Can-Fite BioPharma Ltd. — FY2022 Form 20-F
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone Q4 report. Financial statements are prepared under U.S. GAAP; amounts below are in U.S. dollars unless stated otherwise.
Business context
Can-Fite is a clinical-stage biopharmaceutical company with no approved or commercialized products. It develops A3 adenosine receptor-targeting drug candidates, principally Piclidenoson for psoriasis, Namodenoson for liver cancer and NASH, and CF602 for erectile dysfunction. Reported revenue comes from licensing and distribution agreements, not product sales.
Key financial results and liquidity
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | $0.810 million | $0.853 million |
| Research and development expense | $7.763 million | $9.850 million |
| General and administrative expense | $3.143 million | $3.845 million |
| Operating loss | $10.096 million | $12.842 million |
| Net loss | $10.173 million | $12.615 million |
| Net cash used in operating activities | $10.801 million | $9.858 million |
- Revenue declined 5.1%; R&D expense fell 21.2%, mainly as the Piclidenoson psoriasis Phase III study wound down. Management expects R&D expense to rise in 2023 and beyond.
- At year-end, cash and cash equivalents were $2.978 million, short-term deposits $5.001 million, and short-term investments $0.008 million. Current assets totaled $9.157 million versus current liabilities of $2.502 million.
- Total liabilities were approximately $4.811 million, including deferred revenue and lease obligations; the filing reports no material borrowings. Shareholders’ equity was $4.472 million, down from $14.382 million.
- Operating cash use increased despite the lower net loss. Investing activities provided $9.502 million, primarily from withdrawals of short-term deposits; financing activities provided no cash in 2022, versus $20.457 million in 2021.
- Accumulated deficit reached $150.847 million. The company has not generated product-sale revenue and has incurred losses since inception.
Material developments and outlook
- Piclidenoson’s Phase III COMFORT psoriasis study, announced in June 2022, met its primary endpoint. At week 16, the reported PASI 75 response was 9.7% for the 3 mg dose versus 2.6% for placebo. At week 32, Piclidenoson was inferior to Otezla on PASI 75 in the full study population, though it performed better on the Psoriasis Disability Index. The filing describes a further pivotal Phase III trial as planned; a registration plan was submitted to the EMA in January 2023, with an FDA submission expected.
- Namodenoson’s pivotal Phase III study in advanced liver cancer was open for enrollment, and its Phase IIb NASH study was also enrolling. The earlier Phase II HCC study missed its primary overall-survival endpoint in the full population; favorable survival findings were reported in a CPB7 subgroup.
- In January 2023, the company raised approximately $7.5 million gross and about $6.8 million net through registered direct and private offerings. Management stated that available resources were expected to fund operations for at least 12 months from the annual-report/financial-statement issuance date, while also warning that substantial additional financing will be needed.
- The January 2023 financing included substantial warrants and a reduction in the exercise price of certain previously issued warrants. The filing reports 1,224,837,393 ordinary shares outstanding as of March 30, 2023, compared with 815,746,293 at December 31, 2022. The ADS ratio changed in January 2023 from 1 ADS per 30 ordinary shares to 1 per 300.
- Management reported effective disclosure controls and internal control over financial reporting as of year-end. The auditor issued an unqualified opinion and identified liquidity and going-concern assessment as a critical audit matter; the auditor did not provide an opinion on internal-control effectiveness.
Risks, contingencies, and unusual items
- Funding and dilution: Continued clinical development depends on additional capital, licensing milestones, or partnerships. Financing may be unavailable or costly and may materially dilute shareholders. Warrants and options add potential dilution.
- Clinical and regulatory uncertainty: No candidate is approved. Prior trials have missed endpoints, including Piclidenoson studies in rheumatoid arthritis and certain other indications, and Namodenoson’s Phase II HCC primary endpoint. Earlier or subgroup results may not predict pivotal-trial outcomes.
- Commercial dependence: Revenue is modest and largely recognized over time from upfront licensing payments. Future milestones, royalties, and commercialization depend on clinical, regulatory, and sales outcomes; the company lacks its own sales and marketing capability.
- Other exposures: The filing highlights intellectual-property and licensing risks, supplier and CRO dependence, competition, foreign-exchange exposure, Israel’s political and security environment, inflation, and NYSE American continued-listing requirements. It reports no material litigation at year-end and no plans to pay dividends.
- Disclosure point to reconcile: The operating review describes the year-over-year financial-expense movement as an improvement, but the financial statements report net financial expense of $77,000 in 2022 versus net financial income of $227,000 in 2021. Review the underlying explanation and figures.
Most important facts for investors to verify
- Current cash runway and burn rate, including the use of the January 2023 financing proceeds and clinical-trial commitments.
- Latest enrollment, timing, and results expectations for the Namodenoson Phase III HCC and Phase IIb NASH trials, and the planned Piclidenoson pivotal trial and regulatory path.
- Full COMFORT trial data, including statistical significance, active-control comparisons, subgroup findings, safety, and the clinical relevance of response rates.
- Post-financing share count, warrant terms and exercise prices, and the resulting fully diluted capitalization.
- Reconciliation of the financial-expense discussion with the audited statements, and confirmation of any subsequent changes to liquidity, listing status, or management’s runway assessment.