Two biomed companies, Pluristem Therapeutics Ltd. (Nasdaq:PSTI; TASE: PLTR) and Can-Fite BioPharma Ltd. (TASE:CFBI), announced financing rounds at the end of last week. Pluristem raised $15 million, after enlarging its planned offering, while Can-Fite raised $5 million. Pluristem's offering was at a 12% discount on its share price on Friday, the day on which the offering took place. The offering included non-tradable options, which are lowering the company's effective share price still further.
The Pluristem share plunged 17% in Friday's trading in the US, ending up 6% below the offering price. The share sank 20% in Tel Aviv today, pushing the company's market cap down to NIS 361 million. The underwriter for the offering was HC Wainright.
Last December, Pluristem, which produces stem-cell-based products for treating a range of diseases, announced that it had postponed the date for a binding agreement with a Chinese party for a $30 million investment in Pluristem. The Chinese party approved the investment last November. Pluristem thus found itself with a $30 million hole in its plans. As of the end of the third quarter of 2016, the company had $29 million in cash.
Can-Fite's offering was at a 5% discount on the market price, and on Thursday, its share price dropped nearly to the offering price, putting the company's market cap at NIS 115 million. The underwriter for the offering was HC Wainright division Rodman & Renshaw.
The two companies' financing rounds are in advance of the Tel Aviv Stock Exchange (TASE) indices reform slated to go into effect next month - a change that is likely to result in the two companies' inclusion in the SME60 Index, which will replace the Tel Aviv Yeter 50 Index. Inclusion in the index is expected to generate demand for these shares from exchange traded funds, thereby boosting the share prices, making the occasion opportune for raising money.
Developments in trials
Pluristem this week announced developments in two clinical trials it is conducting. Over the next six months, it is scheduled to recruit patients for a Phase III trial in its treatment for Peripheral Arterial Occlusive Disease (PAOD) – the company's product that has advanced the furthest. The trial will have 250 patients, and if the results for 125 of the patients are impressive enough, the product may already be approved for restricted marketing.
Pluristem has held few clinical trials with its own funding so far; it has attempted to rely on partners in paying for its trials. Now, on the eve of its leading clinical trial, it needs more capital, and therefore held a financing round. At the same time, the company has completed its Phase II trial of its treatment for intermittent claudication. This trial, however, is on a smaller scale, so the company's total spending on its trials is expected to rise.
Can-Fite will soon begin a Phase II trial of its CF102 drug for treatment of fatty liver disease. This is a relatively new use for the company's second product, similar in composition and operating mechanism to CF101, the company's leading product which is being tested in the treatment of dry eye syndrome and arthritis, but which has not yet proven its effectiveness for these purposes. Can-Fite is also about to begin two other large-scale trials. The first is for arthritis, an area in which the company simply refuses to give up, despite a series of failures in its trials with this product. The second trial is for treatment of psoriasis. What all these diseases (arthritis, fatty liver infection, psoriasis, and dry eye) have on common is the inflammatory element. This is the element that the company believes it is attacking with its drug. The company is simultaneously conducting a Phase II trial of its treatment for liver cancer using CF102. At the end of the third quarter of 2016, the company had $10 million in cash.
Published by Globes [online], Israel Business News - www.globes-online.com - on January 22, 2017
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