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I believe in Asia economics in the next decades. Asia will be the place to be to make an enormous wealth. Been a private investor for more than 10 years. If you looks for some insight for Asian companies especially in Thailand or China just contact me.
  • CGEN : The past and The Future 0 comments
    Jan 14, 2010 4:38 PM | about stocks: CGEN
    My Original CGEN Article


    CGEN (NASDAQ:CGEN) got the very high volume spike on 23th Dec 2009 with the 70% gain on the opening price. Let's see what is up with this small company.

    Here is the CEO interview ( Martin Gerstel) . The interview conducted on March 2009 .

    http://www.pharmatelevision.com/​Video/230-Compugen-Martin-Gerstel.aspx

    Here is about Mr Marin Gerstel .I quoted from George Gilder article ( http://disco-tech.org/2009/01/the_cornucopian_realm_of_biosc.php)

    "Martin Gerstel. Alone on the cover of Business Week when he graduated from Stanford Business School in 1968 (as the nation's most promising MBA student), he founded Alza Corp. with Alex Zaffaroni and built it into a major pharmaceutical devices company. It was sold in 2000 to Johnson & Johnson for $14B."

    Mr. Gerstel also own about 1.85M share of CGEN and he is the second largest shareholder.

    For those ,who still do not know. CGEN went public on Nasdaq at late of 1999 with IPO price at $10. And about 3-4 years later ,company changes business perspective to focus solely on "Predictive Platform" . When it went public in 1999. CGEN own "LabOnWeb.com" and sell the services to biologists via this website. I think CGEN needed to have this business unit to get the good ipo price becuase in 1999 .There was a dot com madness.

    But later on, company shift to focus solely on the predictive discovery. And this shift drove the price of share down during the past 5 years because it doesn't have its revenue stream anymore. It is just like research institution without a clear plan to monetize its knowledge.It was disliked by the VC , Fund during that time (CEO mentioned this in the interview)

    CGEN discovered 8 peptides that modulate GPCR receptors in the body but the The average in the entire industry is two a year. Half of all drugs operate by impacting GPCRs so the peptides that CGEN discovered has the potential to be drug. It seems like CGEN has no problem of finding the potential material to be developed . But the size of company is very small .So it doesn't have capability to bring it candidate to further step. And the big pharma firm want something that is closer to reality than what CGEN can provide.

    But the CEO believes that the paradigm shift is coming .And if CGEN can build a reputation by collaboration with big pharma firm and the outcome is good .There will be a lot of other firms running to CGEN to license its candidate. Martin Gerstel said in the interview above that he expects that within 5 year CGEN will be a leading company in this field with the a lot of product candidates in other company pipelines and . And in the earning call for 2009 Q3, Martin said he expects CGEN to be cash flow positive in the end of 2011

    In my 2 cent, 23th Dec is a big day for CGEN. Both fundamental and technical points. A deal with Pfizer including three possible drug candidates. If thing goes well, CGEN can get a several coming colllaborations for its "lottery tickets" . This deal is a not a fake PR like someone mentions in the yahoo board. Yes, CGEN had a deal with Pfizer before but it was for another technology that CGEN no longer pursuit back in 2000 . You can check the link here http://encyclopedia.com/doc/​1G1-6518...
    So the PR is new and also a big news by the reason I mentioned.And it is a sign that the pipeline of big firm is drying up so they turn to CGEN to get something potential to get a new drug candidate. It might costs them more by time and money.But it will be worth trying if it does works.

    And in the past trading history of CGEN, the highest volume traded per day is around 4-5 M .But on 23th ,it was 25 M . That is significant from technical stand point. And by any reason, now CGEN gets many publicity so it is a better chance for another collaborations. For the second offering, CGEN has 6 M share in shelf but will not offer more than $20,000,000 in value. So it is about 20% dilution by this current price($4). I'm looking to buy more after they annouced the share offering .

    By the valuation part , it is very hard to predict the value . But let's say. If CGEN can get one drug candidate to the development pipeline .It should worth some value. And that value depend on that drug type. Let's say 100 M per one drug candidate . So the value of CGEN is depend on how big your dream is .

    I read some message in Yahoo board back in the first of 2009 .Someone mentioned that Mr Gerstel believed that CGEN share should be at $20 by fair value.


    Disclosure: Long CGEN
    Stocks: CGEN
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