Faron Pharmaceuticals Regulatory News (FARN)

Faron Pharmaceuticals Ltd

("Faron" or the "Company")

Faron Expands R&D Strategy for Novel Immunotherapy Drug Candidate, Clevegen®

TURKU - FINLAND 26 May 2016 - Faron Pharmaceuticals Ltd (LON: FARN) announces today that its Board of Directors has expanded the development strategy for Clevegen®, its novel cancer immunotherapy drug candidate. As announced on 19 April 2016, Faron recently filed patents which have opened up new application opportunities for Clevegen in conditions where removal of suppression of local or systemic immunity is desirable.

Faron will now aim to extend the range of Clevegen indications through a technology platform called "Tumour Immunity Enabling Technology", or TIET, which can be used alone or in combination with other immune checkpoint molecules. The Directors believe that Clevegen's ability to convert pro-tumoural M2 macrophages to pro-inflammatory M1 macrophages could help the human body's own immune system to combat cancer and significantly differentiates it from competing products. At the same time, the removal of immune suppression caused by M2 macrophages could provide a significant boost to the efficacy of other immune checkpoint molecules already in use or under development. Faron intends to develop Clevegen in-house for immune dependent cancers such as hepatocellular carcinoma and other cancers known to depend on tumour associated macrophages (TAM). In addition the strategic decision by Faron to leverage the TIET technology platform may allow licensing opportunities and wider use of Clevegen as part of combination cancer therapies, maximising the value to cancer patients.

Dr. Markku Jalkanen, CEO of Faron, said: "We have made significant progress with Clevegen this Spring, culminating in development of the new TIET technology platform. We will intensify our efforts in commercialising the TIET technology globally while also initiating our own cancer treatment programme. We will report these plans at our R&D day on 14 June, as announced on 13 May 2016, and welcome all interested parties to join the London event."

The TIET technology could significantly enhance lymphocyte activation programmes enabling them to be more effective in their fight against cancer cells, making TIET attractive to potential collaborators and licensing partners. Faron was granted €1.5 million funding from Tekes, the Finnish Funding Agency for Innovation, in December 2015 to progress the preclinical development of Clevegen.

For more information, please contact:

Faron Pharmaceuticals Oy

Katja Wallenlind

Phone +358 (50) 577 4807E-mail: katja.wallenlind@faronpharmaceuticals.com

Hume Brophy, PR

Mary Clark, Eva Haas, Hollie Vile

Phone: +44 207 862 6390

E-mail: faron@humebrophy.com

Cairn Financial Advisers LLP, Nominated Adviser

Emma Earl, Tony Rawlinson and Rebecca Anderson

Phone: +44 207 148 7900

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

Ranald McGregor-Smith, Francis North

Phone: +44 207 659 1234

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. Removal of immune suppression locally also limits the 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.

About Faron Pharmaceuticals Ltd.

Faron is a drug discovery and development company focused on creating novel treatments for medical conditions with significant unmet needs. The Company is based in Turku, Finland. The Company currently has a pipeline of clinical stage products focusing on acute organ traumas, cancer immunotherapy and vascular damage. The Company's lead candidate Traumakine®, has been developed to treat acute respiratory distress syndrome ("ARDS"), a rare, severe, life threatening medical condition characterised by widespread inflammation in the lungs. Traumakine® is now in a pan-European pivotal Phase III study (INTEREST). Besides Traumakine®, Faron's pipeline consists of early stage assets including a pre-clinical anti-Clever-1 antibody named Clevegen. Clevegen is focused on converting the immune environment around a tumour from being immune suppressive to immune stimulating and represents a novel immuno-oncology approach called TIET (Tumour Immunity Enabling Technology). Faron Pharmaceuticals Ltd. is listed on AIM under the ticker 'FARN'. Further information is available at www.faronpharmaceuticals.com