Can-Fite An Emerging NASH Play With CF102

Last month, Allergan plc (AGN ) acquired two companies on the same day, both in an effort to strengthen its focus on NASH. Allergan spent $615 million to acquire Tobira Therapeutics, Inc. (TBRA) and $50 million to acquire privately-held Akarna Therapeutics. The acquisition of Tobira gives Allergan cenicriviroc, an oral Phase 3 ready potent inhibitor of the chemokine receptors, CCR2 and CCR5, which are involved in the inflammatory and fibrogenic pathways in NASH and evogliptin, an oral DPP-4 inhibitor in Phase 1 studies for NASH. Allergan also committed to pay shareholders of Tobira another billion dollars in potential milestones upon the successful development of cenicriviroc and evogliptin. The smaller acquisition of Akarna brings in AKN-083, a preclinical farnesoid X receptor (FXR) agonist for the treatment of NASH that Allergan believes is complementary with cenicriviroc and evogliptin.

Allergan's double acquisition day last week reinforces what investors already know - NASH plays are hot and getting scooped up by big biopharma companies left and right. Many consider Intercept Pharmaceuticals (ICPT ) the market leader in NASH, with Gilead Sciences (GILD), Genfit SA (GNFTF), Novartis (NVS), Shire Plc (SHPG), Bristol-Myers (BMY), Merck (MRK), and the aforementioned Allergan all making a strong push into the billion-dollar market. Gilead recently paid $400 million to acquire privately-held Nimbus Therapeutics and its Phase 1 asset, acetyl-CoA carboxylase. In January 2015, Gilead acquired an FXR agonist from privately-held Phenex Pharmaceuticals for $470 million

The deal flurry in NASH last week caused several small-cap biopharma companies to increase in value as investors speculate on who will be acquired next. Galmed Pharmaceuticals (GLMD), Conatus Pharmaceuticals (CNAT), and Galectin Therapeutics (GALT) all soared on the news. Can-Fite Biopharma (CANF) also popped on the news. Can-Fite is a somewhat under-the-radar NASH play. I've written extensively on the name, but tend to focus most of my analysis on CF101, which is Phase 3 ready in both rheumatoid arthritis and psoriasis. For the purpose of this article, I'll look at CF102 for liver disease, including NASH, an opportunity that I do not believe the market is aware of and has the potential to send Can-Fite shares soaring in 2017.

Quick Background on CF102

Can-Fite's CF102 is a selective A3 adenosine receptor (A3AR) agonist. Can-Fite is currently studying CF102 as a second-line treatment of advanced hepatocellular carcinoma (HCC), the leading form of primary liver cancer, in subjects with Child-Pugh B cirrhosis. The 78-patient Phase 2 trial is currently recruiting patients in Israel and select countries in southeastern Europe. I'm expecting enrollment to complete in the next few months and for Can-Fite to report top-line data in 2017.

The anti-cancer effects of CF102 are believed to stem from the activation of adenosine, mainly through binding to the A3 receptor (1). The mechanism of action mediated via A3AR agonism includes modulation of key signaling proteins, such as PI3K, GSK-3β, PKA, PKB/Akt, IKβ, and NF-кB, resulting in deregulation of the Wnt and the NF-кB pathways. In 2007, researchers at CanFite found that A3AR is expressed in very low levels in most normal tissues, but overexpressed in a number of different tumor types, including skin, colon, breast, renal, ovarian, and hepatic cancers (2). As such, targeting the A3AR through pharmaceutical intervention is a likely mechanism for apoptosis of cancer and inflammatory cells (3).

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