F-1: Can-Fite BioPharma Files F-1 for Up to $10.4 Million Securities Offering Amidst Dilution Concerns

Can-Fite BioPharma Ltd. has filed an F-1 registration statement to offer up to 4,901,961 American Depositary Shares and accompanying warrants in a best-efforts offering, aiming to raise approximately $4.20 million in net proceeds for research and development and general corporate purposes.

Summary

• Can-Fite BioPharma Ltd. is offering up to 4,901,961 American Depositary Shares (ADSs) and 4,901,961 Common Warrants in a best-efforts offering.
• The offering also includes up to 4,901,961 Pre-Funded Warrants for purchasers whose beneficial ownership would exceed 4.99% (or 9.99%) of outstanding Ordinary Shares.
• Additionally, up to 343,138 Placement Agent Warrants will be issued to H.C. Wainwright & Co., LLC.
• The assumed combined public offering price is $1.02 per ADS and Common Warrant, based on the NYSE American closing price on July 21, 2025.
• The assumed combined purchase price for each Pre-Funded Warrant and Common Warrant is $1.019.
• Estimated net proceeds from the offering are approximately $4.20 million, assuming the maximum number of ADSs are sold.
• The company is an advanced clinical-stage biopharmaceutical firm developing orally bioavailable small molecule therapeutic products for cancer, liver, and inflammatory diseases, and erectile dysfunction, targeting the A3 adenosine receptor (A3AR).
• Key product candidates include CF101 (Piclidenoson) in pivotal Phase III for psoriasis, and CF102 (Namodenoson) in pivotal Phase III for advanced liver cancer (HCC), Phase IIb for MASH, and exploratory Phase II for pancreatic cancer.
• Piclidenoson and Namodenoson are highlighted for their good safety profiles, oral administration, and low production costs.
• The psoriasis drug market is forecasted to reach $11.3 billion by 2025, and the HCC drug market in G8 countries is expected to reach $3.8 billion by 2027.
• Existing cash and cash equivalents are estimated to fund business operations through the end of August 2026 without this offering.
• With net proceeds of approximately $4.20 million from this offering, the company believes it can meet capital needs through the end of February 2027.

Sentiment

Score: 4

Explanation: The company has a promising clinical pipeline targeting large markets, but it is in a high-risk, pre-commercial stage with a history of losses. The capital raise is crucial but structured as 'best efforts' with no minimum, introducing significant uncertainty regarding funding adequacy. The substantial dilution for new investors and geopolitical risks in Israel further temper positive sentiment.

Positives

• The company has an advanced clinical-stage pipeline with drug candidates (CF101, CF102, CF602) targeting significant diseases.
• Piclidenoson (CF101) is in pivotal Phase III studies for psoriasis, noted for its good safety profile, oral administration, and low production cost, positioning it well against competitors.
• Namodenoson (CF102) is in a pivotal Phase III trial for advanced liver cancer (HCC) and has received Orphan Drug and Fast Track designations from the FDA.
• Namodenoson is also being developed for MASH (Phase IIb) and pancreatic cancer (exploratory Phase II), expanding its potential indications.
• Preclinical data supports the potential utilization of Piclidenoson for Lowe Syndrome and Namodenoson as an anti-obesity drug.
• The company operates in large and growing markets, with the psoriasis drug market forecasted at $11.3 billion by 2025 and the HCC drug market at $3.8 billion by 2027 in G8 countries.
• Existing out-licensing arrangements with pharmaceutical companies in the Far East, Canada, and Europe provide strategic partnerships for development and commercialization.

Negatives

• The company has incurred significant losses since its inception due to research and development activities.
• None of the product candidates have received regulatory approval for sale or marketing, and there have been no commercial sales to date.
• Investing in the company's securities involves a high degree of risk, as explicitly stated in the filing.
• New investors will experience immediate and substantial dilution in net tangible book value per ADS, estimated at approximately $0.29 per ADS.
• The 'best efforts' nature of the offering means there is no minimum amount of capital required to be raised, potentially resulting in significantly less proceeds than the maximum target.
• There is no established public trading market for the Common Warrants and Pre-Funded Warrants, which will limit their liquidity.
• Common Warrants may have no value if the market price of the ADSs does not exceed their exercise price.
• The company has never paid dividends on its share capital and does not intend to do so in the foreseeable future, meaning investment gains depend solely on price appreciation.
• Operations are based in Israel, exposing the company to political, economic, and military instability in the region, including ongoing conflicts.
• The company's commercial insurance does not cover losses from events associated with the security situation in the Middle East, and government coverage is not assured.
• Management will have broad discretion over the use of net proceeds, which may not necessarily result in positive returns on investment.

Risks

• History of losses and the need for additional capital to fund operations, with no assurance of obtaining such capital on acceptable terms or at all.
• Uncertainties regarding cash flows and the ability to meet working capital needs.
• Uncertainty surrounding the initiation, timing, progress, and results of preclinical studies and clinical trials.
• Inability to advance product candidates into clinical trials or successfully complete existing studies.
• Risks associated with receiving regulatory approvals for product candidates and the timing of regulatory filings.
• Challenges related to the clinical development, commercialization, and market acceptance of product candidates.
• Difficulty in establishing and maintaining strategic partnerships and corporate collaborations.
• Risks concerning the scope of protection for intellectual property rights and the ability to operate without infringing on others' IP.
• Intense competition from existing drugs, new drugs under development (including those in more advanced stages), and repurposed drugs.
• Risks of not satisfying the continued listing requirements of NYSE American.
• Adverse effects on business, operations, and financial condition due to political, economic, and military instability in Israel and its region, including military service call-ups.
• Potential for escalation of tensions or violence in the Middle East, which could negatively affect business conditions and capital raising efforts.
• Commercial insurance does not cover losses from security situations in the Middle East, and government coverage is not guaranteed.
• The 'best efforts' offering structure means the company may raise insufficient capital to implement its business plan, potentially leading to greater operating losses.
• Management's broad discretion over the use of net proceeds may not produce favorable returns for investors.
• Immediate and substantial dilution in net tangible book value per ADS for new purchasers.
• Potential for future dilution from subsequent equity offerings or the exercise of outstanding convertible securities.
• Absence of an established public trading market for the Common Warrants and Pre-Funded Warrants, limiting their liquidity.
• Common Warrants may expire without value if the ADS market price does not exceed their exercise price.
• Holders of Pre-Funded Warrants and Common Warrants have no shareholder rights until exercise.
• The company has no plans to pay dividends in the foreseeable future, and Israeli law limits dividend payments and subjects them to withholding taxes.
• Risk of being treated as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes.

Future Outlook

The company intends to use the net proceeds from this offering primarily for funding research and development and clinical trials, as well as for other working capital and general corporate purposes. Management retains broad discretion over the application of these funds. The company estimates that the net proceeds, combined with existing cash, will extend its capital runway to fund operations through the end of February 2027, assuming the maximum offering is achieved.

Management Comments

• Believe our pipeline of drug candidates represents a significant market opportunity.
• Our approach allows us to continue to advance our clinical and preclinical pipeline, test products for additional indications, identify other small molecule drugs, focus on product candidates closest to realizing their potential, and avoid dependency on a small number of small molecules and indications.
• Believe out-licensing arrangements allow us to share high development costs, minimize failure risk, and leverage partners' marketing capabilities, increasing the likelihood of advancing clinical development and potential commercialization.

Industry Context

Can-Fite BioPharma operates in the highly competitive biopharmaceutical industry, focusing on small molecule therapeutics for chronic and life-threatening conditions. The company targets large global markets such as psoriasis (projected $11.3 billion by 2025) and hepatocellular carcinoma (HCC) (projected $3.8 billion by 2027 in G8 countries). It acknowledges significant competition from established drugs, new therapies in development (some more advanced), and repurposed drugs, emphasizing its strategy to differentiate through favorable safety profiles, oral administration, and low production costs for its lead candidates.

Comparison to Industry Standards

• Piclidenoson (CF101) is positioned favorably against existing psoriasis treatments, which often include injectable, highly toxic, expensive, and less effective drugs, due to its good safety profile, oral administration, and low production cost.
• Namodenoson (CF102) is positioned well in the HCC market, where no drug has yet been approved by the FDA for patients with advanced liver cancer defined as Child Pugh B7, highlighting a potential unmet medical need.
• Namodenoson's novel mechanism of action, involving de-regulation of three key signaling pathways, is presented as a differentiator for its anti-inflammatory, anti-steatotic, and anti-fibrotic effects in the liver for NAFLD/MASH.

Corporate Governance

Stakeholder Impact

• Shareholders will experience immediate and substantial dilution in the net tangible book value per ADS purchased in this offering, estimated at approximately $0.29 per ADS.
• Existing shareholders face potential future dilution from additional equity offerings or the exercise of outstanding convertible securities.
• The 'best efforts' nature of the offering means the company may not raise the full target amount, potentially impacting its ability to fund operations and execute its business plan, which could negatively affect shareholder value.
• Employees in Israel may be subject to military service call-ups due to regional instability, which could adversely affect business operations if personnel are absent for extended periods.
• The company's financial stability and ability to pursue its drug development programs directly impact its long-term viability, affecting all stakeholders including employees, partners, and potential patients.

Next Steps

• The company expects to deliver the securities to purchasers on or about the specified date in 2025.
• The offering will terminate on August 23, 2025, unless the company decides to terminate it earlier.
• Net proceeds from the offering are intended to fund research and development, clinical trials, and general corporate purposes.
• The company will apply to list or quote all Shares, Warrant ADSs, and Ordinary Shares on relevant Trading Markets.
• The company will use commercially reasonable efforts to maintain the listing and trading of its ADSs and Ordinary Shares on a Trading Market.
• The company will use commercially reasonable efforts to maintain the eligibility of the ADSs for electronic transfer through The Depository Trust Company.

Key Dates

Recommendation

Can-Fite BioPharma is a high-risk, high-reward biopharmaceutical company with an active clinical pipeline and identified large market opportunities. However, it operates with a history of significant losses and no commercial sales to date, relying heavily on capital raises. This F-1 filing details a 'best efforts' offering with no minimum, indicating potential for insufficient funding and significant dilution for new investors. The geopolitical risks associated with its Israeli operations add further uncertainty. While the long-term potential of its drug candidates is notable, the immediate financial and operational uncertainties warrant a cautious approach. Existing investors should hold to monitor clinical progress and capital deployment, while new investors should consider the substantial risks before committing capital.

Keywords

Biopharmaceutical, Clinical-stage, Drug development, Cancer, Liver disease, Inflammatory disease, Erectile dysfunction, Psoriasis, Hepatocellular carcinoma, MASH, Pancreatic cancer, A3 adenosine receptor, Piclidenoson, Namodenoson, CF101, CF102, CF602, SEC filing, F-1, ADS, Warrants, Public offering, Capital raise, Clinical trials, Orphan drug, Fast Track, Israel, Biotech