(Sharecast News) - Faron Pharmaceuticals announced on Monday that it has successfully secured binding commitments for convertible loans totalling €3.2m from a select group of existing shareholders.
The AIM-traded firm said that would allow it to fulfil critical payments and continue exploring short- and long-term financing solutions.
It said the obtained funding would address immediate short-term financing requirements until the end of March, supplementing its current cash reserves of about €4.3m as of 19 February.
Faron said it was seeking an additional €5m in short-term bridge financing to ensure financial stability and facilitate the publishing of its annual accounts for 2023 on 13 March.
In response to breaching certain undertakings outlined in the secured debt agreement with IPF Fund II SCA, SICAV-FIAR, Faron said it was facing account restrictions.
However, the binding commitments for convertible loans had enabled it to make essential payments and secure a waiver for certain events of default under the terms of the facilities agreement.
The waiver also included amendments to the fee structure and the issue of special rights to IPF, allowing it to subscribe for new ordinary shares.
Looking ahead, Faron said it was actively pursuing both short- and longer-term financing options.
The board said it intended to propose a larger share issue at the annual general meeting on 5 April.
That proposed offering aimed to secure funding for 2024, particularly for the continuation of the BEXMAB study, with a targeted size to meet the company's cash runway needs.
"This fundraise will enable us to meet our immediate financing needs and continue our ambitious bexmarilimab development programme, with a focus on delivering next milestones," said chief executive officer Dr Markku Jalkanen.
"These funds are part of the larger financing plan to secure cash runway for 2024 and to complete phase two study and receive FDA's guidance for the pivotal study part.
"We would like to thank support from our investors in developing this novel immunotherapy, especially for myeloid leukaemia with very few treatment options."
To further support short-term financing, Dr Jalkanen had voluntarily agreed to forgo his salary for the next three months.
The company said it would provide updates on the BEXMAB phase one readout in mid-March, focusing on the efficacy of bexmarilimab on HMA-failed MDS patients, with plans to seek a total of €35m to complete the ongoing phase two study and obtain regulatory feedback from the FDA.
At 1018 GMT, shares in Faron Pharmaceuticals were up 3.61% at 158p.
Reporting by Josh White for Sharecast.com.
Faron Pharma (FARN)