COMPUGEN LTD — Regulatory Filings 2002

Nov 19, 2002

6-K 1 d20007.htm

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

Pursuant to rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 for the month of October, 2002

Compugen Ltd. (Translation of registrant's name in English)

72 Pinchas Rosen Street, Tel-Aviv 69512, Israel (Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F X Form 40-F

On October 24, 2002, Compugen Ltd. (the "Registrant") issued the press release, filed as Exhibits 1 to this Report on Form 6-K, which is hereby incorporated by reference herein.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Compugen Ltd. (Registrant) By: /s/ Mor Amitai Name: Mor Amitai Title: President and CEO Date: November 3rd, 2002.

Exhibit 1

For Immediate Release

Compugen Reports Third Quarter 2002 Financial Results

TEL AVIV, ISRAEL, October 24, 2002 - Compugen Ltd. (NASDAQ: CGEN) today reported financial results for the third quarter ended September 30, 2002.

"We are pleased to report that during the past quarter Compugen continued to progress in each of our three key development areas: computational biology, computational chemistry, and computational medicine. Each one of these efforts is aimed at significantly increasing the probability of success of drug discovery and development," said Mor Amitai, Ph.D., President and Chief Executive Officer of Compugen.

Revenues for the quarter were $2.8 million (including $459,000 from research and development grants), compared to $3.1 million for the third quarter of 2001 (including $215,000 from research and development grants). The net loss for the quarter was $3.0 million (including a non-cash charge of $195,000 for amortization of deferred compensation), or $0.11 per share, compared with a net loss of $3.5 million (including $577,000 of deferred compensation), or $0.14 per share, for the corresponding quarter of 2001.

Revenues for the first nine months ended September 30, 2002 were $8.4 million (including $1.4 million from research and development grants), compared to $8.3 million for the same period in 2001 (including $588,000 from research and development grants). Net loss for the first nine months of 2002 was $9.0 million (including a non-cash charge of $678,000 for amortization of deferred compensation), or $0.34 per share, compared with a net loss of $11.0 million (including $1.8 million of deferred compensation), or $0.42 per share, for the same period in 2001.

Compugen continues to invest broadly in its unique R&D capabilities and intellectual property base. Research and development expenses for the first nine months ended September 30, 2002, excluding amortization of deferred compensation, were $9.9 million, compared to $10.9 million for the same period in 2001. Research and development expenses for the quarter were $3.5 million, excluding amortization of deferred compensation, the same as in the third quarter of 2001.

As of September 30, 2002, Compugen had $70.6 million in cash, cash equivalents, and short and long term cash deposits and corporate bonds, an increase of $0.4 million from $70.2 million as of June 30, 2002, and a decrease of $7.9 million from December 31, 2001. Quarterly fluctuations in cash depend, in part, on timing of payments under agreements. With respect to the third quarter, this had a positive impact on our cash.

Third Quarter Highlights

• Technology Licensing and Collaborations o Novartis - Novartis and Compugen expanded their multimillion-dollar collaboration in the area of computational biology, for the accelerated identification of drug targets, to include target validation. Under the expanded agreement, the two companies collaborate on the research and development of a new large-scale RNA interference (RNAi) platform. In addition, Novartis continued its licensing of Compugen's LEADS™ platform.
• Products o Gencarta - Compugen launched Gencarta™ over the Web. Gencarta, introduced in March 2001, is a comprehensive annotated genome, transcriptome and proteome database accessed through an intuitive viewer and a flexible query engine for advanced post-genomic research. The availability of the database over the Web will make it more accessible to life science researchers worldwide.

Updated Year 2002 Guidance

Compugen is updating its year 2002 guidance, as the Company no longer has covering analysts, in the US, to provide estimates.

• Revenues: Revenue guidance for the year 2002 is expected to be in the range of $10-$12 million. This is a change from our previous guidance of $11-$13 million.
• Research and Development: Guidance for total research and development spending in 2002 is in the range of $13-$14 million. This is a change from our previous guidance of $16-$17 million.
• Net Loss and Cash Balance: Guidance on net loss for 2002 is in the range of $12-$14 million. Guidance for cash and cash equivalents at year-end 2002 is approximately $65 million. These guidance numbers represent changes from our previous guidance of net loss in the range of $17-$19 million and cash and cash equivalents of approximately $60 million

Conference Call and Web Cast Information, and Recent Presentation

Compugen will hold a conference call to discuss its third quarter results on October 24, 2002 at 10:00 am EST. To access the conference call, please dial 1-866-500-4964 or 1-866-500-4965 from the US or +972-3-925-5910 internationally. A replay of the conference call will also be available approximately two hours after the completion of the live conference call. To access the replay, please dial +972-3-925-5933. The replay will be available until 12:00 noon EST on October 26, 2002.

The call will also be available via live Web cast through Compugen's Website, located at www.cgen.com.

In addition, a presentation by Martin Gerstel, Chairman of Compugen, that was given on October 17, 2002 is available at http://www/twst.com/econf/mm/uds2/cgen.html.

About Compugen

Compugen (NASDAQ: CGEN) is a pioneer in the merging of computational technologies with biology, chemistry and medicine to enhance drug discovery and development. This unique capability is a proven basis for providing high value products and services to leading biotechnology and pharmaceutical companies and for in-house discovery. For additional information, please visit Compugen's Corporate Website at www.cgen.com and the Company's Internet research engine for molecular biologists at www.labonweb.com .

This press release and the referenced corporate presentations contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include words like "may," "expects," "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 the development of new products; the ability to implement technological improvements; the ability of Compugen to obtain and retain customers. These and other factors are identified and more fully explained under the heading "Risk Factors" in Compugen's Registration Statement on Form F-1 and annual reports filed with the Securities and Exchange Commission.

(Tables to follow)

Company contact: Nurit Benjamini Chief Financial Officer Compugen Ltd. Email: nurit@cgen.com Tel: +972-3-7658-525

COMPUGEN LTD. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except for share and per-share amounts)

Nine Months Ended Three Months Ended September 30, September 30, 2002 2001 2002 2001 Revenues (unaudited) (unaudited) Products and services 7,040 7,682 2,352 2,902 Research and development grants 1,394 588 459 215 Total revenues 8,434 8,270 2,811 3,117 Cost and Expenses Cost of products and services 2,167 2,519 832 1,251 Research and development expenses 9,926 10,854 3,472 3,530 Sales and marketing expenses 3,920 4,558 1,264 1,271 General and administrative expenses 2,695 2,776 803 900 Amortization of deferred compensation 678 1,842 195 577 Total operating expenses 19,386 22,549 6,566 7,529 Operating loss (10,952) (14,279) (3,755) (4,412) Financing income, net 1,913 3,259 738 897 Minority interest 51 __ __ __ Net loss (8,988) (11,020) (3,017) (3,515) Basic and diluted net loss per ordinary share (0.34) (0.42) (0.11) (0.14) Weighted average number of ordinary shares 26,089,850 25,997,275 26,121,209 26,001,569 outstanding

COMPUGEN LTD. CONDENSED CONSOLIDATED BALANCE SHEETS DATA (U.S. dollars, in thousands)

September 30, December 31, 2002 2001 (Unaudited) (Audited) ASSETS Current assets Cash, cash equivalents and short-term $58,932 $32,347 investments Receivables and prepaid expenses 4,615 3,159 Inventories 140 134 Total current assets 63,687 35,640 Long-term investments Long-term cash deposits and corporate bonds 11,650 46,148 Property and equipment, net 3,824 4,272 Other assets 1,299 1,229 Total assets $80,460 $87,289 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses $4,726 $4,887 Deferred revenues 2,157 960 Total current liabilities 6,883 5,847 Accrued severance pay 1,701 1,380 Total shareholders' equity 71,876 80,062 Total liabilities and shareholders' equity $80,460 $87,289