NEITHER THIS ANNOUNCEMENT NOR ANY PART OF IT CONSTITUTES AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE FOR OR ACQUIRE ANY SECURITIES IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, SINGAPORE, HONG KONG OR ANY JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Result of Open Offer and Further Subscription

TURKU – FINLAND, 27 August 2019 – Faron Pharmaceuticals Oy (“Faron”) (AIM: FARN), the clinical stage biopharmaceutical company, announces that following its announcement on 6 August 2019 (the “Open Offer Announcement“), it has received valid acceptances and excess applications from Qualifying Shareholders in respect of a total of 859,513 Open Offer Shares pursuant to the terms of the Open Offer, raising gross proceeds of approximately €1.01 million (£0.92 million) at the Issue Price of £1.06 per share in respect of Qualifying DI Holders and at the Euro Issue Price of €1.19 in respect of Qualifying non-DI Holders.  

In addition to subscriptions under the Open Offer by Qualifying Shareholders the Company has accepted additional subscriptions for 320,000 new Ordinary Shares (being Open Offer Shares not subscribed for under the Open Offer) (“Further Subscription Shares“) at the Euro Issue Price of €1.19 to raise additional gross proceeds of approximately €0.38 million (the “Further Subscription“). The Company has therefore raised approximately €2.5 million (£2.3 million) (before expenses) in aggregate through the Subscription (details of which were included in the Open Offer Announcement), Further Subscription and Open Offer.

Shareholders and investors should note that the net proceeds of the Subscription, Open Offer and Further Subscription, of €2.5 million in aggregate, are expected to provide the Company with working capital into early Q1 2020.  

Result of Open Offer

The Open Offer closed for acceptances by Qualifying DI Holders through CREST at 11.00 a.m. on 22 August 2019 and by Qualifying Non-DI Holders at 11.00 a.m. on 23 August 2019. 519,433 Open Offer Shares were subscribed for by Qualifying DI Holders at the Issue Price and 340,080 Open Offer Shares were subscribed for by Qualifying non-DI Holders at the Euro Issue Price. Qualifying Shareholders who have validly applied for Open Offer Shares will receive their full Open Offer Entitlement. The Open Offer remains conditional upon, registration and issue of the Open Offer Shares, which is expected to occur shortly.

Further Subscription

320,000 Open Offer Shares not subscribed for pursuant to the Open Offer have been subscribed for by new and existing investors at the Issue Price of €1.19 per Ordinary Share, raising gross proceeds of approximately EUR 0.38 million (£0.35 million). The Further Subscription remains conditional on registeration and issue of the Futher Subscription Shares, which is expected shortly. The aggregate number of  shares subscribed for in the Open Offer and Further Subscription of 1,179,513 represents approximately 69.5 per cent. of the 1,696,699 shares available for subscription.

Related Party Transaction

Timo Syrjälä an existing shareholder in the Company, has subscribed for 70,000 Further Subscription Shares in aggregate (subscribed for through Acme Investments SPF Sarl (“Acme“), an entity wholly owned by Mr Syrjälä), for an aggregate subscription value of EUR 0.08 million (£ 0.08 million) at the Euro Issue Price. In addition, Mr Syrjälä and Acme subscribed for 168,198 Open Offer Shares in aggregate pursuant to the Open Offer. Following this Further Subscription and Open Offer, Mr Syrjälä’s total holding in the Company’s shares, which includes his indirect holding through Acme, is 5,718,573 shares, representing 14.53 per cent. of the enlarged issued share capital. Mr Syrjälä is a “Substantial Shareholder” in the Company for the purposes of the AIM Rules. His subscription for Further Subscription Shares and Open Offer Shares pursuant to the Capital Raising is a related party transaction for the purposes of the AIM Rules. The Directors, all of whom are independent of Mr Syrjälä, having consulted with Panmure Gordon, the Company’s nominated adviser for the purposes of the AIM Rules, consider the terms of the participation by Mr Syrjälä in the Further Subscription and Open Offer to be fair and reasonable insofar as Shareholders are concerned.

Admission

Applications have been made to the London Stock Exchange for 859,513 Open Offer Shares and 320,000 Further Subscription Shares, to be admitted to trading on AIM. It is expected that Admission of the Open Offer Shares and Further Subscription Shares will take place at 8.00 a.m. on 28 August 2019. The Open Offer Shares will rank pari passu with the existing Ordinary Shares. Following issue of the Open Offer Shares and Further Subscription Shares (expected later today), the Company’s issued share capital will consist of 39,355,247 Ordinary Shares. There are no Ordinary Shares held in treasury. Therefore, in accordance with the FCA’s Disclosure Guidance and Transparency Rule 5.6.1, the Company confirms that, the total number of voting rights in the Company will be 39,355,247.This figure may be used by shareholders as the denominator for the calculations by which they determine whether they are required to notify their interest in, or a change to their interest in, the Company under the Disclosure Guidance and Transparency Rules.

Defined terms used in this announcement have the same meanings as in Open Offer Announcement.

Exchange rate

Unless otherwise specified, this announcement contains certain translations of Euros into amounts in Pounds Sterling for the convenience of the reader based on the exchange rate of £1.00 = €1.097, being the published exchange rate by the European Central Bank at the close of business on 22 August 2019.

For more information please contact:

Faron Pharmaceuticals Oy

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2500

Consilium Strategic Communications

Mary-Jane Elliott

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

About Faron Pharmaceuticals Ltd

Faron (AIM:FARN) is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs. The Company currently has a pipeline based on the endothelial receptors involved in regulation of immune response, in oncology and organ damage. Clevegen, its precision immunotherapy, is a novel anti-Clever-1 antibody with the ability to switch immune suppression to immune activation in various conditions, with potential across oncology, infectious disease and vaccine development. Currently in phase I/II clinical development as a novel macrophage checkpoint immunotherapy for patients with untreatable solid tumours, Clevegen has potential as a single-agent therapy or in combination with other immune checkpoint molecules. Traumakine, the Company’s pipeline candidate to prevent vascular leakage and organ failures, has completed a phase III clinical trial in Acute Respiratory Distress Syndrome (ARDS) and progressing in phase II trial for the Rupture of Abdominal Aorta Aneurysm (“RAAA”). Plans for its future development are being finalised to avoid interfering steroid use together with Traumakine. Faron is based in Turku, Finland. Further information is available at www.faron.com

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ”believe”, ”could”, “should”, “expect”, “hope”, “seek”, ”envisage”, ”estimate”, ”intend”, ”may”, ”plan”, ”potentially”, ”will” or the negative of those, variations or comparable expressions, including references to assumptions. These forward looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.

A number of factors could cause actual results to differ materially from the results and expectations discussed in the forward looking statements, many of which are beyond the control of the Company. In particular, the early data from initial patients in the MATINS trial may not be replicated in larger patient numbers and the outcome of clinical trials may not be favourable or clinical trials over and above those currently planned may be required before the Company is able to apply for marketing approval for a product.  In addition,  other factors which could cause actual results to differ materially include the ability of the Company to successfully licence its programmes within the anticipated timeframe or at all, risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes, actions by governmental authorities, the availability of capital markets or other sources of funding, reliance on key personnel, uninsured and underinsured losses and other factors.  Although any forward looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with such forward looking statements. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Subject to any continuing obligations under applicable law or any relevant AIM Rule requirements, in providing this information the Company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.

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, SINGAPORE, HONG KONG OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE EU REGULATION 596/2014

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 (“FARON”) OR ANY OTHER ENTITY IN ANY JURISDICTION IN WHICH ANY SUCH OFFER WOULD BE UNLAWFUL.

FARON HAS NOT TAKEN ANY ACTION, NOR WILL IT TAKE ANY ACTION, TO OFFER ANY OF THE SUBSCRIPTION SHARES OR ANY OTHER DOCUMENTS RELATING TO THE SUBSCRIPTION 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.

NEITHER THE SUBSCRIPTION SHARES NOR THE OPEN OFFER SHARES WILL BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THERE IS NO PUBLIC OFFERING IN THE UNITED STATES, THE UNITED KINGDOM OR ELSEWHERE. NEITHER THE THE SUBSCRIPTION SHARES OR THE OPEN OFFER SHARES HAVE BEEN APPROVED OR DISAPPROVED BY THE US SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY IN THE UNITED STATES, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE SUBSCRIPTION OR THE OPEN OFFER OR THE ACCURACY OR ADEQUACY OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Subscription and Open Offer

TURKU – FINLAND, 5 August 2019 – Faron Pharmaceuticals Oy (“Faron”) (AIM: FARN), the clinical stage biopharmaceutical company, is pleased to announce a subscription of new ordinary shares in the capital of the Company (the “Subscription“) to raise proceeds of approximately € 1.12 million (£1.00 million) before expenses. The Subscription comprises the issue of 941,840 new ordinary shares (the “Subscription Shares“) at the issue price of of €1.19 per share (“Euro Issue Price“).

In addition, to provide Qualifying Shareholders (being those shareholders of the Company on the register of shareholders at the record date, which is expected to be on or shortly after 6 August 2019) (“the “Record Date“) with an opportunity to participate in the fundraise at a sterling equivalent issue price of £1.06 per per share (“Issue Price“), subject to completion of the Subscription, the Company proposes to make an open offer (the “Open Offer“) to all Qualifying Shareholders to raise additional gross proceeds for the Company of up to approximately €2.0 million (£1.8 million) through the issue of up to 1,696,699 new ordinary shares (“Open Offer Shares”) on the basis of 2 Open Offer Share for every 45 existing ordinary shares held by Qualifying Shareholders. Shareholders subscribing for their full entitlement under the Open Offer may also request additional Open Offer Shares through an excess entitlement application facility. The Subscription and Open Offer are together referred to as the “Capital Raising“. 

A circular and a basic information document relating to the Open Offer are expected to be published on or around 6 August 2019. 

Admission of the Subscription Shares to trading on AIM is expected to be on or around 6 August 2019 (“First Admission“) and, assuming successful completion of the Subscription and the subsequent launch of the Open Offer, admission of the Open Offer Shares to trading on AIM is expected to be on or around 28 August 2019 (“Second Admission“).

REASONS FOR THE PROPOSED CAPITAL RAISING

The net proceeds of the Capital Raising will primarily be used to fund further clinical development of Clevegen by:

·    Completing part I of the MATINS trial to determine the maximum tolerated dose and optimal dose for part II,  and to initiate cohort expansion in colorectal cancer (“CRC”) in Q4 2019

·    Providing working capital whilst Faron seeks to negotiate and enter into a licensing agreement in respect of Clevegen in H2 2019

In addition, the net proceeds of the Capital Raising will be used to fund the commercialisation preparation of Traumakine by seeking scientific advice and regulatory approval for the CALIBER study in H2 2019.

Subject to a significant proportion of the Open Offer Shares being subscribed for (and/or receipt of alternative sources of funding),  the Company plans to execute the Company’s plan to include US study sites to MATINS trial for expansion of distinct cancer cohorts in Q4 2019.

Shareholders and investors should note that the net proceeds of the Subscription are expected to extend the Company’s working capital to the end of Q4 2019 while the proceeds of the Capital Raising  (to the extent a significant proportion of the Open Offer Shares are subscribed for) are expected to provide the Company with working capital into early Q1 2020.  The Company continues to seek to partner Clevegen (targeting an upfront payment) and while it cannot be guaranteed, the Company hopes to conclude a licencing agreement by the end of 2019. In the meantime, as previously announced, the Company will continue to explore other potential sources of funding.

DETAILS OF THE SUBSCRIPTION AND OPEN OFFER AND ISSUE OF EQUITY

The Subscription Shares and Open Offer Shares will be issued by the Company at the Issue Price (or the Euro Issue Price where applicable) 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, as approved by shareholders at the Company’s last annual general meeting which was held on 28 May 2019. Legally binding commitments have been in received (in the form of subscription letters) in respect of all Subscription Shares.

In order to comply with local securities law in Finland, the Open Offer Shares must be issued and registered at the Finnish Trade Registry prior to Second Admission. Accordingly, whilst application will be made for admission of the Subscription Shares and (in due course) the Open Offer Shares to trading on AIM, neither the Subscription nor the Open Offer are conditional on admission of the relevant shares to trading on AIM. The Subscription and the Open Offer are not being underwritten. The Open Offer is conditional on completion of the Subscription.

Application has been made for admission of the Subscription Shares to trading on AIM. It is expected that First Admission will become effective and that dealings in the Subscription Shares will commence on or around 8.00 a.m. on 6 August 2019.

Faron’s enlarged issued share capital immediately following registration of the Subscription Shares and  First Admission will be 38,175,734 Ordinary Shares with voting rights attached. The Company has no shares in Treasury; therefore upon, and subject to, registration, (which is expected to occur shortly) the total number of voting rights in Faron will be 38,175,734 (the “Enlarged Number of Shares and Votes“). This figure may be used by shareholders as the denominator for the calculations by which they will determine whether they are required to notify an interest in, or a change to their interest in, the Enlarged Number of Shares and Votes of the Company.

Further details of the Open Offer will be made available in a circular and basic information document to Shareholders which, subject to completion of the Subscription, is expected to be published on or around 6  August 2019.

RELATED PARTY TRANSACTION

Timo Syrjälä an existing shareholder in the Company, has subscribed for 550,000 Subscription Shares in aggregate (250,000 Subscription Shares subscribed for directly and 300,000 Subscription Shares through Acme Investments SPF Sarl (“Acme“), an entity wholly owned by Mr Syrjälä), for an aggregate subscription value of EUR 0.65 million (£0.54 million) at the Euro Issue Price. Following this Subscription, Mr Syrjälä’s total holding in the Company’s shares, which includes his indirect holding through Acme, is 5,430,375 shares, representing 14.2 per cent. of the Enlarged Number of Shares and Votes. Mr Syrjälä is a “Substantial Shareholder” in the Company for the purposes of the AIM Rules. His subscription for Subscription Shares pursuant to the Capital Raising is a related party transaction for the purposes of the AIM Rules. The Directors, all of whom are independent of Mr Syrjälä, having consulted with Panmure Gordon, the Company’s nominated adviser for the purposes of the AIM Rules, consider the terms of the participation by Mr Syrjälä in the Subscription to be fair and reasonable insofar as Shareholders are concerned.

FARON OVERVIEW

Faron is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs. Faron’s drug development is based on extensive knowledge of receptors involved in regulation of immune responses and vascular dysfunctions. The Company currently has two technology platforms (Clevegen® and Traumakine®) and a pipeline focusing on cancer immunotherapy, acute organ traumas and vascular damage.

The Company’s drug candidate, Clevegen, is an early clinical anti-Clever-1 antibody. The Directors believe that Clevegen has the ability to switch immune suppression to immune activation in various conditions, with potential across oncology, infectious disease and vaccine development. The other candidate is Traumakine, to prevent vascular leakage and organ failures.

Innovations for the business have primarily been sourced from academic institutions including, but not limited to Turku University, Finland. The inventions behind both Traumakine and Clevegen were sourced from scientists working at Turku University (Professor Sirpa Jalkanen, the wife of the Company’s CEO Markku Jalkanen, and Professor Marko Salmi).

The Company is developing its drug candidates through research and discovery, drug development and clinical trials. Discovery and development are guided by top-tier scientists in Faron’s network and the clinical development utilises Company’s in-depth pharmacological knowledge of the drug candidates. The Company aims to accelerate time to market via focusing on rare diseases and/or high unmet medical indications based on its proprietary molecules and IPR. In market access and commercialisation the Company seeks to complementary partner to optimise the usage of resources and to create value. The aim is to gradually build-up integrated global pharma functions

PROGRESS OF CLEVEGEN

In 2019, the Company’s focus has been on the development of Clevegen which is currently undergoing an open label phase I/II MATINS clinical trial. The MATINS study is the first-in-human open label Phase I/II clinical trial with an adaptive design to investigate the safety and efficacy of Clevegen in selected metastatic or inoperable solid tumours. The selected tumours under investigation are cutaneous melanoma, hepatobiliary/hepatocellular, pancreatic, ovarian and colorectal cancer, all known to host a significant number of Clever-1 positive tumour associated macrophages (TAM). All together these five target groups consist of approximately 2 million annual cases worldwide. Cancer patients with high Clever-1 expression are identified with a simple blood myeloid cell staining with Clevegen (“liquid biopsy”).

Clevegen dosing reached its planned maximum of 10mg/kg in mid-June, which has continued to be well tolerated. No dose limiting toxicity (DLT) nor maximally tolerated dose (MTD) has been observed so far. The trial includes an option to administer a 20mg/kg dose, which the Company intends to propose to the trial’s independent data monitoring board.

Of the nine subjects dosed so far in the Clevegen trial, across three clinical trial sites in Finland and the UK, two subjects have shown clinical anti-cancer responses. The first patient, a partial responder with colorectal cancer (“CRC“) whose initial treatment progress was announced on 11 April 2019, showed a continuation of lung metastasis shrinkage according to the latest tumour imaging report at the end of May. The subject’s tumour load marker CEA (carcinogenic embryonal antigen), which measures tumour mass of CRC, has also normalised. A second subject with CRC has shown an initial decrease in CEA (-40%) and tumour stabilization.

The Directors believe that all of the study subjects dosed in the trial have experienced a switch in their immune cell profiles following treatment with Clevegen towards increased immune activation. Typically this has been observed by one or more of the following: increased CD8+ cells, an increased in the CD8+/CD4+ ratio, a decrease in regulatory T-cells (T-regs) and a substantial increase in mobile natural killer (NK) cells in the blood. These changes were measurable immediately post-dosing, indicating a dynamic response in the immunological switch to immune-activation after the immunotherapeutic blockade of Clever-1. Data indicates that dose escalation results in prolonged Clever-1 occupancy of the blood monocytes during the first two weeks of the three-week dosing cycle before a decrease to baseline levels prior to the next dosing cycle. 

The majority of patients in the trial have received 5-7 different treatment lines prior entering the MATINS study. Faron is investigating why the observed immune activation has not turned into anti-tumour activity in all study subjects but only in part. The Company believes the patient’s immune system receiving Clevegen as a last line of therapy could have been adversely affected by the underlying therapies they have received prior to taking part in the MATINS study, as previous chemotherapies can inactivate bone marrow, preventing revitalization of the immune system.

As the trial is an open label study, the Company expects to report findings as the dosing progresses. The planned distinct cohort expansions during Part II of the study will focus on identification of patients who show an increased number of Clever-1 positive circulating monocytes and the safety and efficacy of the treatment. The Company has already announced that CRC has been selected as the first expansion cohort in Part II. Faron also intends, subject to regulatory approval, to amend the MATINS trial to allow inclusion of hormone receptor-positive breast cancer, gastric cancer and uveal melanoma, based on striking translational data on CLEVER-1 positive cancer types and current poor survival rates and associated with high Clever-1 expression. Additionally Faron has recently filed a pre-IND package to the FDA. If accepted, Faron plans to open new sites in the US and facilitate expansion of the CRC cohort as fast as possible. Similarly, Faron is planning to include top cancer centres in France and Spain as the next European countries to join the MATINS trial.

TRAUMAKINE UPDATE

Traumakine has previously undergone two phase III studies for the treatment of ARDS (one of these trials being conducted the Company’s Japanese partner, Maruishi). Topline data from the Company’s Phase III INTEREST trial was announced on 8 May 2018 showing that the trial did not meet its primary endpoint although reduced mortality was seen in a sub-group of patients with a biomarker response (MxA and CD73 induction). Further announcements have since been made (including but not limited to those made on 14 June 2018, 22 October 2018, 5 December 2018 and 14 June 2019) in respect of post-hoc analysis from the INTEREST trial and a follow-up pharmacokinetic/dynamic study in health volunteers (YODA).  In particular, post-hoc findings from INTEREST and YODA suggest that concomitant use of corticosteroids and Traumakine appeared to adversely affect both the mortality and biomarker appearance among INTEREST trial patients, indicating corticosteroid interference with Traumakine action. Results from the Japanese Traumakine Phase III trial for ARDS, which also included high levels of concomitant corticosteroid use and which were announced on 29 April 2019, were in line with results from the INTEREST trial.

Interim results of the Company’s Phase II study examining the effect of Traumakine on mortality (predominantly multi organ failures (MOF)) and pharmacodynamic biomarkers of surgically operated RAAA patients (INFORAAA trial) were announced 26 June 2019. Whilst biomarker (MxA and CD73) responses indicated a good interferon response from Traumakine, unexpectedly, concomitant corticosterone was recorded both in the active (28%) and placebo (30%) treatment arm. While the removal of corticosteroid-treated patients from statistical analysis reduced group sizes and made statistical interim mortality analysis meaningless, a trend toward reduction of mortality was seen in the Traumakine-treated patients who did not receive corticosteroids.

The Company is conducting a full review of all the Traumakine data with key opinion leaders in order to make decisions on Traumakine’s future development (including continuance of the Company’s INFORAAA trial given the unexpected levels of concomitant corticosteroid use seen in the trial to date). The Company is currently in the process of designing a new global Phase III trial for Traumakine treatment (CALIBER) for the treatment of ARDS taking into account the high levels of concomitant used as a standard of care for ARDS and some RAAA patients and is in the process of seeking regulatory feedback on the proposed trial. The Company envisages that further Traumakine trials are likely to be funded through a third party.

Exchange rate

Unless otherwise specified, this announcement contains certain translations of Euros into amounts in Pounds Sterling for the convenience of the reader based on the exchange rate of £1.00 = €1.124, being the published exchange rate by the European Central Bank at the close of business on 25 July 2019.

MARKET ABUSE REGULATION

Market Soundings, as defined in the Market Abuse Regulation (“MAR“), were taken in respect of the Capital Raising with the result that certain persons became aware of inside information, as permitted by MAR. That inside information in relation to the Capital Raising 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.

Panmure Gordon (UK) Limited, which is regulated in the UK by the Financial Conduct Authority, is acting as Nominated Adviser and Corporate Broker to the Company and no one else in connection with the Capital Raising. Accordingly, it will not be responsible to any person other than the Company for providing the regulatory and legal protections afforded to its clients nor for providing advice in relation to the contents of this Announcement or any matter, transaction or arrangement referred to in it.

For more information please contact:

Faron Pharmaceuticals Oy

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2500

Consilium Strategic Communications

Mary-Jane Elliott

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

About Faron Pharmaceuticals Ltd

Faron (AIM:FARN) 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, vascular damage and cancer immunotherapy. The Company’s first candidate Traumakine, to prevent vascular leakage and organ failures, has completed a Phase III clinical trial in Acute Respiratory Distress Syndrome (ARDS). An additional European Phase II Traumakine trial is underway for the Rupture of Abdominal Aorta Aneurysm (“RAAA”). Faron’s second candidate Clevegen is a ground breaking early clinical anti-Clever-1 antibody. Clevegen has the ability to switch immune suppression to immune activation in various conditions, with potential across oncology, infectious disease and vaccine development. This novel macrophage-directed immuno-oncology switch called Turn-on-your-Immunity or Turn-It may be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. Faron is based in Turku, Finland. Further information is available at www.faron.com

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ”believe”, ”could”, “should”, “expect”, “hope”, “seek”, ”envisage”, ”estimate”, ”intend”, ”may”, ”plan”, ”potentially”, ”will” or the negative of those, variations or comparable expressions, including references to assumptions. These forward looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.

A number of factors could cause actual results to differ materially from the results and expectations discussed in the forward looking statements, many of which are beyond the control of the Company. In particular, the early data from initial patients in the MATINS trial may not be replicated in larger patient numbers and the outcome of clinical trials may not be favourable or clinical trials over and above those currently planned may be required before the Company is able to apply for marketing approval for a product.  In addition,  other factors which could cause actual results to differ materially include the ability of the Company to successfully licence its programmes within the anticipated timeframe or at all, risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes, actions by governmental authorities, the availability of capital markets or other sources of funding, reliance on key personnel, uninsured and underinsured losses and other factors.  Although any forward looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with such forward looking statements. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Subject to any continuing obligations under applicable law or any relevant AIM Rule requirements, in providing this information the Company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Final results from YODA study confirm previously reported findings

TURKU – FINLAND, 14 June 2019 – Faron Pharmaceuticals Oy (AIM: FARN), the clinical stage biopharmaceutical company, today announces results from its pharmacokinetic/dynamic YODA study examining the administration of concomitant steroids and Traumakine in healthy volunteers.

As previously reported, the post-hoc analysis of the phase III INTEREST study had indicated significant reduction of interferon-beta (“IFN-beta”) action by steroids and this finding was also observed in the Japanese phase III study. Steroid interference with IFN-beta was also reported in ex vivo human lung tissues and human primary lung endothelial cells. The YODA study was set out to further investigate this observed finding in a prospective study setting in human healthy volunteers by administrating Traumakine alone or Traumakine in combination with prednisolone (a corticosteroid).

As previously announced, parts I and II of the YODA study confirmed that the INTEREST study drug produced the expected levels of bioactivity, suggesting that drug formulation was not a factor in the outcome of the INTEREST trial and this observation was confirmed during part III of the YODA trial. The concomitant use of IFN beta-1a and prednisolone during part III reduced IFN beta-1a action, compared to subjects who received IFN beta-1a alone. This was evident during the YODA trial through both clinical signs of the subjects (fever, which is a typical pharmacodynamic effect of interferon beta-1a) and reduction of cluster of differentiation 73 (CD73) activity responses measured from blood samples of these subjects. For the final statistical analysis, 10 subjects were included in the Traumakine group (two drop outs due to strong “flu reaction”) and 12 subjects in the group receiving Traumakine in combination with prednisolone. The statistical AUC (area under curve) difference in CD73 activity between the two groups (10 versus 12 subjects) was p = 0.087. CD73 is regarded as the key molecule to maintain the endothelial barrier, which if it leaks, can cause impaired lung function and result in the life-threatening syndrome, ARDS. Traumakine is designed to prevent this leakage by upregulating CD73 expression.

Dr Markku Jalkanen, Chief Executive Officer of Faron, said: “These YODA results once again are consistent with the INTEREST data, supporting the conclusion that co-administration of steroids with Traumakine in patients inhibited interferon beta action. These findings are significant in explaining the lack of clinical response to Traumakine in the INTEREST trial. The YODA report will become an essential part of our communication dossier with the FDA and EMA when we justify our clinical double dummy design for the concomitant use of steroids for the next Traumakine studies.”  

The Company currently expects to receive the INFORAAA interim results in the near future, allowing full review of all the Traumakine data with key opinion leaders and to make final decisions on Traumakine’s development. The Company currently envisages that a further Traumakine trial is likely to be funded through third party funding. Low concomitant corticosteroid use is expected during the INFORAAA trial.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (“MAR”).

For more information please contact:

Faron Pharmaceuticals Oy

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2500

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

About Faron Pharmaceuticals Ltd

Faron (AIM:FARN) 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, vascular damage and cancer immunotherapy. The Company’s first candidate Traumakine, to prevent vascular leakage and organ failures, has completed a Phase III clinical trial in Acute Respiratory Distress Syndrome (ARDS). An additional European Phase II Traumakine trial is underway for the Rupture of Abdominal Aorta Aneurysm (“RAAA”). Faron’s second candidate Clevegen is a ground breaking early clinical anti-Clever-1 antibody. Clevegen has the ability to switch immune suppression to immune activation in various conditions, with potential across oncology, infectious disease and vaccine development. This novel macrophage-directed immuno-oncology switch called Turn-on-your-Immunity or Turn-It may be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. Faron is based in Turku, Finland. Further information is available at www.faron.com

Faron Pharmaceuticals Ltd

(“Faron” or the “Company”)

Update on notice of AGM,  Board and management changes

TURKU – FINLAND, 24 May 2019 – Faron Pharmaceuticals Ltd (AIM: FARN), the clinical stage biopharmaceutical company, today announces a change to the original notice of the Company’s Annual General Meeting published on 07 May 2019 and an update on the Company’s Board and management team.

Yrjö Wichmann is to leave his current role as the Company’s Chief Financial Officer to take up the new position of Vice President, Financing and Investor Relations, to allow Mr. Wichman to focus on the Company’s future financing and investor relationships. Mr. Wichmann will remain a member of the senior management team but has expressed his intention to step down from the Board with effect from 1 June 2019.

Mr. Toni Hänninen has been appointed as Faron’s new CFO from 1 June 2019 and will be responsible for both internal and external reporting. He joins Faron from Danaher Group where he held a regional EMEA CFO role for their subsidiary X-Rite in Switzerland. Prior to that he worked for the Hilti Group for over 13 years in Germany, Liechtenstein, USA and Asia in various finance and general management roles. Toni brings extensive global experience in business controlling, reporting, compliance and general management which the Board believes will be very relevant as the Company progresses its product portfolio and international commercial development.

In a change to items A.11 and 12 in the original notice of AGM, the Board of Directors proposes, taking the above into account and on the basis of a recommendation from the Nomination Committee, that six members be elected to the Board of Directors, with Frank Armstrong, Markku Jalkanen, Matti Manner, Leopoldo Zambeletti, Gregory Brown and John Poulos being re-elected for a term that ends at the end of the next AGM at this stage.

Commenting on the Managerial Change Dr Markku Jalkanen, CEO of Faron, said: “These managerial changes will strengthen our operations by allowing Yrjö to focus on the Company’s future financing. We also believe this will increase Faron’s capacity to attract external financing and enable us to better maintain and develop investor relationships and target an expanded future shareholder base.

“I am delighted that Toni has decided to join Faron. His vast experience, from international director and controller positions, will help us to advance our international accounting processes and internal reporting“.

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

ENDS

For more information please contact:

Faron Pharmaceuticals Ltd

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville 

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley

Phone: +44 207 886 2500 

About Faron Pharmaceuticals Ltd

Faron (AIM:FARN) 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, vascular damage and cancer immunotherapy. The Company’s first candidate Traumakine, to prevent vascular leakage and organ failures, has completed a Phase III clinical trial in Acute Respiratory Distress Syndrome (ARDS). An additional European Phase II Traumakine trial is underway for the Rupture of Abdominal Aorta Aneurysm (“RAAA”). Faron’s second candidate Clevegen is a ground breaking early clinical anti-Clever-1 antibody. Clevegen has the ability to switch immune suppression to immune activation in various conditions, with potential across oncology, infectious disease and vaccine development. This novel macrophage-directed immuno-oncology switch called Turn-on-your-Immunity or Turn-It may be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. Faron is based in Turku, Finland. Further information is available at www.faron.com

Faron Pharmaceuticals Ltd

(“Faron” or the “Company”)

Share Subscription and Issue of Equity

Total Voting Rights

TURKU – FINLAND, 14 May 2019 – Faron Pharmaceuticals Ltd (“Faron”) (AIM: FARN), the clinical stage biopharmaceutical company, announces a subscription for new ordinary shares in aggregate in the capital of the Company (“Ordinary Shares”) at a price of EUR 0.7598 (£0.65) per share (“Issue Price”) (the “Subscription”) raising gross proceeds of approximately EUR 1.34 million.

Timo Syrjälä and Acme Investments SPF Sarl (“Acme”), an entity wholly owned by Mr Syrjälä, an existing shareholder in the Company, has subscribed for 1,757,375 Ordinary Shares (the “Subscription Shares”) for a subscription value of EUR 1.34 million (£1.15 million). Following this Subscription, Mr Syrjälä’s total holding in the Company’s shares, which includes his indirect holding through Acme, is 4,519,375 shares, representing 12.14 per cent. of the enlarged issued share capital.

The Ordinary Shares are being issued by the Company pursuant to the remaining balance of the Directors’ existing authority to allot ordinary shares in the capital of the Company for cash on a non-pre-emptive basis, as approved by shareholders at the Company’s last annual general meeting which was held on 31 May 2018.

The net proceeds of the Subscription are expected to extend the Company’s working capital into mid-Q4 2019 and will also be applied towards advancement of the Company’s key products in line with the Company’s strategy set out in the recent placing announcement on 26 March 2019 and the annual results announcement on 7 May 2019. The Company will continue to explore further funding opportunities and in particular continue its discussions with potential licensing partners.

The Ordinary Shares are fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends or other distributions made, paid or declared in respect of such shares after Registration.

Application has been made to the London Stock Exchange for admission to AIM of the 1,757,375 Subscription Shares (“Admission”), and it is expected that Admission will take place at 8:00 a.m. on 16 May 2019.

Faron’s enlarged issued number of shares is now 37,233,894 Ordinary Shares with voting rights attached. The Company has no shares in Treasury; therefore upon, the total number of voting rights in Faron is 37,233,894 (the “Enlarged Number of Shares and Votes”).This figure may be used by shareholders as the denominator for the calculations by which they will determine whether they are required to notify an interest in, or a change to their interest in, the Enlarged Number of Shares and Votes of the Company.

Commenting on the Share Subscription Dr Markku Jalkanen, CEO of Faron, said: “Following the financing raised from new and existing shareholders earlier this year, we are very pleased to receive this additional shareholder support. The year 2019 is significant for Faron, as we seek to advance our clinical programmes for Traumakine, and especially for Clevegen. We are highly encouraged by the confidence our shareholders continue to show in the Company.”

Exchange rate

Unless otherwise specified, this announcement contains certain translations of Euros into amounts in Pounds Sterling based on the exchange rate of £1.00 = €1.169.

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

**ENDS**

For more information please contact:

Faron Pharmaceuticals Ltd

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville 

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley

Phone: +44 207 886 2500 

About Faron Pharmaceuticals Ltd

Faron (AIM:FARN) 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, vascular damage and cancer immunotherapy. The Company’s first candidate Traumakine, to prevent vascular leakage and organ failures, has completed a Phase III clinical trial in Acute Respiratory Distress Syndrome (ARDS). An additional European Phase II Traumakine trial is underway for the Rupture of Abdominal Aorta Aneurysm (“RAAA”). Faron’s second candidate Clevegen is a ground breaking early clinical anti-Clever-1 antibody. Clevegen has the ability to switch immune suppression to immune activation in various conditions, with potential across oncology, infectious disease and vaccine development. This novel macrophage-directed immuno-oncology switch called Turn-on-your-Immunity or Turn-It may be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. Faron is based in Turku, Finland. Further information is available at www.faron.com

Faron Pharmaceuticals Ltd

(“Faron” or the “Company”)

Results from the Japanese Phase III study with Traumakine in the treatment of ARDS

TURKU – FINLAND, 29 April 2019 – Faron Pharmaceuticals Ltd (“Faron”) (AIM: FARN), the clinical stage biopharmaceutical company, today announces that its Japanese licensing partner Maruishi Pharmaceutical Co., Ltd. (“Maruishi”) has provided clinical trial results on its Phase III Japanese Traumakine^® study for the treatment of acute respiratory distress syndrome (“ARDS”).

The results of the trial are in line with Faron’s expectations which were detailed in the Proposed Placing announcement on 26 March 2019. In particular:

• Treatment with Traumakine did not result in reduced mortality or increased number of ventilator free survival days when compared to placebo.
• Overall, the placebo and Traumakine treatment groups were well balanced in basic demographics, except that the Traumakine group had more sepsis and less pneumonia as the etiology of ARDS when compared to the placebo group.

According to the post-hoc analysis, the overall percentage of study subjects who received concomitant glucocorticoids was 77%, which was higher than that of the INTEREST study. The effect of glucocorticoids showed similar trends to that observed from the INTEREST study. Due to the limited trial size, further sub-group analysis is not meaningful.

Dr Markku Jalkanen, CEO of Faron, said: “As we had already observed in the INTEREST trial,  it appears likely that corticosteroid use  diminished the treatment benefit of Traumakine in ARDS patients in the Japanese Phase III study. Unfortunately, the use of steroids has become a standard in ARDS despite any evidence base and this requires critical reassessment, as the use of steroids appears to worsen outcomes in certain ARDS subgroups.”

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

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley

Phone: +44 207 886 2500 

¹ JAMA. 2016 Feb;315(8):788-800

² Intensive Care Med. 2011;37(12):1932

³ N Engl J Med. 2005;353(16):1685

About Faron Pharmaceuticals Ltd

Faron (AIM:FARN) 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, vascular damage and cancer immunotherapy. The Company’s first candidate Traumakine, to prevent vascular leakage and organ failures, has completed a Phase III clinical trial in Acute Respiratory Distress Syndrome (ARDS). An additional European Phase II Traumakine trial is underway for the Rupture of Abdominal Aorta Aneurysm (“RAAA”). Faron’s second candidate Clevegen is a ground breaking early clinical anti-Clever-1 antibody. Clevegen has the ability to switch immune suppression to immune activation in various conditions, with potential across oncology, infectious disease and vaccine development. This novel macrophage-directed immuno-oncology switch called Turn-on-your-Immunity or Turn-It may be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. Faron is based in Turku, Finland. Further information is available at www.faron.com

About Maruishi Pharmaceutical Co., Ltd.

Maruishi, an Osaka-based, R&D-orientated company with over 130-year history, has a strong presence in the Japanese market as a specialty pharma developing, manufacturing, and marketing perioperative drugs and drugs used in the acute settings. Maruishi continues to be proactively engaged in R&D activities to contribute to the improvement of the quality of life (QOL) of patients.

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.

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Results of the Placing and Subscription

and Issue of Equity

PDMR Shareholding

Successful fundraising of  €3.12 million (£2.67 million) through the Placing and Subscription

TURKU – FINLAND, 28 March 2019 – Faron Pharmaceuticals Oy (AIM: FARN), the clinical stage biopharmaceutical company, is pleased to announce that, following the announcements on 26 March 2019, the proposed Placing and Subscription has been subscribed for in full, in satisfaction of the Placee Condition.

Pursuant to the Placing and Subscription, the Company is raising approximately €3.12 million before expenses by way of the Placing of 864,164 Placing Shares at the Issue Price of 60.0 pence per share and the Subscription of 3,584,461 Subscription Shares at an equivalent Euro Issue Price of 70.2 cents per share (“Euro Issue Price”). The Placing and Subscription have been supported by the participation of existing and new institutional shareholders. The Board of Directors of Faron has resolved on and approved the issuance of the Placing Shares and the Subscription Shares pursuant to the existing authorisation granted by shareholders at the Company’s Annual General Meeting held on 31 May 2018.

The Placing Shares and the Subscription Shares are expected to be registered with the Finnish Trade Register shortly. The Placing Shares and Subscription Shares will, when registered, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends or other distributions made, paid or declared in respect of such shares after the date of registration of the Placing Shares and Subscription Shares with the Finnish Trade Register.

Application has been made to the London Stock Exchange for admission to AIM of the 4,448,625 Placing Shares and Subscription Shares (in aggregate) (“Admission”), and it is expected that Admission will take place at 8:00 a.m. on 29 March 2019.

Faron’s enlarged issued number of shares immediately following registration and Admission will be 35,476,519 Ordinary Shares with voting rights attached. The Company has no shares in Treasury; therefore upon, and subject to, registration, the total number of voting rights in Faron will be 35,476,519 (the “Enlarged Number of Shares and Votes“). This figure may be used by shareholders as the denominator for the calculations by which they will determine whether they are required to notify an interest in, or a change to their interest in, the Enlarged Number of Shares and Votes of the Company.

Commenting on the successful Placing and Subscription, Dr Markku Jalkanen, CEO of Faron, said: “We are very pleased to have received such support from new and existing shareholders, employees and Company directors. This financing will allow us to further clinical programmes for two medicines with significant potential to help patients with life threatening conditions like organ damage and cancer. The opportunity to prepare a new phase III study for Traumakine marks a significant step for Faron as we remain confident in the impact this future medicine can bring, first to a subset of ARDS patients and then hopefully to all of them. We are also excited and encouraged by the early clinical data being generated for Clevegen and look forward to development of this novel precision cancer immunotherapy.”

Use of Proceeds

The net proceeds of approximately €2.9 million (£2.5 million) will be used to further the clincal development of both Traumakine and Clevegen as described in the Company’s announcement released 7.00 a.m. on 26 March 2019. The net proceeds of the Fundraise are expected to provide the Company with working capital into Q3 2019.  

Director/PDMR and other Shareholdings

Certain Directors (Dr Markku Jalkanen, Yrjo Wichmann, Dr Gregory Brown and Matti Manner) or persons closely associated with them have subscribed for in aggregate 405,982 Subscription Shares at the Euro Issue Price and Dr Frank Armstrong has subscribed for 33,333 Placing Shares at the Issue Price. The beneficial interests of the Directors in the issued shares and votes of the Company is set out below:

*of which, 213,675 have been subscribed by Markku Jalkanen directly, and 71,225 have been subscribed for by the Mehto Estate, a family estate in which Markku Jalkanen’s wife, Sirpa Jalkanen, is benficially interested

** subscribed by Yrjš Wichmann’s wife Irene Averbach-Wichmann

*** of which, 28,490 have been subscribed by Matti Manner directly, and 14,245 have been subscribed for by his wife Susanna Hedenstršm-Manner

The participation of  Dr Markku Jalkanen, Yrjo Wichmann, Dr Frank Armstrong, Dr Gregory Brown and Matti Manner in the Placing and Subscription constitutes a related party transaction for the purposes of the AIM Rules. The independent directors for the purpose of the Placing and Subscription, being Leopoldo Zambeletti and John Poulos, have consulted with the Company’s nominated adviser, Panmure Gordon and consider that the terms of the related party transaction are fair and reasonable insofar as the Shareholders are concerned.

Other PDMRs also participated in the Fundraise, these include Matti Karvonen, Jami Mandelin and Maria Lahtinen or persons closely associated with them who subscribed for 56,980, 10,256 and 14,245 Subscription Shares respectively. 

In addition to the subscriptions made by the Directors and PDMRs above, Dr Jonathan Knowles, chairman of the Scientifc Advisory Board, has also subscribed for 284,900 Subscription Shares for an amount of €200,000.

The notification below, which has been made in accordance with the requirements of the EU Market Abuse Regulation, provides further detail on the subscriptions by PDMRs and person’s closely associated with them.

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

Unless stated otherwise, all capitalised terms in this announcement are made with reference to the announcement made by Faron at 7.00 a.m. (GMT) on 26 March 2019.  

Exchange rate

Unless otherwise specified, this announcement contains certain translations of Euros into amounts in Pounds Sterling for the convenience of the reader based on the exchange rate of £1.00 = €1.17, being the published exchange rate by the Bank of England at the close of business on 25 March 2019 (the latest practicable date prior to the date of the pricing announcement).

ENDS

For more information please contact:

Faron Pharmaceuticals Oy

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2500

Consilium Strategic Communications

Mary-Jane Elliott

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

About Faron Pharmaceuticals Ltd

Faron (AIM:FARN) 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, vascular damage and cancer immunotherapy. The Company’s first candidate Traumakine, to prevent vascular leakage and organ failures, has completed a Phase III clinical trial in Acute Respiratory Distress Syndrome (ARDS). An additional European Phase II Traumakine trial is underway for the Rupture of Abdominal Aorta Aneurysm (“RAAA”). Faron’s second candidate Clevegen is a ground breaking early clinical anti-Clever-1 antibody. Clevegen has the ability to switch immune suppression to immune activation in various conditions, with potential across oncology, infectious disease and vaccine development. This novel macrophage-directed immuno-oncology switch called Turn-on-your-Immunity or Turn-It may be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. Faron is based in Turku, Finland. Further information is available at www.faron.com

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ”believe”, ”could”, “should”, “expect”, ”envisage”, ”estimate”, ”intend”, ”may”, ”plan”, ”potentially”, ”will” or the negative of those, variations or comparable expressions, including references to assumptions. These forward looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.

A number of factors could cause actual results to differ materially from the results and expectations discussed in the forward looking statements, many of which are beyond the control of the Company. In particular, the early data from initial patients in the MATINS trial may not be replicated in larger patient numbers and the outcome of clinical trials may not be favourable or clinical trials over and above those currently planned may be required before the Company is able to apply for marketing approval for a product.  In addition,  other factors which could cause actual results to differ materially include the ability of the Company to successfully licence its programmes, risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes, actions by governmental authorities, the availability of capital markets or other sources of funding, reliance on key personnel, uninsured and underinsured losses and other factors.  Although any forward looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with such forward looking statements. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Subject to any continuing obligations under applicable law or any relevant AIM Rule requirements, in providing this information the Company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.

Faron Pharmaceuticals Ltd

(“Faron” or the “Company”)

MATINS study update

Substantial immune activation taking place post Clevegen administration

UK CTA approval

TURKU – FINLAND, 21 February 2019 – Faron Pharmaceuticals Ltd (“Faron”) (LON: FARN), the clinical stage biopharmaceutical company, today announces an update on early observations on immunity and clinical response of MATINS patients post Clevegen administration.

The phase I/II MATINS clinical trial investigating the safety and efficacy of Clevegen, Faron’s wholly-owned novel precision cancer immunotherapy in selected metastatic or inoperable solid tumours, is advancing as expected at trial sites in Finland. Dosing has moved to the second level (1mg/kg) with no signs of toxicity.

Clevegen is a novel anti-Clever-1 antibody, which causes changes in the immune environment of solid tumours by switching Clever-1 positive immune suppressive macrophages to immune active macrophages. In pre-clinical models, inhibition of Clever-1 decreases tumour associated macrophages and myeloid derived suppressor cells within the tumour, and activates tumour-killing CD8+ cells leading to robust anti-tumour activity (Viitala et al. (2019) Clinical Cancer Research, on-line DOI:10.1158/1078-0432.CCR-18-3016).

Early immune biomarker data from the first two patients dosed in the MATINS trial at 0.3mg/kg indicate an increase in CD8+ and CD4+ T cells, which play a central role in cell-mediated immunity. A single dose of Clevegen increased patients’ blood CD8+ cells and their CD8+/CD4+ ratio by 24% and 15%, respectively (mean of two). These patients also experienced a 22% decrease in their blood regulatory T-cell content (T-reg) on day two, which are linked to immune suppression in cancer patients. This change in immune activation resulted in a material increase in natural killer (NK) cells on day 15, by 16% in the first patient and 148% in the second patient from the pre-dose level. These alterations returned to near pre-dose levels ahead of the second dose.

During the second dosing level (1mg/kg) of the third MATINS patient, similar responses were observed but at significantly faster and higher rates. On day two CD8+ cells had increased 100%, the CD8+/CD4+ ratio by 26% and NK cells by 191%, while T-regs had declined -10% from the pre-dose value.

The Company believes these findings, while limited to the trial’s first three patients (one case of melanoma and two colorectal cancers), are encouraging, alongside biochemical tumour and tumour load markers showing a decrease in carcinoembryonic antigen (CEA) and lactate dehydrogenase (LDH) serum levels. Both indicate the potential early clinical benefit provided by Clevegen for these late state cancer patients.

The Company is currently opening two UK sites (London, Birmingham) to expand the trial, following recent CTA approval by the UK regulator, the Medicines & Healthcare products Regulatory Agency (MHRA). The Company also intends to seek pre-IND advice from the US Food and Drug Administration (FDA) to open sites in USA prior to entering the cohort expansion part of the trial.

Due to high interest in potential new therapies in the immuno-oncology field, either as monotherapy or in combination, the Company is currently engaged in partnering discussions with several parties and hopes for a positive outcome from these negotiations during 2019.

Dr Markku Jalkanen, Chief Executive Officer of Faron, said: “We have previously shown that Clevegen has the ability in experimental settings to convert the macrophage population from immune suppressive macrophages to immune active myeloid cells, which are believed to initiate the tumour fight by host immune cells. These initial data from the MATINS trial appear to confirm that this immune switch can also take place in cancer patients. We are very encouraged by these findings, and by the potential early clinical benefits indicated through the biochemical and tumour load indicators, following several lines of previous ineffective treatments. These biomarker data will prove valuable to help determine the optimal dose as the trial continues and we look forward to generating further data to assess durability of effect and efficacy in a larger number of patients.”

About the MATINS study

The MATINS study is a first-in-human open label Phase I/II clinical trial with an adaptive design to investigate the safety and efficacy of Clevegen in selected metastatic or inoperable solid tumours. The selected tumours under investigation are cutaneous melanoma, hepatobiliary/hepatocellular, pancreatic, ovarian and colorectal cancer, all known to host a significant number of Clever-1 positive tumour associated macrophages (TAM). All together these five target groups consist of approximately 2 million annual cases worldwide. The cancer patients with high Clever-1 expression will be identified with a simple blood myeloid cell staining with Clevegen (“liquid biopsy”).

The first part of the trial deals with safety and dose escalation to optimize dosing. As the trial is an open label study, the Company expects to report initial findings as the dosing progresses. The cohort expansion during part two will focus on identification of patients who show an increased number of Clever-1 positive circulating monocytes and the safety and efficacy of the treatment. During part three the main focus will be on assessing the efficacy of Clevegen on patients who show an increased number of Clever-1 positive circulating monocytes, making the treatment precisely targeted and maximizing the chances of success for efficacy. The treatment, if successful, may ultimately be used as a standalone therapy or in combination with other immunotherapies like PD-1 inhibitors.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (“MAR”).

For more information please contact:

Faron Pharmaceuticals Ltd

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley

Phone: +44 207 886 2500

About Faron Pharmaceuticals Ltd

Faron (AIM:FARN) 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, vascular damage and cancer immunotherapy. The Company’s lead candidate Traumakine, to prevent vascular leakage and organ failures, has completed a Phase III clinical trial in Acute Respiratory Distress Syndrome (ARDS). An additional European Phase II Traumakine trial is underway for the Rupture of Abdominal Aorta Aneurysm (“RAAA”). Faron’s second candidate Clevegen is a ground breaking early clinical anti-Clever-1 antibody. Clevegen has the ability to switch immune suppression to immune activation in various conditions, with potential across oncology, infectious disease and vaccine development. This novel macrophage-directed immuno-oncology switch called Turn-on-your-Immunity or Turn-It may be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. Faron is based in Turku, Finland. Further information is available at www.faron.com

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ”believe”, ”could”, “should”, “expect”, ”envisage”, ”estimate”, ”intend”, ”may”, ”plan”, ”potentially”, ”will” or the negative of those, variations or comparable expressions, including references to assumptions. These forward looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.

A number of factors could cause actual results to differ materially from the results and expectations discussed in the forward looking statements, many of which are beyond the control of the Company. In particular, the early data from initial patients in the MATINS trial may not be replicated in larger patient numbers and the outcome of clinical trials may not be favourable or clinical trials over and above those currently planned may be required before the Company is able to apply for marketing approval for a product.  In addition,  other factors which could cause actual results to differ materially include risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes, actions by governmental authorities, the availability of capital markets, reliance on key personnel, uninsured and underinsured losses and other factors.  Although any forward looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with such forward looking statements. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Subject to any continuing obligations under applicable law or any relevant AIM Rule requirements, in providing this information the Company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.

Faron Pharmaceuticals Ltd

(“Faron” or the “Company”)

INTEREST trial update

Routine corticosteroid treatment correlates with increased mortality and decreased Traumakine efficacy

INTEREST trial results and statistical analyses to be presented at 31^st ESICM (European Society of Intensive Care Medicine) meeting in Paris

TURKU – FINLAND, 22 October 2018 – Faron Pharmaceuticals Ltd (“Faron”) (LON: FARN), the clinical stage biopharmaceutical company, today announces more detailed analysis of data from the Traumakine INTEREST study related to corticosteroids used in parallel to Traumakine treatment and their effect on Traumakine efficacy. This follows the Company’s announcement of 13 September 2018 where it was noted that analysis of the INTEREST trial data had shown that other concurrent and widely used acute respiratory distress syndrome (ARDS) treatments had had a significant effect on mortality in the trial. These data will be presented today by INTEREST study investigators, Professors Geoff Bellingan (University College London Hospitals), and Marco Ranieri (University of Rome) at the 31^st ESICM (European Society of Intensive Care Medicine) meeting in Paris.

As previously reported, inconsistent interferon-beta (IFN-beta) biomarker (MxA and CD73) induction was observed across the treatment group, but a sub-group of patients with a biomarker response showed a reduced day 28 (D28) mortality. To further investigate this selective benefit among the Traumakine-treated ARDS patients, further post-hoc data analysis has been carried out by the trial investigators which has found that concomitant use of corticosteroids and Traumakine appeared to affect both the mortality and biomarker appearance in the INTEREST study patients.

The following key findings will be presented at ESICM:

·      Corticosteroid use was high among INTEREST trial patients (176/296, 59.5%)

·      Concomitant corticosteroid treatment had a significant impact on mortality in the Traumakine treatment group. Mortality was 10.6% (7/66) for those receiving Traumakine and not on corticosteroids, versus 39.7% (31/78) for those receiving Traumakine and on concomitant corticosteroids. This outcome is highly statistically significant (p<0.0001) and was a similar mortality to the treatment group in the phase I/II study

·      Concomitant corticosteroid use with Traumakine was also associated with worse outcomes measured by ventilator free days (VFD) compared to non-users (median 6 VFDs vs. 14 VFDs, p= 0.03)

·      IFN-beta has previously been demonstrated to increase CD73 expression in lung capillaries⁽¹⁾ which was associated with reduced mortality in ARDS patients in the phase I/II trial. However, concomitant exposure of human lung tissue samples to hydrocortisone in ex vivo culture conditions prevents Traumakine induced CD73 expression in lung capillaries

Of note, we also observed that the use of corticosteroids in the placebo group was associated with an increased mortality of 27.6% compared to no use of corticosteroids of 14.8% (p= 0.075). In the group receiving corticosteroids there was a significantly higher APACHE II (acute physiology and chronic health evaluation) score (23.4 versus 20.4, p=0.0007) and SOFA (sequential organ failure assessment) score (10.4 vs 9.5, p=0.0428) but this difference does not, we believe, explain the scale of mortality difference associated with corticosteroid use versus non-use. Additionally, in a genetic analysis of a subset of patients treated with Traumakine, Faron has identified an altered (polymorphic) regulatory motif for the glucocorticoid receptor of the interferon-alpha/beta receptor beta chain which Faron believes could be associated with those patients who responded to traumakine (p=0.007) and which may confer corticosteroid resistance and impact IFN-beta action.

The Company believed that the inconsistent FP-1201-lyo bioactivity observed in the INTEREST trial may well, in part, be due to corticosteroid interference of IFN-beta action. Therefore, further in vitro and ex vivo experiments with human endothelial HUVEC cells and human lung tissue samples were conducted.  Based on these results, no issues have been detected to date in the formulation of FP-1201-lyo used in the INTEREST trial and the formulation was as active as the formulation used in the phase I/II trial. In lung tissue samples, the concomitant corticosteroids prevented the CD73 induction by Traumakine, which indicates similar interference of corticosteroids on IFN-beta bioactivity as observed in the INTEREST study.

To understand the reduced biomarker response to Traumakine administration, even where corticosteroids were not administered in the INTEREST study, a new FP-1201-lyo pharmacokinetic/dynamic study, YODA, is already underway in approximately 50 healthy volunteers. This will determine the optimum mechanism of administration to achieve a full biomarker response with first results expected in Q4 2018. The YODA study may also be extended to examine concomitant use of Traumakine and corticosteroids to get final in vivo evidence for corticosteroid interference of interaction activity.

Dr Matti Karvonen, Chief Medical Officer of Faron, said: “At this stage it appears possible that unexpectedly high corticosteroid use in the INTEREST trial may have masked the treatment benefit of Traumakine in ARDS patients. Therefore, the Company and the investigators await data from the ongoing Phase III ARDS trial with Japanese partner Maruishi, expected later this year, and further experimental data on lung tissue samples and YODA results, to determine the next steps for Traumakine’s development.” 

Commenting on the results, Dr Geoff Bellingan, co-Principal Investigator of the INTEREST study, said: “The controversy around administration of corticosteroids to ARDS patients has been a puzzling topic for decades where there has been an ongoing debate as to whether corticosteroids have any beneficial role, early, late or for more severe un-resolving cases. These new findings from the INTEREST study, where some patients were also given corticosteroids as part of their treatment, now suggest that we should control or exclude corticosteroids from future clinical research in ARDS patients. Corticosteroids have been shown to interfere with interferon-beta signalling⁽²⁾ hence their use could block any beneficial effects of endogenous IFN-beta and may be particularly important when dosing with Traumakine. This brings fresh hope to ARDS patients as the study of Traumakine continues.”

Dr Marco Ranieri, co-Principal Investigator of the INTEREST study, said: “Whilst we were disappointed with the initial results from the INTEREST study, we have now made a very important observation that corticosteroid use significantly disturbs both administered and endogenous interferon-beta activity making it possibly a harmful drug in the acute phase of ARDS. This knowledge, if supported by the YODA study as well, is extremely important for ARDS patients and current practice, and it will help plan successful studies in the future for the defeat of ARDS. The concomitant use of corticosteroids and type I interferons could be prevalent in several other conditions as well (e.g. MS disease) and we believe, therefore, that the whole medical community should be more diligent with regard to their combined use.”

The cited references:

(1) Bellingan G, Maksimow M, Howell DC, Stotz M, Beale R, Beatty M, Walsh T, Binning A, Davidson A, Kuper M, Shah S, Cooper J, Waris M, Yegutkin GG, Jalkanen J, Salmi M, Piippo I, Jalkanen M, Montgomery H, Jalkanen S (2014) 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 2: 97-104.

(2) Flammer JR, Dobrovolna J, Kennedy MA, Chinenov Y, Glass CK, Ivashkiv LB and Rogatsky I (2010) The type I interferon signaling pathway is a target for glucocorticoid inhibition. Molecular and Cellular Biology 30: 4564.

Today’s presentation by INTEREST study investigators, Professors Geoff Bellingan and Marco Ranieri is available to view at www.faron.com 

For more information please contact:

Faron Pharmaceuticals Ltd

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Consilium Strategic Communications

Mary-Jane Elliott, Matthew Neal, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley

Phone: +44 207 886 2500

About Faron Pharmaceuticals Ltd

Faron (AIM:FARN) 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, vascular damage and cancer immunotherapy. The Company’s lead candidate Traumakine, to prevent vascular leakage and organ failures, is currently the only treatment for Acute Respiratory Distress Syndrome (ARDS) undergoing Phase III clinical trials and in 2017 received advice from US FDA to proceed directly to BLA submission following completion of EU and Japanese Phase III studies.  There is currently no approved pharmaceutical treatment for ARDS. An additional European Phase II Traumakine trial is underway for the Rupture of Abdominal Aorta Aneurysm (“RAAA”). Faron’s second candidate Clevegen is a ground breaking pre-clinical anti-Clever-1 antibody. Clevegen has the ability to switch immune suppression to immune activation in various conditions, with potential across oncology, infectious disease and vaccine development. This novel macrophage-directed immuno-oncology switch called Turn-on-your-Immunity or Turn-It may be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. Faron is based in Turku, Finland. Further information is available at  www.faron.com

Faron Pharmaceuticals Ltd

(“Faron” or the “Company”)

Faron Announces Filing of Clinical Trial Application for precision cancer immunotherapy Clevegen

TURKU – FINLAND, 17 September 2018 – Faron Pharmaceuticals Ltd (“Faron”) (AIM: FARN), the clinical stage biopharmaceutical company, today announces that it has filed a Clinical Trial Application (CTA)  for Clevegen, its wholly-owned novel precision cancer immunotherapy drug, in development for the treatment of selected metastatic or inoperable tumours.

Clevegen is a novel anti-Clever-1 antibody which causes changes in the immune environment of solid tumours by switching Clever-1 positive immune suppressive macrophages to immune active macrophages. Clever-1, a cell surface receptor expressed mainly by tumour vascular endothelial cells and monocytes/macrophages, has been shown to control tumour growth (Karikoski et al., 2014), cell-mediated immunity (Palani et al. 2016) and to participate in the control of B cell response and humoral antibody production (Dunkel et al. 2018).

Today’s CTA filing is a key step towards initation of Faron’s MATINS study, a first-in-human open label Phase I/II adaptive design clinical trial to investigate the safety and efficacy of Clevegen in selected metastatic or inoperable solid tumours. The selected tumours under investigation are cutaneous melanoma, hepatobiliary/hepatocellular, pancreatic, ovarian and colorectal cancer.

The first part of the trial deals with safety and dose escalation to optimize the dosing. The cohort expansion parts II and III will recruit only patients who show increased number of Clever-1 positive circulating monocytes, making the treatment precisely targeted and maximizing the chances of success for efficacy. The treatment, if successful, may ultimately be used as a stand alone therapy or in combination with other immunotherapies like PD-1 inhibitors.

The Company plans to conduct the MATINS trial’s dose escalation part in Finland, UK and Netherlands with four to five sites, and increase site numbers during the cohort expansion stage. Patient recruitement for the study is expected to begin in Q4 2018.

Dr Petri Bono, the Principle Investigator of the MATINS trial, said: “I look forward to initiating the MATINS trial patient recruitment since a truly novel approach to break the tumour immune suppression is used in this phaseI/II study. I strongly believe that new immunosuppression releasing approaches (such as anti-Clever-1 antibody) have the potential to become the next wave of cancer treatments”

Dr Markku Jalkanen, CEO of Faron, said: “We are making rapid progress with our Clevegen programme and this CTA filing is an important milestone. This precision therapy for cancers with very few treatment options has a unique mechanism of action which, coupled with promising pre-clinical data and human ex-vivo data, already indicates the product’s potential in a broad range of indications. We look forward to beginning patient recruitment later this year and moving Clevegen into the clinic.”

For more information please contact:

Faron Pharmaceuticals Ltd

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Consilium Strategic Communications

Mary-Jane Elliott, Matthew Neal, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy CrossleyPhone: +44 207 886 2500

About Clevegen®

Clevegen is based on Faron’s turn-on-your-immunity technology platform. Potential indications include immuno-oncology, chronic infections and vaccination enhancement, which all involve the presence of these same macrophages as immune suppressive cell type.

In the context of cancer Clevegen, by binding Clever-1, prevents Tumor Associated Macrophage (TAM) infiltration into a tumour and blocks TAM-to-Tumour cell interaction triggering TAM transformation of tumour supportive cell types. It therefore reduces tumour associated 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 elicts a local tumour effect which similar to the cell-mediated immune response against infections in normal tissues. This kind of removal of immune suppression locally 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 tumour promoting anti-inflammatory M2 TAMs and converts them into M1 TAMs while leaving intact the existing M1 TAMs. This unique mode of action of Clevegen induces immune activation against tumours. Clever-1 blocking results especially in activation of Th1 mediated immunity. The involvement of these Clever-1 positive myeloid cells in tumour progression can be verified from a simple blood sample analysis (liquid biopsy) making the treatment precise.

About MATINS study

MATINS study is a first-in-human open label adaptive design Phase I/II adaptive clinical trial in selected metastatic or inoperable solid tumours to investigate the safety and efficacy of Clevegen. The selected tumours are cutaneous melanoma, hepatobiliary, pancreatic, ovarian and colorectal cancer, which are all known to contain high amounts of Clever-1 positive tumour associated macrophages (TAMs). The trial is to be run in three parts. Part I will be conducted to determine the safe and tolerable dose of Clevegen, which will then be used in Part II to expand the cohorts of individual tumour types. Part III of the trial aims to confirm the efficacy of Clevegen with the cohorts selected based on Part II. The principle Investigator for the trial is Dr. Petri Bono from the Helsinki University Hospital, who has participated in several firat-in-man clinical trials in the area of immune oncology and is also a member of ESMO (European Society of Clinical Oncolgy) GU cancer Scientific Advisory Board.

About Faron Pharmaceuticals Ltd

Faron (AIM:FARN) 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, vascular damage and cancer immunotherapy. The Company’s lead candidate Traumakine, to prevent vascular leakage and organ failures, is currently the only treatment for Acute Respiratory Distress Syndrome (ARDS) undergoing Phase III clinical trials and in 2017 received advice from US FDA to proceed directly to BLA submission following completion of EU and Japanese Phase III studies.  There is currently no approved pharmaceutical treatment for ARDS. An additional European Phase II Traumakine trial is underway for the Rupture of Abdominal Aorta Aneurysm (“RAAA”). Faron’s second candidate Clevegen is a ground breaking pre-clinical anti-Clever-1 antibody. Clevegen has the ability to switch immune suppression to immune activation in various conditions, with potential across oncology, infectious disease and vaccine development. This novel macrophage-directed immuno-oncology switch called Turn-on-your-Immunity or Turn-It may be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. Faron is based in Turku, Finland. Further information is available at  www.faron.com