New shares registered with Finnish Trade Register

Faron Pharmaceuticals Ltd

(“Faron” or the “Company“)

New shares of Faron registered with the Finnish Trade Register

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO ACQUIRE ANY SECURITIES. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.

Company announcement, 20 June 2024 at 3pm (EEST) / 1pm (BST) / 8am (EDT)

TURKU, FINLAND  – Faron Pharmaceuticals Ltd (AIM: FARN, First North: FARON), a clinical-stage biopharmaceutical company pursuing a CLEVER-1 receptor targeting approach to reprogramming myeloid cells to activate anti-tumor immunity in hematological and solid tumor microenvironments, announced earlier today results of the share offering (the “Offering“) and the issuance of a total of 30,709,056 newly issued treasury shares and new shares in the Company in the Offering, as well as the issuance of 308,158 new shares to certain subscription guarantors in the Offering and the issuance of 1,600,153 new shares to investors who participated in the private placement announced on 4 April 2024 (together the “New Shares“), as well as the registration of the first part of the New Shares, i.e. a total of 20,727,359 shares to Faron itself without consideration, to be further conveyed to institutional investors and in the UK offerings.

Faron announces that also the remaining 11,890,008 New Shares have now been registered with the Trade Register maintained by the Patent and Registration Office. These New Shares are issued to private individuals and legal entities in Finland in the public offering, to lenders of the convertible capital loans, and to subscription guarantors.

Following the completion of the registrations, the total number of registered shares in Faron is 104,624,864. The New Shares together account for approximately 45.3 per cent of the Company’s outstanding shares and votes prior to the Offering and 31.2 per cent following the Offering.

As previously announced, the New Shares will be recorded on investors’ book-entry accounts on or about 24 June 2024. The first part of the New Shares has been registered first as treasury shares of the Company and will be recorded upon their conveyance on investors’ book-entry accounts (delivery against payment) and, as applicable, settled as DIs in the UK open offer and the REX retail offer on or about 24 June 2024. No shares will be held in treasury.

Applications will be made for the admission to trading of the New Shares on the Nasdaq First North Growth Market Finland (“First North“) maintained by Nasdaq Helsinki Ltd (“Nasdaq Helsinki“) under the current trading code “FARON”, and on AIM (“AIM“), the market of that name operated by London Stock Exchange plc under the trading code “FARN”. Trading in the New Shares is expected to commence on or around 10:00 a.m. EEST / 8:00 a.m. BST on 24 June 2024 subject to the admission of the New Shares to trading on First North and AIM.

Faron Pharmaceuticals Ltd

For more information please contact:

ICR Consilium
Mary-Jane Elliott, David Daley, Lindsey Neville
Phone: +44 (0)20 3709 5700
E-mail:
  faron@consilium-comms.com

Cairn Financial Advisers LLP, Nomad

Sandy Jamieson, Jo Turner

Phone: +44 (0) 207 213 0880

Peel Hunt LLP, Broker

Christopher Golden, James Steel

Phone: +44 (0) 20 7418 8900

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen

Phone: +358 (0)40 555 4727

Jukka Järvelä

Phone: +358 (0)50 553 8990

About BEXMAB

The BEXMAB study is an open-label Phase I/II clinical trial investigating bexmarilimab in combination with standard of care (SoC) in the aggressive hematological malignancies of acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS). The primary objective is to determine the safety and tolerability of bexmarilimab in combination with SoC (azacitidine) treatment. Directly targeting Clever-1 could limit the replication capacity of cancer cells, increase antigen presentation, ignite an immune response, and allow current treatments to be more effective. Clever-1 is highly expressed in both AML and MDS and associated with therapy resistance, limited T cell activation and poor outcomes.

About bexmarilimab

Bexmarilimab is Faron’s wholly owned, investigational immunotherapy designed to overcome resistance to existing treatments and optimize clinical outcomes, by targeting myeloid cell function and igniting the immune system. Bexmarilimab binds to Clever-1, an immunosuppressive receptor found on macrophages leading to tumor growth and metastases (i.e. helps cancer evade the immune system). By targeting the Clever-1 receptor on macrophages, bexmarilimab alters the tumor microenvironment, reprogramming macrophages from an immunosuppressive (M2) state to an immunostimulatory (M1) state, upregulating interferon production and priming the immune system to attack tumors and sensitizing cancer cells to standard of care.

About Faron Pharmaceuticals Ltd

Faron (AIM: FARN, First North: FARON) is a global, clinical-stage biopharmaceutical company, focused on tackling cancers via novel immunotherapies. Its mission is to bring the promise of immunotherapy to a broader population by uncovering novel ways to control and harness the power of the immune system. The Company’s lead asset is bexmarilimab, a novel anti-Clever-1 humanized antibody, with the potential to remove immunosuppression of cancers through reprogramming myeloid cell function. Bexmarilimab is being investigated in Phase I/II clinical trials as a potential therapy for patients with hematological cancers in combination with other standard treatments. Further information is available at www.faron.com .

Important notice

This announcement is not an offer of securities for sale into the United States. The Offer Shares have not been and will not 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 intention to register the Offer Shares in the United States or to make a public offering in the United States. Any sale of the Offer Shares in the United States will be made solely to a limited number of “qualified institutional buyers” or accredited investors, each as defined in Rule 144A in reliance on an exemption from the registration requirements of the Securities Act.

The distribution of this release may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such relevant legal restrictions. The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, Japan, New Zealand or the Republic of South Africa. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such aforementioned jurisdiction. This release is not directed to, and is not intended for distribution to or use by, any person or entity that is a citizen, resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would violate law or regulation or which would require any registration or licensing within such jurisdiction.

In any European Economic Area Member State, other than Finland, this release is only addressed to and is only directed at “qualified investors” in that Member State within the meaning of Article 2(e) of Regulation (EU) 2017/1129 (the “Prospectus Regulation“).

In the United Kingdom, this release is only being distributed to and is only directed at “qualified investors” within the meaning of Article 2(e) of the Prospectus Regulation as it forms part of domestic law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (the “UK Prospectus Regulation“) who are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order“) or (ii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “UK Relevant Persons“). Any investment activities to which this announcement relates will only be available to and will only be engaged in with UK Relevant Persons. Any person who is not a UK Relevant Person should not act or rely on this release or any of its contents.

This release does not constitute a prospectus as defined in either the Prospectus Regulation or the UK Prospectus Regulation and, as such, it does not constitute or form part of, and should not be construed as, an offer to sell, or a solicitation or invitation of any offer to buy, acquire or subscribe for, any securities or an inducement to enter into investment activity in relation to any securities.

No part of this release, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The information contained in this release has not been independently verified. No representation, warranty or undertaking, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. The Company or any of its respective affiliates, advisors or representatives or any other person, shall have no liability whatsoever (in negligence or otherwise) for any loss, however arising from any use of this release or its contents or otherwise arising in connection with this release. Each person must rely on their own examination and analysis of the Company, its subsidiaries, its securities and the transactions, including the merits and risks involved.

Carnegie Investment Bank AB, Finland Branch and Peel Hunt LLP are acting as lead managers (the “Lead Managers“) and bookrunners for the Offering. The Lead Managers are acting exclusively for the Company and no one else in connection with the Offering. They will not regard any other person as their respective client in relation to the Offering. The Lead Managers will not be responsible to anyone other than the Company for providing the duties afforded to their respective clients, nor for giving advice in relation to the Offering or any transaction or arrangement referred to herein.

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 Company’s current expectations and assumptions regarding the completion and use of proceeds from the Offering, 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 Company’s current beliefs and assumptions and are based on information currently available to the Company.

A number of factors could cause actual results to differ materially from the results and expectations dis-cussed in the forward-looking statements, many of which are beyond the control of the Company. 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 Company believes 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.

Proposed REX Retail Offer

THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR WITHIN THE UNITED STATES OR THE DISTRICT OF COLUMBIA (COLLECTIVELY THE “UNITED STATES”), AUSTRALIA, CANADA, NEW ZEALAND, SOUTH AFRICA OR JAPAN, OR ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA (THE “EEA”), OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

 

THIS ANNOUNCEMENT AMOUNTS TO A FINANCIAL PROMOTION FOR THE PURPOSES OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (“FSMA”) AND HAS BEEN APPROVED BY PEEL HUNT LLP WHICH IS AUTHORISED AND REGULATED BY THE FINANCIAL CONDUCT AUTHORITY (FRN 530083). THIS IS A FINANCIAL PROMOTION AND IS NOT INTENDED TO BE INVESTMENT ADVICE.

 

 

Faron Pharmaceuticals Ltd

 

(“Faron” or the Company“)

 

Proposed REX Retail Offer

 

Company announcement, 5 June 2024 at 10:00 a.m. (EEST) / 8:00 a.m. (BST) / 3:00 a.m. (EDT)

 

Key Highlights

 

  • Faron will conduct an offer to retail investors in the United Kingdom on the “REX” platform. The REX Offer (as defined below) is part of an Offering (as defined below) raising approximately EUR 30.7 million. Details of the Offering can be found in the Company’s announcement dated 4 June 2024 and available on the Company’s website at www.faron.com/investors/publicoffer.

 

TURKU, FINLAND – Faron Pharmaceuticals Ltd (AIM: FARN, First North: FARON), a clinical-stage biopharmaceutical company pursuing a CLEVER-1 receptor targeting approach to reprogramming myeloid cells to activate anti-tumor immunity in hematological and solid tumor microenvironments, today announces its intention to raise funds by means of a proposed retail offer via the Retail Capital Markets ‘REX’ portal (the “REX Offer“) of ordinary shares (“Ordinary Shares“) in the capital of the Company (the “REX Offer Shares“).

 

The Company is conducting the Offering to raise approximately EUR 30.7 million in total through the issue of up to 30,714,592 Ordinary Shares (the “Offer Shares“) at a subscription price of EUR 1 per Offer Share (or GBP 0.85 per Offer Share in respect of the UK Open Offer and the REX Offer) by way of:

  • a public offering of Offer Shares to private individuals and legal entities in Finland (the “Public Offering“);
  • an institutional offering of Offer Shares to institutional investors in the European Economic Area and, in accordance with applicable laws, internationally (the “Institutional Offering“);
  • an open offer to qualifying holders of depositary interests in the United Kingdom (the “UK Open Offer“); and
  • the REX Offer (together with the Public Offering, the Institutional Offering and the UK Open Offer, the “Offering“).

The price of the REX Offer Shares is 85 pence per REX Offer Share (the “Offer Price“), which is the same issue price as for the UK Open Offer and is equivalent to the EUR 1 subscription price of the Public Offering and the Institutional Offering based on an exchange rate of GBP 1 : EUR 1.1714 on 31 May 2024. The Offer Price represents a 54 per cent. discount to the closing price of the Ordinary Shares on 31 May 2024 (being the latest practicable date prior to the announcement of the Offering dated 4 June 2024). The aggregate gross proceeds of the REX Offer and the UK Open Offer shall not exceed £6.8 million (the GBP equivalent of EUR 8 million based on an exchange rate of GBP 1 : EUR 1.1714 on 31 May 2024).

 

For the avoidance of doubt, the REX Offer is not part of the Public Offering, Institutional Offering or the UK Open Offer.

 

REX Offer

 

The REX Offer is conditional upon, among other things:

 

  1. completion of the Public Offering, Institutional Offering and the UK Open Offer;

 

  1. the REX Offer Shares being admitted to trading on AIM, the market of that name operated by London Stock Exchange plc, and Nasdaq First North Growth Market Finland of Nasdaq Helsinki Ltd (Admission“). Admission is expected to take place at or around 8.00 a.m. on 24 June 2024.

  

The Company values its retail shareholder base in the United Kingdom and believes that it is appropriate to provide retail investors in the United Kingdom the opportunity to participate in the current fundraising.

 

Therefore, the Company is making the REX Offer open to eligible investors in the United Kingdom following release of this announcement through certain financial intermediaries.

 

Investors should contact their broker or wealth manager to participate in the REX Offer.

 

The REX Offer is expected to close at or around 7:30 a.m. on 19 June 2024. Investors should note that financial intermediaries may have earlier closing times.

 

At the time of this announcement the following intermediaries have confirmed their participation in the REX Offer:

 

  • AJ Bell
  • interactive investor

 

Retail brokers wishing to participate in the REX Offer on behalf of retail investors, should contact info@rexretail.com.

 

To be eligible to participate in the REX Offer, applicants must be a customer of a participating intermediary, which may include individuals aged 18 years or over, companies and other bodies corporate, partnerships, trusts, associations and other unincorporated organisations.

  

There is a minimum subscription of £50 per investor. The terms and conditions on which investors subscribe will be provided by the relevant financial intermediaries, including relevant commission or fee charges.

 

The Company reserves the right in its absolute and sole discretion to: (i) scale back any order under the REX Offer; and (ii) reject any application for subscription under the REX Offer without giving any reason for such rejection.

 

Allocations under the REX Offer are expected to be in keeping with the principle of soft pre-emption, subject to the Company’s discretion.

 

It is vital to note that once an application for REX Offer Shares has been made and accepted via an intermediary, it cannot be withdrawn.

 

The REX Offer Shares, when issued, will be credited as fully paid and will rank pari passu in all respects with the Company’s then existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of such shares after the date of issue.

 

It is a term of the REX Offer that the aggregate total value of the Offer Shares to be allotted and issued pursuant to the REX Offer and the UK Open Offer does not exceed £6.8 million (the GBP equivalent of EUR 8 million based on an exchange rate of GBP 1 : EUR 1.1714 on 31 May 2024). Allocations under the REX Offer will be scaled back, as necessary, to ensure that the total aggregate consideration under the REX Offer and the UK Open Offer will not exceed this amount.

 

The REX Offer is being made in the United Kingdom under the exemption from the requirement to publish a prospectus in section 86(1)(e) of FSMA. As such, there is no need for publication of a prospectus pursuant to the Prospectus Regulation Rules of the Financial Conduct Authority, or for approval of the same by the Financial Conduct Authority. The REX Offer is not being made into any jurisdiction other than the United Kingdom.

 

No offering document, prospectus or admission document has been or will be prepared or submitted to be approved by the Financial Conduct Authority (or any other authority) in relation to the REX Offer, and investors’ commitments will be made solely on the basis of the information contained in this announcement and information that has been published by or on behalf of the Company prior to the publication of this announcement by notification to a Regulatory Information Service in accordance with the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules, the Market Abuse Regulation (EU Regulation No. 596/2014) (“MAR“) and MAR as assimilated into United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended).

  

Investors should make their own investigations into the merits of an investment in the Company. Nothing in this announcement amounts to a recommendation to invest in the Company or amounts to investment, taxation or legal advice. In relation to the Public Offering, the Institutional Offering and the UK Open Offer, please refer to Company’s announcement on 4 June 2024, published at 7:00 a.m (BST), and materials available on the Company’s website www.faron.com/investors/publicoffer 

It should be noted that a subscription for REX Offer Shares and investment in the Company carries a number of risks. Investors should take independent advice from a person experienced in advising on investment in securities such as the REX Offer Shares if they are in any doubt.

 

An investment in the Company will place capital at risk. The value of your investment in the Company and any income from it is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment, you may get back less than the amount originally invested.

 

Neither past performance nor any forecasts should be considered a reliable indicator of future results.

 

For Further Information

 

Investor Contact

 

ICR Consilium
Mary-Jane Elliott, David Daley, Lindsey Neville
Phone: +44 (0)20 3709 5700
E-mail: faron@consilium-comms.com

 

Cairn Financial Advisers LLP, Nomad

Sandy Jamieson, Jo Turner

Phone: +44 (0) 207 213 0880

 

Peel Hunt LLP, Broker

Christopher Golden, James Steel

Phone: +44 (0) 20 7418 8900

 

 

 

REX Retail

 

 

Info@rexretail.com

 

Further information on the Company can be found on its website at www.faron.com.

 

The Company’s LEI is 7437009H31TO1DC0EB42.

 

This announcement should be read in its entirety. In particular, the information in the “Important Notices” section of this announcement should be read and understood.

 

Important Notices

 

The content of this announcement has been prepared by and is the sole responsibility of the Company.

 

 

THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR WITHIN THE UNITED STATES OR THE DISTRICT OF COLUMBIA (COLLECTIVELY THE UNITED STATES), AUSTRALIA, CANADA, NEW ZEALAND, SOUTH AFRICA OR JAPAN, OR ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA (THE EEA), OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

 

No action has been taken by the Company or any person acting on its behalf or any of its or their affiliates that would permit an offer of the REX Offer Shares or possession or distribution of this announcement or any other offering or publicity material relating to such REX Offer Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required to inform themselves about, and to observe, such restrictions.

 

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America.  The REX Offer Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the “US Securities Act“) or under the applicable state securities laws of the United States and may not be offered or sold directly or indirectly in or into the United States, except pursuant to an applicable exemption from registration. No public offering of the REX Offer Shares is being made in the United States. The REX Offer Shares are being offered and sold outside the United States in “offshore transactions”, as defined in, and in compliance with, Regulation S under the US Securities Act (“Regulation S“). In addition, the Company has not been, and will not be, registered under the US Investment Company Act of 1940, as amended.

 

The REX Offer has not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any United States regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the Institutional Offering, the UK Open Offer, the Public Offering or REX Offer, or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.

 

This announcement or any part of it does not constitute an offer to sell or issue or a solicitation of an offer to buy or subscribe for REX Offer Shares in the United States, Australia, Canada, New Zealand, Japan, the Republic of South Africa, any member state of the EEA or any other jurisdiction in which such offer or solicitation is or may be unlawful. No public offer of the REX Offer Shares referred to herein is being made in any such jurisdiction.

 

The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

 

REX is a proprietary technology platform owned and operated by Peel Hunt LLP (registered address at 7th Floor, 100 Liverpool Street, London EC2M 2AT; FRN 530083). Peel Hunt LLP (“Peel Hunt“) is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company and for no-one else and will not regard any other person (whether or not a recipient of this announcement) as its client in relation to the REX Offer and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, nor for providing advice in connection with the REX Offer, Admission and the other arrangements referred to in this announcement.

 

The value of Ordinary Shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment, you may get back less than you originally invested. Figures refer to past performance and past performance is not a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations.

 

Certain statements in this announcement are forward-looking statements which are based on the Company’s expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as “aim”, “anticipate”, “believe”, “intend”, “estimate”, “expect” and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries in which the Company’s businesses operate to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements.

 

These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. The Company and Peel Hunt expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Conduct Authority, the London Stock Exchange plc or applicable law.

 

The information in this announcement is for background purposes only and does not purport to be full or complete. Neither Peel Hunt nor any of its affiliates, accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. Peel Hunt and its affiliates, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise be found to have in respect of this announcement or its contents or otherwise arising in connection therewith.

 

Any indication in this announcement of the price at which the Ordinary Share have been bought or sold in the past cannot be relied upon as a guide to future performance. Persons needing advice should consult an independent financial adviser. No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings or target dividend per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings or dividends per share of the Company.

 

Neither the content of the Company’s website (or any other website) nor the content of any website accessible from hyperlinks on the Company’s website (or any other website) is incorporated into or forms part of this announcement. The REX Offer Shares to be issued or sold pursuant to the REX Offer will not be admitted to trading on any stock exchange other than the AIM market of the London Stock Exchange plc.

Faron commences a share offering

Faron Pharmaceuticals Ltd

(“Faron” or the “Company”)

Inside Information: Faron commences a share offering of preliminarily a maximum of 30,714,592 Offer Shares at a subscription price of EUR 1.00 per Offer Share and publishes a prospectus

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.

 

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO ACQUIRE ANY SECURITIES. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 (“MAR”) AND ARTICLE 7 OF MAR AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (“UK MAR”). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN MAR AND UK MAR) WERE TAKEN IN RESPECT OF THE TRANSACTION WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF INSIDE INFORMATION (AS DEFINED IN MAR AND UK MAR), AS PERMITTED BY MAR AND UK MAR. THIS INSIDE INFORMATION IS SET OUT IN THIS ANNOUNCEMENT. THEREFORE, THOSE PERSONS THAT RECEIVED INSIDE INFORMATION IN A MARKET SOUNDING ARE NO LONGER IN POSSESSION OF SUCH INSIDE INFORMATION RELATING TO THE COMPANY AND ITS SECURITIES.

 

Company announcement, 4 June 2024 at 9:00 (EEST) / 7:00 (BST) / 2:00 AM (EDT)

Inside information

 

Key highlights

 

  • Faron announces an offering of approximately EUR 30.7 million in total by offering for subscription preliminarily a maximum of 30,714,592 new and/or treasury shares (the “Offer Shares”) at a subscription price of EUR 1.00 per Offer Share (the “Subscription Price”) (the “Offering”).
  • The Offering will be conducted as a directed share issue by way of (i) a public offering to private individuals and legal entities in Finland (the “Public Offering”) and (ii) an institutional offering to institutional investors in the European Economic Area and, in accordance with applicable laws, internationally (the “Institutional Offering”). Moreover, there will be  (a) a separate open offer to qualifying holders of depositary interests in the United Kingdom and elsewhere (the “UK Open Offer”); and (ii) a separate retail offer to retail investors in the United Kingdom on the “REX” platform (the “REX Retail Offer”), through which a part of the amount of proceeds sought by the Company in the Offering may be raised.
  • The objective of the Offering is to strengthen the Company’s cash position so that the Company would have sufficient funding to reach its key milestones for the year 2024, i.e. a significant commercial partnership agreement and to finance the Company’s product development costs until the latter half of March 2025, that mainly include the production and research costs in respect of the Company’s lead program bexmarilimab. If the Company succeeds in completing the Offering of approximately EUR 30.7 million, the Company believes it would have sufficient resources to execute its core business and deliver on its key milestones of the year 2024 under the current business plan and in compliance with the financial covenants of the facilities agreement entered into with IPF FUND II SCA, SICAV-FIAR (“IPF”) (the “IPF Facilities Agreement”) until the latter half of March 2025.
  • The Offering is conditional upon the Company raising at least EUR 15 million in gross proceeds. The Company has obtained:
    • binding subscription commitments in the aggregate amount of approximately EUR 6.2 million (the “Subscription Commitments”); and
    • binding subscription guarantee undertakings whereby the subscription guarantors have undertaken to subscribe for any new shares of the Company not subscribed for in the Offering in an aggregate amount of up to EUR 8.8 million, as described below (the “Subscription Guarantee Undertakings”). The Subscription Guarantee Undertakings are limited to cover any unsubscribed new shares in the Company up to the minimum gross proceeds of the Offering of EUR 15 million.
  • Based on the binding Subscription Commitments and Subscription Guarantee Undertakings received by the Company, the condition of raising at least EUR 15 million in gross proceeds has been fulfilled.
  • The subscription period for the Offer Shares will commence on 5 June 2024 at 10:00 a.m. Finnish time and end on 18 June 2024 at 4:00 p.m. Finnish time for the Public Offering and on 19 June 2024 at 9:30 a.m. Finnish time for the Institutional Offering (the “Subscription Period”).
  • The Subscription Price in the Offering has been determined on market terms, based on feedback received from the market in advance and investors’ price indications, and it includes a significant discount to the market price of the Company’s shares prior to the announcement of the Offering. No subscription rights will be issued in the Offering, and therefore cannot be subject to public trading. The Offering dilutes current shareholders’ ownership share in the Company, unless the current shareholders subscribe for the Offer Shares in the Offering. 
  • The Offering can be completed even if it is not subscribed in full, in which case the Company’s funding would not be sufficient to deliver on the Company’s key milestones of the year 2024 in accordance with the current business plan and it would have to adjust and reduce its operations and negotiate changes to its terms of payment or negotiate new amendments to its financial covenants and seek additional funding earlier than currently planned.
  • Carnegie Investment Bank AB, Finland Branch (“Carnegie”) and Peel Hunt LLP (“Peel Hunt”) are acting as lead managers (the “Lead Managers”) and bookrunners for the Offering. Carnegie is not participating in arranging the UK Open Offer or the REX Retail Offer and Peel Hunt is not participating in arranging the UK Open Offer.
  • The Company has prepared a Finnish language prospectus, which will be available on the Company’s website at www.faron.com/osakeanti and on Nordnet Bank AB’s website at www.nordnet.fi/faron no later than 4 June 2024. An unofficial English language translation of the prospectus will be available on the Company’s website at www.faron.com/publicoffer no later than 4 June 2024.

 

TURKU, FINLAND – Faron Pharmaceuticals Ltd (AIM: FARN, First North: FARON), a clinical-stage biopharmaceutical company pursuing a CLEVER-1 receptor targeting approach to reprogramming myeloid cells to activate anti-tumor immunity in hematological and solid tumor microenvironments, today announces that it will commence a share offering. The aim of the Company is to strengthen its cash position so that the Company would have sufficient funding to reach its key milestones for the year 2024, i.e. to reach a significant commercial partnership agreement and to finance its product development costs until the latter half of March 2025, that mainly include the production and research costs in respect of the Company’s lead program bexmarilimab.

 

Based on the authorisations granted at the annual general meetings of the Company on 5 April 2024 and 24 March 2023, the Board of Directors of the Company has resolved on 3 June 2024 on terms for the Offering of approximately EUR 30.7 million in total by offering for subscription preliminarily up to 30,714,592 Offer Shares. The Board of Directors of the Company may, in the event of an oversubscription, increase the number of Offer Shares offered in the Offering by a maximum of 8,000,000 Offer Shares (the “Upsize Option”). If the Upsize Option is used in full, the number of Offer Shares offered shall amount up to 38,714,592 shares of the Company in aggregate.

 

 

The Offering in brief:

 

  • The Company is offering for subscription preliminarily up to 30,714,592 Offer Shares in the Offering comprising the Public Offering and the Institutional Offering.
  • The Subscription Price, EUR 1.00 per Offer Share, has been determined on market terms, based on feedback received from the market in advance and investors’ price indications, and it includes a significant discount to the market price prior to the announcement of the Offering. The Company’s Board of Directors has confirmed the Subscription Price based on negotiations between the Company, the Lead Managers, and several potential investors regarding the investors’ prerequisites to participate in the Offering in a manner enabling its completion, and the pricing of the Offering, taking into account the Company’s financial situation and the uncertainty regarding the continuation of the Company’s operations.
  • The Subscription Price corresponds to a discount of approximately 58 per cent compared to the closing price of the Company’s current share EUR 2.36, a discount of approximately 61 per cent compared to EUR 2.57, i.e. the 30 days volume-weighted average trading price of the Company’s share, and a discount of approximately 49 per cent compared to EUR 1.98, i.e. the 90 days volume-weighted average trading price of the Company’s share on the First North marketplace on the trading day immediately preceding the decision on the Offering 31 May 2024.
  • In the Public Offering, the Subscription Price shall be paid in euros. In the Institutional Offering, the Subscription Price shall be paid in euros and/or by way of setting off the principal, any accrued interest and any unpaid arrangement fees relating to convertible capital loan instruments issued by the Company to certain investors in March 2024 (the “Capital Loans”).
  • Based on the binding Subscription Commitments and Subscription Guarantee Undertakings received by the Company, the condition of gross proceeds of at least EUR 15 million has been fulfilled.
  • In the Public Offering, the minimum subscription is 750 Offer Shares and the maximum subscription is 99,999 Offer Shares. The minimum subscription in the Institutional Offering is 100,000 Offer Shares. Multiple subscriptions by the same investor shall be combined into one single subscription, subject to the aforementioned maximum and minimum subscription amounts.
  • In the Public Offering, Offer Shares are offered for subscription to individuals and legal entities in Finland. Investors whose permanent address or domicile is in Finland and who subscribe Offer Shares in Finland may participate in the Public Offering.

 

  • The Company aims to raise through the Offering a total of approximately EUR 30.7 million, of which amount, approximately EUR 3.7 million will be paid by converting the Company’s Capital Loans and related arrangement fees and interests into shares in the Company, gross proceeds of approximately EUR 27 million, and net proceeds of approximately EUR 23 million.
  • If the Company succeeds in completing the Offering of approximately EUR 30.7 million, the Company believes it would have sufficient resources to execute its core business and deliver on its key milestones for the year 2024 under the current business plan and in compliance with the financial covenants of IPF’s Facilities Agreement until the latter half of March 2025.
  • The Company will likely complete the Offering even though its targeted amount would not be reached. In such situation, the Company’s funding would not be sufficient to deliver on all of the Company’s key milestones for the year 2024 in accordance with the current business plan and the Company would have to seek additional funding earlier than currently planned to fulfil its current financing needs and financial covenants included in the IPF Facilities Agreement. The financial scenarios have been described below in more detail (see “Reasons for the Offering and use of proceeds; Scenarios for the outcome of the Offering”).
  • The structure of the Offering as a directed share issue rather than a rights issue is due to the challenges involved due to the admission of the Company’s Shares to trading on AIM and the post-Brexit regulatory environment. The structure and reasons for it have been described in the notice of the Annual General Meeting 2024 when seeking the share issue authorisation for the Board.  No subscription rights will be issued in the Offering, and therefore cannot be subject to public trading due to which the current shareholders of the Company cannot receive compensation typical of a rights issue for the sale of subscription rights in the Offering.
  • For the Company to be able to strengthen its financial position, secure the continuation of its operations and create preconditions for delivering on its key milestones for the year 2024 described above in accordance with its current business plan, the Board of Directors of the Company considers that there is a weighty financial reason for the Company to deviate from the shareholders’ pre-emptive subscription right.
  • The Offer Shares issued in the Offering (without the Upsize Option) amount to approximately 42.7 per cent of the shares and votes in the Company prior to the Offering and approximately 29.9 per cent of the shares and votes in the Company following the Offering. The number of outstanding shares in the Company may be increased by a maximum of 41,371,666 shares (i.e. to a total maximum of 113,379,163 shares) when the Upsize Option is exercised in full, the Free Shares (as defined below) are issued as a result of the completion of the Offering as well as assuming that all subscription guarantors would decide to receive their subscription guarantee fee in Shares instead of euros. This would result in approximately 36.5 per cent dilution of the total shareholding of current shareholders.
  • The lenders of the Capital Loans have agreed, pursuant to the terms of the Capital Loans, to convert principal, any accrued interest and any unpaid arrangement fees relating to Capital Loans in the total aggregate amount of EUR 3.7 million into Offer Shares in the Offering, corresponding to approximately 3,714,592 Offer Shares and representing approximately 12 per cent of the aggregate number of the Offer Shares (assuming that the Upsize Option is not used).
  • The Company has committed to issue investors who participated in the private placement announced on 4 April 2024 new shares primarily through a free issue (“Free Shares”), so that the subscription price of the private placement (EUR 1.50 per share) would be equal to the subscription price of a public offer or other share issue that may have been completed with a lower subscription price (or that it will make a corresponding compensation in another way). As the Subscription Price in the Offering is EUR 1.0 per Offer Share, the Company would issue 1,600,153 Free Shares in total.
  • The Board of Directors decides on the procedures to be followed in case of under- or oversubscription and may also decide to not complete the Offering (or the UK Offering). The Board of Directors of the Company may, in the event of an oversubscription, increase the number of Offer Shares offered in the Offering by a maximum of 8,000,000 Offer Shares. If the Upsize Option is used in full, the number of Offer Shares offered shall amount up to 38,714,592 shares of the Company in aggregate. In case of oversubscription of the Offering or when the aggregate number of subscriptions for the Offering and the UK Offering exceed EUR 30.7 million, the Board of Directors of the Company may reduce subscriptions. The Board of Directors has the right to reduce large subscriptions relatively more than small subscriptions. In case of oversubscription, the Board of Directors of the Company may prioritise the allocation of Offer Shares to: (i) first to lenders of the Capital Loans; (ii) secondly to subscribing shareholders of the Company who are registered in the shareholder register of the Company maintained by Euroclear Finland Oy as at 6 June 2024, to whom, based on their ownership as at the date mentioned, a pro rata allocation is intended to be provided, and thereafter to (iii) investors who have committed to subscribe. In any event, valid applications by qualifying holders of DIs will be satisfied in full up to their basic open offer entitlements under the UK Open Offer.
  • The Company’s Board of Directors will decide, on or about 19 June 2024 (unless the Subscription Period is extended) on the completion of the Offering, on the final number of Offer Shares to be issued (including on the exercise of the Upsize Option) and on the acceptance of subscriptions made in the Offering in full or in part. The Company’s Board of Directors decides on the allocation of the Offer Shares between the Public Offering and the Institutional Offering
  • An application will be made for the admission to trading of the Offer Shares on the First North under the current trading code “FARON”, and under the trading code “FARN” on AIM. Trading in the Offer Shares is expected to commence on or about 24 June 2024, unless the Subscription Period (as defined below) is extended and subject to the admission of the Offer Shares to trading on First North and AIM.

 

 

Open Offer and REX Retail Offer in brief

 

  • In the separate share offering in the United Kingdom, the Company may raise up to approximately GBP 6.8 million (equated to EUR 8.0 million based on an exchange rate of 1.1714 on 31 May 2024) through (i) an open offer of up to approximately 5.8 million new shares of the Company (the “UK Open Offer Shares”) to qualifying holders of depositary interests (“DIs”) representing entitlements to shares in the Company in the United Kingdom and elsewhere on the relevant record date (“Qualifying DI Holders”) at a UK subscription price of GBP 0.85 per share (the “UK Open Offer”) and (ii) an offer of new shares of the Company to retail investors in the United Kingdom through intermediaries using Peel Hunt LLP’s Retail Capital Markets Platform at a UK subscription price of GBP 0.85 per share (the “REX Retail Offer” and together with the UK Open Offer, the “UK Offering”). The total consideration under the UK Offering cannot exceed the GBP equivalent of EUR 8 million, and excess allocations under the UK Open Offer and allocations under the REX Retail Offer shall be scaled back accordingly to ensure this. The subscription price for shares in the UK Offering is equivalent to the EUR 1.00 Subscription Price of the Offering based on an exchange rate of 1.1714 on 31 May 2024. The UK Open Offer is governed by separate terms and conditions to be included in a circular published by the Company (the “UK Open Offer Circular”) and does not form part of the Offering. The REX Retail Offer is governed by separate terms and conditions to be included in the announcement of the REX Retail Offer and does not form part of the Offering. Further details of the UK Open Offer are set out below under “Details of the UK Open Offer”. Further details of the REX Retail Offer will be set out in a separate announcement.
  • The issue price of GBP 0.85 per share (the “UK Issue Price”) in the UK Offering corresponds to a discount of approximately 54 per cent compared to the closing price of the Company’s ordinary shares of GBP 1.85, and a discount of approximately 61 per cent compared to GBP 2.18, i.e. the 30 days volume-weighted average trading price of the Company’s ordinary shares, and a discount of approximately 52 per cent compared to GBP 1.78, i.e. the 90 days volume-weighted average trading price of the Company’s Share on AIM on the trading day immediately preceding the resolution on the Offering 31 May 2024.

 

 

Dr. Juho Jalkanen, CEO of Faron, comments:

 

“Years of hard work and dedication are finally expected to come to life over the next nine months as we seek to complete Phase II of our BEXMAB trial in patients with relapsed or refractory higher-risk myelodysplastic syndrome (r/r MDS), obtain regulatory feedback regarding measures required to obtain regulatory approval in the U.S. and complete a partnership agreement for the last stages of development and commercialization of bexmarilimab. With the unmet need in r/r MDS, current competitive landscape, untapped market opportunity and exceptional Phase I and initial Phase II read-outs we feel we could possibly offer a unique opportunity for value inflection. Join us in transforming the care of r/r MDS patients that have very limited treatment options and extremely poor prognosis.

 

Many of you may not know, that r/r MDS is as lethal as pancreatic cancer. We can possibly change this, which would be truly remarkable. For me it also gives great pleasure that we can offer this investment opportunity to the general public with the same terms and discounts as we do to institutional investors. Now everyone can take part and share the excitement of the upcoming year.”

 

Tuomo Pätsi, Chairman of the Board of Faron, comments:

 

“Faron is currently at a very interesting stage. The preliminary results from the Phase II study of our bexmarilimab drug candidate have been excellent and confirmed the previous positive Phase I results. Now, our goal is to bring bexmarilimab to market as quickly as possible, as patients are waiting for such new treatment options. The planned share issue is therefore crucial so that we would have sufficient funding to finance our product development and to sign a significant commercial partnership agreement by the end of 2024.”

 

Background to the Offering and Deviation from the Shareholders’ Pre-emptive subscription right

 

The Company announced on 4 March 2024 that it expects to require EUR 35 million in financing to complete the enrolment of patients for the BEXMAB Phase II trial with interim and final readouts and to obtain regulatory feedback from the FDA regarding path to regulatory approval in the U.S. Earlier this year, the Company has raised financing totalling EUR 8 million (including the EUR 3.2 million convertible Capital Loans announced on 4 March 2024, and paid to the Company on 8 March 2024, and the EUR 4.8 million directed share issue, the completion of which was announced on 4 April 2024), to secure continued compliance with the minimum cash covenant agreed in the waiver with IPF. Thereafter, the Company has assessed preconditions for arranging a larger financing round and now the Company aims, based on the investigations of various alternatives, to conclude the Offering.

 

Due to the admission of the Company’s shares to trading on AIM and the number of DIs (representing shares in the Company) held by DI holders in the United Kingdom, arranging a rights issue in a post-Brexit regulatory environment would involve separate regulatory approval processes in Finland and the UK. Arranging a rights issue in the UK would be challenging, time consuming and expensive and not feasible in the Company’s current financial situation. On 5 April 2024, the Company’s Annual General Meeting granted an authorisation for a directed share issue with broad discretion for the Board of Directors to allow flexibility for the Company to arrange the contemplated offering in a manner involving the Company’s shareholders, in a timely manner and at the most beneficial terms available. Hence, the now contemplated financing round is structured as (i) a public offering of shares in Finland with private placements in the EEA and elsewhere (i.e. the Public Offering and the Institutional Offering), and (ii) a separate UK Offering, the aggregate amount of which shall always be less than EUR 8 million. In the Offering, the current shareholders of the Company do not receive subscription rights, but they have the right to participate in the Offering and subscribe for the Offer Shares in accordance with the terms and conditions of the Offering.

 

The Company has applied for and received a statement from the Market Practice Board of the Finnish Securities Market Association (Decision Recommendation 1/2024) on the compliance of the Offering with good securities market practice. In its decision recommendation, the Market Practice Board has concluded that, in the circumstances described in the application, the planned directed share issue described in the application is in accordance with good securities market practice, provided that the subscription price in the share issue is determined on market terms. The Market Practice Board has in its recommendation also noted that the issuer shall, when disclosing information on the directed share issue, thoroughly and clearly describe information on the directed share issue, the reason for deviating from the shareholders’ pre-emptive subscription right and the determination of the subscription price. When disclosing information on the share issue and marketing, the issuer may not create a misleading understanding that the share issue would be based on the shareholders’ pre-emptive subscription right.

 

Reasons for the Offering and use of proceeds; Scenarios for the outcome of the Offering

 

The objective of the Offering is to strengthen the Company’s cash position so that the Company would have sufficient funding to reach its key milestones for the year 2024, i.e. a significant commercial partnership agreement and to finance its product development costs described below until the latter half of March 2025. The product development costs mainly include the production and research costs in respect of the Company’s lead program bexmarilimab, i.e. costs related to the completion of enrolment of the patients for the BEXMAB Phase II trial, treatment of patients and publication of readouts as well as obtaining regulatory feedback from the FDA regarding measures required to obtain regulatory approval in the U.S. By the end of 2024, the Company is also aiming to conclude a global partnership agreement to fund Phase III clinical research and to commercialise bexmarilimab, and it believes that the better the Company is financed the better its position is to conclude a partnership. If the Company succeeds in completing the Offering of approximately EUR 30.7 million, the Company believes it would have sufficient resources to execute its core business and deliver on its key milestones of the year 2024 under the current business plan and in compliance with the financial covenants of the IPF Facilities Agreement until the latter half of March 2025. The reasons for the UK Offering are the same as described above.

 

The Company estimates to use approximately two-thirds of the net proceeds of the Offering towards product development costs included in its key milestones for the year 2024, i.e. the continuation of the BEXMAB Phase II trial, including site and patient enrolment expenses and the drug’s CMC (Chemistry, Manufacturing, and Controls) related drug product costs, which result from its preparations for Phase III. The Company will also incur costs from an investigator-initiated study to generate data with anti-PD-1 combinations in solid tumors. The balance of the net proceeds will be used for financing costs and repayments of its existing financing agreements (IPF Facilities Agreement, loan agreement with Business Finland and the Company’s lease agreements), general and administrative expenses, working capital and general corporate purposes of the Company. The Company intends to use approximately EUR 3 million in total of the net proceeds towards repayments under the financing agreements mentioned above during the period between June 2024 and February 2025.

 

The Company will likely complete the Offering even though its targeted amount would not be reached. In such situation, the Company’s funding would not be sufficient to deliver on all of the Company’s key milestones for the year 2024 in accordance with the current business plan and the Company would have to seek additional funding earlier than currently planned to fulfil its current financing needs and financial covenants included in the IPF Facilities Agreement. The following is an estimate of the sufficiency of the gross proceeds to be received from the Offering (including the UK Offering) in different situations. The Offering is conditional upon the Company raising at least EUR 15 million in gross proceeds and the Subscription Guarantee Undertakings received by the Company are limited to this minimum amount of the Offering:

 

  • With the EUR 15 million gross proceeds, the Company’s funding could be sufficient until it receives regulatory feedback from the FDA regarding measures required to obtain regulatory approval in the U.S. The Company would have some more time to obtain further clinical results from the current patients as well as recruit some additional patients. The Company would target and focus primarily on achieving a licensing or partnership agreement as soon as possible. With the EUR 15 million gross proceeds (approximately EUR 12 million net proceeds) the Company expects that it is able to comply with its current financial covenants until the end of September 2024. If the Company conducts negotiations with the vendors of accounts payable and achieves a favourable outcome, and agrees on changes to the payment schedules, the Company would be able to comply with its current financial covenants until the end of the year 2024.

 

  • If the gross proceeds received from the Offering would be at least EUR 23 million, the Company would pursue the completion of Phase II of the BEXMAB clinical trial and the Company estimates that it would be able to comply with its current financial covenants until the beginning of January 2025. The Company would have the opportunity to devote more time and resources to negotiating and concluding a licensing or partnership agreement before the beginning of January 2025.

 

  • If the gross proceeds received from the Offering would be EUR 27 million, the Company would pursue readiness to proceed to Phase III clinical trial, which would, in the Company’s opinion, improve its negotiating position in future partnership negotiations, and the Company estimates that it would be able to comply with its current financial covenants until the latter half of March 2025. The Company could have sufficient clinical results and time to improve its negotiating position significantly in negotiating and concluding a commercial partnership agreement.

 

If the Company succeeds in raising more funds through the Offering than the aimed total amount of EUR 27 million in gross proceeds, the Company could achieve the above-mentioned objectives and it would have a stronger balance sheet to conduct commercial negotiations. The proceeds received with the potential Upsize Option would be used to strengthen the Company’s balance sheet, as well as to preparation for the Phase III clinical trial.

 

Subscription Commitments and Subscription Guarantee Undertakings

 

Certain current shareholders of the Company and other investors have, each separately, committed to subscribe for Offer Shares in the Offering for a total of EUR 6.2 million and to pay the Subscription Price for such Offer Shares (the “Subscription Commitments”). The Subscription Commitments cover subscription of the Offer Shares for a total value of approximately EUR 6.2 million, which corresponds to approximately 6,238,724 Offer Shares, and represent approximately 20 per cent of the total number of the Offer Shares (assuming the Upsize Option is not used).

 

The Subscription Commitments are binding, irrevocable and subject only to the fulfilment of the following conditions: (i) the subscription price per new share of the Company in the Offering shall not exceed EUR 1.0, (ii) the Board of Directors of the Company having no later than 30 June 2024 resolved to commence the Offering and (iii) the Company raises gross proceeds totalling at least EUR 15 million in the Offering and the UK Offering (taking into account the binding Subscription Commitments and Subscription Guarantee Undertakings received by the Company).

 

In addition, certain investors (the “Subscription Guarantors”) have entered into Subscription Guarantee Undertakings (“Subscription Guarantee Undertakings”) with the Company, according to which the Subscription Guarantors have undertaken, subject to certain conditions, to subscribe for any new shares of the Company that may not be subscribed for in the Offering for a maximum amount of EUR 8.8 million. The Subscription Guarantees are limited to cover any unsubscribed new shares of the Company only up to the minimum amount of the Offering (EUR 15 million). The Subscription Guarantees do not cover the UK Offering.

 

The Subscription Guarantee Undertakings are binding, irrevocable and subject only to the fulfilment of the following conditions: (i) the subscription price per new share of the Company in the Offering shall not exceed EUR 1.0, (ii) the Board of Directors of the Company having no later than 30 June 2024 resolved to commence the Offering and (iii) the Company raises gross proceeds totalling at least EUR 15 million in the Offering and the UK Offering (taking into account the binding Subscription Commitments and Subscription Guarantee Undertakings received by the Company).

 

Based on the binding Subscription Commitments and Subscription Guarantee Undertakings received by the Company, the condition of EUR 15 million in gross proceeds described above has been fulfilled.

 

Placing Agreement

 

On 3 June 2024, the Company and the Lead Managers have entered into a placing agreement (the “Placing Agreement”), which sets out Carnegie’s and Peel Hunt’s duties as the Lead Managers of the Offering.

The Placing Agreement contains customary terms and conditions, according to which the Lead Managers have the right to terminate the Placing Agreement in certain circumstances and subject to certain conditions. Such circumstances include, but are not limited to, significant adverse changes in the business, financial or other position or operating result of the Company, and certain other changes in, among other things, national or global political or economic conditions. Furthermore, Faron has given customary representations to the Lead Managers in the Placing Agreement regarding, among other things, the business and legal compliance of the Company, the Shares of the Company, and the contents of the Prospectus. In addition, Faron has agreed to indemnify the Lead Managers against certain liabilities in connection with the Offering.

 

Restriction on the Issue or Transfer of Shares (Lock-up)

 

The Company has undertaken not to issue new Shares or securities entitling to Shares or rights attached to them without the written consent of the Lead Managers, for a period that falls 90 days from the completion of the Offering, with the exception of the Offer Shares, the Free Shares, the Shares issued to the lenders of the Capital Loans in connection with the conversion of the Capital Loans, the Shares issued under the warrants granted to IPF, and the Shares to be issued in accordance with the terms of the Company’s current incentive schemes, as well as certain other customary exceptions. In the event that the Offering will not be completed in the targeted amount of appr. EUR 30.7 million, the Lead Managers have agreed not to unreasonably withhold their consent regarding issuance of any equity securities or any securities exchangeable for or convertible into or exercisable for equity securities proposed by the Company within the limits of the currently existing share issuance authorisations granted to the Board.

 

Publication of the prospectus

 

The Company has prepared a Finnish language prospectus regarding the Offering (the “Prospectus”), which the Finnish Financial Supervisory Authority has approved on 3 June 2024. The Prospectus will be available in Finnish on the Company’s website at www.faron.com/osakeanti and on Nordnet Bank AB’s website at www.nordnet.fi/faron on 4 June 2024, at the latest. An unofficial English-language translation of the Prospectus is expected to be available on the Company’s website at www.faron.com/publicoffer on or about 4 June 2024.

 

Important Dates for the Offering

 

  • The Subscription period for the Offering commences on 5 June 2024 at 10:00 a.m. (Finnish time)
  • The allocation preference of the Company’s shareholders is determined in the Offering on 6 June 2024 after 6:00 p.m. (Finnish time)
  • The Subscription period for the Public Offering ends on 18 June 2024 at 4:00 p.m. (Finnish time)
  • The Subscription period for the Institutional Offering ends on 19 June 2024 at 9:30 a.m. (Finnish time)
  • Announcement of the results of the Offering on 20 June 2024 (estimate) 
  • The Offer Shares are registered in the Finnish Trade Register on 20 June 2024 (estimate)
  • The Offer Shares subscribed for in the Offering are recorded in the book-entry accounts of investors on 24 June 2024 (estimate)
  • Trading in the Offer Shares commences on First North Growth Market Finland and AIM on 24 June 2024 (estimate)
  • The Offer Shares subscribed for in the Institutional Offering are ready for delivery against payment on 24 June 2024 (estimate)

 

Details of the UK Open Offer

 

The Company is proposing to raise up to approximately GBP 4.9 million before expenses by the issue of up to 5,765,368 UK Open Offer Shares under the UK Open Offer at the UK Issue Price of GBP 0.85 per share, payable in full on acceptance. Any entitlements to UK Open Offer Shares not subscribed for by Qualifying DI Holders will be available to Qualifying DI Holders under an excess application facility (the “Excess Application Facility”) that allows Qualifying DI Holders to apply for UK Open Offer Shares in excess of their entitlement to UK Open Offer Shares pro rata to their holding of Existing DIs (as defined below) (“UK Open Offer Entitlement”).

 

Qualifying DI Holders should note that the UK Open Offer is not a rights issue and therefore the UK Open Offer Shares which Qualifying DI Holders do not apply for will not be sold in the market for the benefit of Qualifying DI Holders who do not apply for UK Open Offer Shares.

 

Qualifying DI Holders may apply for UK Open Offer Shares under the UK Open Offer at the UK Issue Price pro rata to their holdings of existing DIs on the record date of the UK Open Offer (the “Existing DIs”) on the basis of:

 

3 UK Open Offer Shares for every 7 Existing DIs held

 

Entitlements of Qualifying DI Holders will be rounded down to the nearest whole number of UK Open Offer Shares. Fractional entitlements which would otherwise arise will not be issued to Qualifying DI Holders but will be aggregated and made available under the Excess Application Facility. Not all holders of DI will be Qualifying DI Holders. Shareholders who are located in, or are citizens of, or have a registered office in, the United States, Australia, Canada, Japan, New Zealand, the Republic of South Africa or any jurisdiction the extension or availability of the UK Open Offer would breach any applicable laws or regulations will not qualify to participate in the UK Open Offer.

 

Subject to availability, the Excess Application Facility enables Qualifying DI Holders to apply for UK Open

Offer Shares in addition to their UK Open Offer Entitlement (“Excess Shares”) up to the maximum number of UK Open Offer Shares available less their UK Open Offer Entitlement.

 

Valid applications by Qualifying DI Holders will be satisfied in full up to their UK Open Offer Entitlements. Applicants can apply for less or more than their entitlements under the UK Open Offer, but the Company cannot guarantee that any application for Excess Shares under the Excess Application Facility will be satisfied, as this will depend, in part, on the extent to which other Qualifying DI Holders apply for less than or more than their own UK Open Offer Entitlements. The Company may satisfy valid applications for Excess Shares in whole or in part but reserves the right not to satisfy any application above any UK Open Offer Entitlement. The Board may scale back applications made in excess of UK Open Offer Entitlements on such basis as it reasonably considers to be appropriate.

 

Application has been made for the UK Open Offer Entitlements and the entitlement to apply for UK Open

Offer Shares pursuant to the Excess Application Facility (“Excess CREST UK Open Offer Entitlements”) to be admitted to CREST. It is expected that such UK Open Offer Entitlements and Excess CREST UK Open Offer Entitlements will be credited to CREST on 5 June 2024. The UK Open Offer Entitlements and Excess CREST UK Open Offer Entitlements will be enabled for settlement in CREST until 11.00 a.m. on 18 June 2024. Applications through the CREST system may only be made by the Qualifying DI Holders originally entitled or by a person entitled by virtue of bona fide market claims. The UK Open Offer Shares must be paid in full on application. The latest time and date for receipt of CREST applications by Qualifying DI Holders and payment in respect of the UK Open Offer is 11.00 a.m. on 18 June 2024.

 

Qualifying DI Holders will receive a credit of UK Open Offer Entitlements and Excess CREST UK Open Offer Entitlements to their CREST stock account.

 

The UK Open Offer Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the existing shares of the Company and the Offer Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

 

Application will be made to the London Stock Exchange for the admission of the UK Open Offer Shares to trading on AIM and to Nasdaq Helsinki Ltd for the UK Open Offer Shares to be admitted to trading on First North. It is expected that admission of the UK Open Offer Shares to trading on AIM will occur, and that dealings in the UK Open Offer Shares subscribed for pursuant to the UK Open Offer on AIM will commence, at 8.00 a.m. on 24 June 2024, at which time it is also expected that the UK Open Offer Shares will be enabled for settlement in CREST.

 

Qualifying DI Holders should refer to the UK Open Offer Circular for more information on, and full details of, the UK Open Offer and the terms and conditions on which it is being made.

 

Important Dates for the UK Open Offer

 

Record Date for the UK Open Offer

Close of business on 3 June 2024

Announcement of the UK Open Offer

 4 June 2024

Ex-entitlement Date of the UK Open Offer

8:00 a.m. on 4 June 2024

UK Open Offer Entitlements credited to CREST
stock accounts of Qualifying DI Holders

8:00 a.m. on 5 June 2024

Latest time and date for acceptance of the
UK Open Offer by Qualifying DI holders through CREST

11:00 a.m. on 18 June 2024

Announcement of the result of the UK Open Offer

20 June 2024

Admission of the UK Open Offer Shares to trading on First North and commencement of dealings

8:00 a.m. on 24 June 2024

Admission of the UK Open Offer Shares to trading on AIM and commencement of dealings

8:00 a.m. on 24 June 2024

Expected date for CREST accounts to be credited in respect of UK Open Offer Shares in uncertificated form

24 June 2024

Notes

(1)     Each of the times and dates set out in the above timetable and mentioned in this document is subject to change by the Company, in which event details of the new times and dates will be notified to the London Stock Exchange and the Company will make an appropriate announcement via a Regulatory Information Service.

(2)     References to times in this document are to London time unless otherwise stated.

 

Publication of the UK Open Offer Circular

 

The terms and conditions of the UK Open Offer will be set out in the UK Open Offer Circular to be sent to Qualifying DI Holders in the United Kingdom and elsewhere. It is expected that the UK Open Offer Circular will be dispatched on or around 4 June 2024, and will also be available at this time on the Company’s website at www.faron.com/investors.

 

Webinars

 

Faron will be hosting two virtual webinars for investors and analysts on 6 June 2024. The webinar beginning at 5:30 p.m. (EEST) / 2:30 p.m. (GMT) / 10:30 a.m. (EDT) will be held in Finnish and the webinar beginning at 7:00 p.m. (EEST) / 4:00 p.m. (GMT) / 12 noon (EDT) will be held in English. Dr. Juho Jalkanen, CEO of Faron, and Yrjö Wichmann, Interim CFO of Faron, will be presenting at the webinars.

 

Questions may be presented during the webinar. To register for the webinar, please visit https://faron.videosync.fi/yritysesittely_2024. Contact the IR team for more information at investor.relations@faron.com.

 

Carnegie Investment Bank AB, Finland Branch and Peel Hunt LLP are acting as the Lead Managers of the Offering and as the subscription places in the Institutional Offering. Carnegie is not participating in arranging the UK Open Offer or the REX Retail Offer and Peel Hunt is not participating in arranging the UK Open Offer. In addition, Nordnet Bank AB acts as the subscription place in the Public Offering and as a subscription place in the Institutional Offering for its own customers.

 

Related party and PDMR filing

 

Christine Roth, a director of the Company, has committed to subscribe for 46,075 Offer Shares. Her interests in the issued shares and votes of the Company are set out below:

 

 

Before the Offering

 

Following the Offering

Director

Number of ordinary shares held

% of issued shares and voting rights

Number of Offer Shares committed to subscribe for

Number of ordinary shares held

% of issued shares and votes

Christine Roth

0

0

46,075

46,075

0.04

 

The participation of Christine Roth (“Director Participation”) in the Offering constitutes a related party transaction for the purposes of the AIM Rules, the First North Rulebook and the Finnish Limited Liability Companies Act. The independent directors for the purpose of the Director Participation, being all other members of the Board, having consulted with Cairn Financial Advisers LLP, the Company’s nominated adviser for the purposes of the AIM Rules, consider the terms of the Director Participation in the Offering to be fair and reasonable insofar as shareholders are concerned.

 

Notification of a Transaction pursuant to Article 19(1) of Regulation (EU) No. 596/2014

1

Details of the person discharging managerial responsibilities/person closely associated

a.

Name

Christine Roth

2

Reason for notification

 

 

 

a.

Position/Status

Member of the Board

b.

Initial notification/

Amendment

Initial Notification

3

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a.

Name

Faron Pharmaceuticals Oy

b.

LEI

7437009H31TO1DC0EB42

4

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a.

Description of the financial instrument, type of instrument

Identification Code

Share

ISIN: FI4000153309
 

b.

Nature of the transaction

Subscription of shares

c.

Price(s) and volume(s)

 

 Average

 

 

 

 

Price(s)

Volume(s)

 

1.00

46,075

 

 

 

 

d.

Aggregated information

 

– Aggregated Volume

 

– Price

 

 

 

46,075

 

1.00

e.

Date of the transaction

20 June 2024

f.

Place of the transaction

Outside of trading venue

 

 

The terms of the Offering are available at http://www.faron.com/investors/publicoffer 

For the purposes of MAR and UK MAR, the person responsible for arranging for the release of this

announcement on behalf of Faron is Juho Jalkanen, Chief Executive Officer.

 

Faron Pharmaceuticals Ltd

 

 

For more information please contact:

ICR Consilium
Mary-Jane Elliott, David Daley, Lindsey Neville
Phone: +44 (0)20 3709 5700
E-mail: faron@consilium-comms.com

 

Cairn Financial Advisers LLP, Nomad

Sandy Jamieson, Jo Turner

Phone: +44 (0) 207 213 0880

 

Peel Hunt LLP, Broker

Christopher Golden, James Steel

Phone: +44 (0) 20 7418 8900

 

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen

Phone: +358 (0)40 555 4727

Jukka Järvelä

Phone: +358 (0)50 553 8990

 

About BEXMAB

 

The BEXMAB study is an open-label Phase I/II clinical trial investigating bexmarilimab in combination with standard of care (SoC) in the aggressive hematological malignancies of acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS). The primary objective is to determine the safety and tolerability of bexmarilimab in combination with SoC (azacitidine) treatment. Directly targeting Clever-1 could limit the replication capacity of cancer cells, increase antigen presentation, ignite an immune response, and allow current treatments to be more effective. Clever-1 is highly expressed in both AML and MDS and associated with therapy resistance, limited T cell activation and poor outcomes.

 

About bexmarilimab

 

Bexmarilimab is Faron’s wholly owned, investigational immunotherapy designed to overcome resistance to existing treatments and optimize clinical outcomes, by targeting myeloid cell function and igniting the immune system. Bexmarilimab binds to Clever-1, an immunosuppressive receptor found on macrophages leading to tumor growth and metastases (i.e. helps cancer evade the immune system). By targeting the Clever-1 receptor on macrophages, bexmarilimab alters the tumor microenvironment, reprogramming macrophages from an immunosuppressive (M2) state to an immunostimulatory (M1) one, upregulating interferon production and priming the immune system to attack tumors and sensitizing cancer cells to standard of care.

 

About Faron Pharmaceuticals Ltd

 

Faron (AIM: FARN, First North: FARON) is a global, clinical-stage biopharmaceutical company, focused on tackling cancers via novel immunotherapies. Its mission is to bring the promise of immunotherapy to a broader population by uncovering novel ways to control and harness the power of the immune system. The Company’s lead asset is bexmarilimab, a novel anti-Clever-1 humanized antibody, with the potential to remove immunosuppression of cancers through reprogramming myeloid cell function. Bexmarilimab is being investigated in Phase I/II clinical trials as a potential therapy for patients with hematological cancers in combination with other standard treatments. Further information is available at www.faron.com.

 

Important notice

 

This announcement is not an offer of securities for sale into the United States. The Offer Shares have not been and will not 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 intention to register the Offer Shares in the United States or to make a public offering in the United States. Any sale of the Offer Shares in the United States will be made solely to a limited number of “qualified institutional buyers” or accredited investors, each as defined in Rule 144A in reliance on an exemption from the registration requirements of the Securities Act.

 

The distribution of this release may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such relevant legal restrictions. The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, Japan, New Zealand or the Republic of South Africa. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such aforementioned jurisdiction. This release is not directed to, and is not intended for distribution to or use by, any person or entity that is a citizen, resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would violate law or regulation or which would require any registration or licensing within such jurisdiction.

 

In any EEA Member State, other than Finland, this release is only addressed to and is only directed at “qualified investors” in that Member State within the meaning of Article 2(e) of Regulation (EU) 2017/1129 (the “Prospectus Regulation”).

 

In the United Kingdom, this release is only being distributed to and is only directed at “qualified investors” within the meaning of Article 2(e) of the Prospectus Regulation as it forms part of domestic law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (the “UK Prospectus Regulation”) who are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “UK Relevant Persons”). Any securities mentioned herein are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, in the United Kingdom, UK Relevant Persons. Any person who is not a UK Relevant Person should not act or rely on this release or any of its contents. The UK Open Offer is only available to persons in the United Kingdom falling within Article 43 of the Order.

 

This release does not constitute a prospectus as defined in either the Prospectus Regulation or the UK Prospectus Regulation and, as such, it does not constitute or form part of, and should not be construed as, an offer to sell, or a solicitation or invitation of any offer to buy, acquire or subscribe for, any securities or an inducement to enter into investment activity in relation to any securities.

 

No part of this release, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The information contained in this release has not been independently verified. No representation, warranty or undertaking, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. The Company or any of its respective affiliates, advisors or representatives or any other person, shall have no liability whatsoever (in negligence or otherwise) for any loss, however arising from any use of this release or its contents or otherwise arising in connection with this release. Each person must rely on their own examination and analysis of the Company, its subsidiaries, its securities and the transactions, including the merits and risks involved.

 

The Lead Managers are acting exclusively for the Company and no one else in connection with the Offering. They will not regard any other person as their respective client in relation to the Offering. The Lead Managers will not be responsible to anyone other than the Company for providing the duties afforded to their respective clients, nor for giving advice in relation to the Offering or any transaction or arrangement referred to herein.

 

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 Company’s current expectations and assumptions regarding the completion and use of proceeds from the Offering, 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 Company’s current beliefs and assumptions and are based on information currently available to the Company.

 

A number of factors could cause actual results to differ materially from the results and expectations dis-cussed in the forward-looking statements, many of which are beyond the control of the Company. 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 Company believes 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.

Issuance of warrants

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Issuance of warrants

Company Announcement, 17 May 2024 at 18:00 (EEST) / 16:00 (BST) / 11:00 AM (EDT)

 

TURKU, FINLAND / BOSTON, MA – Faron Pharmaceuticals Ltd. (AIM: FARN, First North: FARON), a clinical-stage biopharmaceutical company pursuing a CLEVER approach to reprogramming myeloid cells to activate anti-tumor immunity in hematological and solid tumor microenvironments, today announces that it has issued to its lender IPF Fund II SCA, SICAV-FIAR (“IPF”) 333,333 warrants (“Warrants”) in accordance  with the announcement released on 30 April 2024 in relation to a waiver extension. The strike price is 1.50 euros for these Warrants and it will be adjusted to any lower subsequent subscription price of shares in any future share issue. Each Warrant entitles its holder to subscribe for one new share in the Company, and the Warrants may be exercised for a period of seven years.

 

Pursuant to the terms of the restated warrant holder agreement entered into between the Company and IPF on 17 May 2024, the number of the Warrants to be issued to IPF may be further increased upon (and subject to) agreed adjustment events so that the total number of new shares in the Company (as a result of the exercise of the Warranties) multiplied by the (adjusted, if applicable) strike price is equal to EUR 500,000 (minus any amounts already paid). For that purpose, the Board of Directors of Faron has approved the terms and conditions for 750,000 Warrants of which the 333,333 Warrants are now issued. The terms and conditions of the Warrants are available on the Company’s website. Any further issuances will be announced separately.

 

On the date of this announcement, IPF holds 1,320,343 warrants, which entitle them to subscribe for the same number of shares in the Company using strike price EUR 1.50, representing 1.8% of the current number of shares in the Company (72,007,497).

 

 

For more information please contact:

Faron Pharmaceuticals

 

Investor Contact

LifeSci Advisors

Daniel Ferry

Managing Director

daniel@lifesciadvisors.com

+1 (617) 430-7576

 

ICR Consilium
Mary-Jane Elliott, David Daley, Lindsey Neville
Phone: +44 (0)20 3709 5700
E-mail: faron@consilium-comms.com

 

Cairn Financial Advisers LLP, Nomad

Sandy Jamieson, Jo Turner

Phone: +44 (0) 207 213 0880

 

Peel Hunt LLP, Broker

Christopher Golden, James Steel

Phone: +44 (0) 20 7418 8900

 

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen

Phone: +358 (0)40 555 4727

Jukka Järvelä

Phone: +358 (0)50 553 8990

 

 

About Faron Pharmaceuticals Oy 

Faron (AIM: FARN, First North: FARON) is a global, clinical-stage biopharmaceutical company, focused on tackling cancers via novel immunotherapies. Its mission is to bring the promise of immunotherapy to a broader population by uncovering novel ways to control and harness the power of the immune system. The Company’s lead asset is bexmarilimab, a novel anti-Clever-1 humanized antibody, with the potential to remove immunosuppression of cancers through targeting myeloid cell function. Bexmarilimab is being investigated in Phase I/II clinical trials as a potential therapy for patients with hematological cancers in combination with other standard treatments and as a monotherapy in last line solid cancers. Further information is available at www.faron.com.

 

 

Announcement of Placing

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, NEW ZEALAND, 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 EU REGULATION 596/2014 (“MAR”) AND ARTICLE 7 OF MAR AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (“UK MAR”).

 

 

Faron Pharmaceuticals Ltd

(“Faron” or the “Company“)

 

Inside Information:

Announcement of Placing of Newly Issued Treasury Shares to Raise EUR 4.8 Million and of

PDMR Dealings

 

Company announcement, 4 April 2024 at 7:00 a.m. BST/ 9:00 a.m. EEST

Inside information

 

Key highlights

 

          The Company has conducted a private placement directed to a limited number of institutional and other investors to raise EUR 4.8 million to secure the required and previously communicated short-term bridge financing totalling EUR 8 million (incl. the EUR 3.2 million convertible loan announced on 4 March 2024).

          Upon receipt of these proceeds, the Company continues to satisfy the required covenant levels and expects to have sufficient working capital into June 2024.

          The Placing was supported by both new and existing shareholders such as European Innovation Council (EIC Fund) and other Finnish and international investors.

          To complete the enrolment of the phase 2 of the BEXMAB study with interim and final readouts and to obtain regulatory feedback from the FDA between now and Q1/2025, the Company expects to need an additional EUR 27 million in total (accounting for the raised EUR 8 million in early March and this Placing).

          The Company continues active endeavours and preparations to secure longer term funding. The Company’s Board of Directors has proposed to the Annual General Meeting scheduled to be held on 5 April 2024 an authorization for a larger share issuance contemplated to be launched as a public offering (with planned allocation preferences to existing shareholders and bridge finance lenders) as soon as practicable once the required preparations and approvals are in place. The targeted size of the contemplated share issue is planned to be set accordingly, to meet cash runway needs for 2024.

 

TURKU, FINLAND / BOSTON, MA – Faron Pharmaceuticals Ltd (First North: FARON, AIM: FARN), a clinical stage biopharmaceutical company pioneering macrophage reprogramming for effective anticancer immunotherapies, today announces that it has conducted a placement of 3,200,298 newly issued treasury shares (“Placing Shares“) to raise EUR 4.8 million before expenses to a limited number of institutional investors and other investors (“Placing“). Upon receipt of these proceeds, the Company continues to satisfy the required covenant levels and expects to have sufficient working capital into June 2024. Carnegie Investment Bank AB (publ), Finland Branch is acting as sole bookrunner and lead manager in the Placing.

 

The Placing was carried out as a private placement by way of a firm placement of Placing Shares to a limited number of institutional and other investors. To implement the Placing, the Board of Directors of Faron (the “Board“) has decided to issue 3,200,298 shares to Faron itself without consideration (“Treasury Shares“) and, subject to the registration of the Treasury Shares, further convey such Treasury Shares as Placing Shares to the participating investors. The subscription price per Placing Share of EUR 1.50 (the “Issue Price“) represents a 11.2 % discount to the close price on 3 April 2024 on Nasdaq Helsinki First North (“First North“). The settlement of the Placing (delivery against payment) trades is expected to complete on or around 9 April 2024. The Placing was supported by both new and existing shareholders such as European Innovation Council (EIC Fund) and other Finnish and international investors.

This fundraise will enable us to meet our immediate financing needs and continue our ambitious bexmarilimab development program, with a focus on delivering next milestones,” said Dr. Markku Jalkanen, Chief Executive Officer of the Company. “These funds are part of the larger financing plan to secure cash runway into beginning of 2025 and to complete Phase II study and receive FDA’s guidance for the pivotal study part. We would like to thank all our investors for their support in developing this novel immunotherapy, especially for myeloid leukemia with very few treatment options“.

 

 

As was announced by the Company on 4 March 2024 following its receipt of the EUR 3.2 million binding commitments for convertible loans to secure the Company’s immediate short-term financing needs until the end of March 2024 and allowing the Company to make critical payments to third parties under agreed waiver (“Waiver“) with IPF Fund II SCA, SICAV-FIAR (“IPF“), the Company has continued active endeavours to secure its short and longer-term financing needs. The now announced Placing covers the required and previously communicated short-term bridge financing totalling at least EUR 8 million (incl. the EUR 3.2 million convertible loan announced on March 4, 2024) to secure continued compliance with the cash covenants agreed in the Waiver. As part of the Waiver, the minimum cash covenant remains at the lowered level of EUR 4.5 million until 30 April 2024 and thereafter it returns to the previously agreed level (being the higher of the Company’s cash runway for the past three (3) calendar months and the Company’s expected cash runway for the following three (3) calendar months). The Company continues active endeavours and preparations to secure longer term funding.

 

As previously announced, the Board has proposed to the Annual General Meeting scheduled to be held on 5 April 2024 an authorization for a larger share issuance contemplated to be launched as a public offering (with planned allocation preferences to existing shareholders and bridge finance lenders including conversion of loans) (the “Public Offering“) as soon as practicable once the required preparations and approvals are in place. The receipt of long-term financing is necessary to secure funding for 2024 and especially the uninterrupted continuation of the Company’s BEXMAB study to full read out of the Phase II study and FDA feedback on registrational study design during 2024. The targeted size of the contemplated Public Offering is planned to be set accordingly, to meet these cash runway needs for 2024. The Company is also evaluating and continuously negotiating several business development alternatives that may result in non-dilutive funding.

 

 

USE OF PROCEEDS

 

Faron has completed an overall cost reduction plan that eliminated over 20% of operating expenses including a 25% reduction in employee-related expenditure. Cash burn for the first half of 2024 is estimated at EUR 2.5 million per month declining to approximately EUR 2.0 million per month in the second half of the year.

Key activities

  • Continuation of BEXMAB Phase 2 Study.
  • Obtaining FDA advice on registrational Study design.
  • Maintaining GMP status for manufactured bexmarilimab and preparing it for registrational Trial.
  • Short term funding needs to satisfy the IPF covenant and bridge operations into June 2024 before a long-term financing is in place.
  • Short term IPF related financing costs.

 

  

DETAILS OF THE PLACING AND SHARE ISSUES

 

The Placing is carried out within the authorization granted to the Board by shareholders at the Company’s Annual General Meeting held on 24 March 2023 to issue up to 12,500,000 new shares in aggregate in the Company, as well as the conveyance of up to the same maximum number (twelve million five hundred thousand (12,500,000)) of treasury shares in the possession of the Company, including the right to deviate from the shareholders’ pre-emptive subscription right. The Company has decided to first issue the Treasury Shares to itself without consideration and then immediately convey such Treasury Shares as Placing Shares to the participating investors against their payment of the Issue Price (delivery against payment of the Issue Price in full).

 

A total of 3,200,298 Treasury Shares (representing approximately 4.7 per cent of all the issued shares and votes in the Company immediately prior to the Placing) have been issued and registered in the Finnish Trade Register today on 4 April 2024. Following the issuance, the aggregate number of ordinary shares in the Company is 72,007,497. As a part of the Placing, the 3,200,298 Placing Shares are further conveyed to investors with payment and settlement (delivery against payment of the Issue Price in full) expected to be completed on or about 9 April 2024. The Placing Shares confer a right to dividends and other shareholder rights from the payment and settlement to investors. One Placing Share entitles the holder to one vote in the general meeting of the Company (save for the Annual General Meeting scheduled to be held on 5 April 2024, the record date of which was 22 March 2024). Following, and subject to, the completion of the settlement in full, the Company will have no shares in treasury and therefore, the total number of voting rights in Faron will be 72,007,497 (the “New 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 New Number of Shares and Votes of the Company.

 

Furthermore, to align the Issue Price to the possibly lower subscription price per share to be applied in the potential Public Offering or (in the absence of the Public Offering) other equity round completed before 10 June 2024 (the “Other Equity Round“), subject to the Annual General Meeting scheduled to be held on 5 April 2024 making the required resolutions and granting the authorisation, and the Company completing such Public Offering or Other Equity Round, the Company would, in connection with (or following) the Public Offering or the Other Equity Round grant the subscribers in the Placing either new shares in the Company free of charge or other instruments to achieve the same net effect from both the Company’s and the said subscribers’ perspective. Such additional shares or other instruments would be granted as soon as practicable after the completion of the Public Offering or the Other Equity Round, estimated on or about 15 June 2024.

 

In assessing the Placing and its terms and concluding that there are weighty financial and value creation reasons for the Company to deviate from the shareholders’ pre-emptive subscription right, the Board has carefully assessed the timing, structure, size, price, participants and other terms of the Placing from the Company’s and all of its shareholders’ perspective, also in light of e.g. available alternatives, consultation and market feedback received, as well as the information, circumstances, timing, needs and planned action to secure the required short and long term financing previously and consistently announced and updated by the Company.

 

As previously announced by the Company on 28 March 2024 and 18 November 2022, respectively, the Company has issued to IPF special rights which entitle them to subscribe for new ordinary shares in the Company (“Warrants“). Pursuant to the terms and conditions of the Warrants, the subscription price per share on the exercise of a) a total of 319,944 Warrants shall be the lower of either EUR 1.85 (equivalent to issue price of the placing announced by the Company on 14 October 2022) or the subscription price per share in any subsequent share offering undertaken by the Company and b) a total of 613,496 Warrants shall be the lower of either EUR 1.63 (equivalent to the terms of a waiver received from IPF) or the subscription price per share in any subsequent share offering undertaken by the Company. As the Issue Price is EUR 1.50, the subscription price per share of the aforementioned aggregate amount of 933,440 Warrants shall be adjusted to EUR 1.50. The Company has also resolved to issue an additional 53,570 Warrants to IPF (with the same subscription price per share of EUR 1.50).

 

Further, pursuant to the terms of the warrant holder agreement entered into between the Company and IPF as announced on 28 March 2024, the number of warrants to be issued to IPF ( currently 613,496 Warrants) may be further increased upon (and subject to) agreed adjustment events so that the total number of new shares in the Company (issued as a result of the exercise of the increased number of warrants) multiplied by the (adjusted) subscription price per share in any subsequent share offering undertaken by the Company is equal to EUR 1,000,000 (minus any amounts already paid). The Company will separately publish an announcement on the issuance of the additional warrants.

 

ADMISSION

 

The Company will make applications for the admission of the Placing Shares to trading on First North and AIM with said admissions expected to become effective and trading to commence on or around 9 April 2024 (the “Admissions“).

 

RELATED PARTY AND PDMR DEALING

 

Timo Syrjälä, an existing shareholder in the Company, has subscribed for and been allocated 133,333 Placing Shares in aggregate (subscribed for by himself and through Acme Investments SPF Sarl (“Acme“), an entity wholly owned by Mr. Syrjälä), for an aggregate subscription value of approximately EUR 0.2 million at the Issue Price. Following the completion of the Placing, Mr. Syrjälä’s total holding in the Company’s shares, which includes his indirect holding through Acme, will be 13,432,335 shares, representing 18,65 per cent of the issued shares and votes of the Company following the Placing. Mr Syrjälä is a “Substantial Shareholder” in the Company for the purposes of the AIM Rules for Companies (the “AIM Rules“). His subscription for Placing Shares pursuant to the Placing is a related party transaction for the purposes of the AIM Rules. The Directors of the Company, all of whom are independent of Mr Syrjälä, having consulted with Cairn Financial Advisers LLP, the Company’s nominated adviser for the purposes of the AIM Rules, consider the terms of the participation by Mr. Syrjälä in the Placing to be fair and reasonable insofar as shareholders are concerned.

 

In addition, Markku Jalkanen and Tuomo Pätsi, directors of the Company, as well as Scientific Advisor Sirpa Jalkanen have subscribed for 33,333, 13,333 and 33,333 shares respectively. Their beneficial interests in the issued shares and votes of the Company are set out below:

 

 

Before the Placing

 

Following the Placing

Director

Number of ordinary shares held

% of issued shares and votes

Number of Placing Shares subscribed for

Number of ordinary shares held

% of issued shares and votes

Markku Jalkanen

2,175,266

3.16

33,333

2,208,599

3.07

Sirpa Jalkanen

1,138,168

1.65

33,333

1,171,501

1.63

Tuomo Pätsi

11,765

0.02

13,333

25,0980

0.03

   

The participation of Markku Jalkanen and Tuomo Pätsi (“Directors’ Participation“) in the Placing constitute related party transactions for the purposes of the AIM Rules. The independent directors for the purpose of the Directors’ Participation, being Dr Frank Armstrong, John Poulos, Christine Roth, Marie-Louise Fjällskog and Erik Ostrowski, having consulted with Cairn Financial Advisers LLP, the Company’s nominated adviser for the purposes of the AIM Rules, consider the terms of the Directors’ Participation in the Placing to be fair and reasonable insofar as shareholders are concerned.

 

 

Notification of a Transaction pursuant to Article 19(1) of Regulation (EU) No. 596/2014

1

Details of the person discharging managerial responsibilities/person closely associated

a.

Name

a)       Markku Jalkanen

b)       Sirpa Jalkanen

c)       Tuomo Pätsi

 

2

Reason for notification

 

 

 

a.

Position/Status

Directors

b.

Initial notification/

Amendment

Initial Notification

3

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a.

Name

Faron Pharmaceuticals Oy

b.

LEI

7437009H31TO1DC0EB42

4

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a.

Description of the financial instrument, type of instrument

Identification Code

Ordinary shares

 

 

ISIN: FI4000153309
 

b.

Nature of the transaction

Purchase of ordinary shares

c.

Price(s) and volume(s)

 

 Average

 

 

 

 

Price(s)

Volume(s)

 

a)       1.50

b)       1.50

c)       1.50

 

a) 33,333

b) 33,333

c) 13,333

 

 

 

 

d.

Aggregated information

 

– Aggregated Volume

 

– Price

 

 

79,999

 

1.50

e.

Date of the transaction

3 April 2024

f.

Place of the transaction

Nasdaq First North Growth Market

 

 

 

 

 

For more information please contact:

 

Investor Contact, US  

LifeSci Advisors 

Daniel Ferry 

Managing Director 

daniel@lifesciadvisors.com

+1 (617) 430-7576 

 

Investor Contact, EUR

Faron Pharmaceuticals

Yrjö E K Wichmann

SVP, Funding & Investor Relations

yrjo.wichmann@faron.com

investor.relations@faron.com

Phone: +358 (0) 40 5868 979

 

Cairn Financial Advisers LLP, Nomad

Sandy Jamieson, Jo Turner

Phone: +44 (0) 207 213 0880

 

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen

Phone: +358 (0)40 555 4727

Jukka Järvelä

Phone: +358 (0)50 553 8990

 

ICR Consilium

Mary-Jane Elliott, David Daley, Lindsey Neville

faron@consilium-comms.com

Phone: +44 (0)20 3709 5700

 

 

THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA. THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES. THE LOANS, ANY SECURITIES ISSUED UPON CONVERSION OF THE LOANS AND ANY SECURITIES ISSUED IN THE INVESTMENT ROUND (COLLECTIVELY, THE “SECURITIES”) HAVE NOT BEEN AND WILL NOT 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 INTENTION TO REGISTER THE SECURITIESIN THE UNITED STATES OR TO MAKE A PUBLIC OFFERING IN THE UNITED STATES. ANY SALE OF THE SECURITIES IN THE UNITED STATES WILL BE MADE SOLELY TO “QUALIFIED INSTITUTIONAL BUYERS” AS DEFINED IN RULE 144A IN RELIANCE ON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT.

 

About BEXMAB 

The BEXMAB study is an open-label Phase 1/2 clinical trial investigating bexmarilimab in combination with standard of care (SoC) in the aggressive hematological malignancies of acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS). The primary objective is to determine the safety and tolerability of bexmarilimab in combination with SoC (azacitidine) treatment. Directly targeting Clever-1 could limit the replication capacity of cancer cells, increase antigen presentation, ignite an immune response, and allow current treatments to be more effective. Clever-1 is highly expressed in both AML and MDS and associated with therapy resistance, limited T cell activation and poor outcomes. 

 

About Bexmarilimab

Bexmarilimab is Faron’s wholly owned, investigational immunotherapy designed to overcome resistance to existing treatments and optimize clinical outcomes, by targeting myeloid cell function and igniting the immune system. Bexmarilimab binds to Clever-1, an immunosuppressive receptor found on macrophages leading to tumor growth and metastases (i.e. helps cancer evade the immune system). By targeting the Clever-1 receptor on macrophages, bexmarilimab alters the tumor microenvironment, reprogramming macrophages from an immunosuppressive (M2) state to an immunostimulatory (M1) one, upregulating interferon production and priming the immune system to attack tumors and sensitizing cancer cells to standard of care.  

 

About Faron Pharmaceuticals Ltd. 

Faron (AIM: FARN, First North: FARON) is a global, clinical-stage biopharmaceutical company, focused on tackling cancers via novel immunotherapies. Its mission is to bring the promise of immunotherapy to a broader population by uncovering novel ways to control and harness the power of the immune system. The Company’s lead asset is bexmarilimab, a novel anti-Clever-1 humanized antibody, with the potential to remove immunosuppression of cancers through targeting myeloid cell function. Bexmarilimab is being investigated in Phase I/II clinical trials as a potential therapy for patients with hematological cancers in combination with other standard treatments. 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 completion and use of proceeds from the Placing, 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 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.

 

 

Issue of Warrants to IPF Funding Update

Faron Pharmaceuticals Oy
(“Faron” or “Company”)

 

Issue of Warrants to IPF

Funding Update

 

Company announcement, March 28, 2024 at 3 AM (EDT) / 7 AM (GMT) / 9 AM (EET)

 

TURKU, FINLAND / BOSTON, MA – Faron Pharmaceuticals Ltd. (AIM: FARN, First North: FARON), a clinical-stage biopharmaceutical company pursuing a CLEVER approach to reprogramming myeloid cells to activate anti-tumor immunity in hematological and solid tumor microenvironments, today announces that Faron has committed to granting IPF special rights entitling to subscribe for ordinary shares of the Company against payment (“Warrants”) in addition to the warrants created on February 28, 2022.

 

IPF Warrants

 

As was announced by the Company on March 4, 2024, pursuant to the waiver regarding certain events of default (“Waiver”) under the terms of the secured debt agreement with IPF Fund II SCA, SICAV-FIAR (“IPF”) as Lender and Faron Pharmaceuticals Ltd as Borrower (“Facilities Agreement”), the Company shall issue to IPF additional special rights which entitle them to subscribe for new ordinary shares in the Company (“Warrants”), with an exercise price equal to the volume-weighted average price of the Company’s share during the three trading days preceding the date of the Waiver (“Strike Price”). The Strike Price shall be the lower of either EUR 1.63 (equivalent to the terms of the Waiver) or the subscription price per share in any subsequent share offering undertaken by the Company. The number of Warrants primarily issued to IPF is calculated by dividing 10% of the original loan amount (EUR 10 million) by the Strike Price, subject to certain adjustments in accordance to the terms of a warrantholder agreement entered into between the Company and IPF (“Warrantholder Agreement”). The Warrants are exercisable for a period of seven years.

 

In accordance with the Waiver and the Warrantholder Agreement, on March 27, 2024, the Board of Directors of the Company, based on the authorisation granted to the Board by shareholders at the Company’s Annual General Meeting held on March 24, 2023, resolved upon a warrant program directed to IPF. Pursuant to the warrant program, the Warrants are issued without consideration. The Warrants are issued as a part of the negotiated funding arrangement with IPF and therefore, from the Company’s point of view, there is a weighty financial reason for the program and the issuance of Warrants thereunder.

 

Pursuant to the Warrantholder Agreement, a preliminary amount of [613,496] warrants were issued on March 27, 2024 to IPF. The maximum total number of warrants to be granted pursuant to the Warrantholder Agreement is 1,500,000, and the Board of the Company shall cause the registration of the remaining 886,504 warrants after the Annual General Meeting 2024 of the Company, scheduled to be held on April 5, 2024. Should the Annual General Meeting 2024 of the Company resolve not to approve the proposal made to the Annual General Meeting to authorise the Board to resolve on the issuance of special rights entitling to shares in the Company, the Board shall convene an Extraordinary General Meeting of the Company to authorise the Board to issue such additional number of special rights as is required to satisfy the maximum total number of warrants to be granted pursuant to the Warrantholder Agreement. Each warrant entitles its holder to subscribe for one new share in the Company, and the number of shares in the Company may be increased by a maximum of 613,496 shares as a result of the exercise of the warrants now issued to IPF and should the maximum amount of warrants be issued to IPF, the number of shares in the Company may be increased by a maximum of 1,500,000 (when taking into account the 613,496 shares already issued) as a result of the exercise of said warrants. The warrants may be exercised for a period of seven years. Pursuant to the terms of the Warrantholder Agreement the number of warrants to be issued to IPF may be further increased upon (and subject to) agreed adjustment events so that the total number of new shares in the Company (as a result of the exercise of the exercise of the warrantes) multiplied by the (adjusted) Strike Price is equal to EUR 1,000,000 (minus any amounts already paid). The terms and conditions of the warrants are attached to this announcement and will be available on the Company’s website.

 

Funding Update

 

Further to the Company’s announcement on February 19, 2024 regarding the Events of Default with IPF, and the subsequent announcements in regards to the Company’s ongoing financial position, the Company confirms that it is in advanced negotiations with various investors in order to secure immediate funding.

 

The Company’s current cash balance is sufficient to allow the Faron to continue its operations into April 2024, however whilst the Company is in advanced negotiations to complete the remaining bridge financing of approximately EUR 5 million shortly, the Company notes that there is no guarantee that the required funds will be raised.

 

The Company will update the market in due course of any material developments as soon as practicable.

 

 

For more information please contact:

 

Investor Contact

LifeSci Advisors

Daniel Ferry

Managing Director

daniel@lifesciadvisors.com

+1 (617) 430-7576

 

ICR Consilium

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consiliumcomms.com

 

Cairn Financial Advisers LLP, Nomad

Sandy Jamieson, Jo Turner

Phone: +44 (0) 207 213 0880

 

Peel Hunt LLP, Broker

Christopher Golden, James Steel

Phone: +44 (0) 20 7418 8900

 

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen

Phone: +358 (0)40 555 4727

Jukka Järvelä

Phone: +358 (0)50 553 8990

 

About Faron Pharmaceuticals Ltd.

 

Faron (AIM: FARN, First North: FARON) is a global, clinical-stage biopharmaceutical company, focused on tackling cancers via novel immunotherapies. Its mission is to bring the promise of immunotherapy to a broader population by uncovering novel ways to control and harness the power of the immune system. The Company’s lead asset is bexmarilimab, a novel anti-Clever-1 humanized antibody, with the potential to remove immunosuppression of cancers through targeting myeloid cell function. Bexmarilimab is being investigated in Phase I/II clinical trials as a potential therapy for patients with hematological cancers in combination with other standard treatments treatments and as a monotherapy in last line solid cancers. Further information is available at www.faron.com.

 

 

Exercise of options

Faron Pharmaceuticals Ltd.

 

(“Faron”)

 

Exercise of options

Issue of equity

 

Company announcement, January 19, 2024, at 1:00 p.m. GMT / 3:00 p.m. EET

 

TURKU, FINLAND / BOSTON, MA – Faron Pharmaceuticals Ltd. (AIM: FARN, First North: FARON), a clinical- stage biopharmaceutical company focused on tackling cancers via novel immunotherapies, announces that it has received notifications from option holders to exercise 2015B options over 5,000 shares in the Company at an exercise price of EUR 2.90 (approx. GBP 2.48) per share, 2015D options over 8,000 shares in the Company at an exercise price of EUR 1.09 (approx. GBP 0.94) per share under the Company’s 2015 Option Plan and 2019 C bis options under the US sub-plan over 7,500  shares in the Company at an exercise price of EUR 2.38 (approx. GBP 2.04) per share under to Company’s 2019 Option Plan (“New Ordinary Shares”). The terms and conditions of the 2015 Option Plan are available on the Company’s website at https://www.faron.com/sites/default/files/Option%20Plan%202015_Terms%20and%20Conditions_20200518.pdf, and the terms and conditions of the 2019 Option Plan are available on the Company’s website at https://www.faron.com/sites/faron-corp/files/faron/investor/general-meeting/2023/annex-1-amended-option-plan-2019.pdf

 

Applications will be made to the London Stock Exchange and Nasdaq Helsinki to admit the New Ordinary Shares to trading on AIM and Nasdaq First North Growth Market, respectively. Admission of the New Ordinary Shares is expected to occur on or around February 7, 2024, following issue and registration of the New Ordinary Shares on or around February 6, 2024 (“Registration”). The New Ordinary Shares will rank pari passu with existing ordinary shares.

 

Faron’s enlarged issued number of shares immediately following Registration will be 68,807,199 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 68,807,199. 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 issued shares and votes of the Company.

 

For more information please contact:

 

Investor Contact

LifeSci Advisors

Daniel Ferry

Managing Director

daniel@lifesciadvisors.com

+1 (617) 430-7576

 

Media Contact

ICR Consilium

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com 

 

Cairn Financial Advisers LLP, Nomad

Sandy Jamieson, Jo Turner

Phone: +44 (0) 207 213 0880

 

Peel Hunt LLP, Broker

Christopher Golden, James Steel

Phone: +44 (0) 20 7418 8900

 

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen

Phone: +358 (0)40 555 4727

Jukka Järvelä

Phone: +358 (0)50 553 8990

 

 

About BEXMAB

The BEXMAB study is an open-label Phase 1/2 clinical trial investigating bexmarilimab in combination with standard of care (SoC) in the aggressive hematological malignancies of acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS). The primary objective is to determine the safety and tolerability of bexmarilimab in combination with SoC (azacitidine) treatment. Directly targeting Clever-1 could limit the replication capacity of cancer cells, increase antigen presentation, ignite an immune response, and allow current treatments to be more effective. Clever-1 is highly expressed in both AML and MDS and associated with therapy resistance, limited T cell activation and poor outcomes.

 

About Bexmarilimab

Bexmarilimab is Faron’s wholly owned, investigational immunotherapy designed to overcome resistance to existing treatments and optimize clinical outcomes, by targeting myeloid cell function and igniting the immune system. Bexmarilimab binds to Clever-1, an immunosuppressive receptor found on macrophages leading to tumor growth and metastases (i.e. helps cancer evade the immune system). By targeting the Clever-1 receptor on macrophages, bexmarilimab alters the tumor microenvironment, reprogramming macrophages from an immunosuppressive (M2) state to an immunostimulatory (M1) one, upregulating interferon production and priming the immune system to attack tumors and sensitizing cancer cells to standard of care.

 

About Faron Pharmaceuticals Ltd.

Faron (AIM: FARN, First North: FARON) is a global, clinical-stage biopharmaceutical company, focused on tackling cancers via novel immunotherapies. Its mission is to bring the promise of immunotherapy to a broader population by uncovering novel ways to control and harness the power of the immune system. The Company’s lead asset is bexmarilimab, a novel anti-Clever-1 humanized antibody, with the potential to remove immunosuppression of cancers through reprogramming myeloid cell function. Bexmarilimab is being investigated in Phase I/II clinical trials as a potential therapy for patients with hematological cancers in combination with other standard treatments. Further information is available at www.faron.com.

 

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 addition, other factors which could cause actual results to differ materially include the ability of the Company to successfully license its programs 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.

 

 

Proposed Issue and Placing

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 (“MAR”) AND ARTICLE 7 OF MAR AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (“UK MAR”).

 

 

Faron Pharmaceuticals Ltd

(“Faron” or the “Company”)

 

Inside Information: Proposed Issue and Placing of a minimum of approx. EUR 6.0 million by way of an accelerated book-building

 

 

Company announcement, 26 October 2023 at 4:30 p.m. GMT / 6:30 p.m. EEST

Inside information

 

KEY HIGHLIGHTS

  • A proposed private placement of newly issued treasury shares (“Placing Shares”) to raise approximately EUR 6.0 million, to be conducted by way of an accelerated book-building, directed to a limited number of institutional and other investors.
  • The minimum amount to be raised is approximately EUR 6.0 million. Subject to the Company raising the minimum amount, the Company will have sufficient funding for its working capital needs into Q1 2024 and be able to meet its financial and operational covenants by 27 October 2023, (with a minimum of EUR 3.0 million needed to meet the covenant as per agreed waivers with IPF Partners). The total cash and cash equivalents held by the Company was ca. EUR 6.3 million as of 30 June 2023 and ca. EUR 6.1 million as of 30 September 2023, respectively.
  • Significant majority of the net proceeds of the placing would be used for the acceleration of the bexmarilimab clinical development program and manufacturing.
  • Carnegie Investment Bank AB (publ), Finland Branch (“Carnegie”) is acting as sole bookrunner and lead manager in the placing.

 

TURKU, FINLAND / BOSTON, MA – Faron Pharmaceuticals Ltd (First North: FARON, AIM: FARN), a clinical stage biopharmaceutical company pioneering macrophage reprogramming for effective anticancer immunotherapies, today announces a proposed private placement to raise a minimum of approximately EUR 6.0 million before expenses to a limited number of institutional and other selected investors (“Placing”). Carnegie is acting as sole bookrunner and lead manager in the Placing.

 

The Placing will be conducted in a private placement by way of an accelerated book-building process in which selected investors may submit bids for the Placing Shares (the “Bookbuild”). The subscription price per Placing Share is to be determined on the basis of the bids received in the Bookbuild in EUR. The Bookbuild is expected to commence immediately following this announcement and is expected to end by 9:00 a.m. EEST on 27 October 2023 at the latest. The Bookbuild may be discontinued or extended at any time during the book-building process. Following the close of the Bookbuild, the Board of Directors of Faron (the “Board“) will first make the decision to issue the relevant number of treasury shares to Faron itself without consideration, followed by the decision to then convey such Placing Shares, including, as applicable, acceptance of the received bids, the number of Placing Shares to be conveyed to investors and the subscription price per Placing Share (the “Issue Price“), subject to the registration of the Placing Shares in the Finnish Trade Register. The Company has received non-binding indications of interest from potential investors to subscribe for the Placing Shares under the Placing during a pre-marketing process.

 

As soon as practicable after the close of the Bookbuild, and following receipt of binding commitments from investors, an announcement will be made on the final number of the Placing Shares to be issued first to Faron itself without consideration and then to be conveyed in the Placing, the expected registration date of the Placing Shares and the Issue Price.

 

Further details on the terms and conditions of the Placing are set out below. The Placing Shares are expected to be admitted to trading on Nasdaq First North Growth Market Finland (“First North”) and AIM (“AIM”) in London as set out below.

 

“This fundraise will enable us to accelerate our ambitious bexmarilimab development program. The emerging data from Phase 1/2 study has continued to be extremely promising, showing continued good safety, encouraging efficacy and long durations of response,” said Dr. Markku Jalkanen, Chief Executive Officer of Faron. “These results strongly support the planned next step of beginning enrollment of the Phase 2 part of the BEXMAB study. We also believe that bexmarilimab has the potential to provide better patient outcomes and improve the quality of life of those suffering from relapsed/refractory AML and MDS, which are conditions with dire prognosis and limited new therapies in the last decades.”

 

REASONS FOR THE PROPOSED PLACING

 

The development of bexmarilimab has advanced significantly over the past 12 months and the furthering of its development provides an opportunity to build additional value for shareholders. The proceeds of the Placing are to be used to advance the development of the Company’s pipeline of drug candidates and to strengthen the financial position of the Company. Raising at least EUR 3.0 million is required to secure that the Company meets all its financial and operational covenants by 27 October 2023, as per agreed waivers with IPF Partners.

 

Should the Company raise approximately EUR 6.0 million, the Company would have sufficient funding for its working capital needs into Q1 2024. The Company intends to use the proceeds of the Placing for the following:

  • BEXMAB program (approx. 29%)
    • Initiation of Phase 2
    • Opening 5 new sites in the US
    • Full Phase 1 data readout
  • Bexmarilimab CMC (approx. 38%)
    • First commercial scale production batch of Bex (2000 L)
  • Other clinical development (approx. 5%)
  • G&A (approx. 15%)
  • Financing (approx. 13%)

 

The use of proceeds from the Placing above is based on streamlined focus on BEXMAB study and resulted in significant cost savings.

 

Under the terms of the facilities arrangement with IPF Partners, the Company is required to maintain a minimum cash

balance of EUR 6.0 million while maintaining three months cash runway. Faron will commence monthly amortisations of the IPF facility at the end of October 2023 with 4.5% PIK interest added to the monthly amortisation instead of earlier agreed quarterly amortisations with no PIK interest payable.

 

DETAILS OF THE PROPOSED PLACING AND ISSUE OF EQUITY

 

  • Faron intends to raise a minimum of approximately EUR 6.0 million by offering Placing Shares to a limited number of domestic and international institutional and other selected investors in the Placing. The Company has an authorization to offer a maximum of 9,298,490 Placing Shares in the Company.
  • With the minimum amount of approximately EUR 6.0 million, the Placing Shares issued would correspond to at least approximately 2.7 % of all the shares and voting rights in the Company immediately prior to the Placing.
  • Subject to the Company raising the minimum amount of approximately EUR 6.0 million, the Company will have sufficient funding for its working capital needs until Q1 2024.
  • IPF has agreed to waive certain covenants under the terms of the facilities agreement until completion of the Placing, subject to the Company raising a minimum of EUR 3.0 million by 27 October 2023, amongst other conditions. Under the terms of the facilities arrangement with IPF, the Company is required to maintain a minimum cash balance of EUR 6.0 million while maintaining three months cash runway.
  • The Placing Shares will be offered by way of an accelerated book building process to institutional investors outside of the U.S. in accordance with Regulation S of the U.S Securities Act and in a private placement in the U.S. to a limited number of qualified institutional buyers, or QIBS, pursuant to an exemption from registration under the U.S. Securities Act.
  • The Company has entered into a lock-up undertaking for a period of 90 days with customary and certain other exemptions, including the possibility to issue further shares provided that Carnegie is provided reasonable notice and consultation, any such further issue is at least at the prevailing market price taking into account customary and market standard discount and other terms, is made to qualifying long-only investors and is within the existing authorities granted at the Company’s Annual General Meeting held on 24 March 2023 (taking into account the authorities used in connection with the contemplated Placing). The Company’s existing authorities, without factoring in the authorities used in connection with the proposed Placing, equate to the conveyance of up to 9,298,490 shares in total.
  • Carnegie acts as sole bookrunner and lead manager.

The proposed Placing is being carried out within the authorisation granted to the Board by shareholders at the Company’s Annual General Meeting held on 24 March 2023 to issue up to a total of 12,500,000 new ordinary shares in the Company as well as to convey up to the same maximum number (12,500,000) of treasury shares in the possession of the Company, in a directed share issue and in deviation from the shareholders’ pre-emptive rights. A total of 2,601,510 new ordinary shares have been issued and conveyed by the Company and up to 600,000 new shares are reserved for share issuances based on the exercise of warrants pursuant to the funding arrangement entered into by Faron with IPF Partners, as disclosed on 28 February 2022. Therefore, pursuant to the outstanding authority, the Company may issue and further convey up to a maximum of 9,298,490 ordinary shares, which represents approximately 14.0 per cent of all the issued shares and votes in the Company immediately prior to the Placing.

 

The Placing, arranged by Carnegie, will be conducted in a private placement by way of the Bookbuild, which is an accelerated book-building process in which selected investors may submit bids for the Placing Shares. The Issue Price is to be determined on the basis of the bids received in the Bookbuild. The Bookbuild is expected to commence immediately following this announcement and is expected to end by 9:00 a.m. EEST on 27 October 2023 at the latest. The Bookbuild may be discontinued at any time during the book-building process. Following the close of the Bookbuild, the Board will make the decision to issue the relevant number of new Placing Shares to the Company itself and subsequently convey the Placing Shares to the investors in the Placing, including deciding upon, as applicable, the acceptance of the received bids, the number of Placing Shares to be conveyed and the Issue Price. As soon as practicable after the close of the Bookbuild, receipt of binding commitments from investors and the Board having resolved on carrying out the Placing, an announcement will be made on the final outcome of the Bookbuild and, as applicable, the number of the Placing Shares to be issued to the Company itself and then conveyed to investors, the Issue Price as well as the expected registration date of the Placing Shares.

 

In connection with the proposed Placing, the Company has entered into a placing agreement with Carnegie (the Placing Agreement“). Pursuant to the terms of the Placing Agreement, the sole bookrunner has agreed to use its reasonable endeavours to procure the subscription of Placing Shares.

 

The Placing Agreement contains customary warranties and an indemnity from the Company in favour of the sole bookrunner. The Placing Agreement also contains provisions which enable the sole bookrunner to terminate the Placing Agreement in certain circumstances before the completion of the Bookbuild, the Board’s resolution on carrying out the Placing and the settlement of the Placing Shares to investors, including where there has been a material breach of any of the warranties contained in the Placing Agreement or where there is a material adverse change, e.g., in the business or financial affairs of the Company. The Company has agreed to pay the sole bookrunner certain commissions and fees in connection with the Placing. Pursuant to the terms of the Placing Agreement, the sole bookrunner shall collect payment of the gross Issue Price from the investors in respect of the Placing Shares allocated in the Placing, paying such amounts to the Company on behalf of the investors and organizing the delivery of the Placing Shares to the investors against payment of the Issue Price in full (DVP).

 

 The Placing is conditional upon, inter alia:

  • the Placing Agreement having become unconditional in all respects;
  • the Board resolving to carry out the Placing at the Issue Price and the Company and sole bookrunner entering into a separate pricing agreement confirming the Issue Price and the number of the Placing Shares; and
  • the Placing Shares being issued and being registered with the Finnish Trade Register.

In connection with the Placing, Faron has entered into a lock-up undertaking for a period of 90 days with customary and certain other exemptions, including the possibility to issue further shares provided that Carnegie is provided reasonable notice and consultation, any such further issue is at least at the prevailing market price taking into account customary and market standard discount and other terms, is made to qualifying long-only investors and is within the existing authorities granted at the Company’s Annual General Meeting held on 24 March 2023 (taking into account the authorities used in connection with the contemplated Placing). The Company’s existing authorities, without factoring in the authorities used in connection with the proposed Placing, equate to the conveyance of up to 9,298,490 shares in total.

Subject to all conditions being met, the Placing Shares are expected to be entered in the Finnish Trade Register approximately on 27 October 2023.

 

ISSUE OF THE PLACING SHARES AND ADMISSION TO TRADING

 

The Placing Shares are expected to be issued in one tranche to the Company itself as treasury shares and subsequently conveyed to the investors, and applications will be made for the admission of the Placing Shares to trading on First North and AIM with said admissions expected to become effective and trading to commence on or around 30 October 2023 (the “Admissions“). The dates above may be subject to change.

 

A further announcement will be made to confirm the outcome of the Placing (subject to, inter alia, satisfaction of the above conditions) and to confirm the expected timing of issue of the Placing Shares to the Company itself and subsequent issuance to investors, and the Admissions.

 

Upon registration with the Finnish Trade Register and further conveyance of the Placing Shares to investors (DVP), the Placing Shares will rank pari passu in all respects with the existing shares of the Company.

 

For more information please contact:

 

Investor Contact, US  

LifeSci Advisors 

Daniel Ferry 

Managing Director 

daniel@lifesciadvisors.com 

+1 (617) 430-7576 

 

Investor Contact, EUR

Faron Pharmaceuticals

Yrjö E K Wichmann

SVP, Investor Relations

yrjo.wichmann@faron.com

investor.relations@faron.com

Phone: +358 (0) 40 5868 979

 

Cairn Financial Advisers LLP, Nomad

Sandy Jamieson, Jo Turner

Phone: +44 (0) 207 213 0880

 

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen

Phone: +358 (0)40 555 4727

Jukka Järvelä

Phone: +358 (0)50 553 8990

 

ICR Consilium

Mary-Jane Elliott, David Daley, Lindsey Neville

faron@consilium-comms.com

Phone: +44 (0)20 3709 5700

 

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN FARON PHARMACEUTICALS OY (“FARON”) PURSUANT TO THE PROPOSED TRANSACTION REFERRED TO IN THIS ANNOUNCEMENT. THIS ANNOUNCEMENT IS THEREFORE DIRECTED ONLY AT, IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA, PERSONS WHO ARE “QUALIFIED INVESTORS” AS DEFINED IN ARTICLE 2(E) OF THE EU PROSPECTUS REGULATION (WHICH MEANS REGULATION (EU) 2017/1129) (THE “PROSPECTUS REGULATION”). 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 OR ANY OTHER ENTITY IN ANY JURISDICTION IN WHICH ANY SUCH OFFER WOULD BE UNLAWFUL.

 

IN ADDITION, IN THE UNITED KINGDOM, THIS ANNOUNCEMENT IS ONLY DIRECTED AT PERSONS IN THE UNITED KINGDOM THAT ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(E) OF THE PROSPECTUS REGULATION AS IT FORMS PART OF  DOMESTIC LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 WHO ARE ALSO (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE “ORDER”) OR (II) HIGH NET WORTH ENTITIES, AND OTHER PERSONS TO WHOM IT MAY LAWFULLY BE COMMUNICATED, FALLING WITHIN ARTICLE 49(2)(A) TO (E) OF THE ORDER (EACH SUCH PERSON, TOGETHER WITH QUALIFIED INVESTORS AS DEFINED IN THE PROSPECTUS REGULATION, BEING REFERRED TO AS A “RELEVANT PERSON”).

 

ACCORDINGLY, THIS ANNOUNCEMENT AND ITS CONTENTS MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT COMES ARE REQUIRED TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.

 

THE PROPOSED TRANSACTION REFERRED TO IN THIS ANNOUNCEMENT WOULD BE MADE PURSUANT TO A PRIVATE PLACEMENT EXEMPTION UNDER THE PROSPECTUS REGULATION FROM THE REQUIREMENTS TO PRODUCE A PROSPECTUS UNDER THE PROSPECTUS REGULATION FOR OFFERS OF SECURITIES. FARON HAS NOT TAKEN ANY ACTION, NOR WILL IT TAKE ANY ACTION, TO OFFER ANY OF THE PLACING SHARES THAT ARE TO BE SUBSCRIBED FOR PURSUANT TO THE TRANSACTION REFERRED TO IN THIS ANNOUNCEMENT OR ANY DOCUMENTS RELATING TO THE PLACING 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.

 

THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA. THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES. THE PLACING SHARES HAVE NOT BEEN AND WILL NOT 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 INTENTION TO REGISTER THE PLACING SHARES IN THE UNITED STATES OR TO MAKE A PUBLIC OFFERING IN THE UNITED STATES. ANY SALE OF THE PLACING SHARES IN THE UNITED STATES WILL BE MADE SOLELY TO “QUALIFIED INSTITUTIONAL BUYERS” AS DEFINED IN RULE 144A IN RELIANCE ON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT.

 

About Bexmarilimab

Bexmarilimab is Faron’s wholly owned, investigational immunotherapy designed to overcome resistance to existing treatments and optimize clinical outcomes, by targeting myeloid cell function and igniting the immune system. Bexmarilimab binds to Clever-1, an immunosuppressive receptor found on macrophages leading to tumor growth and metastases (i.e. helps cancer evade the immune system). By targeting the Clever-1 receptor on macrophages, bexmarilimab alters the tumor microenvironment, reprogramming macrophages from an immunosuppressive (M2) state to an immunostimulatory (M1) one, upregulating interferon production and priming the immune system to attack tumors and sensitizing cancer cells to standard of care.  

 

About Faron Pharmaceuticals Ltd. 

Faron (AIM: FARN, First North: FARON) is a global, clinical-stage biopharmaceutical company, focused on tackling cancers via novel immunotherapies. Its mission is to bring the promise of immunotherapy to a broader population by uncovering novel ways to control and harness the power of the immune system. The Company’s lead asset is bexmarilimab, a novel anti-Clever-1 humanized antibody, with the potential to remove immunosuppression of cancers through targeting myeloid cell function. Bexmarilimab is being investigated in Phase I/II clinical trials as a potential therapy for patients with hematological cancers in combination with other standard treatments. Further information is available at www.faron.com.

 

 

IMPORTANT INFORMATION

 

Market Abuse Regulation

Market soundings, as defined in Regulation (EU) No 596/2014 (“MAR“) and (ii) MAR as it applies to domestic law in the United Kingdom by virtue of the European Unition (Withdrawal) Act 2018 (“UK MAR”), were taken in respect of the proposed Placing with the result that certain persons became aware of inside information, as permitted by MAR and UK MAR. That inside information in relation to the Placing is set out in this announcement and has been disclosed as soon as possible in accordance with article 17 of MAR and UK MAR. Therefore, those persons that received inside information in such market sounding are no longer in possession of inside information relating to the Company and its securities.

 

This announcement contains inside information for the purposes of Article 7 of MAR and Article 7 of UK MAR.

 

EEA product governance

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II“); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements“), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of: (a) retail investors, (b) investors who meet the criteria of professional clients and (c) eligible counterparties (each as defined in MiFID II); and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “Target Market Assessment“). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing.

 

UK product governance

Solely for the purposes of the product governance requirements contained within of Chapter 3 of the FCA Handbook Production Intervention and Product Governance Sourcebook (the “UK Product Governance Requirements“), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the UK Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of investors who meet the criteria of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in paragraph 3 of the FCA Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all distribution channels (the “Target Market Assessment“). Notwithstanding the Target Market Assessment, distributors (for the purposes of UK Product Governance Requirements) should note that: (a) the price of the Placing Shares may decline and investors could lose all or part of their investment; (b) the Placing Shares offer no guaranteed income and no capital protection; and (c) an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom.  The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing.

 

 

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 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.

Exercise of options

 

Faron Pharmaceuticals Oy

 

(“Faron” or “the Company”)

 

Exercise of options

Issue of equity

 

Company announcement, June 12, 2023

 

TURKU, FINLAND / BOSTON, MA – Faron Pharmaceuticals Oy (AIM: FARN, First North: FARON), a clinical stage biopharmaceutical company focused on building the future of immunotherapy by harnessing the power of the immune system to tackle cancer and inflammation, announces that it has received notifications from option holders to exercise 2015D options over 57,000 shares in the Company at an exercise price of EUR 1.09 per share and 2015B options over 5,172 shares in the Company at an exercise price of EUR 2.90 per share under the Company’s 2015 Option Plan (“New Ordinary Shares”). The terms and conditions of the 2015 Option Plan are available on the Company’s website at https://www.faron.com/sites/default/files/Option%20Plan%202015_Terms%20and%20Conditions_20200518.pdf.

 

Applications will be made to the London Stock Exchange and Nasdaq Helsinki to admit the New Ordinary Shares to trading on AIM and Nasdaq First North Growth Market, respectively. Admission of the New Ordinary Shares is expected to occur on or around June 14, 2023 following issue and registration of the new Ordinary Shares on or around June 13, 2023 (“Registration”). The New Ordinary Shares will rank pari passu with existing ordinary shares.

 

Faron’s enlarged issued number of shares immediately following Registration will be 63,559,863 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 63,559,863. 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 issued shares and votes of the Company.

 

For more information please contact:

 

Investor contacts: 

US, Faron Pharmaceuticals 

Julia Balanova  

VP, Investor Relations 

julia.balanova@faron.com 

Phone: +1 (917) 306-6096 

  

EUR, Faron Pharmaceuticals 

Yrjö Wichmann  

VP, Investor Relations 

yrjo.wichmann@faron.com  

Phone: +358 (0)40 5868 979 

 

Media Contact 

Faron Pharmaceuticals 

Jennifer C. Smith-Parker  

Head of Communications 

Jennifer.Smith-Parker@faron.com  

 

Cairn Financial Advisers LLP, Nomad 

Sandy Jamieson, Jo Turner 

Phone: +44 (0) 207 213 0880 

  

Peel Hunt LLP, Broker 

Christopher Golden, James Steel 

Phone: +44 (0) 20 7418 8900 

  

Sisu Partners Oy, Certified Adviser on Nasdaq First North 

Juha Karttunen 

Phone: +358 (0)40 555 4727 

Jukka Järvelä 

Phone: +358 (0)50 553 8990 

  

Consilium Strategic Communications 

David Daley, Lindsey Neville 

faron@consilium-comms.com  

Phone: +44 (0)20 3709 5700  

 

About Faron Pharmaceuticals Oy 

Faron Pharmaceuticals Oy (AIM: FARN, First North: FARON), together with its subsidiaries, is a clinical stage biopharmaceutical group focused on building the future of immunotherapy by harnessing the power of the immune system to tackle cancer. Bexmarilimab, a novel anti-Clever-1 humanized antibody, is its investigational immunotherapy with the potential to remove immunosuppression of cancers through targeting myeloid cell function. Bexmarilimab is being investigated in Phase I/II clinical trials as a potential therapy for patients with hematological cancers in combination with other standard treatments including immune checkpoint molecules, and as a monotherapy for untreatable solid tumors. Faron is headquartered in Turku, Finland. Further information is available at www.faron.com. 

 

Proposed Issue and Placing

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 (“MAR”) AND ARTICLE 7 OF MAR AS INCORPORATED INTO UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (“UK MAR”).

 

 

Faron Pharmaceuticals Ltd

(“Faron” or the “Company”)

 

Proposed Issue and Placing of approx. EUR 11.0 million by way of an accelerated book-building

 

 

Company announcement,26 January 2023 at 4:30 p.m. GMT / 6:30 p.m. EET

Inside information

 

KEY HIGHLIGHTS

  • A proposed private placement of newly issued treasury shares (“Placing Shares”) to raise approximately EUR 11.0 million, to be conducted by way of an accelerated book-building, directed to a limited number of institutional and other investors.
  • The Leukemia & Lymphoma Society Therapy Acceleration Program® (“LLS TAP”) and Mr Timo Syrjälä have provided non-binding indications for a substantial amount of the placing, subject to the minimum total amount of EUR 8.0 million being raised and certain other customary conditions.
  • The placing is conditional upon raising a minimum of EUR 8.0 million. Subject to the Company raising the minimum amount, the Company will have sufficient funding for its working capital needs into May 2023 and be able to meet its financial and operational covenants by 31 January 2023, as per agreed waivers with IPF Partners. The total cash and cash equivalents held by the Company as of 31 December 2022 was ca. EUR 7.0 million.
  • Significant majority of the net proceeds of the placing would be used for the acceleration of the bexmarilimab clinical development program and manufacturing.
  • Carnegie Investment Bank AB (publ), Finland Branch (“Carnegie”) is acting as sole bookrunner and lead manager in the placing.

 

TURKU, FINLAND / BOSTON, MA – Faron Pharmaceuticals Ltd (First North: FARON, AIM: FARN), a clinical stage biopharmaceutical company focused on building the future of immunotherapy by harnessing the power of the immune system to tackle cancer and inflammation, today announces a proposed private placement to raise approximately EUR 11.0 million before expenses to a limited number of institutional investors and other investors (“Placing”). Carnegie is acting as sole bookrunner and lead manager in the Placing.

 

The Placing will be conducted in a private placement by way of an accelerated book-building process in which selected investors may submit bids for the Placing Shares (the “Bookbuild”). The subscription price per Placing Share is to be determined on the basis of the bids received in the Bookbuild in EUR. The Bookbuild is expected to commence immediately following this announcement and is expected to end by 9:00 a.m. EET on 27 January 2023 at the latest. The Bookbuild may be discontinued or extended at any time during the book-building process. Following the close of the Bookbuild, the Board of Directors of Faron (the “Board“) will first make the decision to issue the relevant number of treasury shares to Faron itself without consideration, followed by the decision to then convey such Placing Shares, including, as applicable, acceptance of the received bids, the number of Placing Shares to be conveyed to investors and the subscription price per Placing Share (the “Issue Price“), subject to the registration of the Placing Shares in the Finnish Trade Register. The Company has received non-binding indications of interest from potential investors to subscribe for the Placing Shares under the Placing during a pre-marketing process. In addition, the Company has obtained non-binding indications for a substantial amount of the Placing from LLS TAP and Mr. Timo Syrjälä, both subject to certain customary conditions.

 

As soon as practicable after the close of the Bookbuild, and following receipt of binding commitments from investors, an announcement will be made on the final number of the Placing Shares to be issued first to Faron itself without consideration and then to be conveyed to investors in the Placing, the expected registration date of the Placing Shares and the Issue Price.

 

Further details on the terms and conditions of the Placing are set out below. The Placing Shares are expected to be admitted to trading on Nasdaq First North Growth Market Finland (“First North”) and AIM (“AIM”) in London as set out below.

 

“This fundraise will enable us to accelerate our ambitious bexmarilimab development program, with a specific focus on advancing our combination trials in both solid tumors and hematologic malignancies,” said Dr. Markku Jalkanen, Chief Executive Officer of Faron. “Far too many patients are not benefiting from recently approved treatments because their immune system simply does not recognize and mount a defense against their cancer. By converting highly immunosuppressive M2 macrophages to immune stimulating M1 macrophages, bexmarilimab is capable of igniting an immune response in these patients, which we think will be amplified when used as part of a combination regimen.”

 

REASONS FOR THE PROPOSED PLACING

 

The development of bexmarilimab has advanced significantly over the past 12 – 18 months and the furthering of its development provides an opportunity to build additional value for shareholders. The proceeds of the Placing are to be used to advance the development of the Company’s pipeline of drug candidates and to strengthen the financial position of the Company. Raising at least EUR 8.0 million is required to secure that the Company meets all its financial and operational covenants by 31 January 2023, as per agreed waivers with IPF Partners.

 

  • Bexmarilimab Development (approximately 87%)
    • Complete Part I of the BEXMAB combination trial with AML/MSD patients with an anticipation to accelerate the most promising indication
    • Initiate BEXCOMBO with PD-1 blockade that was recently approved by FIMEA
    • Conclude MATINS trial for FDA Meeting to obtain advice for pivotal pathway with last line cancer patients
    • Advance bexmarilimab commercial scale production
  • US Buildup (approximately 5%)
    • Build medical and regulatory capabilities in the US
    • Build IR and US IPO readiness functions
  • Pipeline – other (approximately 8%)
    • Traumakine and Haematokine development
  • Strengthening of financial position
    • Maintaining sufficient cash position to meet any additional requirements from changes in operational activities, especially clinical trials expansion

 

In addition to the above, Faron is in negotiations with its lender, IPF Partners (“IPF”) on the utilization of the second EUR 5.0 million tranche of the agreed loan commitment. Advanced discussions are expected to start immediately upon the closing of the Placing with the current aim to draw the second tranche during H1 2023. The second tranche would be conditional on, among other things, Faron receiving FDA approval on the continuation of the MATINS trial, which is currently expected in late March – April 2023, and minimum overall funding requirement.

 

Under the terms of the facilities arrangement with IPF, the Company is required to maintain a minimum cash

balance of EUR 6.0 million while maintaining three months cash runway.

 

 

DETAILS OF THE PROPOSED PLACING AND ISSUE OF EQUITY

 

  • Faron intends to raise approximately EUR 11.0 million by offering Placing Shares to a limited number of institutional and other investors in the Placing. The Company has an authorization to offer a maximum of 6,458,270 Placing Shares in the Company.
  • The Company has received non-binding indications for a substantial amount of the Placing from LLS and Mr. Timo Syrjälä, both subject to certain customary conditions.
  • The placing is conditional upon raising a minimum of EUR 8.0 million. With the minimum amount, the Placing Shares issued would correspond to at least approximately 3.4% of all the shares and voting rights in the Company immediately prior to the Placing.
  • Subject to the Company raising the minimum amount of EUR 8.0 million, the Company will have sufficient funding for its working capital needs until May 2023. The minimum amount is required to secure that the Company meets all its financial and operational covenants by 31 January 2023, as per agreed waivers with IPF.
  • IPF has agreed to waive certain covenants under the terms of the facilities agreement until completion of the Placing, subject to the Company raising a minimum of EUR 8.0 million by 31 January 2023, amongst other conditions. Under the terms of the facilities arrangement with IPF, the Company is required to maintain a minimum cash balance of EUR 6.0 million while maintaining three months cash runway.
  • The Placing Shares will be offered by way of an accelerated book building placement to institutional investors outside of the U.S. in accordance with Regulation S of the U.S Securities Act and in a private placement in the U.S. to a limited number of qualified institutional buyers, or QIBS, pursuant to an exemption from registration under the U.S. Securities Act.
  • The Company intends to enter into a lock-up undertaking for a period of 90 days with customary and certain other exemptions, including the possibility to issue further shares, with the prior written consent of Carnegie, who has agreed to provide such consent as long as any such further issue is at least at the prevailing market price, is made to qualifying long-only investors (in the reasonable opinion of Carnegie) and is within the existing authorities granted at the Company’s Extraordinary General Meeting held on 7 July 2022 (taking into account the authorities used in connection with the contemplated Placing). The Company’s existing authorities, without factoring in the authorities used in connection with the proposed Placing, equate to the conveyance of up to 6,458,270 shares in total.
  • Carnegie acts as sole bookrunner and lead manager.

 

The proposed Placing is being carried out within the authorisation granted to the Board by shareholders at the Company’s Extraordinary General Meeting held on 7 July 2022 to issue up to a total of 11,000,000 new ordinary shares in the Company as well as to convey up to the same maximum number (11,000,000) of treasury shares in the possession of the Company, in a directed share issue and in deviation from the shareholders’ pre-emptive rights. A total of 3,229,930 new ordinary shares have been issued and conveyed by the Company and up to 600,000 new shares are reserved for share issuances based on the exercise of warrants pursuant to the funding arrangement entered into by Faron with IPF Partners, as disclosed on 28 February 2022. In addition, a further 1,311,800 treasury shares have been conveyed by the Company within the outstanding authority. Therefore pursuant to the outstanding authority, the Company may issue and further convey up to a maximum of 6,458,270 ordinary shares, which represents approximately 10.8 per cent of all the issued shares and votes in the Company immediately prior to the Placing.

 

The Placing, arranged by Carnegie, will be conducted in a private placement by way of the Bookbuild, which is an accelerated book-building process in which selected investors may submit bids for the Placing Shares. The Issue Price is to be determined on the basis of the bids received in the Bookbuild. The Bookbuild is expected to commence immediately following this announcement and is expected to end by 9:00 EET a.m. on 27 January 2023 at the latest. The Bookbuild may be discontinued at any time during the book-building process. Following the close of the Bookbuild, the Board will make the decision to issue the relevant number of new Placing Shares to the Company itself and subsequently convey the Placing Shares to the investors in the Placing, including deciding upon, as applicable, the acceptance of the received bids, the number of Placing Shares to be conveyed and the Issue Price. As soon as practicable after the close of the Bookbuild, receipt of binding commitments from investors and the Board having resolved on carrying out the Placing, an announcement will be made on the final outcome of the Bookbuild and, as applicable, the number of the Placing Shares to be issued to the Company itself and then conveyed to investors, the Issue Price as well as the expected registration date of the Placing Shares.

 

In connection with the proposed Placing, the Company has entered into a placing agreement with Carnegie (the Placing Agreement“). Pursuant to the terms of the Placing Agreement, the sole bookrunner has agreed to use its reasonable endeavours to procure the subscription of Placing Shares. In addition, the Company has obtained non-binding indications from the LLS TAP and Mr. Timo Syrjälä, both subject to certain customary conditions.

 

The Placing Agreement contain customary warranties and an indemnity from the Company in favour of the sole bookrunner. The Placing Agreement also contain provisions which enable the sole bookrunner to terminate its Placing Agreement in certain circumstances before the completion of the Bookbuild, the Board’s resolution on carrying out the Placing and the settlement of the Placing Shares to investors, including where there has been a material breach of any of the warranties contained in the Placing Agreement or where there is a material adverse change, e.g., in the business or financial affairs of the Company. The Company has agreed to pay the sole bookrunner certain commissions and fees in connection with the Placing. Pursuant to the terms of the Placing Agreement, the sole bookrunner shall collect payment of the gross Issue Price from the investors in respect of the Placing Shares allocated in the Placing, paying such amounts to the Company on behalf of the investors and organizing the delivery of the Placing Shares to the investors against payment of the Issue Price in full (DVP).

 

 The Placing is conditional upon, inter alia:

  • the Placing Agreement having become unconditional in all respects;
  • binding commitments corresponding to gross proceeds of at least the minimum amount of EUR 8 million being received from investors;
  • the Board resolving to carry out the Placing at the Issue Price and the Company and sole bookrunner entering into a separate pricing agreement confirming the Issue Price and the number of the Placing Shares; and
  • the Placing Shares being issued and being registered with the Finnish Trade Register.

In connection with the Placing, Faron has entered into a lock-up undertaking for a period of 90 days with customary and certain other exemptions, including the possibility to issue further shares, with the prior written consent of Carnegie, who has agreed to provide such consent as long as any such further issue is at least at the prevailing market price, is made to qualifying long-only investors (in the reasonable opinion Carnegie) and is within the existing authorities granted at the Company’s Extraordinary General Meeting held on 7 July 2022 (taking into account the authorities used in connection with the contemplated Placing). The Company’s existing authorities, without factoring in the authorities used in connection with the proposed Placing, equate to the conveyvance of up to 6,458,270 shares in total.

Subject to all conditions being met, the Placing Shares are expected to be entered in the Finnish Trade Register approximately on 27 January 2023.

 

ISSUE OF THE PLACING SHARES AND ADMISSION TO TRADING

 

The Placing Shares are expected to be issued in one tranche to the Company itself as treasury shares and subsequently conveyed to the investors, and applications will be made for the admission of the Placing Shares to trading on First North and AIM with said admissions expected to become effective and trading to commence on or around 31 January 2023 (the “Admissions“). The dates above may be subject to change.

 

A further announcement will be made to confirm the outcome of the Placing (subject to, inter alia, satisfaction of the above conditions) and to confirm the expected timing of issue of the Placing Shares to the Company itself and subsequent issuance to investors, and the Admissions.

 

Upon registration with the Finnish Trade Register and further conveyance of the Placing Shares to investors (DVP), the Placing Shares will rank pari passu in all respects with the existing shares of the Company.

 

For more information please contact:

 

Investor Contact

Faron Pharmaceuticals

Julia Balanova

VP, Investor Relations

julia.balanova@faron.com

investor.relations@faron.com

Phone: +1 (917) 306-6096

 

Media Contact

Faron Pharmaceuticals

Jennifer Smith-Parker

Head of Communications

Jennifer.Smith-Parker@faron.com

 

Cairn Financial Advisers LLP, Nomad

Sandy Jamieson, Jo Turner

Phone: +44 (0) 207 213 0880

 

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen

Phone: +358 (0)40 555 4727

Jukka Järvelä

Phone: +358 (0)50 553 8990

 

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

faron@consilium-comms.com

Phone: +44 (0)20 3709 5700

 

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN FARON PHARMACEUTICALS OY (“FARON”) PURSUANT TO THE PROPOSED TRANSACTION REFERRED TO IN THIS ANNOUNCEMENT. THIS ANNOUNCEMENT IS THEREFORE DIRECTED ONLY AT, IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA, PERSONS WHO ARE “QUALIFIED INVESTORS” AS DEFINED IN ARTICLE 2(E) OF THE EU PROSPECTUS REGULATION (WHICH MEANS REGULATION (EU) 2017/1129) (THE “PROSPECTUS REGULATION”). 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 OR ANY OTHER ENTITY IN ANY JURISDICTION IN WHICH ANY SUCH OFFER WOULD BE UNLAWFUL.

 

IN ADDITION, IN THE UNITED KINGDOM, THIS ANNOUNCEMENT IS ONLY DIRECTED AT PERSONS IN THE UNITED KINGDOM THAT ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(E) OF THE PROSPECTUS REGULATION AS INCORPORATED INTO UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 THAT ARE ALSO (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE “ORDER”) AND/OR (II) HIGH NET WORTH ENTITIES, AND OTHER PERSONS TO WHOM IT MAY LAWFULLY BE COMMUNICATED, FALLING WITHIN ARTICLE 49(2)(A) TO (E) OF THE ORDER (EACH SUCH PERSON, TOGETHER WITH QUALIFIED INVESTORS AS DEFINED IN THE PROSPECTUS REGULATION, BEING REFERRED TO AS A “RELEVANT PERSON”).

 

ACCORDINGLY, THIS ANNOUNCEMENT AND ITS CONTENTS MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT COMES ARE REQUIRED TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.

 

THE PROPOSED TRANSACTION REFERRED TO IN THIS ANNOUNCEMENT WOULD BE MADE PURSUANT TO A PRIVATE PLACEMENT EXEMPTION UNDER THE PROSPECTUS REGULATION FROM THE REQUIREMENTS TO PRODUCE A PROSPECTUS UNDER THE PROSPECTUS REGULATION FOR OFFERS OF SECURITIES. FARON HAS NOT TAKEN ANY ACTION, NOR WILL IT TAKE ANY ACTION, TO OFFER ANY OF THE PLACING SHARES THAT ARE TO BE SUBSCRIBED FOR PURSUANT TO THE TRANSACTION REFERRED TO IN THIS ANNOUNCEMENT OR ANY DOCUMENTS RELATING TO THE PLACING 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.

 

THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA. THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES. THE PLACING SHARES HAVE NOT BEEN AND WILL NOT 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 INTENTION TO REGISTER THE PLACING SHARES IN THE UNITED STATES OR TO MAKE A PUBLIC OFFERING IN THE UNITED STATES. ANY SALE OF THE PLACING SHARES IN THE UNITED STATES WILL BE MADE SOLELY TO “QUALIFIED INSTITUTIONAL BUYERS” AS DEFINED IN RULE 144A IN RELIANCE ON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT.

 

About Bexmarilimab

Bexmarilimab is Faron’s wholly-owned, investigative precision immunotherapy with the potential to provide permanent immune stimulation for difficult-to-treat cancers through targeting myeloid cell function. A novel anti-Clever-1 humanised antibody, bexmarilimab targets Clever-1 positive (Common Lymphatic Endothelial and Vascular Endothelial Receptor 1) tumour associated macrophages (TAMs) in the tumour microenvironment, converting these highly immunosuppressive M2 macrophages to immune stimulating M1 macrophages. In mouse models, bexmarilimab has successfully blocked or silenced Clever-1, activating antigen presentation and promoting interferon gamma secretion by leukocytes. Additional pre-clinical studies have proven that Clever-1, encoded by the Stabilin-1 or STAB-1 gene, is a major source of T cell exhaustion and involved in cancer growth and spread. Observations from clinical studies to date indicate that Clever-1 has the capacity to control T cell activation directly, suggesting that the inactivation of Clever-1 as an immune suppressive molecule could be more broadly applicable and more important than previously thought. As an immuno-oncology therapy, bexmarilimab has potential as a single-agent therapy or in combination with other standard treatments including immune checkpoint molecules in both solid tumors and hematologic malignancies. Beyond immuno-oncology, it offers potential in infectious diseases, vaccine development and more.

 

About Faron Pharmaceuticals Ltd. 

Faron (AIM: FARN, First North: FARON) is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs caused by dysfunction of our immune system. The Company currently has a pipeline based on the receptors involved in regulation of immune response in oncology, organ damage and bone marrow regeneration. Bexmarilimab, a novel anti-Clever-1 humanized antibody, is its investigative precision immunotherapy with the potential to provide permanent immune stimulation for difficult-to-treat cancers through targeting myeloid function. Currently in Phase I/II clinical development as a potential therapy for patients with solid tumors and hematologic malignancies, bexmarilimab has potential as a single-agent therapy or in combination with other standard treatments including immune checkpoint molecules. Traumakine is an investigational intravenous (IV) interferon beta-1a therapy for the treatment of acute respiratory distress syndrome (ARDS) and other ischemic or hyperinflammatory conditions. Traumakine is currently being evaluated by the 59th Medical Wing of the US Air Force and the US Department of Defense for the prevention of multiple organ dysfunction syndrome (MODS) after ischemia-reperfusion injury caused by a major trauma. Faron is based in Turku, Finland. Further information is available at www.faron.com.

 

About The Leukemia & Lymphoma Society and Therapy Acceleration Program® (TAP)
The Leukemia & Lymphoma Society® (LLS) is a global leader in the fight against cancer. The LLS mission is to cure leukemia, lymphoma, Hodgkin’s disease and myeloma, and improve the quality of life of patients and their families.  LLS TAP is a strategic initiative that builds business alliances and collaborations with biotechnology companies and academic researchers to identify potential breakthrough therapies with the ability to change the standard of care. LLS TAP funds late-stage preclinical studies, and proof of concept or registrational clinical trials to help advance therapeutics along the drug development and approval pathway. LLS TAP accepts funding applications on a rolling basis from companies with innovative science that has a high potential to improve patient lives. To learn more, visit www.LLS.org/therapy-acceleration-program. Follow LLS on Facebook, Twitter, and Instagram.

 

 

IMPORTANT INFORMATION

 

Market Abuse Regulation

Market soundings, as defined in Regulation (EU) No 596/2014 (“MAR“), were taken in respect of the proposed Placing with the result that certain persons became aware of inside information, as permitted by MAR. That inside information in relation to the Placing 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 such market sounding are no longer in possession of inside information relating to the Company and its securities.

 

This announcement contains inside information for the purposes of Article 7 of MAR and Article 7 of UK MAR.

 

MiFID II

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II“); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements“), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of: (a) retail investors, (b) investors who meet the criteria of professional clients and (c) eligible counterparties (each as defined in MiFID II); and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “Target Market Assessment“). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the offer.

 

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 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.

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