(NASDAQ:CGEN) today reported financial results for the fourth quarter
and year-end December 31, 2004. This greater-than-expected cash balance at
year-end 2004 was due primarily to the timing of cash receipts, lower
than budgeted expenditures, and proceeds from the exercise of stock
options.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.
"We are very excited to have our products at the University of Genoa with
Dr.
Raiteri , University of Genoa. This label-free system provides
researchers with the ability to create high content assays that deliver real
time data.

electrophysiology propagated

These engines, which provide Compugen with the
ability to focus our predictive discovery capabilities on specific
therapeutic and diagnostic areas of interest , are now supporting both
our out-licensing activities and our in-house development," stated Mor
Amitai , Ph. Amitai concluded.
Consistent with the Company's previously announced termination of
certain non-strategic marketed products and services, revenues and
grants for the year 2004 were $4.

2005 Guidance

Compugen's most important financial consideration is to ensure the
availability of the financial resources necessary for the Company to
continue to develop until it reaches positive cash flow from
operations.
Therefore, as previously announced, revenues in 2005 and
thereafter will largely depend on royalties and other payments
associated with such activities.

plasmon photosynthesis

14 per share, compared to a net loss of $3. The Company's expectation
is that its net cash usage for the year will be $14-16
million. Compugen has established a small -molecule drug discovery
affiliate - Keddem Bioscience, and an agricultural biotechnology
affiliate - Evogene.
CONDENSED CONSOLIDATED BALANCE SHEETS DATA
(U.

About Protiveris, Inc.

photosynthesis characterisation

4 million
from governmental and other grants), compared to $8.43 per share, for 2003. Such revenues are not
projected to be material during 2005. ROCKVILLE , Md. Raiteri, a recognized leader in biosensor research," commented Robert
Menzi, Chief Operating Officer at Protiveris.

potentials bioenergetics

"For
example, one of our initial discovery engines is already providing
Diagnostic Products Corporation with candidate diagnostic markers
under the broad diagnostic collaboration signed with them a few months
ago, the first of our pipeline agreements. Using its proprietary methodologies , Compugen has
identified several hundred thousand human transcripts believed to be
previously unknown, including new genes and splice variants of known
and novel genes.
Compugen's current expectations with respect to its financial
results for 2005 are as follows:

Cash Balances and Uses: Compugen began 2005 with $48 million
in cash and cash related accounts. These
forward -looking statements involve known and unknown risks and
uncertainties that may cause the actual results , performance or
achievements of Compugen to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.S.com.

bioelectromagnetics excitable

com

About Compugen

Compugen is a drug and diagnostic discovery company incorporating
ideas and methods from mathematics , computer science, and physics into
biology, chemistry and medicine."
"It is a unique opportunity for us to collaborate with Protiveris and
access their state-of-the-art cantilever-based sensor technology ," said Dr.

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Therefore, the key short-term financial measurements for
Compugen relate to cash balances and uses.

sbnet biophysics

Business Editors/Technology Writers

TEL AVIV, Israel----Compugen Ltd.8 million for 2003
(including $2. The net loss
for the fourth quarter of 2004 was $3. EST.

sbnet enzymatically

4 million for the same quarter in 2003
(including $485,000 from governmental and other grants).protiveris.

thermosynthesis photosynthesis

"This past year saw the maturing of a critical component of our
commercial strategy in the successful application of our initial
discovery engines. Amitai.14) (0.

Protiveris Installs VeriScan(TM) Biosensor System and Begins Collaboration With University of Genoa

characterisation potentials

"
"Incorporating our deeper understandings of important biological
phenomena and utilizing our industry leading computational biology
capabilities, Compugen's discovery engines are unique in the
biopharmaceutical world, " continued Dr. "Furthermore, although
we are confident that these predictive capabilities represent current
'state-of-the-art' innovation, the iterative nature of our research
efforts ensures that both our initial and future discovery engines
will continue to improve as they are used."
"In order to meet the growing experimental biology requirements of
our discovery engines, we tripled the size of our molecular biology
laboratories during 2004, including the establishment of initial
protein production facilities. However, over the past few
years, Compugen has discontinued and/or substantially
deemphasized these activities in order to focus on the
development and commercialization of therapeutic and
diagnostic products based on the Company's discoveries . One result of this shift in
resource allocation was a three to six month delay in adding
additional molecules to its therapeutic protein pipeline, with
three being added during 2004, instead of the planned six.cgen.com

This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Protiveris is
currently installing this system in forward-looking research facilities in the
United States and Europe.unige.it.

sbnet crystallography

5 million (including a
non-cash charge of $262,000 for amortization of deferred
compensation), or $0.1 million
from December 31, 2003. Among Compugen's customers and
partners are leading pharmaceutical and diagnostic companies, such as
Abbott Laboratories, Diagnostic Products Corporation, Novartis, and
Pfizer. For additional information, please visit
Compugen's corporate Website at www.

uwo enzymatically

0 million from governmental and other grants).7 million (including a non-cash
charge of $155,000 for amortization of deferred compensation), or $
0. These and other
factors are identified and more fully explained under the heading
"Risk Factors" in Compugen's annual reports filed with the Securities
and Exchange Commission.50) (0.43)
Weighted average number of
ordinary shares
outstanding 27,685,356 26,785,143 27,473,341 26,409,180

COMPUGEN LTD. Roberto Raiteri, in the University's Department of Biophysical and
Electronic Engineering, will lead a collaborative effort to further biosensor
science and technology using Protiveris's microcantilever-based products.

About DIBE, University of Genoa
The Department of Biophysical and Electronic Engineering (DIBE) at the
University of Genoa is composed of research groups with focus ranging from
Microelectronics to Bioengineering and Nanotechnology .

biophysics bioenergetics

, Compugen's President and Chief Executive Officer., a bio-
nanotechnology company commercializing microcantilever technologies to
facilitate biomolecular research, today announced that it has successfully
completed installation of the VeriScan(TM) 3000 biosensor system at the
University of Genoa, Italy . The Neuroengineering
and Bionanotechnology (NBT) group consists of a twelve person teaching staff ,
postdoctoral fellows and PhD students and is devoted to research in
bioengineering, including the development of new SPM based technologies and
methods to investigate biological surfaces at the nanometer level and the
development of cantilever based biosensors.

biophysics electrophysiology

Compugen Ltd. Reports Fourth Quarter and Year-End 2004 Financial Results

13 per share, for the corresponding quarter in
2003.
These patents and applications cover technologies, methods, and a vast
number of specific genes and gene products, including splice variant
sequences and proteins, and their functional characteristics and
utilities. The biochip utilizes arrays of
microcantilevers with customizable surfaces to detect interactions between
proteins, antibodies, antigens, or DNA.

characterisation sbnet

50 per
share, compared with a net loss of $11. To access the
replay, please dial +972-3-925-5901. More information about Protiveris , their technology, products, and
services can be found at the company's web site at http://www.

socialize bioenergetics

The net
loss for 2004 was $13. Therefore, research and
development expenses for 2005 are expected to remain
Compugen's largest category of expenditure, and are expected
to account for over 60% of the Company's total operating
expenses. Some of these risks are: changes in
relationships with collaborators; the impact of competitive products
and technological changes; risks relating to the development of new
products; the ability to implement technological improvements; the
ability of Compugen to obtain and retain customers. "We are quite confident that
this collaboration will further establish microcantilever technology
applications in biological discovery. "We believe this collaboration will boost our
research productivity on the development of new genomic and proteomic bio-
assays."
The VeriScan 3000 protein biochip and optical reader utilize arrays of
microcantilevers with customizable surfaces to measure, label-free and in
real-time, multiplex and distinct biomolecular interactions.

Biophysics is the application of physical principles, both classical and modern, to problems involving biological systems.

hydration electrofusion

In
addition, it will continue to expand its technology base and
intellectual property portfolio.
To access the conference call, please dial 1-866 -500-4953 or
1-866-500-4964 from the US or +972-3-925-5910 internationally. The Company has
an early stage in-house pipeline consisting of selected therapeutic
protein candidates discovered by the Company; additional discoveries
have been out-licensed for development.S., Protiveris, Inc.

The VeriScan(TM) 3000 bench-top biochip system
measures and analyzes biomolecular and chemical interactions to enable more
efficient and accurate research outcomes.

bioenergetics uwo

1 million for amortization of deferred compensation ), or
$0.

Conference Call and Web Cast Information

Compugen will hold a conference call to discuss its fourth quarter
and year-end results on Tuesday, February 8, 2005 at 10:00 a.m.
The call will also be available via live Web cast through
Compugen's Website, located at www. dollars in thousands, except for share and per-share amounts)

Three Months Ended Year Ended
December 31, December 31,
--------------------------------------------
2004 2003 2004 2003
Unaudited Unaudited Unaudited Unaudited
--------------------------------------------

Revenues 159 876 2,630 6,776
Governmental and other
grants 393 485 1,397 2,050
Total revenues and grants 552 1,361 4,027 8,826

Cost and Expenses
Cost of revenues 82 539 1,100 2,275
Research and development
expenses 3,469 3,339 12,039 12,998
Sales and marketing
expenses 315 930 2,378 3,732
General and administrative
expenses 958 865 3,332 2,975
Amortization of deferred
compensation 155 262 755 1,062
Total operating expenses 4,979 5,935 19,604 23 ,042

Operating loss (4,427) (4,574) (15,577) (14,216)
Financing income , net 342 368 1,417 2,112
Other income 355 662 605 662
Capital loss (13) - (167) -
Net loss (3,743) (3,544) (13,722) (11,442)
Basic and diluted net loss
per ordinary share (0.bio.

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The replay will be available
until 12:00 Noon EST on Thursday , February 10, 2005.
Protiveris is committed to establishing the standard of performance for
proteomic research tools.

crystallography electrofusion

7 million (including a non-cash charge of
$755,000 for amortization of deferred compensation ), or $0.
For the fourth quarter ended December 31, 2004, revenues and
grants were $552,000 (including $393,000 from governmental and other
grants) compared to $1.
Compugen's intellectual property portfolio includes patents and
patent applications filed both in the United States and elsewhere .
During the first half of 2005, Compugen intends to both add
new molecules to its pipeline and to initiate certain
preclinical studies with respect to existing molecules .dibe.

bioelectromagnetics bioenergetics

D. The Company's powerful predictive
models and discovery engines are both advancing the understanding of
important biological phenomena and enabling the discovery of numerous
potential therapeutic products and diagnostic markers.

(Tables to follow)

COMPUGEN LTD.13) (0. dollars, in thousands)

December December
31, 2004 31, 2003
Unaudited Audited
---------------------

ASSETS
Current assets
Cash, cash equivalents, and marketable securities 20,574 16,707
Receivables and prepaid expenses 1,545 1 ,456
Total current assets 22,119 18,163

Long-term investments
Marketable securities 27,854 43,803
Other assets 1,641 1,623
Property and equipment, net 3,739 3,937
Total assets 55,353 67,526

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses 3,107 3,629
Deferred revenues 276 1,566
Total current liabilities 3,383 5,195

Long-term liabilities
Accrued severance pay 1,878 1,997
Other long-term liabilities 60 60
Excess of losses over investment in affiliate 466 466
Total long-term liabilities 2,404 2,523

Total shareholders ' equity 49,566 59,808
Total liabilities and shareholders' equity 55,353 67,526

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Research and Development: During 2004, Compugen committed a
higher than planned percentage of its resources to its growing
diagnostic activities - including the identification,
selection, and validation of immunoassay, nucleic acid, and
membrane-bound biomarkers.
Dr. More information about the NBT
group at the University of Genoa can be found at http://www.

characterisation enzymatically

In addition, we increased our
investment in our diagnostic activities , our initial therapeutic
pipeline, and in the protection of our growing base of intellectual
property ," Dr.0 million (including $1.4 million (including a non-cash
charge of $1.
As of December 31, 2004, Compugen had $48.4 million in cash, cash
equivalents, and marketable securities, a decrease of $12.

faseb characterisation

Revenues: Essentially all of the Company's revenues to date
have been related to the licensing of platforms and tools, and
the provision of services, in each case incorporating certain
of the Company's technologies. A
replay of the conference call will also be available approximately two
hours after the completion of the live conference call.

cgen.
These statements include words like "may," "expects," "believes," and
"intends," and describe opinions about future events.

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