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CANF: CF102 Expanded into NASH

By Grant Zeng, CFA

NYSE:CANF

Earlier this morning, Can-Fite (CANF) announced the expansion of its lead cancer drug candidate CF102 into new indication for non-alcoholic steatohepatitis (NASH).

The expansion is based on the compelling pre-clinical data on CF102 in the treatment of NASH. The company recently concluded preclinical study of CF102 in liver disease. In the study, CF102 revealed its capability to improve liver pathology in a NAFLD (non-alcoholic fatty liver disease)/diabetes animal model of NASH.

In the press release issued today, the company summarized the preclinical data of CF102:

In prior preclinical studies, CF102 has shown efficacy in the treatment of liver regeneration and function following liver surgery.

Based on the above compelling animal data, Can-Fite is going to expand CF102 into the new indication of NASH. Can-Fite also has filed a patent for CF102 in the treatment of NASH.

Our Takeaway

We believe the expansion of CF102 into NASH represents an important milestone for Can-Fite in its clinical development.

Non-alcoholic fatty liver disease (NAFLD) is the build-up of extra fat in liver cells that is not caused by alcohol. It is normal for the liver to contain some fat. However, if more than 5% - 10% percent of the liver’s weight is fat, then it is called a fatty liver (steatosis). The more severe form of NAFLD is called non-alcoholic steatohepatitis (NASH). NASH causes the liver to swell and become damaged.

NAFLD affects about 30% of adults and 10% of children in the US, among which 10-30% will develop NASH. 25-40% NASH patients will develop progressive liver fibrosis, while 20-30% NASH patients with advanced fibrosis will develop cirrhosis, which could lead to liver cancer.

NAFLD/NASH represents a multibillion-dollar market, but currently there are no FDA approved medicines for the treatment of NAFLD/NASH.

CF102 is currently being evaluated as a second-line treatment for HCC through a global Phase II trial. Can-Fite has received Orphan Drugs Designation for CF102 for this indication in Europe and the U.S., as well as Fast Track Status in the U.S. Data from the Phase II HCC study is expected in 2016.

The addition of NASH further expands CF102’s liver disease franchise. We estimate the company will initiate clinical study in 2016.

We recently upgrade Can-Fite shares to Buy with a 12-month price target of $7.50 per share. Our call was based on the multiple achievements the company has made in the past 6 months and the compelling valuation.

The pipeline expansion further convinces us that Can-Fite shares have enough room for further appreciation.

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  • CF102 had a statistically significant reduction in NAFLD activity score compared to placebo.

  • CF102 reduced liver-to-body weight compared to placebo.

  • Representative photomicrographs of H&E-stained liver sections showed improved pathology in animals receiving CF102 vs. placebo.

  • CF102 decreased plasma ALT and triglycerides levels in the livers of NASH-model compared to placebo.

  • Liver sections from the placebo group exhibited severe micro- and macrovesicular fat deposits, hepatocellular ballooning and inflammatory cell infiltration, whereas the CF102 treated group showed a significant decrease in steatosis, ballooning and lobular inflammation compared to the placebo group.

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