Compugen Ltd. Reports Fourth Quarter and Year-End 2006 Financial Results.TEL AVIV Tel Aviv (tĕl əvēv`), city (1994 pop. 355,200), W central Israel, on the Mediterranean Sea. Oficially named Tel Aviv–Jaffa, it is Israel's commercial, financial, communications, and cultural center and the core of its largest , Israel -- Compugen Ltd. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CGEN CGEN Convective Sigmet Generation ) today reported financial results for the fourth quarter and year-end December 31, 2006. "Compugen has now clearly begun to demonstrate the wide scope of commercial opportunities resulting from our very successful decade-long focus on creating a unique life science research capability," stated Alex Kotzer, Compugen's President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "As we begin 2007, we have already utilized this capability to develop platforms for systematic and predictable discovery in a number of very different areas. These include immunoassay Immunoassay An assay that quantifies antigen or antibody by immunochemical means. The antigen can be a relatively simple substance such as a drug, or a complex one such as a protein or a virus. and nucleic acid nucleic acid, any of a group of organic substances found in the chromosomes of living cells and viruses that play a central role in the storage and replication of hereditary information and in the expression of this information through protein synthesis. based biomarkers for diagnostic products, therapeutic candidates, large-scale genetic differences for disease predisposition predisposition /pre·dis·po·si·tion/ (-dis-po-zish´un) a latent susceptibility to disease that may be activated under certain conditions. pre·dis·po·si·tion n. 1. and drug response, biomarkers for the early identification of drug toxicity, and targets for the joint development of antibody therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. ," Mr. Kotzer added. "We enthusiastically look forward to 2007 with the expectation of broadening and deepening this unparalleled capability with the availability of new discovery engines addressing additional important unmet needs, new and expanded collaborations, and a substantial increase in the number of therapeutic and diagnostic product candidates moving forward under revenue sharing revenue sharing Funding arrangement in which one government unit grants a portion of its tax income to another government unit. For example, provinces or states may share revenue with local governments, or national governments may share revenue with provinces or states. arrangements," Mr. Kotzer concluded. As previously projected, revenues for the fourth quarter and for the year 2006 were not significant ($10,000 for the fourth quarter of 2006, compared to no revenues for the fourth quarter of 2005, and revenues of $215,000 for the year 2006, compared to $646,000 for 2005). The net loss for the quarter was $3.8 million (including non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) of $523,000 related to stock based compensation), or $0.14 per share, compared with a net loss of $3.4 million (including a non-cash expense of $78,000 related to stock based compensation), or $0.12 per share, for the corresponding quarter of 2005. The net loss for the year 2006 was $13.0 million (including non-cash expense of $2.1 million related to stock based compensation), or $0.47 per share, compared with a net loss of $14.0 million (including non-cash expense of $391,000 related to stock based compensation), or $0.50 per share, for 2005. Research and development expenses of $3.3 million for the fourth quarter of 2006, compared to $3.2 million for the fourth quarter of 2005, remain the Company's largest expense. Total research and development expenses for 2006 were $11.6 million compared to $12.7 million for 2005. These amounts are before the deduction of governmental and other grants, which totaled $409,000 for the fourth quarter ended December 31, 2006, compared with $800,000 for the corresponding quarter in 2005, and $1.8 million for 2006 compared to $2.3 million for 2005. Accordingly, research and development expenses net of governmental grants were $9.8 million for 2006 as compared to $10.5 million for 2005. The attached balance sheet ended December 31, 2006 reflects a change in the accounting treatment for investment in Evogene Ltd., an affiliate of Compugen, as compared to that used in the balance sheets reported for the first three quarters of 2006. This revised accounting treatment had no effect on the Company's reported cash flows or results of operations for any periods and resulted in a reduction in total shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $1,278,000. Compugen also announced that Eli Zangvil, M.D., who joined the Company in November 2006 as Vice President of Business Development, has assumed the responsibilities previously held by Mr. Erez Chimovits as Executive Vice President of Commercial Operations. In addition, Anat Cohen-Dayag, Ph.D., Vice President of Diagnostic Markers and Therapeutic Targets, and Yossi Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. , M.D., Vice President of Research and Development, have assumed the responsibilities previously held by Noam Shani, Ph.D., as Vice President of Therapeutics. 2007 Projected Cash Uses and Balances As of December 31, 2006, Compugen had $26.4 million in cash, cash equivalents, deposits, and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has . The Company's expectation is that its total cash expenditures during 2007 will be in the range of $12-$14 million with a net cash usage for the year of $9-$11million, and therefore, assuming no new sources of cash during 2007, the Company would end 2007 with cash and cash equivalent reserves of approximately $16 million. Assuming no new sources of cash during either 2007 or 2008 and anticipated net cash uses, the Company anticipates that it would require additional cash resources by mid-2009, and that such additional required cash could be in the range of an estimated twenty million dollars until positive cash flow could be achieved. Market and other conditions will determine whether any necessary funds would be sought through equity-related offerings, collaborative or strategic arrangements, or some combination of these or other types of transactions. Conference Call and Webcast Information Compugen will hold a conference call to discuss its fourth quarter and year-end results on February 6, 2007 at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . 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 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 1-888-782-4291 from the US or +972-3-925-5901. The replay will be available until 12 noon EST on February 8, 2007. About Compugen Compugen's mission is to be the world leader in the discovery and licensing of product candidates to the drug and diagnostic industry. The Company's powerful discovery engines enable the predictive discovery of numerous potential therapeutics and diagnostic biomarkers. This capability results from the Company's decade-long pioneering efforts in the deeper understanding of important biological phenomena at the molecular level through the incorporation of ideas and methods from mathematics, computer science, and physics into biology, chemistry, and medicine. To date, Compugen's product discovery efforts and its initial discovery engines have focused mainly within the areas of cancer, immune-related, and cardiovascular diseases Cardiovascular disease Disease that affects the heart and blood vessels. Mentioned in: Lipoproteins Test cardiovascular disease . The Company's primary commercialization pathway for its therapeutic and diagnostic product candidates is to enter into milestone and revenue sharing out-licensing and joint development agreements with leading companies. Compugen has established an agricultural biotechnology affiliate - Evogene, and a small-molecule drug discovery affiliate - Keddem Bioscience. For additional information, please visit Compugen's corporate website at www.cgen.com. This press release may contain "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements include words such as "may", "expects", "could", "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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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. [TABLE OMITTED] [TABLE OMITTED] |
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