Faron Pharmaceuticals Oy (LON:FARN) ended the first half of 2016 with more cash than it had anticipated.
The clinical stage biopharmaceutical company had a cash balance of €8.9mln at the end of June, it revealed in its results for the first half of the year.
Research & development (R&D) expenses more than doubled from the year before, in line with the company's strategy, but the combination of higher than anticipated income, in the form of both revenue and grant income, and lower operating costs meant the company experienced only a modest cash outflow over the reporting period.
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Revenue in the six months to the end of June was €1.17mln, up from €454,000 the year before. Primarily the revenue comprised a €750,000 signing fee from Pharmbio and a €356,500 pre-payment relating to IFB-beta production, with the rest coming from sales of active drug product and placebo to Maruishi.
The group also received €968,000 from the European Union from its FP7 Traumakine grant; Traumakine is the company’s flagship formulation for the treatment of acute respiratory distress syndrome (ARDS).
The half-year operating loss was €2.63mln, versus a loss of €2.35mln the year before. Loss before tax widened to €2.94mln from €2.39mln.
Faron said it has started preparations for a Traumakine US safety trial as requested by the Food and Drug Administration (FDA).
The FDA has opted not to grant what is called orphan drug designation (ODD) status for Traumakine in the US at present, as it believes there is insufficient nationwide evidence to demonstrate that the US incidence of ARDS is less than the statutory "orphan" limit of 200,000 patients per year.
Getting ODD status effectively fast-tracks development of a drug, and the company has appealed against the decision. Traumakine already has ODD status in Europe.
The Faron directors believe that Traumakine could be entitled to a US regulatory package called a biologics licence application (BLA), which could allow 12 years of data exclusivity in the US, reducing the risk of bio-similar competition in the US market.
“Our lead product, Traumakine for acute lung injury, is progressing well. The pivotal pan-European Phase III INTEREST trial is underway at more than 50 sites and we have received encouraging Phase II data from our Japanese partner Maruishi,” declared Dr Markku Jalkanen, chief executive officer (CEO) of Faron.
“The Korean licensing deal with Pharmbio is in-line with our growth strategy to partner Traumakine in territories where both clinical and financial impact can be optimised in conjunction with a local partner,” the CEO added.
The other treatment in the company’s pipeline is Clevegen, which is designed to use the body’s own immune system to tackle cancer.
Dr Jalkanen said the company had made substantial progress with Clevegen through the development of its new TIET platform.
“In addition to its potential use in combination cancer therapies, new opportunities include chronic infections and vaccination enhancement. We believe the approach offers significant advantages to future collaborators and licensing partners," Dr Jalkanen said.