Faron Pharmaceuticals Ltd

(“Faron” or the “Company”)

Faron files patent application to further strengthen protection for its novel Traumakine®

(FP-1201-lyo) formulation

TURKU – FINLAND, 1 March 2016 – Faron Pharmaceuticals Ltd (“Faron”) (LON: FARN), the drug discovery and development company is pleased to announce that it has filed a national application for a new formulation patent in Finland with filings to be expanded over the next two years to almost all countries worldwide under the Patent Co-operation Treaty (PCT). The patent further protects Faron’s final FP-1201-lyo (lyophilised interferon-beta or Traumakine®) formulation for the intravenous treatment of acute respiratory distress syndrome (“ARDS”) and other vascular diseases.

Interferon-beta, especially if freeze-dried, is known to form aggregates or stick to container surfaces, requiring careful control of dosing and in-use stability during administration. Faron has developed a proprietary new product formulation for which tests have shown almost 100 per cent recovery of solubilised interferon-beta for intravenous use. With this patent formulation filing, Faron is seeking to protect this discovery for the next 20 years. Based on patent database searches, no similar formulation has been reported previously.

Dr Markku Jalkanen, CEO of Faron, said: “As of today, our Traumakine treatment is the only known intravenously administered human interferon-beta preparation and it is important that dosing is optimal for patients lacking peripheral circulation, as is the case with ARDS patients. We have carefully tested various ingredients to optimise interferon-beta use in these patients and have now completed all necessary tests for patent purposes. If our claims are approved, we could have a proprietary product for the next two decades, further increasing Traumakine’s significant, commercial potential. We already have new use patents for interferon-beta in ischaemic conditions and multi organ failure, and this new formulation patent will reinforce our global patent protection strategy”.

The new formulation, which has not previously been made public, is already in use in Faron’s pivotal, pan-European INTEREST trial, the recruitment of which the Company expects to be completed in 10-16 months from now. Besides several granted patents and pending filings, Faron has also sought exclusivity for Traumakine through orphan drug designations (ODD) and has been successful in Europe regarding ARDS. The Company has also sought ODD in the USA where the application is ongoing. Faron’s Japanese licensing partner Maruishi Pharmaceutical, Co. is also planning to file an orphan application in Japan.

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: +44 207 862 6390

E-mail: faron@humebrophy.com

About Faron Pharmaceuticals Ltd

Faron is a drug discovery and development company focused on creating novel treatments for medical conditions with significant unmet needs. Faron is based in Turku, Finland. The Company has identified several molecular mechanisms involved in the control of endothelial functions as a source of innovations. Faron 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 representing a novel immuno-oncology approach.

Further information is available at www.faronpharmaceuticals.com.

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).

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.

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Faron Awarded €1.5 million Tekes Funding to

Progress Novel Cancer Immunotherapy Clevegen

TURKU – FINLAND 21 December 2015 – Faron Pharmaceuticals Ltd (“Faron”) (LON: FARN) is pleased to announce that Tekes, the Finnish Funding Agency for Innovation (www.tekes.fi) has granted €1,535,100 in funding to progress the preclinical development of Clevegen, Faron´s novel cancer immunotherapy drug candidate. The funding awarded is a government loan (“Loan”), which covers 50 per cent of the budgeted cost of the preclinical development of Clevegen.

Clevegen targets Clever-1 cell surface receptors, which are involved in cancer growth and spread. When Clever-1 is blocked, tumour-associated macrophages (TAMs) cannot enter the tumour site and their function in the tumour as an immune suppressive cell is diminished. Both these events are shown to change the tumour environment from immune suppression to immune stimulation, allowing the host immune system to fight the tumour cells. The active pharmaceutical ingredient of Clevegen is humanised anti-Clever-1 antibody. Clever-1 is known to reduce Th1 mediated immunity in particular such that blocking it increases this immunity (see Company announcement on 30 November 2015).

Dr. Markku Jalkanen, CEO of Faron said: “We are very grateful to Tekes for this non-dilutive funding. Clevegen has the potential to become an important part of immune therapies against cancers and is currently undergoing preclinical trials by our collaborators in cells from cancer patients. We are excited about the opportunities presented by Clevegen which also has the potential to be used in combination therapies with other immune check-point compounds while progressing to clinical stage.”

The final conditions of the Loan are yet to be negotiated with Tekes but are likely to follow the conditions set for the Tekes loans in respect of Traumakine previously. Loans are normally unsecured and have low interest rates (below EU market values). Furthermore, if the project falls short of its goals and results cannot be commercialised, part of the loan may afterwards be converted into a grant. Loans can partly be obtained in advance.

As announced on 3 November 2015, Faron has entered into an agreement with Selexis SA under which Selexis will establish the rapid generation of high expressing clonal cell lines for use in the development and production of Clevegen monoclonal antibodies for pre- and clinical development.

For more information, please 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 Clevegen

Faron´s preclinical drug development project Clevegen revolves around Clever-1, a cell surface receptor expressed mainly by endothelial cells and monocytes/macrophages. Clever-1 is involved in cancer growth and spread. The active pharmaceutical ingredient of Clevegen is a humanised anti-Clever-1 antibody.

Clevegen, by binding Clever-1 prevents Tumor Associated Macrophage (TAM) infiltration into a tumour and blocks TAM-to-Tumour cell interaction triggering TAM transformation into tumour supportive cell types. It therefore reduces suppression of the human immune system and converts the whole immune environment around a tumour to immune stimulating allowing a patient’s own immune system to combat cancer, known as “immunotherapy”. Clevegen has a local tumour effect which also allows the cell-mediated immune response to attack infections in normal tissues and removal of immune suppression locally also limits risk of autoimmune reaction, a potentially severe side effect observed with some immune checkpoint inhibitors. The Directors of Faron believe that Clevegen is well differentiated from competing products as it specifically targets M2 TAMs which facilitate tumour growth, while leaving intact the M1 TAMs which support immune activation against tumours. Clever-1 blocking results especially in activation of Th1 mediated immunity.

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 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. Faron Pharmaceuticals Oy is listed on AIM under the ticker ‘FARN’. Further information is available at www.faronpharmaceuticals.com

About Tekes 

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Key Publication on Novel Cancer Immunotherapy Mechanism Related to Clevegen in Journal of Immunology

Immunosuppressive drug-target Clever-1 controls Th1 mediated immunity

TURKU – FINLAND 30 November 2015 – Faron Pharmaceuticals Ltd (“Faron”) (LON: FARN) is pleased to announce a key publication on Clever-1 function related to its novel cancer immunotherapy antibody Clevegen, in the Journal of Immunology, the highly ranked journal of the American Association of Immunology. The article is available at doi:10.4049/jimmunol.1500257.

The Journal of Immunology paper outlines the functional role of Clever-1 (also known as Stabilin-1) in immune responses. According to this Palani et al. study (2016), the study data defines Clever-1 as a new immunosuppressive molecule and suggests that Clever-1 may dampen pro-inflammatory reactions in vivo, especially when expressed on the surface of monocytes/macrophages. Pro-inflammatory reactions are necessary to stimulate immunological attacks by the body against tumour. The study also showed anti-Clever 1 treatment (using preclinical versions of Clevegen) led to an increase in pro-inflammatory molecules, including tumor necrosis factor-a (a cytokine with well known anti-cancer properties).

Clevegen targets these Clever-1 cell surface receptors which are involved in cancer growth and spread. When Clever-1 is blocked, tumour-associated macrophages (TAM) cannot enter the tumour site and their function in the tumour as an immune suppressive cell is diminished. Both these events change the tumour environment from immune suppression to immune stimulation, allowing the host immune system to fight the tumour cells.

Markku Jalkanen, CEO of Faron Pharmaceuticals said: “It is well known that tumours use similar immunosuppressive mechanisms to escape from the control of the host immune system. Therefore we are very excited about these findings which demonstrate the importance of Clever-1 as an immuosuppresive molecule and supports the use of Clevegen as an immunotherapy product. Our collaborators are working actively to show similar suppression with cells from cancer patients. We are working hard to advance our Clevegen programme, as announced recently, towards clinical use as a new onco-immunological alternative.”

Clever-1 can be found on selected endothelial cells and alternatively activated M2 macrophages, especially when present in tumours where they are called tumour-associated macrophages (TAM).

Palani´s functional experiments with monocytes/macrophages expressing either low or high amounts of Clever-1 resulted in a clear difference in antigen-mediated immunity (Th1). The experiments with Clever-1 blocking antibodies (preclinical versions of Clevegen) revealed a very significant increase in Th1-mediated immune response under their influence. High numbers of Clever-1-positive monocytes/macrophages were also found in the blood and placenta during normal pregnancy. This suggests that the Clever-1 positive monocytes/macrophages can contribute to the immune tolerance between an embryo and maternal tissues, which is needed to prevent rejection of the foetus.

Referenced article: Palani S, Elima K, Ekholm E, Jalkanen S and Salmi M (2016) Monocyte Stabilin-1 Suppresses the Activation of Th1 lymphocytes. J. Immunol., in press.

For more information, please 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 Clevegen

Faron´s preclinical drug development project Clevegen revolves around Clever-1, a cell surface receptor expressed mainly by endothelial cells and monocytes/macrophages. Clever-1 is involved in cancer growth and spread. The active pharmaceutical ingredient of Clevegen is a humanised anti-Clever-1 antibody.

Clevegen, by binding Clever-1 prevents Tumor Associated Macrophage (TAM) infiltration into a tumour and blocks TAM-to-Tumour cell interaction triggering TAM transformation into tumour supportive cell types. It therefore reduces suppression of the human immune system and converts the whole immune environment around a tumour to immune stimulating allowing a patient’s own immune system to combat cancer, known as “immunotherapy”. Clevegen has a local tumour effect which also allows the cell-mediated immune response to attack infections in normal tissues and removal of immune suppression locally also limits risk of autoimmune reaction, a potentially severe side effect observed with some immune checkpoint inhibitors. The Directors of Faron believe that Clevegen is well differentiated from competing products as it specifically targets M2 TAMs which facilitate tumour growth, while leaving intact the M1 TAMs which support immune activation against tumours.

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 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.

Faron Pharmaceuticals Oy is listed on AIM under the ticker ‘FARN’. Further information is available at www.faronpharmaceuticals.com