Business context and reporting period
Can-Fite BioPharma Ltd. filed this audited Form 20-F for the fiscal year ended December 31, 2023; it is an annual report, not a standalone fourth-quarter report. The Israeli clinical-stage biotech develops A3 adenosine receptor (A3AR)-targeting drug candidates. It has no approved products or product-sales revenue; reported revenue is primarily recognition of upfront payments under licensing and distribution agreements. Financial statements are prepared under U.S. GAAP.
Financial results and liquidity
| Metric (USD millions, except per-share data) | 2023 | 2022 | Change / context |
|---|---|---|---|
| Revenue | 0.743 | 0.810 | Down $0.067 million, about 8%; entirely licensing-related, not product sales |
| Research and development | 5.983 | 7.763 | Down 22.9%, largely reflecting lower Piclidenoson costs |
| General and administrative | 2.955 | 3.143 | Down 6.0% |
| Operating loss | (8.195) | (10.096) | Loss narrowed |
| Financial income (expense), net | 0.561 | (0.077) | Improved, mainly from deposit interest and lower investment revaluation expense |
| Net loss | (7.634) | (10.173) | Loss narrowed by about 25% |
| Basic and diluted net loss per ordinary share | $(0.01) | $(0.01) | 2021 was $(0.03); share counts increased substantially |
| Operating cash flow | (8.440) | (10.801) | Cash used decreased |
At year-end, cash and cash equivalents were $4.278 million and short-term deposits were $4.625 million, totaling $8.903 million. Current assets were $9.908 million and current liabilities $2.020 million. The filing reports no significant long-term borrowings; liabilities principally include deferred revenue, payables and lease obligations. Deferred revenue was $2.335 million ($0.622 million current). The company reported an accumulated deficit of $158.481 million. Gross margin is not a meaningful disclosed measure for this development-stage, licensing-revenue business.
Financing activities provided $9.144 million net in 2023, including proceeds from equity and warrant transactions; investing activities provided $0.498 million, mainly reflecting short-term deposit movements. Cash increased $1.300 million to $4.278 million. The company raised approximately $7.5 million gross in January 2023 and approximately $3.0 million gross in November 2023; the November transaction generated approximately $2.61 million net according to management’s discussion.
Material changes and operating developments
- Revenue declined from $0.810 million to $0.743 million as smaller portions of prior upfront payments were recognized. Ewopharma represented 46% of 2023 revenue, CKD 25%, Gebro 18% and Cipher 11%, creating customer concentration.
- R&D spending fell year over year, while the company continued a pivotal Phase III Namodenoson trial in advanced liver cancer and a Phase IIb Namodenoson trial in NASH. The filing describes Piclidenoson psoriasis Phase III preparations, with initiation expected in the second half of 2024.
- Namodenoson’s earlier Phase II HCC study missed its primary overall-survival endpoint in the full study population; the company highlighted favorable results in the CPB7 subgroup. Its current Phase III trial is enrolling patients.
- In the 2022 Piclidenoson psoriasis Phase III COMFORT study, the 3 mg dose met the Week 16 primary endpoint versus placebo. At Week 32, Piclidenoson was inferior to Otezla on PASI 75 in the overall comparison, but showed better Psoriasis Disability Index results and a favorable tolerability profile. These findings do not establish approval or commercial success.
- Equity financing materially increased potential dilution. Ordinary shares outstanding rose from 815.7 million at year-end 2022 to 1.360 billion at year-end 2023; 1.852 billion warrants and 82.5 million options were outstanding at year-end 2023.
Outlook, risks and unusual items
Management stated that available resources were expected to fund operations for at least 12 months from the financial statements’ issuance, while also acknowledging substantial doubt arising from recurring losses, operating cash outflows and reliance on additional financing. Management concluded that planned expense reductions, R&D deferrals and reprioritization would alleviate that doubt for at least 12 months; it cautioned that implementation and funding are uncertain. The auditor identified liquidity and going concern as a critical audit matter, while issuing an unqualified opinion on the financial statements.
Management expects continued operating losses and substantial funding needs. It may seek additional equity or debt, partnerships, licensing proceeds or milestone payments; future financing may be unavailable or dilutive. The company said R&D expenses may increase as development advances. There is no specific financial earnings or revenue guidance in the filing.
- Clinical and regulatory risks are significant: no candidate is approved, later-stage outcomes may differ from earlier data, and past studies include failures to meet endpoints, including Piclidenoson studies in rheumatoid arthritis and psoriasis and Namodenoson’s full-population HCC endpoint.
- Further risks include dependence on a small pipeline, limited patent protection for Piclidenoson and Namodenoson composition of matter, partner and supplier dependence, competitive and reimbursement pressures, and possible NYSE American listing noncompliance.
- The company operates primarily in Israel and disclosed the October 2023 war and potential regional escalation as risks. It reported no disruption to clinical studies or operations as of the report date; most study sites and all drug-candidate manufacturing were outside Israel.
- Warrant repricing and inducement transactions issued substantial new warrant coverage and could cause significant dilution. No material litigation was disclosed. No cash dividends are planned.
- Management reported effective disclosure controls and internal control over financial reporting as of year-end; the company was a non-accelerated filer and the auditor did not attest to internal controls.
Important facts for investors to verify
- Runway and funding assumptions: reconcile the $8.903 million year-end cash-and-deposits balance with trial commitments, management’s 12-month assessment and any subsequent financing or spending changes.
- Warrant and share dilution: confirm current warrant balances, exercise prices, abeyance shares and fully diluted share count; the filing reports 1.852 billion warrants against 1.360 billion year-end ordinary shares.
- ADS ratio and share-count disclosures: the filing generally states one ADS represents 300 ordinary shares, but a passage elsewhere states two; verify the operative depositary ratio and relevant dates.
- Clinical evidence and timelines: monitor enrollment, endpoints and results for Namodenoson Phase III HCC and Phase IIb NASH, and confirm whether Piclidenoson psoriasis Phase III studies began as expected.
- Revenue quality and partner concentration: distinguish recurring license-payment recognition from milestone, royalty or product-sales revenue, and track the timing and conditions of prospective partner payments.