Executive Summary / Key Takeaways

• Can-Fite BioPharma is a clinical-stage biotechnology company focused on developing orally bioavailable small molecule drugs targeting the A3 adenosine receptor (A3AR) for cancer and inflammatory diseases, a unique technological differentiator.
• The company has strategically re-focused its pipeline on promising assets, notably Piclidenoson for psoriasis (now in pivotal Phase III) and Namodenoson for liver cancer (Phase III) and NASH (Phase IIb), following a positive interim analysis for psoriasis and the discontinuation of its rheumatoid arthritis program.
• Namodenoson has shown significant efficacy in addressing critical unmet needs, including the complete resolution of NASH cases in a Phase II study and efficacy in Child Pugh B liver cancer patients, a population currently lacking approved treatments.
• Can-Fite maintains a lean financial profile typical of a development-stage biotech, with consistent net losses and reliance on capital raises, including recent offerings in 2025, to fund its extensive R&D and clinical trial activities.
• The investment thesis hinges on the successful advancement and commercialization of its lead drug candidates through strategic partnerships, leveraging its proprietary A3AR platform and a growing intellectual property portfolio in high-value therapeutic areas.

Can-Fite's A3AR Advantage and Strategic Focus

Can-Fite BioPharma Ltd., established in 1994, has evolved into a clinical-stage biopharmaceutical company dedicated to developing orally bioavailable small molecule therapeutic products. The company's foundational strength lies in its proprietary platform technology, which specifically targets the A3 adenosine receptor (A3AR). This receptor is over-expressed in pathological cells and tissues, making it a compelling target for various conditions, including cancer and inflammatory diseases. The strategic advantage of A3AR targeting is its potential to offer a differentiated mechanism of action, leading to favorable safety profiles and targeted efficacy.

The company's strategic trajectory has been shaped by its clinical progress. A pivotal moment occurred in 2020 with a strategic re-prioritization of its pipeline. While the Phase III psoriasis (Comfort) trial for Piclidenoson received encouraging recommendations from an independent data monitoring committee (IDMC), the rheumatoid arthritis (Acrobat) study was discontinued. This decision, made despite Piclidenoson demonstrating efficacy superior to placebo, was due to the drug missing its primary endpoint of non-inferiority versus methotrexate. This strategic pivot allowed Can-Fite to concentrate resources on its most promising assets: Piclidenoson for psoriasis and Namodenoson for liver cancer and NASH.

The A3AR platform offers tangible benefits that underpin Can-Fite's competitive positioning. Its small molecule drugs are orally bioavailable, a significant advantage over many injectable biologics, particularly in inflammatory conditions like psoriasis. This oral delivery translates to enhanced patient convenience and potentially lower costs, factors that a 2018 industry study indicated are preferred by psoriasis patients. Furthermore, the company is developing a commercial predictive biomarker blood test kit for A3AR, which could enhance patient selection and treatment efficacy, thereby improving R&D efficiency and potentially leading to better patient outcomes.

Piclidenoson: A Strategic Pivot in Inflammatory Diseases

Piclidenoson, Can-Fite's lead drug candidate, has seen a focused strategic advancement. In the psoriasis program, the IDMC's recommendation to proceed with the Phase III study and drop one dose group was highly encouraging, as it identified an optimal dose and suggested an earlier conclusion than originally planned. The majority of costs for this study had already been incurred, making its continuation financially efficient. Piclidenoson has since reported topline Phase III psoriasis results and commenced a pivotal Phase III trial by July 2025. The drug is out-licensed for psoriasis in nine countries, with agreements structured to include milestone payments and royalties upon regulatory approval. This out-licensing model is central to Can-Fite's strategy, allowing it to leverage partners' commercialization capabilities.

Beyond psoriasis, Piclidenoson's anti-inflammatory and anti-viral properties led to its opportunistic development for COVID-19. A Phase II study for hospitalized patients with moderate COVID-19 received FDA and IRB approval, with enrollment expected to commence by the end of 2020. The drug, administered at a 2mg dose on top of standard supportive care, aimed to address the cytokine release syndrome, a prominent manifestation of the disease. More recently, in July 2025, a breakthrough study from UCLA demonstrated Piclidenoson's efficacy in an experimental model of vascular dementia, hinting at broader therapeutic potential for the A3AR mechanism.

Namodenoson: Targeting Unmet Needs in Liver Cancer and NASH

Namodenoson represents another cornerstone of Can-Fite's pipeline, particularly in addressing high-need liver indications. Its Phase II study in NAFLD/NASH yielded compelling data, demonstrating a highly significant and sustained reduction in liver fat volume and the complete resolution of NASH cases in patients treated with the 25mg dose. This dose was identified as optimal for both efficacy and safety and will be carried forward into future studies. The robust anti-inflammatory effects and favorable safety profile of Namodenoson are particularly noteworthy, given that many drugs in advanced stages for NASH have struggled to demonstrate both safety and efficacy sufficient for marketing approval. This underscores the significant unmet need that Namodenoson aims to address.

The company has secured patents for Namodenoson in the treatment of NASH in the U.S., Europe, and Korea, which are critical for engaging with potential distribution partners. For hepatocellular carcinoma (HCC), Namodenoson has shown significant efficacy in Child Pugh B patients, a population constituting 70% of advanced liver cancer patients who currently lack approved treatment options. Following successful End-of-Phase II meetings with both the FDA and EMA, Can-Fite has a proposed pivotal Phase III trial design for HCC, aiming to conduct a single global study in the U.S., Europe, and Israel with 500 patients and an interim analysis. Namodenoson is already out-licensed for HCC in China and Korea, and the company is actively pursuing additional in-licensing partners. Recent developments in 2025 further highlight Namodenoson's potential, with FDA compassionate use approval for pancreatic carcinoma leading to interest from major U.S. medical centers, and its Phase 2a study for pancreatic cancer achieving over 50% enrollment with a favorable safety profile. Additionally, a press release on September 15, 2025, reported the complete resolution of esophageal varices in a decompensated cirrhosis patient treated with Namodenoson, suggesting broader utility in liver-related conditions.

Diversification and Innovation: The Cannabis Assay and Biomarker

Beyond its primary drug candidates, Can-Fite has diversified its technological offerings by developing a unique cell-based in vitro assay. This assay identifies clinically active cannabis-derived compounds that bind to and activate the A3 adenosine receptor, the company's core target. This innovation stems from findings that cannabis can act through A3AR, not solely cannabis receptors. The assay can determine the efficacy of cannabis or its derivatives in various clinical situations, including inflammation, cancer, and liver diseases.

The strategic "so what" for investors is twofold: first, it supports the development of Can-Fite's own cannabis-derived therapeutics, and second, it creates a new revenue stream. The company plans to market this assay on a "fee for service" basis to researchers and other cannabis companies worldwide. This initiative leverages Can-Fite's core technological expertise and intellectual property, offering a diversified revenue opportunity outside of traditional drug development milestones.

Financial Performance and Liquidity: Fueling the Pipeline

As a clinical-stage biopharmaceutical company, Can-Fite's financial performance reflects its heavy investment in research and development. For the nine months ended September 30, 2020, revenues were $0.61 million, a decrease from $1.84 million in the same period of 2019, primarily due to the recognition of a lower portion of advance payments from distribution agreements. This trend of declining revenue from distribution agreements continued through 2024, with annual revenue reported at $674,000.

Research and development expenses, however, increased to $9.05 million for the nine months ended September 30, 2020, up from $7.01 million in 2019. This surge was primarily driven by the accelerating rate of patient enrollment in the Phase III studies for Piclidenoson (rheumatoid arthritis and psoriasis) and expenses for Namodenoson's Phase II studies (NASH and HCC). While annual R&D expenses decreased to $5.76 million by 2024, they remain the company's largest expenditure. Consequently, Can-Fite reported a net loss of $10.81 million for the nine months ended September 30, 2020, compared to a net loss of $7.84 million in the prior year period. The company has consistently reported annual net losses, reaching -$7.88 million in 2024.

Can-Fite's liquidity is crucial for sustaining its pipeline. As of September 30, 2020, cash and cash equivalents stood at $10.22 million, a significant increase from $2.69 million at the end of 2019. This improvement was largely due to $17.68 million in net proceeds from warrant exercises and public offerings throughout 2020, though offset by $10.16 million used in operating activities.

The company continues to rely on capital raises, securing $3.0 million in a registered direct offering in April 2025 and up to $15.0 million (with $5.0 million upfront) in a public offering in July 2025. These funds are earmarked for R&D, clinical trials, and general corporate purposes.

Comparing Can-Fite's financial ratios to larger, established competitors like Gilead Sciences (GILD), Pfizer (PFE), AstraZeneca (AZN), Johnson & Johnson (JNJ), and Novartis (NVS) highlights its early-stage profile. Can-Fite's TTM Gross Profit Margin of 100% reflects minimal cost of goods sold, typical for a development company. However, its deeply negative Operating Profit Margin (-1206.23%) and Net Profit Margin (-1169.14%) contrast sharply with the positive and substantial margins of its profitable peers. Similarly, Can-Fite's negative P/E ratio and lower P/B ratio (1.20) compared to its competitors (e.g., Gilead at 7.21, Pfizer at 1.54, AstraZeneca at 5.80) underscore its pre-commercialization status and the market's valuation based on future potential rather than current earnings or asset base. This financial landscape necessitates continuous capital management and successful clinical progression to bridge the gap to commercialization.

Outlook and Risks: A Path Forward

Can-Fite's outlook is intrinsically linked to the successful progression of its clinical pipeline. For Piclidenoson, the pivotal Phase III psoriasis trial is underway, with management's earlier guidance suggesting an earlier conclusion due to optimal dose identification. The company also continues to explore Piclidenoson's potential in new indications, as evidenced by the UCLA study in vascular dementia. For Namodenoson, the initiation of a pivotal Phase III study in liver cancer and the advancement of its Phase IIb NASH trial are key milestones. The ongoing Phase 2a study in pancreatic cancer, with over 50% enrollment and a favorable safety profile, further expands Namodenoson's oncological reach.

Despite these promising developments, Can-Fite faces inherent risks common to clinical-stage biopharmaceutical companies. A history of losses and a continuous need for additional capital to fund operations pose significant financial challenges. The uncertainties surrounding cash flows and the ability to meet working capital needs are ever-present. Clinical trial risks, including the initiation, timing, progress, and results of studies, as well as the receipt of regulatory approvals, are critical determinants of future success. The company's ability to establish and maintain strategic partnerships for commercialization is also vital, as its business model relies on out-licensing. Furthermore, the competitive landscape, intellectual property protection, and the impact of the political and security situation in Israel represent ongoing considerations for investors.

Conclusion

Can-Fite BioPharma stands at a critical juncture, leveraging its proprietary A3AR-targeted platform to develop novel small molecule therapies for significant unmet medical needs in liver diseases and inflammatory conditions. The strategic re-focusing of its pipeline on Piclidenoson for psoriasis and Namodenoson for liver cancer and NASH, supported by compelling clinical data and a growing intellectual property portfolio, forms the core of its investment thesis. Namodenoson's demonstrated efficacy in resolving NASH and its targeted approach to Child Pugh B liver cancer patients represent substantial opportunities in markets with high unmet needs and limited competition.

While the company's financial profile reflects its development-stage nature, characterized by ongoing R&D investments and reliance on capital raises, its technological differentiation and strategic partnerships are crucial for future value creation. The successful advancement of its lead candidates through pivotal trials and subsequent commercialization through its out-licensing model will be paramount. Investors should closely monitor clinical milestones, regulatory progress, and partnership developments, as these will be key indicators of Can-Fite's potential to translate its innovative science into long-term shareholder value within a highly competitive biopharmaceutical landscape.