On Wednesday, Can-Fite BioPharma (NYSE:CANF), a biotechnology company, received a positive assessment from EF Hutton, as the firm initiated coverage on the company's stock. Can-Fite was given a Buy rating and a price target of $10.00, signaling confidence in the company's pipeline drugs, Namodenoson for HCC (Hepatocellular carcinoma) and Piclidenoson for psoriasis.
The coverage initiation was based on a detailed model that includes the probability of success for the company's key drug candidates. Namodenoson and Piclidenoson were both assigned a 70% chance of success, reflecting the latter's advancement into pivotal trials for the treatment of psoriasis.
EF Hutton applied a 30% discount rate to Can-Fite's valuation, justifying this figure with the company's current lack of profitability and the reliance on the successful outcome of ongoing clinical trials. This discount is in addition to the probability of success rates already factored into the model.
The price target of $10.00 was derived from an equally weighted average of free cash flow forecast (FCFF), earnings per share (EPS), and sum-of-the-parts analysis, adjusted to the nearest whole number. The valuation also accounts for a fully diluted end-year share count and the assumption of capital raises, which are common for companies in the biotech sector that are not yet profitable and require funding for research and development activities.
The endorsement by EF Hutton marks an optimistic outlook for Can-Fite BioPharma as it continues to progress through the necessary clinical trials for its drug candidates. The Buy rating and notable price target reflect the potential that the firm sees in the company's therapeutic developments.
"In other recent news, Can-Fite BioPharma Ltd. reported promising results from a clinical study on dogs with osteoarthritis, showing significant improvement in clinical status and pain reduction using Piclidenoson.
In parallel, the company's drug candidate, Namodenoson, received Fast Track and Orphan Drug designations from the U.S. Food and Drug Administration (FDA) for the treatment of advanced liver cancer, currently undergoing a pivotal Phase III trial.
The FDA also granted Investigational New Drug clearance for Namodenoson, enabling the inclusion of U.S. patients in an ongoing Phase IIb trial for metabolic dysfunction-associated steatohepatitis.
In addition, Can-Fite has received a Notice of Allowance from the European Patent Office for its erectile dysfunction (ED) treatment patent, related to the CF602 drug candidate. The company also expanded its agreement with Ewopharma to include marketing rights for Namodenoson in treating pancreatic carcinoma.
These recent developments highlight Can-Fite's continued commitment to drug development and clinical trials, with a focus on addressing various health concerns such as osteoarthritis in dogs, advanced liver cancer, metabolic dysfunction-associated steatohepatitis, and erectile dysfunction."
InvestingPro Insights
Alongside the positive outlook from EF Hutton, real-time data from InvestingPro offers a nuanced view of Can-Fite BioPharma's (NYSE:CANF) financial health and market performance. Notably, the company's latest metrics indicate a Price/Book ratio of 3.15, reflecting a market valuation that may be influenced by investor expectations of future growth. With a modest revenue of $0.74M in the last twelve months as of Q1 2023, Can-Fite's financials suggest a company in the early stages of commercializing its research.
InvestingPro Tips highlight both the opportunities and risks associated with Can-Fite. The company's liquid assets exceed its short-term obligations, which is a positive sign for its financial stability. Moreover, the stock has seen a significant return over the last three months, with an impressive 86.73% price total return, signaling strong market confidence. On the cautionary side, analysts note that Can-Fite is not expected to be profitable this year, and it is quickly burning through cash, which is a critical consideration for potential investors.
For those interested in a deeper analysis, there are additional InvestingPro Tips available that could further inform investment decisions. By using the coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking the full suite of insights. With the next earnings date set for August 26, 2024, investors will be watching closely to see if the company's clinical advancements translate into financial success.
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