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Struggling biomed startup Can-Fite Biopharma raised NIS 5.8 million in a share offering Tuesday. The company, which develops drugs to treat for autoimmune-inflammatory diseases and cancer, issued a shelf proposal to the public aiming for NIS 5.2 million after covering 9% in associated fees. The offered price reflected a 30% discount on the share's trading value, driving the stock down almost 14% for the day.

Like all research-based firms biomed companies need constant infusions of cash, especially to fund the long development pipelines that are typical for new drugs or medical devices. Can-Fite is no exception.

The company offered the public bundles of 3,000 shares for NIS 1,431. It threw in, at no extra cost, 2,000 series 8 options valued at 7.7 agorot each and 3,000 series 9 options valued at 9.6 agorot each. This reflected a price of 33 agorot per share. The share closed on Monday at 47.6 agorot. The final price of the bundles was NIS 1,440, or 0.6% above the asking price.

Poalim IBI Underwriting & Issuing led the offering. It is expected to share a minimum of NIS 500,000 in fees and commissions - 9% of the anticipated gross take - with Clal Finance Underwriting, Barak Capital Underwriting and DIM Risk Management. Can-Fite also undertook to pay 7.9% of the actual funds raised.

It was the company's high burn rate that forced it to accept the tight terms. Can-Fite lost NIS 21 million in 2011, compared to losses of NIS 13 million in 2010. The company pointed out that the growth in expenses was mainly due to stock issuing costs. But the inflow from investors hasn't kept pace with expenses: The company's cash balance - NIS 1.5 million at year - declined NIS 16 million in 2011.