Can-Fite BioPharma Ltd. (TASE:CFBI) has obtained approval from Israeli authorities to spin off its ophthalmologic business and merge it with US stock market shell Denali Concrete Management Inc. (Bulletin Board: DCMG). Can-Fite raised $3.3 million in a private placement to finance the purchase of Denali at $1.144 per share, giving a value of $50 million for Denali.
Denali's share price closed at $0.26 yesterday, giving a market cap of $3 million.
Can-Fite also announced an offering to raise NIS 4.9 million to close the deal. $500,000 (NIS 1.86 million) of the proceeds will be used to buy 437,000 Denali shares, and will allot to the US company shares worth $2.4 million. When the deal is closed, Can-Fite will own 82% of Denali, which will have $5 million in cash.
Can-fite will license its CF101 drug for the treatment of dry-eye syndrome, glaucoma, and uveitis to Denali, which will pursue its development. Can-Fite is readying a Phase III clinical trial CF101 for dry-eye syndrome. Can-Fite added that it hopes that Denali's market cap will rise sufficiently to list the company on the American Stock Exchange (AMEX).
Can-Fite will continue developing other drugs for the treatment of liver and autoimmune inflammatory diseases.
Can-Fite's share price fell 5.2% by mid-afternoon to NIS 0.47, giving a market cap of NIS 110 million.
Published by Globes [online], Israel business news - www.globes-online.com - on November 16, 2011
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