Faron Pharma Regulatory News (FARN)

Faron Pharmaceuticals Oy

("Faron" or the "Company")

Faron and the University of Birmingham to collaborate on Clevegen® clinical program in liver cancer

TURKU - FINLAND, 18 April 2017. Faron Pharmaceuticals Ltd ("Faron") (LON: FARN), the clinical stage biopharmaceutical company, is pleased to announce that it has signed an agreement with the University of Birmingham Medical School, UK, to initiate a liver cancer program testing Clevegen, the Company's immuno switch antibody, in clinical trials. This collaboration will focus on trial and protocol design for a Phase I/II trial, TIETALC, (Tumour Immunity Enabling Technology Against Liver Cancer) in liver cancer patients at Birmingham Health Partners' NIHR Clinical Research Facility and the Centre for Liver Research.

As part of the preparations, approval will be sought from the UK regulatory authorities (MHRA) for an adaptive protocol, which would allow flexible administration of Clevegen based on results obtained in previous dosings. Faron and the University of Birmingham anticipate filing the clinical trial application (CTA) with the MHRA in late 2017 or early 2018. In the event of successful collaboration and CTA approval, it is expected that Faron and the University of Birmingham will conduct the TIETALC trial together.

The main focus of TIETALC is to study the safety, pharmacokinetics/pharmacodynamics and initial efficacy of Clevegen in liver cancer patients, focusing on those with hepatocellular carcinoma (HCC). The study will also examine the efficacy of Clevegen in reducing the number of Clever-1 positive, immune suppressive myeloid cells, circulating in the blood and entering tumour tissue of cancer patients where they can suppress anti-cancer immunity.

TIETALC may also assist Faron with its aim to develop a liquid biopsy based on recognition of Clever-1 positive circulating myeloid cells. This detection could potentially become a surrogate marker of improved immune capacity in response to Clevegen and assist in the selection of those target cancer patients who are likely to benefit most from Clevegn treatment.

Dr Markku Jalkanen, CEO of Faron, said: "We are excited to start this collaboration with this world-renowned liver cancer unit in Birmingham. Their substantial clinical expertise and numerous research programmes in liver cancer treatment will provide us with a unique opportunity to assess the effect Clevegen has on immune function in these patients. We are optimistic that Clevegen will stimulate strong immune responses against the cancer, restricting tumour growth and metastasis, and thereby improving the long term survival of these patients, whose prognosis with current therapies is very poor."

Prof. David Adams, Director of the NIHR Biomedical Research Centre and Head of the College of Medical and Dental Sciences at University of Birmingham, said: "We are very familiar with the Clever-1 target molecule. Previously, we have demonstrated that it controls the accumulation of immunosuppressive regulatory lymphocytes in the liver1 and we have also shown in previous studies that liver cancer can be treated by stimulating anti-tumour immunity2. We are excited to move towards commencement of trials using Clevegen which we believe has the ability to boost immune responses against liver cancer through a novel mechanism. The current prognosis for liver cancer patients is very poor and so potential treatments, like Clevegen, offer new possibilities in fighting this aggressive and poorly responsive cancer."

About Liver Cancer

Hepatocelluar cellular carcinoma (HCC) is the most common liver cancer type and the leading cause of cancer-related morbidity and mortality worldwide. Less than 20% of HCC patients are alive five years post diagnosis and there is a clear unmet need for effective targetted therapies. HCC is usually a complication of liver cirrhosis which may be caused by viruses, toxins (including alcohol) or autoimmune liver diseases. Additionally, the liver is a frequent site of metastasis from other cancers, particularly colorectal cancer. The immune positive phenotype of HCC and reports of responses to immunotherapy suggest that is an excellent target tumour for immuno-oncology treatments by the removal of immunosuppressive white blood cells including macrophages.

About Clevegen®

Faron´s preclinical drug development project Clevegen revolves around Clever-1, a cell surface receptor expressed mainly by endothelial cells and monocytes/macrophages. Clever-1 is involved in cancer growth and spread. The active pharmaceutical ingredient of Clevegen is a humanised anti-Clever-1 antibody.

Clevegen, by binding Clever-1 prevents Tumor Associated Macrophage (TAM) infiltration into a tumour and blocks TAM-to-Tumour cell interaction triggering TAM transformation into tumour supportive cell types. It therefore reduces suppression of the human immune system and converts the whole immune environment around a tumour to immune stimulating allowing a patient's own immune system to combat cancer, known as "immunotherapy". Clevegen has a local tumour effect which also allows the cell-mediated immune response to attack infections in normal tissues and removal of immune suppression locally also limits risk of autoimmune reaction, a potentially severe side effect observed with some immune checkpoint inhibitors. The Directors of Faron believe that Clevegen is well differentiated from competing products as it specifically targets M2 TAMs which facilitate tumour growth, while leaving intact the M1 TAMs which support immune activation against tumours. Clever-1 blocking results especially in activation of Th1 mediated immunity.

About Tumor Immunity Enabling Technology (TIET) 

The TIET technology is built around the humanised anti-Clever-1 antibody FP-1305, which binds to a specific Clever-1 proprietary epitope. Clevegen® binding to this epitope activates conversion of type 2 tumour associated macrophages to type 1 macrophages, resulting in the transformation of the tumour environment from immune suppression to immune activation. As the TIET technology is based on a humanised antibody, the Faron Directors believe it can be combined with a number of other immune therapies without a significant risk of increased adverse events. The TIET technology could provide a significant boost for the efficacy of other immune checkpoint molecules, as its target is unique and represents a completely separate control of immunity.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For more information, please contact:

Faron Pharmaceuticals Ltd

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com

Consilium Strategic Communications

Mary-Jane Elliott, Chris Welsh, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)

Chris Brinzey

Phone: 01 339 970 2843

E-Mail: chris.brinzey@westwicke.com

Cairn Financial Advisers LLP, Nominated Adviser

Emma Earl, Tony Rawlinson, Rebecca Anderson

Phone: +44 207 213 0880

Panmure Gordon (UK) Limited, Joint Broker

Freddy Crossley, Duncan Monteith (Corporate Finance)

Tom Salvesen (Corporate Broking)

Phone: +44 207 886 2500

Whitman Howard Limited, Nominated Broker (UK)

Ranald McGregor-Smith, Francis North

Phone: +44 207 659 1234

About Faron Pharmaceuticals Ltd

Faron (AIM:FARN) is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs. The Company currently has a pipeline focusing on acute organ traumas, vascular damage and cancer immunotherapy. The Company's lead candidate Traumakine, to prevent vascular leakage and organ failures, is currently the only treatment for Acute Respiratory Distress Syndrome (ARDS) undergoing Phase III clinical trials. There is currently no approved pharmaceutical treatment for ARDS. An additional European Phase II Traumakine trial is underway for the Rupture of Abdominal Aorta Aneurysm ("RAAA"). Faron's second candidate Clevegen® is a ground breaking pre-clinical anti-Clever-1 antibody. Clevegen has the ability to switch immune suppression to immune activation in various conditions, with potential across oncology, infectious disease and vaccine development. This novel macrophage-directed immuno-oncology switch called Tumour Immunity Enabling Technology ("TIET") may be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. Faron is based in Turku, Finland. Further information is available at www.faronpharmaceuticals.com

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 discussed in the forward looking statements including 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, reliance on key personnel, uninsured and underinsured losses and other factors, many of which are beyond the control of the Company. 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.