On June 1, 2018 Can-Fite BioPharma Ltd. (NYSE American: CANF) (TASE:CFBI), a biotechnology company advancing a pipeline of proprietary small-molecule drugs that address cancer, liver disease and inflammatory diseases, reported financial results for the three months ended March 31, 2018 and provided clinical and corporate updates (Press release, Can-Fite BioPharma, JUN 1, 2018, View Source [SID1234527025]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
Clinical Development Program and Corporate Highlights Include:
Piclidenoson (CF101) – Can-Fite continues Phase III trial of Piclidenoson in the treatment of rheumatoid arthritis and signed multi-million dollar distribution agreement with Gebro Holdings for Piclidenoson in three European countries
Rheumatoid Arthritis: In January 2018, Can-Fite signed a distribution agreement with Gebro Holding GmBH to distribute Can-Fite’s lead drug candidate, Piclidenoson (CF101), for the treatment of rheumatoid arthritis and psoriasis, in three European countries (Spain, Switzerland and Austria), upon receipt of regulatory approvals. Under the terms of the distribution agreement, Gebro is required to pay additional milestone payments of up to $7,000,000 upon the achievement of certain regulatory, launch and sales milestones plus double-digit percentage royalty payments on net sales.
Rheumatoid arthritis is a treatment market forecast to reach $34.6 billion by 2020.
Psoriasis: In April 2018, Can-Fite published a paper titled "Inhibition of IL-17 and IL-23 in Human Keratinocytes by the A3 Adenosine Receptor Agonist Piclidenoson" (View Source) in the Journal of Immunology Research. The Company has completed the preparatory work for its COMFORT Phase III Psoriasis study, designed to evaluate the efficacy and safety of daily Piclidenoson, administered orally compared to Apremilast (Otezla) and placebo in around 400 patients with moderate-to-severe plaque psoriasis. The study will be conducted in 5 countries in Europe, Israel and Canada. The study protocol has been already submitted and approved by the IRB in Israel, which will be the first country to initiate enrollment.
The psoriasis therapeutic market is estimated to reach $11.4B in 2020 according to Visiongain.
Namodenoson (CF102) – Can-Fite global Phase II advanced liver cancer study is fully enrolled; Potentially favorable drug safety profile has been reported; The Company continues to follow up on patients’ overall survival
Advanced Liver Cancer: During the fourth quarter of 2017, Can-Fite reported on the progress of its Phase II liver cancer study with Namodenoson (CF102) in the treatment of advanced hepatocellular carcinoma (HCC) indicating a potentially favorable drug safety profile. The global Phase II study is being conducted in the U.S., Europe and Israel. Patients with advanced HCC, Child-Pugh Class B, who failed Nexavar (sorafenib) as a first-line treatment are treated twice daily with 25 mg of oral Namodenoson or placebo using a 2:1 randomization. The primary endpoint of the Phase II study is overall survival (OS). Secondary endpoints include progression free survival (PFS), safety, and the relationship between outcomes and A3 adenosine receptor expression. The Company anticipates data release to occur in 2H2018.
According to Datamonitor, the HCC market is expected to generate $1.4 billion in sales in 2019.
NAFLD/NASH:
Phase II clinical study – The Company is currently conducting a Phase II trial with its drug candidate Namodenoson for the treatment of 60 patients with nonalcoholic fatty liver disease (NAFLD) and nonalcoholic steatohepatitis (NASH). There is currently no U.S. FDA-approved drug for the treatment of NASH, which is an addressable pharmaceutical market estimated to reach $35-40 billion by 2025.
New pre-clinical data – In February 2018, Can-Fite announced new preclinical data supporting a novel anti-NASH mechanism of action for Namodenoson. Preclinical studies were conducted in hepato-stellate cells in vitro and in an experimental NASH CCL4 model, showing that in both systems, the molecular mechanism of action of Namodenoson is conferred by decreased expression levels of the signaling protein phosphoinositol-3-phosphate (PI3K) which confers three downstream signal transduction pathways, the Wnt, NF-kB and α-SMA, altogether, controlling liver inflammation, fibrosis and steatosis. The data were presented at the European Association for the Study of the Liver (EASL) annual conference.
"We continue to build positive momentum with our drug candidates. We also secured a significant distribution agreement with Gebro Holding GmBH to distribute Piclidenoson for the treatment of rheumatoid arthritis and psoriasis in three European countries. This quarter we also submitted our annual safety summaries on both Piclidenoson and Namodenoson to regulatory authorities around the world and were pleased to note that both drug candidates continue to demonstrate a favorable safety profile in human clinical trials. We look forward to providing updates on our Phase II study on Namodenoson during the second half of the year," stated Can-Fite CEO Dr. Pnina Fishman.
Financial Results
Change in Functional and Presentation Currency
From the Company’s inception through January 1, 2018, the Company’s functional and presentation currency was the New Israeli Shekel (NIS). Management conducted a review of the functional currency of the Company and decided to change its functional and presentation currency to the U.S. dollar from the NIS effective January 1, 2018. This change was based on an assessment by Company management that the dollar is the primary currency of the economic environment in which the Company operates. Accordingly, the functional and presentation currency of the Company in the financial results presented in this press release is the U.S. dollar.
In determining the appropriate functional currency to be used, the Company followed the guidance in International Accounting Standard (IAS) 21, which states that factors relating to sales, costs and expenses, financing activities and cash flows, as well as other potential factors, should be considered. In this regard, the Company is incurring and expects to continue to incur a majority of its expenses in U.S. dollars as a result of its expanded clinical trials. These changes, as well as the fact that the majority of the Company’s available funds are in U.S. dollars, the Company’s principal source of financing is the U.S. capital market, and all of the Company’s budgeting is conducted solely in U.S. dollars, led to the decision to make the change in functional currency as of January 1, 2018, as indicated above.
For presentation purposes, comparative figures in the financial results have been translated into dollars on the following basis: (i) monetary assets and liabilities of the Company were translated using the current rate method, using the dollar exchange rate as of December 31, 2017, (ii) non-monetary assets and liabilities of the Company and equity were translated using historical exchange rates at the relevant transaction dates, (iii) profit and loss accounts were recorded at the exchange rate at the date of the transaction, and (iv) translation differences resulting from the change in functional currency have been reported as a component of shareholders’ equity.
Revenues for the three months ended March 31, 2018 were U.S. $0.63 million compared to revenues of U.S. $0.07 million during the three months ended March 31, 2017. The increase in revenues for the first quarter of 2018 was mainly due to the recognition of a portion of the U.S. $2.2 million advance payment received in January 2018 under the distribution agreement with Gebro Holding GmbH.
Research and development expenses for the three months ended March 31, 2018 were U.S. $1.31 million compared with U.S. $1.22 million for the same period in 2017. Research and development expenses for the first quarter of 2018 comprised primarily of expenses associated with the Phase II studies for Namodenoson as well as expenses for ongoing studies of Piclidenoson. The increase is primarily due to increased costs associated with the initiation of the Phase III clinical trial of Piclidenoson for the treatment of rheumatoid arthritis. The Company expects that the research and development expenses will increase through 2018 and beyond.
General and administrative expenses were U.S. $0.90 million for the three months ended March 31, 2018 compared to U.S. $0.76 million for the same period in 2017. The increase is primarily due to an increase in investor relations expenses. We expect that the annual general and administrative expenses will remain at the same level as 2017.
Financial expense, net for the three months ended March 31, 2018 aggregated U.S. $0.13 million compared to financial income, net of U.S. $0.17 million for the same period in 2017. The increase in financial expense, net in the first quarter of 2018 was mainly due to an increase in interest expenses related to advance payment recognition and an increase in exchange rate differences on balances of cash and cash equivalents.
Can-Fite’s net loss for the three months ended March 31, 2018 was U.S. $1.72 million compared with a net loss of U.S. $1.74 million for the same period in 2017. The slight difference in net loss for the first quarter of 2018 was primarily attributable to an increase in revenues, which was offset by an increase in general and administrative expenses and in financial expenses, net.
As of March 31, 2018, Can-Fite had cash and cash equivalents of U.S. $8.31 million as compared to U.S. $3.5 million at December 31, 2017. The increase in cash during the three months ended March 31, 2018 is due to U.S. $4.37 million received from the issuance of shares and warrants, net of issuance expenses, and the $2.2 million advance payment received from Gebro.
The Company’s consolidated financial results for the three months ended March 31, 2018 are presented in accordance with International Financial Reporting Standards.