SNTS Santarus, Inc. (MM)

Can-Fite BioPharma Ltd. (CANF) suffered a setback when its pipeline candidate CF101 did not fare well in a 24 week phase III placebo controlled study (n=237). The study evaluated patients suffering from moderate-to-severe dry eye syndrome. The news impacted the stock adversely. Shares dipped by over 32% to close the trading session on Dec 30, 2013 at $5.54.

The top-line results of the study, released by Can-Fite BioPharma’s subsidiary OphthaliX Inc., failed to meet the primary efficacy endpoint of complete clearing of corneal staining. The secondary efficacy endpoints of the study were also not met. CF101 is also being developed to treat other eye disorders such as glaucoma and uveitis.

We remind investors that Can-Fite BioPharma had received positive news on CF101 earlier in the month, albeit for a different indication (rheumatoid arthritis or RA). CF101 met all the primary efficacy endpoints in a 12 week phase IIb study (n=79) for the RA indication. The placebo controlled study evaluated CF101 as a monotherapy for treating RA patients.

Can-Fite BioPharma is also developing CF101 for the psoriasis indication (phase II/III). The company intends to announce detailed results from the study by Dec 31, 2014. The market for both the above-mentioned anti-inflammatory conditions is growing and offers significant commercial potential. Consequently, successful development of CF101 for the indications would boost Can-Fite BioPharma, which currently has no approved product.

Other interesting pipeline candidates at Can-Fite BioPharma include CF102 (liver cancer) and CF602 (inflammatory diseases). The company is actively developing its pipeline since positive news regarding the same has the potential to lift a stock. Similarly pipeline setbacks, like the one suffered by Can-Fite BioPharma on CF101 for dry eye syndrome, can adversely impact a stock. Consequently, we expect investor focus to remain on pipeline updates at Can-Fite BioPharma.

Can-Fite BioPharma carries a Zacks Rank #2 (Buy). Investors interested in the biopharma industry may consider stocks like Santarus, Inc. (SNTS) Vanda Pharmaceuticals, Inc. (VNDA) and Jazz Pharmaceuticals (JAZZ). All these stocks carry a Zacks Rank #1 (Strong Buy).

 
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