Seikagaku Corporation (SKK), the exclusive licensee of Can-Fite's CF101 in the Japanese market, is about to commence phase-I clinical trial in Japan with CF101 for the treatment of rheumatoid arthritis. Under the terms of the 2006 agreement between SKK and Can-Fite, Can-Fite will receive a consideration of USD 1mn upon clinical trial initiation.

Under the agreement, Can-Fite will receive an aggregate consideration of up to USD 19.5 million based on predetermined milestones, until the drug is marketed in Japan; Can-Fite will also receive royalties from the sales of CF101 in the Japanese market. To date, Can-Fite has received USD 6 million from this licensing agreement. Since the agreement was signed, SKK has been conducting preclinical trials, in keeping with the strict regulatory requirements in Japan to commence phase-I clinical trial.

It is of note that under this agreement, SKK is allowed to develop, manufacture and market CF101 in Japan for the treatment of inflammatory diseases (excluding ophthalmology indications).

CF101 as treatment for rheumatoid arthritis is currently in advanced phases of clinical trials in the US and Europe. Can-Fite currently conducts an ongoing multinational phase-IIb trial with CF101. According to the information available to Can-Fite, the market for rheumatoid arthritis medications is estimated at about $11 billion and consists predominantly of costly biological agents that have the disadvantage of an intravenous route of administration and adverse events. CF101 is also clinically tested in two additional phase-II studies, one for the treatment of psoriasis and the other for the treatment of dry eyes.

Prof Pnina Fishman, CEO of Can-Fite, congratulated SKK on entering phase-I clinical trial and said, "The close cooperation between the two companies for more than two years has promoted effective and targeted drug development and enabled the expansion of our database in support of drug safety and efficacy. We are very pleased with the collaboration that advances the commercial opportunity of CF101 in the highly important Japanese therapeutic market."

Seikagaku Corporation is a significant, research based and innovative Japanese pharmaceutical company traded on the Tokyo Stock Exchange. The company is a pioneer and leader in the field of glycoscience and therapeutics for joint diseases such as arthritis.

Can-Fite Biopharma Ltd is a public company traded on the Tel Aviv Stock Exchange. The Company, which commenced business activity in 2000, was founded by Prof. Pnina Fishman, an investigator from Rabin Medical Center, and patent attorney Dr Ilan Cohn, a senior associate at Reinhold Cohn Patent Attorneys.