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OPERATING AND FINANCIAL REVIEW AND PROSPECTS
You should read the following
selected financial data and discussion of our operating and financial condition and prospects in conjunction with the financial statements
and the notes thereto included elsewhere in this 6-K. Our financial statements are prepared in accordance with U.S. GAAP, and reported
in U.S. dollars. We maintain our accounting books and records in U.S. dollars and our functional currency is the U.S. dollar. Certain
amounts presented herein may not sum due to rounding. Unless the context requires otherwise, references in this report to "Can-Fite,"
the "Company," "we," "us" and "our" refer to Can-Fite BioPharma Ltd, an Israeli company
and our consolidated subsidiaries. "NIS" means New Israeli Shekel, and "$," "US$,"U.S. dollars"
and "USD" mean United States dollars.
Forward Looking Statements
The following discussion contains
"forward-looking statements," including statements regarding expectations, beliefs, intentions or strategies for the future.
These statements may identify important factors which could cause our actual results to differ materially from those indicated by the
forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include,
but are not limited to:
| our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all; | ||
| uncertainties of cash flows and inability to meet working capital needs; | ||
| the initiation, timing, progress and results of our preclinical studies, clinical trials and other product candidate development efforts; |
| competitive companies, technologies and our industry; | ||
| risks related to the COVID-19 pandemic and the Russian invasion of Ukraine; | ||
| risks related to not satisfying the continued listing requirements of NYSE American; and |
All forward-looking statements
attributable to us or persons acting on our behalf speak only as of the date of the 6-K to which this discussion is attached and are expressly
qualified in their entirety by the cautionary statements included herein. We undertake no obligations to update or revise forward-looking
statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. In
evaluating forward-looking statements, you should consider these risks and uncertainties.
Glossary of Certain Terms
As used herein, unless the
context otherwise requires:
| references to "NASH" refer to nonalcoholic steatohepatitis; and | ||
| references to "ordinary shares," "our shares" and similar expressions refer to the Company's Ordinary Shares, NIS 0.25 nominal (par) value per share; |
We are a clinical-stage biopharmaceutical
company that develops orally bioavailable small molecule therapeutic products for the treatment of cancer, liver and inflammatory diseases
and erectile dysfunction. We are also developing specific formulations of cannabis components for the treatment of cancer, inflammatory,
autoimmune, and metabolic diseases. Our platform technology utilizes the Gi protein associated A3AR as a therapeutic target. A3AR is highly
expressed in pathological body cells such as inflammatory and cancer cells, and has a low expression in normal cells, suggesting that
the receptor could be a specific target for pharmacological intervention. Our pipeline of drug candidates are synthetic, highly specific
agonists and allosteric modulators targeting the A3AR.
Our research further suggests
that A3AR affects pathological and normal cells differently. While specific A3AR agonists, such as Piclidenoson and Namodenoson, and allosteric
modulators, such as CF602, appear to inhibit growth and induce apoptosis of cancer and inflammatory cells, normal cells are refractory,
or unresponsive to the effects of these drugs. To date, the A3AR agonists have had a positive safety profile as a result of this differential
Our product pipeline is based
on the research of Dr. Pnina Fishman, who investigated a clinical observation that tumor metastasis can be found in most body tissues,
but are rarely found in striated muscle tissue, which constitutes approximately 60% of human body weight. Dr. Fishman's research
revealed that one reason that striated muscle tissue is resistant to tumor metastasis is that muscle cells release small molecules which
bind with high selectivity to the A3AR. As part of her research, Dr. Fishman also discovered that A3ARs have significant expression in
tumor and inflammatory cells, whereas normal cells have low or no expression of this receptor. The A3AR agonists and allosteric modulators,
currently our pipeline drug candidates, bind with high selectivity and affinity to the A3ARs and initiating down-stream signal transduction
pathways resulting in apoptosis, or programmed cell death, of tumors and inflammatory cells and inhibition of inflammatory cytokines.
Cytokines are proteins produced by body cells and affect the immune system in order to maintain homeostasis. Overproduction or inappropriate
production of certain cytokines by the body can result in disease.
Our product candidates, CF101,
CF102 and CF602, are being developed to treat cancer, liver and inflammatory diseases, as well as erectile dysfunction. CF101, also known
as Piclidenoson, is in an advanced stage of clinical development for the treatment of psoriasis. During 2021, we decided to end our Phase
II COVID-19 trial of Piclidenoson for the treatment of COVID-19 to focus on other clinical programs. CF102, also known as Namodenoson,
is being developed for the treatment of HCC and has an orphan drug designation for this indication in the United States and Europe. Namodenoson
was granted Fast Track designation by the FDA as a second line treatment for patients with advanced HCC who failed first line therapy.
Namodenoson is also being developed for the treatment of NASH, a disease for which no FDA approved therapies currently exist. CF602 is
our second-generation allosteric drug candidate for the treatment of erectile dysfunction, which has shown efficacy in the treatment of
erectile dysfunction in preclinical studies and we are investigating additional compounds, targeting A3AR, for the treatment of erectile
dysfunction. Preclinical studies revealed that our drug candidates have potential to treat liver diseases, additional inflammatory diseases,
oncological diseases, viral diseases, such as the JC virus, and obesity.
We believe our pipeline of
drug candidates represent a significant market opportunity. For instance, according to iHealthcareAnalyst, the psoriasis drug market is
forecasted to be worth $11.3 billion by 2025. According to DelveInsight, the HCC drug market in the G8 countries (U.S., Germany, France,
Italy, Spain, UK, Japan and China) is expected to reach $3.8 billion by 2027.
We have out-licensed the following
product candidates for indications that we are currently pursuing:
We are currently: (i) planning
to submit our registration plans to the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA) for a pivotal
Phase III trial of Piclidenoson for the treatment of moderate to severe psoriasis; (ii) conducting a Phase III trial for Namodenoson in
the treatment of advanced liver cancer which is open for enrollment, (iii) conducting a Phase IIb study of Namodenoson in the treatment
of NASH, (iv) planning to initiate, through Vetbiolix, a clinical trial of Piclidenoson for the treatment of osteoarthritis in dogs, (iv)
investigating additional compounds, targeting the A3 adenosine receptor, for the treatment of erectile dysfunction, and (v) developing
formulations of cannabis components for the treatment of diseases in which there is an overexpression of A3AR.
Moreover, we believe characteristics
of Piclidenoson, as exhibited in our clinical studies to date, including its good safety profile, clinical activity, simple and less frequent
delivery through oral administration and its low cost of production, position it well against the competition in psoriasis markets, where
treatments, when available, often include injectable drugs, many of which can be highly toxic, expensive and not always effective.
Like Piclidenoson, Namodenoson
has a good safety profile, is orally administered and has a low cost of goods, which we believe may position it well in the HCC market,
where no drug has yet been approved by the FDAn for patients with advanced liver cancer disease defined as Child Pugh B7. In addition,
pre-clinical studies show Namodenoson's novel mechanism of action which entails de-regulation of three key signaling pathways which
mediate the etiology and pathology of NAFLD/NASH and are responsible for the anti-inflammatory and anti-fibrogenic effect in the liver.
Most recently, pre-clinical data support Namodenoson's potential utilization as an anti-obesity drug.
Nevertheless, other drugs
on the market, new drugs under development (including drugs that are in more advanced stages of development in comparison to our drug
candidates) and additional drugs that were originally intended for other purposes, but were found effective for purposes targeted by us,
may all be competitive to the current drugs in our pipeline. In fact, some of these drugs are well established and accepted among patients
and physicians in their respective markets, are orally bioavailable, can be efficiently produced and marketed, and are relatively safe.
None of our product candidates have been approved for sale or marketing and, to date, there have been no commercial sales of any of our
Results of Operations
Revenues for the six
months ended June 30, 2022 were $0.40 million compared to revenues of $0.39 million during the six months ended June 30, 2021.
Revenues for the six months ended June 30, 2022 and June 30, 2021 comprised of recognition of a portion of advance payments
received under distribution agreements with Gebro, CKD, Cipher and Ewopharma.
Research and development expenses
Research and development expenses
for the six months ended June 30, 2022 were $3.27 million compared with $3.81 million for the same period in 2021. Research and development
expenses for the first half of 2022 comprised primarily of expenses associated the completion of the Phase III study of Piclidenoson for
the treatment of psoriasis and two studies for Namodenoson, a Phase III study in the treatment of liver cancer and a Phase IIb study for
NASH. The decrease is primarily due to lower costs incurred in 2022 associated with the two new studies for Namodenoson and due to wrap
up of Phase III study of Piclidenoson for the treatment of psoriasis in 2022.