Can-Fite BioPharma Ltd. — FY2021 Form 20-F
Reporting period: Fiscal year ended December 31, 2021. This is an annual report, not a standalone Q4 filing; separate Q4 results are not provided. Figures below are in U.S. dollars.
Business context
Can-Fite is a clinical-stage biopharmaceutical company developing small-molecule drug candidates targeting the A3 adenosine receptor. Its lead programs are Piclidenoson (psoriasis), Namodenoson (liver cancer and NASH), and CF602 (erectile dysfunction). The company has no approved products or product-sale revenue; reported revenue primarily reflects licensing arrangements.
Financial performance and liquidity
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | $0.853 million | $0.763 million |
| Research and development expense | $9.850 million | $11.951 million |
| General and administrative expense | $3.845 million | $2.951 million |
| Operating loss | $12.842 million | $14.139 million |
| Net loss | $12.615 million | $14.443 million |
| Net cash used in operating activities | $9.858 million | $12.063 million |
- Revenue increased 12%, mainly reflecting recognition of part of Ewopharma’s upfront payment, partly offset by lower recognition of earlier license advances. Revenue is not product sales, and a product gross margin is not meaningful or reported.
- R&D expense fell 17%, while G&A expense rose 30%. Management expects R&D expense to increase as clinical programs advance; it expected G&A to remain around the 2021 level through 2022.
- Financial income was $0.227 million, versus a $0.304 million expense in 2020. Net loss improved, but remained substantial.
- At year-end, cash and cash equivalents were $4.390 million and short-term deposits were $14.512 million. Current assets totaled $20.068 million against current liabilities of $2.730 million. Total assets were $20.253 million; total liabilities were approximately $5.871 million, including deferred revenue and lease liabilities. No material borrowings are identified in the provided filing text.
- Operating cash outflow was $9.858 million; investing cash outflow was $14.511 million, principally the placement of $14.5 million in short-term deposits; financing provided $20.457 million. The company raised approximately $10 million in August and another $10 million through warrant exercises in December.
- Accumulated deficit was $140.674 million. Shares outstanding increased to 815.7 million from 463.8 million. Outstanding warrants and options create further potential dilution. A $2.590 million deemed dividend related to the December warrant exercise was recorded outside net loss, contributing to comprehensive loss of $15.205 million.
Changes, outlook, and material risks
- In 2021, Can-Fite completed enrollment in its Phase III COMFORT psoriasis trial; topline results were expected in Q2 2022. It planned to start enrollment in a Phase III Namodenoson HCC trial in the first half of 2022. Enrollment in a Phase IIb Namodenoson NASH study began in January 2022.
- The company ended its Phase II Piclidenoson COVID-19 program in 2021 to focus resources on other programs. Earlier studies also had important setbacks: Piclidenoson trials in rheumatoid arthritis and certain ophthalmic indications missed endpoints, and a psoriasis Phase II/III study missed its primary endpoint. Namodenoson’s Phase II HCC study missed its primary endpoint in the full population, though the company reported favorable results in a CPB7 subgroup.
- Management said available resources were expected to fund operations for at least 12 months from the filing date. The auditor identified liquidity and capital resources as a critical audit matter because this conclusion depends on forecasts and assumptions. The company expects to need substantial additional financing; funding may be unavailable or dilutive, and program delays, reductions, or terminations may follow.
- Key risks include clinical and regulatory failure, dependence on three principal drug candidates, lack of commercial products and sales infrastructure, reliance on collaborators and contract suppliers, patent and licensing limits, and competition. COVID-19, geopolitical and capital-market disruption, and political or security events in Israel may also affect trials, operations, and financing.
- Can-Fite reported effective disclosure controls and internal control over financial reporting as of December 31, 2021. The auditor issued an unqualified opinion on the U.S. GAAP financial statements; it did not audit internal-control effectiveness.
Most important facts for investors to verify
- Whether the reported cash and short-term deposits, after commitments and trial spending, support the stated runway and planned studies.
- Actual outcomes and timing of the COMFORT psoriasis and Namodenoson HCC and NASH trials, including whether subgroup findings replicate in pivotal studies.
- The amount and timing of future license milestones and royalties, which depend on clinical, regulatory, and commercial progress.
- Fully diluted share count and warrant terms, including the potential dilution from outstanding warrants, options, and future financing.
- Whether clinical spending rises as projected and whether additional capital can be secured on acceptable terms.