Faron Pharmaceuticals Ltd: Interim results for the six months ended 30 June 2019

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


Operational (including post Period-end):

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

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

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

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

Group financial

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

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

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

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

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

For more information please contact:

Faron Pharmaceuticals Ltd

Dr Markku Jalkanen, Chief Executive Officer


Consilium Strategic Communications

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-mail: chris.brinzey@westwicke.com

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2500

About Faron Pharmaceuticals Ltd

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

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