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THE GENOMEWEB INTERVIEW: In Spite of a Bubbling Maelstrom, Compugen Looks Ahead

NEW YORK, April 3 - According to Robertson Stephens, Compugen "is having its most successful year." Recent collaborations with Millennium Pharmaceuticals, Gene Logic, and DiaDexus have broadened the company's external R&D footprint, while in-house the firm has used its LEADs platform to discover a pair potentially lucrative proteins. 

Compugen is also widely expected to lock up a handful of agreements in the coming months, including additional subscriptions to its GenCarta database, a deal to license its first genomics targets, and maybe some target-discovery collaborations.

But like most of its peers in the genomics and proteomics space, Compugen is forced to play the waiting game: Customers have yet to use its technology to create new therapeutics.


What's more, Compugen has only one main customer, Parke-Davis, which accounts for "a large portion" of its revenue, according to Robbie Stephens, which maintains Compugen as a 'Strong Buy.' And not only does the firm's new site have just two corporate customers, the platform itself "remains unproven."

And Compugen's geography--it's based in Tel Aviv, Israel--only adds to the anxiety. Unless, that is, you're Lior Ma-ayan, Compugen's optimistic executive vice president of corporate development, who recently spoke to GenomeWeb about the company's direction--and tenuous geopolitical predicament.


(Editor's note: This interview took place on March 20, days before Israel sent troops and tanks into the West Bank, located about 25 miles from Tel Aviv.)


GenomeWeb: Compugen is based in Israel. Have the recent spasms of violence caused any day-to-day corporate disruptions?


Lior Ma-ayan: The very short answer is No. Absolutely not. I cannot tell even one example of any constrain on our day-to-day operation. We have just had several presentations at the first Israel biotechnology event [BioTech Israel 2002, held in Tel Aviv on March 20 to 21]. I would say not everybody arrived, and not all pre-booking was fulfilled.

But it was clear that biotech in Israel is probably as lucrative as it was, and still attracts a lot of scientific and commercial interest from all over the world.... There really is no practical issues with the situation.


Although ... if this turns into a long-term issue it will hinder several aspects, and biotech will not be the only [industry] to suffer.


GW: As a former member of Israel's biotech committee, can you say how many companies in your space are based in the country?


LM: Probably now around 170 companies across the drug-discovery spectrum; there are product companies, there are platform companies. However, there are probably no more than 12 publicly traded companies, and that includes three public markets: the Nasdaq, where we are traded; in London, where companies like XTL [Biopharmaceuticals is] traded; and in Tel Aviv, where we also are listed.

You are looking at a nice size of an industry, which is the result of very strong science being done at academic institutes here in Israel. 


GW: Faced with this uncertain political environment, does Compugen plan to grow its R&D or sales and marketing staff either organically or through outside acquisitions?


LM: For the near future, we do have plans to grow [R&D] in an organic way. As for the inorganic way, we are looking at opportunities ... but that is not a core element in our R&D growth.


GW: What, in your opinion, can Compugen do better as a genomics-proteomics company?


LM: The fact that the American market is not exposed to the science and the breadth of business we do here at Compugen is unfortunate. I am talking mainly about the financial market. I think there was a lot of noise about genomic and post-genomic companies coming to the public markets in the year 2000, and it was very difficult to highlight the very good from the good, and the good from the bad.


And we were probably in a second seat in our ability to expose our capabilities in front of the [American] financial markets. We are trying to change that by exposing the quality of science and the quality of discovery we do and the quality of business we do by doing a lot of effort across ... the  European and American markets. And I hope that this will bear fruit soon. 

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