEN-15027 and CGEN-15049, for internal advancement towards future clinical trials. Both programs are currently advancing in parallel at our South San Francisco site toward the selection of lead clinical antibodies.”

Dr. Cohen-Dayag continued, “Looking forward to the remainder of 2015, our primary objective, with our sharply increased resources and capabilities, is to aggressively advance in parallel a number of our early stage immuno-oncology candidates, with a focus on CGEN-15027 and CGEN-15049. While doing so, we continue to evaluate with potential partners various forms of high-value collaborations, certain of which are now possible for us to consider due to the progress we made during 2014 and our increased financial resources. In addition, we intend to further advance selected antibody drug conjugate programs, apply our biomarker discovery capabilities to selected checkpoints, continue to meet our commitments under our existing collaborations, and extend and enhance our unique predictive discovery capabilities.”

Revenues for the fourth quarter of 2014 were $6.6 million, compared with $1.8 million in the comparable period of 2013. Net loss for the fourth quarter of 2014 was $1.5 million, or $0.03 per diluted share, compared with a net loss of $2.9 million, or $0.09 per diluted share, in the comparable period of 2013.

Revenues for the year ended December 31, 2014 were $12.4 million, compared with $3.5 million in the comparable period of 2013. The increase in revenues is attributable to the milestone payments in the amount of $7.2 million and the relevant portion of the non-refundable upfront payment, both relating to the August 2013 collaboration and license agreement with Bayer HealthCare. Net loss for the year ended December 31, 2014 was $11.1 million, or $0.23 per diluted share, compared with a net loss of $14.1 million or $0.36 per diluted share in the same period of 2013.

As of December 31, 2014, cash, cash related accounts, short-term and long-term bank deposits totaled $107.7 million, compared with $46.8 million at December 31, 2013. This increase resulted primarily from net proceeds of $67.0 million from the Company's underwritten public offering of ordinary shares completed in March 2014.

Conference Call and Webcast Information Conference Call and Webcast Information

Compugen will hold a conference call to discuss its fourth quarter and year-end 2014 results today, February 10, 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 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 [phone] internationally. The replay will be available through February 12, 2015.

(Tables to follow)

About Compugen

Compugen is a leading 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 U.S. 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 http://www.cgen.com/.

Forward-Looking Statement Disclaimer

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 and include statements related to the potential availability of various forms of high-value collaborations, and Compugen’s intentions to advance selected drug antibody conjugate programs, apply its biomarker discovery capabilities, continue to meet commitments under existing collaborations, and extend and enhance its unique predictive discovery capabilities. 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 EndedDecember 31,

Year EndedDecember 31,

2014

2013

2014

2013

Revenues

        
        
        
        
        
        
          6,552
        
        
        
        
        
        
        
        
          1,775
        
        
        
        
        
        
        
        
          12,367
        
        
        
        
        
        
        
        
          3,549
        
        
        
      
      
        
          Cost of revenues
        
        
        
        
        
        
          987
        
        
        
        
        
        
        
        
          810
        
        
        
        
        
        
        
        
          3,344
        
        
        
        
        
        
        
        
          2,509
        
        
        
      
      
        
          

Gross profit

5,565

965

9,023

1,040

Operating expenses

        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Research and development expenses, net
        
        
        
        
        
        
          4,848
        
        
        
        
        
        
        
        
          3,257
        
        
        
        
        
        
        
        
          15,074
        
        
        
        
        
        
        
        
          12,275
        
        
        
      
      
        
          Marketing and business development expenses
        
        
        
        
        
        
          400
        
        
        
        
        
        
        
        
          195
        
        
        
        
        
        
        
        
          838
        
        
        
        
        
        
        
        
          962
        
        
        
      
      
        
          General and administrative expenses
        
        
        
        
        
        
          1,432
        
        
        
        
        
        
        
        
          1,471
        
        
        
        
        
        
        
        
          5,448
        
        
        
        
        
        
        
        
          4,846
        
        
        
      
      
        
          

Total operating expenses*

6,680

4,923

21,360

18,083

Operating loss

(1,115

)

(3,958

)

(12,337

)

(17,043

)

Financing and other income (loss), net**

        
        
        
        
        
        
          (67
        
        
          )
        
        
        
        
        
        
          1,375
        
        
        
        
        
        
        
        
          1,603
        
        
        
        
        
        
        
        
          3,460
        
        
        
      
      
        
          

Net loss before taxes

(1,182

)

(2,583

)

(10,734

)

(13,583

)

        
      
      
        
          Taxes on income
        
        
        
        
        
        
          300
        
        
        
        
        
        
        
        
          345
        
        
        
        
        
        
        
        
          360
        
        
        
        
        
        
        
        
          500
        
        
        
      
      
        
          

Net loss

(1,482

)

(2,928

)

(11,094

        
        
          )
        
        
        
        
        
        
          

(14,083

)

        
      
      
        
           
        
      
      
        
          Basic net loss per ordinary share
        
        
        
        
        
        
          (0.03
        
        
          )
        
        
        
        
        
        
          (0.07
        
        
          )
        
        
        
        
        
        
          (0.23
        
        
          )
        
        
        
        
        
        
          (0.36
        
        
          )
        
      
      
        
          Weighted average number of Ordinary shares used in computing basic 
          net loss per share
        
        
        
        
        
        
          50,144,787
        
        
        
        
        
        
        
        
          40,802,976
        
        
        
        
        
        
        
        
          47,808,855
        
        
        
        
        
        
        
        
          38,869,438
        
        
        
      
      
        
          Diluted net loss per ordinary share
        
        
        
        
        
        
          (0.03
        
        
          )
        
        
        
        
        
        
          (0.09
        
        
          )
        
        
        
        
        
        
          (0.23
        
        
          )
        
        
        
        
        
        
          

(0.36

)

        
      
      
        
          Weighted average number of Ordinary shares used in computing diluted 
          net loss per share
        
        
        
        
        
        
          50,144,787
        
        
        
        
        
        
        
        
          42,738,997
        
        
        
        
        
        
        
        
          47,808,855
        
        
        
        
        
        
        
        
          38,869,438
        
        
        
      
    
    
      
        
          

*

Includes non-cash stock based compensation.

**

Includes non-cash income (expenses) related to the Baize research and development funding arrangement.

COMPUGEN LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS DATA

(U.S. dollars in thousands)

December 31,2014

December 31,2013

ASSETS

Current assets

        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Cash, cash equivalents and short-term bank deposits
        
        
        
        
          $
        
        
          72,643
        
        
        
        
        
        
          $
        
        
          46,766
        
      
      
        
          Investment in Evogene
        
        
        
        
        
        
          1,054
        
        
        
        
        
        
        
        
          4,565
        
      
      
        
          Other accounts receivable and prepaid expenses
        
        
        
        
        
        
          1,260
        
        
        
        
        
        
        
        
          1,885
        
      
      
        
          

Total current assets

        
        
        
        
        
        
          74,957
        
        
        
        
        
        
        
        
          53,216
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
          

 

Non-current investments

        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Severance pay fund
        
        
        
        
        
        
          2,024
        
        
        
        
        
        
        
        
          2,129
        
      
      
        
          

Total non-current investments

        
        
        
        
        
        
          2,024
        
        
        
        
        
        
        
        
          2,129
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          

Non-current prepaid expenses

        
        
        
        
        
        
          108
        
        
        
        
        
        
        
        
          158
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          

Long-term bank deposits

        
        
        
        
        
        
          35,026
        
        
        
        
        
        
        
        
          -
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          

Property and equipment, net

        
        
        
        
        
        
          2,730
        
        
        
        
        
        
        
        
          1,208
        
      
      
        
          

Total assets

$

114,845

$

56,711

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities

        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Other accounts payable, accrued expenses and trade payables
        
        
        
        
          $
        
        
          4,379
        
        
        
        
        
        
          $
        
        
          2,421
        
      
      
        
          Research and development funding arrangement
        
        
        
        
        
        
          421
        
        
        
        
        
        
        
        
          -
        
      
      
        
          Deferred revenues
        
        
        
        
        
        
          1,789
        
        
        
        
        
        
        
        
          5,318
        
      
      
        
          

Total current liabilities

        
        
        
        
        
        
          6,589
        
        
        
        
        
        
        
        
          7,739
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          

Non-current liabilities

        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Research and development funding arrangement
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          13,189
        
      
      
        
          Deferred revenues
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          1,454
        
      
      
        
          Accrued severance pay
        
        
        
        
        
        
          2,281
        
        
        
        
        
        
        
        
          2,441
        
      
      
        
          

Total non-current liabilities

        
        
        
        
        
        
          2,281
        
        
        
        
        
        
        
        
          17,084
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          

Total shareholders’ equity

        
        
        
        
        
        
          105,975
        
        
        
        
        
        
        
        
          31,888
        
      
      
        
          

Total liabilities and shareholders’ equity

$

114,845

$

56,711

Compugen Ltd.Tsipi Haitovsky, [phone]Global Media [e-mail]