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Can-Fite Reports Second Quarter 2018 Financial Results and Provides Clinical Update

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- Company signed a multi-million dollar development and
distribution agreement for Piclidenoson and Namodenoson in China with
CMS Medical and received an upfront payment of $2M

- Piclidenoson Phase III study in psoriasis has been initiated and
prompts a regulatory milestone payment

Can-Fite
BioPharma Ltd
. (NYSE:CANF) (TASE:CFBI), a biotechnology
company advancing a pipeline of proprietary small-molecule drugs that
address cancer, liver disease and inflammatory diseases, today reported
financial results for the three months ended June 30, 2018 and provided
clinical and corporate updates.

Clinical Development Program and Corporate Highlights of the Second
Quarter 2018 and Recent Weeks Include:

Business Development Activities Q

In August 2018, Can-Fite signed a License, Collaboration and
Distribution agreement with CMS Medical Venture Investment Limited ("CMS
Medical") for the development and commercialization of Can-Fite's
Piclidenoson for the treatment of rheumatoid arthritis and psoriasis and
Namodenoson for the treatment of advanced liver cancer and NAFLD/NASH in
China (including Hong Kong, Macao and Taiwan). Under the terms of the
agreement, CMS Medical made an upfront payment of $2,000,000 to Can-Fite
and is required to pay to Can-Fite milestone payments of up to
$14,000,000 upon the achievement of certain regulatory milestones and
payments of up to $58,500,000 upon the achievement of certain sales
milestones. In addition, the agreement provides for double-digit royalty
payments on net sales.

This deal adds to the distribution agreements that the Company already
has in place with Cipher Pharmaceuticals (for the distribution of
Piclidenoson in Canada for rheumatoid arthritis and psoriasis), Kwang
Dong Pharmaceutical (for the distribution of Piclidenoson in South Korea
for rheumatoid arthritis), Chong Kun Dang (for distribution of
Namodenoson in South Korea for treatment of liver cancer) and Gebro
Pharma (for the distribution of Piclidenoson in Spain, Switzerland and
Austria).

Intellectual Property

Can-Fite has been granted by the Australian and Chinese patent offices a
patent for the utilization of A3 adenosine receptor ligands in the
treatment of sexual dysfunction, in a patent (Australian, No.
2013301125ZL; Chinese No. 2013800472970) titled, "A3adenosine receptor
ligands for use in treatment of a sexual dysfunction." The Company has
been investigating compounds that target the A3 adenosine receptor
(A3AR) and the Company's CF602 drug candidate previously demonstrated a
robust positive effect in the treatment of erectile dysfunction in
preclinical studies.

Clinical Development Activities

Piclidenoson (CF101)

Psoriasis – In August 2018, Can-Fite
enrolled and dosed the first patient in its Phase III Comfort™ trial for
the treatment of moderate-to-severe plaque psoriasis, which makes up
about 90 percent of cases. The study, is designed to evaluate the
efficacy and safety of daily Piclidenoson, administered orally compared
to Apremilast (Otezla®) and placebo, in 407 patients. The study will be
conducted in 5 countries in Europe, Israel and Canada. The first patient
has been dosed in Israel.

Study initiation prompts a milestone payment of 300,000 Euro that is due
under the distribution agreement recently entered into with Gebro.

Rheumatoid Arthritis – The Company
continues to enroll patients in its Phase III Acrobat™ trial that is
evaluating Can-Fite's lead drug candidate Piclidenoson as a first line
treatment and replacement for the current standard of care, Methotrexate
(MTX). The trial will enroll approximately 500 patients in Europe,
Canada and Israel.

Namodenoson (CF102)

Advanced Liver Cancer

In August 2017, Can-Fite completed enrollment of its global Phase II
advanced liver cancer study of Namodenson. In June 2018, the Company
reported that the accumulated safety data continues to indicate a
favorable safety profile, with no clinically significant novel or
emerging events attributed to chronic treatment with Namodenoson. The
Company continues to follow up on patients' overall survival.

In July 2018, the Company announced that key opinion leaders from the
University of Texas MD Anderson Cancer Center, Houston, TX, USA,
published scientific findings recommending development of anti-liver
cancer drugs based on a mechanism of action utilized by Namodenoson. The
latter inhibits a specific molecular signaling pathway in the liver
cancer cells, designated as the Wnt/β-catenin, and is responsible for
the development and progression of hepato-cellular carcinoma (HCC).

NAFLD/NASH

The Company is continuing to enroll patients for its Phase II trial of
Namodenoson for the treatment of 60 patients with nonalcoholic fatty
liver disease (NAFLD) and nonalcoholic steatohepatitis (NASH).

"We continue to make progress with our drug candidates. We also signed a
significant development and commercialization agreement with CMS Medical
for both Piclidenoson and Namodenoson for the Chinese market with
significant regulatory and sales' milestone payments. We look forward to
providing updates on our Phase II study of Namodenoson towards the end
of year," stated Can-Fite CEO Dr. Pnina Fishman.

Financial Results

Revenues for the six months ended June 30, 2018 were $0.9 million
compared to $0.1 million in the first six months of 2017. The increase
in revenue was mainly due to the recognition of a portion of the U.S.
$2.2 million advance payment received in January 2018 under the
distribution agreement with Gebro.

Research and development expenses for the six months ended June 30, 2018
were $2.6 million compared with $2.4 million for the same period in
2017. Research and development expenses for the first six months of 2018
comprised primarily of expenses associated with the Phase II studies for
Namodenoson as well as expenses for ongoing studies of Piclidenoson. The
increase is primarily due to increased costs associated with the
initiation of the Phase III clinical trial of Piclidenoson for the
treatment of rheumatoid arthritis. We expect that the research and
development expenses will increase through 2018 and beyond.

General and administrative expenses were $1.8 million for the six months
ended June 30, 2018, compared to $1.3 million for the same period in
2017. The increase is primarily due to an increase in professional
services and investor relations expenses. We expect that the annual
general and administrative expenses for 2018 will be higher compared to
2017.

Financial income, net for the six months ended June 30, 2018 aggregated
$0.6 million compared to financial income, net of $0.2 million for the
same period in 2017. The increase in financial income, net was mainly
due to fair value revaluation of our long-term investment.

Can-Fite's loss for the six months ended June 30, 2018 was U.S. $3.0
million compared with a loss of U.S. $3.5 million for the same period in
2017. The difference in loss for the first half of 2018 was primarily
attributable to an increase in revenues and an increase in financial
income, net.

As of June 30, 2018, Can-Fite had cash and cash equivalents of U.S. $5.8
million as compared to U.S. $3.5 million at December 31, 2017. The
increase in cash during the six months ended June 30, 2018 is due to
U.S. $4.4 million received from a registered direct offering in March
2018, net of issuance expenses, and the $2.2 million upfront payment
received from Gebro.

The Company's consolidated financial results for the six months ended
June 30, 2018 are presented in accordance with International Financial
Reporting Standards.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

In thousands (except for share and per share data)

  June 30,   December 31,
2018 2017
Unaudited
USD
 
ASSETS
 
CURRENT ASSETS:
 
Cash and cash equivalents $ 5,840 $ 3,505
Other receivable and prepaid expenses 3,286 3,159
 
Total current assets 9,126 6,664
 
NON-CURRENT ASSETS:
 
Lease deposits 5 5
long-term investment 1,829 917
Property, plant and equipment, net 24 28
 
Total long-term assets 1,858 950
 
Total assets $ 10,984 $ 7,614

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

In thousands (except for share and per share data)

  June 30,   December 31,
2018 2017
Unaudited
USD
 
LIABILITIES AND SHAREHOLDERS' EQUITY  
 
CURRENT LIABILITIES:
 
Trade payables $ 668 $ 427
Deferred revenues 792 330
Other accounts payable 697 997
 
Total current liabilities 2,157 1,754
 
 
NON-CURRENT LIABILITIES:
 
Deferred revenues 2,317 846
 
Total long-term liabilities 2,317 846
 
CONTINGENT LIABILITIES AND COMMITMENTS
 
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY:
 
Share capital 2,633 2,123
Share premium 81,646 81,104
Capital reserve from share-based payment transactions 5,713 5,547
Warrants exercisable into shares 12,408 8,815
Accumulated other comprehensive income 1,127 1,127
Accumulated deficit (97,017) (93,702)
 
Total equity 6,510 5,014
 
Total liabilities and equity $ 10,984 $ 7,614

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

In thousands (except for share and per share data)

  Six months ended

June 30,

2018   2017
Unaudited
USD
 
Revenues $ 902 $ 136
 
Research and development expenses 2,638 2,436
General and administrative expenses 1,819 1,373
 
Operating loss 3,555 3,673
 
Finance expenses 346 305
Finance income (936) (463)
 
Total Financial income, net (590) (158)
 
 
Loss 2,965 3,515
 
Other comprehensive loss:

 

Amounts that will not be reclassified subsequently to profit or
loss:

 
Adjustment arising from translating financial statements from
functional currency to presentation currency
- (420)
 
Total other comprehensive loss $ 2,965 $ 3,095
 
 
Loss attributable to:
Equity holders of the Company 2,965 3,462
Non-controlling interests - 53
 
$ 2,965 $ 3,515
 
 
Total comprehensive loss attributable to:
Equity holders of the Company 2,965 3,042
Non-controlling interests - 53
 
$ 2,965 $ 3,095
 
Loss per share attributable to equity holders of the Company :
Basic and diluted loss per share (0.08) (0.1)

About Can-Fite BioPharma Ltd.

Can-Fite BioPharma Ltd. (NYSE:CANF) (TASE: CFBI) is an
advanced clinical stage drug development Company with a platform
technology that is designed to address multibillion-dollar markets in
the treatment of cancer, inflammatory disease and sexual dysfunction.
The Company's lead drug candidate, Piclidenoson, is currently in Phase
III trials for rheumatoid arthritis and psoriasis. Can-Fite's liver
cancer drug, Namodenoson, is in Phase II trials for hepatocellular
carcinoma (HCC), the most common form of liver cancer, and for the
treatment of non-alcoholic steatohepatitis (NASH). Namodenoson has been
granted Orphan Drug Designation in the U.S. and Europe and Fast Track
Designation as a second line treatment for HCC by the U.S. Food and Drug
Administration. Namodenoson has also shown proof of concept to
potentially treat other cancers including colon, prostate, and melanoma.
CF602, the Company's third drug candidate, has shown efficacy in the
treatment of erectile dysfunction in preclinical studies and the Company
is investigating additional compounds, targeting A3AR, for the treatment
of sexual dysfunction. These drugs have an excellent safety profile with
experience in over 1,000 patients in clinical studies to date. For more
information please visit: www.can-fite.com.

Forward-Looking Statements

This press release may contain forward-looking statements, about
Can-Fite's expectations, beliefs or intentions regarding, among other
things, market risks and uncertainties, its product development efforts,
business, financial condition, results of operations, strategies or
prospects. In addition, from time to time, Can-Fite or its
representatives have made or may make forward-looking statements, orally
or in writing. Forward-looking statements can be identified by the use
of forward-looking words such as "believe," "expect," "intend," "plan,"
"may," "should" or "anticipate" or their negatives or other variations
of these words or other comparable words or by the fact that these
statements do not relate strictly to historical or current matters.
These forward-looking statements may be included in, but are not limited
to, various filings made by Can-Fite with the U.S. Securities and
Exchange Commission, press releases or oral statements made by or with
the approval of one of Can-Fite's authorized executive officers.
Forward-looking statements relate to anticipated or expected events,
activities, trends or results as of the date they are made. Because
forward-looking statements relate to matters that have not yet occurred,
these statements are inherently subject to risks and uncertainties that
could cause Can-Fite's actual results to differ materially from any
future results expressed or implied by the forward-looking statements.
Many factors could cause Can-Fite's actual activities or results to
differ materially from the activities and results anticipated in such
forward-looking statements. Factors that could cause our actual results
to differ materially from those expressed or implied in such
forward-looking statements include, but are not limited to: our history
of losses and needs for additional capital to fund our operations and
our inability to obtain additional capital on acceptable terms, or at
all; uncertainties of cash flows and inability to meet working capital
needs; the initiation, timing, progress and results of our preclinical
studies, clinical trials and other product candidate development
efforts; our ability to advance our product candidates into clinical
trials or to successfully complete our preclinical studies or clinical
trials; our receipt of regulatory approvals for our product candidates,
and the timing of other regulatory filings and approvals; the clinical
development, commercialization and market acceptance of our product
candidates; our ability to establish and maintain strategic partnerships
and other corporate collaborations; the implementation of our business
model and strategic plans for our business and product candidates; the
scope of protection we are able to establish and maintain for
intellectual property rights covering our product candidates and our
ability to operate our business without infringing the intellectual
property rights of others; competitive companies, technologies and our
industry; statements as to the impact of the political and security
situation in Israel on our business; and risks and other risk factors
detailed in Can-Fite's filings with the SEC and in its periodic filings
with the TASE. In addition, Can-Fite operates in an industry sector
where securities values are highly volatile and may be influenced by
economic and other factors beyond its control. Can-Fite does not
undertake any obligation to publicly update these forward-looking
statements, whether as a result of new information, future events or
otherwise.

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