Oncology arm of Pipeline Program expanded to
include three different approaches for antibody-based cancer
therapy
Compugen Ltd. (NASDAQ: CGEN) today reported financial results
for the second quarter ending June 30, 2014.
Dr. Anat Cohen-Dayag, Compugen’s President and CEO, stated,
"During the first six months of this year, our R&D efforts
focused primarily on advancing product candidates in our Pipeline
Program, diversifying the pipeline with additional target
candidates for antibody-based therapy, and extending our
capabilities to enable the validation and development of multiple
product candidates in parallel. Product candidates added to the
Pipeline Program since late last year include two additional
B7/CD28-like checkpoint candidates that increased the total number
of such discoveries by Compugen to eleven, five target candidates
for antibody-drug conjugate cancer therapy, and four
immune-modulatory targets candidates distinct from the B7/CD28
family of proteins.”
Dr. Cohen-Dayag continued, “Following these latest additions,
the oncology arm of our Pipeline Program now includes early stage
target candidates representing three different approaches for
antibody-based cancer treatment, all based on Compugen-discovered
targets. We believe that this achievement, which is unique in our
industry, provides an excellent example of the value of Compugen’s
long-term investment in establishing its broadly applicable
predictive discovery infrastructure.”
Dr. Cohen-Dayag concluded, "We are already beginning to see an
acceleration of positive experimental results with respect to our
Pipeline Program candidates. This, combined with the resulting
increase in both industry recognition of our discovery capabilities
and interest in our pipeline candidates, provides us with even
greater confidence of achieving our short-term objectives and
longer-term goals.”
Revenues for the second quarter of 2014 and six months ending
June 30, 2014 were $2.0 million and $4.1 million respectively,
compared with $22,000 and $184,000 for the comparable periods in
2013. These substantial increases from the prior year periods
resulted primarily from a milestone payment and the recognizable
portions of a non-refundable upfront payment in accordance with US
GAAP revenue recognition accounting, in each case pursuant to the
August 2013 collaboration and license agreement with Bayer Pharma
AG.
Cost of revenues for the second quarter of 2014 and the six
months ending June 30, 2014 were $0.9 million and $1.6 million
respectively, compared with $84,000 and $234,000 for the comparable
periods in 2013. These increases are largely the result of
increased research and development expenses attributed to our
current collaborations.
Research and development expenses, net, for the second quarter
of 2014 and the six months ending June 30, 2014 were $3.1 million
and $6.3 million respectively, compared with $3.4 million and $6.2
million for the comparable periods in 2013. Research and
development expenses do not include expenses incurred in support of
current collaborations which, as noted above, are accounted for as
cost of revenues.
Compugen’s net loss for the second quarter of 2014 was $2.3
million (after reflecting non-cash stock-based compensation of $0.7
million), or $0.05 per basic share, compared with a net loss of
$3.0 million (after reflecting non-cash stock-based compensation of
$0.7 million), or $0.08 per basic share, for the comparable period
in 2013. Compugen’s net loss for the first six months of 2014 was
$4.2 million (after reflecting non-cash stock-based compensation of
$1.6 million), or $0.09 per basic share, compared with a net loss
of $6.4 million (after reflecting non-cash stock-based compensation
of $1.4 million), or $0.17 per basic share, for the comparable
period in 2013. The reductions in net loss for the second quarter
and the first six months of 2014, compared with the comparable
periods in 2013, were attributable to increases in revenues
recognized for the quarter and the first six months, compared with
the comparable periods in 2013, partially off-set by increased
corporate expenses for such periods, primarily relating to research
and development.
As of June 30, 2014 and December 31, 2013, the liability related
to the "Research and development funding arrangements" amounted to
$13.1 million and $13.2 million respectively, in each case solely
relating to the accounting for the Baize research and development
funding arrangements signed in December 2011 and December 2010, as
amended. These noncash liability balances, which increase or
decrease based on changes in the market value of Compugen ordinary
shares, are primarily related to the estimated fair values of the
embedded derivative instruments resulting from the right of the
investor, under the amended agreement, to waive its right to
receive potential future payments in exchange for Compugen ordinary
shares.
As of June 30, 2014, cash, cash equivalents and short-term bank
deposits totaled $113.3 million compared with $46.8 million at
December 31, 2013. This increase of $66.5 million compared with
December 31, 2013 resulted primarily from net proceeds of $67.0
million from the Company's underwritten public offering of ordinary
shares completed in March 2014. With respect to calendar year 2014,
Compugen has budgeted total cash expenditures (without taking into
consideration actual to date or potential additional cash receipts)
of approximately $24 million.
Conference Call and Webcast InformationCompugen will hold
a conference call to discuss its second quarter 2014 results today,
August 6, 2014 at 10:00 a.m. EDT. To access the conference call,
please dial 1-888-281-1167 from the US or +972-3-918-0610
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
1-877-456-0009 from the US or +972-3-925-5925 internationally. The
replay will be available through August 8, 2014.
About CompugenCompugen 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 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. Compugen’s wholly-owned
U.S. subsidiary located in South San Francisco is developing
monoclonal antibody therapeutic candidates against its novel drug
targets. For additional information, please visit Compugen's
corporate website at www.cgen.com.
Forward-Looking Statement DisclaimerThis press release
contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, including
statements related to the Company’ short and long-term objectives,
anticipated total cash uses for 2014 and product candidates added
to the Company’s Pipeline Program, including, without limitation,
B7/CD28 checkpoint proteins, targets for antibody-drug conjugate
cancer therapy and other immune-modulatory targets. Forward-looking
statements can be identified by the use of terminology such as
“may,” “expectations,” “approximately,” “further” and “potential”
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 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, 2013 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,
2014Unaudited
2013Unaudited
2014Unaudited
2013Unaudited
Revenues 1,964 22 4,097 184 Cost of revenues
859 84 1,616
234
Gross profit (loss) 1,105
(62) 2,481
(50) Operating expenses Research
and development expenses, net 3,074 3,437 6,316 6,176 Marketing and
business development expenses 109 157 282 352 General and
administrative expenses
1,240 1,063
2,512 2,105 Total operating
expenses 4,423 4,657
9,110 8,633
Operating loss (3,318) (4,719) (6,629)
(8,683) Financing income, net
1,059
1,680 2,472 2,270 Net
loss before taxes (2,259) (3,039) (4,157)
(6,413) Taxes on income
(60) -
(60) - Net loss
(2,319) (3,039)
(4,217) (6,413)
Basic net loss per ordinary share (0.05) (0.08) (0.09)
(0.17) Weighted average number of ordinary shares used in computing
basic net loss per share 48,462,334 38,204,202 45,970,766
37,746,520 Diluted net loss per ordinary share (0.07) (0.09) (0.09)
(0.18) Weighted average number of ordinary shares used in computing
diluted net loss per share 49,796,012 40,221,504 45,970,766
39,140,651
COMPUGEN LTD. CONDENSED
CONSOLIDATED BALANCE SHEETS DATA
(U.S. dollars, in thousands)
June 30,2014(unaudited)
December 31,2013(audited)
ASSETS Current assets Cash, cash equivalents and
short-term bank deposits 113,259 46,766 Investment in Evogene 1,858
4,565 Trade receivable 1,140 - Other accounts receivable and
prepaid expenses
912 1,885 Total
current assets 117,169 53,216
Non-current investments Severance pay fund
2,256 2,129 Total non-current
investments 2,256 2,129
Non-current prepaid expenses 107
158 Property and equipment, net
2,009 1,208 Total assets
121,541 56,711 LIABILITIES AND
SHAREHOLDERS’ EQUITY Current liabilities Other accounts
payable, accrued expenses and trade payables 3,692 2,421 Deferred
revenues
3,121 5,318 Total current
liabilities 6,813 7,739
Non-current liabilities Research and development funding
arrangement 13,074 13,189 Deferred revenues 948 1,454 Accrued
severance pay
2,577 2,441 Total
non-current liabilities 16,599 17,084
Total shareholders’ equity 98,129
31,888 Total liabilities and shareholders’
equity 121,541 56,711
Compugen Ltd.Tsipi Haitovsky, Global Media
Liaison+972-52-598-9892tsipih@cgen.com
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