On September 1, 2017 Can-Fite BioPharma Ltd. (NYSE American: CANF) (TASE:CFBI), a biotechnology company with a pipeline of proprietary small molecule drugs that address inflammatory and cancer diseases, reported financial results for the six months ended June 30, 2017 and provided clinical and corporate updates (Press release, Can-Fite BioPharma, SEP 1, 2017, View Source [SID1234520359]).

Clinical Development Program and Corporate Highlights Include:

Namodenoson (CF102): Progress in Clinical Development and Receipt of Milestone Payment

● Patient Enrollment Completed in Phase II Liver Cancer Trial of Namodenoson

Can-Fite enrolled and randomized all 78 patients for its global Phase II study of Namodenoson in the treatment of hepatocellular carcinoma (HCC), the most common form of liver cancer. Patients with advanced HCC, Child Pugh B, were enrolled in the U.S., Europe and Israel. The primary endpoint of the Phase II study is overall survival. Can-Fite is following the survival data closely and plans to perform the survival analysis at the earliest possible opportunity. The HCC market is expected to generate $1.4 billion in sales in 2019.

● Milestone Payment Received for Distribution of Namodenoson in Korea for the Treatment of Liver Cancer

In August 2017, Can-Fite received a milestone payment of $500,000 from Chong Kun Dang Pharmaceuticals (CKD), which licensed the exclusive right to distribute Namodenoson for the treatment of liver cancer in Korea upon receipt of regulatory approvals. The payment is part of a deal worth up to $3,000,000 in upfront and milestone payments plus 23% royalties.

● Namodenoson to Commence Phase II Trial in the Treatment of NAFLD/NASH

During the second quarter of 2017, Can-Fite conducted a successful Clinical Investigator Meeting with principal investigators, researchers, and doctors participating as clinical investigators in the Company’s Phase II trial of Namodenoson in the treatment of non-alcoholic fatty liver disease (NAFLD) and non-alcoholic steatohepatitis (NASH). Namodenoson drug supply for the trial has been paid for and is ready to be administered to patients. The trial protocol has been approved by two leading Institutional Review Boards in Israel. Can-Fite estimates the cost of this Phase II trial to be less than $1 million. Patient enrollment is expected to begin in the third quarter of 2017. By 2025, the addressable pharmaceutical market for NASH is estimated to reach $35-40 billion.

● Established Clinical Advisory Board for NASH Indication

Can-Fite established a Clinical Advisory Board comprised of Key Opinion Leaders to provide advice and steer Namodenoson’s clinical development program in the treatment of NAFLD and NASH. Board members include researchers and medical practitioners in the field of liver disease from institutions including Mount Sinai in New York, Virginia Commonwealth University School of Medicine, and Hadassah University in Israel.

Piclidenoson (CF101): ACRobat Phase III Trial in Rheumatoid Arthritis to Commence

In August 2017, Can-Fite successfully concluded a cardiodynamic trial for its lead drug candidate Piclidenoson, which showed favorable safety data required by the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA) prior to initiation of Phase III studies.

During the second quarter of 2017, Can-Fite conducted a successful Clinical Investigator Meeting with approximately 100 rheumatologists, and their staff, who are participating as clinical investigators in the Company’s global pivotal Phase III ACRobat study, which is set to commence patient enrollment in the third quarter of 2017.

ACRobat is a Phase III trial that will evaluate Piclidenoson as a first line treatment and replacement for the current standard of care, Methotrexate (MTX), the most widely used drug for rheumatoid arthritis. The trial will enroll approximately 500 patients in Europe, Canada and Israel. The estimated cost of the entire Phase III study is approximately $5 million. Rheumatoid arthritis is a treatment market forecast to reach $34.6 billion by 2020.

Piclidenoson is also being developed as a treatment for psoriasis. Can-Fite is preparing for an upcoming Phase III trial that will investigate the efficacy and safety of Piclidenoson compared to placebo as its primary endpoint and as compared to apremilast (Otezla) as its secondary endpoint in approximately 400 patients with moderate-to-severe plaque psoriasis. Can-Fite expects to submit its clinical protocol to Institutional Review Boards in the fourth quarter of 2017. The psoriasis market is forecast to be $8.9 billion in 2018 and Otezla sales are estimated to be $2.35 billion by 2020.

“Completion of patient enrollment in our Phase II study is a significant advancement in the development of Namodenoson to treat liver cancer. We will evaluate results as soon as possible based on survival data. There is a clear unmet medical need for HCC patients with Child-Pugh Class B cirrhosis. Our Orphan Drug status in both the U.S. and Europe, as well as Fast Track status in the U.S. in this indication, we believe will accelerate our path towards applying for market approval for Namodenoson for liver cancer,” stated Can-Fite CEO Dr. Pnina Fishman. “In the current quarter, we look forward to commencing patient enrollment in our Phase II NAFLD/NASH study for Namodenoson and our Phase III rheumatoid arthritis study for Piclidenoson.”

Financial Results

Revenues for the six months ended June 30, 2017 were NIS 0.53 million (U.S. $0.15 million) compared to NIS 0.43 million (U.S. $0.12 million) in the first six months of 2016. The increase in revenue was mainly due to the recognition of a portion of the NIS 1.9 million (U.S. $0.5 million) advance payment received in December 2016 under the distribution agreement with CKD.

Research and development expenses for the six months ended June 30, 2017 were NIS 8.84 million (U.S. $2.53 million) compared with NIS 9.97 million (U.S. $2.85 million) for the same period in 2016. Research and development expenses for the first half of 2017 comprised primarily of expenses associated with the Phase II study for Namodenoson, the preclinical study of CF602, as well as expenses for ongoing studies of Piclidenoson. The decrease is primarily due to a reduction in preclinical studies of CF602 conducted during the six months ended June 30, 2017.

General and administrative expenses were NIS 5.0 million (U.S. $1.43 million) for the six months ended June 30, 2017, the same as the general and administrative expenses for the same period in 2016.

Financial income, net for the six months ended June 30, 2017 aggregated NIS 1.57 million (U.S. $0.45 million) compared to financial income, net of NIS 3.19 million (U.S. $0.91 million) for the same period in 2016. The decrease in financial income, net in the first half of 2017 was mainly from exchange rate differences as compared to the same period in 2016 and from issuance expenses, offset by a larger decrease in the fair value of warrants that are accounted for as financial liability as compared to the same period in 2016.

Can-Fite’s net loss for the six months ended June 30, 2017 was NIS 11.72 million (U.S. $3.35 million) compared with a net loss of NIS 11.35 million (U.S. $3.25 million) for the same period in 2016. The slight increase in net loss for the first half of 2017 was primarily attributable to a decrease in financial income, net.

As of June 30, 2017, Can-Fite had cash and cash equivalents of NIS 23.98 million (U.S. $6.86 million) as compared to NIS 31.2 million (U.S. $8.92 million) at December 31, 2016. The decrease in cash during the six months ended June 30, 2017 is due to use of cash to fund operating expenses.

For the convenience of the reader, the reported NIS amounts have been translated into U.S. dollars, at the representative rate of exchange on June 30, 2017 (U.S. $1 = NIS 3.496).

The Company’s consolidated financial results for the six months ended June 30, 2017 are presented in accordance with International Financial Reporting Standards.