Originally it was founded by Simchon Faigler, Eli Mintz, and Amir Natan, near S'deh Boker in Israel. They built a hardware accelerator for the Smith-Waterman algorithm, called a bioccelerator. This was really cool stuff, so all sorts of people joined. There wasn't enough room so it moved to Petakh Tivka (also in Israel).

Then somebody had the bright idea of making the boxes run other dynamic programming algorithms, which are also used in bioinformatics.

Nowadays Compugen does all sorts of neat computational biology. One major project is LEADs.