MATINS poster presentation at ESMO Congress

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Poster discussion presentation at ESMO Congress highlights effective immune switch in MATINS patients with advanced solid tumours

TURKU – FINLAND, 30 September 2019 – Faron Pharmaceuticals Oy (AIM: FARN), the clinical stage biopharmaceutical company, today announces details from a poster discussion presentation held at the European Society of Medical Oncology (ESMO) 2019 Congress to showcase recent data from its ongoing MATINS study.

The phase I/II MATINS clinical trial is investigating the safety and efficacy of Clevegen, Faron’s wholly-owned novel precision cancer immunotherapy targeting Clever-1 positive tumour associated macrophages (TAM), in selected metastatic or inoperable solid tumours. During the session Dr Petri Bono, principal investigator of the MATINS trial, presented data showing Clevegen’s potential early efficacy and good tolerability. The discussion highlighted:

·    Good tolerability across all dosing levels with no dose limiting toxicity (DLT) observed. Maximally tolerated dose (MTD) has not been reached yet.

·    Promising clinical anti-tumour activity, evidenced by the trial’s first long-lasting partial responder – a heavily pre-treated metastatic colorectal cancer (CRC) patient, whose tumour had been classified as microsatellite instability (MSI)-low and tumour mutation burden (TMB), and who had previously been treated with six different anti-cancer drugs, which had all failed. MSI-low colorectal patients represent around 90% of all colorectal cancers and over one million annual cases globally.

·    Th1 immune activation was observed in all subjects measured following treatment with Clevegen, confirming earlier ex vivo results with human cells (Palani et al., 2016). The patients also increased circulating CD8+ T cells and CD8+/CD4+ ratio,  decreased regulatory T-cells (T-regs) or had a substantial increase in mobile natural killer (NK) cells in the blood, all signs of this desired immune activation.

·    Clevegen’s potential to overcome the immunosuppressive environment in difficult-to-treat PD-1/PD-L1- resistant immunologically non-inflamed (cold) tumours, by converting them into inflamed (hot) tumours.

·    The ongoing development path investigating Clevegen as a monotherapy in CRC MSI-low patients and other advanced solid tumours (liver, pancreas, ovarian and melanoma), including targeting patients with hormone receptor-positive breast cancer, gastric cancer and uveal melanomas. The potential of Clevegen to bring a synergistic benefit to existing immunotherapies also warrants further investigation through future combination studies.

Commenting on the presented data, Dr. Petri Bono, principal investigator of the MATINS study, said: “We are very encouraged by the progress of this trial. The emerging tolerability profile and early signs of clinical benefit from this novel anti Clever-1 antibody are promising, particularly as the patients enrolled in the MATINS trial had already received several lines of treatment and exhausted all available options for further therapy. Early indications of its potential to convert cold tumours to hot are an important signal for the next wave of immunotherapies in development and we look forward to generating further data as the trial continues.”

The poster discussion was held at ESMO 2019, Barcelona, on 28 September 2019. The full abstract and poster are available online at the ESMO Congress website: https://www.esmo.org

Title: Immune activation with a novel immune switch anti-macrophage antibody (anti-Clever-1 mAb; FP-1305) in phase I/II first-in-human MATINS trial in patients with advanced solid tumours

Presenter: Dr. Petri Bono, MATINS trial principal investigator

Abstract Number: 6587

Further information, including poster and discussion slides, is also available at the company web pages (www.faron.com).

About the MATINS study

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

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

For more information please contact:

Faron Pharmaceuticals Oy

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2500

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

About Faron Pharmaceuticals Ltd

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

Caution regarding forward looking statements

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

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

Holdings in Company

TR-1: Standard form for notification of major holdings

NOTIFICATION OF MAJOR HOLDINGS (to be sent to the relevant issuer and to the FCA in Microsoft Word format if possible)i

1a. Identity of the issuer or the underlying issuer of existing shares to which voting rights are attachedii:

Faron Pharmaceuticals Ltd

1b. Please indicate if the issuer is a non-UK issuer  (please mark with an “X” if appropriate)

Non-UK issuer

X

2. Reason for the notification (please mark the appropriate box or boxes with an “X”)

An acquisition or disposal of voting rights

X

An acquisition or disposal of financial instruments

An event changing the breakdown of voting rights

Other (please specify)iii:

3. Details of person subject to the notification obligationiv

Name

Timo Syrjälä

City and country of registered office (if applicable)

4. Full name of shareholder(s) (if different from 3.)v

Name

City and country of registered office (if applicable)

5. Date on which the threshold was crossed or reachedvi:

24.09.2019

6. Date on which issuer notified (DD/MM/YYYY):

25.09.2019

7. Total positions of person(s) subject to the notification obligation

% of voting rights attached to shares (total  of 8. A)

% of voting rights through financial instruments
(total of 8.B 1 + 8.B 2)

Total of both in % (8.A + 8.B)

Total number of voting rights of issuervii

Resulting situation on the date on which threshold was crossed or reached

15.18%

15.18%

39.355.247

Position of previous notification (if

applicable)

14.53%

14.53%

8. Notified details of the resulting situation on the date on which the threshold was crossed or reachedviii

A: Voting rights attached to shares

Class/type of
shares

ISIN code (if possible)

Number of voting rightsix

% of voting rights

Direct

(Art 9 of Directive 2004/109/EC) (DTR5.1)

Indirect

(Art 10 of Directive 2004/109/EC) (DTR5.2.1)

Direct

(Art 9 of Directive 2004/109/EC) (DTR5.1)

Indirect

(Art 10 of Directive 2004/109/EC) (DTR5.2.1)

FI4000153309

2.279.150

3.694.423

5.79%

9.39%

SUBTOTAL 8. A

5.973.573

15.18%

B 1: Financial Instruments according to Art. 13(1)(a) of Directive 2004/109/EC (DTR5.3.1.1 (a))

Type of financial instrument

Expiration
date
x

Exercise/
Conversion Period
xi

Number of voting rights that may be acquired if the instrument is

exercised/converted.

% of voting rights

SUBTOTAL 8. B 1

B 2: Financial Instruments with similar economic effect according to Art. 13(1)(b) of Directive 2004/109/EC (DTR5.3.1.1 (b))

Type of financial instrument

Expiration
date
x

Exercise/
Conversion Period
xi

Physical or cash

settlementxii

Number of voting rights

% of voting rights

SUBTOTAL 8.B.2

9. Information in relation to the person subject to the notification obligation (please mark the

applicable box with an “X”)

Person subject to the notification obligation is not controlled by any natural person or legal entity and does not control any other undertaking(s) holding directly or indirectly an interest in the (underlying) issuerxiii

Full chain of controlled undertakings through which the voting rights and/or the
financial instruments are effectively held starting with the ultimate controlling natural person or legal entity
xiv (please add additional rows as necessary)

X

Namexv

% of voting rights if it equals or is higher than the notifiable threshold

% of voting rights through financial instruments if it equals or is higher than the notifiable threshold

Total of both if it equals or is higher than the notifiable threshold

Timo Syrjälä (Direct)

              5.79%

5.79%

Acme Investments SPF Sarl (Indirect)

              9.39%

9.39%

10. In case of proxy voting, please identify:

Name of the proxy holder

The number and % of voting rights held

The date until which the voting rights will be held

11. Additional informationxvi  

Place of completion

Lausanne

Date of completion

25/09/2019

Interim results

Faron Pharmaceuticals Ltd

(“Faron” or the “Company”)

Interim results for the six months ended 30 June 2019

TURKU – FINLAND, 23 September 2019 – Faron (AIM: FARN), the clinical stage biopharmaceutical company, today announces its unaudited interim results for the six months ended 30 June 2019 (the “Period”).

HIGHLIGHTS  

Operational (including post Period-end):

Clevegen®  – wholly-owned novel cancer immunotherapy in clinical development

  • Dose escalation reached its planned maximum level of 10mg/kg in the open label phase I/II MATINS study and data from 11 subjects, dosed across three sites in Finland and the UK, indicated Clevegen’s potential early efficacy and good tolerability.
  • All subjects showed a switch in their immune cell profiles towards increased immune activation, demonstrating the biological effect of Clevegen.
  • The first partial responder observed among colorectal cancer (CRC) patients showed a continuation of lung and lymph node metastasis shrinkage. The subject’s tumour load biochemical marker, carcinoembryonic antigen (CEA), also normalised.
  • CRC was selected as a first expansion cohort for part II of the trial. Simon’s two-stage statistical design will be utilised during parts II and III to predict cohort sizes for efficacy and regulatory acceptance.
  • A pre-IND package was filed with the FDA, to be followed by the IND submission and to enable new trial site openings in the US. Planning commenced to include top clinical cancer research centres in France and Spain as the next European countries to join the trial.
  • New experimental data supporting the immunotherapeutic blockade of Clever-1 as an alternative to, or in combination with PD-1 checkpoint inhibition to reactivate immunity against immunosuppressive tumours was published in Clinical Cancer Research, a journal of the American Association for Cancer Research.
  • Data from the MATINS study was selected for a poster discussion presentation at the European Society of Medical Oncology (ESMO) 2019 Congress, taking place in Barcelona between 27 September and 1 October 2019.
  • Several new patent filings have been carried out during the period to further strengthen the existing IP around Clevegen use in conditions where harmful immune suppression causes serious diseases.
  • Manufacturing has been established to supply drug product for cohort expansions in part II of the MATINS study.
  • Partnering discussions continue with the aim of supporting expansion of clinical development and exploring the potential of Clevegen in combination with existing immunotherapies.

Traumakine® – in development for the treatment of ARDS and organ failures without interfering corticosteoids

  • Top-line data from the phase III ARDS trial with Japanese partner Maruishi Pharmaceutical Co., Ltd were, as expected, consistent with the INTEREST study results, showing that treatment with Traumakine did not result in reduced mortality or an increased number of ventilator-free survival days when compared to placebo. In the study very high concomitant glucocorticoid use (77%) was observed.
  • A phase I study in healthy volunteers (pharmacokinetic/dynamic YODA study), examining the administration and concomitant use of corticosteroids with Traumakine, confirmed observations previously seen in the INTEREST study. Traumakine produced the expected levels of bioactivity, suggesting drug formulation was not a factor in the outcome of that trial and that concomitant corticosteroid use interferes in the desired interferon-beta effect on CD73.
  • Interim results from the phase II INFORAAA study examining the effect of Traumakine on mortality (predominantly for Multi-Organ Failure, MOF) and on pharmacodynamic biomarkers in surgically operated Ruptured Abdominal Aorta Aneurysm (RAAA) patients, showed biomarker (MxA and CD73) responses indicating a good interferon-beta response from Traumakine. A trend toward reduction of mortality was seen in patients increasing their CD73 plasma levels.
  • Based on the advice from the INFORAAA Independent Data Monitoring Committee and investigators, the Company has decided to close the INFORAAA trial, as unexpected high use of concomitant corticosteroids prevent the scientific implementation of the INFORAAA protocol.
  • Faron remains focused on designing a new global phase III trial for Traumakine treatment (CALIBER) for the treatment of ARDS taking into account the high levels of concomitant steroids used as a standard of care for ARDS and some RAAA patients, and is in the process of seeking scientific advice from regulatory authorities on the proposed new trial structure.
  • It is the understanding of the Company that the current API manufacturing process used to manufacture Traumakine requires significant upgrading to secure MAA/BLA approval. Various options are currently explored.
  • The Company envisages that further Traumakine trials are likely to be funded through a third party.

Group financial

  • Raised EUR 4.5 million (net EUR 4.2 million) in aggregate through a placing and subscription in March and May 2019 at an issue price of Eur 0.76 (£0.65) per share.
  • Cash balances of EUR 2.9 million at 30 June 2019 (2018: EUR 11.2 million).
  • Operating loss of EUR 6.3 million for the six months ended 30 June 2019 (2018: EUR 14.0 million).
  • Net assets of EUR −1.8 million (2018: EUR 6.7 million) as at 30 June 2019.
  • Post the Period-end raised approximately EUR 2.5 million (before expenses) through an issue of equity consisting of subscriptions and an open offer at an issue price of EUR 1.19 (GBP 1.06) per share.
  • The net proceeds of the post-Period fundraise are expected to provide the Company with working capital into Q1 2020. 

Commenting on the results, Dr Markku Jalkanen, CEO of Faron, said: “We have focused on two important matters during H1-2019, MATINS study progress and the re-design of Traumakine’s development pathway. I am delighted to report that both of these have advanced significantly. Our novel precision cancer immunotherapy, Clevegen, has been well tolerated in cancer patients with advanced solid tumours, all showing an immune switch that we predicted based on the preclinical data and expected mode of action of Clevegen. We have also observed a first partial responder showing a constant decline of tumour burden in tumour imaging and biochemical markers. The response in this patient, who suffers from colorectal cancer (MSI low type) and has failed on all previous treatments, is a promising indicator of Clevegen’s potential.

“It has become clear that Traumakine’s development requires a study design which would avoid concomitant corticosteroid use. Faron’s solution is a design which would allow corticosteroid use within the standard of care arm but never in combination with Traumakine. As soon as the Company receives feedback for this new design, we will finalise plans to allow us to progress third party funding discussions. The unmet medical need among these patients is significant and the widespread use of corticosteroids for ARDS and multi-organ failures requires serious re-consideration.

“I am pleased that, through the recent fundraise, the Company is in a more secure financial position while we explore partnering activities for Clevegen and funding opportunities for Traumakine. I would like to thank shareholders, both new and existing, for their support of Faron.”

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

For more information please contact:

Faron Pharmaceuticals Ltd

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-mail: chris.brinzey@westwicke.com

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking) 

Phone: +44 207 886 2500

About Faron Pharmaceuticals Ltd

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

Chairman’s and Chief Executive Officer’s Review

Introduction

Faron’s two projects Clevegen and Traumakine are based on long term research findings made by the Company’s scientific network. This network has shown again its vital role through our work to understand the unexpected results from the INTEREST study – the  interfering role of corticosteroids on exogenous and endogenous action of interferon-beta. This analysis has penetrated to molecular signalling pathways and could have a significant impact on the wide use of corticosteroids in emergency conditions. Similarly, Clevegen’s mode of action has advanced the detailed understanding of how Clever-1 blockade results in an immune switch needed by cancer patients who are immune suppressed by their disease progress. Therefore, the Company believes that both projects are today on solid grounds to move forward and in this report we provide further information on their progress.

Clevegen – encouraging phase I/II MATINS data show potential of novel cancer immunotherapy

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

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

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

All study subjects dosed in the trial have experienced a switch in their immune cell profiles following treatment with Clevegen towards increased immune activation. Typically this has been observed by one or more of the following: increased CD8+ cells, an increase in the CD8+/CD4+ ratio, a decrease in regulatory T-cells (T-regs) and a substantial increase in mobile natural killer (NK) cells in the blood. These changes were measurable immediately post-dosing, indicating a dynamic response in the immunological switch to immune-activation after the immunotherapeutic blockade of Clever-1. Data indicate that dose escalation results in prolonged Clever-1 occupancy of the blood monocytes during the first two weeks of the three-week dosing cycle before a decrease to baseline levels prior to the next dosing cycle. Key data will be presented in a poster discussion session at the European Society of Medical Oncology (ESMO) meeting in Barcelona September 27 – October 1.

The majority of patients in the trial have received 5-7 different treatment lines prior to entering the MATINS study. Faron is investigating why the observed immune activation has not turned into anti-tumour activity in all study subjects but only in part. The Company believes the patient’s immune system receiving Clevegen as a last line of therapy could have been adversely affected by the underlying therapies they have received prior to taking part in the MATINS study, as previous chemotherapies can inactivate bone marrow, preventing revitalization of the immune system. It is also important to note that the partial responder patient with CRC (MSI low type) is resistant to PD-1 treatments, increasing the significance of this response.

The planned distinct cohort expansions during part II of the study will focus on identification of patients who show an increased number of Clever-1 positive circulating monocytes and the safety and efficacy of the treatment. The Company has announced that CRC has been selected as the first expansion cohort in part II and that initiation of this expansion is expected in Q4 2019. Faron also intends, subject to regulatory approval, to amend the MATINS trial to allow inclusion of hormone receptor-positive breast cancer, gastric cancer and uveal melanoma, based on striking translational data on Clever-1 positive cancer types and current poor survival rates and associated with high Clever-1 expression. Additionally, Faron has filed a pre-IND package to the FDA and intends to file a final IND package in early Q4-2019. If accepted, Faron plans to open new sites in the US and facilitate expansion of the CRC cohort as fast as possible. Similarly, Faron is planning to include top cancer centres in France and Spain as the next European countries to join the MATINS trial.

Traumakine – determining a path for future development

Following the detailed analyses undertaken by the Company and its scientific network during 2018 to understand the INTEREST trial results, in 2019 Faron has continued to further explore the potential causes and to determine a way forward for Traumakine’s continued development.

The final part of the pharmacokinetic/dynamic YODA study, examining the administration of concomitant steroids and Traumakine in healthy volunteers, confirmed earlier observations from parts I and II of the study that the INTEREST study drug produced the expected levels of bioactivity, suggesting drug formulation was not a factor in the outcome of the INTEREST trial. Results from YODA also showed that concomitant use of interferon-beta and the corticosteroid prednisolone reduced interferon-beta action, compared to subjects who did not receive steroids. This was evident through both clinical signs of the subjects and reduction of cluster of differentiation 73 (CD73) activity responses measured from blood samples of these subjects.

Results from the Japanese Traumakine phase III trial for ARDS, which included high levels of concomitant corticosteroid use, were in line with results from the INTEREST trial with the effect of corticosteroids showing similar trends to those observed from the INTEREST study.

Interim results of the Company’s phase II study examining the effect of Traumakine on mortality (predominantly MOF) and pharmacodynamic biomarkers of surgically operated RAAA patients (INFORAAA trial) also indicated corticosteroid interference with Traumakine action. Whilst biomarker (MxA and CD73) responses indicated a good interferon-beta response from Traumakine, unexpectedly, concomitant corticosterone was recorded both in the active and placebo treatment arms. The removal of corticosteroid-treated patients from statistical analysis reduced group sizes and made statistical interim mortality analysis meaningless; however, a trend toward reduction of mortality was seen in the Traumakine-treated patients who did not receive corticosteroids.

The Company has conducted a full review of all the Traumakine data with key opinion leaders in order to make decisions on Traumakine’s future development. This review has led to the decision to close the INFORAAA trial given unexpected levels of concomitant corticosteroid use seen in the trial to date which would prevent the scientific implementation of the INFORAAA protocol. The Company is designing a new global phase III trial for Traumakine treatment (CALIBER) for the treatment of ARDS taking into account the high levels of concomitant steroids used as a standard of care for ARDS and some RAAA patients, and is in the process of seeking regulatory feedback on the proposed trial. The Company envisages that further Traumakine trials are likely to be funded through a third party.

Financial review

During the Period, in March and May 2019, the Company successfully raised approximately EUR 4.5 million from new and existing shareholders, employees and Company Directors.  The majority of these proceeds are being used to advance Clevegen through the MATINS trial, further Traumakine development through the design and preparation of the global phase III CALIBER clinical trial and advance partnering discussions in respect of both Traumakine and Clevegen.

Statement of comprehensive income

The loss from operations for the six months ended 30 June 2019 was EUR 6.3 million (six months ended 30 June 2018: loss of EUR 14.0 million). No revenue was generated during the the period or prior revenue. Research and development expenditure decreased by EUR 6.7 million to EUR 5.0 million (2018: EUR 11.7 million). Administrative expenses decreased by EUR 1.0 million to EUR 1.4 million (2018: EUR 2.4 million). Both the research and development and the administrative expenses include the IFRS charge resulting from the options allocated by the Board to the personnel. This had no impact on the cash flow or the Company’s equity.

The loss after tax for the Period was EUR 6.4 million (2018: loss of EUR 14.1 million) and the basic loss per share was 0.17 (2018: loss per share of 0.45).

Statement of financial position and cash flows

At 30 June 2019, net assets amounted to EUR −1.8 million (30 June 2018: EUR 6.7 million). The net cash flow for the first six months in 2019 was EUR −1.1 million (2018:  EUR 1.8 million positive). As at 30 June 2019, total cash and cash equivalents held were EUR 2.9 million (2018: EUR 11.2 million).

Events after the Period

In August 2019, the Company successfully raised approximatey EUR 2.5 million (before expenses) from existing Shareholders. The net proceeds are expected to provide the Company with working capital into early Q1 2020 to further the clinical development of Clevegen. 

Corporate

Yrjö Wichmann left his role as the Company’s Chief Financial Officer to take up the new position of Vice President, Financing and Investor Relations. Mr. Wichmann remains a member of the senior management team but stepped down from the Board with effect from 28 May 2019.

Toni Hänninen was appointed as Faron’s new CFO from 1 June 2019, being responsible for both internal and external reporting.

The annual general meeting held on 28 May 2019 resolved the number of members of the Board as six. Frank Armstrong, Markku Jalkanen, Matti Manner, Leopoldo Zambeletti, Gregory Brown and John Poulos were re-elected to the Board for a term that ends at the end of the next AGM.

Summary & outlook

The successful financing undertaken in H1 2019 will allow us to further progress the clinical programme for Clevegen which, we continue to believe, offers significant potential as a novel immunotherapy for patients in need of new treatment options. Successful completion of part I of the MATINS study and initiation of the cohort expansion phase in colorectal cancer in Q4 2019 will provide important data to support our ongoing negotiations as we seek to enter a licensing agreement for Clevegen. We will also fund the commercialisation preparation of Traumakine by seeking scientific advice and regulatory approval for the CALIBER study in H2 2019.

On behalf of the Board, we would like to thank our new and existing shareholders for their continued support and belief in Faron. While work continues apace to progress development of our two clinical assets we will also continue to preserve cash in order to drive value for shareholders. We look forward to updating shareholders on the pathways for Clevegen and Traumakine over the coming months. 

Caution regarding forward looking statements

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

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

Statement of comprehensive income

Group

Parent

EUR ‘000

Unaudited six months ended 30 Jun 2019

Unaudited six months ended 30 Jun 2018

For the year ended 31 Dec 2018

Unaudited six months ended 30 Jun 2019

Unaudited six months ended 30 Jun 2018

For the year ended 31 Dec 2018

Revenue

20

19

20

19

Other operating income

14

205

14

205

Research and development expenses

(4,982)

(11,701)

(16,463)

(4,982)

(11,701)

(16,463)

General and administrative expenses

(1,361)

(2,372)

(3,750)

(1,334)

(2,368)

(3,740)

Operating loss

(6,343)

(14,038)

(19,989)

(6,316)

(14,034)

(19,979)

Financial expense

(73)

(327)

(397)

(73)

(327)

(397)

Financial income

5

305

302

5

305

302

Loss before tax

(6,411)

(14,060)

(20,084)

(6,384)

(14,055)

(20,074)

Tax expense

(0)

(2)

(0)

(2)

Loss for the period

(6,412)

(14,060)

(20,086)

(6,384)

(14,055)

(20,076)

Comprehensive loss for the period attributable to the equity holders of the Company

(6,412)

(14,060)

(20,086)

(6,384)

(14,055)

(20,076)

Loss per ordinary share

Basic and diluted loss per share, EUR

(0,17)

(0,45)

(0,65)

(0,17)

(0,45)

(0,65)

MATINS study selected for ESMO 2019

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

MATINS study selected for presentation at ESMO 2019 congress

TURKU – FINLAND, 02 September 2019 – Faron Pharmaceuticals Oy (AIM: FARN), the clinical stage biopharmaceutical company, today announces that an abstract highlighting recent data from the Phase I/II MATINS study with Clevegen, its wholly-owned novel precision cancer immunotherapy, has been selected for a poster discussion presentation at the European Society of Medical Oncology (ESMO) 2019 Congress, taking place in Barcelona between 27 September and 1 October, 2019.

Title: Immune activation with a novel immune switch anti-macrophage antibody (anti-Clever-1 mAb; FP-1305) in phase I/II first-in-human MATINS trial in patients with advanced solid tumors

Presenter: Dr. Petri Bono, MATINS trial principal investigator

Abstract Number: 6587

Faron will release further information from the poster and discussion slides to coincide with the start of the official Congress session during which it features.

The full abstract and poster will be made available online at the ESMO Congress website: https://www.esmo.org

About the MATINS study

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

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

For more information please contact:

Faron Pharmaceuticals Oy

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2500

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

About Faron Pharmaceuticals Ltd

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

Result of Open Offer and Further Subscription

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

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

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Result of Open Offer and Further Subscription

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

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

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

Result of Open Offer

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

Further Subscription

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

Related Party Transaction

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

Admission

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

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

Exchange rate

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

For more information please contact:

Faron Pharmaceuticals Oy

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2500

Consilium Strategic Communications

Mary-Jane Elliott

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

About Faron Pharmaceuticals Ltd

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

Caution regarding forward looking statements

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

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

Holding(s) in Company

TR-1: Standard form for notification of major holdings

NOTIFICATION OF MAJOR HOLDINGS (to be sent to the relevant issuer and to the FCA in Microsoft Word format if possible)i

1a. Identity of the issuer or the underlying issuer of existing shares to which voting rights are attachedii:

Faron Pharmaceuticals Ltd

1b. Please indicate if the issuer is a non-UK issuer  (please mark with an “X” if appropriate)

Non-UK issuer

X

2. Reason for the notification (please mark the appropriate box or boxes with an “X”)

An acquisition or disposal of voting rights

X

An acquisition or disposal of financial instruments

An event changing the breakdown of voting rights

Other (please specify)iii:

3. Details of person subject to the notification obligationiv

Name

Timo Syrjälä

City and country of registered office (if applicable)

4. Full name of shareholder(s) (if different from 3.)v

Name

City and country of registered office (if applicable)

5. Date on which the threshold was crossed or reachedvi:

05.08.2019

6. Date on which issuer notified (DD/MM/YYYY):

15.08.2019

7. Total positions of person(s) subject to the notification obligation

% of voting rights attached to shares (total  of 8. A)

% of voting rights through financial instruments
(total of 8.B 1 + 8.B 2)

Total of both in % (8.A + 8.B)

Total number of voting rights of issuervii

Resulting situation on the date on which threshold was crossed or reached

14.36%

14.36%

38.175.734

Position of previous notification (if

applicable)

13.11%

13.11%

             

8. Notified details of the resulting situation on the date on which the threshold was crossed or reachedviii

A: Voting rights attached to shares

Class/type of
shares

ISIN code (if possible)

Number of voting rightsix

% of voting rights

Direct

(Art 9 of Directive 2004/109/EC) (DTR5.1)

Indirect

(Art 10 of Directive 2004/109/EC) (DTR5.2.1)

Direct

(Art 9 of Directive 2004/109/EC) (DTR5.1)

Indirect

(Art 10 of Directive 2004/109/EC) (DTR5.2.1)

FI4000153309

2.205.025

3.275.350

5.78%

8.58%

SUBTOTAL 8. A

5.480.375

14.36%

B 1: Financial Instruments according to Art. 13(1)(a) of Directive 2004/109/EC (DTR5.3.1.1 (a))

Type of financial instrument

Expiration
date
x

Exercise/
Conversion Period
xi

Number of voting rights that may be acquired if the instrument is

exercised/converted.

% of voting rights

SUBTOTAL 8. B 1

B 2: Financial Instruments with similar economic effect according to Art. 13(1)(b) of Directive 2004/109/EC (DTR5.3.1.1 (b))

Type of financial instrument

Expiration
date
x

Exercise/
Conversion Period
xi

Physical or cash

settlementxii

Number of voting rights

% of voting rights

SUBTOTAL 8.B.2

                   

9. Information in relation to the person subject to the notification obligation (please mark the

applicable box with an “X”)

Person subject to the notification obligation is not controlled by any natural person or legal entity and does not control any other undertaking(s) holding directly or indirectly an interest in the (underlying) issuerxiii

Full chain of controlled undertakings through which the voting rights and/or the
financial instruments are effectively held starting with the ultimate controlling natural person or legal entity
xiv (please add additional rows as necessary)

X

Namexv

% of voting rights if it equals or is higher than the notifiable threshold

% of voting rights through financial instruments if it equals or is higher than the notifiable threshold

Total of both if it equals or is higher than the notifiable threshold

Timo Syrjälä (Direct)

              5.78%

5.78%

Acme Investments SPF Sarl (Indirect)

              8.58%

8.58%

10. In case of proxy voting, please identify:

Name of the proxy holder

The number and % of voting rights held

The date until which the voting rights will be held

11. Additional informationxvi  Threshold announced in company stock market release 5.8.2019

         

Place of completion

Lausanne

Date of completion

15/08/2019

Notice of Interim Results

Faron Pharmaceuticals Ltd

(“Faron” or the “Company”)

Notice of Interim Results

TURKU – FINLAND, 16 August 2019 – Faron Pharmaceuticals Ltd (Faron”) (LON: FARN), the clinical stage biopharmaceutical company, will announce its unaudited interim results for the six months ended 30 June 2019 on Monday 23 September 2019.

Dr Markku Jalkanen, Chief Executive Officer, Toni Hänninen, Chief Financial Officer and Yrjö Wichmann, Vice President, Financing and Investor Relations will host a presentation and conference call for analysts at 9.30am BST on the day of the results at the offices of Panmure Gordon, One New Change, London, EC4M 9AF. Please contact Consilium Strategic Communications for further details.

ENDS

For more information please contact:

Faron Pharmaceuticals Ltd

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley

Phone: +44 207 886 2500

About Faron Pharmaceuticals Ltd

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

Issue of Equity

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 IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN FARON PHARMACEUTICALS OY (“FARON”) OR ANY OTHER ENTITY IN ANY JURISDICTION IN WHICH ANY SUCH OFFER WOULD BE UNLAWFUL.

FARON HAS NOT TAKEN ANY ACTION, NOR WILL IT TAKE ANY ACTION, TO OFFER ANY OF THE SUBSCRIPTION SHARES OR ANY OTHER DOCUMENTS RELATING TO THE SUBSCRIPTION TO THE PUBLIC IN FINLAND, SWEDEN, NORWAY OR DENMARK, OR IN ANY OTHER JURISDICTION IN ANY FORM WHICH WOULD CONSTITUTE AN OFFER TO THE PUBLIC.

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

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Issue of equity

Total Voting Rights

Publication of Open Offer Circular

TURKU – FINLAND, 6 August 2019 – Faron Pharmaceuticals Oy (Faron”) (AIM: FARN), the clinical stage biopharmaceutical company, is pleased to announce that further to the announcement on 5 August 2019 (“Capital Raising Announcement“), the Subscription Shares have been issued and registered with the Finnish Trade Register, resulting in the issue of 941,840  new ordinary shares in aggregate to raise in aggregate €1.12 million (£1.00 million) before expenses at the Euro Issue Price of €1.19 (£1.06)  per share in respect of the  Subscription.

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

Open Offer

Following completion of the Subscription, as noted in the Capital Raising Announcement, in order to provide Shareholders who have not taken part in the Subscription with an opportunity to participate in the proposed issue of New Ordinary Shares, the Company is providing all Qualifying Shareholders with the opportunity to subscribe for an aggregate of up to 1,696,699  Open Offer Shares, to raise up to approximately €2.0 million (£1.8 million) through the Open Offer, on the basis of 2 Open Offer Share for every 45 Existing Ordinary Shares, at the Issue Price  (or the Euro Issue Price in respect of Qualifying non-DI Holders) each payable in full on acceptance.  Any entitlements to Open Offer Shares not subscribed for by Qualifying Shareholders will be available to Qualifying Shareholders under the Excess Application Facility.  Qualifying Shareholders are those shareholders and DI Holders on the register of members of the Company at the Record Date (being 6 August 2019).

The net proceeds of the Open Offer will be used alongside the net proceeds of the Subscription to further the clinical development of Clevegen as outlined in the Capital Raising Announcement. The net proceeds of the Capital Raising  (to the extent a significant proportion of the Open Offer Shares are subscribed for) are expected to provide the Company with working capital into early Q1 2020.  

A Circular setting out the terms and conditions of the Open Offer and instructions for application under the Open Offer (including the Excess Application Facility) for Qualifying non-DI Holders and Qualifying DI Holders is available on the Company’s website at www.faron.com/investors. Qualifying non-DI Holders are also instructed to refer to the Basic Information Document and Finnish Law Terms and Conditions which are also available on the Company’s website in accordace with Finnish law requirements.

This summary should be read in conjunction with the full text shown below and in the Circular.

For more information please contact:

Faron Pharmaceuticals Oy

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2500

Consilium Strategic Communications

Mary-Jane Elliott

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

About Faron Pharmaceuticals Ltd

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

Caution regarding forward looking statements

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

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

DEFINITIONS

The following definitions apply throughout this announcement, unless the context requires otherwise:

“Admission”

First Admission or Second Admission as the context requires

“Admission Document”

the Company’s AIM admission document dated 11 November 2015

“AIM”

the AIM market operated by London Stock Exchange

“AIM Rules”

the AIM Rules for Companies as published by the London Stock Exchange from time to time

“Basic Information Document”

the basic information document concerning the Open Offer prepared by the Company in accordance with Finnish law

“Board” or “Directors”

the directors of the Company as at the date of the Ciruclar

“Capital Raising”

the Subscription and the Open Offer, taken together

“Capital Raising Announcement”

the announcement made by the Company through RNS on 5 August 2019 in respect of the Capital Raising

“Company” or “Faron”

Faron Pharmaceuticals Oy, a limited liability company incorporated in Finland with registered number 2068285-4

“CREST”

the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the operator (as defined in the CREST Regulations), which facilitates the transfer of title to shares in uncertificated form

“CREST sponsor”

a CREST participant admitted to CREST as a CREST sponsor

“DI”

the depository interest representing entitlements to Ordinary Shares

“DI Holders”

the holders of DIs from time to time

“DI Holder Terms and Conditions”

the terms of conditions of the Open Offer applicable to the DI Holders, as set out in Part 3 of the Circular

“EIS”

Enterprise Investment Scheme

“EIS Open Offer Shares”

the Open Offer Shares to be allotted and issued by the Company at the Issue Price, in connection with the Open Offer, which are intended to qualify for EIS Relief

“EIS/VCT Open Offer Shares”

the EIS Open Offer Shares and the VCT Open Offer Shares together

“EIS Relief”

the relief claimed by any holder of EIS Open Offer Shares under Part 5 of the ITA 2007 or exemption or relief available under sections 150A, 150C and Schedule 5B Taxation of Chargeable Gains Act 1992

“enabled for settlement”

in relation to the Open Offer Entitlements and Excess CREST Open Offer Entitlements, enabled for the limited purpose of settlement of claim transactions and unmatched stock event transactions (each as described in the CREST Manual issued by Euroclear)

“Enlarged Share Capital”

the entire issued share capital of the Company as enlarged by the issue of the Open Offer Shares following Second Admission (assuming subscription in full for the Open Offer Shares)

“EU”

the European Union

“Euroclear”

Euroclear UK & Ireland Limited

“Excess Application Facility”

the arrangement pursuant to which Qualifying Shareholders may apply for additional Open Offer Shares in excess of their Open Offer Entitlement in accordance with the DI Holder Terms and Conditions

“Excess CREST Open Offer Entitlements”

in respect of each Qualifying DI Holder who has taken up their Open Offer Entitlement in full, the Excess Open Offer Entitlements credited to his stock account in CREST

“Excess Open Offer Entitlements”

in respect of each Qualifying Shareholder, the entitlement (in addition to his Open Offer Entitlement) to apply for Open Offer Shares pursuant to the Excess Application Facility, subject to the DI Holder Terms and Conditions

“Excess Shares”

Open Offer Shares in addition to the Open Offer Entitlement for which Qualifying Shareholders may apply under the Excess Application Facility

“Ex-entitlement Date”

the date on which the Existing Ordinary Shares are marked “ex” for entitlement under the Open Offer, being 8.00 a.m. on 7 August 2019

“Existing Ordinary Shares”

the 38,175,734 Ordinary Shares in issue (including the Subscription Shares)

“FCA”

the Financial Conduct Authority

“Finnish Law Terms and Conditions”

the terms of the conditions of the Open Offer applicable to the Qualifying non-DI Holders

First Admission

Admission of the Subscription Shares to trading on AIM becoming effective in accordance with the AIM Rules, at 8.00 a.m. on 6 August 2019

“HMRC”

Her Majesty’s Revenue and Customs

“ISIN”

International Securities Identification Number

“ITA 2007”

Income Tax Act 2007

“Issue Price”

106 pence (or equivalent Euro Issue Price of €1.19 in respect of the Subscription and Open Offer Shares to be subscribed by Qualifying non-DI Holders) per New Ordinary Share

“New Ordinary Shares”

the Subscription Shares and the Open Offer Shares

“Open Offer”

the conditional invitation made to Qualifying Shareholders to apply to subscribe for the Open Offer Shares at the Issue Price on the terms and subject to the conditions set out in Part 3 of the Circular

“Open Offer Entitlement”

in respect of each Qualifying Shareholder, the entitlement to apply for the number of Open Offer Shares pro rata to their holding of Existing Ordinary Shares pursuant to the Open Offer as described in Part 3 of the Circular

“Open Offer Shares”

up to 1,696,699 new Ordinary Shares being made available to Qualifying Shareholders pursuant to the Open Offer

“Ordinary Shares

ordinary shares in the capital of the Company from time to time

“Overseas Shareholders”

Shareholders with registered addresses outside the United Kingdom or who are citizens or residents of countries outside the United Kingdom

“Qualifying DI Holders”

holders of DIs in respect of Existing Ordinary Shares in uncertificated form on the register of members of the Company at the Record Date (other than certain Overseas Shareholders)

“Qualifying non-DI Holders”

directly registered holders of Existing Ordinary Shares on the register of members of the Company at the Record Date (other than certain Overseas Shareholders);

“Qualifying Shareholders”

Qualifying DI Holders and Qualifying non-DI Holders

“Receiving Agent”

Computershare

“Record Date”

close of business on 6 August 2019

“Depositary”

Computershare

“Regulatory Information Service”

has the meaning given in the AIM Rules

“Restricted Jurisdiction”

the United States of America, Canada, Australia Japan, The Republic of South Africa, Singapore, Hong Kong and any jurisdiction where the extension or availability of the Open Offer (and any other transaction contemplated thereby) would breach any applicable laws or regulations and “Restricted Jurisdictions” shall mean all of them

“Second Admission”

Admission of the Open Offer Shares to trading on AIM becoming effective in accordance with the AIM Rules, expected to be on or around 28 August 2019

“Shareholders”

the persons who are registered as holders of Ordinary Shares and, for the purpose of the Circular unless specified otherwise, the persons who are registered as DI Holders

“Subscriber”

the persons who have agreed to subscribe for Subscription Shares under the Subscription

“Subscription”

the subscription for the Subscription Shares by the Subscribers, at the Issue Price announced by the Company on 5 August 2019

“Subscription Shares”

the 941,840 new Ordinary Shares which are the subject of the Subscription

“stock account”

an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited

“uncertificated” or “in uncertificated form”

in relation to a share or other security, recorded on the relevant register as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred through CREST

“United Kingdom” or “UK”

the United Kingdom of Great Britain and Northern Ireland

“United States”, “United States of America” or “US”

the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia and all areas subject to its jurisdiction

“VCT”

Venture Capital Trust as defined by section 259 ITA 2007

“VCT Open Offer Shares”

the Open Offer Shares to be allotted and issued by the Company at the Issue Price, in connection with the Open Offer, which are intended to qualify for VCT Relief

“VCT Relief”

the relief claimed by any holder of the VCT Open Offer Shares under Part 6 of the ITA 2007 or exemption or relief available under sections 151A, 151B and Schedule 5C Taxation of Chargeable Gains Act 1992 or Chapter 5 of Part 6 of the Income Tax (Trading and Other Income) Act 2005

OPEN OFFER TIMETABLE

Record Date for the Open Offer

Close of business 6 August 2019

Ex-entitlement Date

8:00am 7 August 2019

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

8:00am 8 August 2019

Recommended last time and date for requesting withdrawal of Open Offer Entitlements from CREST

4:30 p.m. on 19 August 2019

Latest time and date for depositing Open Offer Entitlements into CREST

3:00 p.m. on 20 August 2019

Latest time and date for splitting Application Forms

3:00 p.m. on 21 August 2019

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

11:00 a.m. on 22 August 2019

Latest time and date for acceptance of the
Open Offer by Non-DI Holders and payment of subscription price for Open Offer Shares

11:00 a.m. on 23 August 2019

Announcement of result of Open Offer

27 August 2019

Issue of the Open Offer Shares

27 August 2019

Admission and commencement of dealings in the Open Offer Shares (Second Admission)

8 a.m. on 28 August 2019

Open Offer Shares credited to CREST members’ account

as soon as possible after 28 August 2019

Notes

(1)              References to times in this announcement  are to London time (unless otherwise stated).

(2)              The dates and timing of the events in the above timetable and in the rest of this announcement are indicative only and may be subject to change.

(3)              If any of the above times or dates should change, the revised times and/or dates will be notified by an announcement through RNS.

FURTHER INFORMATION

1.             Introduction

On 5 August 2019, the Board announced the results of a Subscription of 941,840 Ordinary Shares at €1.19 (106 pence) per Ordinary Share to raise approximately €1.12 million (£1.0 million) in aggregate before expenses. The Issue Price is at a discount of 11.3 per cent. to the closing middle market price of 119.5 pence per existing Ordinary Share on 2 August 2019 (being the last practicable date prior to the Capital Raising Announcement).

In addition, in order to provide Shareholders who have not taken part in the Subscription with an opportunity to participate in the proposed issue of New Ordinary Shares, the Company is providing all Qualifying Shareholders with the opportunity to subscribe for an aggregate of up to 1,696,699 Open Offer Shares, to raise up to approximately £1.8 million (€2.0 million), on the basis of 2 Open Offer Shares for every 45 Existing Ordinary Shares, at the Issue Price each payable in full on acceptance. The Subscription was not conditional on the Open Offer.

First Admission in respect of the Subscription Shares occurred at 8.00 a.m. on 6 August 2019 and Second Admission in respect of Open Offer Shares validly subscribed for and issued is expected to occur no later than 8.00 a.m. on 28 August 2019 (or such later time and/or date, in each case, as Panmure Gordon and the Company may agree, being no later than 8.00 a.m. on 4 September 2019). The Open Offer is not underwritten and the Subscription is not subject to clawback under the Open Offer.

The Subscription Shares and Open Offer Shares are being issued pursuant to the Company’s existing share authorities granted at the Annual General Meeting held on 28 May 2019.

The purpose of the Circular is to provide Qualifying Shareholders with background to the Capital Raising, the details of the Open Offer, and the terms and conditions applicable to it.

2.             Description of Company

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

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

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

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

PROGRESS OF CLEVEGEN

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

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

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

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

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

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

TRAUMAKINE UPDATE

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

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

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

CURRENT TRADING

The Company prepares its financial statements in accordance with the International Financial Reporting Standards (IFRS). The Company’s loss for the financial year ended 31 December 2018 was 20.1 million (2017: 21.1 million loss).

The Company’s cash balances were 4.9 million on 31 March 2019, 4.1 million on 31 December 2018, and 9.3 million on 31 December 2017. The Company has implemented a cash preservation program to reduce cash burn and preserve existing resources in order to deliver value to shareholders. The Company’s net assets were 0.7 million on 31 March 2019, 0.4 million on 31 December 2018 and 4.7 million on 31 December 2017.

The Company raised net 15.9 million in February 2018 intended to support preparations for the commercialisation of Traumakine and to advance the clinical development of Clevegen in several indications at the issue price of £8.05 per share. In January 2019, the Company received the fourth and last instalment of the Clevegen Tekes R&D loan of €0.31 million. In March 2019, the Company raised net 2.9 million through placing and subscription at the issue price of €0.702 (60 pence) per share and net 1.3 million in May 2019 at the issue price of €0.7598 (65 pence) per share.

3.             Use of Proceeds

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

·    completing part I of the MATINS trial to determine the maximum tolerated dose and optimal dose for part II, and to initiate cohort expansion in CRC in Q4 2019; and

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

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

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

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

4.             Details of the Subscription

The Company has raised approximately £1.0 million before expenses by way of the issue of 941,840 Subscription Shares pursuant to the Subscription at the Euro Issue Price.

The Subscription Shares were issued and registered with the Finnish Trade Authority on 5 August 2019 and First Admission took place at 8.00 am on 6 August 2019.

The Subscription Shares have been issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

5.             Details of the Open Offer

The Company is proposing to raise up to approximately £1.8 million before expenses by the issue of up to 1,696,699 Open Offer Shares under the Open Offer at the Issue Price, payable in full on acceptance. Any entitlements to Open Offer Shares not subscribed for by Qualifying Shareholders will be available to Qualifying Shareholders under the Excess Application Facility.

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

Qualifying Shareholders may apply for Open Offer Shares under the Open Offer at the Issue Price pro rata to their holdings of Existing Ordinary Shares on the Record Date on the basis of:

2 Open Offer Shares for every 45 Existing Ordinary Shares

Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Open Offer Shares. Fractional entitlements which would otherwise arise will not be issued to Qualifying Shareholders but will be aggregated and made available under the Excess Application Facility. Not all Shareholders will be Qualifying Shareholders. Shareholders who are located in, or are citizens of, or have a registered office in a Restricted Jurisdiction will not qualify to participate in the Open Offer. The attention of Overseas Shareholders is drawn to paragraph 6 of Part 3 of the Circular.

Subject to availability, the Excess Application Facility enables Qualifying Shareholders to apply for Excess Shares up to the maximum number of Open Offer Shares available less their Open Offer Entitlement, subject to availability. Further details of the Open Offer and the Excess Application Facility are given in Part 3 of the Circular.

Valid applications by Qualifying Shareholders will be satisfied in full up to their Open Offer Entitlements. Applicants can apply for less or more than their entitlements under the 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 Shareholders apply for less than or more than their own 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 Open Offer Entitlement. The Board may scale back applications made in excess of Open Offer Entitlements on such basis as it reasonably considers to be appropriate.

Application has been made for the Open Offer Entitlements and Excess CREST Open Offer Entitlements to be admitted to CREST. It is expected that such Open Offer Entitlements and Excess CREST Open Offer Entitlements will be credited to CREST on 8 August 2019. The Open Offer Entitlements and Excess CREST Open Offer Entitlements will be enabled for settlement in CREST until 11.00 a.m. on 22 August 2019. 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 Open Offer Shares must be paid in full on application. The latest time and date for receipt of CREST applications by DI Holders and payment in respect of the Open Offer is 11.00 a.m. on 22 August 2019.

The Open Offer Shares must be paid for in full on application.

Qualifying DI Holders will receive a credit of Open Offer Entitlements and Excess CREST Open Offer Entitlements to your CREST stock account. Please refer to paragraph 3.4 and paragraphs 3 to 11 of Part 3 of the Circular and also to the CREST Manual for further information on the CREST procedures referred to below. Further details of the Open Offer to Qualifying DI Holders and the terms and conditions on which it is being made, including the procedure for application and payment, are contained in Part 3 of the Circular (DI Holder Terms and Conditions). The Circular sets out the terms and conditions of the Open Offer to Qualifying DI Holders. Qualifying non-DI Holders are instructed to also refer to the Basic Information Document and Finnish Law Terms and Conditions available on the Company’s website at www.faron.com/investors which contain instructions for how Qualifying non-DI Holders can subscribe for Open Offer Shares pursuant to the Open Offer.

If you are electing for EIS Relief or VCT Relief in respect of your application for Open Offer Shares please refer to paragraph 3.4 of Part 3 of the Circular and if your existing Ordinary Shares are registered in a single name, then the Company will use the same information to supply to HMRC. If your Ordinary Shares are registered in joint names or a nominee name, you or the nominee, will need to notify the Company at EIS.investors@faron.com by no later than 11 September 2019 of the registration details required for all of the underlying beneficial holders who wish to receive the EIS tax certificate for use in their tax return along with your contact details. Failure to supply the EIS registration information by the cut-off date will result in no application being made to HMRC for Tax relief on your subscription.

Under the relevant legislation, the maximum amount the Company may raise in any 12-month period by issuing shares to EIS and VCT investors is £10 million. The Company expects all of the Open Offer Shares to be eligible for EIS Relief and VCT Relief to the extent validly subscribed for and subject to the circumstances of individual investors as described in paragraph 6 below. Accordingly, all Open Offer Shares are deemed to be EIS/VCT Open Offer Shares.

EIS income tax relief will only be available to Qualifying DI Holders who hold Existing Ordinary Shares which were acquired pursuant to an EIS compliant issue of shares by the Company. EIS income tax relief is not available for Qualifying DI Holders who subscribe for Open Offer Shares at a time when they hold Existing Ordinary Shares for which EIS Relief has not been claimed.

Qualifying DI Holders must not seek EIS Relief on any Open Offer Shares that are not EIS/VCT Open Offer Shares.

Following Second Admission, the Company will notify Qualifying DI Holders who are VCTs or who stated that they would seek EIS Relief on the number of EIS/VCT Open Offer Shares allocated to them and accordingly upon which Open Offer Shares they may seek such relief.

The 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 Ordinary 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 Open Offer Shares to trading on AIM. It is expected that Second Admission will occur, and that dealings in the Open Offer Shares subscribed for pursuant to the Open Offer will commence, at 8.00 a.m. on 28 August 2019, at which time it is also expected that the Open Offer Shares will be enabled for settlement in CREST.

6.             Enterprise Investment Scheme and Venture Capital Trust

As of 2 January 2018, HMRC can no longer consider VCT advance assurance applications where the details of the potential qualifying holding are not given.

The Directors believe that all of the Open Offer Shares should be eligible (subject to the circumstances of investors) for tax reliefs under EIS and as a qualifying holder for VCTs (and accordingly all Open Offer Shares are deemed to be “EIS/VCT Open Offer Shares”). The Directors are not aware of any subsequent change in the qualifying conditions or the Company’s circumstances that would prevent the EIS/VCT Open Offer Shares from being eligible VCT and EIS investments on this occasion. However, neither the Directors nor the Company gives any warranty or undertaking that relief will be available in respect of any investment in EIS/VCT Open Offer Shares pursuant to the Circular or the Capital Raising, nor do they warrant or undertake that the Company will conduct its activities in a way that qualifies for or preserves its status.

The Company will, following Second Admission, make an application to HMRC to authorise the Company to deliver certificates under section 204, ITA 2007 in respect of those Open Offer Shares which Qualifying Shareholders have indicated in their USE instruction that they wish to seek EIS Relief on and which have been duly allocated such relief by the Board. Assuming that HMRC gives authorisation to the Company, it will deliver such certificates in respect of such allocations of EIS/VCT Open Offer Shares.

Provided that Qualifying DI Holders and the Company comply with the EIS legislation (Part V, ITA 2007 and sections 150A-C and Schedule 5B of the Taxation of Chargeable Gains Act 1992), which includes a requirement that the EIS Open Offer Shares are held by investors for not less than three years, UK taxpayers should qualify for EIS Relief on their investment in the EIS Open Offer Shares.

As the rules governing EIS Relief and VCT Relief are complex and interrelated with other legislation, if Shareholders or any potential investors are in any doubt as to their tax position, require more detailed information than the general outline above, or are subject to tax in a jurisdiction other than the United Kingdom, they should consult their professional adviser.

7.             Overseas Shareholders

The attention of Qualifying Shareholders who have registered addresses outside the United Kingdom, or who are citizens or residents of countries other than the United Kingdom, or who are holding Existing Ordinary Shares for the benefit of such persons (including, without limitation, custodians, nominees, trustees and agents) or who have a contractual or other legal obligation to forward the Circular to such persons, is drawn to the information which appears in paragraph 6 of Part 3 of the Circular.

Qualifying DI Holders who have registered addresses in or who are resident in, or who are citizens of, countries other than the United Kingdom (including without limitation the United States), should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their entitlements under the Open Offer.

8.             Effect of the Subscription and Open Offer

Upon Second Admission, and assuming full take up of all the Open Offer Shares offered under the Open Offer, the Enlarged Share Capital is expected to be 39,872,433 Ordinary Shares. On this basis, the Open Offer Shares will represent approximately 4.3 per cent. of the Enlarged Share Capital.

9.             Risk Factors and Additional Information

The attention of Shareholders is drawn to the risk factors set out in Part 2 and the information contained in Parts 3 to 4 (inclusive) of the Circular, which provide additional information on the Subscription and the Open Offer.

10.          Action to be taken

In respect of the Open Offer

Qualifying DI Holder

If you are a Qualifying DI Holder you will receive a credit to your appropriate stock account in CREST in respect of the Open Offer Entitlements representing your entitlement under the Open Offer and Excess CREST Open Offer Entitlements. You should refer to the procedure for application and payment set out in paragraph 3.4 of Part 3 of the Circular.

The relevant CREST instructions must have settled in accordance with the instructions in paragraph 3.4 of Part 3 of the Ciruclar by no later than 11.00 a.m. on 22 August 2019.

EIS Relief will only be available to Qualifying DI Holders who hold Existing Ordinary Shares which were acquired pursuant to an EIS compliant issue of shares by the Company. Qualifying Shareholders who obtained Existing Ordinary Shares on the secondary markets will not be eligible to claim EIS Relief.

Qualifying DI Holders should refer to their CREST sponsors regarding the action to be taken in connection with the Circular and the Open Offer.

Qualifying non-DI Holder

Qualifying non-DI Holders are instructed to also refer to the Basic Information Document and the Finnish Law Terms and Conditions available on the Company’s website at www.faron.com/investors and contain the instructions for how Qualifying non-DI Holders can subscribe for Open Offer Shares pursuant to the Open Offer.

Subscription and Open Offer

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

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

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN FARON PHARMACEUTICALS OY (“FARON”) OR ANY OTHER ENTITY IN ANY JURISDICTION IN WHICH ANY SUCH OFFER WOULD BE UNLAWFUL.

FARON HAS NOT TAKEN ANY ACTION, NOR WILL IT TAKE ANY ACTION, TO OFFER ANY OF THE SUBSCRIPTION SHARES OR ANY OTHER DOCUMENTS RELATING TO THE SUBSCRIPTION TO THE PUBLIC IN FINLAND, SWEDEN, NORWAY OR DENMARK, OR IN ANY OTHER JURISDICTION IN ANY FORM WHICH WOULD CONSTITUTE AN OFFER TO THE PUBLIC.

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

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Subscription and Open Offer

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

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

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

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

REASONS FOR THE PROPOSED CAPITAL RAISING

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

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

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

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

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

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

DETAILS OF THE SUBSCRIPTION AND OPEN OFFER AND ISSUE OF EQUITY

The Subscription Shares and Open Offer Shares will be issued by the Company at the Issue Price (or the Euro Issue Price where applicable) pursuant to the Directors’ existing authority to allot ordinary shares in the capital of the Company (“Ordinary Shares“) for cash on a non-pre-emptive basis, as approved by shareholders at the Company’s last annual general meeting which was held on 28 May 2019. Legally binding commitments have been in received (in the form of subscription letters) in respect of all Subscription Shares.

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

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

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

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

RELATED PARTY TRANSACTION

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

FARON OVERVIEW

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

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

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

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

PROGRESS OF CLEVEGEN

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

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

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

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

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

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

TRAUMAKINE UPDATE

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

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

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

Exchange rate

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

MARKET ABUSE REGULATION

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

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

For more information please contact:

Faron Pharmaceuticals Oy

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2500

Consilium Strategic Communications

Mary-Jane Elliott

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

About Faron Pharmaceuticals Ltd

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

Caution regarding forward looking statements

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

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

MATINS study update

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

MATINS study update

–           High Clevegen dosing well tolerated: 9 patients dosed to date

–           Switch of immune cell profiles towards immune activation seen across all study subjects immediately post dosing

–           Filing of pre-IND package with the FDA

TURKU – FINLAND, 12 July 2019 – Faron Pharmaceuticals Oy (AIM: FARN), the clinical stage biopharmaceutical company, today announces additional data from the open label phase I/II MATINS clinical trial investigating the safety and efficacy of Clevegen, Faron’s wholly-owned novel precision cancer immunotherapy, in selected metastatic or inoperable solid tumours.

Dr Markku Jalkanen, Chief Executive Officer of Faron, said: “We are thrilled with the progress the MATINS study has made during the last few months. We believe we have the first macrophage immune checkpoint drug in clinical development promoting immune activation and are encouraged by the latest data indicating potential early efficacy and good tolerability. We expect to progress the cohort expansion phase of the study in Q3 2019 in patients with late-stage colorectal cancer and as more data are generated we will seek guidance from regulators regarding the best and fastest pathway to secure initial approval of Clevegen as a single-agent treatment.

“We also hope to conclude partnering discussions during H2-2019, which should enable us to expand clinical development to include combination studies exploring the potential of Clevegen in combination with existing immunotherapies.”

·    Clevegen well tolerated also at high doses

Clevegen dosing reached its planned maximum of 10mg/kg in mid-June, which has continued to be well tolerated. No dose limiting toxicity (DLT) nor maximally tolerated dose (MTD) has been observed so far. The trial includes an option to administer a 20mg/kg dose, which the Company intends to propose to the trial’s independent data monitoring board. Safe administration of this higher dose would demonstrate a high tolerability and an unusually wide safety margin for Clevegen compared to other immuno-oncology (IO) products. This Directors believe this could allow the Company to move forward rapidly and initiate new clinical studies in first-line and neo-adjuvant study settings and would, in turn, help to demonstrate the full potential of Clever-1 blockade early in the treatment pathway, accelerate time-to-market and increase the market potential of Clevegen.

·    Continuous induction of immune activation

All MATINS study subjects have consistently shown a switch in their immune cell profiles towards increased immune activation, observed by an increase in CD8+ cells, an increased in the CD8+/CD4+ ratio, a decrease in regulatory T-cells (T-regs) and a substantial increase in mobile natural killer (NK) cells in the blood. These changes are measurable immediately post-dosing, indicating a dynamic response in the immunological switch to immune-activation after the immunotherapeutic blockade of Clever-1.

Latest data also show that dose escalation results in prolonged Clever-1 occupancy of the blood monocytes during the first two weeks of the three-week dosing cycle before a decrease to baseline levels prior to the next dosing cycle. Longer exposure of blood monocytes to Clevegen is also expected to induce a stronger pro-inflammatory response in study subjects.

·    Further molecular evidence of immune activation

A new discovery following study of subjects’ cellular responses, has been the identification of an increase in interferon gamma (IFNγ) production by the host immune system, accompanied by an increase in circulating Th1 differentiated CD4+ and CD8+ T cells. The Company believes the decrease in tumour burden seen in the partial responder is partially (if not completely) explained by this effect of Clevegen on the immune system. Blood myeloid cell analyses also indicate that the proportion of CD163/CD206 positive cells (considered as M2 type immunosuppressive myeloid cells) decrease, as expected, among the whole CD14 positive monocytes of the responder. This is consistent with the M2 to M1 immune switch in their immune profile towards more immune activation, induced by Clevegen, which has been previously observed in animal models.

·    Anti-cancer responses continue in the clinics

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

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

·    Expanding clinical development plans

These data support Clevegen’s potential, with promising single-agent activity as a last-line therapy in CRC patients who are refractory to all other treatment options. The Company intends to keep the CRC expansion cohort open and enrolling and while more data is generated, to approach regulatory authorities to seek scientific advice regarding the path to regulatory approval. On the basis of Clevegen’s current safety profile and potential in patients who have exhausted by all other treatment options, the Company believes it may seek initial regulatory approval supported by data from the expanding MATINS trial by 2022. Faron also intends, subject to regulatory approval, to amend the MATINS trial to allow inclusion of hormone receptor-positive breast cancer, gastric cancer and uveal melanoma, based on striking translational data on CLEVER-1 positive cancer types and current poor survival rates. The Directors believe that earlier lines of treatment for these illnesses which currently lack successful treatments may be possible based on the safety profile of Clevegen seen to date and would allow Clevegen to activate more naïve and responsive immune systems.

Faron has recently also filed a pre-IND package to the FDA. If accepted, Faron plans to open new sites in the US and facilitate expansion of the CRC cohort as fast as possible. Similarly, Faron is planning to include top cancer centres in France and Spain as the next European countries to join the MATINS trial.

·    Clever-1 expression predicts resistance to other immune-oncology (IO) treatments

Increasing data from IO-treated patients has become available through publicly-accessible data sources. Interestingly, data from The Cancer Genome Atlas (TCGA, the National Cancer Institute, USA) indicate that tumours with high Clever-1 (also known as Stab-1) expression do not respond to current IO treatments (p<0.00001) and correlates to a decreased survival (p<0.001). This finding strongly supports earlier research indicating the potential synergistic anti-tumour benefit when immunotherapeutic blockade of Clever-1 is combined with other IO treatments. It also supports the potential of measuring Clever-1 (e.g. from blood myeloid cells) to provide selection criteria for current IO treatments which lack good biomarkers.

About the MATINS study

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

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

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

For more information please contact:

Faron Pharmaceuticals Oy

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2500

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

About Faron Pharmaceuticals Ltd

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

Caution regarding forward looking statements

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

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

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