REG - Faron Pharma. Oy - Results of Placing

Faron Pharmaceuticals OyAnnouncement

27/01/2023 07:00

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RNS Number : 0857O  Faron Pharmaceuticals Oy  27 January 2023

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
THE EU REGULATION 596/2014 ("MAR") AND ARTICLE 7 OF MAR AS INCORPORATED INTO
UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("UK
MAR").

 

 

Faron Pharmaceuticals Ltd

("Faron" or the "Company")

 

Announcement of the Results of 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 26 January 2023 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, 27 January 2023 at 7:00 a.m. GMT / 9:00 a.m. EET

Inside information

 

TURKU, FINLAND / BOSTON, MA Ð Faron Pharmaceuticals Ltd (First North: FARON,
AIM: FARN), a clinical stage biopharmaceutical company focused on building
the future of immunotherapy by harnessing the power of the immune system to
tackle cancer and inflammation, announces today that the Bookbuild, announced
on 26 January 2023, is now closed. The Placing comprises of the issuance of
3,692,308 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 3.25 per
Placing Share. The Issue Price represents a 13.9% discount to the close price
on 26 January 2023 on NASDAQ Helsinki First North Growth and a 75.7% premium
to the last share issue completed on 14 October 2022. The payment and
settlement (delivery against payment of the Issue Price in full) of the
Placing Shares is expected to be completed on or about 31 January 2023.
Carnegie Investment Bank AB (publ), Finland Branch (ÒCarnegieÓ) acted as
sole bookrunner and lead manager in the Placing.

 

The Placing Shares conveyed to investors amount to approximately 6.2% of the
issued shares and votes in the Company, immediately prior to the Placing. The
Company has raised aggregate gross proceeds of approximately EUR 12.0 million
in the Placing. The Placing was supported by new investors and existing
shareholders such as local long-only institutional investors and family
offices, Mr. Timo SyrjŠlŠ and The Leukemia & Lymphoma Society Therapy
Acceleration Program¨. With these proceeds and the current level of
activities the Company has sufficient working capital into Q3 2023.

 

ÒWe are extremely pleased with the results of this oversubscribed Placing and
the support we received from new and existing investors, especially the second
investment from LLS (The Leukemia & Lymphoma Society).Ó said Toni
HŠnninen, Chief Financial Officer of Faron. ÒThese funds allow us to
accelerate our bexmarilimab pipeline further, including the acceleration of
our BEXMAB study and the initiation of our recently approved BEXCOMBO study in
2023. Additionally, we are further strengthening our presence and building the
team in the US as previously communicated.Ó

 

"We are excited to make an additional investment in Faron and to continue the
partnership to leverage our expertise and network to help advance their
development of bexmarilimab," said Lore Gruenbaum, PhD, Vice President, The
Leukemia & Lymphoma Society Therapy Acceleration Program¨ (LLS TAP).
"There is a critical need to develop new treatment options for blood cancer
patients and novel combination therapies, like those being explored by Faron,
are particularly promising because they can work synergistically to not only
treat the cancer, but also activate a systemic response by the patient's own
immune system."

 

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

The primary reason for conducting the Placing was to accelerate and expand
the clinical development of the CompanyÕs main drug candidate, bexmarilimab.
Some of the proceeds will also be used to advance bexmarilimab commercial
scale production, to support general corporate purposes and other pipeline
development, and to strengthen the CompanyÕs balance sheet. Raising of at
least EUR 8.0 million was also required to secure that the Company meets all
its financial and operational covenants by 31 January 2023, as per agreed
waivers with IPF Partners.

 

A total of 3,692,308 Placing Shares have been issued and registered in the
Finnish Trade Register today on 27 January 2023. Following the issuance, the
aggregate number of ordinary shares in the Company is 63,497,691. As a part of
the Placing, the 3,692,308 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 31 January 2023. 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 63,497,691 (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
latest on or about 31 January 2023.

 

Related Party Transaction

Timo SyrjŠlŠ, an existing shareholder in the Company, has subscribed for
400,000 Placing Shares in aggregate, for an aggregate subscription value of
EUR 1,300,000 at the Issue Price. Following the Placing, Mr. SyrjŠlŠ's total
holding in the Company's shares, which includes his indirect holding through
Acme Investments SPF Sarl ("Acme"), an entity wholly owned by Mr. SyrjŠlŠ,
will be  12,767,825 shares, representing  20.11 % of the New Number of
Shares and Votes. Mr SyrjŠlŠ 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 First North Rulebook and
the Finnish Limited Liability Companies Act. The Directors of the Company, all
of whom are independent of Mr SyrjŠlŠ, 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. SyrjŠlŠ in the Placing
to be fair and reasonable insofar as shareholders are concerned.

 

 

For more information please contact:

 

Investor Contact

Faron Pharmaceuticals

Julia Balanova

VP, Investor Relations

julia.balanova@faron.com (mailto:julia.balanova@faron.com)

investor.relations@faron.com (mailto:investor.relations@faron.com)

Phone: +1 (917) 306-6096

Faron Pharmaceuticals

Yrjš Wichmann

VP, Investor Relations and Funding

yrjo.wichmann@faron.com (mailto:yrjo.wichmann@faron.com)
Phone: +358 (0) 40 5868 979

 

 

Media Contact

Faron Pharmaceuticals

Jennifer Smith-Parker

Head of Communications

Jennifer.Smith-Parker@faron.com

 

 

Cairn Financial Advisers LLP, Nominated Adviser

Sandy Jamieson, Jo Turner

Phone: +44 (0) 207 213 0880

 

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen

Phone: +358 (0)40 555 4727

Jukka JŠrvelŠ

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

 

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 BY VIRTUE OF THE EUROPEAN
UNION (WITHDRAWAL) ACT 2018 THAT ARE ALSO (I) INVESTMENT PROFESSIONALS FALLING
WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL
PROMOTION) ORDER 2005 (THE "ORDER") AND/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
ÒRELEVANT PERSONÓ). 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
ÒQUALIFIED INSTITUTIONAL BUYERSÓ AS DEFINED IN RULE 144A IN RELIANCE ON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT.

 

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) tumour
associated macrophages (TAMs) in the tumour 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 pre-clinical 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 in both solid tumors and hematologic
malignancies. Beyond immuno-oncology, it offers potential in infectious
diseases, vaccine development and more.

 

About Faron Pharmaceuticals Ltd.

Faron (AIM: FARN, First North: FARON) is a clinical stage biopharmaceutical
company developing novel treatments for medical conditions with significant
unmet needs caused by dysfunction of our immune system. The Company currently
has a pipeline based on the receptors involved in regulation of immune
response in oncology, organ damage and bone marrow regeneration. 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 solid
tumors and hematologic malignancies, bexmarilimab has potential as a
single-agent therapy or in combination with other standard treatments
including immune checkpoint molecules. Traumakine is an investigational
intravenous (IV) interferon beta-1a therapy for the treatment of acute
respiratory distress syndrome (ARDS) and other ischemic or hyperinflammatory
conditions. Traumakine is currently being evaluated by the 59th Medical Wing
of the US Air Force and the US Department of Defense for the prevention of
multiple organ dysfunction syndrome (MODS) after ischemia-reperfusion injury
caused by a major trauma.  Faron is based in Turku, Finland. Further
information is available at www.faron.com (http://www.faron.com) .

 

About The Leukemia & Lymphoma Society¨ and Therapy Acceleration Program¨
(TAP)

The Leukemia & Lymphoma Society (LLS) is a global leader in the fight
against cancer. The LLS mission is to cure leukemia, lymphoma, Hodgkin's
disease, and myeloma, and improve the quality of life of patients and their
families. LLS TAP is a strategic venture philanthropy initiative that builds
business alliances and collaborations with biotechnology companies to identify
potential breakthrough therapies with the ability to change the standard of
care. LLS TAP funds late-stage preclinical studies, and proof of concept or
registrational clinical trials to help advance therapeutics along the drug
development and approval pathway. LLS TAP accepts funding applications on a
rolling basis from companies with innovative science that has a high potential
to improve patient lives. To learn more, visit
 https://www.lls.org/therapy-acceleration-program
(https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.lls.org%2Ftherapy-acceleration-program&data=05%7C01%7C%7C84f3293f65c94e29944c08daffbce45d%7Ca2d9b7a432f64a96b03727499230d5fd%7C1%7C0%7C638103484017851877%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=rZ4UaoE6WoDsRpnIu1Swnfy%2FFwgr8kTD8rGULEszHfg%3D&reserved=0)
. Follow LLS on Facebook (https://www.facebook.com/LLSusa) , Twitter
(https://twitter.com/llsusa) , and Instagram
(https://www.instagram.com/llsusa/) .

 

IMPORTANT INFORMATION

 

Market Abuse Regulation

Market soundings, as defined in Regulation (EU) No 596/2014 ("MAR"), were
taken in respect of the proposed Placing with the result that certain persons
became aware of inside information, as permitted by 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 paragraph 7 of article
17 of 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.

 

MiFID II

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 offer.

 

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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