Faron Pharma Regulatory News (FARN)

Faron Pharmaceuticals Ltd

("Faron" or the "Company")

Faron Files Two New Patents to Strengthen Protection for Novel Immunotherapy Drug Candidate, Clevegen®

TURKU - FINLAND 19 April 2016 - Faron Pharmaceuticals Ltd ("Faron") (LON: FARN) announces today that it has filed two new patent applications on Clevegen®, its novel cancer immunotherapy drug candidate. The patents, which have been filed in Finland, are expected to be expanded to most countries over the next few years under the Patent Co-operation Treaty (PCT) and open up new opportunities for wider application of Clevegen® in conditions where removal of suppression of the local or systemic immunity is desired.

Dr. Markku Jalkanen, CEO of Faron said: "We are very excited about these new filings. The new patents, if granted, will provide a significant extension to our strong intellectual property coverage on Clever-1 and presents new opportunities for Clevegen, which also has the potential to be used in combination therapies with other immune checkpoint compounds. We believe that Clevegen also has the potential for use in chronic infections as well as vaccination protocols, both of which are dependent on immune balance between activation and suppression."

The Directors believe that Clevegen is well differentiated from competing products as it specifically targets Clever-1 positive M2 macrophages while leaving intact the pro-inflammatory type 1 macrophages supporting immune activation against foreign antigens (e.g. cancer antigens).

Clevegen targets Clever-1 cell surface receptor, which is heavily expressed by tumour-associated macrophages (TAMs). Previous research has shown that when Clevegen binds to TAM Clever-1 the environment of the tumour changes from immune suppression to immune stimulation, but the precise mechanism for action has been partially unclear. On 30 November 2015, Faron announced findings that showed the active pharmaceutical ingredient of Clevegen (humanised anti-Clever-1 antibody) increases Th1-lymphocytes mediated immunity (Palani et al., 2016). This may indicate that Clevegen binding initiates a process that results in conversion of pro-tumoural M2 macrophages to pro-inflammatory M1 macrophages.

Cited reference: Palani et al. (2016) J. Immunol. 196: 115-123.

Filed patent numbers: FI 20165335 and FI 20165336

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For more information, please contact:

Faron Pharmaceuticals Oy

Katja Wallenlind

Phone +358 (50) 577 4807

E-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

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 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 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. Faron Pharmaceuticals Oy is listed on AIM under the ticker 'FARN'. Further information is available at www.faronpharmaceuticals.com