Compugen Ltd (CGEN) 2005 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Compugen Ltd. Q3 2005 financial results for conference call. [Operator Instructions]

With on the line today are Mr. Martin Gerstel, Chairman; Alex Kotzer, President and CEO; and Nurit Benjamini, CFO.

I would like to remind everyone that the Safe Harbor language contained in today’s press release also pertains to all contents of this conference call. If you have not received a copy of today’s release and would like to do so, please contact Nurit Benjamini at telephone number 9-723-765-8525.

Mr. Gerstel, would you like to begin?

Yes. Thank you. Greetings and thank you for participating in this, our first quarterly call with Alex Kotzer, Compugen’s new President and CEO. Alex will address you after my initial comments, followed by Nurit Benjamini, Compugen’s CFO, who will review our financial results for the quarter and then we will conclude with a Q&A session.

Alex joined Compugen on September 1st, just two months ago, after spending the prior 12 years with Serono, a global biotechnology leader headquartered in Switzerland, initially as the President and CEO of its Israeli affiliate, InterPharm. Accordingly, Alex has brought to Compugen many years of relevant experience, combined with a proven track record in managing biotech research and operations.

His background makes him ideal to lead Compugen as we move forward with the development and commercialization of our initial diagnostic and therapeutic product candidates, as well as to continue to advance our predictive research capabilities. We are extremely pleased that Alex has chosen to join us.

Alex has taken the leadership role at Compugen at a very exciting and also a very challenging time. For almost a decade, Compugen’s exceptionally talented, multidisciplinary team has pioneered the deeper understanding of various life processes at the molecular level. And we have now reached the point where these capabilities are demonstrating the ability to reliably provide the types of discoveries that biopharmaceutical and diagnostic companies are looking for to seed their product development pipelines.

The initial demonstration of this capability was the signing, during a period of less than 10 months, of milestone and royalty-bearing pipeline agreements with Diagnostic Products Corporation, Ortho-Clinical Diagnostics, a J&J company, and Biosite - three leading diagnostic companies.

In total, these three agreements target the development of up to 15 individual diagnostic products and thus, in the future, could give rise to tens of millions of dollars of royalty income to Compugen per year in addition to some significant milestone payments along the way.

As earlier stated, Alex has also joined Compugen at a time of great challenge for the Company. Our key strategic advantage is in the breadth, power, and predictability of our discovery capabilities. However, discoveries, by definition, create intellectual property at a very early stage and due to the high failure rate experienced by our industry, it is difficult to recognize significant value from this discoveries through early sale or licensing without additional validation.

This is particularly true with respect to therapeutic products, compared to diagnostics or biomarkers. For diagnostics and biomarkers, in general, the researcher, at least initially, is primarily interested in the fact that the protein is differentially expressed in healthy and diseased tissue.

Therefore, Compugen’s predictive, transcriptome and proteome, combined with the use of our focused discovery engines, provide an exceptional and unique capability for this purpose, as demonstrated by the signing in a period of less than 10 months of the three pipeline agreements that I just mentioned. Perhaps the most impressive part of this achievement is that Compugen did not focus its discovery efforts on diagnostics and biomarkers until early last year.

On the other hand, in order for a potential collaborator to have enough confidence in a putative therapeutic protein to license it in and commit development dollars to it, in general, in addition to knowing that it is differentially expressed, there must be some indication that it plays a role in the disease pathway.

Thus, some level of additional validation, which will vary greatly from company to company and disease to disease, will be required. This is the primary purpose of our current efforts with respect to the putative therapeutic proteins that we have discovered and selected for addition to our early-stage pipeline.

Based on the above, the next three years should be very exciting, as our initial discoveries enter the commercialization stage and we continue to advance our very powerful discovery capabilities. Furthermore, the anticipated success of our initial discoveries should not only lead to direct financial rewards but should greatly increase the confidence of the industry and the financial community in our efforts and their expected results.

We are confident of this occurring and of the long-term value of our efforts. However, a key challenge now for management is to substantially accelerate this process through demonstrated external corporate validation events. Our current cash resources will be sufficient, based on our current burn rate, until early 2008. This makes the next year or so a very critical time for us to clearly demonstrate and provide validation for our intellectual property and underlying capabilities.

And now I’d like to turn the call over to Alex Kotzer, who two months ago took over, took on - and I believe I can say, enthusiastically - these responsibilities as Compugen’s new President and CEO. Alex?

Thank you, Martin, for your kind introduction and thank you all for joining our conference call to review Compugen’s Q3 financial results.

I would like to take this opportunity to also thank Mor Amitai, my predecessor, for his long service to the Company and specifically for his commitment and full time involvement in ensuring a smooth transfer of the CEO responsibilities.

Martin described in his opening remarks my previous work experience in the biopharmaceutical world. In my remarks today, I would like to start with a few words on why I accepted the position of CEO of Compugen and yes, Martin, with a lot of enthusiasm.

First, I assume that we all agree that many important new healthcare products will be discovered as scientists worldwide continue to increase their understanding of life processes at the molecular level. Compugen has positioned itself to be a leader in this effort. This has been accomplished through building a world class life science research capability, uniquely incorporating [indiscernible - highly accented language] mathematics, physics and computer sciences into molecular biology and its related disciplines.

The scientific success of this effort has been demonstrated by many publications of important breakthroughs in areas such as alternative splicing and natural [indiscernible - highly accented language], while the commercial potential has been demonstrated by the creation of the Company’s intellectual property portfolio and by the three recent diagnostic product pipeline agreements that Martin mentioned.

However, what was much more exciting to me in accepting Compugen’s CEO position, was the recognition with this [indiscernible - highly accented language] and accomplishments have now reached the point where the Company can focus on commercializing the molecules discovered by the use of its unique research capabilities rather than tools of their research.

In addition to many other advantages, this [highly valuable type] of commercialization will allow Compugen to share in the future profitability of products based on our discoveries, thus significantly leveraging the financial potential of the Company.

Therefore, in order to maximize the value of these capabilities, I will initially be focusing on two broad and equally important objectives. The first is to maximize the commercial value of our current pipelines and intellectual property. The recent diagnostic agreements mentioned before were the example of this.

With respect to our therapeutic [indiscernible - highly accented language] of this, we have an ongoing in vitro and in vivo validation program under which we expect to get results for some candidates by 2006 and for the remaining candidate molecules by early 2007.

My current assessment, assuming positive results, is that we will be signing collaborative agreements for our therapeutic candidates by 2007. Similar to the diagnostic agreements, these therapeutic agreements should provide Compugen the opportunity to share significantly in any future revenues from these products.

My second key objective as CEO will be to ensure the continuation, and provide guidance for, our cutting edge research and discovery activities. Our multidisciplinary scientific capability has been the source of all the intellectual property that we are now validating and commercializing and represents the Company’s key strategic advantage for the long-term.

I have been with the Company for only two months and I’m of course still in the process of learning this complex and unique organization. However, it seems clear to me that in order to achieve the objectives that I have discussed, we have to more carefully focus our activities and optimize the use of our resources.

Therefore, I have found it very helpful that during this two-month period Compugen has been undergoing this annual strategic review process in preparation for next-year budgets. This is providing me an excellent opportunity for both gaining more understanding of the Company and its operations and to suggest areas in which I believe some changes or reevaluation is warranted.

This process will be completed by the end of the year and accordingly, I will be able to share with you additional information in our next conference call.

In closing, I am very excited to be onboard and looking forward to the challenges of leading Compugen and its talented team to mix together our goals and deliver meaningful results to all our stakeholders.

Now I would like to turn the call to Nurit.

Thank you, Alex.

The Company has completed its transition from being a provider of software products and services to a company that discovers and develops potential biomarker and therapeutic proteins. This transition is reflected by the decreasing product revenues from the same period of last year.

R&D expenses remain our largest category of expenditure, representing approximately two-thirds of our total operating costs. The major activities in R&D involve the further development and use of our discovery engines, discovery and validation of biomarker candidates, early-stage development activities with respect to our therapeutic protein candidates, and certain new research initiatives.

R&D expenses for the quarter of $3.0 million were approximately the same as $2.9 million reported for the third quarter of last year.

S&M expenses for the most recent quarter were $420,000, compared to $664,000 for the same quarter of last year. With the completion of our transition from the marketing of tools and services, our S&M activities are now primarily devoted to potential diagnostic, therapeutic and other collaborative agreements.

With regard to our finance income, primarily interest earned on our cash balances, GAAP require that non-cash interest income be recognized on a current basis on certain types of instruments, based on estimated future interest rates. This can result in reported financial income and expenses that may fluctuate significantly from quarter-to-quarter, without any current cash changes.

During the third quarter of 2005, this resulted in a financial income of $160,000 and for the YTD income of $470,000. We ended the third quarter of this year with $38 million in cash and cash-related accounts, a decrease of approximately $3.0 million from June 30, 2005.

The cash flow for the first nine months of this year of approximately $10.4 million is consistent with our previously stated outlook for 2005 of [a net debt] decrease of $14 to $16 million.

And with this, we conclude our formal presentations and open the call to any questions you might have about the presentations today, the financial statement and first release for Q3 ‘05 or any other aspects of our Company.

Thank you, ma’am. [Operator Instructions] We have a question from Jeffrey Grossman.

Hi, good afternoon to all of you. It was recently published that the drug Herceptin, marketed by Genetech for the treatment of breast cancer is showing dramatic results. I’m thinking that perhaps you can provide us a few details concerning the advantage that Compugen’s splice variant of this drug is hoped to have relative to Genentech’s product.

We have announced that we have such a product or a putative protein in our pipeline. We haven’t disclosed any of the details about it and it really, at this point, probably would be too early to do so and I think for other reasons - competitive, etc, it’s probably not a good idea to do. But you are correct; this is a very hot area right now.

Okay, thanks, Martin. Same question concerning PYY for the treatment of obesity and appetite control, if you might be able to tell us - again, I imagine that you can’t - what is the advantage that Compugen’s splice variant has over the nasal spray being developed by Merck?

Well, first I want to thank you for pointing out a couple of the very exciting molecules that we have in our pipeline. Maybe you’ve done a better job on this conference call than we have. So thank you, but you are right.

As we’ve stated in the past, we placed things in our pipeline only if they meet certain criteria. And one of those criteria is that we believe or that we have some reason to believe that the product, the compound we have, would have some advantage over the ones that are out there.

Now, of course, this is in early stages. It’s a belief that has to be proven, whatever, but this is one of the selection criteria. So, I think anything that we’ve announced you can assume that we believe that it has advantages over the current protein, but on the other hand, ours is at a very early stage.

Okay. Mr. Kotzer -- well, I think Merck is also at a fairly early stage and nevertheless entered into an agreement to acquire that, so I think that holds a lot of promise for Compugen.

Mr. Kotzer indicated that the Company hopes to be signing agreements by 2007 for the therapeutic proteins. How many, if I can ask, how many therapeutic proteins are we talking about now? How many therapeutic proteins are in animal trials at this stage?

I haven’t mentioned any animal study yet. I said we have a program. We have a number of families of candidates. For each family we have several variants. All together, I would say, is a lot of molecules.

But I don’t think we should say the number and it is more important that we cannot say number before we see the results, because only when we have the outcome of these studies it will be really meaningful. We know that the attrition rate, at this stage, is very high.

So, even if we start with many dozens of molecules, we hope to have -- even if we have fewer at the end we’ve seen a lot. So I don’t think it has any meaning, at this stage, how many molecules we really have.

Have you reason for optimism?

Sorry?

Have you reason for optimism that there will be those few at the end?

Would you have joined if you didn’t have?

Yes, I believe that there is more than several chances that at the end we will have a few, at least a few.

Okay and concerning the diagnostic candidates that are being examined by the three companies with which Compugen has announced agreements, has there been any further progress concerning the selection of these candidates by the companies?

Well, as you know, as one of our loyal shareholders, you know that our policy and I believe the policy of most companies that work within the industry is that when you have a collaborative arrangement with somebody else, where the other party is going to be doing the marketing, that it really is up to the other party to disclose what they want to disclose with respect to the progress of the agreements.

I guess the only thing I can say is that things are going pretty much as planned. But hopefully we’ll, in the not-too-distant future, will be in a position where our collaborator agrees with us that some additional information about the progress of one or more of the products is appropriate. But as of right now, we have to again say that we’re not in a position to say anything.

Well, can you -- well, you mentioned that there are up to 15 diagnostic candidates that these companies can choose. Perhaps you can just give us an indication of the number that have been chosen until now?

In total, I believe it’s about a third of that number. Is that right?

Approximately.

About a third have been chosen so far for initial development.

Jeffrey, we would like have the opportunity to other people.

Absolutely. Please, I will continue with my examinations afterwards. Okay.

Thank you.

Jim Smith of Bedrock Capital.

Yes. I don’t want to beat too much on agreements, but one of the earliest ones was in January of ‘03 with diagnostic products and I don’t know if that agreement is still in effect. But it was based on two novel prostate specific proteins. So I’m assuming the targets were identified and chosen and I’m just wondering if that initiative is still in place and if so, what the timeline to commercialization and royalty payments is.

I think we’ve -- well, we already have disclosed the fact that, with respect to moving forward with diagnostic products from those compounds, it doesn’t look very promising at the present time. The agreement is still in place and we are looking at, with our partner, looking at other alternatives. But as I said, we believe it was more than six months ago that we stated it.

I think one of perhaps the most important thing I can say about those initial proteins is that because of them the DPC, a major diagnostic company, gained the confidence in what we can do, to sign a very, very major agreement with us.

As Alex has already stated, all of the putative products are not going to be successful. So, in fact, the great majority of them will not be. The value that we have is what I call this predictable or discovery on demand capability that I believe is totally unique in the industry and that is what has led DPC and the J&J Company and Biosite to us. The idea that they can come to us and tell us the types of diagnosis products that they would like to develop and we can use our discovery engines to actually provide them the protein and other molecules to begin the development.

May I add, I think in general, the agreements are different between each other in terms of what is doing, who is doing what. But maybe an important information is just in general, when you try to develop a diagnostic marker, the diagnostic product, it includes the production of the marker itself. Then an antibody to the marker and then the screening if these antibodies are able to detect the specific marker in patients.

And what I can say, that in general this poses by itself what we call the proof of concept validation. It can take anything between one year and a half to two years. So, if you asked before about what should be a timeframe of this activity, this is in general the frame, regardless who is doing it, we do it or our partner do it. And usually, if there is a success in this then it is much easier to proceed to the next step.

Yes. I think the difference here and with respect to therapeutics, again, is that if products that successfully get through that hurdle, you’re pretty much there with respect to a diagnostic. There’s still a question as to where will it fit into medical practice and how big a market and whatever. But essentially, when you get to that point, you’re at the point of saying, yes, this is a legitimate biomarker and could be used as a diagnostic.

As I said, it’s another sort of advantage that you have with diagnostics, that very early on you have a very high -- there’s really a go/no-go decision, which in most cases is a very definite one. And it’s one of the reasons that we moved some of our focus to diagnostics and other biomarkers about a year ago and you can see the success that we’ve had already with this.

And the timeline to commercialization after the go/no-go decision is made is [inaudible - multiple speakers]?

I think the overall, you can think of -- with respect to diagnostics, you can think of three, four, five years as a timeframe. If you get something out in three years, not from the time of the go/no-go, but from the time of starting the process, if you -- that’s -- you’re doing extremely well, extremely well. If it goes beyond five years, you probably are having some type of a problem, which again is much, much better in the therapeutic area.

Thank you.

[Ronald Oviter]; Capital Partners.

You’ll have to speak a little louder. Ron, are you there? Operator, if there -- we don’t hear anything at our end, so if you do, let us know or else let’s move to the next question and maybe come back to this one.

Excuse me. I had a bit of technical problems. Moving on to the next questioner, Ronald. [Indiscernible], please. Ronald Oviter, Capital Partners, please go ahead.

Yes. Can you hear me now?

Yes we can, now, sorry for the technical difficulty.

Okay. Well, I was saying before, I first wanted to welcome Dr. Kotzer to the family of Compugen and I’m delighted as a shareholder. My question is sort of more of general one. I want to go back to something, which has always been difficult for me to get a sense of, which is Marty, you just alluded to the value of the discovery engines and in looking at the therapeutic proteins.

How do you measure, in the end, the success of the discovery engines? In that as you’ve come up with these putative proteins, you’ve got to go through the whole drill of the preclinical and so and so forth. So what are parameters by which you judge the success of the discovery engine? Is it number of successful proteins as a percentage of those, putatively identified in the beginning? Is it speed? Is it quality of the protein?

I’m just trying to get a sense of how you measure the success of the discovery platforms.

I think that first, the ultimately, of course, when you said in the end, it’s that people are being cured by our discoveries. But that obviously is a long way off.

I think the fairest thing to say now with respect to our discovery engines is that we, the companies that are commercializing therapeutic proteins and other pharmaceutical products, those companies have a view as to what kinds of molecules they want to begin. That are exciting enough for them to actually bring into their development pipeline.

And I think the best -- the thing that probably is the fairest that we can say at this point in time is that with our discovery engines we can provide the type of molecules that, with respect that at least we’ve shown on the diagnostic side, we can provide exactly the type of molecules that these companies are essentially searching the world to try and find. And we can pretty much provide them on a predictable basis.

If they know a lot about what they’re looking for and whatever, I mean, ultimately it will raise the success rate. I’m sorry, and another aspect of it is the novelty of what we can find and we’ve proven now that these discovery engines clearly can discover things in very, very exciting areas of research around the world, where it’s clear that people have focused in these areas but have missed some apparently very important molecules.

So these two points, one that we can find things that clearly other people can’t do, and two, we can predictively sort of focus these engines to the types of discoveries that companies want, I think is quite unique. This is much -- on the therapeutic side, we really can’t -- well, we can say the first part -- I guess we can say both of things. These are patented. Now, we filed patents on them and they do look very good.

But, as I mentioned in my initial remarks, that in order to have any level of confidence in a therapeutic product, you need some additional type of validation. Which is what Alex referred to as what we’re going through now with our initial proteins and we expect that process to begin to provide results next year, and then to be completed in early 2007.

So is it fair to say that as time goes by, if the discovery engines are viewed as successful by your partners coming to you, then there’ll be a reinforcement of that process with other molecules in the future? I’m just trying to see how you extract incremental perceived value out of the discovery. I just mean when that really kicks in, from a [inaudible - multiple speakers] --

Yes, don’t -- also, don’t think of the discovery engine that is something that is you create it and then it sits there. The beautiful thing about the discovery engines and about the method by which Compugen does its research in general, is that things just continue to get better over time.

I mean, with the discovery engines, in the beginning, we put into everything that we know, everything that our partner knows to be the predictive proteome and the predictive transcriptome that is unique to us. And then, as we work with it and as we work with our clients and our collaborators, over time it just gets better and better. I mean, which is it really is quite unique in the pharmaceutical world.

I mean, because typically the process is you make one discovery and you may never make another one. I think, with us, once we make one discovery, it increases the potential and the odds that we’re going to continue to make more and better discoveries.

So it’s a building process.

Exactly.

One last comment and I’ll step out of the queue. Can you comment a little bit more on the Novartis situation? I know we don’t hear a lot about it. I just wanted to get a little more insight, exactly are there any molecules that you’re testing for them? Or can you just give a little more insight into what’s going on with Novartis?

Just so that there’s no misunderstanding, none of the agreements that we’ve involved with them specifically cover molecules. These are much more capability types of arrangements. The one that we have announced recently was a pilot program in sort of systems biology, predictive biology that is ongoing with them.

But there are -- just so that there’s no misunderstanding, in many cases we will, I will not be able to be as direct as I am now. But there are no molecules involved at this point in time with our relationship with Novartis.

Okay. All right. Thank you.

Jim Smith of Bedrock Capital.

Yes. Martin, in September, Teva announced that they bought a large stake in your second-largest shareholder Clow Biotechnology. Do you have any ongoing dialogs with either Clow or Teva and if so, can you talk about the nature of them?

Well, I’m a former director of Teva up until a few years ago, so I have a close relationship, on a personal level, with a number of the people there. On the [Clow] (ph), of course, is, was, one of our first shareholders at a venture level and has been extremely supportive of the company and has been, I can just say, has been an excellent shareholder for the company.

We’re in contact with them to the degree that we are with all of our shareholders. So I don’t -- I’m not privy, of course, to what’s going on within the [Clow] organize. But, as I said, they’re a very good shareholder and I believe a happy shareholder with us.

And with Teva, since you’ve resigned from the board, any ongoing activity through Compugen or otherwise?

Well, I mean, I can say that there’s nothing formal right now. For a number of years, obviously, we’ve had discussions of various types with them, but as of -- we don’t have any formal arrangement with them.

Okay and one last question for Mr. Kotzer. When you are set to have your budgets down and during your next conference call or whatever form you choose, do you think you’ll be able to give some, a little more, exact guidance on what financial results we should expect over the 2006-2007-2008 timeframe?

I think it’s a little -- I apologize, but it’s a little too early for me. As I said before, we are in the process and it is not concluded yet. So unfortunately, I can’t say anything more than this. We have to conclude within about a month from now at the latest and only by then will we have a much better understanding how would we look like. But I’m sorry for this, but I don’t think I have more details at the moment.

But by then do you think you might be able to provide some --?

Yes. Once we conclude the 2006 working plan, of course it will be including -- and I’ll share all outcomes and so on.

Okay. Thank you.

Jeffrey Grossman.

Hi. Wondering, are there new therapeutic proteins that are being introduced into the pipeline?

I mean, as you -- when Alex answered a question, I mean, he sort of gave the information that we have many more putative proteins that we’re looking at from a validation standpoint than we disclosed in the past. We don’t intend to continue to talk in terms of how many there are and how many are entering and whatever. Let me just say that at the earliest -- right now we have in the ten dozens, whatever, of proteins that are going to be going through this -- either are or will be going through this validation process.

As Alex clearly stated, though, I mean, numbers are not very relevant at this point in time. I mean, the question is what percentage are going to survive this and what I’m hoping is that we will have a higher survival rate than is typical in the industry. Just because of the way we selected these and because of our research, the way we have found them.

But don’t expect us -- obviously when we began actually the process of building our pipeline, we felt it was very, very important to let the world know that we had moved to a different stage in our research. I mean, for a number of years, obviously we were building the team. We were building the scientific capability, building the LEADS platform, the discovery engines and this was sort of an infrastructure activity.

And then, a few years ago, when we reached the stage where we had what I call a critical mass and we began to actually be able to use it for discoveries, to find proteins of interest. When we reached that stage we felt we had to fine some way to inform our shareholders and [we agreed that] the public is watching us, the public, as to that we had reached this stage.

And so we specifically stated some compounds that we had discovered, some very unusual ones, the PSA’s, the Herpes IT and some others that we announced. But again, that’s not going to be the continuing sort of disclosure policy of the Company. I don’t think it would be appropriate.

No, Martin, but I’m trying to ask, I suppose, here is it was said that there will be results in 2006 and early 2007. What I want to hear is that there are also going to be results in 2008 and 2009 and 2010 as well.

Oh, no, no, no, of course. I mean, this is an important part of the future of the Company. Our activities in the therapeutic proteins - I should say therapeutic molecules. There are other things in there other than just proteins and this is very important and we believe will be a significant part of the Company forever and so we’re planning.

And on that basis, clearly this first phase that’s going through is a critical, you know, this first group is critical, because we expect and hope to get very good results and if we do, then we just move forward. But as of now, as you’re aware, we haven’t concluded these validation studies for any of our proteins. The earliest ones would be finished during 2006.

Okay. A quick question about PR and IR. Mr. Kotzer, perhaps you can tell us whether you have any plans for the Company with respect to PR and IR, whether you personally plan to meet with the press, analysts and shareholders?

I have to be honest again. It is not the priority that I am giving at the moment. At the moment I’m starting and focusing on learning the Company’s capabilities, the organization, its needs, its budget, it’s costs. I didn’t have the time to look at this and certainly I believe, in general, that we should try to give as much information as we can, an honest one, a balanced one. I assume it will be reflected somehow in the future. But to tell you that I have plans now how to deal with it will be not correct, even.

Okay. If I could just ask, are you a shareholder or do you plan to become a shareholder of the Company?

I’m not sure that in the moment I have, in my agreement part of my compensation is Company options. Which I think is an important way to demonstrate first that there is a relation between my performance and the Company success and this is what I have at the moment. I don’t think we should tell in this stage if I am planning to do or not. And basically, if you are trying to ask do I believe in this, I would say. Otherwise I will not comment, if this is the question to indirect -- if this is the right answer to an indirect question.

Okay. I would only express my desire and I think the desire of many other shareholders that the PR and IR be beefed up. Months go by where we receive very little information. I realize that over the past year there has been a problem and it was announced that the prior CEO was leaving and he was not meeting with the press analysts.

I think shareholders who own the Company should be informed of developments and given the maximum amount of information that is available. That will not, of course, hurt the Company, but nevertheless can promote an understanding of what is happening in the Company. I wish you would at least take that into consideration.

I will. I will consider that.

I think we agree with you.

And I thank you for the input.

Jeffrey, you can call me any time.

I do.

And it doesn’t help?

Thank you very much.

Thank you.

Thanks, Jeff.

Thank you. There are no further questions at this time. Before I ask Mr. Gerstel to go ahead with his closing statement, I would like to remind participants that a replay of this call is scheduled to begin in two hours, for a period of 48 hours. In the US, please call 1-866-276-1485. In Israel, please call 0-392-55-5901. Internationally, call 9-723-925-5901

Mr. Gerstel, would you like to make your concluding statement?

Well, thank you. I know that just for the longer-term, I know for the longer-term shareholders it’s been frustrating at times while we were building the people, the capabilities, etc. But these -- it takes time to build things of value that are going to last and once you put them in place, then you can begin to harvest the results from them.

I believe we have reached that point and I believe that, with Alex, we have a CEO who is experienced in bringing and making, looking at these from a commercial standpoint and moving the Company forward. So I just want to thank all of you who have been with us for a long time. I think we’re entering now a very exciting period for the Company and hopefully one where we will be able to give you a lot more information as things like the products and potential products move forward.

And thank you very much for being on the call today. Bye-bye.

Thank you. This concludes the Compugen Ltd. Q3 2005 conference call. Thank you for your participation. You may go ahead and disconnect.

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