Can-Fite BioPharma Ltd. (CANF) CEO Pnina Fishman on Q2 2020 Results - Earnings Call Transcript
Aug. 27, 2020 9:51 PM ET | About: Can-Fite BioPharma Ltd. (CANF)
Q2: 08-27-20 Earnings Summary
Press Release
EPS of $-0.3 beats by $0.06 Revenue of $0.2M (-47.56% Y/Y) misses by $-0.3M
Company Participants
Pnina Fishman - Chief Executive Officer
Motti Farbstein - Chief Financial Officer
Conference Call Participants
Jason Kolbert - Dawson James
Vernon Bernardino - H.C. Wainwright & Co., LLC
Now I would like to turn the call over to Dr. Pnina Fishman. Thank you. You may begin.
Pnina Fishman
Thank you, Ben, and thanks all of you for participating in our call today, and clinical development for our advanced pipeline of small molecule drugs since the second quarter include the final data analysis from our Phase II NASH study, which showed Namodenoson on treated patients with a highly significant and sustained reduction in liver fat volume throughout the study period.
Namodenoson also moved one step closer to its Phase III global pivotal trial in liver cancer, following successful meetings and guidance from both agencies, the FDA in the U.S., and the EMA in Europe. Our lead drug candidate, Piclidenoson is headed into Phase II COVID-19 study in the U.S. and Israel using the [indiscernible] response of the FDA to our submitted IND. We are highly encouraged by all these important development.
And now I would really get into farther details about this and other clinical development. As we reported in June, our successful Phase II study of Namodenoson in NAFLD/NASH produced even more positive and meaningful data upon final analysis. While incidence of NAFLD/NASH continued to rise, there is still no treatment for this condition, which is expected to soon surpass hepatitis C as the leading cause of liver transplant in the U.S.
An estimated 25% of U.S. adults have NAFLD and 20% of those have NASH according to the American Liver Foundation. While a handful companies has taken their drugs into advanced stage trial for the treatment of NASH, those that have completed pivotal stage studies has not yet succeeded in showing both safety and efficacy sufficient to support marketing approval according to [indiscernible] agency. This underscores the continued need for a variety of NASH drugs that are both safe and effective to address a very large unmet need.
Namodenoson has been evaluated in the Phase II study for both NASH and liver cancer with both studies showing a very favorable safety profile and lack of hepatotoxicity. As reported previously, Namodenoson induced significant change in primary and secondary study endpoints over the 12-week study period, which is a very relatively short period of time.
A robust anti-inflammatory effect manifested by a significant decrease in the liver enzymes ALT and AST and significant improvement in the positive cytokine adiponectin was recorded. A reduced liver fat content and a reduction in percent of liver fat volume was found together with a decrease in FIB-4 and FAST, both non-invasive tests used as markers to exclude advanced fibrosis. In addition, a decrease in body weight has been observed in the two doses of Namodenoson, with a better effect in the higher dose.
The 25 milligram dose of Namodenoson was found to have optimal efficacy while also having a strong safety profile and was well tolerated. 25mg has been selected as the dose to be used in our next NAFLD/NASH study. We believe Namodenoson is a very strong candidate for continued clinical development in the treatment of NAFLD/NASH and we are now working closely with key opinion leaders on the development of our next clinical study in this indication.
We were very pleased that during the second quarter, the U.S. Patent and Trademark Office granted Can-Fite a patent for Namodenoson in the treatment of NAFLD/NASH. Additionally, just a few days ago, we were notified by the European Patent Office with the intent to issue a similar NAFLD/NASH patent to us. Earlier in the year, we issued a patent in this indication in Korea. This is very important for us since we have already [indiscernible] in Korea.
Our global intellectual property portfolio addressing NAFLD/NASH is critical as we engage in talks with potential distribution partners. Namodenoson has also shown significant efficacy in the treatment of liver cancer in the population defined as Child Pugh B, which constitutes 70% of the patient with advanced liver cancer.
Now I will provide an update on our planned pivotal global Phase III study of Namodenoson in this indication. Our aim is to conduct one Phase III pivotal trial in U.S., Europe and Israel for regulatory approval in those markets, should the study achieves its endpoint. As previously announced, following the successful End-of-Phase II meeting with the FDA regarding Namodenoson in the treatment of hepatocellular carcinoma, the FDA agreed with our proposed pivotal Phase III trial design to support a New Drug Application submission and approval.
During the second quarter, we also concluded a successful meeting with the European Medicine Agency Scientific Advice Working Party regarding the same Phase III protocol. Based on the advice from both the regulators and our academic key opinion leaders, we have completed enrolling protocol for the pivotal Phase III study designed to support a New Drug Application submission in the U.S. and a Marketing Authorization Application in Europe.
Now I will turn to developments with Piclidenoson. We filed an Investigational New Drug Application with the FDA for Piclidenoson in the treatment of COVID-19. Piclidenoson’s anti-rheumatic and anti-viral effects, combined with its excellent safety profile, make it a potential candidate for the treatment of coronavirus. Based on pre-IND advice and guidance we received from the FDA during the second quarter towards end of July, we filed an IND for planned 28-day Phase II study to evaluate hospitalized patients with moderate COVID-19 symptoms.
The randomized, double blind, placebo-controlled trial will enroll 40 patients who are receiving standard supportive care and will be randomly assigned in a 1:1 ratio to the trial arms of Piclidenoson twice daily or placebo. After 28 days of treatment, efficacy will be assessed through standard measures of clinical and respiratory status at day 29, including the proportion of patients alive and free of respiratory failure, as well as the proportion discharged home without need of supplemental oxygen. We are working with FDA’s Coronavirus Treatment Acceleration Program and expect IND activation very shortly to begin our Phase II trial.
Piclidenoson has completed over 50% enrollment into Phase III study for rheumatoid arthritis and psoriasis and we expect an interim data readout in the fourth quarter. Data monitored by two independent data monitoring committees, which will have un-blinded access to the data during the third quarter and we intend to announce this data in the fourth quarter.
Following the end of the second quarter, we achieved a milestone in our compassionate use program in Israel. We completed the development of a biological cell-based in vitro assay which can identify clinically active cannabis derived compounds that bind to and activate A3 adenosine receptor, the target of Can-Fite’s platform technology.
Studies published in peer reviewed scientific journals demonstrate that cannabis derived compounds bind to the Gi protein-coupled A3 adenosine receptor, which is over-expressed in pathological cells and tissues. In addition to using this assay in the development of our own cannabis derived compound-based therapeutics, we also plans to market the assay on a fee-for-service basis to researchers and other cannabis companies worldwide.
I will now turn the call over to Motti Farbstein, our CFO for a review on the financial results. Motti, please.
Motti Farbstein
Thank you, Pnina. Revenues for the six months ended June 30, 2020 were $0.4 million compared to the revenues of $0.68 million during the six months ended June 30, 2019. The decrease in the revenues was mainly due to the recognition of a lower portion of advance payments received under distribution agreements from Gebro, CKD Pharmaceuticals and Cipher Pharmaceuticals.
Research and development expenses for the six months ended June 30, 2020 were $7.05 million compared with $3.96 million for the same period in 2019. Research and development expenses for the six months ended June 30, 2020 comprised primarily of expenses associated with the Phase II studies for Namodenoson in the treatment of NASH and HCC, as well as expenses for ongoing Phase III studies of Piclidenoson in the treatment of rheumatoid arthritis and psoriasis. The increase is primarily due to the increased costs associated with the accelerating rate of enrollment of patients for the Phase III clinical trial of Piclidenoson for the treatment of rheumatoid arthritis and for the psoriasis study.
General and administrative expenses were $1.45 million for the six months ended June 30, 2020 compared to $1.33 million for the same period in 2019. The increase is primarily due to an increase in compensation-related benefits and insurance expenses which was partly offset by a decrease in travel expenses and professional services.
Financial expenses, net for the six months ended June 30, 2020 was $0.12 million compared to financial expenses, net of $0.28 million for the same period in 2019. The decrease in financial expenses, net is primarily due to a decrease in exchange rate expenses.
Can-Fite's net loss for the six months ended June 30, 2020 was $8.23 million compared with a net loss of $4.89 million for the same period in 2019. As of June 30, 2020, Can-Fite had cash and cash equivalents of $9.05 million as compared to $2.69 million at December 31, 2019. The increase in cash during the six months ended June 30, 2020 is due to an aggregate of $17.9 million received through a warrant exercise transaction in January 2020, a public offering in February 2020, partial exercises in March, April and May 2020 of warrants issued in February 2020 public offering, and a registered direct offering in June 2020.
I will now turn the call over to the operator for our Q&A session.
Question-and-Answer Session
Operator
Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Jason Kolbert with Dawson James. Please proceed with your question.
Jason Kolbert
So long guys, how are you doing?
Pnina Fishman
Thank you. Good.
Jason Kolbert
Okay. In terms of COVID, can you walk me through what you're thinking in terms of the effect that you might see and that you might use in order to kind of explore a trial, Phase I trial, and what dose and dosing, and most importantly, at what point would you expect to be able to administer the drug? Because our understanding of the disease is that once people are hospitalized, they're experiencing the cytokine storm, if you will. And so one goal is deleting the virus, another goal is reducing the inflammation, all of which without interfering with the body's ability to heal itself. So steroids are a blunt instrument, are you from a mechanism of action point of view looking at this as a more specific instrument versus a steroid? Thanks.
Pnina Fishman
Okay. Thanks for your question. Actually, we are going dose the patients with 2 milligram. We know that the drug has a very good safety profile and interestingly enough, and without any connection with the coronavirus, it was a year ago we published our drug can act against the cytokine release syndrome which you just mentioned is one of the most prominent manifestations of the disease.
So we believe – while we are going to treat patients with moderate Phase II study, we will be able to overcome the cytokine release syndrome, which will be expressed in an improvement in the clinical state of the patients. So this is our approach and we hope for a notch that we will be able to prove it. We are expecting the approval or what we say now, any action from the FDA in the next couple of days and we will be able to start dosing the patients afterwards.
Jason Kolbert
And where exactly you're going to be running this trial in multiple sites in the United States? Will you be running it also in Israel? Are you looking to Europe as well? And what kind of costs? How do we calculate that in terms of our model?
Pnina Fishman
At this stage, we are looking at – we will be looking at patients in the U.S. in the couple of centers and also in Israel. We may later on expand it also to Europe.
Jason Kolbert
And last question is regarding liver cancer. Can you give us some idea of what the timing might be or what you're thinking internally in terms of how that trial advances and how is your BD discussions going? It would be great to have a partner that could fund that.
Pnina Fishman
Yes, sure. Actually, we have a protocol for the Phase III clinical study as I've just mentioned [indiscernible] to go. Basically – and as for your second question, we have already out-licensed the drug for China and for Korea, and we are now having, as I also mentioned talks with other companies who would like to in license this drug, and we hope very much to come up with the news very shortly.
Jason Kolbert
Thanks so much for the update guys.
Pnina Fishman
You’re welcome.
Operator
[Operator Instructions] Our next question comes from the line of Vernon Bernardino with H.C. Wainwright. Please proceed with your question.
Vernon Bernardino
Hi, Pnina and Motti. Good evening. I know it's really late for you guys. Thanks for having this call.
Pnina Fishman
Hi.
Vernon Bernardino
So regarding the planned announced interim analysis for Piclidenoson and rheumatoid arthritis and psoriasis, could you remind us again what kind of data should we expect?
Pnina Fishman
Actually, regarding the rheumatoid arthritis study, the patient population are naive patients and our aim is at the end of the day to register the drug in first-line in-patients and to replace the methotrexate drug which most of the patients will get as the first-line. This is as of the rheumatoid arthritis. And the indefinite frame of the study, we have a placebo group where we are comparing [indiscernible] which is methotrexate and we need to be non-inferior versus methotrexate.
Regarding the psoriasis, it’s the same, but we are comparing to Otezla, the Celgene drug. So we expect that kind of drug, of course, we will and will be non-inferior, and on Q4, we plan to come with the data, everything is going smoothly regarding the data analysis. So it's coming very soon and of course, we are very positive.
Vernon Bernardino
Perfect. Thanks for reminding us. And I was wondering regarding the pivotal Phase III design for Namodenoson in liver cancer, could you provide insights as to the regulators view especially with discussions fresh from the EMA into their view of Child Pugh B7 cirrhotic patients and the effects of Namodenoson. Just wondered if you could share some of the insights they provided.
Pnina Fishman
Sure. The thing is that our drug interestingly was found to be efficacious in a [separate relation]. We should constitute like 70% of the whole population of patients with advanced liver cancer. This [population] is defined as Child Pugh B and they do not have any drug currently, which they can get. So the approach of both agencies was to encourage us to go ahead for this patient population and this is where we are aiming at. The study is aiming at 500 patients and there will be an interim analysis like we are doing now with rheumatoid arthritis and psoriasis, and we are doing now in all different part we work, and we will, of course, let everybody know when we will be ready to embark and initiate the study.
Vernon Bernardino
So when you mentioned like psoriasis interim look at the number of patients, so like 250.
Pnina Fishman
Yes. Correct.
Vernon Bernardino
And one follow-up now, and I’ll get back in the queue. Regarding Namodenoson and the compassionate use program in Israel, should we expect to see some results or an update on the status of these patients?
Pnina Fishman
Usually it doesn't go that [indiscernible] like an overview about the patients, but in general, we are treating patients via this program and there are patients on the drug, which is a very good sign because as we know, this is a very advanced patient population. And every time, yes, we will come up and summarize the data with these patients.
Vernon Bernardino
Thank you. I have a few more questions, but I'll get back in the queue. Thank you.
Pnina Fishman
Okay. Thank you.
Operator
[Operator Instructions] We do have a follow-up question for the line of Vernon Bernardino with H.C. Wainwright. Please proceed with your question.
Vernon Bernardino
Hi. Hello, again. Regarding the IND filed for the Phase II study with Piclidenoson in COVID-19 moderate patients, do you anticipate providing – because you mentioned that one of the things that you've assessed is standard measures of clinical and respiratory status at day 29, but along the way, one of the things that tends to be measured frequently where you also be collecting perhaps data on the oxygen status of these patients?
Pnina Fishman
Yes, one of the endpoints really be to look at these patients are not anymore on oxygen, need oxygen or not. So this is additional thing that we will look at, yes.
Vernon Bernardino
Terrific. Because as you probably know by now that that's an early indicator of how – whether these patients are getting worse or not. And early on in the study, after 28 days of treatment, certainly day 29 would be useful information, but along the way you could gauge as far as how quickly the Piclidenoson is working. Would you agree?
Pnina Fishman
Yes, absolutely.
Vernon Bernardino
Okay. Turning to the assays for cannabis derived program, you mentioned that the biological cell-based in vitro assay, how exactly does the assay work?
Pnina Fishman
Cell is a cell-based assay, basically we have different ones. And when we want to look at different types of diseases, for example, we have one which can look, of course, at oncological indications. So we can look at different types of cancers in vitro and see if certain kind of been an aid and kind of been a derivative and can affect the proliferation or growth or some functional capabilities of a given type of cells. We have different systems in liver cells, which is not related to oncology, but to metabolic indications, we have different one for fat cells. So there are a couple of cell-based assay, which we are looking at from a proliferated and from functional point of view. And this is how we can segregate and see if a given compound is active or not.
Vernon Bernardino
Okay. Terrific. Thank you for providing that additional information. Look forward to continued progress.
Pnina Fishman
Hey, you are more than welcome.
Operator
There are no further questions left in the queue, I would like to turn the call back over to Dr. Fishman for a closing remarks.
Pnina Fishman
Okay. Thank you very much. And hope to hear you again in the next Q. Bye-bye.
Operator
This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation and have a wonderful day.
