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UPDATED: Compugen Sees Q4 Revenue Triple; Plans New Product Launches

This story has been updated from a previous version.

NEW YORK, Feb 14 – Compugen said Wednesday its fourth-quarter revenues tripled to $3.3 million, compared with $1.1 million a year ago, while revenues for 2000 increased to $6.9 million from $3.2 million in 1999 due to collaborations with Pfizer and Human Genome Sciences as well as patent licensing revenue. 

The company’s fourth quarter operating expenses totaled $6.2 million, up from $2.9 million for the same period in 1999, as research and development costs rose to $3 million, compared with $1.5 million in the year ago quarter.  

In the fourth quarter, Compugen launched its Z3 2d electrophoresis gel analysis software for proteomics, selling the tool to customers including Pfizer, Procter & Gamble, Genentech, and Aventis, and inked a deal to design DNA chips for Motorola.

The company also offers chip-design services and genomics analysis services through its LabOnWeb portal.

In a conference call following the release of its results, Compugen reiterated the strength of its strategy, particularly its emphasis on alternative splicing, which has gained prominence since the publication of the human genome papers earlier this week.

“This week’s release of the sequence of the human genome supports Compugen’s position of the past four years that alternative splicing is the rule and not the exception,” said Mor Amitai, CEO of Compugen. “Our understanding of this phenomenon positions us as the leading company in the understanding of the transcriptome, the missing link between the genome and the proteome.”

In its paper Genomics leader Celera estimated that there are only 30,000 genes in the human genome and said that alternative splicing explained the existence of many more proteins. 

Compugen’s off-the-shelf Gencarta platform offers access to its genome, proteome, and transcriptome databases. Compugen said it expects to see revenues from Gencarta in the first half of the year.

In the first two quarters, Compugen is also planning to launch a new web-based system for analyzing proteomics data. Protocall, which will be accessible through the company’s LabOnWeb platform, will be designed to help researchers identify proteins by matching up samples to the company’s protein database, which currently has 160,000 known proteins.

Compugen said throughout the year it would also explore the possibility of licensing the proteins it has discovered for commercial purposes and might also consider developing its own therapeutics.

“We may begin to develop one to two of our own [findings] in our own research facilities,” Compugen Chairman Martin Gerstel said.

Total R&D expenses for the quarter were $9.5 million, compared with $5.8 million for 1999, contributing to an increase in expenses for the year, which totaled $21.3 million, compared with $10.9 million for 1999.  

Sales and marketing expenses also increased to $1.2 million in the fourth quarter, compared with $299,000 for the same period of 1999, while total sales and marketing expenses for 2000 increased to $3.2 million, up from $1.1 million for 1999. General and administrative expenses increased to $725,000 for the quarter, from $394,000 for the 1999 quarter; and $3 million for the year, up from $1.9 million for 1999. 

Compugen’s total net loss decreased slightly for the fourth quarter to $1.5 million, or 6 cents per share, from $1.8 million for the same period of 1999. These losses were smaller than Wall Street’s expectation of 8 cents per share, based on a survey of brokers conducted by FirstCall/Thomson financial. 

For the year Compugen reported $13.4 million, or 96 cents a share, compared with $8.1 million, or $1.38 a share, in 1999. 

As of December 31, 2000, Compugen had cash assets of $90.7 million. 


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