Compugen Reports First Quarter 2005 Financial Results

    Business Editors/Health/Medical Writers

    TEL AVIV, Israel--(BUSINESS WIRE)--April 20, 2005--Compugen Ltd. (NASDAQ: CGEN) today reported financial results for the first quarter ended March 31, 2005.
    Revenues and governmental and other grants for the quarter were $865,000 (including $384,000 from governmental and other grants), compared to $1.5 million (including $401,000 from governmental and other grants) for the first quarter of 2004. The net loss for the quarter was $3.7 million (including a non-cash income of $10,000 for amortization of deferred compensation), or $0.13 per share, compared with a net loss of $3 million (including a non-cash expenses of $238,000 for amortization of deferred compensation), or $0.11 per share, for the corresponding quarter of 2004.
    As of March 31, 2005, Compugen had $43.5 million in cash, cash equivalents, and marketable securities, a decrease of $5 million from December 31, 2004, compared to a decrease of $3.5 million during the fourth quarter of 2004. The larger amount for the most recent quarter is related to the timing of certain receipts and expenditures.
    "During the past quarter we saw important accomplishments in each of the two components of our business model - expanding and deepening our unique discovery capabilities in terms of scientific understandings, specific discoveries, platforms and people; and utilizing these capabilities in establishing the framework, arrangements and relationships that are essential to the establishment of a profitable, and long term sustainable, discovery company," stated Mor Amitai, Ph.D., President and CEO. "Accomplishing this through important contributions to human therapeutics and diagnostics is a goal that others in the pharmaceutical industry, relying on more traditional and various novel discovery methods, have found exceedingly difficult to achieve," he concluded.

    Conference Call and Web Cast Information

    Compugen will hold a conference call to discuss its first quarter results on April 20, 2005 at 10:00 am EST. To access the conference call, please dial 1-866-860-9642 from the US or +972-3-918-0610 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 1-866-276-1485 from the US or +972-3-925-5901. The replay will be available until 12 noon EST on April 22, 2005.
    The call will also be available via live Web cast through Compugen's Website, located at www.cgen.com.

    About Compugen

    Compugen is a drug and diagnostic discovery company incorporating ideas and methods from mathematics, computer science, and physics into biology, chemistry, and medicine. The Company's powerful predictive models and discovery engines are both advancing the understanding of important biological phenomena and enabling the discovery of numerous potential therapeutic products and diagnostic markers. The Company has an early stage in-house pipeline consisting of selected therapeutic protein candidates discovered by the Company; additional discoveries have been out-licensed for development. Among Compugen's customers and partners are leading pharmaceutical and diagnostic companies, such as Abbott Laboratories, Diagnostic Products Corporation, Novartis, and Pfizer. Compugen has established a small-molecule drug discovery affiliate - Keddem Bioscience, and an agricultural biotechnology affiliate - Evogene. For additional information, please visit Compugen's corporate Website at www.cgen.com.

    This press release contains "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 annual reports filed with the Securities and Exchange Commission.

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

Three Months Ended March 31, ---------------------- 2005 2004 Unaudited Unaudited ----------------------

Revenues 481 1,119 Governmental and other grants 384 401 Total revenues and grants 865 1,520

Cost and Expenses Cost of revenues 19 464 Research and development expenses 3,495 2,896 Sales and marketing expenses 460 678 General and administrative expenses 700 787 Amortization of deferred compensation (10) 238 Total operating expenses 4,664 5,063

Operating loss (3,799) (3,543) Financing income (expenses), net (5) 460 Other income 66 93 Net loss (3,738) (2,990) Basic and diluted net loss per ordinary share (0.13) (0.11) Weighted average number of ordinary shares outstanding 27,758,583 27,198,759

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

March 31, December 2005 31, 2004 Unaudited Audited ---------------------

ASSETS Current assets Cash, cash equivalents, and marketable securities 19,686 20,574 Receivables and prepaid expenses 1,511 1,545 Total current assets 21,197 22,119

Long-term investments Marketable securities 23,781 27,854 Other assets 1,645 1,641 Property and equipment, net 3,890 3,739 Total assets 50,513 55,353

LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses 2,082 3,107 Deferred revenues - 276 Total current liabilities 2,082 3,383

Long-term liabilities Accrued severance pay 1,955 1,878 Other long-term liabilities 60 60 Excess of losses over investment in Evogene 466 466 Total long-term liabilities 2,481 2,404

Total shareholders' equity 45,950 49,566 Total liabilities and shareholders' equity 50,513 55,353

--30--CA/se*

CONTACT: Compugen Ltd. Chief Financial Officer Nurit Benjamini, +972-3-7658-525 nurit@cgen.com

KEYWORD: ISRAEL INTERNATIONAL AFRICA/MIDDLE EAST INDUSTRY KEYWORD: MEDICAL PHARMACEUTICAL BIOTECHNOLOGY EARNINGS CONFERENCE CALLS SOURCE: Compugen Ltd.

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