Faron, etusivu

Update on results of Placing and 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.

Faron Pharmaceuticals Oy

Update on results of Placing

and

Issue of Equity

Capitalised terms used in this announcement have the meanings given to them in the announcement made at 4.45 p.m. BST/ 6.45 p.m. EEST on 21 April 2020 regarding the proposed placing of new ordinary shares in the Company (the “Launch Notice“) and the subsequent announcement released at 7.00 a.m. BST/ 9.00 a.m. EEST on 22 April 2020 (“Result Announcement“), unless the context provides otherwise.

Company announcement, 23 April 2020 at 1.00 p.m. BST/ 3.00 p.m. EEST

TURKU – FINLAND– Faron Pharmaceuticals Oy (“Faron” or the “Company“) (First North: FARON, AIM: FARN), the clinical stage biopharmaceutical company, is pleased to announce that following the Launch Notice and the Result Announcement, the proposed UK Placing has been subscribed for in full, in satisfaction of the UK Placee Condition. As a consequence, and conditional on, amongst other things, issue and registration of the Placing Shares, the Company has raised gross proceeds of approximately €14 million (£12.18 million) through the Placing.

The First Issue Shares (comprising 1,892,763 Placing Shares) are expected to be registered with the Finnish Trade Register today, 23 April 2020, and First Admission is expected to occur tomorrow as set out in the Result Announcement. The expected timing for issue, registration and admission to trading of the Second Issue Shares (comprising 950,000 Placing Shares) and the Third Issue Shares (comprising 657,237 Placing Shares) currently remains as set out in the Result Announcement. 

Faron’s enlarged issued number of shares immediately following registration of the First Issue Shares will be 45,183,510 Ordinary Shares with voting rights attached. The Company has no shares in Treasury; therefore upon, and subject to, registration of the First Issue Shares, the total number of voting rights in Faron will be 45,183,510 (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. Faron’s enlarged issued number of shares immediately following registration of the Second Issue Shares will be 46,133,510 Ordinary Shares with voting rights attached. Faron’s enlarged issued number of shares immediately following registration of the Third Issue Shares will be 46,790,747 Ordinary Shares with voting rights attached.

Exchange rate

Unless otherwise specified, this notice contains certain translations of euros into amounts in pounds sterling for the convenience of the reader based on the exchange rate of €1 = £0.87, being the published exchange rate by the European Central Bank at the close of business on 20 April 2020 (the latest practicable date prior to the date of the Launch Notice) rounded to 2 decimal places.

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 40 741 6959

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2892 

Consilium Strategic Communications

Mary-Jane Elliott

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen

Phone: +358 40 555 4727

Result of placing and issue price

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.

Faron Pharmaceuticals Oy

Result of Placing and Issue Price

and

Broker Option

Capitalised terms used in this announcement have the meanings given to them in the announcement made at 4.45 p.m. BST/ 6.45 p.m. EEST on 21 April 2020 regarding the proposed placing of new ordinary shares in the Company (the “Launch Notice“), unless the context provides otherwise.

Company announcement, 22 April 2020 at 7.00 a.m. BST/ 9.00 a.m. EEST

Inside information

TURKU – FINLAND– Faron Pharmaceuticals Oy (“Faron” or the “Company“) (First North: FARON, AIM: FARN), the clinical stage biopharmaceutical company, is pleased to announce that further to the Launch Notice, both the Nordic Bookbuild and the UK Bookbuild are now closed. The Placing was significantly oversubscribed and comprises the issue of 2,719,002 Nordic Placing Shares at the Nordic Issue Price of €4.00 per Nordic Placing Share (representing a discount of 7.6 per cent. to the closing price of €4.33 per existing ordinary share on 21 April 2020 on Nasdaq First North) and up to 780,998 UK Placing Shares at the equivalent UK Issue Price of £3.48 per UK Placing Share. Subject to all conditions being met, the aggregate gross proceeds of the Placing will be up to €14 million (£12.18 million) before expenses.

Binding commitments have been received for the Nordic Placing, however, as set out in the Launch Notice, the UK Placing remains subject to, inter alia, legally binding commitments being received (“UK Placee Condition“).  A further announcement will be made when the UK Placee Condition has been met, expected to be on or before 23 April 2020. Both the Nordic Placing and the UK Placing remain subject to, inter alia, the Placing Shares being issued and being registered at the Finnish Trade Register (“Registration“).

The Placing Shares will confer a right to dividends and other shareholder rights from their Registration. Registration is expected to occur in tranches as follows:

·    1,892,763 Placing Shares (comprising the “First Issue Shares“) are expected to be issued and registered on or about 23 April 2020;

·    950,000 Placing Shares (comprising the “Second Issue Shares“) are expected to be issued and registered on or about 24 April 2020; and

·    657,237 Placing Shares and, to the extent that the Broker Option is exercised, any Option Shares to be issued (comprising the “Third Issue Shares“) are expected to be issued and registered on or about 28 April 2020.

Following Registration of each tranche of shares as above, the new Ordinary Shares will subsequently be entered in the book-entry system maintained by Euroclear Finland Oy and registered in the book-entry accounts of each investor.

Applications will be made to the Nasdaq Helsinki Ltd and London Stock Exchange for admission to Nasdaq First North Growth Market Finland and AIM, respectively, of the Placing Shares. Subject to all conditions being met, First Admission is expected to occur on or around 8.00 a.m. BST/ 10.00 a.m. EEST on 24 April 2020, Second Admission is expected to occur on or around 8.00 a.m. BST/ 10.00 a.m. EEST on 27 April 2020 and Third Admission, is expected to occur on or around 8.00 a.m. BST/ 10.00 a.m. EEST on 29 April 2020.

Broker Option

As announced in the Launch Notice, the Broker Option will remain exercisable to approximately 1.00 p.m. BST/ 3.00 p.m. EEST later today. Owing to the Placing being significantly oversubscribed, the Broker Option has been reduced to up to 435,500 new Ordinary Shares, being the remaining balance of the Company’s existing share authorities. To the extent that the Broker Option is exercised, Option Shares issued pursuant to the Broker Option will be issued at the UK Issue Price. The Broker Option is subject to the same terms and conditions as the UK Placing as detailed in the Launch Notice. In the event that the Broker Option is exercised a further announcement will be made once the UK Placee Condition in respect of the Option Shares is met.

Commenting on the successful Placing, Dr Markku Jalkanen, CEO of Faron, said: “We are extremely happy with the support we have received from existing and new shareholders on this oversubscribed fundraising. With these additional resources we can expand MATINS cancer cohorts into all nine cancer areas as advised by the trial data monitoring committee recently. With initial clinical benefit already observed among the Part I patients, we are very excited to move to Part II patient recruitment.“

Exchange rate

Unless otherwise specified, this notice contains certain translations of euros into amounts in pounds sterling for the convenience of the reader based on the exchange rate of €1 = £0.87, being the published exchange rate by the European Central Bank at the close of business on 20 April 2020 (the latest practicable date prior to the date of the Launch Notice) rounded to 2 decimal places.

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

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 6959

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2892 

Consilium Strategic Communications

Mary-Jane Elliott

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen

Phone: +358 40 555 4727

Proposed Placing

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

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

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN FARON PHARMACEUTICALS OY (“FARON”) PURSUANT TO THE PROPOSED TRANSACTION REFERRED TO IN THIS ANNOUNCEMENT. THIS ANNOUNCEMENT IS THEREFORE DIRECTED ONLY AT: (A) IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA, PERSONS WHO ARE “QUALIFIED INVESTORS” AS DEFINED IN ARTICLE 2(E) OF THE EU PROSPECTUS REGULATION (WHICH MEANS REGULATION (EU) 2017/1129) (THE “PROSPECTUS REGULATION”); AND (B) IN THE UNITED KINGDOM, PERSONS WHO ARE: (I) “INVESTMENT PROFESSIONALS” WITHIN THE MEANING OF ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE “ORDER”); (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) (“HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC”) OF THE ORDER; OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “RELEVANT PERSONS”). THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN FARON OR ANY OTHER ENTITY IN ANY JURISDICTION IN WHICH ANY SUCH OFFER WOULD BE UNLAWFUL. ACCORDINGLY, THIS ANNOUNCEMENT AND ITS CONTENTS MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT COMES ARE REQUIRED TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.

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

(“Faron” or the “Company”)

Proposed fundraising of a minimum of approximately €10 million through the issue of new ordinary shares

Proposed broker option to raise up to £2 million

Company announcement, 21 April 2020 at 4.45 p.m. BST/ 6.45 p.m. EEST

Inside information

TURKU – FINLAND– Faron Pharmaceuticals Oy (First North: FARON, AIM: FARN), the clinical stage biopharmaceutical company is pleased to announce a proposed placing of new ordinary shares to raise a minimum of approximately €10 million before expenses (the “Placing“). The Placing is being conducted within the Directors’ existing authority to allot ordinary shares in the capital of the Company (“Ordinary Shares“) for cash on a non-pre-emptive basis.

The Placing will be effected via a proposed private placement of new Ordinary Shares to a limited number of institutional investors in the Nordic region (the “Nordic Placing Shares” and the “Nordic Placing”) and a concurrent proposed private placement of new Ordinary Shares to UK institutional investors (the (“UK Placing Shares” and “UK Placing“). Carnegie Investment Bank AB (“Carnegie“) is acting as sole bookrunner and financial adviser to the Company for the Nordic Placing and Panmure Gordon (UK) Limited (“Panmure Gordon“) is acting as sole bookrunner and corporate broker to the Company in respect of the UK Placing.

Both the Nordic Placing and the UK Placing will be conducted by way of an accelerated bookbuild process, in the Nordic region (“Nordic Bookbuild“) and in the United Kingdom (“UK Bookbuild“) (together the “Bookbuild“) in which selected investors may submit bids for the Nordic Placing Shares or the UK Placing Shares, as applicable (together the “Placing Shares“), and  which will be launched immediately following this announcement and is expected to end by 7:00 BST/ 9:00 EEST on 22 April 2020 at the latest.  

The subscription price per Nordic Placing Share and UK Placing Share will be determined on the basis of the bids received in the bookbuild process with an Euro issue price for Nordic Placing Shares (“Nordic Issue Price“) and an equivalent Pound Sterling issue price for the UK Placing Shares  (based on the prevailing EUR/GBP exchange rate on 20 April 2020) (“UK Issue Price“). The Company has received non-binding indications of interest from potential investors to subscribe for the Placing Shares under the Placing during a pre-marketing process.

The Company has also authorised Panmure Gordon to raise up to a further £2 million before expenses by granting a broker option (the “Broker Option“), (the Broker Option together with the Placing, the “Fundraise“). The Broker Option will be exercisable from announcement of result of the Placing to approximately 13:00 BST/ 15:00 EEST on 22 April 2020. To the extent that the Broker Option is exercised, new Ordinary Shares issued pursuant to the Broker Option (“Option Shares“) will be issued at the UK Issue Price.

As soon as practicable after closing of the Bookbuild, an announcement will be made to confirm the Nordic Issue Price and the equivalent UK Issue Price and the number of Nordic Placing Shares and UK Placing Shares to be issued by the Company (“Result Announcement“). Following the Result Announcement, the final number of UK Placing Shares to be issued under the UK Placing (excluding any Option Shares issued pursuant to the exercise of the Broker Option) will remain subject to and conditional upon, inter alia, legally binding placing letters being received from persons who have submitted bids as part of the UK Bookbuild, and inter alia, the UK Issue Condition as described below.  Further details on the terms and conditions of the Nordic Placing and the UK Placing are set out below. The Nordic Placing and the UK Placing are subject to separate placing agreements with the Company and as also described below. It should be noted that neither of those agreements, are conditional on the other save for in respect of a minimum aggregate fundraise of approximately €10 million being achieved across the Nordic Placing and UK Placing.

The Placing Shares and, subject to exercise of the Broker Option, the Option Shares, are expected to be issued and admitted to trading on Nasdaq First North Growth Market Finland (“First North“) and AIM in multiple tranches as set out below. VCT/EIS investors may participate in the UK Placing (excluding the Broker Option).

KEY HIGHLIGHTS

·    Proposed Placing with institutional investors for new Ordinary Shares to raise a minimum of approximately €10 million (£8.7 million) in aggregate across the Nordic Placing and UK Placing via the Nordic Bookbuild and UK Bookbuild;

·    Broker Option to raise up to £2 million;

·    The net proceeds of the proposed Fundraise would be primarily used to commence expansion of the Company’s precision immunotherapy candidate, Clevegen®, into planned additional cancer targets in the Company’s phase I/II Matins trial and expansion of Clevegen manufacturing.

·    The net proceeds of the Fundraise will also significantly strengthen the Company’s balance sheet to support the Company during the use of Traumakine ®in the ongoing REMAP-CAP trial to study the effect of interferon beta-1a in COVID-19 and whilst the Company continues its potential licensing discussions for Clevegen and explores third party funding options for Traumakine;

·    Cash balance of the Company at 31 December 2020: EUR 7.1 million.

Dr Markku Jalkanen, Chief Executive Officer of Faron, said: “We have made significant clinical progress with both our Clevegen and Traumakine projects during the last 12 months and expect both of them to bring significant value for shareholders during the next 8-12 months. Clevegen has shown very promising clinical response in MATINS Part I stage, which we believe will transform into significant opportunity when the study moves to Part II-III expansion stages. Traumakine, on the other hand, has a new corticosteroid-free setting through the global REMAP-CAP study, which we believe is one of the most important intensive care study of the current pandemic environment.”

REASONS FOR THE PROPOSED FUNDRAISE

The primary reason for conducting the Fundraise is for expansion of the Company’s precision immunotherapy candidate, Clevegen®, into planned additional cancer targets in the Company’s phase I/II Matins trial and expansion of Clevegen manufacturing. The Company announced the completion and headline results of Part I of the Matins trial on 30 March 2020 including confirming that immune activation was observed in all subjects (except patients receiving 0.1 mg/kg) measured following treatment with Clevegen and was observed as increased circulating CD8+ T cells and CD8+/CD4+ ratio, decreased regulatory T-cells (T-regs) or a substantial increase in mobile natural killer (NK) cells in the blood. This activation was dose dependent. 12 patients showed at least a 20 per cent increase in interferon gamma and eight patients a similar increase in IP-10 chemokine production. Interferon gamma is known to restrict cancer growth and IP-10 to attract T-lymphocytes to infiltrate the tumour.

As previously announced and according to the RECIST classification, during Part I of the MATINS trial Clevegen treatment showed a clinical effect of two partial responses and seven cases of stable disease. None of the patients experiencing these effects had received the lowest dose level of 0.1mg/kg, therefore the response rate in Part I was 36 percent (9/25) among 0.3-10 mg/kg dose levels.

Subject to the outcome of the Fundraise, additional cancer types besides colorectal and ovarian to be included in Part II of the MATINS study are expected to be ER-positive breast cancer, hepatocellular carcinoma, cholangiocarcinoma (bile duct cancer) and gall bladder cancer, gastric cancer, cutaneous melanoma, uveal melanoma, and pancreatic ductal adenocarcinoma. Part II is expected to conclude in Q3 2021.  The Company is in the process of filing for Breakthrough Therapy status with the FDA and Prime Therapy status with the European Medicines Agency, which if granted, could provide an expedited development and review path.

The anticipated proceeds of the Fundraise will strengthen the Company’s balance sheet as it continues its licensing discussions in respect of Clevegen and seeks third party financing for Traumakine® to allow initiation of a US trial following acceptance by the FDA of the Company’s protocol for a new US Traumakine trial (announced 9 March 2020). As previously announced Traumakine has also recently been included in the approved protocol for the Global Randomized, Embedded, Multifactorial Adaptive Platform Trial for Community-Acquired Pneumonia (“REMAP-CAP”) with Faron providing Traumakine and support to the trial sites.  A total of c. 7,000 ICU patients are expected to be recruited into the trial by 2022.  REMAP-CAP is a global network of leading experts, institutions and research networks with over fifty sites participating worldwide. The program recruits patients with community-acquired pneumonia, including COVID-19 patients, who require ICU care for the support of organ functions and uses an innovative trial design to efficiently evaluate multiple interventions simultaneously.  The Company is exploring options to re-establish future manufacturing of Traumakine. 

DETAILS OF THE PROPOSED PLACING AND ISSUE OF EQUITY

The proposed Fundraise is being carried out within the authorisation granted to the Board by shareholders at the Company’s Extraordinary General Meeting held on 25 October 2019 to issue up to a total of 7,871,000 ordinary shares in the Company in a directed share issue and in deviation from the shareholders’ pre-emptive rights. The remaining outstanding authority allows the Company to issue up to a maximum of 3,935,500 new Ordinary Shares pursuant to the Fundraise, which represents 9.1 per cent. of all the issued shares and votes in the Company immediately prior to the Fundraise.

Nordic Placing

The Nordic Placing, arranged by Carnegie, will be conducted in a private placement by way of the Nordic Bookbuild, which is an accelerated book-building process in which selected investors may submit bids for the Nordic Placing Shares. The Nordic Issue Price is to be determined on the basis of the bids received in the Nordic Bookbuild and is expected to be the equivalent Euro price of the UK Issue Price. The Nordic Bookbuild is expected to commence immediately following this announcement and is expected to end by 7:00 BST/ 9:00 EEST on 22 April 2020 at the latest. Carnegie reserves the right to close the Nordic Bookbuild earlier or later without further notice. The Nordic 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 Nordic Placing Shares, including, as applicable, acceptance of the received bids, the number of Nordic Placing Shares to be issued and the Nordic Issue Price and Carnegie will procure binding commitments from Nordic investors prior to announcement of the result of Placing (subject to any outstanding conditions).

In connection with the proposed Nordic Placing, the Company has entered into a placing agreement with Carnegie (the ““Nordic Placing Agreement““). Pursuant to the terms of the Nordic Placing Agreement, Carnegie has agreed to use its reasonable endeavours to procure subscribers for the Nordic Placing Shares. The Nordic Placing Agreement contains customary warranties and an indemnity from the Company in favour of Carnegie together with provisions which enable Carnegie to terminate the Nordic Placing Agreement in certain circumstances before the completion of the Nordic Bookbuild and the Board’s resolution on carrying out the Nordic Placing, including where there has been a material breach of any of the warranties contained in the Nordic 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 Nordic Placing. Pursuant to the terms of the Nordic Placing Agreement, Carnegie has agreed to a limited settlement underwriting covering payment of the subscription price to be made by subscribers of the Nordic Placing Shares to the Company upon the Board having resolved on carrying out the Nordic Placing after the close of the Bookbuild, at the Nordic Issue Price, on approving the binding subscriptions received through the Nordic Bookbuild and UK Bookbuild and on confirming such final number of Placing Shares to be issued.

The Nordic Placing is conditional upon, inter alia:

·    the Nordic Placing agreement having become unconditional in all respects;

·    binding commitments being received from investors;

·    the Minimum Fundraise Condition being satisfied;

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

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

In connection with the Nordic 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 Fundraise.

UK Placing and Broker Option

The UK Placing will be conducted by way of an accelerated bookbuild process which will be launched immediately following this announcement. Panmure Gordon is acting as sole bookrunner in relation to the UK Placing. The UK Issue Price is to be determined on the basis of the bids received in the Bookbuild and is expected to be the equivalent Pounds Sterling price of the Nordic Issue Price.  It is envisaged that the UK Bookbuild will be closed by 7:00 BST/9:00 EEST on 22 April 2020 at the latest but Panmure Gordon (in conjunction with the Company) reserve the right to close the book earlier or later without further notice. The UK Bookbuild may also be discontinued at any time during the book-building process.   Venture capital trust and enterprise investment scheme funds may participate in the UK Placing.

Shortly following the closure of the UK Bookbuild and announcement of the result of the Placing, Panmure Gordon will issue placing letters to those persons who have submitted bids to subscribe for Placing Shares as part of the UK Bookbuild and which will contain the terms and conditions upon which they shall participate in the UK Placing. Accordingly, participation in the UK Placing and the determination of the precise number of UK Placing Shares to be issued under the UK Placing at the UK Issue Price will be conditional upon the receipt of signed placing letters back from potential investors.  

In addition, the Company has also granted the UK Broker Option to Panmure Gordon in order to cater for additional demand under the UK Placing. Any Option Shares issued pursuant to the exercise of the Broker Option will be issued on the same terms, and subject to the same conditions, as the UK Placing Shares and the return of signed placing letters corresponding to those Option Shares from relevant investors. The Broker Option is exercisable by Panmure Gordon, at any time from the date of announcement of the result of the Bookbuild to approximately 13.00 BST/ 15.00 EEST on 22 April 2020 in their absolute discretion, following consultation with the Company. However, there is no obligation on Panmure to exercise the Broker Option or to seek to procure subscribers for Option Shares pursuant to the Broker Option. The Broker Option will not qualify for investments made by venture capital trust and enterprise investment scheme funds.

In connection with the proposed UK Placing and the Broker Option, the Company has entered into a placing agreement with Panmure Gordon (the “UK Placing Agreement“). Pursuant to the terms of the UK Placing Agreement, Panmure Gordon has agreed to use its reasonable endeavours to procure placees for the UK Placing Shares. The UK Placing is conditional upon, inter alia:

·    the UK Placing Agreement having become unconditional in all respects;

·    the Company having performed, in all material respects, its obligations under the UK Placing Agreement and not being in material breach of the UK Placing Agreement;

·    legally binding commitments being received (in the form of placing letters) in respect of all of the UK Placing Shares and, to the extent exercised, the Option Shares (the “UK Placee Condition“);

·     minimum gross proceeds of €10 million being raised in aggregate under the Nordic Placing and UK Placing (“Minimum Fundraise Condition“); and

·    the UK Placing Shares and Option Shares being issued and being registered at the Finnish Trade Register (the “UK Issue Condition“).

The UK Placing Agreement contains customary warranties and an indemnity from the Company in favour of Panmure Gordon together with provisions which enable Panmure Gordon to terminate the UK Placing Agreement in certain circumstances before satisfaction of the UK Issue Condition and the Minimum Fundraise Condition in respect of each stage of the Placing, including where there has been a material breach of any of the warranties contained in the UK Placing Agreement (in the reasonable opinion of Panmure Gordon) or where there is a material adverse change in the business or financial affairs of the Company. The Company has agreed to pay Panmure Gordon certain commissions and fees in connection with the UK Placing.  In order to comply with local corporate law in Finland, the UK Issue Condition will be satisfied prior to the admission of the UK Placing Shares to trading on AIM (“UK Admission“). Accordingly, pursuant to the terms of the UK Placing Agreement, Panmure Gordon has agreed to limited settlement underwriting of payment of the subscription price to be made by subscribers of the UK Placing Shares to the Company subject to the Board having resolved to carry out the UK Placing after the close of the Bookbuild at the UK Issue Price and subject to satisfaction of the UK Placee Issue Condition.

ISSUE OF THE PLACING SHARES, OPTION SHARES AND ADMISSION TO TRADING

Subject to all conditions being met and the Placing Shares being subscribed for, the Placing Shares are expected to be issued in multiple tranches in anticipation of allowing investments made by certain venture capital trust and enterprise investment scheme funds, (the “EIS/VCT Investors“) in order to qualify under Venture Capital Trust and Enterprise Investment Scheme rules as part of the UK Placing (excluding the Broker Option) and to facilitate the limited settlement underwriting.

Based on indications of interest received as part of market soundings conducted in relation to the Fundraise then, subject to all conditions being met, UK Placing Shares issued to the EIS/VCT Investors are expected to be allotted and issued first alongside certain Nordic Placing Shares (“First Issue Shares“) followed by the remaining Nordic Placing Shares (“Second Issue Shares“) and then followed by the UK Placing Shares and Option Shares issued to non-EIS/VCT Investors (“Third Issue Shares“). To the extent shares are subscribed for and subject to all conditions being met, application will then be made for the admission of all such Placing Shares to trading on First North and AIM with admission of the First Issue Shares to First North and AIM expected to become effective and dealings to commence on or around 24 April 2020 (“First Admission“); admission of the Second Issue Shares to First North and AIM is expected to become effective and dealings to commence on or around 27 April 2020 (“Second Admission“) and admission of the Third Issue Shares (including any Option Shares to the extent subscribed for) to First North and AIM is expected to become effective and dealings  to commence on or around 29 April 2020 (“Third Admission“). (First Admission, Second Admission and Third Admission, together “Admission“).  The dates above may be subject to change.

A further announcement will be made to confirm the outcome of the Placing (subject to, inter alia, satisfaction of the UK Issue Condition) and to confirm the expected timing of issue of the Placing Shares and Admission.

Upon registration with the Finnish Trade Register, the Placing Shares will rank pari passu in all respects with the existing shares of the Company.

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 40 741 6959

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2892

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen

Phone: +358 40 555 4727

About Faron Pharmaceuticals Ltd

Faron (AIM:FARN, First North: FARON) is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs. The Company currently has a pipeline based on the 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 standard treatments including 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.

IMPORTANT INFORMATION

Market Abuse Regulation

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

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

MiFID II

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

Caution regarding forward looking statements

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

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

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 = £0.87, being the published exchange rate by the European Central Bank at the close of business on 20 April  2020 (the latest practicable date prior to the date of this announcement).

Advisers

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

Panmure Gordon (UK) Limited, which is regulated in the UK by the Financial Conduct Authority, is acting as Nominated Adviser, Sole Bookrunner and Corporate Broker to the Company and no one else in connection with the UK 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.

Notice of Annual General Meeting

NOTICE OF faron pharmaceuticals LTD’s ANNUAL GENERAL MEETING

Shareholders of Faron Pharmaceuticals Ltd (the “Company“) are notified of the annual general meeting (the “AGM“) to be held on 18 May 2020 at 10:00 a.m. (Finnish time) at the offices of the Company at Joukahaisenkatu 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).

Due to the SARS-CoV-2 situation, the AGM will only be held if the number of participants at the meeting is low enough to allow the AGM to be conducted safely and in compliance with the regulations issued by the authorities. The Company encourages its shareholders to participate in the AGM by way of centralised proxy representation and to follow the AGM by webcast. The special arrangements are described in more detail under section C.5.

The Company’s annual report for 2019 is available on the Company’s website at https://www.faron.com/investors/results.

A.  MATTERS ON THE AGENDA OF THE AGM

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.   Presentation of the financial statements, the Board’s report and the auditor’s report for 2019

Review by the CEO; measures to remedy equity shortfall.

7.   Adoption of the financial statements

8.   Resolution on the use of the profit shown on the balance sheet and the payment of dividend

The board of directors (the “Board“) proposes that no dividend for the financial year 2019 will be paid and that the losses of the Company for the financial year, amounting to EUR 13,261,911.93 (IFRS), will be carried forward to the reserve for invested unrestricted equity.

9.   Resolution on the discharge of the members of the Board and the CEO of the Company from liability

10. Resolution on the remuneration of the members of the Board

The Board proposes, on the basis of the proposal of the remuneration committee, that an annual remuneration of EUR 35,000 will be paid to the Board members, in addition to which an annual remuneration of EUR 35,000 will be paid to the chair of the Board. In addition, a further annual remuneration of EUR 11,000 will be paid to the chair of the audit committee, a further annual remuneration of EUR 9,000 will be paid to the chair of the remuneration committee and a further annual remuneration of EUR 6,000 will be paid to the chair of the nomination committee. In addition, a further annual remuneration of EUR 6,000 will be paid to the audit committee members, a further annual remuneration of EUR 5,000 will be paid to the remuneration committee members and a further annual remuneration of EUR 3,000 will be paid to the nomination committee members.

The Board furthermore proposes that meeting fees will be paid to the Board members as follows:

·    a meeting fee of EUR 1,000 will be paid to Board members per Board meeting where the Board member was physically present, and which was held on another continent than the member’s place of residence; and

·    no meeting fees will be paid to Board members who were attending a Board meeting but not physically present or for Board meetings held on the same continent than the member’s place of residence.

In addition, it is proposed that all reasonable and properly documented expenses incurred in the performance of duties of the members of the Board would be compensated.

The Board also proposes, on the basis of the proposal of the remuneration committee, that no remuneration will be paid based on the Board membership of the CEO of the Company or a person serving the Company under a full-time employment or service agreement.

11. Resolution on the number of members of the Board

The Board proposes, on the basis of the proposal of the nomination committee, that six (6) members be elected to the Board.

12. Election of members of the Board

The Board proposes, on the basis of the proposal of the nomination committee, that Frank Armstrong, Markku Jalkanen, Matti Manner, Leopoldo Zambeletti, Gregory Brown and John Poulos be re-elected to the Board for a term that ends at the end of the next AGM.

Descriptions of the Board member candidates are available on the Company’s website at https://www.faron.com/faron/our-people.

The proposed Board members have informed the Company that in the event they are elected, they intend to elect Frank Armstrong as chair of the Board and Matti Manner as vice-chair of the Board.

13. Resolution on the remuneration of the auditor

The Board proposes, on the basis of the proposal of the audit committee, that the auditor be remunerated in accordance with the invoice presented.

14. Election of the auditor

The Board proposes, on the basis of the proposal of the audit committee, that PricewaterhouseCoopers Oy (“PwC“), a firm of authorised public accountants, continue to act as the Company’s auditor.

PwC has informed the Company that it will appoint Panu Vänskä, authorised public accountant (KHT), as the key audit partner.

15. Resolution on the amendment of the option programmes

A. The Company’s extraordinary general meeting has on 15 September 2015 adopted the terms and conditions of an option programme which have later been amended by the decision of the AGM held on 16 May 2017 (the “Option Plan 2015“). The options cannot currently be transferred or pledged before the subscription of shares without the consent of the Board. The Board proposes, on the basis of the proposal of the remuneration committee, that the AGM resolves to amend the terms and conditions of the Option Plan 2015 so that the options may be transferred or pledged after the conditions for share subscription have been fulfilled under the terms and conditions of the Option Plan 2015. The Board deems that the proposed amendment will enhance the usability of the options and thereby significantly increase the desired benefits of the incentivisation system for the management and personnel of the Company.

The consolidated terms and conditions of the Option Plan 2015, incorporating the amendments proposed herein, are attached hereto.

B. The Company’s AGM has on 28 May 2019 decided to authorise the Board to resolve on issuances of options or other special rights entitling to shares referred to in chapter 10, section 1 of the Finnish Limited Liability Companies Act. Pursuant to the decision of the AGM, the authorisation may be used for implementing an option plan for the employees and directors of, and persons providing services to, the group, substantially in the form of the rules attached to that decision (the “Share Option Plan 2019“). The options cannot currently be transferred or pledged before the subscription of shares. The Board proposes, on the basis of the proposal of the remuneration committee, that the AGM resolves to approve implementing a change corresponding the aforementioned in the rules of the Share Option Plan 2019 so that the options may be transferred or pledged after the conditions for share subscription have been fulfilled. The Board deems that the proposed amendment will enhance the usability of the options and thereby significantly increase the desired benefits of the incentive system for the management and personnel of the Company.

The consolidated rules of the Share Option Plan 2019, incorporating the amendments proposed herein, are attached hereto.

16. Authorising the Board to decide on the issuance of shares, options or other special rights entitling to shares

The Board proposes that the AGM authorise the Board 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 8,650,000 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’s 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 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 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 2021. This authorisation shall not replace the authorisation referred to in item 15 of this notice.

17. Closing of the meeting

B.   DOCUMENTS OF THE AGM

The above-mentioned proposals to the AGM and this notice are available immediately after publication of this notice on the Company’s website at https://www.faron.com/investors/general-meetings. The Company’s annual report for 2019, including the financial statements, the report of the Board and the auditor’s report, is available on the Company’s website at https://www.faron.com/investors/results. The Board proposals and the other above-mentioned documents will also be available at the AGM. Copies of these documents and of this notice will be sent to shareholders upon request. The minutes of the AGM will be available to be viewed on the Company’s website from 1 June 2020 at the latest.

C.  INSTRUCTIONS FOR THE PARTICIPANTS

1.   The right to participate and registration

Each shareholder who on the record date of the AGM, being 6 May 2020, is registered in the Company’s shareholders’ register held by Euroclear Finland Ltd (“Euroclear“) has the right to participate in the AGM. 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 AGM should register for the meeting by no later than 4 p.m. (Finnish time) on Wednesday, 13 May 2020 by giving a prior notice of participation:

•     by email to general.meeting@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 or 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. In addition, the shareholder shall state whether they will follow the AGM by webcast. The personal data given by shareholders to the Company are used only in connection with the AGM 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.

Registrations submitted to the cancelled annual general meeting, convened to be held on 15 April 2020, will not be valid for this AGM. Therefore, the previously registered shareholders must re-register.

2.   Following the AGM by webcast

The Company’s shareholders can follow the AGM by webcast. By following the meeting by webcast, a shareholder does not attend the meeting nor can use the right to request information in accordance with the Finnish Limited Liability Companies Act nor exercise their voting rights. A link to the webcast will be sent to all shareholders who have given notice of attendance to the meeting and provided their email address.

Shareholders may pose questions about the items on the agenda of the AGM by 4 p.m. (Finnish time), 13 May 2020 by sending email to general.meeting@faron.com. The presentations by the Company will be prepared, to the extent possible, so that such questions will be answered.

3.   Proxy representative and powers of attorney

Shareholders may participate in the AGM 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.

Due to the SARS-CoV-2 situation, the Company encourages its shareholders to participate in the AGM by way of a centralised proxy representation. Shareholders are able to exercise their voting rights at the AGM without physical presence through the centralised proxy representation service provided by the Company’s General Counsel Pessi Honkasalo. Shareholders who wish to participate in the AGM through authorising Dr Honkasalo as proxy representative are required to register to the AGM as specified in this notice and deliver the proxy form, available on the Company’s website at https://www.faron.com/investors/general-meetings, to the Company before the end of registration period. Authorising Dr Honkasalo as proxy representative will not accrue any costs for the shareholder (excluding potential postal fees).

A shareholder may participate in the AGM 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 AGM.

Proxy documents should be sent to Faron Pharmaceuticals Ltd, attn. Virve Nurmi, Joukahaisenkatu 6, FI-20520 Turku, Finland or by email to general.meeting@faron.com before the end of registration period.

4.   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 AGM 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 on the AGM’s record date of 6 May 2020.

Additionally, participation requires that the holder of nominee-registered shares is temporarily registered in the Company’s shareholders’ register held by Euroclear by 10 a.m. (Finnish time) on Wednesday, 13 May 2020. Temporary registration in the shareholders’ register shall be deemed to be a registration for the AGM.

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 AGM 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 AGM to be temporarily entered into the Company’s shareholders’ register by the above-mentioned time.

5.   Other instructions and information

The AGM will be organised in compliance with the regulations issued by the Finnish authorities in response to SARS-CoV-2. Due to the SARS-CoV-2 situation, the Company intends to limit the amount of the physical participants of the AGM to the minimum. Developments in the SARS-CoV-2 situation and complying with the governmental regulations may even lead to a situation where the number of participants arriving at the meeting venue will need to be limited. The Company requests its shareholders to comply with the following instructions regarding the meeting that are aimed to enable organising the meeting in consideration of the health and the safety of the Company’s shareholders:

·    All of the shareholders are asked to participate in the AGM by way of centralised proxy representation and to follow the AGM by webcast (see detailed provisions under sections 1-3 above).

·    No food or refreshments will be served at the meeting.

·    The AGM and all of the presentations, including the review by the CEO, will be kept as short as possible.

·    The participation by the Board and management will be restricted to minimum.

Shareholders are asked to comply with authority regulations and recommendations for their own part. The Company takes the threat of SARS-CoV-2 seriously and is following the situation carefully. Developments in the SARS-CoV-2 situation may require other special arrangements to organise the AGM or even to postpone the AGM to a later date. The Company’s shareholders are asked to follow the Company’s announcements as well as the web page https://www.faron.com/investors/general-meetings for any possible changes or additional information.

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

On the date of this notice, 14 April 2020, the total number of shares and votes in the Company is 43,290,747.

The AGM shall be held in Finnish and in English.

Turku, 14 April 2020

FARON PHARMACEUTICALS LTD

Board of Directors

For more information please contact:

Faron Pharmaceuticals Ltd

Dr Markku Jalkanen, CEO

investor.relations@faron.com 

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

+44 207 886 2500

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen, Jussi Majamaa

+358 40 555 4727

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

+44 20 3709 5700

faron@consilium-comms.com 

About Faron Pharmaceuticals Ltd

Faron (AIM: FARN, First North: FARON) is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs. The Company currently has a pipeline based on the 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 standard treatments including 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.

AGM to be postponed

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

AGM to be postponed

Company announcement, 3 April 2020 at 4.45pm (EEST)

TURKU, FINLAND – Faron Pharmaceuticals Oy (AIM: FARN, First North: FARON), the clinical stage biopharmaceutical company, today announces that, due to the prevailing Covid-19 situation, the Company’s Board of Directors has decided to cancel the Company’s annual general meeting (“AGM”) scheduled to be held on 15 April 2020.

A new notice will be published in due course to convene the AGM at a later stage.

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

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen, Jussi Majamaa

Phone: +358 (0)40 555 4727

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

About Faron Pharmaceuticals Oy

Faron (AIM: FARN, First North: FARON) 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 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 standard treatments including 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.

Part 1 of the MATINS Phase I/II Study Completed

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Completion of Part 1 dose finding stage of the MATINS Phase I/II Study

Study data monitoring committee recommends rapid expansion of study into new tumour types following promising results

Company announcement, 30 March 2020 at 9.00 AM (EET)
Inside information

TURKU – FINLAND – Faron Pharmaceuticals Oy (AIM: FARN, First North: FARON), the clinical stage biopharmaceutical company, today announces positive feedback from the MATINS study data monitoring committee (“DMC”) following a comprehensive review and analysis of the data from the now completed Part 1 (dose finding) stage of the trial.  

The ongoing phase I/II MATINS clinical trial is investigating the tolerability, 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. The DMC has reviewed all available data, including imaging and biomarker analyses from the 30 patients treated in Part 1 of the trial. The reviewed biomarker (cellular and biochemical) data is from the first cycle of all 30 patients and target tumour lesion images according to RECIST between the third and fourth cycles (roughly 60-70 days from the first dose).

The following key findings were presented to the DMC:

Immune switch. Consistent with earlier analyses, immune activation was observed in all subjects (except patients receiving 0.1 mg/kg) measured following treatment with Clevegen and was observed as increased circulating CD8+ T cells and CD8+/CD4+ ratio, decreased regulatory T-cells (T-regs) or a substantial increase in mobile natural killer (NK) cells in the blood. This activation was dose dependent. Interestingly, 12 patients showed at least a 20 per cent increase in interferon gamma and eight patients a similar increase in IP-10 chemokine production. Interferon gamma is known to restrict cancer growth and IP-10 to attract T-lymphocytes to infiltrate the tumour.

Clinical response. According to the RECIST classification, Clevegen treatment showed a clinical effect of two partial responses (as previously announced), and seven cases of stable disease. None of the patients experiencing these effects had received the lowest dose level of 0.1mg/kg, therefore the response rate in Part I was 36 percent (9/25) among 0.3-10 mg/kg dose levels.

DMC recommendation. The MATINS DMC has now reviewed all available data on Part I patients and the Company has received advice to continue the trial as planned with the following notes:

·    Dose escalation reached its planned maximum level of 10mg/kg with Clevegen demonstrating good tolerability at all dosing levels (0.1 to 10 mg/kg) without dose limiting toxicity. A maximally tolerated dose (MTD) was not reached. The DMC recommends that all further administration of Clevegen should take place at 1mg/kg.

·    Part 2 of the study should now be expanded to include all cancer cohorts in the study protocol, beyond the colorectal and ovarian cancer cohorts previously selected and announced (see list below).

·    Patient recruitment for the expansion cohorts should follow standard of care for each cancer type and enable subjects with less compromised immune systems (i.e., earlier treatment lines whenever possible according to the study protocol) to be enrolled to the trial.

Dr. Markku Jalkanen, Faron’s CEO, said: “We welcome the support from the data monitoring committee to expand our studies, exploring the safety and efficacy of Clevegen in additional cancer types. We continue to be highly encouraged by the consistency of the data from the MATINS trial indicating Clevegen’s strong immune switch and the low dosing levels required to show these responses, but most importantly its clinical effect on tumour lesions in patients who have exhausted all treatment options.

“We will now work with trial sites in the MATINS network across Europe and the US to ensure expansion of the trial beyond the colorectal and ovarian cancer cohorts already recruiting. We look forward to generating further data to assess the durability of effect and efficacy of Clevegen in larger numbers of patients.”

Subject to funding, additional cancer types besides colorectal and ovarian to be included in Part 2 of the MATINS study are:

·     ER-positive breast cancer

·     Hepatocellular carcinoma

·     Cholangiocarcinoma (bile duct cancer) and gall bladder cancer

·     Gastric cancer

·     Hepatocellular carcinoma

·     Cutaneous melanoma

·     Uveal melanoma

·     Pancreatic ductal adenocarcinoma 

Ten patients are expected to be treated in each of the cohorts. The first colorectal cancer cohort has already been recruited and dosed at the previously agreed 0.3 mg/kg dosing level. As noted above, going forwards all future dosing will be at 1 mg/kg. The Company has received feedback from the study sites that the initiation of new cohorts may be delayed due to restricted resources caused by corona infections. The Company will work closely with these trial sites to ensure the trial progresses as smoothly as possible.

RECIST: Response evaluation criteria in solid tumours is a set of published rules that define when tumors in cancer patients improve (“respond”), stay the same (“stabilize”), or worsen (“progress”) during treatment.

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

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen, Jussi Majamaa

Phone: +358 (0)40 555 4727

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.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 II 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. Colorectal cancer and ovarian cancer have been selected as the first and second expansion cohorts 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.

About Faron Pharmaceuticals Ltd

Faron (AIM: FARN, First North: FARON) is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs. The Company currently has a pipeline based on the 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 standard treatments including 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.

Correction to Faron´s Annual Report 2019

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Correction to Faron´s Annual Report 2019  

Company announcement, 26 March 2020 at 12.00 PM (EET)
 

TURKU – FINLAND – Faron Pharmaceuticals Oy (AIM: FARN, First North: FARON), the clinical stage biopharmaceutical company, announces the correction to the Annual Report 2019 which has been published yesterday.

The correction is related to the average number of shares and EPS (loss per share). The correct average number of shares is 36,850,577 not 35,533,179 in 2019 as published earlier yesterday in the Annual Report 2019 and in the Financial statement release published on 20 March 2020. The resulting EPS is (0.36) for the full year 2019. Loss per share unaudited 7-12/2019 is (0.18) and unaudited 7-12/2018 is (0.20).

The corrected versions of Faron Pharmaceuticals´ Annual Report 2019 and financial statements for the accounting period 1 January – 31 December 2019 have been published in English and its financial statements in Finnish, on the Company’s website https://www.faron.com/investors/results.

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

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen, Jussi Majamaa

Phone: +358 (0)40 555 4727

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

About Faron Pharmaceuticals Ltd

Faron (AIM: FARN, First North: FARON) is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs. The Company currently has a pipeline based on the 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 standard treatments including 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 

Attachment:

Faron´s Annual Report 2019.pdf

http://www.rns-pdf.londonstockexchange.com/rns/6962H_1-2020-3-26.pdf 

6962H_1-2020-3-26

Faron´s Annual Report 2019 published

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Faron´s Annual Report 2019 published

Company announcement, 25 March 2020 at 9.00 AM (EET)
 

TURKU – FINLAND – Faron Pharmaceuticals Oy (AIM: FARN, First North: FARON), the clinical stage biopharmaceutical company, announces that its Annual Report for the year 2019 has been published today.

Faron Pharmaceuticals´ Annual Report 2019 and financial statements for the accounting period 1 January – 31 December 2019 have been published in English and its financial statements in Finnish, on the Company’s website https://www.faron.com/investors/results.

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

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen, Jussi Majamaa

Phone: +358 (0)40 555 4727

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

About Faron Pharmaceuticals Ltd

Faron (AIM: FARN, First North: FARON) is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs. The Company currently has a pipeline based on the 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 standard treatments including 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 

Attachment: 

http://www.rns-pdf.londonstockexchange.com/rns/5169H_1-2020-3-25.pdf

Faron´s Annual Report 2019.pdf

5169H_1-2020-3-25

Notice of Annual General Meeting

NOTICE OF faron pharmaceuticals LTD’s ANNUAL GENERAL MEETING

Company announcement, 20 March 2020 at 1.30 PM (EET)

Shareholders of Faron Pharmaceuticals Ltd (the “Company“) are notified of the annual general meeting (the “AGM“) to be held on 15 April 2020 at 2:00 p.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 1:00 p.m. (Finnish time). Due to the prevailing SARS-CoV-2 situation, the Company encourages its shareholders to participate in the AGM by way of centralised proxy representation and to follow the AGM by webcast.

The annual financial statement release containing the most important information from the Company’s annual report for 2019 has been published on the date of this notice. The Company’s annual report for 2019 will be available on the “Results” section of the Company’s website at https://www.faron.com/investors/results no later than three weeks before the AGM, i.e. as of 25 March 2020 at the latest.

A.  MATTERS ON THE AGENDA OF THE AGM

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.   Presentation of the financial statements, the Board’s report and the auditor’s report for 2019

Review by the CEO; measures to remedy equity shortfall.

7.   Adoption of the financial statements

8.   Resolution on the use of the profit shown on the balance sheet and the payment of dividend

The board of directors (the “Board“) proposes that no dividend for the financial year 2019 will be paid and that the losses of the Company for the financial year, amounting to EUR 13,261,911.93 (IFRS), will be carried forward to the reserve for invested unrestricted equity.

9.   Resolution on the discharge of the members of the Board and the CEO of the Company from liability

10. Resolution on the remuneration of the members of the Board

The Board proposes, on the basis of the proposal of the remuneration committee, that an annual remuneration of EUR 35,000 will be paid to the Board members, in addition to which an annual remuneration of EUR 35,000 will be paid to the chair of the Board. In addition, a further annual remuneration of EUR 11,000 will be paid to the chair of the audit committee, a further annual remuneration of EUR 9,000 will be paid to the chair of the remuneration committee and a further annual remuneration of EUR 6,000 will be paid to the chair of the nomination committee. In addition, a further annual remuneration of EUR 6,000 will be paid to the audit committee members, a further annual remuneration of EUR 5,000 will be paid to the remuneration committee members and a further annual remuneration of EUR 3,000 will be paid to the nomination committee members.

The Board furthermore proposes that meeting fees will be paid to the Board members as follows:

·     a meeting fee of EUR 1,000 will be paid to Board members per Board meeting where the Board member was physically present, and which was held on another continent than the member’s place of residence; and

·     no meeting fees will be paid to Board members who were attending a Board meeting but not physically present or for Board meetings held on the same continent than the member’s place of residence.

In addition, it is proposed that all reasonable and properly documented expenses incurred in the performance of duties of the members of the Board would be compensated.

The Board also proposes, on the basis of the proposal of the remuneration committee, that no remuneration will be paid based on the Board membership of the CEO of the Company or a person serving the Company under a full-time employment or service agreement.

11. Resolution on the number of members of the Board

The Board proposes, on the basis of the proposal of the nomination committee, that six (6) members be elected to the Board.

12. Election of members of the Board

The Board proposes, on the basis of the proposal of the nomination committee, that Frank Armstrong, Markku Jalkanen, Matti Manner, Leopoldo Zambeletti, Gregory Brown and John Poulos be re-elected to the Board for a term that ends at the end of the next AGM.

Descriptions of the Board member candidates are available on the Company’s website at https://www.faron.com/.

The proposed Board members have informed the Company that in the event they are elected, they intend to elect Frank Armstrong as chair of the Board and Matti Manner as vice-chair of the Board.

13. Resolution on the remuneration of the auditor

The Board proposes, on the basis of the proposal of the audit committee, that the auditor be remunerated in accordance with the invoice presented.

14. Election of the auditor

The Board proposes, on the basis of the proposal of the audit committee, that PricewaterhouseCoopers Oy (“PwC“), a firm of authorised public accountants, continue to act as the Company’s auditor.

PwC has informed the Company that it will appoint Panu Vänskä, authorised public accountant (KHT), as the key audit partner.

15. Resolution on the amendment of the option programmes

A. The Company’s extraordinary general meeting has on 15 September 2015 adopted the terms and conditions of an option programme which have later been amended by the decision of the AGM held on 16 May 2017 (the “Option Plan 2015“). The options cannot currently be transferred or pledged before the subscription of shares without the consent of the Board. The Board proposes, on the basis of the proposal of the remuneration committee, that the AGM resolves to amend the terms and conditions of the Option Plan 2015 so that the options may be transferred or pledged after the conditions for share subscription have been fulfilled under the terms and conditions of the Option Plan 2015. The Board deems that the proposed amendment will enhance the usability of the options and thereby significantly increase the desired benefits of the incentivisation system for the management and personnel of the Company.

The consolidated terms and conditions of the Option Plan 2015, incorporating the amendments proposed herein, are attached hereto.

B. The Company’s AGM has on 28 May 2019 decided to authorise the Board to resolve on issuances of options or other special rights entitling to shares referred to in chapter 10, section 1 of the Finnish Limited Liability Companies Act. Pursuant to the decision of the AGM, the authorisation may be used for implementing an option plan for the employees and directors of, and persons providing services to, the group, substantially in the form of the rules attached to that decision (the “Share Option Plan 2019“). The options cannot currently be transferred or pledged before the subscription of shares. The Board proposes, on the basis of the proposal of the remuneration committee, that the AGM resolves to approve implementing a change corresponding the aforementioned in the rules of the Share Option Plan 2019 so that the options may be transferred or pledged after the conditions for share subscription have been fulfilled. The Board deems that the proposed amendment will enhance the usability of the options and thereby significantly increase the desired benefits of the incentive system for the management and personnel of the Company.

The consolidated rules of the Share Option Plan 2019, incorporating the amendments proposed herein, are attached hereto.

16. Authorising the Board to decide on the issuance of shares, options or other special rights entitling to shares

The Board proposes that the AGM authorise the Board 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 8,650,000 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’s 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 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 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 2021. This authorisation shall not replace the authorisation referred to in item 15 of this notice.

17. Closing of the meeting

B.  DOCUMENTS OF THE AGM

The above-mentioned proposals to the AGM and this notice are available immediately after publication of this notice on the Company’s website at https://www.faron.com/investors/general-meetings. The Company’s annual report for 2019, including the financial statements, the report of the Board and the auditor’s report, will be made available as of 25 March 2020 at the latest on the Company’s website under the section Investors > Results. The Board proposals and the other above-mentioned documents will also be available at the AGM. Copies of these documents and of this notice will be sent to shareholders upon request. The minutes of the AGM will be available to be viewed on the Company’s website from 29 April 2020 at the latest.

C.  INSTRUCTIONS FOR THE PARTICIPANTS

1.   The right to participate and registration

Each shareholder who on the record date of the AGM, being 1 April 2020, is registered in the Company’s shareholders’ register held by Euroclear Finland Ltd (“Euroclear“) has the right to participate in the AGM. 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 AGM should register for the meeting by no later than 4 p.m. (Finnish time) on Wednesday, 8 April 2020 by giving a prior notice of participation:

•     by email to general.meeting@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 or 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. In addition, the shareholder shall state whether they will follow the AGM by webcast. The personal data given by shareholders to the Company are used only in connection with the AGM 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.

Due to the SARS-CoV-2 situation, the Company intends to limit the amount of the physical participants of the AGM to the minimum. Developments in the SARS-CoV-2 situation and complying with the governmental regulations may even lead to a situation where the number of participants arriving at the meeting venue will need to be limited. Therefore, the Company encourages its shareholders to participate in the AGM by way of proxy representation and to follow the AGM by webcast.

2.   Following the AGM by webcast

The Company’s shareholders can follow the AGM by webcast. By following the meeting by webcast, a shareholder does not attend the meeting nor can use the right to request information in accordance with the Finnish Limited Liability Companies Act nor exercise their voting rights. A link to the webcast will be sent to all shareholders who have given notice of attendance to the meeting and provided their email address.

3.   Proxy representative and powers of attorney

Shareholders may participate in the AGM 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 AGM 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 AGM.

Shareholders are also able to exercise their voting rights at the AGM without physical presence through the centralized proxy representation service provided by the Company’s Corporate Legal Counsel Pessi Honkasalo. Shareholders who wish to participate in the AGM through authorising Dr Honkasalo as proxy representative are required to register to the AGM as specified in this notice and deliver the proxy form, available at the Company’s website at https://www.faron.com/investors/general-meetings, to the Company before the end of registration period. Authorising Dr Honkasalo as proxy representative will not accrue any costs for the shareholder (excluding postal fees).

Proxy documents should be sent to Faron Pharmaceuticals Ltd, attn. Virve Nurmi, Joukahaisenkatu 6, FI-20520 Turku, Finland or by email to general.meeting@faron.com before the end of registration period.

4.   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 AGM 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 on the AGM’s record date of 1 April 2020.

Additionally, participation requires that the holder of nominee-registered shares is temporarily registered in the Company’s shareholders’ register held by Euroclear by 10 a.m. (Finnish time) on Wednesday, 8 April 2020. Temporary registration in the shareholders’ register shall be deemed to be a registration for the AGM.

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 AGM 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 AGM to be temporarily entered into the Company’s shareholders’ register by the above-mentioned time.

5.   Other instructions and information

The Company takes the threat of SARS-CoV-2 seriously and is following the situation carefully. Developments in the SARS-CoV-2 situation may require special arrangements to organise the AGM or even to postpone the AGM to a later date. The Company’s shareholders are asked to follow the Company’s announcements as well as its website, https://www.faron.com/investors/general-meetings, for any possible changes or additional information.

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

On the date of this notice, 20 March 2020, the total number of shares and votes in the Company is 43,290,747.

The AGM shall be held in Finnish and in English.

Turku, 20 March 2020

FARON PHARMACEUTICALS LTD

Board of Directors

For more information please contact:

Faron Pharmaceuticals Ltd

Dr Markku Jalkanen, CEO

investor.relations@faron.com 

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

+44 207 886 2500

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen, Jussi Majamaa

+358 40 555 4727

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

+44 20 3709 5700

faron@consilium-comms.com 

About Faron Pharmaceuticals Ltd

Faron (AIM: FARN, First North: FARON) is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs. The Company currently has a pipeline based on the 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 standard treatments including 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.

Final Results for the year ended December 31, 2019

Faron Pharmaceuticals Oy

(“Faron” or the “Company”)

Financial statement release January 1 to December 31, 2019

Financial statement release, Turku, 20 March 2019 at 9.00 AM (EET)

Inside information

TURKU, FINLAND – Faron Pharmaceuticals Oy (AIM: FARN, First North: FARON), the clinical stage biopharmaceutical company, today reports its financial statements for the year ended 31 December 2019 and H2 2019.

HIGHLIGHTS

Operational (including post period):

Clevegen® – Regulator of major inhibitory immune checkpoints and wholly-owned novel cancer immunotherapy in development

•      Part I of the open label phase I/II MATINS trial, initiated across multiple sites through Europe and primarily intended to investigate safety and tolerability, was completed with dose escalation reaching its planned maximum level of 10mg/kg. Clevegen demonstrated good tolerability at all dosing levels (0.1 to 10 mg/kg) without dose limiting toxicity.

•      Clevegen promoted immune activation in all dosed patients, measured following treatment with Clevegen and observed as increased circulating CD8+ T cells and CD8+/CD4+ ratio, decreased regulatory T-cells (T-regs) or a substantial increase in mobile natural killer (NK) cells in the blood.

•      Partial responses were observed in two patients. The first, a colorectal cancer (CRC) patient, showed a continuation of lung and lymph node metastasis shrinkage and their tumour load biochemical marker, carcinoembryonic antigen (CEA), also normalised. The second, a heavily pre-treated melanoma patient, showed a reduction in the size of the target lesion tumour (a lung metastasis) by 44 percent and other non-target lesions stabilized. Their biochemical tumour load marker also declined and clearance of pleura fluid was observed.

•      Data showing Clevegen’s potential early efficacy and good tolerability were presented at the European Society of Medical Oncology (ESMO) 2019 Congress in Barcelona, Spain. At the Society’s subsequent Immuno-Oncology Congress 2019 in Geneva, Switzerland, more detailed cell surface biomarker data were presented for the first time showing Clevegen’s potential to downregulate a range of inhibitory immune checkpoints commonly targeted by current immuno-oncology (IO) therapies.

•      The US Food and Drug Administration (FDA) approved Faron’s Investigational New Drug (IND) application for Clevegen, enabling expansion of the MATINS trial into the US.

•      CRC and ovarian cancer were selected by the MATINS data monitoring committee as the first and second expansion cohorts in part II of the study. Both cancer types are known to host a significant number of Clever-1 positive tumour-associated macrophages (TAM) which correlates with increased mortality rates.

•      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 were published in Clinical Cancer Research, a journal of the American Association for Cancer Research.

•      Several new patent filings were carried out during the period to further strengthen the existing IP around Clevegen use in conditions where harmful immune suppression causes serious diseases.

•      bexmarilimab is under consideration by the World Health Organization as the Proposed International Nonproprietary Name.

•      Manufacturing was established to supply drug product for cohort expansions in part II of the MATINS study.

•      Partnering discussions continued with the aim of supporting expansion of clinical development and exploring the potential of Clevegen in combination with existing immunotherapies and other cancer therapies.

Traumakine® – in development for the treatment of organ failures

•        Faron remains focused on developing Traumakine as a treatment for acute respiratory distress syndrome (ARDS) taking into account the high levels of concomitant corticosteroids used as a standard of care for ARDS and some ruptured abdominal aorta aneurysm (RAAA) patients.

•        Following feedback from the FDA regarding trial design, Faron submitted an amended protocol to the FDA, reflecting the FDA’s feedback that further studies with interferon-beta (IFN-beta) should exclude the use of overlapping corticosteroids since they are likely to block the desired therapeutic effect of Traumakine and may have a potentially deleterious impact on patient outcomes.

•        The FDA accepted Faron’s proposed study protocol for the new Traumakine trial, which excludes the use of concomitant corticosteroids and which will be split in two steps. The first step will commence with INTEGRITY, a pilot randomised and placebo controlled study, which will serve as final adjustment for adequate statistical powering and sample size justification for the pivotal second step, CALIBER.

•        The Company envisages that further Traumakine trials are likely to be funded through a third party.

•        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 corticosteroids 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 corticosteroids use interferes in the desired IFN-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 RAAA patients, showed biomarker (MxA and CD73) responses indicating a good IFN-beta response from Traumakine. A trend towards 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 decided to close the INFORAAA trial, as unexpected high use of concomitant corticosteroids prevent the scientific implementation of the INFORAAA protocol.

•        Faron filed a request for arbitration with the Arbitration Institute of the Stockholm Chamber of Commerce seeking damages from Rentschler Biopharma SE for terminating the API manufacturing process for Traumakine.

•        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 for manufacturing are currently being explored.

AOC3 Antagonist Platform Technology

•        In March 2020, Faron acquired rights for the potential new use of AOC3 inhibitors. Faron will be responsible for the future development of the AOC3 protein inhibitor and for the management, prosecution, maintenance and filing of patent applications.

Corporate

•        Yrjö Wichmann took up the new position of Vice President, Financing and Investor Relations and Toni Hänninen was appointed as Faron’s new Chief Financial Officer.

•        Faron’s shares were listed on Nasdaq First North Growth Market Helsinki as of 3 December 2019.

Financial

•        On 31 December 2019, the Company held cash balances of €7.1 million (2018: €4.1 million).

•        Loss for the period for the financial year ended 31 December 2019 was €13.3 million (2018: €20.1 million loss).

•        Net assets on 31 December 2019 were €1.6 million (2018: €0.4 million).

•        During the period, in November, August, May and March 2019, the Company successfully raised a total of €15.6 million gross (€14.5 million net) from new and existing shareholders, employees and Company Directors through issuance of a total of 12,262,853 new ordinary shares. 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 next clinical trials and advance partnering discussions in respect of both Traumakine and Clevegen.

FINANCIAL

Consolidated key figures, IFRS

€’000

Unaudited

7-12/2019
6 months

Unaudited

7-12/2018
6 months

1-12/2019
12 months

1-12/2018
12 months

Revenue

0

(1)

0

19

Research and Development expenses

(5,255)

(4,762)

(10,237)

(16,463)

General and Administrative expenses

(1,688)

(1,378)

(3,049)

(3,750)

Loss for the period

(6,850)

(6,026)

(13,262)

(20,086)

Unaudited

7-12/2019
6 months

Unaudited

7-12/2018
6 months

1-12/2019
12 months

1-12/2018
12 months

Loss per share EUR

(0.16)

(0.19)

(0.31)

(0.65)

Number of shares at end of period

43,290,747

31,027,894

43,290,747

31,027,894

Average number of shares

35,533,179

30,749,648

35,533,179

30,749,648

€’000

Unaudited 30 Jun 2019

Unaudited

30 Jun 2018

31 Dec 2019

31 Dec 2018

Cash and cash equivalents

2,892

11,168

7,059

4,067

Equity

(1,761)

6,722

1,610

369

Balance sheet total

5,103

16,716

10,209

8,002

Commenting on the results, Dr Markku Jalkanen, CEO of Faron, said: “Our priority in 2019 was to rapidly accelerate our immunotherapy candidate, Clevegen, through the clinic. With the continued progression of the phase I/II MATINS trial, we are very encouraged by its results so far. Clevegen is clearly exhibiting exciting properties as a potential immunotherapy capable of down regulating a range of major inhibitory immune checkpoints (PD-1, PD-L1, CTLA-4) across several cancers. With our two cohort expansions in colorectal and ovarian cancer, we will continue to rapidly progress the development of Clevegen in patients with limited effective treatment options.   

“We are also pleased that, following feedback from the FDA, we have agreed the trial design for the continued clinical development of Traumakine, which we continue to believe holds great potential as a future treatment for ARDS, regardless of the underlying condition.

“We are very pleased to also have secured a further EUR 8 million through our series of fundraises in late 2019, further supporting the progress of our pipeline. I would like to thank our new and existing shareholders, and the entire team at Faron, for their continued support.”

Board of Directors’ Proposal on the Dividend

The Group’s loss for the accounting period was 13,261,911.93 euro (2018: 20,086,402.60 euro).

The Board of Directors does not recommend the payment of a dividend (2018: nil).

March 19, 2020

Faron Pharmaceuticals

Board of Directors

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

Conference call information

Faron will host a conference call for analysts to provide an update on the results followed by a Q&A session at 09:30 GMT / 11:30 EET. A presentation to accompany the call will be available on the Faron website (https://www.faron.com/investors/results) at 09:00 GMT / 11:00 EET

Dial-in details are:

International: +44 (0) 20 7192 8000

Finland: (09) 4245 0806
Conference ID: 7377079

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

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen, Jussi Majamaa

Phone: +358 (0)40 555 4727

Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com 

Publication of financial information during year 2020

The half-year financial report for the period 1 January to 30 June 2020 is scheduled to be published on 24 September 2020. Faron’s financial statements for full year 2019 will be published on 25 March and will also be available on the Company’s website at https://www.faron.com/investors/results.

The Annual General Meeting is planned for 15 April 2020. A separate stock exchange notice will be issued by Faron’s Board of Directors to convene the meeting.

About Faron Pharmaceuticals Ltd

Faron (AIM:FARN, First North: FARON) is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs. The Company currently has a pipeline based on the 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 standard of care therapies. 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.

Chairman’s statement

2019 was a significant year for Faron. The highly experienced management team made significant progress executing the Company’s strategy and maintaining momentum in the delivery of its novel pipeline.

The development programme for Faron’s wholly-owned novel precision cancer immunotherapy candidate, Clevegen, has accelerated rapidly. Promising early clinical data continued to give us confidence in the potential of Clevegen as a next-generation immuno-oncology therapy and one that could potentially be used in combination therapy. The strength of the early clinical data generated in 2019 enabled the Clevegen team to quickly identify a group of patients thought most likely to respond to treatment. Selection of the first expansion cohort in colorectal cancer was a significant achievement and is testament to the focus Faron has placed on Clevegen’s development this year. The US Food and Drug Administration (FDA) approval of the Company’s Investigational New Drug (IND) application for Clevegen was a major development milestone enabling expansion of Clevegen’s clinical development in the US.

Harnessing the immune system to fight cancer has transformed the way patients are treated and scientists continue to make new discoveries in the field of immune-oncology every day. It is exciting to see the Clevegen programme generating such interest in this field, from the scientific community and commercial organisations. The wealth of data generated in 2019 strengthens Faron’s confidence in the programme’s future.

Alongside Clevegen’s development progress in 2019, the Company continued to build on its understanding of the results from Traumakine’s INTEREST trial. Data from a late-stage trial undertaken by our Japanese partner Maruishi were consistent with our study results a year earlier and supported our observation that corticosteroid use interferes with Traumakine efficacy. This observation has since been confirmed by the FDA who, following discussions about the future development path for Traumakine, advised that further studies should exclude the concomitant use of steroids. The body of evidence generated during Traumakine’s development programme is clearly a matter of interest for opinion leaders involved in the treatment of acute respiratory distress syndrome (ARDS) patients and the debate around whether corticosteroids have any beneficial role in ARDS patients continues.

Recent guidance from the World Health Organization (WHO) on the clinical management of severe acute respiratory infection related to the novel coronavirus that emerged in China at the end of 2019 advises against the routine use of corticosteroids. The emergence of this novel virus, and the risk of ARDS among infected patients, is a reminder of the need for new treatments to tackle this potentially fatal condition.

During the year our fundraising activities and our listing on the Nasdaq First North Growth Market in Finland received strong shareholder support enabling us to build a more secure financial position for the Company and give the pipeline its greatest chances of success. It was also encouraging to see the Company’s share price performance in 2019, its growth reflecting the progress of the business and the strength of Faron’s pipeline potential.

On behalf of the Board, I would like to thank all those who have played a part in Faron’s progress in 2019 – the management team, staff and Board for their hard work and commitment, our partners and steering committee members for their support and expertise, and the investigators and patients involved in our clinical trials. I would also like to pay particular thanks to our CEO, Markku Jalkanen who, while guiding Faron through difficult circumstances, has successfully led its transition to becoming a leading immunotherapy company.

We look forward to continued progress with our pipeline products Clevegen and Traumakine in 2020.

Dr Frank Armstrong

Chairman

March 19, 2020

Chief Executive Officer’s Review 

Overview

Faron is focused on immuno-oncology, organ trauma and vascular damage. Our goal is to save lives by developing unique scientific discoveries into ground-breaking new treatments for hard-to-treat and rare diseases. Our work is rooted in two scientific principles. First, a deep knowledge of the pharmacology of our drug candidates. And second, understanding the science of the targeted conditions at the molecular level, to most effectively influence their underlying causes.

Our focus for 2019 has been to continue to progress our wholly-owned novel precision cancer immunotherapy candidate, Clevegen, through the first-in-human clinical study, MATINS, in selected metastatic or inoperable solid tumours. We have also been working closely with the regulatory authorities to determine the future development pathway for Traumakine in ARDS and organ failures.

Clevegen Development

We have made significant, and exciting, clinical progress with Clevegen during 2019. Clevegen is our wholly-owned novel precision cancer immunotherapy candidate, which causes conversion of the immune environment around a tumour from immune-suppressive to immune-stimulating by reducing the number and function of tumour-associated macrophages (TAMs). Clevegen is differentiated from other immunotherapies through its specific targeting of M2 TAMs which facilitate tumour growth. Through myeloid cell plasticity, Clevegen can convert these M2 TAMs to M1s, leaving existing M1 TAMs intact and allowing both to support immune activation against tumours. We believe it has the potential to function as a novel macrophage checkpoint immunotherapy both as a monotherapy and in combination with other immuno-oncology therapies or standard of care treatments.

MATINS Trial

The MATINS (Macrophage Antibody To INhibit immune Suppression) study is a first-in-human open label phase I/II clinical trial with an adaptive design to investigate the safety and efficacy of Clevegen in selected metastatic or inoperable solid tumours. The selected tumours under investigation are cutaneous melanoma, hepatobiliary/hepatocellular, pancreatic, ovarian and colorectal cancer, all known to host a significant number of Clever-1 positive TAMs. 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 MATINS study was conducted to establish tolerability, safety and dose escalation to optimize dosing. Subjects in Part I of the study received doses of 0.1 mg/ kg, 0.3 mg/kg, 1.0 mg/kg, 3.0 mg/kg and 10 mg/kg. All dose levels tested showed good tolerability with no dose limiting toxicity signals and all subjects dosed in the study experienced a switch in their immune cell profiles following treatment with Clevegen towards increased immune activation, observed as increased circulating CD8+ T cells and CD8+/CD4+ ratio, decreased regulatory T-cells (T-regs) or a substantial increase in mobile natural killer (NK) cells in the blood.

Based on results from the initial part of the MATINS trial, Faron announced in April 2019 that late-stage colorectal cancer (CRC) had been chosen for the first expansion cohort for the second part of the trial. Following the successful conclusion of the dose escalation in Part I, and with approval from the MATINS trial’s data monitoring committee (DMC), Faron initiated this first expansion cohort, Part II, in January 2020. A total of 10 late-stage CRC patients are expected to be dosed at the approved initial dose level of 0.3 mg/kg cohort, including two patients who had previously received this dose in the earlier Part I of the study. Furthermore, in January 2020, we announced that ovarian cancer has been selected as the second expansion cohort in the trial. Both these tumour types are known to host a significant number of Clever-1 positive TAMs which correlates with increased mortality rates among these patients.

In November 2019, the FDA approved the Company’s Investigational New Drug (IND) application for Clevegen (FP-1305), enabling expansion of the MATINS trial into the US. We anticipate opening the first site in mid-2020. In due course, we also plan to file applications for Breakthrough Therapy status in the US and PRIME status in Europe, further facilitating regulatory interactions during the development of Clevegen.

Clevegen’s ability to down regulate a range of major inhibitory checkpoints reaffirms our belief in its potential as a master regulator of immunity and a highly effective immunotherapy. It indicates that Clevegen treatment could potentially allow increased efficacy of other immuno-oncology therapies through the biomarker analysis of patient’s blood cells post Clevegen induced immune activation, finally offering a biological rationale to guide combination therapies. Due to high interest in the potential for new combination therapies in the immuno-oncology field, we are currently engaged in partnering discussions with several parties and hope for a positive outcome from these negotiations during 2020.

Traumakine Development

With no currently approved pharmacological treatments available, acute respiratory distress syndrome (ARDS) remains a significant problem for patients and healthcare systems. During 2019, the Company has continued to further understand the correlation between the combined use of corticosteroids and IFN-beta and has been working closely with the regulatory authorities in order to determine the next steps in Traumakine’s future development pathway.

In April 2019, Faron announced top-line data from the Phase III trial with Japanese partner Maruishi Pharmaceutical Co., Ltd. Results from this trial were in line with the Company’s expectations, and previously announced results observed in the INTEREST trial, 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 order to further examine the effects of concomitant steroid use and Traumakine, as seen in both the INTEREST trial and the Japanese study, Faron conducted the pharmacokinetic/dynamic YODA study in healthy volunteers. Results from this study, announced in June 2019, were consistent with the INTEREST data, supporting the conclusion that coadministration of steroids with Traumakine in patients inhibits IFN-beta action.

Also, in June 2019, Faron announced interim results from the Phase II INFORAAA study, which examined the effect of Traumakine on mortality (predominantly for multi-organ failure, MOF) and pharmacodynamic biomarkers of surgically operated ruptured abdominal aorta aneurysm (RAAA) patients. Based on the advice from the INFORAAA independent data monitoring committee and investigators, the Company decided to close the INFORAAA trial, as unexpected high use of concomitant corticosteroids was preventing the scientific implementation of the INFORAAA protocol.

Interestingly, in January 2020, the World Health Organization (WHO) published a recommendation recognising the risk of using corticosteroids on patients with coronavirus. This recommendation aligns with our findings from the post-hoc analysis of the INTEREST study and strengthens our belief that the whole medical community should be more diligent with regard to the combined use of corticosteroids and type I interferons. Faron’s scientific network has also confirmed this interaction at a molecular level in lung endothelial cells.

The Company remains committed to progressing Traumakine for the treatment of ARDS and, following the Company’s revised protocol submission in February 2020, the FDA have now accepted the protocol design for the next Traumkine study. The study design reflects the feedback and conclusions from the FDA that further studies with IFN beta should exclude the use of concomitant glucocorticoids since they are likely to block the desired therapeutic effect of Traumakine and may have a potentially deleterious impact on patient survival. We are planning to split the clinical development of Traumakine in ARDS into two steps, commencing with INTEGRITY, a pilot randomised and placebo controlled study with approximately 60 patients. The INTEGRITY data will then serve as final adjustment for adequate statistical powering and sample size justification for the pivotal CALIBER study, subjected for FDA review. We expect that the sample size of the CALIBER study will not exceed 200 patients based on the post hoc analysis of the INTEREST trial data. We envisage that future Traumakine trials (including INTEGRITY and CALIBER) are likely to be funded through a third party or parties.

AOC3 Antagonist Platform Technology

In March 2020, Faron announced it had acquired rights for the potential new use of AOC3 inhibitors covered by a recently filed patent application. The AOC3 enzymatic domain, a semicarbazide-sensitive amine oxidase, is known to produce hydrogen peroxide, a potent inflammatory mediator. Being expressed by many inflamed vascular endothelial cells, the AOC3 overexpression has been connected with many vascular diseases.

Faron will be responsible for future development of the invention and for the management, prosecution and maintenance of any patent applications as well as for the filing of new patent applications for the AOC3 protein inhibitor. Pre-clinical studies with humanized AOC3 mice and with ex vivo human cells in relation to the Invention are currently ongoing and further information will be provided later in the year.

Corporate

On 3 December 2019, Faron started trading on Nasdaq First North Growth Market (“Nasdaq First North”), a multilateral trading facility operated by Nasdaq Helsinki Ltd. The ISIN code of Faron’s ordinary shares is FI4000153309 and the trading code on Nasdaq First North is FARON. This is in addition to Faron’s listing, since November 2015, on AIM.

In October 2019, Faron received a letter from Rentschler Biopharma SE (“Rentschler”) in which Rentschler stated that it was terminating the agreement concerning the API manufacturing for Traumakine. Following a detailed investigation by Faron into the circumstances around manufacturing arrangements, the Company has since concluded that, in its view, Rentschler was in breach of the underlying agreement between the parties. Faron has filed a request for arbitration, funded by a third party on a non-recourse basis, with the Arbitration Institute of the Stockholm Chamber of Commerce seeking damages.

In May 2019, 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. We were delighted to welcome Mr Toni Hänninen as Faron’s new CFO, effective 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.

Financial

During the period, the Company successfully raised approximately EUR 15.6 million (gross), EUR 14.5 million (net) 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 next clinical trials and advance partnering discussions in respect of both Traumakine and Clevegen.

Outlook

Our focus for 2020 will be to continue to expedite Clevegen’s clinical development through part II and part III of the MATINS trial and to report these data to regulatory authorities. We will also continue to work in close collaboration with the regulatory authorities in order to progress the INTEGRITY and CALIBER clinical trials and secure Traumakine’s future development pathway. We are continuing to make progress with potential partners regarding both Clevegen and Traumakine, whilst also exploring funding opportunities to ensure we can continue to progress both products. I would like to thank our shareholders for their continued belief in the Company and the management team for their hard-work and dedication and look forward to updating the market on our progress throughout the course of the year.

The Board anticipates the following pipeline progress and catalysts during 2020:

Clevegen:

•        Completion of all biomarker analyses from MATINS Part I patients to guide Clevegen dosing

•        Initiation of the second expansion cohort, ovarian cancer, during H1-2020

•        Initial data from the first expansion cohort (CRC) expected in Q2-2020

•        Expansion of the MATINS trial to leading cancer centres in France and Spain in Q2-2020

•        Opening of US study sites to facilitate rapid expansion of the MATINS trial in Q2-2020

•        Partnering update during 2020

Traumakine:

•        Further updates in relation to INTEGRITY and CALIBER during 2020

•        Continuation plans to be announced in H2-2020

AOC3 Antagonist Platform Technology:

•        Additional information from pre-clinical studies with humanized AOC3 mice and with ex vivo human cells during 2020

Dr Markku Jalkanen

Chief Executive Officer

March 19, 2020

Financial review

Key Performance Indicator

As a clinical stage drug development company, Faron’s primary interconnected KPIs are cash burn and cash position. The Company conducted several successful fundraises during 2019. The Company’s net cash flow showed €3.0 million positive due to a reduction in expenses and said fundraises. The Board will consider the appropriateness of monitoring additional KPIs as the Company’s operations advance.

Revenue and Other Operating Income

The Company’s revenue was €0.0 million for the year ended 31 December 2019 (2018: €nil).

The Company recorded €0.2 million (2018: €0.2 million) of other operating income. This consisted of the reimbursement of already occurred legal expenses by the third-party recovery services provider as announced by the Company on 30 December 2019.

Research and development costs

The R&D costs decreased by €6.3 million from €16.5 million in 2018 to €10.2 million in 2019. The costs of outsourced clinical trial services were reduced by €3.4 million from €5.3 to €1.9 million. The cost of materials and services used in the R&D was reduced by €1.7 million from €7.3 to €5.6 million.

General and administration costs

Administrative expenses decreased by €0.8 million from €3.8 million in 2018 to €3.0 million in 2019. The decrease was mainly due to the €1.4 million decrease in external costs related to the development of internal financial and reporting processes during 2018, but this was partially offset by an increase of €0.7 million in the other administrative expenses.

Taxation

The Company’s tax credit for the fiscal year 2019 can be recorded only after the Finnish tax authorities have approved the tax report and confirmed the amount of tax-deductible. The total amount of cumulative tax losses carried forward approved by tax authorities on 31 December 2019 was €16.1 million (2018: €11.2 million). The Company estimates that it can utilise most of these during the years 2020 to 2028 by offsetting them against future profits. In addition, Faron has €58.6 million of R&D costs incurred in the financial years 2010 – 2019 that have not yet been deducted in its taxation. This amount can be deducted over an indefinite period at the Company’s discretion.

Losses

Loss before income tax was €13.3 million (2018: €20.1 million). Net loss for the year was €13.3 million (2018: €20.1 million), representing a loss of €0.31 per share (2018: €0.65 per share) (adjusted for the changes in number of issued shares).

Cash Flows

Net cash flow was €3.0 million positive for the year ended 31 December 2019 (2018: €5.3 million negative). Cash used for operating activities decreased by €9.0 million to €11.5 million for the year, compared to €20.5 million for the year ended 31 December 2018. This decrease was mostly driven by a decrease in R&D investments.

Net cash inflow from financing activities was €14.5 million (2018: €15.5 million) due to the successful equity placings completed in during 2019.

Fundraising

During the period, 1 January to 31 December 2019, the Company successfully raised a total of €15.6 million gross (€14.5 million net) across several fundraises 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 next clinical trials and advance partnering discussions in respect of both Traumakine and Clevegen.

•        In March 2019, €3.1 million gross (€2.9 net) through issuance of new ordinary shares.

•        In May 2019, €1.3 million gross (€1.3 net) through issuance of new ordinary shares.

•        In August 2019, €2.5 gross (€2.2 net) million through issuance of new ordinary shares.

•        In November 2019, €8.7 million gross (€8.0 net) through issuance of new ordinary shares.

Financial Position 

As at 31 December 2019, total cash and cash equivalents held were €7.1 million (2018: €4.1 million). The Company continues to exercise tight cost control to keep the cash burn as low as possible for preservation of existing resources.

Going Concern

As part of their going concern review, the Directors have followed the Finnish Limited Liability Companies Act, the Finnish Accounting Act and the guidelines published by the Financial Reporting Council entitled “Guidance on the Going Concern Basis of Accounting and Reporting on Solvency and Liquidity Risks – Guidance for directors of companies that do not apply the UK Corporate Governance Code”. The Company and its subsidiaries (the “Group”) are subject to a number of risks similar to those of other development stage pharmaceutical companies. These risks include, amongst others, generation of revenues in due course from the development portfolio and risks associated with research, development, testing and obtaining related regulatory approvals of its pipeline products. Ultimately, the attainment of profitable operations is dependent on future uncertain events which include obtaining adequate financing to fulfil the Group’s commercial and development activities and generating a level of revenue adequate to support the Group’s cost structure.

The Group made a net loss of €13.3 million during the year ended 31 December 2019. It had total equity of €1.6 million including an accumulated deficit of €80.0 million. As at that date, the Group had cash and cash equivalents of €7.1 million.

The Directors have prepared detailed financial forecasts and cash flows looking beyond 12 months from the date of the approval of these financial statements. In developing these forecasts, the Directors have made assumptions based upon their view of the current and future economic conditions that are expected to prevail over the forecast period. The Directors estimate that the cash held by the Group together with known receivables will be sufficient to support the current level of activities into the fourth quarter of 2020. The Directors are continuing to explore sources of finance available to the Group and they believe they have a reasonable expectation that they will be able to secure sufficient cash inflows for the Group to continue its activities for not less than 12 months from the date of approval of these financial statements; they have therefore prepared the financial statements on a going concern basis.

Because the additional finance is not committed at the date of issuance of these financial statements, these circumstances represent a material uncertainty that may cast significant doubt on the Company’s ability to continue as going concern. Should the Group be unable to obtain further finance such that the going concern basis of preparation were no longer appropriate, adjustments would be required, including to reduce balance sheet values of assets to their recoverable amounts, to provide for further liabilities that might arise.

Headcount

Average headcount of the Company for the year was 24 (2018: 25).

Shares and Share Capital

During the period 1 January to 31 December 2019, the Company, using the share authorities granted at the Annual General Meetings held on 31 May 2018 and on 28 May 2019, as well as at an Extraordinary General Meeting held on 25 October 2019, issued a total of 12,262,853 new ordinary shares.

•    On 28 March 2019, 4,448,625 shares at an issuance price of € 0.7020 (£0.60) per share.

•    On 13 May 2019, 1,757,375 shares at an issuance price of € 0.7598 (£0.65) per share.

•    On 5 August 2019, 941,840 shares at an issuance price of € 1.1900 (£1.06) per share.

•    On 27 August 2019, 1,179,513 shares at an issuance price of € 1.1900 (£1.06) per share.

•    On 12 November 2019, 3,935,500 shares at an issuance price of €2.1980 (£1.90) per share.

The subscription price net of costs was credited in full to the Company’s reserve for invested unrestricted equity, and the share capital of the Company was not increased.

The Company has no shares in treasury; therefore at the end of 2019 the total number of voting rights was 43,290,747.

Legal proceedings

As announced by the Company on 2 October 2019 and 30 December 2019, the Company has received a letter from Rentschler Biopharma SE in which Rentschler stated that it terminates the agreement concerning the Traumakine API manufacturing. The Company considers that this statement is without merit and has filed a request for arbitration to seek damages. To fund the proceedings, the Company has entered into a litigation funding agreement with a third-party recovery services provider which, in the event of success, would receive a typical portion of any damages awarded.

Toni Hänninen

Chief Financial Officer

March 19, 2020

 

Consolidated Income Statement, IFRS

 €’000

Unaudited

7-12/2019
6 months

Unaudited

7-12/2018
6 months

1-12/2019
12 months

1-12/2018
12 months

Revenue

0

(1)

0

 19 

Other operating income

185

191

185

 205

Research and development expenses

(5,255)

(4,762)

(10,237)

(16,463)

General and administrative expenses

(1,688)

(1,378)

(3,049)

(3,750)

Operating loss

(6,758)

(5,951)

(13,101)

(19,989)

Financial expense

(151)

(70)

(224)

(397)

Financial income

69

(3)

74

302

Loss before tax

(6,840)

(6,024)

(13,251)

(20,084)

Tax expense

(10)

(2)

(11)

(2)

Loss for the period

(6,850)

(6,026)

(13,262)

(20,086)

Other comprehensive income

–

–

–

–

Total comprehensive loss for the period

(6,850)

(6,026)

(13,262)

(20,086)

Loss per ordinary share

Basic and diluted loss per share, EUR

(0.16)

(0.19)

(0.31)

(0.65)
Final Results for the year ended December 31, 2019
Back to top