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 PLACING SHARES OR ANY DOCUMENTS RELATING TO THE PLACING TO THE PUBLIC IN FINLAND, SWEDEN, NORWAY OR DENMARK, OR IN ANY OTHER JURISDICTION IN ANY FORM WHICH WOULD CONSTITUTE AN OFFER TO THE PUBLIC.

THE PLACING SHARES WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THERE IS NO PUBLIC OFFERING IN THE UNITED STATES, THE UNITED KINGDOM OR ELSEWHERE. THE PLACING SHARES HAVE NOT 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 PLACING OR THE ACCURACY OR ADEQUACY OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

Faron Pharmaceuticals Oy

Proposed Placing of Shares and Appointment of Financial Adviser

TURKU – FINLAND, 7 November 2019 – Faron Pharmaceuticals Oy (AIM: FARN) (“Company“), the clinical stage biopharmaceutical company, today announces a proposed private placement to a limited number of institutional investors and certain members of the management and of the Board of Directors of Faron (“Placing“) of new shares in the Company, to issue a minimum number of 3,935,500 ordinary shares in the Company (“Placing Shares”).

The Placing, arranged by Carnegie Investment Bank AB (“Carnegie“), will be conducted in a private placement by way of an accelerated book-building process in which selected investors may submit bids for the Placing Shares (the “Bookbuild”). The subscription price per Placing Share is to be determined on the basis of the bids received in the Bookbuild. The Bookbuild is expected to commence immediately following this announcement and is expected to end by 9:00 EET on 8 November 2019 at the latest. Carnegie reserves the right to close the Bookbuild earlier or later without further notice. The Bookbuild may also be discontinued at any time during the book-building process. Following the close of the Bookbuild, the Board of Directors of Faron (the “Board“) will make the decision on the issue of the Placing Shares, including, as applicable, acceptance of the received bids, the number of Placing Shares to be issued and the subscription price per Placing Share (the “Issue Price“). As soon as practicable after the close of the Bookbuild, and following receipt of binding commitments from investors, an announcement will be made on the final number of the Placing Shares to be issued and the Issue Price as well as the expected registration date of the Placing Shares.

KEY HIGHLIGHTS

·     A private placement conducted by way of an accelerated book-building, directed to a limited number of institutional investors and certain members of the management and of the Board, in which Carnegie uses reasonable endeavours to procure subscriptions for the Placing Shares, which would correspond to a minimum of approximately 10.0 per cent. of all of the issued shares and votes in the Company immediately prior to the Placing.

·     The net proceeds of the Placing would be primarily used to advance the clinical development of Clevegen^® in several indications and to help advance the seamless continuation of Clevegen® development to optimise the value of the asset in advance of any partnership deal.

·     The cash balance held by the Company as at 30 September 2019 was c. €2.38 million.

Carnegie acts as Lead Manager and Sole Bookrunner of the Placing and Financial Adviser to the Company.

REASONS FOR THE PROPOSED PLACING

Advance the clinical development of Clevegen^® in several indications

·     Faron intends to initiate the cohort expansion (part II) of the MATINS trial in colorectal cancer after the dose optimisation (details of which were announced 9 October 2019) has been completed. Once the cohort expansion reaches meaningful size the Company plans to share the data with the US Food and Drug Administration (“FDA“) for discussions of the content of a biologics licence application; and

·     The Company also expects further analysis of patient data from part I of the MATINS trial to aid the selection of additional cohort expansions among the non-treatable and advanced solid cancers as indicated in the clinical pipeline available on the Company’s website and based on the substantial appearance of Clever-1 positive myeloid cells in these cancer types.

Advance seamless continuation of Clevegen® development to optimise value creation 

·     The Company has during the course of the MATINS trial to date learned that Clevegen has been shown to promote immune activation in all of the dosed patients. This would potentially make Clevegen a new and effective macrophage immune checkpoint drug for cancer patients, who frequently suffer from supressed immune capacity toward tumour elimination;

·     Clevegen has also been shown to be safe and well tolerated, which the Company believes to make it a low-risk candidate to be used together with existing cancer therapies;

·     The recent analysis of the MATINS data has also confirmed that lower doses may potentially induce a stronger immune response than higher doses, which forms the basis for additional dose optimisation to secure the best possible outcome of the ongoing clinical development under way currently; and

·     Combined, this MATINS data suggests there may be an increased value to a Clevegen partnership with a wider number of partners. As announced on 1 November 2019, the Company is working hard to optimise the structure to capture the most value from any potential deal with the best possible partner which is likely to result in discussions continuing into 2020.

Traumakine® program

·     The Company will have a face-to-face meeting with the FDA in early December 2019, which is expected to result in a written opinion of the FDA on the Company’s clinical development plan for Traumakine.

Dr Markku Jalkanen, Chief Executive Officer of Faron, said: “Over the last couple of months we have come to realise the significance of the data generated to date from the MATINS study, which has confirmed three important points: i) In Clevegen, we potentially have the first macrophage immune checkpoint drug which has promoted immune activation of all dosed patients to date, ii) Clevegen is safe and well tolerated, making it a low-risk candidate for combination with existing cancer therapies, and iii) Clevegen has shown early clinical benefits in patients who have exhausted all other options. These results open multiple new opportunities for Clevegen in combination with existing cancer therapies. The possibility to expand the Clevegen platform outside single-agent treatment has also widened Faron’s approach to its commercialisation strategy for Clevegen either alone or with a partner. This proposed private placement will not only strengthen the Company’s resources but also strengthen its position in partnership negotiations as it explores the best outcome for the Company and its shareholders.“

DETAILS OF THE PROPOSED PLACING AND ISSUE OF EQUITY

The proposed Placing is carried out on the basis of the authorisation granted to the Board by the Company’s Extraordinary General Meeting held on 25 October 2019 to issue a total of 7,871,00 ordinary shares in the Company in a directed share issue and in deviation from the shareholders’ pre-emptive rights.

If the minimum number of 3,935,500 Placing Shares are fully subscribed for, the number of Placing Shares corresponds to approximately 10.0 per cent. of all of the issued shares and votes in the Company immediately prior to the Placing. The Company may in its discretion resolve on the final number of the Placing Shares up to a total of 7,871,000 ordinary shares, depending on the demand in the Bookbuild.

The Placing, arranged by Carnegie, will be conducted in a private placement by way of the Bookbuild, which is an accelerated book-building process in which selected investors may submit bids for the Placing Shares. The Issue Price is to be determined on the basis of the bids received in the Bookbuild. The Bookbuild is expected to commence immediately following this announcement and is expected to end by 9:00 EET on 8 November 2019 at the latest. Carnegie reserves the right to close the Bookbuild earlier or later without further notice. The Bookbuild may also be discontinued at any time during the book-building process. Following the close of the Bookbuild, the Board will make the decision on the issue of the Placing Shares, including, as applicable, acceptance of the received bids, the number of Placing Shares to be issued and the Issue Price. As soon as practicable after the close of the Bookbuild, receipt of binding commitments from investors and the Board having resolved on carrying out the Placing, an announcement will be made on the final outcome of the Bookbuild and, as applicable, the number of the Placing Shares to be issued and the Issue Price as well as the expected registration date of the Placing Shares.

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

The Placing Agreement contains customary warranties and an indemnity from the Company in favour of Carnegie together with provisions which enable Carnegie to terminate the Placing Agreement in certain circumstances before the completion of the Bookbuild and the Board’s resolution on carrying out the Placing, including where there has been a material breach of any of the warranties contained in the Placing Agreement or where there is a material adverse change, e.g., in the business or financial affairs of the Company. The Company has agreed to pay Carnegie certain commissions and fees in connection with the Placing. Pursuant to the terms of the Placing Agreement, Carnegie has agreed to a limited settlement underwriting covering payments of the subscription prices to be made by subscribers of the Placing Shares to the Company upon the Board having resolved on carrying out the Placing after the close of the Bookbuild, on the Issue Price, on approving the binding subscriptions received through the Bookbuild and on confirming such final number of the Placing Shares. Provided that the Board decides on issuing the Placing Shares, an application will then be made for the admission of all Placing Shares to trading on AIM market of the London Stock Exchange (“Admission“).

The Placing is conditional upon, inter alia:

·     The Placing Agreement having become unconditional in all respects;

·     Binding commitments being received from investors;

·     The Board resolving to carry out the Placing at the Issue Price and the Company and Carnegie entering into a separate pricing agreement confirming the Issue Price and the number of the Placing Shares; and

·     The Placing Shares being issued and being registered with the Finnish Trade Register.

In connection with the Placing, Faron has entered into a lock-up undertaking, under which it has, subject to certain exceptions, agreed not to issue or sell any shares in Faron for a period of 180 days after the closing of the Placing.

Subject to all conditions being met, the Placing Shares are expected to be entered in the Finnish Trade Register approximately on 12 November 2019. It is expected that Admission will become effective and that dealings in the Placing Shares (in the form of depositary interests) will commence at 10:00 Finnish time, 8:00 a.m. UK time, on or around 14 November 2019. As noted above, further update announcements will be made in due course. Upon registration with the Finnish Trade Register, the Placing Shares will rank pari passu in all respects with the existing shares of the Company.

As announced on 1 November 2019, the Company has been and is investigating various options to facilitate easier trading on the Company’s shares especially for Finnish investors, including possibility to dual list its shares on Nasdaq First North Growth Market. No decisions regarding a dual listing or otherwise have been made in this respect. 

MARKET ABUSE REGULATION

Market soundings, as defined in Regulation (EU) No 596/2014 (“MAR“), were taken in respect of the proposed Placing with the result that certain persons became aware of inside information, as permitted by MAR. That inside information in relation to the Placing is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in such market sounding are no longer in possession of inside information relating to the Company and its securities.

Carnegie, a public limited company duly incorporated and validly existing under the laws of Sweden, is acting as Financial Adviser to the Company and no one else in connection with the Placing. 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.

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

For more information please contact:

Faron Pharmaceuticals Oy

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Carnegie Investment Bank AB, Financial Adviser

Mika Karikoski (Corporate Finance)

Phone: +358 9 6187 1295

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 or other cancer standard cares. 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”, ”envisage”, ”estimate”, ”intend”, ”may”, ”plan”, ”potentially”, ”will” or the negative of those, variations or comparable expressions, including references to assumptions. These forward looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.

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

NOTICE OF faron pharmaceuticals LTD’s extraordinary GENERAL MEETING

Shareholders of Faron Pharmaceuticals Ltd (the “Company“) are invited to attend the Extraordinary General Meeting to be held on 25 October 2019 at 10.00 a.m. (Finnish time) at the BioCity building, meeting room Manu at Tykistökatu 6, 20520 Turku, Finland. The registration of attendees and the distribution of voting slips will commence at the meeting venue at 9.00 a.m. (Finnish time).

The Company’s Annual Report 2018, the half-yearly report for the six months ended 30 June 2019 and the statement by the Board of Directors on events after the preparation of the half-yearly report with a material effect on the Company are available to view and download on the Company’s website at https://www.faron.com/ (link on the homepage).

A.  MATTERS ON THE AGENDA OF THE EXTRAORDINARY GENERAL MEETING

1.   Opening of the meeting

2.   Calling the meeting to order

3.   Election of persons to scrutinise the minutes and to supervise the counting of votes

4.   Recording the legality of the meeting

5.   Recording the attendance at the meeting and adoption of the list of votes

6.   Measures to remedy equity shortfall and authorising the Board of Directors to decide on the issuance of shares, options or other special rights entitling to shares

The Company is exploring possibilities for raising further capital in order to strengthen the financial position of the Company. The Board of Directors proposes that the Extraordinary General Meeting authorise the Board of Directors to resolve by one or several decisions on issuances of shares, options or other special rights entitling to shares referred to in chapter 10, section 1 of the Finnish Limited Liability Companies Act, which authorisation contains the right to issue new shares or dispose of the shares in the possession of the Company. The authorisation would consist of up to 7,871,000 shares in the aggregate (including shares to be received based on options or other special rights), which corresponds to approximately 20 per cent of the existing shares and votes in the Company.

The authorisation would not exclude the Board of Directors’ right to decide on the issuance of shares, options or other special rights entitling to shares in deviation from the shareholders’ pre-emptive rights. The authorisation is proposed to be used for material arrangements from the Company’s point of view, such as financing or implementing business arrangements, investments or for other such purposes determined by the Board of Directors in which case a weighty financial reason for issuing shares, options or other special rights entitling to shares and possibly deviating from the shareholders’ pre-emptive rights, would exist.

The Board of Directors would be authorised to resolve on all other terms and conditions of the issuance of shares, options or other special rights entitling to shares.

The authorisation will be effective until 30 June 2020. The proposed authorisation shall replace the authorisation for up to 7,095,000 shares in the aggregate granted by the Company’s Annual General Meeting held on 28 May 2019 (the “2019 AGM“) concerning the issuance of shares, options or other special rights entitling to shares. The proposed authorisation shall not replace the authorisation for up to 2,000,000 shares in the aggregate granted by the 2019 AGM concerning issuances of options or other special rights entitling to shares referred to in chapter 10, section 1 of the Finnish Limited Liability Companies Act.

7.   Closing of the meeting

B.   DOCUMENTS OF THE EXTRAORDINARY GENERAL MEETING

The above-mentioned proposals to the Extraordinary General Meeting, the Company’s Annual Report 2018 including the financial statements, the Report of the Board of Directors and the Auditor’s Report, the half-yearly report for the six months ended 30 June 2019, the statement by the Board of Directors on events after the preparation of the half-yearly report with a material effect on the Company and this notice are available on the Company’s website at https://www.faron.com/ (link on the homepage) as of the date of publication of this notice. The Board proposals and the other above-mentioned documents will also be available at the Extraordinary General Meeting. Copies of these documents and of this notice will be sent to shareholders upon request. The minutes of the Extraordinary General Meeting will be available to be viewed on the Company’s website from 8 November 2019 at the latest.

C.  INSTRUCTIONS FOR THE PARTICIPANTS

1.   The right to participate and registration

Each shareholder who on the record date of the Extraordinary General Meeting, being 15 October 2019, is registered in the Company’s shareholders’ register held by Euroclear Finland Ltd has the right to participate in the Extraordinary General Meeting. A shareholder whose shares are registered on their personal book-entry account is registered in the Company’s shareholders’ register.

A shareholder who is registered in the Company’s shareholders’ register and who wants to participate in the Extraordinary General Meeting should register for the meeting by no later than 4 p.m. (Finnish time) on Tuesday, 22 October 2019 by giving a prior notice of participation:

•     by email to virve.nurmi@faron.com; or

•     by mail to Faron Pharmaceuticals Ltd, attn. Virve Nurmi, Joukahaisenkatu 6, FI-20520 Turku, Finland.

When registering, a shareholder shall state their name, personal identification number / business identity code, address, telephone number and the name of a possible proxy representative or assistant and the personal identification number of the proxy representative. The personal data given by shareholders to the Company are used only in connection with the Extraordinary General Meeting and the necessary processing of related registrations.

Shareholders, and their authorised representatives or proxy representatives should, when necessary, be able to prove their identity and/or right of representation.

2.   Proxy representative and powers of attorney

Shareholders may participate in the Extraordinary General Meeting and exercise their rights at the meeting by way of proxy representation. A proxy representative must present a dated power of attorney or other reliable proof of their authority to represent the shareholder.

A shareholder may participate in the Extraordinary General Meeting by means of several proxy representatives, who represent the shareholder with shares held on different book-entry accounts. In such case, the shares represented by each proxy representative shall be identified when registering for the Extraordinary General Meeting.

Possible proxy documents should be sent in originals to Faron Pharmaceuticals Ltd, attn. Virve Nurmi, Joukahaisenkatu 6, FI-20520 Turku, Finland before the end of registration period.

3.   Holder of nominee-registered shares (including depositary interest holders)

A holder of nominee-registered shares (including depositary interest holders) has the right to participate in the Extraordinary General Meeting by virtue of such shares based on which the holder would be entitled to be registered in the Company’s shareholders’ register held by Euroclear Finland Ltd on the Extraordinary General Meeting’s record date of 15 October 2019.

Additionally, participation requires that the holder of nominee-registered shares is temporarily registered in the Company’s shareholders’ register held by Euroclear Finland Ltd by 10 a.m. (Finnish time) on Tuesday, 22 October 2019. Temporary registration in the shareholders’ register shall be deemed to be a registration for the Extraordinary General Meeting.

Holders of nominee-registered shares are advised to request the necessary instructions regarding the temporary registration in the shareholders’ register, the issuing of proxy documents and registration for the General Meeting from their custodian bank without delay. The account management organisation of the custodian bank shall notify a holder of nominee-registered shares who wants to participate in the Extraordinary General Meeting to be temporarily entered into the Company’s shareholders’ register by the above-mentioned time.

4.   Other instructions and information

Pursuant to chapter 5, section 25 of the Finnish Limited Liability Companies Act, shareholders who are present at the Extraordinary General Meeting are entitled to request information regarding the matters addressed by the meeting.

On the date of this notice, 4 October 2019, the total number of shares and votes in the Company is 39,355,247.

The Extraordinary General Meeting shall be held in Finnish and in English.

Turku, 4 October 2019

FARON PHARMACEUTICALS LTD

Board of Directors

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2500

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. 

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Update on Traumakine drug substance manufacturing

TURKU – FINLAND, 02 October 2019 – Faron Pharmaceuticals Oy (AIM: FARN), the clinical stage biopharmaceutical company, announces that further to the update provided in the H1 2019 interim results in relation to the active pharmaceutical ingredient (“API”) manufacturing process for Traumakine, Rentschler Biopharma SE (“Rentschler”) has sent Faron a letter in which Rentschler states that it terminates the agreement concerning the API manufacturing. It is the Company’s understanding that this relates to the fact that significant upgrading of the API manufacturing process would be required prior to MAA/BLA approval for Traumakine.

The Company is exploring various options for future API manufacturing. This termination has no impact on the currently on-going clinical advice process with FDA/EMA, which focuses on the structure of the next Traumakine clinical study.

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

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.