Compugen Ltd. has reported financial results for the first quarter ending March 31, 2013.
Anat Cohen-Dayag, Ph.D., President and CEO of Compugen, stated, “During this past quarter, Compugen made substantial progress in addressing its commercial, product development and scientific objectives for 2013. These previously disclosed objectives include entering into collaboration arrangements with respect to certain product candidates in our Pipeline Program, furthering the research and development of product candidates and initiating our second focused area of discovery.”
Dr. Cohen-Dayag added, “With respect to our monoclonal antibody (mAb) programs, the continuing successful integration of our U.S. mAb generation and development activities, initiated last year, with our target discovery capabilities now allows us to move forward in advancing our programs toward therapeutic product development. In addition, we believe that these continuing achievements will establish Compugen as a major player in the field of mAb therapeutics, the fastest growing drug class in pharmaceuticals. This progress also supports the initiation of our target discovery for antibody-drug conjugate therapy, which was recently disclosed as our second focused product candidate discovery activity.”
Revenues for the first quarter of 2013 were $162,000 compared with no revenues for the comparable period in 2012, reflecting amounts received for certain activities in support of Neviah Genomics, Compugen's joint venture with Merck Serono.
Net loss for the most recent quarter was $3.4 million (after reflecting non-cash stock based compensation expense of $675,000 and a non-cash financial loss of $139,000 related to the accounting for certain research and development funding arrangements), or $0.09 per share, compared with a net loss of $4.1 million (after reflecting non-cash stock based compensation expense of $543,000 and a non-cash financial loss of $1.2 million related to the accounting for certain research and development funding arrangements), or $0.12 per share, for the corresponding quarter of 2012.
The decrease in net loss for the most recent quarter resulted in large part from the lower non-cash financial loss related to the accounting for certain research and development funding arrangements in the most recent quarter compared with the same quarter of 2012, as further discussed below.
Research and development expenses, net, for the first quarter of 2013 increased to $2.7 million, compared with $2.1 million for the first quarter of 2012, and remained the Company’s largest expense.
This increase mostly reflects establishment and initiation of activities at the South San Francisco operation in the second quarter of 2012 as well as increasing levels of activity in support of the Company’s Pipeline Program.
As of March 31, 2013 and 2012, the “Research and development funding arrangements and others” liability amounted to $8.0 million and $7.7 million, respectively, resulting from the accounting for the Baize research and development funding arrangements signed in December 2011 and December 2010, which were recently combined into one agreement following the receipt by Compugen of the final $5.0 million investment amount pursuant to the second Baize agreement.
The liability balances as of March 31, 2013 and 2012 were primarily related to the estimated fair values of the embedded derivative instruments resulting from the right of the investor, under both arrangements, to waive its right to receive potential future payments in exchange for Compugen ordinary shares.
As of March 31, 2013, cash and cash related accounts totaled $24.6 million, compared with $19.6 million at December 31, 2012. Both the March 31, 2013 and December 31, 2012 balances do not include either the $5.0 million recently received pursuant to the December 2011 Baize research and development funding arrangement or the market value of Compugen’s holdings of Evogene shares at the end of each such period.
Compugen continues to have no long-term debt other than the book liability associated with the Baize research and development funding arrangement, which, as discussed above, does not represent future cash obligations.