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:
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the
initiation, timing, progress and results of our preclinical studies, clinical trials
and other product candidate development efforts;
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our
ability to advance our product candidates into clinical trials or to successfully complete
our preclinical studies or clinical trials;
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our
receipt of regulatory approvals for our product candidates, and the timing of other regulatory
filings and approvals;
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the
clinical development, commercialization and market acceptance of our product candidates;
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our
ability to establish and maintain corporate collaborations;
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the
implementation of our business model and strategic plans for our business and product
candidates;
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the
scope of protection we are able to establish and maintain for intellectual property rights
covering our product candidates and our ability to operate our business without infringing
the intellectual property rights of others;
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estimates
of our expenses, future revenues, capital requirements and our needs for additional financing;
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competitive
companies, technologies and our industry; and
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statements
as to the impact of the political and security situation in Israel on our business.
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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:
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references
to “ADSs” refer to the Registrant’s American Depositary Shares;
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references
to “A3AR” refer to the A3 adenosine receptor;
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references
to “$” are to United States Dollars;
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references
to “HCC” refer to hepatocellular carcinoma, also known as primary liver cancer;
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references to “NASH” refer to nonalcoholic steatohepatitis;
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references
to “ordinary shares,” “our shares” and similar expressions refer
to the Company’s Ordinary Shares, NIS 0.25 nominal (par) value per share;
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references
to “RA” refer to rheumatoid arthritis; and
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references
to “NIS” are to New Israeli Shekels, the Israeli currency.
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Overview
We
are a clinical-stage biopharmaceutical company focused on developing orally bioavailable small molecule therapeutic products for
the treatment of autoimmune-inflammatory indications, oncology and liver diseases as well as sexual dysfunction. Our platform
technology utilizes the Gi protein associated A3AR as a therapeutic target. A3AR is highly expressed in inflammatory and cancer
cells, and not significantly expressed in normal cells, suggesting that the receptor could be a unique target for pharmacological
intervention. Our pipeline of drug candidates are synthetic, highly specific agonists and allosteric modulators, or ligands or
molecules that initiate molecular events when binding with target proteins, targeting the A3AR.
Our product candidates,
CF101, CF102 and CF602 are being developed to treat autoimmune inflammatory indications, oncology and liver diseases as well as
sexual dysfunction. CF101, also known as Piclidenoson, is in an advance stage of clinical development for the treatment of autoimmune-inflammatory
diseases, including RA and psoriasis. CF102, also known as Namodenoson, is being developed for the treatment of HCC and has orphan
drug designation for the treatment of HCC in the U.S. and Europe. Namodenoson was granted Fast Track designation by the FDA as
a second line treatment to improve survival for patients with advanced hepatocellular carcinoma who have previously received Nexavar
(sorafenib). Namodenoson is also being developed for the treatment of NASH following our study which revealed compelling pre-clinical
data on Namodenoson in 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 sexual 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 sexual
dysfunction. Preclinical studies revealed that our drug candidates have potential to treat additional inflammatory diseases,
such as Crohn’s disease, oncological diseases and viral diseases, such as the JC virus.
Our
strategy is to build a fully integrated biotechnology company that discovers, in-licenses and develops an innovative and effective
small molecule drug portfolio of ligands that bind to a specific therapeutic target for the treatment of autoimmune-inflammatory,
oncological and ophthalmic diseases and more. We continue to develop and test our existing pipeline, while also testing other
indications for our existing drug candidates and examining, from time to time, the potential of other small molecules that may
fit our platform technology of utilizing small molecules to target the A3AR. We generally focus on drugs with global market potential
and we seek to create global partnerships to effectively assist us in developing our portfolio and to market our products.
We
have in-licensed an allosteric modulator of the A3AR, CF602 from Leiden University. In addition, we have out-licensed Piclidenoson
(i) for the treatment of RA to Kwang Dong Pharmaceutical Co. Ltd., a South Korean limited company, or KD for the Korean market,
and (ii) for the treatment of psoriasis and RA to Cipher Pharmaceuticals for the Canadian market.
With
respect to Namodenoson, in October 2016, we entered into an exclusive distribution agreement with Chong Kun Dang Pharmaceuticals,
or CKD for the exclusive right to distribute Namodenoson for the treatment of liver cancer in South Korea, upon receipt of regulatory
approvals. The distribution agreement provides for up to $3,000,000 in upfront and milestone payments, plus royalties on net sales
of 23%. The distribution agreement further provides that we will deliver finished product to CKD and grant CKD a right of first
refusal to distribute Namodenoson for other indications for which we develop Namodenoson.
In
July 2016, OphthaliX released top-line results from its Phase II clinical trial of Piclidenoson for the treatment of glaucoma.
In this trial, no statistically significant differences were found between the Piclidenoson treated group and the placebo group
in the primary endpoint of lowering intra ocular pressure, or IOP. High IOP is a characteristic of glaucoma. Piclidenoson was
found to have a favorable safety profile and was well tolerated. Based on these overall results, OphthaliX sees no immediate path
forward in glaucoma. As of the date hereof, OphthaliX has no active business operations. Subsequently, on May 21, 2017, OphthaliX,
Wize Pharma Ltd., a company formed under the laws of the State of Israel (“Wize”), and Bufiduck Ltd., a company formed
under the laws of the State of Israel and a wholly owned subsidiary of OphthaliX (“Merger Sub”), entered into an Agreement
and Plan of Merger (as may be amended from time to time, the “Merger Agreement”) that provides for, among other things,
the merger of Merger Sub with and into Wize, with Wize continuing as the surviving entity and becoming a wholly owned subsidiary
of OphthaliX, on the terms and conditions set forth in the Merger Agreement (the “Merger”). The Merger is subject
to the satisfaction or waiver of the conditions set forth in the Merger Agreement and certain closing conditions.
In
June 2015, we received a lawsuit, filed with the District Court of Tel-Aviv, requesting recognition of this lawsuit as a class
action. The lawsuit named us, our Chief Executive Officer and directors as defendants. The lawsuit alleged, among other things,
that we misled the public with regard to disclosures concerning the efficacy of our drug candidate, Piclidenoson in relation to
the Psoriasis studies. The claimant alleged that he suffered personal damages of over NIS 73,000, while also claiming that our
shareholders suffered aggregate damages of approximately NIS 125 million. On March 31, 2016, we filed a response to the lawsuit.
On March 1, 2017, a hearing was held in the District Court on whether to certify the lawsuit as a class action. A final hearing
on the certification held on May 17, 2017. On July 18, 2017, the District Court of Tel-Aviv issued a ruling in which it denied
the request to recognize the lawsuit as a class action and awarded us an amount of NIS 50,000 to pay our expenses in relation
to such law suit. The time for filing an appeal has not expired.
We
are currently: (i) preparing to commence a Phase III trial for Piclidenoson in the treatment of RA, following agreement with
the EMA on our protocol design and expect to commence enrollment in the third quarter of 2017, (ii) conducting preparatory
work for a Phase III trial for Piclidenoson in the treatment of psoriasis following agreement with the EMA on our protocol
design and expect to commence Institutional Review Board, or IRB, submissions in the fourth quarter of 2017, (iii) conducting
a Phase II study with respect to the development of Namodenoson for the treatment of HCC and completed enrollment of 78
patients in the third quarter of 2017 with results expected in the second half of 2018, (iv) preparing to commence a Phase II trial of Namodenoson in the treatment of NASH,
a new indication identified by us for our liver cancer drug, following approval of the study protocol by IRBs and anticipate
commencing enrollment in the third quarter of 2017, and (v) investigating additional compounds, targeting the A3 adenosine
receptor, for the treatment of sexual dysfunction and have therefore postponed a planned Investigational New Drug (IND)
submission for this indication.
Since
inception, we have incurred significant losses in connection with our research and development. At June 30, 2017, we had an accumulated
deficit of approximately NIS 362 million ($103 million). Although we have recognized revenues in connection with our existing
out-licensing agreements with KD, Cipher and CKD and our historic out-licensing agreement with SKK, we expect to generate losses
in connection with the research and development activities relating to our pipeline of drug candidates. Such research and development
activities are budgeted to expand over time and will require further resources if we are to be successful. As a result, we expect
to incur operating losses, which may be substantial over the next several years, and we will need to obtain additional funds to
further develop or research and development programs.
We have funded our
operations primarily through the sale of equity securities (both in private placements and in public offerings) and payments
received under our existing out-licensing agreements with KD, Cipher and CKD and our historic out-licensing agreement with
SKK. We expect to continue to fund our operations over the next several years through our existing cash resources, potential
future payments under our out-licensing agreements, interest earned on our investments, if any, payments from any future
out-licensing of our product candidates, and additional capital to be raised through public or private equity offerings or
debt financings.
Results
of Operations
Revenues
Revenues
for the six months ended June 30, 2017 were NIS 0.53 million (U.S. $0.15 million) compared to NIS 0.43 million (U.S. $0.12 million)
in the first six months of 2016. The increase in revenue was mainly due to the recognition of a portion of the NIS 1.9 million
(U.S. $0.5 million) advance payment received in December 2016 under the distribution agreement with CKD.
Research
and development expenses
Research
and development expenses for the six months ended June 30, 2017 were NIS 8.84 million (U.S. $2.53 million) compared with NIS 9.97
million (U.S. $2.85 million) for the same period in 2016. Research and development expenses for the first half of 2017 comprised
primarily of expenses associated with the Phase II study for Namodenoson, the preclinical study of CF602, as well as expenses
for ongoing studies of Piclidenoson. The decrease is primarily due to a reduction in preclinical studies of CF602 conducted during
the six months ended June 30, 2017.
General
and administrative expenses
General
and administrative expenses were NIS 5.0 million (U.S. $1.43 million) for the six months ended June 30, 2017, the same as the
general and administrative expenses for the same period in 2016.
Financial
income, net
Financial
income, net for the six months ended June 30, 2017 aggregated NIS 1.57 million (U.S. $0.45 million) compared to financial income,
net of NIS 3.19 million (U.S. $0.91 million) for the same period in 2016. The decrease in financial income, net in the first half
of 2017 was mainly from exchange rate differences as compared to the same period in 2016 and from issuance expenses, offset by
a larger decrease in the fair value of warrants that are accounted for as financial liability as compared to the same period in
2016.
Liquidity
and Capital Resources
Since
inception, we have funded our operations primarily through public (in Israel and US) and private offerings of our equity securities
and payments received under our strategic licensing arrangements. At June 30, 2017, we had NIS 23.98 million (U.S. $6.86 million) of
cash and cash equivalents, and have invested most of our available cash funds in short-term bank deposits. In December 2016, we
received approximately NIS 1.9 million ($0.5 million) from CKD, as upfront payment for entering into the distribution agreement
with CKD and in January 2017, we raised approximately NIS 16.64 million ($4.76 million) in a registered direct offering. In
August 2017, we received a milestone payment of $0.5 million from CKD.
We
may be able to use U.S. taxes withheld as credits against Israeli corporate income tax when we have income, if at all, but there
can be no assurance that we will be able to realize the credits. In addition, we believe that we may be entitled to a refund of
such withholding tax from the U.S. government but there can be no assurance that we will be entitled to such a refund.
Net
cash used in operating activities was NIS 21.06 million ($6.02 million) for the six months ended June 30, 2017, compared with
net cash used in operating activities of NIS 20.16 million ($5.77 million) for the same period in 2016. The NIS 0.9 million increase
in the net cash used in operating activities during the six months ended June 30, 2017 compared to the same period in 2016, was
mainly due to a decrease in trade payables.
Net
cash used in investing activities for the six months ended June 30, 2017 was NIS 0.02 million ($0.01 million) compared to net
cash used in investing activities of NIS 0.04 million ($0.01 million) for the same period in 2016.
Net
cash provided by financing activities for the six months ended June 30, 2017 was NIS 16.63 million ($4.76 million) was due to
our registered direct offering in January 2017. There was no net cash provided by financing activities for the six months ended
June 30, 2016.
Developing
drugs, conducting clinical trials and commercializing products is expensive and we will need to raise substantial additional funds
to achieve our strategic objectives. Although we believe our existing financial resources as of June 30, 2017, will be sufficient
to fund our projected cash requirements through for the next twelve months, we will require significant additional financing to
fund our operations. Additional financing may not be available on acceptable terms, if at all. Our future capital requirements
will depend on many factors, including:
Additional
financing may not be available on acceptable terms, if at all. Our future capital requirements will depend on many factors, including:
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the level of research and development investment required to develop our product candidates;
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the failure to obtain regulatory approval or achieve commercial success of our product candidates, including Piclidenoson, Namodenoson and CF602;
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the results of our preclinical studies and clinical trials for our earlier stage product candidates, and any decisions to initiate clinical trials if supported by the preclinical results;
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the costs, timing and outcome of regulatory review of our product candidates that progress to clinical trials;
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the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our issued patents and defending intellectual property-related claims;
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the cost of commercialization activities if any of our product candidates are approved for sale, including marketing, sales and distribution costs;
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the cost of manufacturing our product candidates and any products we successfully commercialize;
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the timing, receipt and amount of sales of, or royalties on, our future products, if any;
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the expenses needed to attract and retain skilled personnel;
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any product liability or other lawsuits related to our products;
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the extent to which we acquire or invest in businesses, products or technologies and other strategic relationships;
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the costs of financing unanticipated working capital requirements and responding to competitive pressures; and
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maintaining
minimum shareholders’ equity requirements under the NYSE American Company Guide.
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Until we can generate significant
continuing revenues, we expect to satisfy our future cash needs through potential future payments received under our out-licensing
agreements, interest earned on our investments, if any, payments from any other future out-licensing agreements, if any, and debt
or equity financings. We cannot be certain that additional funding will be available to us on acceptable terms, or at all. If funds
are not available, we may be required to delay, reduce the scope of, or eliminate one or more of our research or development programs
or our commercialization efforts.
Research
and Development, Patents and Licenses, Etc.
Our
research and development expenses consist primarily of salaries and related personnel expenses, fees paid to external service
providers, up-front and milestone payments under our license agreements, patent-related legal fees, costs of preclinical studies
and clinical trials, drug and laboratory supplies and costs for facilities and equipment. We charge all research and development
expenses to operations as they are incurred. We expect our research and development expense to remain our primary expense in the
near future as we continue to develop our products. Increases or decreases in research and development expenditures are attributable
to the number and/or duration of the pre-clinical and clinical studies that we conduct.
The
following table identifies our current major research and development projects:
Project
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Status
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Expected or Recent Near Term Milestone
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Piclidenoson
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Preparing for a Phase III study in RA
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Preparing to commence a Phase III trial for Piclidenoson in the treatment of RA, following agreement with the EMA on our protocol design and expect to commence enrollment in the third quarter of 2017
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Preparing for a Phase III study in psoriasis
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Conducting preparatory work for a Phase III trial for Piclidenoson in the treatment of psoriasis following agreement with the EMA on our protocol design and expect to commence Institutional Review Board, or IRB, submissions in the fourth quarter of 2017
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Namodenoson
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Phase II study in HCC
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Conducting a Phase
II study with respect to the development of Namodenoson for the treatment of HCC and completed enrollment of 78 patients in
the third quarter of 2017 with results expected to be released in the second half of 2018.
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Preparing for a Phase II study in NASH
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Preparing to commence a Phase II trial of Namodenoson in the treatment of NASH, a new indication identified by us for our liver cancer drug, following approval of the study protocol by IRBs and anticipate commencing enrollment in the third quarter of 2017
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CF 602
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Conducting IND enabling studies
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Investigating additional compounds, targeting the A3 adenosine receptor, for the treatment of sexual dysfunction and have therefore postponed a planned IND submission for this indication.
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We
record certain costs for each development project on a “direct cost” basis, as they are recorded to the project for
which such costs are incurred. Such costs include, but are not limited to, CRO expenses, drug production for pre-clinical and
clinical studies and other pre-clinical and clinical expenses. However, certain other costs, including but not limited to, salary
expenses (including salaries for research and development personnel), facilities, depreciation, share-based compensation and other
overhead costs are recorded on an “indirect cost” basis, i.e., they are shared among all of our projects and are not
recorded to the project for which such costs are incurred. We do not allocate direct salaries to projects due to the fact that
our project managers are generally involved in several projects at different stages of development, and the related salary expense
is not significant to the overall cost of the applicable projects. In addition, indirect labor costs relating to our support of
the research and development process, such as manufacturing, controls, pre-clinical analysis, laboratory testing and initial drug
sample production, as well as rent and other administrative overhead costs, are shared by many different projects and have never
been considered by management to be of significance in its decision-making process with respect to any specific project. Accordingly,
such costs have not been specifically allocated to individual projects.
Set
forth below is a summary of the gross direct costs allocated to our main projects on an individual basis, as well as the gross
direct costs allocated to our less significant projects on an aggregate basis, for the years ended December 31, 2014, 2015 and
2016 and for the six months ended June 30, 2017 and on an aggregate basis since project inception:
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($ in thousands)
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Six Months Ended
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Costs
Since
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Year Ended December 31,
|
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June 30,
|
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Project
|
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2014
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2015
|
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2016
|
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2017
|
|
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Inception
|
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CF 101
|
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1,866
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971
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1,946
|
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824
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24,015
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CF 102
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1,289
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1,044
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1,907
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902
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6,530
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CF 602
|
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23
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243
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1,126
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15
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1,407
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Other projects
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18
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1
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-
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-
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19
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Total gross direct project costs
(1)
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3,196
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2,259
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4,979
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1,741
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|
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31,971
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(1)
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Does
not include indirect project costs and overhead, such as payroll and related expenses (including stock-based compensation),
facilities, depreciation and impairment of intellectual property, which are included in total research and development expenses
in our financial statements.
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From
our inception through June 30, 2017, we have incurred research and development expenses of approximately $87 million. We expect
that a large percentage of our research and development expense in the future will be incurred in support of our current and future
preclinical and clinical development projects. Due to the inherently unpredictable nature of preclinical and clinical development
processes and given the early stage of our preclinical product development projects, we are unable to estimate with any certainty
the costs we will incur in the continued development of the product candidates in our pipeline for potential commercialization.
Clinical development timelines, the probability of success and development costs can differ materially from expectations. We expect
to continue to test our product candidates in preclinical studies for toxicology, safety and efficacy, and to conduct additional
clinical trials for each product candidate. If we are not able to enter into an out-licensing arrangement with respect to any
product candidate prior to the commencement of later stage clinical trials, we may fund the trials for the product candidates
ourselves.
While
we are currently focused on advancing each of our product development projects, our future research and development expenses will
depend on the clinical success of each product candidate, as well as ongoing assessments of each product candidate’s commercial
potential. In addition, we cannot forecast with any degree of certainty which product candidates may be subject to future out-licensing
arrangements, when such out-licensing arrangements will be secured, if at all, and to what degree such arrangements would affect
our development plans and capital requirements.
As
we obtain results from clinical trials, we may elect to discontinue or delay clinical trials for certain product candidates or
projects in order to focus our resources on more promising product candidates or projects. Completion of clinical trials by us
or our licensees may take several years or more, but the length of time generally varies according to the type, complexity, novelty
and intended use of a product candidate.
The
cost of clinical trials may vary significantly over the life of a project as a result of differences arising during clinical development,
including, among others:
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the
number of sites included in the clinical trials;
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the
length of time required to enroll suitable patients;
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the
number of patients that participate in the clinical trials;
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the
duration of patient follow-up;
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the
development stage of the product candidate; and
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the
efficacy and safety profile of the product candidate.
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We
expect our research and development expenses to increase in the future from current levels as we continue the advancement of our
clinical trials and preclinical product development and to the extent we in-license new product candidates. The lengthy process
of completing clinical trials and seeking regulatory approval for our product candidates requires expenditure of substantial resources.
Any failure or delay in completing clinical trials, or in obtaining regulatory approvals, could cause a delay in generating product
revenue and cause our research and development expenses to increase and, in turn, have a material adverse effect on our operations.
Because of the factors set forth above, we are not able to estimate with any certainty when we would recognize any net cash inflows
from our projects.
Trend
Information.
We
are a development stage company and it is not possible for us to predict with any degree of accuracy the outcome of our research,
development or commercialization efforts. As such, it is not possible for us to predict with any degree of accuracy any significant
trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net sales or
revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause financial information
to not necessarily be indicative of future operating results or financial condition. However, to the extent possible, certain
trends, uncertainties, demands, commitments and events are identified in the preceding subsections.
Off-Balance
Sheet Arrangements.
We
have no off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to investors.
8
Exhibit 99.2
CAN-FITE
BIOPHARMA LTD.
INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF JUNE 30, 2017
UNAUDITED
INDEX
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Page
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Interim
Condensed Consolidated Statements of Financial Position
|
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2
- 3
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Interim
Condensed Consolidated Statements of Comprehensive Loss
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4
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Interim
Condensed Consolidated Statements of Changes in Equity
|
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5
- 6
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Interim
Condensed Consolidated Statements of Cash Flows
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7
- 8
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Notes
to Interim Condensed Consolidated Financial Statements
|
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9
- 17
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-
- - - - - - - - - -
CAN-FITE BIOPHARMA LTD.
INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
In
thousands (except for share and per share data)
|
|
Convenience translation into
U.S. dollars
|
|
|
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|
|
June 30,
|
|
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June 30,
|
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December 31,
|
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2017
|
|
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2017
|
|
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2016
|
|
|
|
Unaudited
|
|
|
Audited
|
|
|
|
USD
|
|
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NIS
|
|
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|
|
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|
ASSETS
|
|
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|
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CURRENT ASSETS:
|
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|
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|
|
|
|
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Cash and cash equivalents
|
|
|
6,859
|
|
|
|
23,982
|
|
|
|
31,203
|
|
Other receivable and prepaid expenses
|
|
|
3,345
|
|
|
|
11,694
|
|
|
|
7,664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
10,204
|
|
|
|
35,676
|
|
|
|
38,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease deposits
|
|
|
8
|
|
|
|
28
|
|
|
|
37
|
|
Property, plant and equipment, net
|
|
|
53
|
|
|
|
185
|
|
|
|
205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term assets
|
|
|
61
|
|
|
|
213
|
|
|
|
242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
10,265
|
|
|
|
35,889
|
|
|
|
39,109
|
|
The
accompanying notes are an integral part of the interim condensed consolidated financial statements.
CAN-FITE BIOPHARMA LTD.
INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
In
thousands (except for share and per share data)
|
|
Convenience translation into
U.S. dollars
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2017
|
|
|
2016
|
|
|
|
Unaudited
|
|
|
Audited
|
|
|
|
USD
|
|
|
NIS
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade payables
|
|
|
529
|
|
|
|
1,848
|
|
|
|
4,804
|
|
Deferred revenues
|
|
|
305
|
|
|
|
1,066
|
|
|
|
1,237
|
|
Other accounts payable
|
|
|
757
|
|
|
|
2,649
|
|
|
|
3,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
1,591
|
|
|
|
5,563
|
|
|
|
9,629
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants exercisable into shares
|
|
|
3,439
|
|
|
|
12,023
|
|
|
|
10,068
|
|
Deferred revenues
|
|
|
1,187
|
|
|
|
4,149
|
|
|
|
4,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term liabilities
|
|
|
4,626
|
|
|
|
16,172
|
|
|
|
14,578
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTINGENT LIABILITIES AND COMMITMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
2,371
|
|
|
|
8,289
|
|
|
|
7,039
|
|
Share premium
|
|
|
97,701
|
|
|
|
341,561
|
|
|
|
332,873
|
|
Capital reserve from share-based payment transactions
|
|
|
6,145
|
|
|
|
21,483
|
|
|
|
20,438
|
|
Warrants exercisable into shares (series 10-12)
|
|
|
2,570
|
|
|
|
8,983
|
|
|
|
8,983
|
|
Treasury shares, at cost
|
|
|
(1,038
|
)
|
|
|
(3,628
|
)
|
|
|
(3,628
|
)
|
Accumulated other comprehensive loss
|
|
|
(256
|
)
|
|
|
(893
|
)
|
|
|
(883
|
)
|
Accumulated deficit
|
|
|
(103,486
|
)
|
|
|
(361,785
|
)
|
|
|
(349,953
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity attributable to equity holders of the Company
|
|
|
4,007
|
|
|
|
14,010
|
|
|
|
14,869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
41
|
|
|
|
144
|
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
4,048
|
|
|
|
14,154
|
|
|
|
14,902
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
|
10,265
|
|
|
|
35,889
|
|
|
|
39,109
|
|
The
accompanying notes are an integral part of the interim condensed consolidated financial statements.
CAN-FITE BIOPHARMA LTD.
INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
In
thousands (except for share and per share data)
|
|
Convenience translation into
U.S. dollars
|
|
|
|
|
|
|
Six months ended June 30,
|
|
|
|
2017
|
|
|
2017
|
|
|
2016
|
|
|
|
Unaudited
|
|
|
|
USD
|
|
|
NIS
|
|
|
NIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
152
|
|
|
|
533
|
|
|
|
428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
|
2,528
|
|
|
|
8,838
|
|
|
|
9,968
|
|
General and administrative expenses
|
|
|
1,425
|
|
|
|
4,982
|
|
|
|
4,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
3,801
|
|
|
|
13,287
|
|
|
|
14,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance expenses
|
|
|
1,070
|
|
|
|
3,740
|
|
|
|
575
|
|
Finance income
|
|
|
(1,519
|
)
|
|
|
(5,309
|
)
|
|
|
(3,761
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
3,352
|
|
|
|
11,718
|
|
|
|
11,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive loss (income):
|
|
|
|
|
|
|
|
|
|
|
|
|
Total components that will be or that have been reclassified to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments arising from translating financial statements of foreign
operations
|
|
|
4
|
|
|
|
13
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss
|
|
|
3,356
|
|
|
|
11,731
|
|
|
|
11,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity holders of the Company
|
|
|
3,384
|
|
|
|
11,832
|
|
|
|
11,186
|
|
Non-controlling interests
|
|
|
(32
|
)
|
|
|
(114
|
)
|
|
|
164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,352
|
|
|
|
11,718
|
|
|
|
11,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity holders of the Company
|
|
|
3,387
|
|
|
|
11,841
|
|
|
|
11,188
|
|
Non-controlling interests
|
|
|
(31
|
)
|
|
|
(111
|
)
|
|
|
165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,356
|
|
|
|
11,731
|
|
|
|
11,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share attributable to equity holders of the Company :
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share
|
|
|
0.10
|
|
|
|
0.36
|
|
|
|
0.40
|
|
The
accompanying notes are an integral part of the interim condensed consolidated financial statements.
CAN-FITE BIOPHARMA LTD.
INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
NIS
in thousands (except for share and per share data)
|
|
Attributable to equity holders of the Company
|
|
|
|
|
|
|
|
|
Share
capital
|
|
|
Share premium
|
|
|
Capital
reserve from share-based payment transactions
|
|
|
Warrants exercisable
into shares
|
|
|
Treasury shares
|
|
|
Accumulated other comprehensive loss
|
|
|
Accumulated deficit
|
|
|
Total
|
|
|
Non-
controlling interests
|
|
|
Total equity
|
|
|
|
NIS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2017
|
|
|
7,039
|
|
|
|
332,873
|
|
|
|
20,438
|
|
|
|
8,983
|
|
|
|
(3,628
|
)
|
|
|
(883
|
)
|
|
|
(349,953
|
)
|
|
|
14,869
|
|
|
|
33
|
|
|
|
14,902
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(11,832
|
)
|
|
|
(11,832
|
)
|
|
|
114
|
|
|
|
(11,718
|
)
|
Adjustments arising from translating financial statements of foreign operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10
|
)
|
|
|
-
|
|
|
|
(10
|
)
|
|
|
(3
|
)
|
|
|
(13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10
|
)
|
|
|
(11,832
|
)
|
|
|
(11,842
|
)
|
|
|
111
|
|
|
|
(11,731
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of share capital and warrants, net of issue expenses of NIS 1,435
|
|
|
1,250
|
|
|
|
8,688
|
|
|
|
712
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,650
|
|
|
|
-
|
|
|
|
10,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based payment
|
|
|
-
|
|
|
|
-
|
|
|
|
333
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
333
|
|
|
|
-
|
|
|
|
333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of June 30, 2017 (unaudited)
|
|
|
8,289
|
|
|
|
341,561
|
|
|
|
21,483
|
|
|
|
8,983
|
|
|
|
(3,628
|
)
|
|
|
(893
|
)
|
|
|
(361,785
|
)
|
|
|
14,010
|
|
|
|
144
|
|
|
|
14,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2016
|
|
|
7,030
|
|
|
|
332,873
|
|
|
|
19,288
|
|
|
|
8,983
|
|
|
|
(3,628
|
)
|
|
|
(1,401
|
)
|
|
|
(322,876
|
)
|
|
|
40,269
|
|
|
|
504
|
|
|
|
40,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(11,186
|
)
|
|
|
(11,186
|
)
|
|
|
(164
|
)
|
|
|
(11,350
|
)
|
Adjustments arising from translating financial statements of foreign operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive (loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
(11,186
|
)
|
|
|
(11,188
|
)
|
|
|
(165
|
)
|
|
|
(11,353
|
)
|
Share-based payment
|
|
|
9
|
|
|
|
-
|
|
|
|
688
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
697
|
|
|
|
12
|
|
|
|
709
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of June 30, 2016 (unaudited)
|
|
|
7,039
|
|
|
|
332,873
|
|
|
|
19,976
|
|
|
|
8,983
|
|
|
|
(3,628
|
)
|
|
|
(1,403
|
)
|
|
|
(334,062
|
)
|
|
|
(29,778
|
)
|
|
|
351
|
|
|
|
30,129
|
|
The
accompanying notes are an integral part of the interim consolidated financial statements.
CAN-FITE BIOPHARMA LTD.
I
NTERIM
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
US.
dollars in thousands (except for share and per share data)
|
|
Attributable to equity holders of the Company
|
|
|
|
|
|
|
|
|
|
Share
capital
|
|
|
Share premium
|
|
|
Capital
reserve from share-based payment transactions
|
|
|
Warrants exercisable
into shares
|
|
|
Treasury shares
|
|
|
Accumulated other comprehensive loss
|
|
|
Accumulated deficit
|
|
|
Total
|
|
|
Non-
controlling interests
|
|
|
Total equity
|
|
|
|
Convenience translation into U.S. dollars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2017
|
|
|
2,014
|
|
|
|
95,216
|
|
|
|
5,846
|
|
|
|
2,570
|
|
|
|
(1,038
|
)
|
|
|
(253
|
)
|
|
|
(100,102
|
)
|
|
|
4,253
|
|
|
|
10
|
|
|
|
4,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,384
|
)
|
|
|
(3,384
|
)
|
|
|
32
|
|
|
|
(3,352
|
)
|
Adjustments arising from translating financial statements of foreign operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
(1
|
)
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
(3,384
|
)
|
|
|
(3,387
|
)
|
|
|
31
|
|
|
|
(3,356
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of share capital and warrants, net of issue expenses of USD 410
|
|
|
357
|
|
|
|
2,485
|
|
|
|
204
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,046
|
|
|
|
-
|
|
|
|
3,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based payment
|
|
|
-
|
|
|
|
-
|
|
|
|
95
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
95
|
|
|
|
-
|
|
|
|
95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of June 30, 2017
|
|
|
2,371
|
|
|
|
97,701
|
|
|
|
6,145
|
|
|
|
2,570
|
|
|
|
(1,038
|
)
|
|
|
(256
|
)
|
|
|
(103,486
|
)
|
|
|
4,007
|
|
|
|
41
|
|
|
|
4,048
|
|
The
accompanying notes are an integral part of the interim condensed consolidated financial statements.
CAN-FITE BIOPHARMA LTD.
INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In
thousands (except for share and per share data)
|
|
Convenience translation
into
U.S. dollars
|
|
|
|
|
|
|
Six months ended June 30,
|
|
|
|
2017
|
|
|
2017
|
|
|
2016
|
|
|
|
Unaudited
|
|
|
|
USD
|
|
|
NIS
|
|
|
NIS
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(3,352
|
)
|
|
|
(11,718
|
)
|
|
|
(11,350
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash used:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of property, plant and equipment
|
|
|
10
|
|
|
|
36
|
|
|
|
35
|
|
Share-based payment
|
|
|
95
|
|
|
|
333
|
|
|
|
521
|
|
Increase in severance pay, net
|
|
|
-
|
|
|
|
-
|
|
|
|
13
|
|
Issuance expenses
|
|
|
248
|
|
|
|
864
|
|
|
|
-
|
|
Issuance expenses related to warrants exercisable into shares
|
|
|
77
|
|
|
|
268
|
|
|
|
188
|
|
Changes in fair value of warrants liability exercisable into shares
|
|
|
(1,476
|
)
|
|
|
(5,162
|
)
|
|
|
(3,574
|
)
|
Exchange differences on balances of cash and cash equivalents
|
|
|
794
|
|
|
|
2,777
|
|
|
|
(593
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(252
|
)
|
|
|
(884
|
)
|
|
|
(3,410
|
)
|
Working capital adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in other receivable and prepaid expenses and lease deposit
|
|
|
(1,150
|
)
|
|
|
(4,022
|
)
|
|
|
(4,187
|
)
|
Increase (decrease) in trade payables
|
|
|
(853
|
)
|
|
|
(2,982
|
)
|
|
|
678
|
|
Decrease in deferred revenues
|
|
|
(152
|
)
|
|
|
(532
|
)
|
|
|
(428
|
)
|
Decrease in other accounts payable
|
|
|
(265
|
)
|
|
|
(926
|
)
|
|
|
(1,464
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,420
|
)
|
|
|
(8,462
|
)
|
|
|
(5,401
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
(6,024
|
)
|
|
|
(21,064
|
)
|
|
|
(20,161
|
)
|
The
accompanying notes are an integral part of the interim condensed consolidated financial statements.
CAN-FITE BIOPHARMA LTD.
INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In
thousands (except for share and per share data)
|
|
Convenience translation
into
U.S. dollars
|
|
|
|
|
|
|
Six months ended June 30,
|
|
|
|
2017
|
|
|
2017
|
|
|
2016
|
|
|
|
Unaudited
|
|
|
|
USD
|
|
|
NIS
|
|
|
NIS
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment
|
|
|
(5
|
)
|
|
|
(16
|
)
|
|
|
(36
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(5
|
)
|
|
|
(16
|
)
|
|
|
(36
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of share capital and warrants, net of issuance expenses
|
|
|
4,758
|
|
|
|
16,636
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
4,758
|
|
|
|
16,636
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on balances of cash and cash equivalents
|
|
|
(794
|
)
|
|
|
(2,777
|
)
|
|
|
593
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents
|
|
|
(1,836
|
)
|
|
|
(6,417
|
)
|
|
|
(18,679
|
)
|
Cash and cash equivalents at the beginning of the period
|
|
|
8,925
|
|
|
|
31,203
|
|
|
|
66,026
|
|
Cash and cash equivalents at the end of the period
|
|
|
6,859
|
|
|
|
23,982
|
|
|
|
46,422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash received during the year for interest
|
|
|
34
|
|
|
|
118
|
|
|
|
75
|
|
The
accompanying notes are an integral part of the interim condensed consolidated financial statements.
CAN-FITE BIOPHARMA LTD.
NOTES
TO INTERIM CONDENSED CONSOLIDATED STATEMENTS (UNAUDITED)
In
thousands (except for share and per share data)
|
a.
|
These
financial statements have been prepared in a condensed format as of June 30, 2017 and for the six months then ended. These financial
statements should be read in conjunction with the Company's annual consolidated financial statements as of December 31, 2016 and
for the year then ended and accompanying.
|
In
these consolidated financial statements:
|
The
Company
|
-
|
Can-Fite
Biopharma Ltd.
|
|
|
|
|
|
The
Group
|
-
|
The
Company and its subsidiaries (as defined below).
|
|
|
|
|
|
Subsidiaries
|
-
|
Companies
that are controlled by the Company (as defined in IAS 27 (2008)) and whose accounts are consolidated with those of the Company.
|
|
|
|
|
|
OphthaliX
|
-
|
OphthaliX
Inc. (owned 82% by the Company).
|
|
|
|
|
|
Related
company
|
-
|
Eye-Fite
Ltd. (OphthaliX Inc.’s wholly owned subsidiary).
|
|
|
|
|
|
Related
parties
|
-
|
As
defined in IAS 24.
|
|
|
|
|
|
NIS
|
-
|
New
Israeli Shekel.
|
|
|
|
|
|
USD
|
-
|
U.S.
dollar.
|
|
c.
|
In
the six months ended June 30, 2017, the Company incurred net losses of NIS 11,718
and it had negative cash flows from operating activities in the amount of NIS 21,064
as well as accumulated losses from previous years.
|
The
Company has not generated yet any material revenues from sales of its own developed products and has financed its activities by
raising capital and by collaborating with multinational companies in the industry.
In
October 2016, the Company signed a distribution agreement with Chong Kun Dang Pharmaceuticals Corp. ("CKD") for future
sales in South Korea. As part of the distribution agreement, CKD will distribute the company's drug candidate Namodenoson (CF102)
for the treatment of liver cancer in the South Korean market upon receipt of regulatory approvals. Under the terms of the agreement,
CKD made an upfront payment of NIS 1,901 ($500) to the Company in December 2016. In addition, the agreement provides that additional
payments of up to $2,500 to the Company upon the achievement of certain milestones plus royalty payments of 23% of net sales of
Namodenoson in South Korea.
In
January 2017, the Company raised a net total of NIS 16,636. Furthermore, the Company is continuing to finance its operating activities
by raising capital and collaborating with multinational companies in the industry. The Company has other alternative plans for
financing its ongoing activities, if necessary, such as having the flexibility to control clinical trials costs. There are no
assurances that the Company will be successful in obtaining an adequate level of financing needed for its long-term research and
development activities. If the Company will not have sufficient liquidity resources, the Company may not be able to continue the
development of all of its products or may be required to delay part of its development programs. The Company's management and
board of directors are of the opinion that these financial resources will be sufficient to continue the development of the Company's
products at least for twelve months from the balance sheet date.
CAN-FITE BIOPHARMA LTD.
NOTES
TO INTERIM CONDENSED CONSOLIDATED STATEMENTS (UNAUDITED)
In
thousands (except for share and per share data)
|
a.
|
In
January 2017, the Company completed a private placement with certain institutional and
accredited investors, pursuant to which it sold an aggregate 2,500,000 ADSs representing
5,000,000 of its ordinary shares and warrants to purchase 1,250,000 ADSs representing
2,500,000 of its ordinary shares for an aggregate purchase price of NIS 18,935 (the "January
2017 Financing"). The warrants may be exercised after 6 months from the date of
issuance for a period of five and a half years and have an exercise price of $2.25 per
ADS (subject to certain adjustments). The Company also issued placement agent warrants
to purchase 125,000 ADSs representing 250,000 ordinary shares exercisable at $2.25 per
ADS, subject to certain adjustments, for a period of five years. The placement agent
warrants may be exercised on a cashless basis if six months after issuance there is no
effective registration statement registering the ADSs underlying the warrants.
|
The
cash issuance costs in relation to the January 2017 Financing was NIS 2,299.
In
relation to the Janaury 2017 Financing, the Company first allocated the proceeds to the warrants, that due to the dollar exercise
price terms and in accordance with IAS 39 is being considered a freestanding liability instrument that is measured at fair value
at each reporting date, based on its fair value, with changes in the fair values being recognized in the Company's statement of
comprehensive loss as financial income or expense. The remaining proceeds were allocated to the shares and were recorded to equity.
The issuance costs were allocated between the warrants and the shares in proportion to the allocation of the proceeds. The portions
of the issuance costs that were allocated to the warrants and to the ordinary share were recorded as financial expense in the
Company's statement of comprehensive loss and to the additional paid in capital in the Company's balance sheet, respectively.
The
fair value of the warrants issued to the investors in the January 2017 Financing at the commitment date was NIS 7,117 with changes
in recorded as financial income in the Company's statement of comprehensive loss. The fair value of the placement agents warrants
issued in the Janaury 2017 Financing at the grant date were NIS 712, and were considered as additional issuance costs
.
|
b.
|
In
March 2017, the Company's board of directors approved a grant of unlisted options exercisable
into 210,000 of the Company
'
s ordinary shares to three of its employees
for an exercise price of NIS 3.662 per share. The options vest on a quarterly basis
for a period of 48 months from the grant date.
|
|
c.
|
On
May 21, 2017, OphthaliX, Wize Pharma Ltd., a company formed under the laws of the State
of Israel (“Wize”), and Bufiduck Ltd., a company formed under the laws of
the State of Israel and a wholly owned subsidiary of OphthaliX (“Merger Sub”),
entered into an agreement and plan of merger (as may be amended from time to time, the
“Merger Agreement”) that provides for, among other things, the merger of
Merger Sub with and into Wize, with Wize continuing as the surviving entity and becoming
a wholly owned subsidiary of OphthaliX, on the terms and conditions set forth in the
Merger Agreement (the “Merger”). The Merger is subject to the satisfaction
or waiver of the conditions set forth in the Merger Agreement and certain closing conditions.
|
CAN-FITE BIOPHARMA LTD.
NOTES
TO INTERIM CONDENSED CONSOLIDATED STATEMENTS (UNAUDITED)
In
thousands (except for share and per share data)
As
a condition to closing of the Merger, OphthaliX is required, pursuant to a Stock Purchase Agreement, to sell on an “as is”
basis to the Company all the ordinary shares of OphthaliX’s wholly-owned subsidiary, Eyefite, in exchange for the irrevocable
cancellation and waiver of all indebtedness owed by OphthaliX and Eyefite to Can-Fite, including approximately $4.8 million of
deferred payments owed by OphthaliX and Eyefite to the Company and, as part of the purchase of Eyefite, the Company will also
assume certain accrued milestone payments in the amount of $175 under the exclusive license agreement described at the end of
this paragraph. Immediately following the sale of Eyefite to Can-Fite, it is expected that OphthaliX’s sole asset shall
consist of 446,827 ordinary shares of Can-Fite. In addition, as a condition to closing of the Merger, that certain exclusive license
of Can-Fite’s Piclidenoson (CF101) drug candidate for the treatment of ophthalmic diseases granted to OphthaliX and
that related services agreement is required to be terminated pursuant to a termination of license agreement and a termination
of services agreement. The Merger Agreement may be terminated under certain circumstances by either OphthaliX or Wize, including
if the Merger is not completed by October 30, 2017 unless the failure to complete the merger was primarily due to the material
breach of the terminating party.
The
Company's management believes the the current operation of Ophthalix is immaterial to the Company's financial statments.
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES
|
|
a.
|
Basis
of presentation of the financial statements
|
The
interim condensed consolidated financial statements for the six months period ended June 30, 2017 have been prepared in accordance
with IAS 34, "Interim Financial Reporting".
The
accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with
those followed in the preparation of the Company's annual financial statements for the year ended December 31, 2016.
|
b.
|
Convenience
translation
|
For
the convenience of the reader, the reported NIS amounts as of June 30, 2017 have been translated into U.S. dollars at the
representative rate of exchange on June 30, 2017 (U.S. $1 = NIS 3.496). The U.S. dollar amounts presented in these financial
statements should not be construed as representing amounts that are receivable or payable in dollars or convertible into U.S.
dollars, unless otherwise indicated. The U.S. dollar amounts were rounded to whole numbers for convenience.
CAN-FITE BIOPHARMA LTD.
NOTES
TO INTERIM CONDENSED CONSOLIDATED STATEMENTS (UNAUDITED)
In
thousands (except for share and per share data)
NOTE 3:-
|
CONTINGENT LIABILITIES AND COMMITMENTS
|
|
a.
|
Liabilities
to pay royalties:
|
|
1.
|
According
to the license agreement that the Company entered into with the NIH on January 29, 2003,
the Company was committed to pay royalties until the expiration of the last patent licensed
under the license agreement. The last patent under this agreement expired on June 29,
2015, and therefore except with respect to any amounts already accrued on the Company’s
balance sheet, no future payments or royalties will be due.
|
As
of June 30, 2017, the Company accrued NIS 1,635 (approximately $425) in other accounts payable with respect to the NIH.
|
2.
|
According
to the patent license agreement that the Company entered into with Leiden University
in the Netherlands on November 2, 2009, which is affiliated with the NIH, the Company
was granted an exclusive license for the use of the patents of several compounds, including
CF602 in certain territories.
|
The
Company is committed to pay royalties as follows:
|
a)
|
A
one-time concession commission of € 25 ;
|
|
b)
|
Annual
royalties of € 10 until the clinical trials commence;
|
|
c)
|
2%-3%
of net sales (as defined in the agreement) received by the Company;
|
|
d)
|
Royalties
in a total amount of up to € 850 based on certain progress milestones in the license
stages of the products, which are the subject of the patent under the agreement, as follows:
(i) € 50 upon initiation of Phase I studies; (ii) € 100 upon initiation of
Phase II studies; (iii) € 200 upon initiation of Phase III studies; and (iv) €
500 upon marketing approval by any regulatory authority.
|
|
e)
|
If
the agreement is sublicensed to another company, the Company will provide Leiden University
royalties at a rate of 10%. A merger, consolidation or any other
change
in ownership will not be viewed as an assignment of the agreement as discussed in this paragraph.
|
As
of June 30, 2017, no accrual is recorded with respect to Leiden University.
CAN-FITE BIOPHARMA LTD.
NOTES
TO INTERIM CONDENSED CONSOLIDATED STATEMENTS (UNAUDITED)
In
thousands (except for share and per share data)
NOTE 3:-
|
CONTINGENT LIABILITIES AND COMMITMENTS (Cont.)
|
|
b.
|
Commitments
and license agreements:
|
|
1.
|
In
March 2015, the Company signed a distribution agreement with Cipher. As part of the distribution
agreement, Cipher will distribute Can-Fite's lead drug candidate, Piclidenoson ("Product")
for the treatment of psoriasis and rheumatoid arthritis in the Canadian market upon receipt
of regulatory approvals.
|
Under
the terms of the agreement, Cipher made an upfront payment of NIS 5,141 (CAD 1,650 ) to the Company in March 2015. In addition,
the agreement provides that additional payments of up to CAD 2,000 will be received by the Company upon the achievement of certain
milestones plus royalty payments of 16.5% of net sales of Piclidenoson in Canada. The agreement further provides that the
Company will deliver finished Product to Cipher and that Cipher will reimburse the Company for the cost of manufacturing. Furthermore,
under the distribution agreement, the Company shall be responsible for conducting Product development activities including management
of the clinical studies required in order to secure regulatory approvals, and shall use commercially reasonable efforts in conducting
such activities. In addition the Company obliged to form a joint steering committee with Cipher which will oversee the progress
of the clinical studies.
The
Company identified four components in the agreement: (i) performing the research and development services through regulatory
approval; (ii) exclusive license to distribute the product in Canada; (iii) participation in joint steering committee; and,
(iv) Royalties resulting from future sales of the product. Components (i) – (iii) were analyzed as one unit of
accounting. Consequently, revenue from these components is recorded based on the term of the research and development
services (which is the last deliverable in the arrangement). The Company estimates these services will spread over a period
of 30 quarters beginning March 2015. Component (iv) was not accounted as part of the research and development services and
will be recognized entirely upon the Company reaching sales stage.
CAN-FITE BIOPHARMA LTD.
NOTES
TO INTERIM CONDENSED CONSOLIDATED STATEMENTS (UNAUDITED)
In
thousands (except for share and per share data)
NOTE 3:-
|
CONTINGENT LIABILITIES AND COMMITMENTS (Cont.)
|
|
2.
|
In
December 2008, the Company signed an agreement regarding the provision of a license for
its Piclidenoson drug with a South Korean pharmaceutical company, Kwang Dong Pharmaceutical
Co. Ltd. (the “Korean License Agreement” and the “Korean Company”,
respectively). According to the license agreement, the Company granted the Korean Company
a license to use, develop and market its Piclidenoson drug for treating only rheumatoid
arthritis only in the Republic of Korea.
|
According
to the license agreement, the Company is entitled to receive the following amounts:
|
a)
|
A
non-refundable amount of $300 that was received on the effective date of the license
agreement in 2006, and up to $1.2 million (gross) based on the Company's achievement
of certain milestones as follows: (i) $200 upon the public announcement of the data from
the Can-Fite Phase II clinical trial (such amount was received and included in the Company's
revenue for the year ended December 31, 2010); (ii) $200 upon commencement of the first
clinical study by the Korean Company in the Republic of Korea; (iii) $200 upon submission
by the Korean Company of a new drug application in the Republic of Korea; (iv) $300 upon
all approval, licenses or authorizations of any regulatory authority necessary for the
commercial marketing, sale and use of the product in the United States, in the European
Union as a whole or in any one of the following countries: Germany, Italy, the United
Kingdom, France or Switzerland; and (v) $300 upon commercial launch of the product in
the Republic of Korea.
|
|
b)
|
The
Company is entitled to annual royalties of 7% based on sales of Piclidenoson in Korea
as marketed by the Korean Company according to the Korean License Agreement.
|
As
of June 30, 2017, the Company estimates that such contingent payments are remote.
On
June 29, 2015 the Company received a lawsuit requesting recognition of the lawsuit as a class action, naming the Company, its
Chief Executive Officer and its directors as defendants. The lawusit was filed with the District Court of Tel-Aviv. The lawsuit
alleged, among other things, that the Company misled the public with regard to disclosures concerning the efficacy of the Company’s
drug candidate, Piclidenoson. The claimant alleged that he suffered personal damages of over NIS 73, while also claiming
that the shareholders of the Company suffered damages of approximately NIS 125 million. On July 18, 2017, the District Court of
Tel-Aviv issued a ruling in which it denied the request to recognize the lawsuit as a class action (see Note 8).
CAN-FITE BIOPHARMA LTD.
NOTES
TO INTERIM CONDENSED CONSOLIDATED STATEMENTS (UNAUDITED)
In
thousands (except for share and per share data)
NOTE 4:-
|
DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO
THEIR ADOPTION
|
In
follow up to note 4c IFRS 15 "Revenues from contracts with customers" in the Company's annual financial statements for
the year ended December 31, 2016, the Company is currently assessing the expected results, implementation process and the
possible impact of IFRS 15 on the consolidated financial statements and the implementation approach.
|
a.
|
Composition
of share capital:
|
|
|
|
June 30, 2017
|
|
|
December 31, 2016
|
|
|
|
|
Authorized
|
|
|
Issued and outstanding
|
|
|
Authorized
|
|
|
Issued and outstanding
|
|
|
|
|
Number of Shares
|
|
|
Ordinary shares of NIS 0.25 par value each
|
|
|
80,000,000
|
|
|
|
33,156,728
|
|
|
|
80,000,000
|
|
|
|
28,156,728
|
|
|
b.
|
Issue
of shares and warrants and changes in equity:
|
|
1.
|
On
May 26, 2016, the Company's board of directors approved a grant of 37,000 ADSs representing
74,000 ordinary shares of the Company to a service provider. Pursuant to the agreement
with the service provider, and as partial consideration, the Company issued 18,500 ADSs
representing 37,000 ordinary shares and agreed to issue an additional 18,500 ADSs respresenting
37,000 ordinary shares within 180 days, provided that the agreement was not terminated.
As of December 31, 2016 the Company recorded an amount of NIS 283 for share based payment
expenses relating to this transaction.
|
CAN-FITE BIOPHARMA LTD.
NOTES
TO INTERIM CONDENSED CONSOLIDATED STATEMENTS (UNAUDITED)
In
thousands (except for share and per share data)
|
2.
|
On
May 26, 2016, the Company's board of directors approved a grant of 20,000 options exercisable
up to 20,000 ordinary shares of the Company to one of its advisers at an exercise price
of 5.376 NIS per share. The options will vest on a quarterly basis for a period of 48
months from the grant date.
|
|
c.
|
Warrants
classified as equity:
|
|
1.
|
The
Company has 39,042,000 registered warrants (Series 10) that are exercisable into 1,561,680
ordinary shares of the Company for NIS 9.85 per share. The warrants are exercisable,
according to the court approval, until October 31, 2017.
|
|
2.
|
The
Company has 37,372,500 registered warrants (Series 11) that are exercisable into 1,494,900
ordinary shares of the Company for NIS 9.80 per share. The warrants are exercisable,
according to the court approval, until October 31, 2017.
|
|
3.
|
The
Company has 1,470,000 registered warrants (Series 12) that are exercisable into 1,470,000
ordinary shares of the Company for NIS 15.29 per share. The warrants are exercisable,
according to the court approval, until October 31, 2017.
|
|
4.
|
In
February 2016, the Company’s board of directors approved a grant of unlisted options
exercisable into 160,000 of the Company's ordinary shares to three of its employees and
one senior officer for an exercise price of NIS 4.317 per share. The options vest on
quarterly basis for a period of 4 years from the grant date.
|
NOTE 6:-
|
TRANSACTIONS WITH RELATED PARTIES
|
The
following table provides the total amount of transactions that have been entered into with related parties during the six months
ended June 30, 2017 and 2016:
|
|
|
Six months ended
June 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
NIS
|
|
|
|
|
|
|
|
|
|
|
Management and consulting fees and share based payment
|
|
|
1,096
|
|
|
|
964
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses
|
|
|
29
|
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
Patent expenses
|
|
|
369
|
|
|
|
331
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors' fee and share-based payment
|
|
|
372
|
|
|
|
214
|
|
As
of June 30, 2017 and December 31, 2016, there were no outstanding balances with related parties.
CAN-FITE BIOPHARMA LTD.
NOTES
TO INTERIM CONDENSED CONSOLIDATED STATEMENTS (UNAUDITED)
NIS
in thousands (except for share and per share data)
NOTE
7:-
|
FINANCIAL INSTRUMENTS
|
The
Company's warrants exercisable into shares liability are classified as level 3 (valuations based on unobservable inputs reflecting
assumptions, consistent with reasonably available assumptions made by other market participants). The carrying amount of cash
and cash equivalents, accounts receivables, trade payables and other accounts payable approximate their fair value.
NOTE 8:-
|
SUBSEQUENT EVENTS
|
|
a.
|
On
July 18, 2017, the District Court of Tel-Aviv issued a ruling in which it denied the
request to recognize the lawsuit as a class action which was submitted in June 2015 and
awarded the Company an amount of NIS 50 to pay the Company’s expenses in relation
to such lawsuit.
|
|
b.
|
On
August 23, 2017, the Company received a second milestone payment in the amount of $500
from CKD, which has licensed the exclusive right to distribute Namodenoson for the treatment
of liver cancer in Korea upon receipt of regulatory approvals.
|
-
17 -