Compugen shares nearly double on Pfizer deal

BANGALORE (Reuters) - Shares of Compugen Ltd (CGEN.O) jumped as much as 96 percent after the Israeli biotech company said it entered into a collaboration deal with Pfizer Inc (PFE.N) to develop peptide products for three drug candidates.

The process, based on Compugen's discovery platforms and funded by Pfizer as part of the "discovery on demand" deal, is expected to take a few months, Compugen said.

Following an evaluation process, Pfizer will have the right to exercise options for worldwide exclusive milestone and royalty bearing licenses to develop and commercialize the selected product candidates, it said.

Peptide therapeutics is a rapidly growing field, where peptides, or protein fragments, are designed to develop potential drug candidates for various indications.

Cantor Fitzgerald analyst Pamela Bassett said Compugen's predictive platform portfolio offers "a paradigm shift in discovery/development programs that can mitigate risk, condense timelines, and exponentially increase pharmas' output of both diagnostics and therapeutics."

"We expect Compugen to enter into additional alliances in the next 6-12 months," said Bassett, who kept her "buy" rating on the stock.

On Monday, Pfizer bought the rights to Athersys Inc's (ATHX.O) stem-cell therapy to treat inflammatory bowel disease. Athersys shares shot up over the next two days to end at $5.55 on Tuesday, up from Friday's close of $1.00.

Compugen shares, which were one of the top percentage gainers Wednesday on Nasdaq, were up 62 percent at $4.60 in high-volume afternoon trade after touching a nearly five-year high of $5.58.

(Reporting by Shailesh Kuber in Bangalore; Editing by Deepak Kannan, Ratul Ray Chaudhuri)