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TWST: Could we begin with an introduction and historical overview of Compugen (NasdaqNM:CGEN)?

Dr. Amitai: Compugen is a pioneer in the merging of computational technologies with biology, chemistry and medicine to enhance drug discovery and development. Our competitive advantage is the combination of intensive computational capabilities with the thorough understanding of biology in order to model and understand the underlying mechanisms of life. This unique capability is a proven basis for providing high value products and services to leading biotechnology and pharmaceutical companies, and for in-house therapeutic and diagnostic discovery. Compugen’s efforts are aimed at enabling and accelerating the drug discovery and development chain from identification of new targets based on the discovery and understanding of genes and cell processes, through the creation of small molecule drugs, and the analysis and interpretation of medical and clinical data. In merging our unique capabilities with these areas, we have chosen to focus on the key bottlenecks in this chain. This approach has already resulted in both high value products and services licensed to leading biotechnology and pharmaceutical companies including Novartis, Pfizer, Gene Logic, diaDexus and Avalon and for our own in-house therapeutic and diagnostic discovery efforts. We have created a substantial and growing base of proprietary intellectual property, to date primarily in the form of genes and proteins. One example is the discovery of two novel prostate-specific proteins, one of which is encoded by alternative splice variants of the genes for prostate specific antigen (PSA). Compugen was founded nine years ago by three graduates of one of the Israeli military’s elite research units. They brought with them their advanced education in mathematics, physics and computer science into the world of life science. The Company’s first product was the Bioccelerator, a special purpose computer that significantly accelerates homology searches of genomic and protein sequences, 1000 times faster than a single processor workstation. Within a year, the first Bioccelerator was sold to Merck, and since then has been sold to over 40 leading companies such as Johnson & Johnson, Eli Lilly, Bayer and Incyte, making it the industry standard. We are especially proud of our ongoing agreement with the United States Patent and Trademark Office, which uses our software and hardware to check every patent application for biological sequences. In addition to being our first product, the Bioccelerator was extremely important for the long-term success of the Company in creating relationships with most of the leading pharmaceutical and biotechnology companies. From these relationships, we better understood what were, and in some case still are, the challenges of our industry and which of these challenges were best addressed through the merging of computational technologies and molecular biology. In 1996, the company undertook a major research effort to develop LEADS, a new drug discovery platform that analyzes genomic and expressed data, creating what we believe is the best representation of the transcriptome, the biological bridge between the genome and proteome. We commercialize our LEADS platform in several channels. First, it is the basis for collaborations with companies such as Novartis, Pfizer and diaDexus. As part of these collaborations, Compugen’s scientists work in conjunction with our partners’ scientists to analyze both publicly available and proprietary data, using LEADS to find novel drug targets and advance their drug discovery process. Second, based on this platform, we also developed several tools that we commercialize, including Gencarta, an annotated genome, transcriptome and proteome database. Another tool we’ve developed based on the LEADS technology is our DNA Chip Design Services that we supply to companies such as Motorola, Novartis and Pfizer. DNA Chips are one of most important recent advances in the field of functional genomics. They enable researchers to extract differential gene expression information, in only a single experiment, what has, until recently, required thousands, and sometimes tens of thousands, of experiments. Based on our understanding of the transcriptome, we believe we are in a better position to help researchers decide which probes to include on their chips in order to optimize the results of their experiment. An additional product based on LEADS is OligoLibraries, a collection of nucleotide sequences that represent transcripts for gene expression experiments. OligoLibraries is co-branded with Sigma-Genosys, one of the world leaders in manufacturing of reagents. OligoLibraries are used to create DNA microarrays. We design these libraries while Sigma-Genosys manufactures and distributes them, sharing both the cost and profits from their sales. To summarize, we commercialize the LEADS platform both through collaborations and in addition by developing products, derived from this technologies. An additional activity, based on the LEADS technology, is our internal research to discover new drug targets leading to future therapeutics and diagnostics. One discovery that was recently published is related to the PSA gene. PSA, Prostate-Specific Antigen, is the gene that produces the PSA protein, whose level is measured in the blood in order to detect prostate cancer. It is today’s golden standard for screening for prostate cancer. The market size is about half a billion dollars a year and it is growing rapidly. What we have found, using our LEADS technology and internal research, is that this gene, in addition to producing the protein that is known, also produces another protein that is specific to the prostate. It may be related to the detection of prostate cancer and to potential therapeutics for this disease.