THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND, NEW ZEALAND OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN FARON PHARMACEUTICALS OY OR ANY OTHER ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION, SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH ANY INVESTMENT DECISION IN RESPECT OF FARON PHARMACEUTICALS.

THE PROPOSED TRANSACTION REFERRED TO IN THIS ANNOUNCEMENT WOULD BE MADE PURSUANT TO A PRIVATE PLACEMENT EXEMPTION UNDER THE EUROPEAN DIRECTIVE 2003/71/EC (AND AMENDMENTS THERETO (THE “PROSPECTUS DIRECTIVE”), AS IMPLEMENTED IN THE MEMBER STATES OF THE EUROPEAN ECONOMIC AREA, FROM THE REQUIREMENTS TO PRODUCE A PROSPECTUS UNDER THE PROSPECTUS DIRECTIVE (AND AMENDMENTS THERETO) FOR OFFERS OF SECURITIES. FARON PHARMACEUTICALS HAS NOT TAKEN ANY ACTION, NOR WILL IT TAKE ANY ACTION, TO OFFER ANY SECURITIES OR ANY OTHER DOCUMENTS RELATING TO THE PROPOSED TRANSACTION TO THE PUBLIC IN FINLAND, SWEDEN, NORWAY OR DENMARK, OR IN ANY OTHER JURISDICTION IN ANY FORM WHICH WOULD CONSTITUTE AN OFFER TO THE PUBLIC.

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Proposed Placing and Subscription to raise up to £5.0 million

TURKU – FINLAND, 7.00 A.M. GMT, 28 February 2017 – Faron Pharmaceuticals Oy (“Faron” or “Company”) (LON: FARN), the clinical stage biopharmaceutical company, is pleased to announce a proposed placing of up to 1,362,340 new ordinary shares in the capital of the Company (the “Placing Shares”) and a proposed subscription of up to 60,000 new ordinary shares in the capital of the Company (the “Subscription Shares”) at a price of 350 pence per share (the “Issue Price”) to raise, in aggregate, up to approximately £5.0 million before expenses.

KEY HIGHLIGHTS

·    Proposed conditional placing of up to 1,362,340 Placing Shares at the Issue Price (“Placing”) and conditional subscription of up to 60,000 Subscription Shares at the Issue Price (“Subscription”) to raise, in aggregate, up to approximately £5.0 million before expenses

·      The Placing Shares and Subscription Shares if subscribed for in full will represent, in aggregate, approximately 5.4% of the Company’s total number of existing issued shares

·      The Issue Price of 350 pence per share represents a premium of 0.7% to the closing mid-market price of 347.5 pence on 27 February 2017, being the last practicable date prior to this announcement

·      The net proceeds of the proposed Placing and Subscription (of approximately £4.7 million if fully subscribed) would be used to fund:

o  The expansion of the pre-clinical and planned early-stage clinical development of Clevegen, the Company’s novel cancer immune switch antibody, to other Clever-1 positive solid tumours (ovarian, pancreas, melanoma)

o  Further strengthen the Company’s balance sheet as it explores strategic partnering negotiations

·     The proposed Placing and Subscription is to be implemented through a private placement with a limited number of institutional and other investors. It is expected that finalisation of the proposed Placing and Subscription will commence immediately following this announcement. Further terms of the proposed Placing and Subscription are set out below

·    Panmure Gordon (UK) Limited (“Panmure Gordon”) is acting as Lead Bookrunner and Corporate Broker to the Company and Cairn Financial Advisers LLP (“Cairn”) as Nominated Adviser to the Company

Commenting on the proposed Placing and Subscription, Dr Markku Jalkanen, CEO of Faron, said:

“2017 is set to be a pivotal year for Faron as we prepare to get data from our Phase III INTEREST trial in the second half of the year.  We are also continuing our development program for Clevegen and this proposed placing should assist us in expanding its pre-clinical and planned early-stage clinical development to Phase I/II trials in other Clever-1 positive solid tumours (ovarian, pancreas, melanoma). We believe that Clevegen’s ability to remove immune suppressision around tumours will be the next important step in the fight against tumour growth and spread, and could lead to complete cancer remission as well as providing long term vaccination against future tumours from the patient’s own immune system. We would like to thank our existing and new institutional investors for their support and for their continued committment to our programmes.”

REASONS FOR THE PROPOSED PLACING AND SUBSCRIPTION

Expansion of the pre-clinical and clinical development of Clevegen®

·      Faron intends to expand the pre-clinical and planned early-stage clinical development of Clevegen, its novel cancer immune switch antibody, to Phase I/II trials in other solid tumours (ovarian, pancreas, melanoma) known to reside high numbers of Clever-1 positive immune suppressive macrophages

·      The Directors believe that Clevegen’s ability to remove local immune suppression by targeting pro-tumoural type-2 macrophages could help the human body’s own immune system to combat cancer

Further strengthen Faron’s balance sheet as it explores commercialisation opportunities

·     In addition to its in-house development of its own programmes, Faron continues to explore out-licensing and partnering opportunities of its technologies and/or products with a number of companies, including those in the immuno-oncology field

·     The Company continually assesses business opportunities to produce maximum value for shareholders, and a strong balance sheet should be beneficial to securing favourable terms from these opportunities

DETAILS OF THE PROPOSED PLACING AND SUBSCRIPTION AND ISSUE OF EQUITY

Subject to the Placing Shares and Subscription Shares being subscribed in full, they are to be issued by the Company pursuant to the Directors’ existing authority to allot ordinary shares in the capital of the Company (“Ordinary Shares”) for cash on a non-pre-emptive basis approved by shareholders at the Company’s annual general meeting held on 26 May 2016. The Company has received non-binding indications of interest from potential institutional investors for the Placing and Subscription during a pre-marketing process.

In connection with the proposed Placing, the Company has entered into a placing agreement with Panmure Gordon and Cairn (together the “Placing Advisers”) (the “Placing Agreement”). The Placing is conditional upon, inter alia:

·      the Placing Agreement having become unconditional in all respects;

·      the Company having performed, in all material respects, its obligations under the Placing Agreement and not being in material breach of the Placing Agreement;

·      legally binding commitments being received in respect of all of the Placing Shares and the Subscription Shares (the “Placee Condition“); and

·      the Placing Shares and the Subscription Shares being issued and being registered at the Finnish Trade Registry (the “Issue Condition“).

Pursuant to the terms of the Placing Agreement, Panmure Gordon has agreed to use reasonable endeavours to procure placees for the Placing Shares at the Issue Price. The Placing is being implemented through a private placement with a limited number of institutional and other investors. A further announcement will be made to confirm its completion in due course, but by no later than 4.30 p.m. on 1 March 2017. The Placing Agreement contains customary warranties and an indemnity from the Company in favour of the Placing Advisers together with provisions which enable the Placing Advisers to terminate the Placing Agreement in certain circumstances before satisfaction of the Issue Condition, including where there has been a material breach of any of the warranties in the reasonable opinion of any Placing Adviser or where there is a material adverse change in the business or financial affairs of the Company. In order to satisfy the Issue Condition prior to Admission, pursuant to the terms of the Placing Agreement, Panmure Gordon has agreed to underwrite the subscription for and payment to the Company of the gross total of the Issue Price for the Placing Shares upon satisfaction of the Placee Condition.

Assuming that the Placing Shares and Subscription Shares are fully subscribed for, an application has been made for admission of the Placing Shares and Subscription Shares to trading on AIM (“Admission”) and it is expected that Admission will become effective and that dealings in the Placing Shares and Subscription Shares will commence on or around 8.00 a.m. on 3 March 2017. As noted above, a further update announcement will be made in due course. 

MARKET ABUSE REGULATION

The Market Abuse Regulation (“MAR”) became effective from 3 July 2016. Market Soundings, as defined in MAR, were taken in respect of the proposed Placing and Subscription with the result that certain persons became aware of inside information, as permitted by MAR. That inside information in relation to the Placing and Subscription is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a Market Sounding are no longer in possession of inside information relating to the Company and its securities.

ENDS

For more information please contact:

Faron Pharmaceuticals Oy

Dr Markku Jalkanen, Chief Executive Officer

E-mail: investor.relations@faronpharmaceuticals.com

Consilium Strategic Communications

Mary-Jane Elliott, Chris Welsh, Lindsey Neville, Rosie Phillips

Phone: +44 203 709 5700

E-Mail: Faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: +1 339 970 2843

E-Mail: chris.brinzey@westwicke.com

Cairn Financial Advisers LLP, Nominated Adviser

Emma Earl, Tony Rawlinson, Rebecca Anderson

Phone: +44 207 213 0880

Panmure Gordon (UK) Limited, Lead Bookrunner and Corporate Broker

Freddy Crossley, Duncan Monteith (Corporate Finance)

Tom Salvesen (Corporate Broking)

Phone: +44 207 886 2500

Whitman Howard Limited, Joint Corporate Broker

Ranald McGregor-Smith, Francis North

Phone: +44 207 659 1234

About Faron Pharmaceuticals Oy

Faron is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs. The Company currently has a pipeline focusing on acute organ traumas, cancer immunotherapy and vascular damage. The pipeline is built on Faron’s scientific knowledge and control of the endothelial barrier, the membrane of cells lining blood and lymphatic vessels to separate blood content from tissues. The Company’s lead candidate Traumakine is in development for the treatment of Acute Respiratory Distress Syndrome (“ARDS”), a rare, severe, life-threatening medical condition characterised by widespread inflammation in the lungs. Traumakine is currently in pan-European (INTEREST) and Japanese pivotal Phase III studies, and is commencing a European Phase II trial for the Rupture of Abdominal Aorta Aneurysm (“RAAA”). Additionally, Faron is developing Clevegen® a ground breaking pre-clinical anti-Clever-1 antibody. Clevegen has the ability to convert the immune environment around a tumour from being immune suppressive to immune stimulating. This novel macrophage-directed immuno-oncology approach is called Tumour Immunity Enabling Technology (“TIET”) and can be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. New application opportunities related to TIET cover chronic infections and inefficient vaccination. Based in Turku, Finland, Faron Pharmaceuticals is listed on AIM under the ticker ‘FARN’. Further information is available at www.faronpharmaceuticals.com

Forward Looking Statements

Certain statements included herein express Faron Pharmaceutical’s expectations or estimates of future performance and constitute “Forward-looking Statements”.  Forward-looking Statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Faron Pharmaceuticals are inherently subject to significant business, economic and competitive uncertainties and contingencies.  Such Forward-looking Statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements to be materially different from estimated future results, performance or achievements expressed or implied by those Forward-looking Statements and, as such, the Forward-looking Statements are not guarantees of future performance. 

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

New Patent Application Accepted by Finnish Patent Office

Protect the intravenous use of interferon-beta in a novel formulation

TURKU – FINLAND, 31 October 2016 – Faron Pharmaceuticals Ltd (“Faron”) (LON: FARN), the clinical stage biopharmaceutical company, is pleased to announce that its patent application to protect the intravenous use of interferon-beta (IFN-beta) in a novel formulation has been accepted by the Finnish patent office. The allowed claims cover single intravenous dose of IFN-beta at the range of 2-15 micrograms in a formulation that allows a precise dosing of IFN-beta. This formulation is being used in both on-going pivotal Traumakine® trials in Europe and Japan for acute respiratory distress syndrome (“ARDS”) and will be the drug for which Faron is targeting approval in various territories for the treatment of ARDS and other vascular dysfunctions.

ARDS is a severe orphan disease with a reported mortality rate of approximately 30-45%, for which there is currently no approved pharmacological treatment. It is characterised by widespread capillary leakage and inflammation in the lungs, most often as a result of pneumonia (e.g. following a pandemic influenza), sepsis, or significant trauma. An earlier Phase I/II trial conducted in the UK and published in The Lancet Respiratory Medicine, (Bellingan et al. 2014: 2: 98-107), showed a decline in the odds of all-cause mortality at day 28 of 81%. Faron has developed the first intravenous formulation of IFN-beta to enable treatment of vascular leakage in lungs and other central organs. The allowed claims cover this use but are not limited to ARDS.

Dr Markku Jalkanen, CEO of Faron said: “We are delighted that the patent claims for the intravenous use of IFN-beta in vascular dysfunctions have been accepted as they enable us to build a strong global proprietary position for Traumakine®. We have already granted patents for INF-beta in ischemic conditions in many countries, and these additional claims significantly extend protection for Traumakine® as a drug to treat life threatening conditions like acute lung injuries up to 2036-37. Faron plans to file application to the US patent office with same scope of protection. Furthermore, in spring 2017 we will file the international PCT to initiate the patenting process in other countries too.”

The information contained within this announcement constitutes inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014.

For more information please contact:

Faron Pharmaceuticals Ltd

Katja Wallenlind

Phone +358 (50) 577 4807
E-mail: katja.wallenlind@faronpharmaceuticals.com

Hume Brophy, PR

Mary Clark, Eva Haas, Hollie Vile

Phone: +44 207 862 6390

E-mail: faron@humebrophy.com

Cairn Financial Advisers LLP, Nominated Adviser

Emma Earl, Tony Rawlinson, Rebecca Anderson

Phone: +44 207 213 0880

Panmure Gordon (UK) Limited, Joint Broker

Freddy Crossley, Duncan Monteith (Corporate Finance)

Tom Salvesen (Corporate Broking)

Phone: +44 207 886 2500

Whitman Howard Limited, Nominated Broker

Ranald McGregor-Smith, Francis North

Phone: +44 207 659 1234

About Faron Pharmaceuticals Ltd

Faron is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs. The Company currently has a pipeline focusing on acute organ traumas, cancer immunotherapy and vascular damage. The pipeline is built on Faron’s scientific knowledge and control of the endothelial barrier, the membrane of cells lining blood and lymphatic vessels to separate blood content from tissues. The Company’s lead candidate Traumakine® is in development for the treatment of Acute Respiratory Distress Syndrome (“ARDS”), a rare, severe, life-threatening medical condition characterised by widespread inflammation in the lungs. Traumakine is currently in pan-European (INTEREST) and Japanese pivotal Phase III studies. Additionally, Faron is developing Clevegen® a ground breaking pre-clinical anti-Clever-1 antibody. Clevegen has the ability to convert the immune environment around a tumour from being immune suppressive to immune stimulating. This novel macrophage-directed immuno-oncology approach is called Tumour Immunity Enabling Technology (“TIET”) and can be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. New application opportunities related to TIET cover chronic infections and inefficient vaccination. Based in Turku, Finland, Faron Pharmaceuticals is listed on AIM under the ticker ‘FARN’. Further information is available at www.faronpharmaceuticals.com

Faron Pharmaceuticals Ltd

(“Faron” or the “Company”)

Faron Provides Update at R&D Day

TURKU – FINLAND 14 June 2016 – Faron Pharmaceuticals Ltd (LON: FARN), the clinical stage biopharmaceutical company, today presents an update on the Company’s pipeline activities around Traumakine® and its novel cancer immunotherapy drug candidate Clevegen® at its R&D Day in London. On 26 May 2016 the Board of Directors announced that the development strategy for Clevegen has been expanded to open up new application opportunities in conditions where removal of suppression of local or systemic immunity is desirable. The Company has introduced two additional technology platforms related to Tumour Immunity Enabling Technology, or TIET to cover new development areas, chronic infections and inefficient vaccination.

The following updates are being presented at the R&D Day:

Clevegen:

• An introduction of Chronic Infection Removal Therapy, CIRT, which would allow combat against bacteria, when they use M2 macrophages to hide host immune system
• An introduction of Vaccination Response Enhancement Technology, VRET to use Clevegen as an adjuvant in vaccination protocols
• A potential key target group for TIET program, hepatocellular carcinoma (HCC) patients

Traumakine:

• Faron is currently preparing plans for US safety trial as requested by FDA
• Confirmation that Faron plans to file Traumakine CTA in H2 2016 to the Finnish Medicines Agency (FIMEA) for clinical trial INFORAA on patients suffering from Rupture of Abdominal Aorta Aneurysm and operated surgically.

The updated Faron pipeline as of 14 June, 2016 can be found on the Company website: http://www.faronpharmaceuticals.com/pipeline

Dr. Markku Jalkanen, CEO of Faron, said: “We have clear plans to advance our exciting pipeline over the next two to three years and maintain focus on our most advanced projects Traumakine and Clevegen, which represent tremendous expansion potential into new indications and territories. Our Board fully recognise the potential of Clevegen towards several non-tumoural indications. Our scientific collaborators are already exploring these new CIRT and VRET technologies in order to provide pre-clinical data for our clinical plans. As stated on our TIET RNS on 26 May 2016, Faron plan to intensify commercial efforts around these three exciting technologies and make them available for interested licensing partners while at the same time focusing on our own development as well.”

“Tumour Immunity Enabling Technology”, or TIET, can be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. The Directors also believe that Clevegen’s ability to convert M2 macrophages to M1 macrophages could provide additional applications to control immune suppression causing inadequate immune response. These are related to many chronic infections and inefficient vaccination due to low adjuvant effect. Faron will now introduce two additional technology platforms to cover these exciting development areas and starts to promote their development and use worldwide.

Presentations are available for viewing on Faron’s Company website: http://www.faronpharmaceuticals.com/investor-relations/events

For more information, please contact:

Faron Pharmaceuticals Oy

Katja Wallenlind

Phone +358 (50) 577 4807
E-mail: katja.wallenlind@faronpharmaceuticals.com

Hume Brophy, PR

Mary Clark, Eva Haas, Hollie Vile

Phone: +44 207 862 6390

E-mail: faron@humebrophy.com

Cairn Financial Advisers LLP, Nominated Adviser

Emma Earl, Tony Rawlinson and Rebecca Anderson

Phone: +44 207 148 7900

Panmure Gordon (UK) Limited, Joint Broker

Freddy Crossley, Duncan Monteith (Corporate Finance)

Tom Salvesen (Corporate Broking)

Phone: +44 207 886 2500

Whitman Howard Limited, Nominated Broker

Ranald McGregor-Smith, Francis North

Phone: +44 207 659 1234

About Faron Pharmaceuticals Ltd.

Faron is a drug discovery and development company focused on creating novel treatments for medical conditions with significant unmet needs. The Company is based in Turku, Finland. The Company currently has a pipeline of clinical stage products focusing on acute organ traumas, cancer immunotherapy and vascular damage. The Company’s lead candidate Traumakine®, has been developed to treat acute respiratory distress syndrome (“ARDS”), a rare, severe, life threatening medical condition characterised by widespread inflammation in the lungs. Traumakine® is now in a pan-European pivotal Phase III study (INTEREST). Besides Traumakine®, Faron’s pipeline consists of early stage assets including a pre-clinical anti-Clever-1 antibody named Clevegen. Clevegen is focused on converting the immune environment around a tumour from being immune suppressive to immune stimulating and represents a novel immuno-oncology approach called TIET (Tumour Immunity Enabling Technology). Faron Pharmaceuticals Ltd. is listed on AIM under the ticker ‘FARN’. Further information is available at www.faronpharmaceuticals.com

About Tumor Immunity Enabling Technology (TIET) 

The TIET technology is built around the humanised anti-Clever-1 antibody FP-1305, which binds to a specific Clever-1 proprietary epitope. Clevegen® binding to this epitope activates conversion of type 2 tumour associated macrophages to type 1 macrophages, resulting in the transformation of the tumour environment from immune suppression to immune activation. As the TIET technology is based on a humanised antibody, the Faron Directors believe it can be combined with a number of other immune therapies without a significant risk of increased adverse events. The TIET technology could provide a significant boost for the efficacy of other immune checkpoint molecules, as its target is unique and represents a completely separate control of immunity.

Faron Pharmaceuticals Ltd

(“Faron” or the “Company”)

Faron Licenses Traumakine® Korean Rights to Pharmbio Korea Inc. (“Pharmbio”)

TURKU – FINLAND 13 June 2016 – Faron Pharmaceuticals Ltd (LON: FARN), the clinical stage biopharmaceutical company, announces today that it has entered into a licensing agreement with Pharmbio Korea Inc., for the development and commercialisation of Traumakine® in Korea. Pharmbio is based in Seoul and specialises in hospital sales of novel pharmaceutical products. Traumakine is in development for the treatment of Acute Respiratory Distress Syndrome (ARDS), a rare, severe, life threatening medical condition for which there is currently no approved pharmaceutical treatment. Traumakine is now in the pivotal pan-European Phase III INTEREST trial.

Under the terms of the agreement Pharmbio will obtain exclusive Korean rights to Traumakine. Faron will receive an initial signing fee of €750,000, which will be recorded as a revenue in H1-2016 financial results, and is entitled to receive additional, undisclosed development based milestones. In addition, Pharmbio will pay Faron one third of Traumakine profits, representing a double digit royalty on net sales, depending on end user pricing, and has agreed to cover development costs for Traumakine in Korea. Additionally, Faron will provide European approval material for Pharmbio to obtain market authorisation in Korea and will also supply Traumakine drug product to Pharmbio at an agreed transfer price.

Dr. Markku Jalkanen, CEO of Faron, said: “We are very pleased to have signed this agreement with Pharmbio which represents a great opportunity for Traumakine to enter the Korean market. Given the successful track record of Pharmbio sales team, achieving a steady 30% sales growth over the last five years, it is an excellent partner for Traumakine in the Korean market. This licensing deal follows our growth strategy to partner Traumakine in territories where Faron has limited presence, while maintaining rights in major territories including Europe and North America. We believe this agreement represents the best way to accelerate the development of Traumakine and create long term value for our shareholders.”

Dr. Junsang Nam, CEO of Pharmbio, said: “We are very excited to license Traumakine in Korea and for the opportunity to introduce this product targeting significant unmet medical need to Korean hospitals and ARDS patients. During the MERS virus outbreak in South Korea, a year ago many people suffered from serious lung infections and acute loss of respiration. We believe Traumakine, offers a new treatment option for these patients as well as ARDS patients with other underlying conditions.”

For more information, please contact:

Faron Pharmaceuticals Oy

Katja Wallenlind

Phone +358 (50) 577 4807
E-mail: katja.wallenlind@faronpharmaceuticals.com

Hume Brophy, PR

Mary Clark, Eva Haas, Hollie Vile

Phone: +44 207 862 6390

E-mail: faron@humebrophy.com

Cairn Financial Advisers LLP, Nominated Adviser

Emma Earl, Tony Rawlinson and Rebecca Anderson

Phone: +44 207 148 7900

Panmure Gordon (UK) Limited, Joint Broker

Freddy Crossley, Duncan Monteith (Corporate Finance)

Tom Salvesen (Corporate Broking)

Phone: +44 207 886 2500

Whitman Howard Limited, Nominated Broker

Ranald McGregor-Smith, Francis North

Phone: +44 207 659 1234

About Faron Pharmaceuticals Ltd

Faron is a drug discovery and development company focused on creating novel treatments for medical conditions with significant unmet needs. The Company is based in Turku, Finland. The Company currently has a pipeline of clinical stage products focusing on acute organ traumas, cancer immunotherapy and vascular damage. The Company’s lead candidate Traumakine®, has been developed to treat Acute Respiratory Distress Syndrome (“ARDS”), a rare, severe, life-threatening medical condition characterised by widespread inflammation in the lungs. Traumakine® is now in a pan-European pivotal Phase III study (INTEREST). Besides Traumakine®, Faron’s pipeline consists of early stage assets including a pre-clinical anti-Clever-1 antibody named Clevegen®. Clevegen is focused on converting the immune environment around a tumour from being immune suppressive to immune stimulating and represents a novel immuno-oncology approach called TIET (Tumour Immunity Enabling Technology). Faron Pharmaceuticals Ltd is listed on AIM under the ticker ‘FARN’. Further information is available at www.faronpharmaceuticals.com

About Pharmbio Korea Inc

Pharmbio started business in 1999 in South Korea and claims to have annual turnover of over USD 47 million. It has continued expanding its scope of services and growing its revenue by 24% (8-year CAGR). Pharmbio developed the first treatment of urinary stone in Korea, UROCITRA, and has provided a pipeline of innovative products in urology, gastroenterology, general surgery, ob-gyn among others. Pharmbio has licensed and marketed products in a close collaboration with pharmaceutical companies in the EU, Japan, and Canada and has exported its patent products to SE Asian countries including Myanmar, Philippines, Vietnam, and Pakistan to fulfill unmet worldwide medical needs. Further information is available at www.pharmbio.co.kr

About Traumakine®

Faron completed a Phase I/II trial in respect of Traumakine® in 2011 where treatment with Traumakine® was associated with an 81% reduction in the odds of 28 day mortality in patients with ARDS. These data were published in The Lancet Respiratory Medicine, a leading medical journal (Bellingan et al. 2014) ¹.  Comparable results were obtained from Traumakine Phase II Japanese study conducted by Faron´s Japanese licencing partner Maruishi Pharmaceutical Co. Ltd. in Japan, as announced in January 2016.

The presently ongoing pivotal Phase III trial called INTEREST is to be conducted in about 55 ICUs (Intensive Care Units) in seven European countries: Belgium, Finland, France, Germany, Italy, Spain and UK. A total of 300 adult patients with moderate or severe ARDS will be enrolled, and the first patient was enrolled in December 2015. INTEREST has received €6 million funding from the European Union Seventh Framework Programme (FP7).

The scientific rationale for Traumakine treatment is based on the proprietary use of room temperature stable formulation of interferon-beta-1a (FP-1201-lyo) for the restoration of the endothelial barrier function in ARDS patients. In Phase I/II trials interferon-beta was found to be safe and well tolerated in ARDS patients and the optimal tolerated dose was established. The selected pharmacodynamic marker for interferon-beta bioactivity showed clear dose response and the treatment target molecule CD73 levels were induced during the dosing period.

References:

1.   Bellingan, G., Maksimow, M., Howell D.C., Stoltz, M., Beale, R., Beatty, M., Walsh, T., Binning, A., Davidson, A., Kuper, M., Shah, S., Cooper, J., Waris, M., Yegutkin, G.G., Jalkanen, J., Salmi, M., Piippo, I., Jalkanen, M., Montgomery, H., Jalkanen, S.: “The effect of intravenous interferon-beta-1a (FP-1201) on lung CD73 expression and on acute respiratory distress syndrome mortality: an open-label study”. Lancet Respiratory Medicine 2014.

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

First Patient recruited in Pan-European Phase III INTEREST study for treatment of acute respiratory distress syndrome 

TURKU – FINLAND, 29 December 2015 – Faron Pharmaceuticals Ltd (“Faron”) (LON: FARN), the clinical stage biopharmaceutical company, is pleased to announce the enrolment of the first patient in the Phase III INTEREST clinical programme for Traumakine® for the treatment of acute respiratory distress syndrome (“ARDS”).

ARDS is a severe orphan disease with a reported mortality rate of approximately 30-45%, for which there is currently no approved pharmacological treatment. It is characterised by widespread capillary leakage and inflammation in the lungs, most often as a result of sepsis, pneumonia or significant trauma.  In the earlier completed Phase I/II trial in respect of Traumakine® the drug candidate was associated with an 81% reduction in the odds of 28-day mortality. Traumakine® has been granted Orphan Drug Designation in Europe which allows a period of 10 years of market exclusivity following marketing approval by the EMA.

The recruitment of the first patient, so soon after the Company’s recent IPO, is consistent with the anticipated timeline of 12 to 18 months required to complete recruitment for the pivotal Phase III trial for Traumakine®. The Phase III trial is being led by Professor Geoff Bellingan from University College London Hospital and Professor Marco Ranieri from the University of Rome.

Dr Markku Jalkanen, CEO of Faron said: “Following our successful IPO, we very much welcome the commencement of patient recruitment for the pivotal Phase III trial for this awful condition, ARDS which has significant unmet medical needs. Our previous exceptional results with an 81% reduction in odds of 28-day mortality of ARDS patients have excited our clinical network, which we expect will facilitate completion of patient recruitment within the anticipated time frame of 12-18 months. We believe that Traumakine® presents a significant opportunity for those suffering from ARDS, the hospitals which treat them and the societies covering the recovery of ARDS patients.”

The Phase III clinical trial INTEREST is a double-blinded, randomised, parallel-group comparison of efficacy and safety of FP-1201-lyo (the lyophilised form of Traumakine®) and placebo in the treatment of patients with moderate to severe ARDS. The INTEREST trial will be conducted through 55 hospitals in Belgium, Finland, France, Germany, Italy, Spain and UK with the target of recruiting 300 ARDS patients in total.

In addition to the orphan drug designation of Traumakine® in Europe, the Company has applied for the same orphan status in the U.S. and will update Shareholders in due course when the outcome of the Company’s application is known.

For more information contact:

Faron Pharmaceuticals Oy

Katja Wallenlind

Phone +358 (50) 577 4807
E-mail: katja.wallenlind@faronpharmaceuticals.com

Cairn Financial Advisers LLP, Nominated Adviser

Emma Earl, Tony Rawlinson and Rebecca Anderson

Phone: +44 207 148 7900

Whitman Howard Limited, Nominated Broker

Niall Devins, Francis North

Phone: +44 207 659 1234

Hume Brophy, PR

Mary Clark, Eva Haas, Hollie Vile

Phone: +44 203 440 5654

E-mail: faron@humebrophy.com

About Faron Pharmaceuticals Oy

Faron is a drug discovery and development company focused on creating novel treatments for medical conditions with significant unmet needs. The Company is based in Turku, Finland. The Company currently has a pipeline of products focusing on acute organ traumas, cancer immunotherapy and vascular damage. The Company’s lead candidate Traumakine®, has been developed to treat acute respiratory distress syndrome (“ARDS”), a rare, severe, life threatening medical condition for which there is currently no approved pharmaceutical treatment. Traumakine® is now in a pan-European pivotal Phase III study (INTEREST). Besides Traumakine®, Faron’s pipeline consists of early stage assets including a pre-clinical anti-Clever-1 antibody named Clevegen. Clevegen is focused on converting the immune environment around a tumour from being immune suppressive to immune stimulating. Further information is available at www.faronpharmaceuticals.com.

About ARDS

ARDS is a severe, life-threatening medical condition characterised by widespread inflammation in the lungs and sudden failure of the respiratory system. ARDS causes inflammation of the alveoli in the lungs, which are unable to perform the normal oxygenation of blood. It is characterised by rapid breathing, difficulty getting enough air into the lungs and low blood oxygen levels. Common causes of ARDS are sepsis, pneumonia, aspiration of fumes, food or stomach contents going into the lung or significant trauma. The condition was first described in 1967 and gained wide attention during the Vietnam War when it was nicknamed “white lung” as X-rays presented the lungs of the patients as white.

ARDS is the leading cause of respiratory failure in intensive care unit patients requiring mechanical ventilation and oxygen therapy. Despite progress in critical care medicine ARDS is currently associated with a mortality rate of 30% to 45% depending on the severity of the condition. Although ARDS mortality has decreased in the last decade due to improvements in supportive care and in the treatment of the underlying conditions, it still remains high.

Currently, patients suffering from ARDS are generally treated with lung-protective mechanical ventilation. This treatment is accompanied by ancillary support such as positioning, fluid management, and food restrictions. Extra corporeal support may also be provided depending on the severity of the condition. Complications, which can also arise whilst a patient is being treated for ARDS, include the development of infections, pneumothorax, lung scarring and blood clots, which can develop into a pulmonary embolism. Patients who recover from ARDS may suffer other consequences of ARDS after being discharged from the intensive care unit. A recovering patient’s quality of life may be adversely affected by permanent damage to the lungs, respiratory problems, scar tissue, muscle weakness and depression, all of which can have an adverse effect on the patient’s quality of life.

About Traumakine®

Faron completed a Phase I/II trial in respect of Traumakine® in 2011 where treatment with Traumakine® was associated with an 81 % reduction in the odds of 28 day mortality in patients with ARDS. These data were published in The Lancet Respiratory Medicine, a leading medical journal (Bellingan et al. 2014) ¹.

The scientific rationale for Traumakine treatment is based on the proprietary use of room temperature stable formulation of interferon-beta-1a (FP-1201-lyo) for the restoration of the endothelial barrier function in ARDS patients. In Phase I/II trials interferon-beta was found to be safe and well tolerated in ARDS patients and the optimal tolerated dose was established. The selected pharmacodynamic marker for interferon-beta bioactivity showed clear dose response and the treatment target molecule CD73 levels were induced during the dosing period.

The Traumakine® research consortium (www.traumakine.eu) led by Faron has received €6 million funding from the European Union Seventh Framework Programme (FP7) targeting European marketing application as a final milestone of the programme.

References:

1.   Bellingan, G., Maksimow, M., Howell D.C., Stoltz, M., Beale, R., Beatty, M., Walsh, T., Binning, A., Davidson, A., Kuper, M., Shah, S., Cooper, J., Waris, M., Yegutkin, G.G., Jalkanen, J., Salmi, M., Piippo, I., Jalkanen, M., Montgomery, H., Jalkanen, S.: “The effect of intravenous interferon-beta-1a (FP-1201) on lung CD73 expression and on acute respiratory distress syndrome mortality: an open-label study”. Lancet Respiratory Medicine 2014.