Immune checkpoint related achievements
include first collaboration agreement for cancer immunotherapy and
experimental results supporting additional candidates
Scientific Advisory Board for Oncology and
Immunology formed
Compugen Ltd. (NASDAQ: CGEN) today reported financial
results for the third quarter and nine months ending September 30,
2013.
Anat Cohen-Dayag, Ph.D., President and CEO of Compugen, stated,
“After more than a decade of focused research and infrastructure
building, we are now demonstrating significant progress in the
first, of what we hope to be, a number of new and exciting product
oriented chapters in the evolution of Compugen. This first chapter
relates to our ongoing activities in the field of immune checkpoint
proteins, a field of great promise and interest.
Dr. Cohen-Dayag continued, “During the past quarter we entered
with Bayer Pharma AG our first immune checkpoint related
collaboration agreement. In addition, we disclosed experimental
results supporting a third immune checkpoint related product
candidate for oncology and results supporting additional potential
indications for a previously disclosed candidate. We also formed a
Scientific Advisory Board of world experts to provide insight and
guidance in this area, and more generally in the Company’s focus
areas of immunology and oncology.”
Dr. Cohen-Dayag concluded, “The field of immune checkpoint based
therapies was selected for the first focused use of Compugen’s
predictive discovery capabilities. Therefore, it is extremely
gratifying to see how our continuing achievements in this field are
now providing the potential to establish Compugen as a significant
contributor in the worldwide fight against cancer and the treatment
of autoimmune diseases through therapies based on immune
checkpoints, while at the same time, demonstrating the value of the
unique predictive discovery infrastructure that we have
established.”
Revenues for the third quarter of 2013 and the nine months
ending September 30, 2013 were $1.6 million and $1.8 million,
respectively, compared with $108,000 for both comparable periods in
2012. Revenues reported for the most recent periods included the
portion of the non-refundable upfront payment received under the
August 2013 collaboration and license agreement with Bayer Pharma
AG (“Bayer Agreement”) that was recognizable during such periods in
accordance with U.S. GAAP revenue recognition accounting.
Cost of revenues for the third quarter of 2013 and the nine
months ending September 30, 2013 were $1.5 million and $1.7 million
respectively, compared with $33,000 for both comparable periods in
2012. The increase reflects the certain research and development
expenses attributed to the Bayer Agreement and royalties to the
Israeli Chief Scientist Office, in accordance with Israeli research
grants rules. In addition, cost of revenues for the third quarter
of 2013 and the nine months ending September 30, 2013 also include
certain payments we made pursuant to the research and development
funding arrangements related to the Bayer Agreement’s upfront
payment.
Net loss after taxes for the most recent quarter was $4.7
million (after reflecting a non-cash expense of $1.0 million
related to stock-based compensation and non-cash financial loss of
$2.1 million related to the accounting for certain research and
development funding arrangements as further described below), or
$0.12 per share, compared with a net loss of $3.5 million (after
reflecting a non-cash expense of $708,000 related to stock-based
compensation and a non-cash financial income of $58,000 related to
the research and development funding arrangements), or $0.10 per
share, for the corresponding quarter of 2012.
Net loss after taxes for the first nine months of 2013 was $11.2
million (after reflecting non-cash expense of $2.4 million related
to stock-based compensation and a non-cash financial loss of $1.7
million related to the research and development funding
arrangements), or $0.29 per share, compared with net loss of $8.3
million (after reflecting a non-cash expense of $1.8 million
related to stock-based compensation and non-cash financial income
of $1.3 million related to the research and development funding
arrangements), or $0.23 per share, for the same nine-month period
in 2012. The increase in net loss for the first nine months of 2013
compared with the same nine-month period in 2012, resulted in large
part from increased cost of revenues and research and development
expenses, net, as further discussed below.
Research and development expenses, net, were $2.8 million for
both the third quarter of 2013 and 2012, and remain the Company’s
largest expense. Research and development expenses, net, were $9.0
million for the first nine months of 2013, compared with $6.8
million for the first nine months of 2012. The growth in research
and development expenses, net, for the first nine months of 2013
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.
As of September 30, 2013 and December 31, 2012, the liability
related to the "Research and development funding arrangements"
amounted to $14.1 million and $7.9 million, respectively, resulting
from the accounting for the Baize research and development funding
arrangements signed in December 2010 and December 2011, and as
amended in April 2013. The liability balances do not reflect future
cash payment obligations and are primarily related to the estimated
fair values of the derivative instruments resulting from the right
of Baize to waive its right to receive potential future payments in
exchange for Compugen ordinary shares. Therefore such liability
balances will reflect changes in the market value of Compugen
ordinary shares.
As of September 30, 2013, cash and cash related accounts totaled
$44 million, which includes net proceeds from the at-the-market
sale during the third quarter of 2013 by the Company of 584,927
Compugen ordinary shares at an average price of $9.23 per share
pursuant to a registration statement filed January 11, 2011 and a
subsequent sales agreement entered into with Cantor Fitzgerald
& Co. Such September 30, 2013 cash and cash accounts balance
does not include the market value of Compugen’s holdings of Evogene
Ltd.'s shares at such time.
Conference Call and Webcast Information
Compugen will hold a conference call to discuss its third
quarter 2013 results today, October 29, 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 +972-3-925-5921 internationally. The replay will be
available through November 1, 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, include words such as “may,” “expects,”
“anticipates,” “potential,” “believes,” and “intends,” and describe
opinions about future events. Forward-looking statements in this
press release include, but are not limited to, statements that
Compugen's achievements in the field of immune checkpoint based
therapies are providing the potential to establish Compugen as a
significant contributor in the in the worldwide fight against
cancer and the treatment of autoimmune diseases through therapies
based on immune checkpoints. 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 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, 2012 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 Ended
September 30,
Nine Months Ended
September 30,
2013
Unaudited
2012
Unaudited
2013
Unaudited
2012
Unaudited
Revenues 1,590 108 1,774 108 Cost of revenues
1,465
33
1,699
33
Gross profit 125 75
75 75 Operating
expenses Research and development expenses, net 2,842 2,787
9,018 6,834 Marketing and business development expenses 415 147 767
498 General and administrative expenses
1,270
765 3,375 2,444 Total
operating expenses * 4,527
3,699 13,160
9,776 Operating loss
(4,402) (3,624) (13,085) (9,701)
Financing income (loss), net **
(185) 114
2,085 1,446 Net loss before taxes
(4,587) (3,510) (11,000) (8,255) Taxes
on income
155 - 155
- Net loss (4,742)
(3,510) (11,155)
(8,255) Basic net loss per
ordinary share (0.12) (0.10) (0.29) (0.23) Weighted average number
of Ordinary shares used in computing basic net loss per share
39,145,119 35,991,398 38,217,843 35,750,276 Diluted net loss per
ordinary share (0.12) (0.10) (0.29) (0.30) Weighted average number
of Ordinary shares used in computing diluted net loss per share
39,145,119 36,797,405 38,217,843 36,406,301
* Includes non-cash stock based compensation.
** Includes non-cash expenses related to the Baize research and
development funding arrangements.
COMPUGEN LTD. CONDENSED CONSOLIDATED BALANCE
SHEETS DATA (U.S. dollars, in thousands)
September 30,
2013
Unaudited
December 31,
2012
Audited
ASSETS Current assets Cash, cash equivalents and
short-term bank deposits $ 43,837 $ 19,589 Restricted cash 101 96
Investment in Evogene 3,985 5,196 Other accounts receivable and
prepaid expenses 1,917 690 Receivables on account of shares
2,011 - Total current
assets 51,851 25,571
Non-current investments Severance pay fund
2,007 1,728 Total non-current
investments 2,007 1,728
Long-term prepaid expenses 185
360 Deferred tax asset
201 - Property and
equipment, net 1,143
1,250 Total assets $
55,387 $ 28,909
LIABILITIES AND SHAREHOLDERS’ EQUITY Current
liabilities Other accounts payable, accrued expenses and trade
payables $ 3,425 $ 1,384 Deferred revenue
5,781
- Total current liabilities
9,206 1,384 Long-term
liabilities Research and development funding arrangements
14,102 7,872 Deferred revenue 2,720 - Accrued severance pay
2,329 1,981 Total long-term
liabilities 19,151
9,853 Total shareholders’ equity
27,030 17,672 Total liabilities
and shareholders’ equity $ 55,387
$ 28,909
Compugen Ltd.Tsipi HaitovskyGlobal Media LiaisonEmail:
tsipih@netvision.net.ilTel: +972-52-598-9892
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