REG - Faron Pharma. Oy - Financial Statement January 1 to December 31 2022
03/03/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230303:nRSC8296Ra&default-theme=true
RNS Number : 8296R Faron Pharmaceuticals Oy 03 March 2023
Faron Pharmaceuticals Oy
Faron's Financial Statement Release January 1 to December 31, 2022
Financial statement release March 3, 2023 at 09:00 AM (EET) / 07:00 AM (GMT) /
03:00 AM (EDT)
TURKU, FINLAND / BOSTON, MA - Faron Pharmaceuticals Oy ("Company", AIM: FARN,
First North: FARON) together with its subsidiaries ("Faron"), a clinical stage
biopharmaceutical group focused on building the future of immunotherapy by
harnessing the power of the immune system to tackle cancer and inflammation,
today announced audited full-year financial results for January 1 to December
31, 2022 (the "period") and H2 2022 and provided an overview of recent
corporate developments.
2022 Highlights
· Faron reported that for the Phase I/II BEXMAB study of bexmarilimab,
in combination with standard of care (SoC), in aggressive hematological
malignancies including acute myeloid leukemia (AML) and myelodysplastic
syndrome (MDS), that a partial responder achieved complete remission of blasts
in blood and bone marrow followed by normalization of blood counts. A second
patient showed reduced blast counts.
· Bexmarilimab has been evaluated as a single agent in the Phase I/II
MATINS in more than 200 patients and found to be well-tolerated.
· In MATINS, median overall survival was 14.9 months for patients who
achieved stabilization of disease from bexmarilimab compared to 4.4 months for
those who did not, representing a 3.4-fold increase.
· Bexmarilimab ignites the immune system by inducing IFN-y
production. A high baseline level of IFN-γ in the tumor indicates that the
immune system is already set to attack cancer cells and seems required for
PD-1 blockade to work. Thus, adding bexmarilimab to PD-1 blockade is
anticipated to enhance efficacy.
· The Company plans to initiate the Phase II BEXCOMBO study
investigating bexmarilimab in metastatic or unresectable, recurrent HNSCC,
locally advanced or metastatic UCC and metastatic NSCLC where first-line PD-1
blockade is approved SoC.
· The Company conducted two successful fundraising rounds in 2022.
Combined, they raised EUR 13.4 million gross and both rounds included new and
existing investors. The Company also obtained up to EUR 30.0 million debt
funding from IPF Partners, drew EUR 10.0 million upon signing in February
2022, further tranches possible under certain conditions
· Virtual briefing and Q&A to be held today at 8:00 AM (EDT) /
12:00 PM (GMT) / 2:00 PM (EET)
Major Events After the 2022 Financial Year
· Post period in January 2023, Faron reported that three out of five
patients achieved objective responses in the first doublet cohort of the Phase
I/II BEXMAB study evaluating the combination of azacitidine and bexmarilimab.
Two of the three responders were refractory to standard of care (SoC)
azacitidine monotherapy. The addition of bexmarilimab to standard of care was
well-tolerated.
· Both the 1mg/kg and 3mg/kg doublet arms are fully enrolled, and the
dose-escalation meeting is planned for Q1 2023.
· The Company successfully raised a total of EUR 12.0 million gross.
This fundraising round was supported by long-only institutional investors,
family offices, existing shareholders, and the Leukemia & Lymphoma
Society® (LLS).
· Faron will support activities in preparation of a potential clinical
trial with the Fred Hutchinson Cancer Center in Seattle, Washington, to
investigate intravenous (IV) interferon beta in the prevention of cytokine
release syndrome (CRS) and other CAR-T therapy side effects, such as
neurotoxicity.
"I am extremely proud of the progress we made in 2022 for the bexmarilimab
program and building our corporate infrastructure, both in the US and in
Europe, to support the ambitious plans we have for 2023 and beyond," said Dr.
Markku Jalkanen, Chief Executive Officer of Faron. "Last year we accelerated
the development of bexmarilimab in hematological malignancies and reported
exciting early data that lays a solid trajectory. We also demonstrated
compelling antitumor activity in heavily pretreated patients across multiple
solid tumor types, setting the stage for a combination with standard of care
in first-line solid tumors. We accomplished all of this while also
strengthening our balance sheet, adding highly experienced team members and
expanding our global footprint with a growing presence in the US."
HIGHLIGHTS (including post period):
Pipeline Highlights
Bexmarilimab - Faron's wholly owned, novel precision cancer immunotherapy
candidate, in Phase I/II development for difficult-to-treat cancers.
Hematological cancers
· Faron reported objective responses for three out of five patients
enrolled in the first doublet cohort of the Phase I/II BEXMAB study
investigating bexmarilimab and azacitidine in patients with hematological
cancers. Notably, 2 of the 3 responders had been refractory to prior
azicitidine therapy. No additional adverse events have been observed adding
bexmarilimab to standard of care.
· BEXMAB's 1mg/kg and 3mg/kg bexmarilimab doublet cohorts have fully
enrolled. Faron anticipates sites in the US to be opened during Q1 2023 to
speed up recruitment even further.
Advanced solid tumors
· Bexmarilimab has been evaluated as a single agent in the Phase I/II
MATINS in more than 250 patients and found to be well-tolerated.
· Up to 36% of heavily pretreated patients achieved disease control in
certain indications.
· Median overall survival was 14.9 months for patients who achieved
stabilization of disease from bexmarilimab compared to 4.4 months for those
who did not, representing a 3.4-fold increase.
· Bexmarilimab treatment in MATINS induced significant systemic
interferon gamma (IFN-γ) increase, again showing the therapy's capacity to
activate immune response in cancer patients, especially in patients with
immunologically "cold" tumors. As presented at ASCO2022 in Chicago, the higher
baseline CLEVER-1 levels in the tumors were associated with clinical benefit
and could become an essential component as a diagnostic tool for patient
selection.
· An FDA meeting will take place in Q1 2023 for feedback on the
recommended dosing regimen and study design for further development of single
agent bexmarilimab.
Traumakine® - Faron's investigational intravenous (IV) interferon beta-1a
therapy, in development for the prevention of complications from cytokine
release syndrome, and hyperinflammatory conditions.
· Faron has refocused its therapeutic strategy of Traumakine and closed
its Phase II/III HIBISCUS trial investigating Traumakine in the treatment of
hospitalized COVID-19 patients compared to corticosteroid treatment with
dexamethasone.
· Data from the preclinical Salvage, Preservation, and Advanced
Resuscitation through Endothelial Stabilization (SPARES) study was presented
at the Military Health System Research Symposium (MHSRS) held in Orlando,
Florida. The results further highlight the promise of IV interferon beta-1a
(IFN beta-1a) therapy as a potential therapeutic for emergency and trauma
patients, especially when given early on.
· The Company filed a patent to the US Patent Office and Trademark
Office regarding a patient selection method in terms of steroid treatment with
an identified gene mutation in the interferon beta receptor. It received
positive feedback in 2022.
· Scientific Reports published data from INFORAAA study showing
Traumakine induced up-regulation of CD73 was associated with 100% survival in
surgically operated ruptured abdominal aorta aneurysm (RAAA) patients. These
patients are at high risk of ischemia-reperfusion injury, with expected
mortality between 30-40%.
· Another patent has been filed on sequencing interferon beta and
steroid treatments, so that steroids can be used once adequate levels of CD73
are reached using IV IFN beta-1a.
Haematokine® - An investigative AOC3 (amine oxidase copper containing 3)
protein inhibitor targeting Vascular Adhesion Protein-1 (VAP-1) for the use in
regenerative medicine for the expansion of hematopoietic stem cells and to
treat supressed bone marrow and the production of new blood cells.
Corporate Highlights
· Balance sheet was strengthened by raising EUR 13.4 million gross
through fundraising rounds. This included two private placements, which
encompassed existing and new investors, including The Leukemia & Lymphoma
Society® (LLS). In February 2022, Faron also announced a debt funding
agreement with IPF Partners for up to EUR 30 million. EUR 10 million was
accessed upon signing of the agreement with an additional EUR 20 million
available in the future through additional tranches of EUR 5 million and EUR
15 million, subject to certain conditions being met. Post period in January
2023, Faron raised EUR 12.0 million gross from new and existing shareholders,
including The Leukemia & Lymphoma Society® (LLS).
· Marie-Louise Fjällskog, M.D., Ph.D., joined Faron's Global
Management Team as Chief Medical Officer, bringing with her over 30 years of
experience in clinical oncology, translational research, and drug development.
Dr. Fjällskog joined Faron from Sensei Biotherapeutics (NASDAQ: SNSE). As
Chief Medical Officer at Sensei, she was responsible for leading clinical and
development strategy and operations. Previously, she served as Vice President,
Clinical Development at Merus (NASDAQ: MRUS) and Infinity Pharmaceuticals
(NASDAQ: INFI) where she led development of multiple small molecule and
immuno-oncology clinical programs. She was also formerly Global Clinical
Program Leader at the Novartis Institute for Biomedical Research.
· Maija Hollmén, Ph.D, joined Faron's Global Management Team as Chief
Scientific Officer. In her role, Dr. Hollmén oversees preclinical and support
clinical development for Faron. Her priority will be the further development
of bexmarilimab, Faron's wholly owned, novel precision cancer immunotherapy
candidate. Dr. Hollmén is the world-leading expert on CLEVER-1 biology and
CLEVER-1-expressing tumor-associated macrophages. She is an Adjunct Professor
of Tumor Immunology on the Faculty of Medicine at the University of Turku in
Finland, as well as a Principal Investigator.
· Juho Jalkanen, M.D., Ph.D., joined Faron's Global Management Team as
as Chief Operating Officer. In his role, Dr. Jalkanen will lead business
strategy and daily operations for Faron. This includes oversight of academic
and industry partnerships, resource prioritization and allocation, chemistry,
manufacturing and controls, supply chain and driving performance measures. Dr.
Jalkanen joined Faron in 2018 as the Faron's Chief Development Officer. He
also served as Faron's interim Chief Medical Officer in 2021 prior to the
appointment of Dr. Marie-Louise Fjällskog.
· Vesa Karvonen, LL.M. General Counsel and Juuso Vakkuri, MA, MSc,
EMBA, Chief Human Resources Officer joined Faron's Global Management Team.
· Faron appointed Erik Ostrowski as a Non-Executive Director of the
Company. Mr. Ostrowski is an experienced biotech and financial executive who
is currently the Chief Financial Officer of AVROBIO, Inc. (NASDAQ: AVRO).
Financial Highlights
· On December 31, 2022, Faron held cash balances of EUR 7.0 million
(2021: EUR 6.9 million).
· Loss for the period for the financial year ended December 31, 2022
was EUR 28.7 million (2021: EUR 21.2 million).
· Net assets on December 31, 2022 were EUR -11.5 million (2021: EUR 2.9
million).
· In June 2022, the Company successfully raised a total of EUR 5.0
million gross (EUR 4.8 million net) from new and existing shareholders,
through issuance of a total of 3,318,421 new ordinary shares to itself without
consideration. 2,006,621 of those shares were conveyed to investors. In
October 2022, the Company successfully raised a total of EUR 8.4 million gross
(EUR 8.2 million net) from new and existing shareholders, through issuance of
a total of 3,229,930 new ordinary shares to itself. Those shares and the
1,311,800 existing treasury shares were conveyed to investors. Proceeds from
both raises will be used to accelerate clinical development of Faron's main
drug candidate, continue the CMC process and US build-up and to strengthen the
Company's balance sheet.
· In February 2022, the Company secured a debt funding agreement with
IPF Partners for up to EUR 30 million. EUR 10 million was accessed upon
signing of the agreement with an additional EUR 20 million available in the
future though additional tranches of EUR 5 million and EUR 15 million, subject
to certain conditions being met.
· Post period, in January 2023 the Company successfully raised a total
of EUR 12.0 million gross through the issuance of 3,692,308 ordinary shares to
itself without consideration which were conveyed to investors.
Consolidated key figures, IFRS
EUR '000 Unaudited Unaudited 1-12/2022 1-12/2021
12 months 12 months
7-12/2022 7-12/2021
6 months 6 months
Other operating income 318 4,927 803 6,137
Research and Development expenses (10,683) (8,361) (20,730) (17,369)
General and Administrative expenses (3,697) (7,250) (7,498) (9,876)
Loss for the period (15,609) (10,649) (28,730) (21,194)
Unaudited Unaudited 1-12/2022 1-12/2021
12 months 12 months
7-12/2022 7-12/2021
6 months 6 months
Loss per share EUR (0.27) (0.21) (0.52) (0.42)
Number of shares at end of period 59,805,383 53,232,032 59,805,383 53,232,032
Average number of shares 57,230,625 51,836,953 55,229,835 50,723,964
EUR '000 Unaudited Unaudited 31 December 2022 31 December 2021
30 June 2022 30 June 2021
Cash and cash equivalents 9,936 6,967 6,990 6,853
Equity (5,194) 2,813 (11,476) 2,919
Balance Sheet total 16,729 11,865 11,271 13,182
Board of Directors' Proposal on the Dividend
The Company's comprehensive loss for the period was EUR 28,924,250.82 (2021:
EUR 21,270,235.71) . The Board of Directors proposes to the Annual General
Meeting 2023 not to pay dividend.
March 2, 2023
Faron Pharmaceuticals Oy
Board of Directors
Webcast for investors, analysts and media
A live webcast and Q&A session for investors, analysts and media will be
hosted by Dr. Markku Jalkanen, Chief Executive Officer of Faron, and Toni
Hänninen, Chief Financial Officer of Faron, at 2:00 pm EET / 12:00 pm GMT /
8:00 am EDT today. The Full-year results release for 2022, presentation,
webcast details, and Annual Report 2022 will be made available at
www.faron.com/investors (http://www.faron.com/investors) . A replay of the
analyst briefing will be made available shortly afterwards.
Webcast link: https://faron.videosync.fi/2022-financial-statement
(https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Ffaron.videosync.fi%2F2022-financial-statement&data=05%7C01%7C%7C48604aba72d3436eb98d08db10eb5cc6%7Ca2d9b7a432f64a96b03727499230d5fd%7C1%7C0%7C638122375291824132%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=L1M33PdCVD7Jbg8uKstR4DU3za2TbF2U3eGeARdsATk%3D&reserved=0)
For more information please contact:
Media / Investor Contact
Faron Pharmaceuticals
Jennifer C. Smith-Parker
Head of Communications
Jennifer.Smith-Parker@faron.com
Cairn Financial Advisers LLP, Nomad
Sandy Jamieson, Jo Turner
Phone: +44 (0) 207 213 0880
Peel Hunt LLP, Broker
Christopher Golden, James Steel
Phone: +44 (0) 20 7418 8900
Sisu Partners Oy, Certified Adviser on Nasdaq First North
Juha Karttunen
Phone: +358 (0)40 555 4727
Jukka Järvelä
Phone: +358 (0)50 553 8990
Consilium Strategic Communications
Mary-Jane Elliott, David Daley, Lindsey Neville
faron@consilium-comms.com (mailto:faron@consilium-comms.com)
Phone: +44 (0)20 3709 5700
Publication of financial information during year 2023
Faron's financial statements for full year 2022 will be published today, March
3, 2023 and will also be available on Faron's website at
https://www.faron.com/investors/results
(https://www.faron.com/investors/results) . The half-year financial report for
the period January 1 to June 30, 2023 is scheduled to be published on August
29, 2023. The Annual General Meeting is planned for March 24, 2023. A separate
stock exchange notice will be issued by Faron's Board of Directors to convene
the meeting.
About Bexmarilimab
Bexmarilimab is Faron's wholly owned, investigative precision immunotherapy
with the potential to provide permanent immune stimulation for
difficult-to-treat cancers through targeting myeloid cell function. A novel
anti-CLEVER-1 humanised antibody, bexmarilimab targets CLEVER-1 positive
(Common Lymphatic Endothelial and Vascular Endothelial Receptor 1)
tumor-associated macrophages (TAMs) in the tumor microenvironment, converting
these highly immunosuppressive M2 macrophages to immune stimulating M1
macrophages. In mouse models, bexmarilimab has successfully blocked or
silenced CLEVER-1, activating antigen presentation and promoting interferon
gamma secretion by leukocytes. Additional preclinical studies have proven that
CLEVER-1, encoded by the Stabilin-1 or STAB-1 gene, is a major source of T
cell exhaustion and involved in cancer growth and spread. Observations from
clinical studies to date indicate that CLEVER-1 has the capacity to control T
cell activation directly, suggesting that the inactivation of CLEVER-1 as an
immune suppressive molecule could be more broadly applicable and more
important than previously thought. As an immuno-oncology therapy, bexmarilimab
has potential as a single-agent therapy or in combination with other standard
treatments including immune checkpoint molecules.
About Faron
Faron Pharmaceuticals Oy (AIM: FARN, First North: FARON) together with its
subsidiaries, is a clinical stage biopharmaceutical group focused on building
the future of immunotherapy by harnessing the power of the immune system to
tackle cancer and inflammation. Bexmarilimab, a novel anti-CLEVER-1 humanized
antibody, is its investigative precision immunotherapy with the potential to
provide permanent immune stimulation for difficult-to-treat cancers through
targeting myeloid function. Currently in Phase I/II clinical development as a
potential therapy for patients with hematological cancers and untreatable
solid tumors, bexmarilimab has potential as a single-agent therapy or in
combination with other standard treatments including immune checkpoint
molecules. In terms of other pipeline assets, Traumakine® is an
investigational intravenous (IV) interferon beta-1a therapy for the treatment
of hyperinflammatory conditions. Faron is headquartered in Turku, Finland.
Further information is available at www.faron.com (http://www.faron.com/) .
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 Faron'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 Faron. Other factors which could cause actual
results to differ materially include the ability of the Faron to successfully
license its programs 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 Faron 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.
CEO Statement
The past year 2022 has been an incredible year of transformation for Faron, in
terms of development of our key asset bexmarilimab, building up a new Global
Management Team with five new C-level members and the initiation of a
clinical/regulatory team for US-based activities. We are excited to go into
2023 with strong clinical data behind us and clear plans to move forward.
The year 2022 started with premium recruitment when Dr. Marie-Louise
Fjällskog (M.D., PhD) came on board as Chief Medical Officer, bringing over
30 years of experience in clinical oncology, translational research, and drug
development. She joined Dr. Juho Jalkanen (M.D., PhD), Chief Operating
Officer, as well as our new General Counsel, Vesa Karvonen. We also welcomed
Juuso Vakkuri as our Chief Human Resources Officer, and most recently, Dr.
Maija Hollmén, PhD, as our Chief Scientific Officer. She will spearhead
further inventions around bexmarilimab, Faron's wholly owned, novel precision
cancer immunotherapy candidate.
Our first, large Phase I/II MATINS study has provided us a proper dosing
regimen for bexmarilimab and demonstrated a good safety profile. Initial
efficacy data on advanced solid tumors allows us to identify biomarkers
predicting extended survival of these hard-to-treat cancer patients. Our teams
have worked hard to build a solid data package for the FDA on the next steps
forward. This feedback will significantly impact our activities in 2023.
Importantly, we have found bexamarilimab is effective for patients who are
refractory to PD-1 blockade. These patients have silent immune reaction as
observed in low interferon gamma (IFN-gamma) levels. This is opposite to PD-1
blockers that are usually are active in cancer patients with high IFN-gamma
levels. This is understandable as their mode of action is based on activating
the existing T-cells, not to generate new T-cell populations. Thus, the
combination of PD-1 blockade with bexmarilimab provides a unique opportunity
to stimulate immune ignition and effective T-cells.
Bexmarilimab is being evaluated for safety and efficacy in the Phase I/II
BEXMAB clinical trial, in combination with standard of care (SoC), in
aggressive hematological malignancies including acute myeloid leukemia (AML)
and myelodysplastic syndrome (MDS). This study is very exciting as now we have
cancer cells which express the therapy target molecule CLEVER-1 on their
surfaces. This means that wherever they travel in cancer patients, they carry
this immunosuppressive element with them. In December, we reported in BEXMAB a
partial responder achieving complete remission of blasts in blood and bone
marrow followed by normalization of blood counts. A second patient showed
reduced blast counts. This is particularly noteworthy considering the
population targeted in BEXMAB, such as those having AML, have high mortality
rates. Post period, we reported even more positive news: that three out of
five patients achieved objective responses in the first doublet cohort of the
Phase I/II BEXMAB study evaluating the combination of azacitidine and
bexmarilimab. Two of the three responders were refractory to standard of care
(SoC) azacitidine monotherapy.
We are thrilled with the progress and are pushing ahead in opening sites at US
hematological centers.
We have also been successful in obtaining continued, long-term patent
protection for bexmarilimab. During 2021 the United States Patent and
Trademark Office and equivalent Japanese patent office approved protection, at
least through 2037, for our humanized anti-CLEVER-1 antibody (bexmarilimab)
sequence. During 2022 we obtained similarly patent coverage in Europe and
other territories providing Faron excellent commercial opportunity in more
than 90% of pharmaceutical markets. This fact has been recognised also by our
partner candidates.
We have continued background work to advance both Traumakine® and
Haematokine® programs to open clinical studies for both in 2023. We decided
to close the HIBISCUS study using Traumakine due to lack of steroid-free
patients. Our focus now is on opportunities where steroids cannot be used, and
where ischemic conditions with vascular damage is the main reason for patient
death. For the latter, we will continue to collaborate with the US Department
of Defense (DoD). We also understand today the molecular basis of steroid
interruption of IFN-beta signalling pathway and what role some genetic
alterations may cause.
The third program in our pipeline, Haematokine, an investigational Vascular
Adhesion Protein 1 (VAP-1) inhibitor, has preclinical studies continuing. We
believe Haematokine could have broad applicability, not just in hematological
malignancies, but across the field of regenerative medicine.
Our future looks bright, with the focus for 2023 to accelerate bexmarilimab's
clinical development, especially in BEXMAB. We also aim to initiate the Phase
II BEXCOMBO study investigating bexmarilimab in metastatic or unresectable,
recurrent HNSCC, locally advanced or metastatic UCC and metastatic NSCLC where
first-line PD-1 blockade is approved standard of care. This combination
regimen has the potential to change the future of cancer care. Future
interactions with the FDA will guide our path forward.
I would like to thank our shareholders for their continued support of Faron
and the management team. I would also like to express my profound gratitude to
every Faron team member who come to work each day committed to disrupting the
current treatment landscape and fundamentally improving patient outcomes.
Markku Jalkanen
Chief Executive Officer
March 2, 2023
Chairman Statement
During 2022, Faron has continued to focus on bexmarilimab, our novel, wholly
owned novel precision cancer immunotherapy candidate, with exciting clinical
data milestones anticipated for 2023. We have also grown the Company in the US
and in Finland, bringing world-class expertise into Faron to advance
bexmarilimab.
We have the ongoing Phase I/II MATINS clinical trial in pretreated, late-stage
cancer, and as a result have delivered on our goals to understand monotherapy
bexmarilimab efficacy and safety across multiple tumor types, as well as
identify a dose and potential dosing regimens. We have also undertaken
substantial work on biomarkers to develop enrichment strategies to identify
patients who will best respond in future trials.
Faron has published data on bexmarilimab that consistently supports earlier
positive results and continues to underscore that the mechanism of action
demonstrates an effect on mortality in responders. The company will be
presenting a data package to the US Food and Drug Administration in the first
quarter of 2023.
Faron recognises the future of cancer treatment will be in combination
therapies, and as such we have reported exciting data from the Phase I/II
BEXMAB study in hematological malignancies. We also plan to initiate BEXCOMBO,
a Phase II study of the combination therapy bexmarilimab plus PD-1 blockade in
patients that have metastatic or unresectable, recurrent HNSCC, locally
advanced or metastatic UCC and metastatic NSCLC where first-line PD-1 blockade
is approved standard of care.
We continue to see bexmarilimab as the major value driver for Faron, and our
goal is to deliver worldwide approvals to allow bexmarilimab to be used by
cancer physicians to treat patients.
Despite Faron's focus on bexmarilimab, we have used partnerships to develop
Traumakine®, Faron's investigational intravenous (IV) interferon (IFN)
beta-1a therapy, to prevent multiorgan dysfunction.
We recognise the funding environment for European companies has been extremely
challenging and despite that, we have continued to raise capital to finance
Faron's activities. In 2022, we announced Faron had entered into a secured
debt agreement with IPF Partners to advance and accelerate its pipeline
programs. We had two equity financing rounds and are pleased we continue to
have supportive shareholders in Finland and the rest of Scandinavia. In
January 2023 we completed a further financing round of EUR 12 million to
support the continued development of bexmarilimab. We are delighted that The
Leukemia & Lymphoma Society participated in the previous round and in the
January fundraise.
In terms of building the company, Dr. Juho Jalkanen was promoted to COO and we
welcomed CMO Marie-Louise Fjällskog, based in Boston, as well as a Vesa
Karvonen, our new general counsel based in Turku and Juuso Vakkuri as Chief
Human Resources Officer. We have developed the US team in Boston, investing in
clinical and regulatory personnel. Erik Ostrowski joined the Board of
Directors. He brings substantial finance experience including as the CFO of a
NASDAQ-listed company. We anticipate continuing to add employees in 2023.
I'd like to thank the staff of Faron, our partner organizations, study
steering and advisory committee members investigators and patients that have
participated in our clinical trials. I am indebted to CEO Dr. Markku Jalkanen,
CFO Toni Hänninen, COO Juho Jalkanen, CMO Marie-Louise Fjällskog, General
Counsel Vesa Karvonen and CHRO Juuso Vakkuri for their contributions to Faron
in 2022. We look forward to great success in 2023.
Dr Frank Armstrong
Chairman
March 2, 2023
Financial Review
Despite continuing challenging market conditions, the Company was able to
conduct two successful fundraising rounds in 2022. Combined, they raised EUR
13.4 million gross and both rounds included new and existing investors. In our
fundraising round in June we were able to attract The Leukemia & Lymphoma
Society® (LLS) to support our newest bexmarilimab trial, BEXMAB. Faron became
part of LLS' Therapy Acceleration Program® (TAP). In our October fundraise we
were further able to attract reputable Finnish pension funds.
Additionally, in February 2022, the Company secured a debt funding agreement
with IPF Partners, one of the leading alternative financing providers focused
on the healthcare sector, for up to EUR 30 million. EUR 10 million was
accessed upon signing of the agreement with an additional EUR 20 million
available in the future, subject to certain conditions being met. This funding
agreement strengthened our financial position and gives us the flexibility to
access supplemental and inexpensive capital as we continue to accelerate the
development of our pipeline assets.
As a result of these fundraising efforts, the net cash from financing
activities of EUR 23.5 million exceeded the net cash used in operating
activities of EU 23.0 million in 2022. We were able to accomplish this while
also increasing R&D and reducing G&A expenditures, as per our plan, to
focus on accelerating our pipeline.
Post period in January 2023, the Company successfully raised a total of EUR
12.0 million gross. This fundraising round was supported by long-only
institutional investors, family offices, existing shareholders and the
Leukemia & Lymphoma Society® (LLS).
Revenue and Other Operating Income
Faron's revenue was nil for the year ended December 31, 2022 (2021: EUR nil).
Faron recorded other income of EUR 0.8 million that consisted of grants from
the European Union and Business Finland.
Research and Development Costs
R&D costs increased by EUR 3.4 million from EUR 17.4 million in 2021 to
EUR 20.7 million in 2022. In total, almost 90% of the R&D costs are
directly attributable to advancing our clinical programs, and Faron expects
this to continue as we accelerate patient recruitment. The costs of outsourced
clinical trial services were increased by EUR 1.6 million from EUR 3.5 to EUR
5.1 million. The cost of employee benefits increased by EUR 1.9 million from
EUR 3.3 to EUR 5.2 million, mainly driven by additional headcount in the US.
General and Administration Costs
Administrative expenses decreased by EUR 2.4 million from EUR 9.9 million in
2021 to EUR 7.5 million in 2022. The decrease was mainly due to the EUR 3.5
million decrease of legal expenses, that consisted in 2021 of the arbitration
with Rentschler Biopharma SE, resulting in Faron's favor. Employee benefits
increased by EUR 1.1 million from EUR 3.5 million to EUR 4.5 million due to
additional headcount.
Taxation
The Company's tax credit for the fiscal year 2022 can be recorded only after
the Finnish tax authorities have approved the tax report and confirmed the
amount of tax-deductible expenses. The total amount of cumulative tax losses
carried forward approved by tax authorities on December 31, 2022 was EUR 47.1
million (2021: EUR 41.0 million). The Company estimates that it can utilize
most of these during the years 2023 to 2033 by offsetting them against future
profits.
In addition, the Company has EUR 91.8 million of R&D costs incurred in the
financial years 2010 - 2022 that have not yet been deducted from taxation.
This amount can be deducted over an indefinite period at the Company's
discretion.
Losses
Loss before income tax was EUR 28.7 million (2021: EUR 21.2 million).
Comprehensive loss for the year was EUR 28.7 million (2021: EUR 21.2 million),
representing a loss of EUR 0.52 per share (2021: EUR 0.42 per share).
Cash Flows
Net cash flow was EUR 0.1 million positive for the year ended December 31,
2022 (2021: EUR 2.7 million positive). Cash used for operating activities
increased by EUR 0.8 million to EUR 23.0 million for the year, compared to EUR
22.2 million for the year ended December 31, 2021. This increase was mostly
driven by an increase in R&D investments. Net cash inflow from financing
activities was EUR 23.5 million (2021: EUR 25.6 million) mainly due to the
successful equity placings completed in June 2022 and October 2022 as well as
the proceeds from borrowings of the loan with IPF Partners.
Fundraising
In June 2022, the Company successfully raised a total of EUR 5.0 million gross
(EUR 4.8 million net) from new and existing shareholders, through issuance of
a total of 3,318,421 new ordinary shares to itself without consideration.
2,006,621 of those shares were conveyed to investors. In October 2022, the
Company successfully raised a total of EUR 8.4 million gross (EUR 8.2 million
net) from new and existing shareholders, through issuance of a total of
3,229,930 new ordinary shares to itself. Those shares and the 1,311,800
existing treasury shares were conveyed to investors. Proceeds from both raises
were used to accelerate clinical development of the Company's main drug
candidate, continue the CMC process and US buildup and to strengthen the
Company's balance sheet. In February 2022, the Company secured a debt funding
agreement with IPF Partners for up to EUR 30 million. EUR 10 million was
accessed upon signing of the agreement with an additional EUR 20 million
available in the future, subject to certain conditions being met.
Post period, in January 2023, the Company successfully raised a total of EUR
12.0 million gross through and issuance of 3,692,308 ordinary shares to itself
without consideration which were conveyed to investors.
Financial Position
As of December 31, 2022, total cash and cash equivalents held were EUR 7.0
million (2021: EUR 6.9 million).
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". Faron is 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
Faron's commercial and development activities and generating a level of
revenue adequate to support Faron's cost structure.
Faron made a net loss of EUR 28.7 million during the year ended December 31,
2022. It had a negative equity of EUR 11.4 million including an accumulated
deficit of EUR 143.7 million. As of that date, Faron had cash and cash
equivalents of EUR 7.0 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 Faron together with known receivables will be sufficient to
support the current level of activities into the third quarter of 2023. The
Directors are continuing to explore sources of finance available to Faron and
they believe they have a reasonable expectation that they will be able to
secure sufficient cash inflows for Faron 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 Faron's ability to continue as
going concern. Should Faron 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
Faron's headcount at the end of year was 40 (2021: 37).
Shares and Share Capital
During the period January 1 to December 31, 2022, the Company, using the share
authorities granted at the Annual General Meeting held on April 23, 2021,
issued a total of 3,318,421 new ordinary shares to itself without
consideration and conveyed 2,006,621 of those shares at an issuance price of
EUR 2.49 per share to investors. During the same period, the Company, using
the share authorities granted at the Extraordinary General Meeting held on
July 7, 2022, issued a total of 3,229,932 new ordinary shares to itself
without consideration. Those shares and the existing treasury shares were
conveyed to investors at an issuance price of EUR 1.85 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 2022 the total number of voting rights was 59,805,383.
Toni Hänninen
Chief Financial Officer
March 2, 2023
Consolidated Income Statement, IFRS
EUR '000 Unaudited Unaudited 1-12/2022 1-12/2021
12 months 12 months
7-12/2022 7-12/2021
6 months 6 months
Other operating income 318 4,927 803 6,137
Research and development expenses (10,683) (8,361) (20,730) (17,369)
General and administrative expenses (3,697) (7,250) (7,498) (9,876)
Operating loss (14,062) (10,684) (27,426) (21,108)
Financial income (596) 103 96 165
Financial expense (970) (44) (1,400) (235)
Loss before tax (15,628) (10,625) (28,730) (21,178)
Tax expense 19 (9) 0 (16)
Loss for the period (15,609) (10,634) (28,730) (21,194)
Other comprehensive gain/loss 6 (15) 17 (15)
Total comprehensive loss for the period (15,603) (10,649) (28,713) (21,209)
Loss per ordinary share
Basic and diluted loss per share, EUR (0.27) (0.21) (0.52) (0.42)
Consolidated Balance Sheet, IFRS
EUR '000 31 December 2022 31 December 2021
Assets
Non-current assets
Machinery and equipment 13 20
Right-of-use-assets 314 187
Intangible assets 1,154 899
Prepayments and other receivables 60 53
Total non-current assets 1,541 1,159
Current assets
Prepayments and other receivables 2,740 5,170
Cash and cash equivalents 6,990 6,853
Total current assets 9,730 12,023
Total assets 11,271 13,182
Equity and liabilities
Capital and reserves attributable to the equity holders of Faron
Share capital 2,691 2,691
Reserve for invested unrestricted equity 129,544 116,507
Accumulated deficit (143,713) (116,265)
Translation difference 2 (15)
Total equity (11,476) 2,919
Provisions
Other provisions 158 0
Total provisions 158 0
Non-current liabilities
Borrowings 11,102 2,918
Lease liabilities 163 16
Other liabilities 853 151
Total non-current liabilities 12,118 3,085
Current liabilities
Borrowings 1,851 429
Lease liabilities 153 184
Trade payables 6,014 2,229
Accruals and other current liabilities 2,453 4,336
Total current liabilities 10,471 7,178
Total liabilities 22,748 10,263
Total equity and liabilities 11,271 13,182
Consolidated Statement of Changes in Equity, IFRS
EUR '000 Share capital Reserve for invested unrestrict- Trans- Accumu-lated deficit Total equity
ed equity
lation
difference
Balance as at 31 December 2020 2,691 92,015 2 (96,557) (1,849)
Comprehensive loss for the year 2021 0 0 (15) (21,194) (21,209)
Transactions with equity holders of the Company
Issue of ordinary shares, net of transaction costs 0 24,492 0 0 24,492
Share-based compensation 0 0 0 1,487 1,487
0 24,492 0 1,487 25,980
Balance as at 31 December 2021 2,691 116,507 (15) (116,265) 2,919
Comprehensive loss for the year 2022 0 0 17 (28,730) (28,713)
Transactions with equity holders of the Company
Issue of ordinary shares, net of transaction costs 0 13,037 0 0 13,037
Share-based compensation 0 0 0 1,297 1,297
Other movements 0 0 0 (16) (16)
0 13,037 17 (27,448) (14,395)
Balance as at 31 December 2022 2,691 129,544 2 (143,713) (11,476)
Consolidated Cash Flow Statement, IFRS
EUR '000 Unaudited Unaudited 1-12.2022 1-12.2021
7-12.2022 7-12.2021 12 months 12 months
6 months 6 months
Cash flow from operating activities
Loss before tax (15,628) -10,64 (28,730) (21,194)
Adjustments for:
Received grant (388) (745) (803) (1,387)
Depreciation and amortization 149 165 300 307
Change in provision (158) 0 (158) 0
Financial items 787 1,304 0
Interest expense 0 128 0 216
Tax expense 19 6 0 16
Unrealized foreign exchange loss (gain), net 0 434 0 153
Share-based compensation 632 644 1,297 1,487
Adjusted loss from operations before changes in working capital (14,587) (10,008) (26,790) (20,402)
Change in net working capital:
Prepayments and other receivables 2,045 (-1259) 2,864 (1,919)
Trade payables (657) 744 719 723
Other liabilities 2,197 24 1,183 (566)
Cash used in operations (11,001) (10,499) (22,023) (22,163)
Taxes paid 0 (1) 0 (16)
Transaction costs related to loans and borrowings 0 0 (165) 0
Interest received 11 0 11 0
Interest paid (708) (10) (816) (40)
Net cash used in operating activities (11,698) (10,508) (22,993) (22,218)
Cash flow from investing activities
Payments for intangible assets (218) (76) (385) (461)
Payments for equipment 0 (6) (0) (13)
Net cash used in investing activities (218) (81) (385) (473)
Cash flow from financing activities
Proceeds from issue of shares 8,923 10,515 13,445 25,559
Share issue transaction cost (174) (405) (365) (1,067)
Proceeds from borrowings (0) 145 10,389 662
Repayment of borrowings 0 0 (105) (122)
Proceed from grants 231 750 231 750
Payment of lease liabilities (20) (95) (116) (191)
Net cash from financing activities 8,959 10,910 23,478 25,590
Net increase (+) / decrease (-) in cash and cash equivalents (2,946) 320 137 2,899
Effect of exchange rate changes on cash and cash equivalents 11 (434) 37 (153)
Cash and cash equivalents at 1 January / 1 July 9,936 6,967 6,853 4,108
Cash and cash equivalents at 31 December 6,990 6,853 6,990 6,853
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR GLGDXSXGDGXXRecent news on Faron Pharmaceuticals Oy
See all newsRCS - Faron Pharma. Oy - Faron confirms plans under new leadership
AnnouncementREG - Faron Pharma. Oy - Appointment of Chief Financial Officer
AnnouncementREG - AIM - AIM Notice - 09/04/2024
AnnouncementREG - Faron Pharma. Oy - Decisions of the Board of Directors
AnnouncementREG - Faron Pharma. Oy - Approval of Warrant Terms and Conditions
Announcement