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In each and every Prohost Letter we repeated the same advice to our readers: Do not take it for granted Wall Street evaluation of development-stage sophisticated biotechnology firms based on their financial statements. These firms have yet to generate revenues and it is totally irrational expecting them to generate income and then cremate them because they didn’t. Rather, their evaluation should be based on the promises of their breakthrough technologies and products. Yet, Wall Street seems to still insist that the biotech firms are the highest risk among all stocks, even after causing millions of investors to miss billions of dollars in profit in the biotech industry in addition to millions of dollars that vanished in what they insisted on calling the no-risk groups that happen to falter.

CompuGen (CGEN) is a small biotech firm that we met with several years ago and were stunned to learn about its strategy in turning the information brought by the genomic revolution into diagnostic tests and therapeutic molecules. Of course, the brokers were against buying into these very high-risk dreamers and tried to change their minds. Here we are now. In today’s news this small, bad, high-risk, company signed a collaboration agreement with Pfizer (PFE) for the predictive discovery of three of its therapeutic peptide product candidates that interested Pfizer.

The discovery process, which will be based on various Compugen discovery platforms and funded by Pfizer, is expected to take a few months, following which the predicted molecules will be synthesized and delivered to Pfizer. Following an evaluation period, Pfizer will have the right to exercise options for worldwide exclusive milestone and royalty bearing licenses to develop and commercialize the selected product candidates or further optimize them to obtain final potent, selective product candidates with favorable pharmacokinetic properties. Here what Anat Cohen-Dayag, president and co-CEO of Compugen said:

Although use of our various discovery platforms is now providing us with a growing inventory of novel drug and target candidates for further development and licensing, the most unique aspect of our capabilities is the ability to systematically and within a short timeframe provide, what we call, discovery on demand product candidates for selected areas of interest to our partners. We are extremely pleased to be entering into this multi-target collaboration with Pfizer, and we look forward to entering into similar agreements with additional pharmaceutical and biopharmaceutical companies.

Trust us, they will, and they will contribute into taking the drug discovery process into a higher level that will definitely improve, by far, the treatment of intractable diseases.

We congratulate our subscibers who listened to us and accumulated the stock when it was subjected to sell offs through the misleading campaigns of fear.

What CompuGen (the dreamer!) has accomplishments in the past years.

During the past few years, Compugen has designed, developed, validated and disclosed ten product candidate discovery platforms directed at various important areas of drug and diagnostic discovery. The development of this diverse range of discovery platforms in such a short period of time was possible only due to Compugen’s commitment since 1997 to understand deeply the science underlying various important biological phenomena. Utilizing this continuously growing base of scientific understanding, Compugen has created, and continues to create, predictive models, algorithms and other computational biology methodologies that provide a unique and rich infrastructure for the design of systematic platforms for the predictive discovery of novel drug, target and biomarker candidates.

Most of Compugen’s ten discovery platforms developed to date are based on a process of in silico prediction and selection, followed by synthesis and experimental validation. The initial in silico predictions usually involve a large number – often in the thousands or more - of possible candidates, with the selection step resulting in a very small subset – usually dozens of molecules or less - which are predicted to have the highest probability of success. These molecules are then prioritized, synthesized, and experimentally validated. Among the Compugen platforms developed to date based on this prediction-selection-validation process are platforms designed for the discovery of therapeutic proteins and peptides, targets for monoclonal antibodies, and both molecular and genetic biomarkers.

One of the key Compugen platforms to be utilized in the Pfizer collaboration announced Wednesday was recently developed, and has not yet been publicly disclosed. This undisclosed platform is based on a process which is different from the prediction-selection-validation process underlying most of Compugen’s previously announced discovery platforms as described above.

In this second process, Compugen’s multidisciplinary scientific team uses its understandings of certain basic biological phenomena and advanced computational biology capabilities to “design”, in silico, molecules that should meet the specific requirements needed for them to become optimal therapeutic candidates for the relevant target. As with all of our in silico platforms, these predicted molecular sequences are then synthesized and experimentally validated. This prediction-design-validation approach is also the process utilized by Compugen’s previously disclosed Disease Associated Conformations (“DAC”) Blockers Platform, but in this case employing different discovery principles and models.

Can anybody tell us who are the real dreamers?

Disclosure: No Positions

Source: CompuGen-Pfizer Deal: What Biotech 'Dreamers' Can Accomplish