Can Fite raises NIS 30m in convertible bond offering
Tuesday, May 16, 2006
 
Can Fite BioPharma Ltd. (TASE:CFBI), which is developing drugs to treat rheumatoid arthritis, cancer and dry eye syndrome, has raised NIS 30 million in an issue of convertible bonds on the Tel Aviv Stock Exchange (TASE). Each unit comprises 300 convertible bonds and 100 warrants.
The bonds will be handed over to a trustee today for one year. When Can Fite reaches two predetermined milestones, it can forcibly convert the bonds into shares at 90% of the average share price during the preceding 30 trading days, on the condition that the share price does not exceed NIS 2.50. Can Fite’s current share price is NIS 1.48.
Investors may convert the bonds into shares at NIS 2.50 per share. At the end of the year-long lockup period, if Can Fite does not achieve the milestones, the money will be returned to investors at no interest.
The warrants are for two years at a strike price of NIS 2 per share. Exercising all the warrants will generate NIS 20 million for Can Fite.
The first milestone is the completion of Phase IIa clinical trials for the company’s CF-101 drug of rheumatoid arthritis. The second milestone is the start of Phase IIb clinical trials of this drug. It is highly unlikely that Can Fite will not reach these milestones.
Can Fite went public in October 2005 at a value of NIS 337.50 per unit. The current unit value is NIS 506, a 50% return in six months.
Caf Fite CEO Dr. Pnina Fishman said, “The company is scheduled to file its final report on the Phase IIb clinical trials on rheumatoid arthritis between July and September 2007, and begin Phase IIa clinical trials for dry eye syndrome between January and April 2007. It’s usually possible to make an exit after the completion of Phase II trials, and that’s our goal. We’re in constant contact with large international pharmaceutical companies, but only after publication of the trials’ results can we begin discussion terms with them.”
Can Fite confirmed that it has sufficient capital to begin Phase III clinical trials, and will not stop if an exit is delayed for one reason or another.
 
 

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