REG - Faron Pharma. Oy - Results of Oversubscribed Placing

Faron Pharmaceuticals OyAnnouncement

06/02/2025 07:00

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RNS Number : 0938W  Faron Pharmaceuticals Oy  06 February 2025

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
EU REGULATION 596/2014 ("MAR") AND ARTICLE 7 OF MAR AS IT FORMS PART OF UK
DOMESTIC LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018 ("UK MAR").

 

 

Faron Pharmaceuticals Ltd

("Faron" or the "Company")

 

Inside Information: Announcement of the Results of the Significantly
Oversubscribed Placing, the Issue Price and registration of Placing Shares
with the Trade Register

 

Capitalised terms used in this announcement have the meanings given to them in
the announcement made on 5 February 2025 regarding the proposed issue of new
ordinary shares in the Company to the Company itself without consideration and
placing of treasury shares in the Company (the "Launch Announcement"), unless
the context provides otherwise.

 

Company announcement, 6 February 2025 at 7:00 a.m. GMT / 9:00 a.m. EET

Inside information

 

TURKU, FINLAND - Faron Pharmaceuticals Ltd. (AIM: FARN, First North: FARON),
a clinical-stage biopharmaceutical company focused on tackling cancers via
novel immunotherapies, announces that the Bookbuild, announced on 5 February
2025, is now closed. The Placing was oversubscribed 1.8 times and thus the
Board decided to upsize the offering and raise gross proceeds of EUR 12
million.

 

The Placing comprises of the issuance of 6,976,744 Placing Shares to Faron
itself without consideration, which have today been registered in the Finnish
Trade Register, and subsequent conveyance of these Placing Shares, to
investors at the Issue Price of EUR 1.72 per Placing Share. The Issue Price
represents a 10.3 % discount to the close price on 5 February 2025 on NASDAQ
Helsinki First North Growth. The settlement (delivery against payment of the
Issue Price in full) of the Placing Shares is expected to be completed on or
about 10 February 2025. Carnegie Investment Bank AB (publ), Finland Branch
("Carnegie"), Bryan, Garnier & Co Ltd. and Bryan Garnier Securities SAS
(together with Bryan, Garnier & Co Ltd., "Bryan Garnier") acted as joint
bookrunners in the Placing.

 

The Placing Shares conveyed to investors amount to approximately 6.67 per cent
of the issued shares and votes in the Company, immediately prior to the
Placing. The Company has raised aggregate gross proceeds of approximately EUR
12 million in the Placing. The Placing primarily targeted long-term
institutional and other qualified investors due to their capability of
offering substantial investments cost-effectively, at attractive terms and was
supported by existing shareholders, including long-only institutional
investors and family offices, as well as new investors.  As the Issue Price
was determined through the Bookbuild, it is the Board's assessment that the
Issue Price has been determined on market terms, reflecting current market
conditions and investor demand. With these proceeds and the current level of
activities the Company has sufficient working capital until December 2025 and
be able to meet its financial covenants into September 2025.

 

"This fundraising is pivotal and comes at an exciting time for Faron. As we
will soon see topline data from the Phase II of the BEXMAB clinical trial, it
was important to raise funds to provide a cash runway into December 2025."
said Yrjö Wichmann, Chief Financial Officer of Faron. "The investor interest
has been stronger than anticipated which demonstrates that the market shares
our strong belief in the Company and bexmarilimab. We would like to thank all
our investors for their continued support in developing this novel
immunotherapy!".

 

Use of Proceeds and registration of Placing Shares in the Trade Register

 

The primary reason for conducting the Placing was to strengthen the
Company's financial position ahead of its upcoming BEXMAB Phase II trial
topline readout, which is expected in April 2025. The proceeds will be used
for the continuation of the BEXMAB Phase II trial, mainly to produce follow-up
data (duration of response and survival) and prepare the package for end of
Phase II FDA meeting and to enhance the Company's balance sheet. The Company
will continue to evaluate further business transactions such as licensing
agreements as well as other financing alternatives (e.g. equity, convertible
or debt instruments) in order to achieve the best commercial outcome to its
shareholders. The Placing improves the Company's negotiation position ahead of
the BEXMAB Phase II efficacy and safety readout, while also ensuring
compliance with the financial covenants.

 

A total of 6,976,744 Placing Shares have been issued and registered in the
Finnish Trade Register today on 6 February 2025. Following the issuance, the
aggregate number of ordinary shares in the Company is 111,601,608. As a part
of the Placing, the 6,976,744 Placing Shares are further conveyed to investors
with payment and settlement (delivery against payment of the Issue Price in
full) expected to be completed on or about 10 February 2025. The Placing
Shares confer a right to dividends and other shareholder rights from the
payment and settlement to investors. One Placing Share entitles the holder to
one vote in the general meeting of the Company. Following, and subject to, the
completion of the settlement in full, the Company will have no shares in
treasury and therefore, the total number of voting rights in Faron will be
111,601,608 (the "New 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 New Number of Shares and Votes of the Company.

 

Trading in the Placing Shares is expected to commence on First North and AIM
on or about 10 February 2025.

 

Applications have been made for the admission to trading of the Placing Shares
on the Nasdaq First North Growth Market Finland ("First North") maintained by
Nasdaq Helsinki Ltd ("Nasdaq Helsinki") under the current trading code
"FARON", and on AIM ("AIM"), the market of that name operated by London Stock
Exchange plc (the "LSE") under the trading code "FARN". It is expected that
the admission of the Placing Shares to trading on First North and AIM will
become effective at 10:00 a.m. EEST / 8:00 a.m. BST on 10 February 2024.
Trading in the Placing Shares is expected to commence on 10 February 2025
subject to the admission of the New Shares to trading on First North and AIM.

 

Related Party Transaction

Timo Syrjälä, an existing shareholder in the Company, has subscribed through
Acme Investments SPF Sarl ("Acme") for 930,232 Placing Shares in aggregate,
for an aggregate subscription value of EUR 1,599,999.04 at the Issue Price.
Mr. Syrjälä held more than 10% of all shares in the Company prior to the
Placing, which includes his indirect holding through Acme, an entity wholly
owned by Mr. Syrjälä, and has been allocated more than 10% of the Placing
Shares. Following the Placing, Mr. Syrjälä's total holding in the Company's
shares, which includes his indirect holding through Acme, will be
16,903,396shares, representing 15.15 % of the New Number of Shares and Votes.
Mr Syrjälä is a "Substantial Shareholder" in the Company for the purposes of
the AIM Rules for Companies (the "AIM Rules"). His subscription for Placing
Shares pursuant to the Placing is a related party transaction for the purposes
of the AIM Rules. The Directors of the Company, all of whom are independent of
Mr. Syrjälä, having consulted with Cairn Financial Advisers LLP, the
Company's nominated adviser for the purposes of the AIM Rules, consider the
terms of the participation by Mr. Syrjälä in the Placing to be fair and
reasonable insofar as shareholders are concerned.

 

 

For more information please contact:

 

Investor Contact, Media Contact

Faron Pharmaceuticals

E-mail: investor.relations@faron.com (mailto:investor.relations@faron.com)
 

 

ICR Healthcare
Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@icrhealthcare.com (mailto:faron@icrhealthcare.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

 

THIS ANNOUNCEMENT IS ONLY DIRECTED AT PERSONS IN THE UNITED KINGDOM THAT ARE
QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(E) OF REGULATION
2017/1129/EU AS INCORPORATED INTO UK DOMESTIC LAW IN THE UNITED KINGDOM BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 WHO ARE ALSO (I) INVESTMENT
PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND
MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER") OR (II) HIGH
NET WORTH ENTITIES, AND OTHER PERSONS TO WHOM IT MAY LAWFULLY BE COMMUNICATED,
FALLING WITHIN ARTICLE 49(2)(A) TO (E) OF THE ORDER (EACH SUCH PERSON BEING
REFERRED TO AS A "RELEVANT PERSON"). 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.

 

THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA. THIS ANNOUNCEMENT IS NOT
AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES. THE PLACING SHARES
HAVE NOT BEEN AND 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. THERE IS NO INTENTION TO REGISTER THE
PLACING SHARES IN THE UNITED STATES OR TO MAKE A PUBLIC OFFERING IN THE UNITED
STATES. ANY SALE OF THE PLACING SHARES IN THE UNITED STATES WAS MADE SOLELY TO
"QUALIFIED INSTITUTIONAL BUYERS" AS DEFINED IN RULE 144A IN RELIANCE ON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT.

 

About BEXMAB

 

The BEXMAB trial is an open-label Phase I/II clinical trial investigating
bexmarilimab in combination with standard of care (SoC) in the aggressive
hematological malignancies of acute myeloid leukemia (AML) and myelodysplastic
syndrome (MDS). The primary objective is to determine the safety and
tolerability of bexmarilimab in combination with SoC (azacitidine) treatment.
Directly targeting Clever-1 could limit the replication capacity of cancer
cells, increase antigen presentation, ignite an immune response, and allow
current treatments to be more effective. Clever-1 is highly expressed in both
AML and MDS and associated with therapy resistance, limited T cell activation
and poor outcomes.

 

About bexmarilimab

 

Bexmarilimab is Faron's wholly owned, investigational immunotherapy designed
to overcome resistance to existing treatments and optimize clinical outcomes,
by targeting myeloid cell function and igniting the immune system.
Bexmarilimab binds to Clever-1, an immunosuppressive receptor found on
macrophages leading to tumor growth and metastases (i.e. helps cancer evade
the immune system). By targeting the Clever-1 receptor on macrophages,
bexmarilimab alters the tumor microenvironment, reprogramming macrophages from
an immunosuppressive (M2) state to an immunostimulatory (M1) one, upregulating
interferon production and priming the immune system to attack tumors and
sensitizing cancer cells to standard of care.

 

About Faron Pharmaceuticals Ltd

 

Faron (AIM: FARN, First North: FARON) is a global, clinical-stage
biopharmaceutical company, focused on tackling cancers via novel
immunotherapies. Its mission is to bring the promise of immunotherapy to a
broader population by uncovering novel ways to control and harness the power
of the immune system. The Company's lead asset is bexmarilimab, a novel
anti-Clever-1 humanized antibody, with the potential to remove
immunosuppression of cancers through reprogramming myeloid cell function.
Bexmarilimab is being investigated in Phase I/II clinical trials as a
potential therapy for patients with hematological cancers in combination with
other standard treatments. Further information is available at www.faron.com
(http://www.faron.com) .

IMPORTANT INFORMATION

 

Market Abuse Regulation

Market soundings, as defined in (i) Regulation (EU) No 596/2014 ("MAR") and
(ii) MAR as it applies to domestic law in the United Kingdom by virtue of the
European Unition (Withdrawal) Act 2018 ("UK MAR"), were taken in respect of
the proposed Placing with the result that certain persons became aware of
inside information, as permitted by MAR and UK MAR. That inside information in
relation to the Placing is set out in this announcement and has been disclosed
as soon as possible in accordance with article 17 of MAR AND UK 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 and Article 7 of UK MAR.

 

EEA product governance

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 Placing.

 

UK product governance

Solely for the purposes of the product governance requirements contained
within of Chapter 3 of the FCA Handbook Production Intervention and Product
Governance Sourcebook (the "UK Product Governance Requirements"), and
disclaiming all and any liability, whether arising in tort, contract or
otherwise, which any "manufacturer" (for the purposes of the UK Product
Governance Requirements) may otherwise have with respect thereto, the Placing
Shares have been subject to a product approval process, which has determined
that such securities are: (i) compatible with an end target market of
investors who meet the criteria of retail investors and investors who meet the
criteria of professional clients and eligible counterparties, each as defined
in paragraph 3 of the FCA Handbook Conduct of Business Sourcebook; and (ii)
eligible for distribution through all distribution channels (the "Target
Market Assessment"). Notwithstanding the Target Market Assessment,
distributors (for the purposes of UK Product Governance Requirements) should
note that: (a) the price of the Placing Shares may decline and investors could
lose all or part of their investment; (b) the Placing Shares offer no
guaranteed income and no capital protection; and (c) an investment in the
Placing Shares 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 Placing.

 

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 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.

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