F-1/A: Can-Fite BioPharma Seeks Up to $15.4 Million in Public Offering of ADSs and Warrants

Can-Fite BioPharma Ltd. filed an amended prospectus for a best-efforts public offering of American Depositary Shares and various warrants, aiming to raise capital for research, development, and general corporate purposes.

Summary

• Offering up to 4,901,961 American Depositary Shares (ADSs), each representing 300 ordinary shares, along with up to 9,803,922 common warrants to purchase ADSs.
• Also offering up to 4,901,961 pre-funded warrants to purchase ADSs, primarily for purchasers whose beneficial ownership would exceed 4.99% (or 9.99% by election) of outstanding ordinary shares.
• 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.
• Each ADS or pre-funded warrant will be accompanied by two common warrants, each exercisable for one ADS at an undisclosed exercise price, expiring two years from issuance.
• Placement Agent Warrants to purchase up to 343,138 ADSs will be issued to H.C. Wainwright & Co., LLC, with an exercise price of $1.275 per ADS and a two-year term.
• Estimated net proceeds from the offering range from approximately $2.36 million (for $3.0 million gross) to $4.20 million (for $5.0 million gross), after deducting placement agent fees and estimated offering expenses of approximately $246,000.
• Proceeds are intended for funding research and development, clinical trials, and other working capital and general corporate purposes.
• The company is an advanced clinical-stage biopharmaceutical company developing orally bioavailable small molecule therapeutic products for cancer, liver, and inflammatory diseases, utilizing the A3 adenosine receptor (A3AR) as a therapeutic target.
• Key drug candidates include CF101 (Piclidenoson) for psoriasis (in pivotal Phase III studies) and CF102 (Namodenoson) for hepatocellular carcinoma (HCC) (in pivotal Phase III trial, with orphan drug and Fast Track designations) and MASH (Phase IIb study).
• Namodenoson is also in an exploratory Phase II study for pancreatic cancer.
• CF602 is a second-generation allosteric drug candidate for erectile dysfunction, currently in preclinical studies.
• The company has out-licensed Piclidenoson for psoriasis in Canada, Spain, Switzerland, Austria, China, and South Korea, and for osteoarthritis in companion animals.
• Namodenoson has been out-licensed for liver cancer, MASH, and pancreatic cancer in South Korea, China, Central Eastern Europe, and Switzerland.
• The company has a history of significant losses from research and development.
• The offering is on a 'best-efforts' basis with no minimum offering amount, meaning the company may sell fewer than all securities and receive significantly less proceeds.
• The company's ADSs are listed on NYSE American under 'CANF', and ordinary shares trade on the Tel Aviv Stock Exchange (TASE) under 'CANF'.
• No established public trading market is expected for the common warrants or pre-funded warrants.
• The company is an Israeli limited company and a foreign private issuer under U.S. federal securities laws, subject to reduced disclosure standards.

Sentiment

Score: 4

Explanation: The filing outlines a critical capital raise to fund ongoing R&D and clinical trials, which is positive for continued operations. However, the 'best-efforts' nature of the offering, significant dilution for new investors, and the company's history of losses and geopolitical risks in Israel temper the overall sentiment. The lack of a trading market for warrants also adds a negative liquidity aspect.

Positives

• Advanced clinical-stage biopharmaceutical company with a pipeline of drug candidates (CF101, CF102, CF602) targeting significant markets.
• Piclidenoson (CF101) is in pivotal Phase III studies for psoriasis, following FDA and EMA meetings.
• Namodenoson (CF102) is in a pivotal Phase III trial for advanced liver cancer and has received Orphan Drug and Fast Track designations from the FDA for this indication.
• Namodenoson is also being developed for MASH (Phase IIb study) and pancreatic cancer (exploratory Phase II study), showing robust anti-pancreatic tumor growth in preclinical findings.
• Drug candidates like Piclidenoson and Namodenoson exhibit good safety profiles, oral administration, and low production costs, positioning them well against competitors.
• The company has a strategy of out-licensing product candidates to share development costs, minimize risk, and leverage partners' marketing capabilities.
• Preclinical data supports potential new indications for Piclidenoson (Lowe Syndrome) and Namodenoson (anti-obesity drug).

Negatives

• Incurred significant losses since inception due to research and development activities.
• The offering is a 'best-efforts' offering with no minimum amount, meaning the company may not raise sufficient capital to meet its business goals.
• Purchasers will experience immediate and substantial dilution in net tangible book value per ADS, estimated at approximately $0.29 per ADS.
• Future equity offerings or other equity issuances could cause further dilution to stockholders.
• There is no established public trading market for the common warrants and pre-funded warrants, limiting their liquidity.
• Common warrants may not have any value if the ADS market price does not exceed their exercise price.
• The company has never paid dividends and does not intend to in the foreseeable future, meaning investment gains depend solely on price appreciation.
• The company's operations in Israel expose it to political, economic, and military instability in the region, including ongoing conflicts and potential call-ups of personnel.
• Commercial insurance does not cover losses from events associated with the security situation in the Middle East, and government coverage is not assured.

Risks

• Immediate and substantial dilution in net tangible book value per ADS for new purchasers.
• Future dilution from additional equity offerings or other equity issuances.
• Uncertainty of capital raise success due to 'best-efforts' offering structure, potentially leading to insufficient funds for business plan execution.
• Broad discretion of management over the use of net proceeds, which may not result in positive returns.
• No established public trading market for common warrants and pre-funded warrants, limiting liquidity.
• Common warrants may expire worthless if the ADS market price does not exceed the exercise price.
• No dividends are expected to be paid, making investment gains dependent on stock price appreciation.
• Political, economic, and military instability in Israel and the Middle East, including ongoing conflicts, could adversely affect business operations, financial condition, and stock price.
• Military service call-ups of personnel (e.g., CEO) could materially and adversely affect business operations.
• Commercial insurance does not cover losses from events associated with the security situation in the Middle East, and government coverage is not guaranteed.
• Competition from other drugs on the market, new drugs under development (including those in more advanced stages), and repurposed drugs could adversely affect product candidate success.
• Failure to obtain regulatory approvals for product candidates or delays in clinical trials.
• Inability to establish and maintain strategic partnerships and other corporate collaborations.
• Risks related to not satisfying the continued listing requirements of NYSE American.
• Potential for the company to be classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, leading to adverse tax consequences for U.S. Holders.

Future Outlook

The company intends to continue developing its existing portfolio of small molecule orally bioavailable drugs for targeted diseases and other potential indications, focusing on cancer, liver, and inflammatory diseases. It plans to advance product candidates in the most advanced stages (Piclidenoson for psoriasis, Namodenoson for HCC, MASH, and pancreatic cancer). The strategy includes evaluating in-licensing opportunities synergistic with its A3AR expertise, focusing on products with global market potential, and commercializing through out-licensing arrangements to share development costs and leverage partners' marketing capabilities. The company does not intend to develop its own manufacturing facilities or sales forces.

Management Comments

• Believe characteristics of Piclidenoson, including its good safety profile, clinical activity, simple and less frequent oral administration, and low cost of production, position it well against competition in psoriasis markets.
• Believe Namodenoson's good safety profile, oral administration, and low cost of goods may position it well in the HCC market, where no drug has yet been approved by the FDA for patients with advanced liver cancer disease defined as Child Pugh B7.
• Preclinical studies show Namodenoson's novel mechanism of action entails de-regulation of three key signaling pathways which mediate the etiology and pathology of NAFLD/MASH and are responsible for the anti-inflammatory, anti-steatotic and anti-fibrotic effect in the liver.
• Preclinical data supports Piclidenoson's potential utilization for the treatment of Lowe Syndrome and Namodenoson's potential utilization as an anti-obesity drug.

Industry Context

The company operates in the biopharmaceutical industry, specializing in small molecule therapeutics targeting the A3 adenosine receptor (A3AR) for cancer, liver, and inflammatory diseases. This approach aims for specific targeting due to A3AR's high expression in pathological cells and low expression in normal cells. The company's strategy of out-licensing aligns with common industry practices for smaller biotech firms to share development risks and leverage larger pharmaceutical companies' commercialization capabilities. The psoriasis drug market is projected to reach $11.3 billion by 2025, and the HCC drug market in G8 countries is expected to reach $3.8 billion by 2027, indicating significant market opportunities for the company's lead candidates. However, the industry is highly competitive, with established drugs and new therapies under development, posing a challenge to market penetration.

Comparison to Industry Standards

• Piclidenoson's good safety profile, clinical activity, simple and less frequent oral administration, and low cost of production are highlighted as competitive advantages against existing psoriasis treatments, which often include injectable, potentially toxic, expensive, and less effective drugs.
• Namodenoson's good safety profile, oral administration, and low cost of goods are noted as potential advantages in the HCC market, particularly given that no drug has yet been approved by the FDA for patients with advanced liver cancer defined as Child Pugh B7.
• Namodenoson's novel mechanism of action, involving de-regulation of key signaling pathways for NAFLD/MASH, differentiates it from other treatments by addressing anti-inflammatory, anti-steatotic, and anti-fibrotic effects in the liver.

Corporate Governance

Stakeholder Impact

• Shareholders: Face significant immediate dilution from the offering and potential future dilution from additional equity issuances and warrant exercises. Investment gains are dependent on stock price appreciation, as no dividends are expected.
• Employees: Israeli employees, including the CEO, are subject to potential military service call-ups due to regional instability, which could disrupt operations.
• Investors in Warrants: Will experience limited liquidity due to no established public trading market for the common and pre-funded warrants.
• Company Operations: The capital raise is crucial for funding ongoing research and development and clinical trials, directly impacting the company's ability to advance its drug pipeline and achieve business objectives.

Next Steps

• Continue pivotal Phase III studies for Piclidenoson in the treatment of psoriasis.
• Continue enrolling patients in the pivotal Phase III trial for Namodenoson in the treatment of advanced liver cancer.
• Continue enrolling patients in a Phase IIb study of Namodenoson in the treatment of MASH.
• Continue conducting an exploratory Phase II study of Namodenoson in the treatment of patients with pancreatic cancer.
• Undertake preparatory work for a Phase II study with Piclidenoson for the treatment of Lowe syndrome.
• Continue investigating additional compounds targeting the A3 adenosine receptor for the treatment of erectile dysfunction.
• Apply to list or quote all of the Shares, Warrant ADSs, Warrant Shares, and/or ADSs on applicable Trading Markets concurrently with the Closing.
• Maintain the listing or quotation of ADSs, Warrant ADSs, and Ordinary Shares on each Trading Market where they are currently listed.

Key Dates

Recommendation

The company is at a critical juncture with multiple drug candidates in advanced clinical stages, including pivotal Phase III trials. This offering provides necessary capital for continued R&D and clinical progress, which is essential for long-term value creation. However, the significant immediate dilution for new investors, the 'best-efforts' nature of the offering (implying uncertainty in capital raised), and the inherent risks associated with clinical-stage biopharmaceutical development, coupled with geopolitical risks in Israel, suggest a 'hold' position. Investors should monitor the success of the capital raise, progress in clinical trials, and the geopolitical situation before considering a 'buy' or 'sell' decision. The lack of dividends and illiquidity of warrants also weigh on the short-term attractiveness.

Keywords

Biopharmaceutical, Clinical-stage, A3 Adenosine Receptor, Piclidenoson, Namodenoson, Psoriasis, Hepatocellular Carcinoma, MASH, Pancreatic Cancer, Erectile Dysfunction, Orphan Drug, Fast Track Designation, SEC Filing, Public Offering, ADS, Warrants, Pre-Funded Warrants, Dilution, Israel, Drug Development, Out-licensing