Seeking Alpha
Long-term horizon
Profile| Send Message|
( followers)  

Can-Fite BioPharma (CANFY) is an Israeli biopharmaceutical company with near-term late-stage clinical trial catalysts outlined below along with a recent capital raise to support a planned NYSE MKT (formerly AMEX) stock market listing.

CLINICAL TRIAL CATALYSTS:

CF101 (IB-MECA) is being developed as an oral signaling protein modulator anti-inflammatory agent with the following Phase II and III clinical trial catalysts, including a recent press release which provides specific guidance for reporting a pair of clinical trial results during the last two weeks of December.

- ClinicalTrials.gov ID NCT01034306 is the identifier for a Phase IIb rheumatoid arthritis clinical trial with results expected during the last two weeks of December.

- ClinicalTrials.gov ID NCT01235234 is the identifier for a Phase III dry eye clinical trial with results expected during the last two weeks of December.

- ClinicalTrials.gov ID NCT01033422 is the identifier for a Phase II glaucoma trial with results expected late 2013-early 2014.

- ClinicalTrials.gov ID NCT01265667 is the identifier for a Phase II/III psoriasis clinical trial with results expected during H1 2014.

- The eye-based indications for CF101 are licensed to majority-owned (82%) OphthaliX (OTCQB:OPLI) which has filed for an initial public offering.

- Ex-eye indications for CF101 are licensed to Seikagaku (Japan) and Kwang Dong Pharma (Korea) in deals that included approximately $22 million (NYSE:M) in up-front cash as outlined on page 6 of the Company's December presentation.

FINANCIAL STATS:

A summary of the Company's financials through 6/30/13 is provided in a SEC 6-K filing from 9/16/13 and includes the following highlights:

- As 6/30/13, CANFY reported $4.1M in cash and investments and subsequently raised $6M in an offering that was announced on 10/25/13 at a US equivalent price of $6.60 along with 0.7M options issued that have an exercise price of $8.69 and a 3-year term to support a planned up-listing of US ADR shares to the NYSE MKT (formerly AMEX) and fund future R&D activities including the ongoing trials outlined above.

- On a post-offering basis, CANFY has approximately $10M in cash which is adequate to fund operations for over one year based on the current cash burn rate that includes the use of about ($4.2M) in cash to fund operating activities during the first six months of 2013.

- CANFY has about 8M equivalent (1:2 ratio) US ADR shares of common stock outstanding based on the Company's primary TASE stock exchange statistics.

TRADE SUMMARY:

As illustrated on the one-year chart below, shares of CANFY have only recently began trading with volume for the US ADR currently listed on OTC with an up-listing to NYSE MKT imminent following a recent $6M offering.

More importantly, the Company recently provided a very specific timeline to report a pair of clinical trial results during the last two weeks of December and expected near-term up-listing of shares to NYSE MKT which should improve trading volumes and visibility of the Company to US investors--resulting in the potential for a share price run-up as results for the two trials approach.

I expect CANFY to reverse the recent pullback in price and make a new 52-week high as key trial results approach ($7-8 target) that will provide insight into to the commercial potential, if any, for the drug across a variety of conditions targeting large market opportunities in the autoimmune and eye disorder space.

Risk factors include low average trading volumes, the risk of failure in upcoming clinical trials and inability to up-list shares as planned to NYSE MKT. I estimate a slightly better than average (60%) chance for success in at least one of the late-stage clinical trials given this is the first major test of CF101 which has some degree of validation from earlier stage clinical trials, interim data and the Asian licensing agreements as outlined in the December presentation. My targets include $10-12 for success in at least one of the upcoming late-stage trials ($12-14 target for success in both upcoming trials) vs. sub-$2 for failure in both trials.

(click to enlarge)

Source: Can-Fite BioPharma: Near-Term Clinical Trial And Up-Listing Catalysts