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Compugen Announces Organizational Changes and Restructuring

Compugen Announces Organizational Changes and Restructuring

Compugen Announces Organizational Changes and Restructuring

Compugen Announces Organizational Changes and Restructuring

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Compugen Ltd. has announced organizational changes to support its recently disclosed development and commercialization plans for 2006 and 2007.

The Company is being reorganized into three operating units: business units for Therapeutics and Diagnostic Biomarkers, and a Research and Discovery Unit.

The Therapeutics Business Unit’s primary short term focus is the on-going in-vitro and in-vivo validation of a large number of potential therapeutic proteins predicted by the Company’s initial discovery engines, and selected for further evaluation on the basis of market potential, proprietary position, and therapeutic advantages.

This business unit will be led by Dr. Noam Shani, previously Vice President, Biology Research and Development.

All of the Company’s activities in the field of diagnostic biomarkers have been consolidated into a Diagnostic Biomarker Business Unit that will be led by Dr. Anat Cohen-Dayag, previously Director of Diagnostics within the Biology R&D division.

During the past year Compugen has demonstrated its ability to discover biomarker candidates, primarily for various cancers and cardiovascular diseases that are of interest for further development and commercialization by leading companies in the field of immunoassay diagnostics.

To date, the Company has entered into milestone and royalty bearing agreements with three leading diagnostic companies covering a dozen potential products.

Compugen’s key competitive advantage is its scientific and technological infrastructure for life science discovery, and the Company will continue to invest substantial resources in further developing this capability.

In the revised organizational structure, a Research and Discovery Unit has been established to both provide new discoveries for evaluation by the therapeutic and diagnostic business units, as well as to be responsible for the creation of additional discovery engines and other platforms and technologies to continue to secure the Company’s leadership in predictive biology and its future growth.

This new unit will be headed by Dr. Yossi Cohen, previously Director of Science and Technology. 

The key driver for these organizational changes has been the desire to focus all of the Company’s resources and activities on its short and mid-term development and commercialization goals as disclosed last month.

Consistent with this, the objectives and resources required for each segment of the Company were analyzed and updated, resulting in the elimination of some activities that were determined not to directly support the achievement of these corporate goals.

The net result of these efforts is a planned reduction in the Company’s total headcount by approximately 25%, and an expected decrease in expenditures of $2-3 million per year in 2006 and 2007, compared to 2005.

Alex Kotzer, President and Chief Executive Officer stated, "It is now both possible and appropriate for the Company to target the unique discovery capability that has been created to specific product areas and, while continuing to invest substantially in the further enhancement of our core research, to also focus these activities in broad, but clearly defined, application areas."

"Unfortunately, this results in a number of very talented and loyal contributors to our past efforts and accomplishments leaving the Company, which is a very painful step for us to take."

"However, it is clear that these actions significantly improve Compugen’s ability to support and achieve its development and commercial objectives," Mr. Kotzer concluded.