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EPIC: FARN
Market: AIM
52-week High/Low: 825.00p / 244.50p
Sector: Pharma & Biotech
Market Cap: 195.40M
Faron Pharmaceuticals Oy

Faron Pharmaceuticals Oy

Faron Pharmaceuticals is a clinical stage drug discovery and development company based in Turku, Finland. Faron has a pipeline of clinical stage products focusing on acute organ traumas, cancer immunotherapy and vascular damage. Implementing the strategy of creating a novel treatment for significant unmet medical needs, Faron has now entered into a pan-European pivotal Phase III study with its lead candidate Traumakine®, which targets the treatment of Acute Respiratory Distress Syndrome (ARDS). Currently there is no available drug treatment for ARDS, an orphan lung disease coupled with a reported mortality rate of approximately 30 to 45%. Although ARDS is not common, there are about 170 000 patients annually in Europe and nearly 200 000 in the US.

Faron Pharmaceuticals Oy

www.faronpharmaceuticals.com

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Big picture - Why invest in Faron Pharmaceuticals Oy


Faron Pharmaceuticals Oy Snapshot

Faron is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs. The Company currently has a pipeline focusing on acute organ traumas, cancer immunotherapy and vascular damage. The pipeline is built on Faron’s scientific knowledge and control of the endothelial barrier, the membrane of cells lining blood and lymphatic vessels to separate blood content from tissues.

The Company’s lead candidate Traumakine® is in development for the treatment of Acute Respiratory Distress Syndrome (ARDS), a rare, severe, life-threatening medical condition characterised by widespread inflammation in the lungs. Traumakine is currently in a pan-European (INTEREST) and Japanese pivotal Phase III studies.

There is no available drug treatment for ARDS, an orphan lung disease coupled with a reported mortality rate of approximately 30 to 45%. Although ARDS is not common, there are about 125,000 patients annually in Europe and nearly 170,000 in the US.

Additionally Faron is developing Clevegen®, a ground breaking pre-clinical anti-Clever-1 antibody. Clevegen has the ability to convert the immune environment around a tumour from being immune suppressive to immune stimulating. This novel macrophage-directed immuno-oncology approach is called Tumour Immunity Enabling Technology (TIET) and can be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. New application opportunities related to TIET cover chronic infections and inefficient vaccination.

Faron operates in an agile way by sourcing its innovations primarily from academia. The inventors of the projects are close scientific collaborators with the Company and continue to be involved in further developments of the projects. As much of the development work up to the proof-of-concept stage can be contracted to the innovators’ labs, Faron is able to maintain a lean operating structure. As a result, Faron can run a relatively extensive drug development operation with significantly fewer members of staff and lower costs than would be possible for a typical drug development company.

Based in Turku, Finland, Faron Pharmaceuticals is listed on AIM under the ticker ‘FARN’.

Our Drug Targets

Faron sources innovations from academia and has strong links with academic institutions including Turku University, Finland. Our strategy is to collaborate with strategic partners early in the drug development cycle in order to bring new pharmaceutical products to market in a timely and cost-effective manner.


Traumakine®

Traumakine® is based on a patent-protected use of interferon beta to prevent leakage of vascular beds in acute lung injuries. The active pharmaceutical ingredient in Traumakine® is recombinant human IFN beta-1a.

Mechanism of action

The mechanism behind Traumakine®’s action was invented by scientists at Turku University during the period 1995 to 2003. Through extensive research and ex-vivo studies, it was identified that a molecule called CD73 is an essential entity needed to maintain the endothelial barrier function. CD73 is an ectoenzyme capable of breaking down extracellular AMP to produce locally active adenosine. Adenosine maintains the endothelial barrier and downregulates inflammation escalation, preventing both early vascular leakage and escalation of inflammation, which are the two early patho-physiological events leading to Acute Respiratory Distress Syndrome (ARDS).

One of the key findings that led to the development of Traumakine®, was a discovery that interferon beta could enhance CD73 expression and therefore could be used to treat a range of vascular leakage conditions including ARDS. Traumakine® works by enhancing lung CD73 expression and increasing production of anti-inflammatory adenosine such that vascular leaking and escalation of inflammation are reduced.

faron_traumakine_action_v221.jpg

Recombinant human IFN beta-1a is an approved treatment for patients with relapsing remitting MS and the safety profile of recombinant human IFN beta-1a in such patients is well characterised.

Clevegen®

One of Faron’s key areas of focus is to develop a cancer treatment to support the hosts’ immune defences against tumours, as these are often suppressed in cancer patients. Our second most advanced drug development project, Clevegen®, revolves around Clever-1, an endothelial cell surface molecule involved in cancer growth and spread. The active pharmaceutical ingredient of Clevegen® is an anti-Clever-1 antibody.

Mechanism of action

All tumours are infiltrated by immune cells, for example macrophages, neutrophils, T-cells, dendritic cells, mast cells, myeloid derived suppressor cells and natural killer cells. Depending on the immune cells stimulated and activated, they can either have a protective effect for the host through suppression of tumour growth or deleterious effect by promoting tumour growth, invasion, metastasis and angiogenesis. Tumour associated macrophages (TAMs) have emerged as an essential constituent of the tumour environment, with influence over many aspects of cancer (proliferation and survival) as well as interaction with surrounding elements (angiogenesis, escape from antitumour specific immunity). When TAMs populate a tumour, one of the very significant influences they exert over it, is a strong increase in immune suppression. Clever-1-positive TAMs represent one major macrophage population involved in this elimination of host immune system activity against the tumour cells. Clevegen® is an anti-Clever-1 antibody which targets and eliminates Clever-1-positive TAM’s from cancer patients.

Clevegen® has two significant ways to intervene in the TAM role in tumour growth and spread: prevent TAM infiltration into a tumour and block TAM-to-Tumour cell interaction triggering TAM transformation into tumour supportive cell types.

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Dr Frank Armstrong

Dr Frank Armstrong

Non-Executive Chairman

Dr Armstrong has held Chief Executive roles with five biotechnology companies (both public and private) including Fulcrum Pharma PLC (AIM). He led Medical Science and Innovation at Merck Serono and was previously Executive Vice President of Product Development at Bayer and Senior Vice President of Medical Research and Communications at Zeneca. Dr Armstrong is currently the Chairman of Xceleron Inc., Summit Therapeutics (AIM and NASDAQ) and Redx Pharma (AIM) and a Non-Executive Director of Actino Pharma, Juniper Therapeutics (NASDAQ) and Mereo Pharma.

Dr Armstrong is a physician and a Fellow of the Royal College of Physicians (Edinburgh). He is also a member of the Scientific Advisory Board of Healthcare Royalty Partners. He was appointed as a Non-Executive Director of the Company in September 2015.

Matti Manner

MATTI MANNER

Non-Executive Vice-Chairman

Mr Matti Manner was appointed as a partner of Brander & Manner Attorneys Ltd in 1980 having previously sat as a judge at Turku Appeal Courts. He has significant experience in national and international business deals, corporate law and mergers and acquisitions having held a number of board memberships throughout his career. Mr Manner joined the board of the Company as Chairman in 2007 having previously been the Chairman of Faron Ventures Oy from 2002. He is currently Chairman of Turun Osuuskauppa and Ruissalo Foundation and a member of the board of Marva Media Ltd, Satatuote Ltd, YH VS-Rakennuttajat Ltd and Kauppakeskus Mylly Ltd.

Mr Manner has experience of several trustee posts including the Presidency of the Finnish Bar (Lawyers) Association during the period of 1998 to 2004. Mr Manner obtained a Master of Laws from the University of Turku. He became an honorary Chief Justice in Finland in 2013.

Dr Markku Jalkanen

Dr Markku Jalkanen

PhD - Chief Executive Officer

Dr Jalkanen has more than 25 years of experience within biomedical research, biotech development and the biopharmaceutical industry. He was a founding member of the Company and is the Company´s CEO. In addition to his role as CEO of the Company, Dr Jalkanen is an advisor for the only active Finnish life sciences fund – Inveni Capital. Between 1996 and 2002, Dr Jalkanen was the founding CEO and President of BioTie Therapies Corp which has since become the first publically traded Finnish biotech company to have listed on NASDAQ.

Dr Jalkanen has published over 130 peer reviewed scientific publications in various highly ranked international journals.

Dr Jalkanen has held several board memberships for both public and private companies including Inveni Capital Management, Meddia Ltd and Priaxon AG.

Dr Jalkanen obtained a Masters in Medical Biochemistry from the University of Kuopio and subsequently received a PhD in Medical Biochemistry from the University of Turku. He completed a side-laudatur examination in Molecular Biology from the University of Turku and completed his post-doctoral training at Stanford University, California between 1983 and 1986. Dr Jalkanen obtained the position of docent in Biochemistry from University of Helsinki and the same qualification in Molecular and Cell Biology from the University of Turku. He became a Professor at the University of Turku in 1992.

Yrjö E K Wichmann

YRJÖ E K WICHMANN

Chief Financial Officer

Mr Wichmann has a career spanning over 20 years in financing and investment banking. He was appointed as Chief Financial Officer of the Company in 2014. Prior to his appointment at the Company, Mr Wichmann has held a number of senior positions within the life sciences and biotechnology sector, most recently at IP Finland Oy, Biohit Oyj (NASDAQ OMX Helsinki), Capman Oyj, FibroGen Europe Oyj (NASDAQ) and D. Carnegies & Co AB. Whilst carrying out these roles Mr Wichmann has participated in healthcare IPOs on the London, Stockholm and Helsinki stock exchanges as both an investment banker and as a member of the board.

Mr Wichmann is a member of the Investment Committee at Dasos Timberland Fund I and II and a member of the Innovation Board of Helsinki University, which advises the rector and the board of the university in research commercialisation. The Innovation Board also oversees the venture capital portfolio of Helsinki University Funds valued at approximately €30 million. Mr Wichmann is also a member of the board of Bioretec Oy.

Mr Wichmann obtained a Masters in Economics from Helsinki University. He was appointed as an Executive Director of the Company in 2015.

Dr Huaizheng Peng

DR HUAIZHENG PENG

Non-Executive Director

Dr Peng is a General Manager of China Medical System Holdings, a specialty pharmaceutical company listed on the Hong Kong Stock Exchange. He is in charge of international operations for the Company, including pharmaceutical asset acquisition/product licensing-in/out, international business development, outbound investment and asset management, among others. Dr Peng served as an independent Non-executive Director of China Medical System Holdings Ltd for three years, and the Company was admitted to trading on AIM (between 2007 and 2010).

Dr Peng was a partner of Northland Bancorp, a private equity firm. Before that, he worked as a head of life sciences and as a director of corporate finance at Seymour Pierce, a London-based investment bank and stockbroker. In addition, he was a Non-executive Director of China Medstar, an AIM listed medical device company. Earlier in his career Dr Peng was a senior portfolio manager, specialising in global life science and Asian technology investment at Reabourne Technology Investment Management Limited.

Dr Peng received his Bachelor´s degree in medicine from Hunan Medical College (now Central South University Siangya School of Medicine) in Changsha, Hunan Province, China and he subsequently obtained a Master´s degree in medicine from Hunan Medical College. Dr Peng was awarded his PhD in molecular pathology from University College London (UCL) Medical School and subsequently practiced as a clinical lecturer there. Dr Peng was appointed as a Non-Executive Director of the Company in September 2015.

Dr Jonathan Knowles

DR JONATHAN KNOWLES

Non-Executive Director

Dr Jonathan Knowles has a career spanning over 40 years in the biotech industry. Dr Knowles held a number of research and teaching positions in the early part of his career before founding the molecular biology group within the Biotechnical Laboratory, Helsinki in 1980.

Dr Jonathan Knowles is currently the Chairman of Adaptimmune Therapeutics PLC (NASDAQ) and Immunocore Ltd and serves on the boards of a number of biotech companies in Europe and the USA. He is a trustee of CRUK and Chairman of the Genomics England Access committee. Jonathan Knowles is a visiting Professor at the University of Oxford, a Research Director at FIMM University of Helsinki (20010-2014 FiDiPro Distinguished Professor), and Professor Emeritus at EPFL, Lausanne. He is a member of EMBO and a member of the Board of A*Star in Singapore.

Dr Knowles was appointed as the President of Global Research at F. Hoffman-La Roche Ltd and subsequently the President of Group Research. He was a member of the Genentech Board for 12 years and a member of the Chugai Board for seven years. He was also the Chairman of the Corporate Governance Committee of Genentech. Under his leadership, the company developed and implemented a strategy of highly effective therapies based on personalised healthcare. Dr Knowles retired from his position at F. Hoffman-La Roche Ltd at the end of 2009. Prior to joining Roche, Dr Knowles was the Head of the Glaxo Institute for Molecular Biology in Geneva and subsequently the Research Director for Glaxo Wellcome Europe.

Dr Knowles was, for 5 years, the Chairman of the Hever Group and the Chairman of the Research Directors’ Group of EFPIA (European Federation of Pharmaceutical Industry Associations) and was the first Chairman of the Board of the Innovative Medicines Initiative, a unique public-private partnership between 28 pharmaceutical companies and the European Commission with the participation of over 200 academic institutions in Europe with a budget of more than 5 billion euros over ten years.

Dr Knowles obtained a Bachelor of Science in Biological Sciences from the University of East Anglia, Norwich and subsequently received a PhD in Mitochondrial Genetics from the University of Edinburgh. Dr Knowles was appointed as a Non-Executive Director of the Company in September 2015.

Dr Juho Jalkanen

DR JUHO JALKANEN

Non-Executive Director

Dr Jalkanen is currently a consultant in vascular surgery at Turku University Hospital, having previously held positions as Resident in Surgery at the Hospital District of Southwest Finland, General Hospitals of Raisio and Salo and at Turku University Hospital.

For the period 2009 to 2012 Dr Jalkanen was a board member of Duodecim Medical Association on Southwest Finland and subsequently joined the board of the Company in 2013.

Dr Jalkanen obtains degrees from both business and medicine. He has a Master’s degree in Economics and Business Administration from the Turku School of Economics, a Medical Doctor’s degree from the University of Turku and subsequently became a fully licensed General Practitioner. At the moment Dr Jalkanen is conducting his PhD on the molecular mechanisms of atherosclerosis. He has published six articles in various publications including the International Journal of Biotechnology and Circulation Research.

Leopoldo Zambeletti

LEOPOLDO ZAMBELETTI

Non-Executive Director

During a 19 year career as an investment banker, Mr Zambeletti led the European Healthcare Investment team at JP Morgan for eight years before taking up the same position at Credit Suisse for a further five years. Since 2013 he has been an independent strategic advisor to life science companies on merger and acquisitions, out-licencing deals and financing strategy. He is a Non-Executive Director at Advanced Accelerator Applications, Qardio, Summit Therapeutics PLC (NASDAQ and AIM) and Nogra Pharma. Mr Zambeletti started his career at KPMG as an auditor.

Mr Zambeletti received a BA in Business from Bocconi University in Milan, Italy. He serves as a trustee to Barts and the London Charity, which helps to fund the hospitals of the Barts NHS Trust including St Bartholomew, the Royal London and the London Chest Hospitals. He is the founder of the cultural initiative 5×15 Italy. Mr Zambeletti was appointed as a Non-Executive Director of the Company in September 2015.

Significant shareholders

The Company has been notified of the following holdings of 3% or more of the issued share capital of the Company:

Name

Number of shares

%

A&B (HK) Company Limited

3,408,409

12.95

Marko Salmi

3,389,570

12.88

Tom-Erik Lind

2,552,523

9.70

Aviva plc & its subsidiaries

1,986,577

7.55

Markku Jalkanen

1,794,890

6.82

Juho Jalkanen*

1,082,570

4.11

Legal & General (Unit Trust Managers) Limited (UTM)

1,365,000

5,19

Legal & General Investment Management Limited (LGIM)

1,365,000

5,19

Sirpa Jalkanen

1,078,500

4.10

Maija-Leena Hollmén

1,078,500

4.10

Katriina Peltola

1,078,500

4.10

City Financial Investment Company Limited

1,000,000

3.80

Timo Syrjälä**

925,176

3.52

*Held by Juho Jalkanen and connected parties.

**of which, 520,830 are held directly by Timo Syrjälä and 403,846 are held by Acme Investments SPF S.à.r.l., an entity which is wholly owned by Timo Syrjälä.

Faron Pharmaceuticals
Joukahaisenkatu 6, Intelligate
FIN-20520 TURKU
Finland


Phone: +358 2 469 5151
Fax: +358 2 469 5152
Email: [email protected]

Nominated Adviser
Cairn Financial Advisers
Cheyne House, Crown Court
62-63 Cheapside
London EC2V 6AX

Broker
Panmure Gordon, Joint Broker
One New Change
London EC4M 9AF

Whitman Howard, Nominated Broker
First Floor
Connaught House
1-3 Mount Street
London W1K 3NB

Equity Adviser
RX Securities
Third Floor
1 Fore Street
Moorgatel
London EC2Y 9DT

Solicitors to the Company as to English law
Jones Day
21 Tudor Street
London EC4Y 0DY

Solicitors to the Company as to Finnish law
Hannes Snellman Attorneys Ltd
Eteläesplanadi 20
PO Box 333
00130/00131 Helsinki
Finland

Auditors to the Company
Pricewaterhouse Coopers Oy
P.O. Box 1015
Itämerentori 2
FI-00101 Helsinki
Finland

Public Relations
Hume Brophy
55 King William Street
London EC4R 9 AD

Depositary
Investor Services Plc
The Pavilions
Bridgwater Road
Bristol BS13 8AE

Finnish Registrar
Euroclear Finland Ltd
Urho Kekkosen katu 5C
Pl 1110, 00101 Helsinki
Finland

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