Compugen Reports First Quarter 2008 Results

  
    
  
  
    
      Compugen Ltd. (NASDAQ:CGEN) today reported its results for the first 
      quarter ended March 31, 2008.
    
    
      “The accelerating rate of discovery and 
      initial validation of attractive product candidates in different drug 
      and diagnostic areas reported during recent months is clearly 
      demonstrating that Compugen has established a unique, powerful and 
      broadly applicable capability. In parallel and not surprisingly, we are 
      seeing a substantial increase in interest in both our existing product 
      candidates and our discovery capabilities by leading companies in these 
      industries, and were pleased to add agreements with Merck & Co., Inc., 
      and Roche to our growing list of collaborations,” 
      stated Martin Gerstel, Compugen’s Chairman. “In 
      addition to providing the company with interesting strategic 
      alternatives that we have now begun to explore, we expect these trends 
      to continue as, during the coming months, the values and potential of 
      our approach will be more fully demonstrated through the disclosure of 
      additional discovery platforms and further evidence of the broad 
      applicability and continuous improvement with time and usage of our 
      existing nine 'state of the art' predictive biology based platforms,” 
      Mr. Gerstel concluded.
    
    
      Revenues for the first quarter of 2008 were $281,000 compared to none 
      for the first quarter of 2007. The net loss for the quarter was $2.5 
      million (including a non-cash expense of $327,000 related to stock based 
      compensation), or $0.09 per share, compared with a net loss of $3.1 
      million (including a non-cash expenses of $797,000 related to stock 
      based compensation), or $0.11 per share, for the corresponding quarter 
      of 2007.
    
    
      Research and development expenses of $1.9 million for the first quarter 
      of 2008, compared to $2.3 million for the first quarter of 2007, remain 
      the Company’s largest expense, representing 
      approximately 70% of our total expenses for the periods. These amounts 
      are before the deduction of governmental and other grants, which totaled 
      $166,000 for the first quarter in 2008, compared with $297,000 for the 
      corresponding quarter in 2007.
    
    
      Other assets as shown in the Company’s 
      consolidated balance sheets increased from $1.9 million as of December 
      31, 2007 to $4.2 million as of March 31, 2008. This increase was 
      substantially due to the Company’s holding in 
      Evogene Ltd.
    
    
      As of March 31, 2008, Compugen had $14.8 million in cash, cash 
      equivalents, deposits and marketable securities, a decrease of $2.3 
      million from December 31, 2007.
    
    
      Conference Call and Web Cast Information
    
    
      To access the conference call, please dial 1-888-407-2553 from the US or 
      [phone] internationally. The call will also be available via 
      live webcast through Compugen’s Website, 
      located at www.cgen.com.
    
    
      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 1-877-456-0009 from the US or [phone]. 
      The replay will be available until 12 noon EDT on May 17, 2008.
    
    
      About Compugen
    
    
      Compugen’s mission is to be the world leader 
      in the discovery and licensing of product candidates to the drug and 
      diagnostic industries under milestone and revenue sharing agreements. 
      The Company’s increasing inventory of 
      powerful and proprietary discovery platforms is enabling the predictive 
      discovery – field after field – 
      of numerous therapeutic and diagnostic product candidates. These 
      discovery platforms are based on the Company’s 
      decade-long focus on the predictive understanding of important 
      biological phenomena at the molecular level. Compugen’s 
      current collaborations include Biosite, Medarex, Inc., Merck & Co., 
      Inc., Ortho-Clinical Diagnostics (a Johnson & Johnson company), Roche, 
      Siemens Healthcare Diagnostics, Inc., and Teva Pharmaceutical 
      Industries. In 2002, Compugen established an affiliate – 
      Evogene Ltd. (TASE:EVGN.TA) – to utilize the 
      Company’s in-silico predictive 
      discovery capabilities in the agricultural biotechnology field. For 
      additional information, please visit Compugen's corporate Website at www.cgen.com 
      and Evogene’s corporate Website at www.evogene.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 Ended 

          
            March 31,
          
        
      
      
        
        
        
        
        
          2008

          
            Unaudited
          
        
        
           
        
        
          2007

          
            Unaudited
          
        
      
      
        
          Revenues
        
        
        
        
          281
        
        
        
        
        
        
          -
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Cost and Expenses
        
        
        
        
        
        
        
        
        
      
      
        
          Cost of revenues
        
        
        
        
          7
        
        
        
        
        
        
          -
        
        
        
      
      
        
          Research and development expenses
        
        
        
        
          1,931
        
        
        
        
        
        
          2,339
        
        
        
      
      
        
          Less: governmental and other grants
        
        
        
        
          (166
        
        
          )
        
        
        
        
          (297
        
        
          )
        
      
      
        
          Research and development expenses, net
        
        
        
        
          1,765
        
        
        
        
        
        
          2,042
        
        
        
      
      
        
          Sales and marketing expenses
        
        
        
        
          308
        
        
        
        
        
        
          594
        
        
        
      
      
        
          General and administrative expenses
        
        
        
        
          814
        
        
        
        
        
        
          553
        
        
        
      
      
        
          
            Total operating expenses (1)
          
        
        
        
        
          2,887
        
        
        
        
        
        
          3,189
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating loss
        
        
        
        
          (2,613
        
        
          )
        
        
        
        
          (3,189
        
        
          )
        
      
      
        
          Financing income, net
        
        
        
        
          102
        
        
        
        
        
        
          276
        
        
        
      
      
        
          Other income, net
        
        
        
        
          16
        
        
        
        
        
        
          9
        
        
        
      
      
        
          Loss before taxes on income
        
        
        
        
          (2,495
        
        
          )
        
        
        
        
          (2,904
        
        
          )
        
      
      
        
          Taxes on income
        
        
        
        
          -
        
        
        
        
        
        
          -
        
        
        
      
      
        
          Loss from continuing operations
        
        
        
        
          (2,495
        
        
          )
        
        
        
        
          (2,904
        
        
          )
        
      
      
        
          Income (Loss) from discontinued operations
        
        
        
        
          -
        
        
        
        
        
        
          (203
        
        
          )
        
      
      
        
          Net loss
        
        
        
        
          (2,495
        
        
          )
        
        
        
        
          (3,107
        
        
          )
        
      
      
        
          Basic and diluted net loss per ordinary share from continuing 
          operation
        
        
        
        
          (0.09
        
        
          )
        
        
        
        
          (0.10
        
        
          )
        
      
      
        
          Basic and diluted loss per ordinary share from discontinuing 
          operation
        
        
        
        
          -
        
        
        
        
        
        
          (0.01
        
        
          )
        
      
      
        
          Basic and diluted net loss per ordinary share
        
        
        
        
          (0.09
        
        
          )
        
        
        
        
          (0.11
        
        
          )
        
      
      
        
          Weighted average number of ordinary shares outstanding
        
        
        
        
          28,349,291
        
        
        
        
        
        
          28,198,634
        
        
        
      
      
        
           
        
      
      
        
          
            (1) Includes stock based compensation
          
        
      
    
    
      
        
          
            COMPUGEN LTD.
          
          
            CONDENSED CONSOLIDATED BALANCE SHEETS DATA
          
          
            (U.S. dollars, in thousands)
          
        
      
      
        
           
        
      
      
        
        
        
           
        
        
          March 31,

          
            2008
          
          
            Unaudited
          
        
        
           
        
        
          December 31,

          
            2007
          
          
            Audited
          
        
      
      
        
        
        
        
        
           
        
      
      
        
          ASSETS
        
        
        
        
        
        
        
        
        
      
      
        
          Current assets
        
        
        
        
        
        
        
        
        
      
      
        
          Cash, cash equivalents, short term deposits and marketable securities
        
        
        
        
          
            14,831
          
        
        
        
        
          
            15,082
          
        
      
      
        
          Cash held in favor of other consortium partners
        
        
        
        
          64
        
        
        
        
          118
        
      
      
        
          Trade receivables
        
        
        
        
          12
        
        
        
        
          40
        
      
      
        
          Receivables and prepaid expenses
        
        
        
        
          836
        
        
        
        
          950
        
      
      
        
          Assets related to discontinued operation
        
        
        
        
          52
        
        
        
        
          54
        
      
      
        
          Total current assets
        
        
        
        
          15,795
        
        
        
        
          16,244
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Long-term investments
        
        
        
        
        
        
        
        
        
      
      
        
          Long term deposits and marketable securities
        
        
        
        
          -
        
        
        
        
          2,080
        
      
      
        
          Other assets
        
        
        
        
          4,196
        
        
        
        
          1,925
        
      
      
        
          Property and equipment, net
        
        
        
        
          1,312
        
        
        
        
          1,417
        
      
      
        
          Total assets
        
        
        
        
          21,303
        
        
        
        
          21,666
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          LIABILITIES AND SHAREHOLDERS’ EQUITY
        
        
        
        
        
        
        
        
        
      
      
        
          Current liabilities
        
        
        
        
        
        
        
        
        
      
      
        
          Accounts payable and accrued expenses
        
        
        
        
          2,268
        
        
        
        
          2,741
        
      
      
        
          Deferred revenues
        
        
        
        
          110
        
        
        
        
          150
        
      
      
        
          Liabilities related to discontinued operations
        
        
        
        
          -
        
        
        
        
          4
        
      
      
        
          Total current liabilities
        
        
        
        
          2,378
        
        
        
        
          2,895
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Long-term liabilities
        
        
        
        
        
        
        
        
        
      
      
        
          Accrued severance pay
        
        
        
        
          1,761
        
        
        
        
          1,486
        
      
      
        
          Other long-term liabilities
        
        
        
        
          20
        
        
        
        
          -
        
      
      
        
          Total long-term liabilities
        
        
        
        
          1,781
        
        
        
        
          1,486
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total shareholders’ equity
        
        
        
        
          17,144
        
        
        
        
          17,285
        
      
      
        
          Total liabilities and shareholders’ 
          equity
        
        
        
        
          21,303
        
        
        
        
          21,666