Today I had the privilege of listening to the Compugen Conference call at 10:00 EST. As soon as it began I noticed that the style of this conference call was very different than the usual vomit of numbers. The Biotech calls tend to be conceptual rather than numerical. CGEN representatives steered clear of the financials which were all par with the projections of the previous quarter.
Compugen’s CEO came on the line and laid out exactly what CGEN is all about: The only factor which is relevant in the BioTechnology industry is the discovery and development of working products, everything else will follow.
Three Big Questions that face Compugen:
Can it be done?
The computer driven predicative molecular biology did not work until 2008. Since then, CGEN has been very lucky to have some loyal investors. The avoidance of the balance sheet wasbecause the company has not been making money.
Even if you have the discovery capability do you have the business model?
Compugen banks on milestone payments and royalties from a successful product. With the new in silico technology, they are well on their way to pushing out many new, working products into their pipeline. The key for CGEN is collaboration.
Given the business model, do they have the capital?
The answer is yes. CGEN has 23 Million Cash on hand with No outstanding Debt. Cash burn of only 8.5 million
Currently Compugen is delivering peptides to Pfizer, CEO Martin S. Gerstel is confident that more deals like this are approaching in the future. The pendulum has swung towards the small cap bio technology market, now the big guys are all knocking on the door not wanting to miss the next big thing. 2010 marks a clear inflection point for this bio-tech company with the culmination of both funding and technology, success may be right around the corner.
Investors agree, CGEN is trading at $4.45 up 8.5% +.35 at a volume just over 500k
About Compugen
Compugen’s mission is to be the world leader in the discovery and licensing of product candidates to the drug and diagnostic industries under milestone and revenue sharing agreements. The Company’s increasing inventory of powerful and proprietary discovery platforms is enabling the predictive discovery – field after field – of numerous therapeutic and diagnostic product candidates. These discovery platforms are based on the Company’s decade-long focus on the predictive understanding of important biological phenomena at the molecular level. Compugen’s to date collaborations include Biosite, Medarex, Inc., Merck & Co., Inc., Ortho-Clinical Diagnostics (a Johnson & Johnson company), Roche, Siemens Healthcare Diagnostics, Inc., and Teva Pharmaceutical Industries. In 2002, Compugen established an affiliate – Evogene Ltd. (TASE: EVGN.TA) – to utilize the Company’s in silico predictive discovery capabilities in the agricultural biotechnology field.