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LONDON (Alliance News) - Shares in Faron Pharmaceuticals Ltd dropped on Thursday after the company said its loss for the first half of its financial year increased on higher research costs.
Shares were trading 13% lower at 105.25 pence each after the news.
For the six months to June 30, the biopharmaceutical firm posted pretax loss of EUR14.1 million compared to EUR7.1 million a year prior on increased research & development costs by 95% year-on-year to EUR11.7 million from EUR6.0 million.
Administrative expenses also increased to EUR2.4 million from EUR1.5 million.
As the company focuses on developing drugs, it only generated revenue of EUR20,000 from product sales to Maruishi Pharmaceutical. A year ago revenue was EUR0.
Research expenses increased as a result of clinical costs associated with an unsuccessful trial of Traumakine, a treatment for acute respiratory distress syndrome, as well as an increase in development activities for Clevegen, a potential treatment for various types of cancer, the company explained.
During the first half the company announced disappointing results from Traumakine which did not meet the primary outcome of a phase III trial.
"These results have required the company to shift its focus and, whilst we are continuing to complete further detailed analysis in order to fully understand the data, we have also had to take the necessary steps to significantly reduce our cash burn by initiating a cash preservation program and by halting the commercial, manufacturing and regulatory activities underway for Traumakine," Faron said.
Looking ahead, the company said it is focusing on the Clevegen programme for which the first human study will commence later this year.
Chief Executive Officer Markku Jalkanen said: "Our focus for the remainder of 2018 will be to continue to rapidly progress Clevegen through the clinic whilst also continuing to preserve cash in order to deliver value to shareholders."