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Compugen (Nasdaq:CGEN) on Wednesday officially announced the establishment of its agricultural biotechnology and plant genomics subsidiary Agros-LEADS.

The subsidiary is a spin-off of a Compugen division involved in this activity as of 1999.

Compugen specializes in merging computational technologies with biology and medicine for advancing the development of drugs.

Compugen President and CEO Mor Amitai said that Compugen is commencing to raise capital and recruit investors for the subsidiary. Compugen will continue supporting Agro-LEADS, but this does not involve big funds, Amitai said. He added that to date the subsidiary has directly cost Compugen just $1 million, including grants from the chief scientist of the Ministry of Industry and Trade.

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Agro-LEADS is planning to raise $5 million. Amitai said that several financial entities have already approached the company. He said that Compugen is looking into the possibility of raising capital from these entities, or to form alliances with potential investors interested in the Agro-LEADS technology.

The objective of the Agro-LEADS technology is to overcome the limitations involved in classical breeding and modern biotechnology for the purpose of more efficiently generating improved crops and new agricultural biotechnology products. This can be accomplished by combining computational biology and plant genomics with classical breeding techniques into platforms. The purpose of this is the acceleration, direction and mimicking of the natural evolution process.

"We were extremely pleased by the rapid and important progress achieved by this team, and believe that establishing our agricultural activity as a separate company will provide it with the necessary focus and committed resources to fulfill its substantial potential," Amitai said.

The subsidiary has offices and laboratories in Rehovot, Israel.