Faron Pharma Regulatory News (FARN)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, SINGAPORE, HONG KONG OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

Faron Pharmaceuticals Oy

Results of Placing and Issue Price

Issue of Equity and Total Voting Rights

PDMR dealing

Capitalised terms used in this announcement have the meanings given to them in the announcement made at 16.51 GMT on 7 November 2019 regarding the proposed placing of new ordinary shares in the company (the "Launch Notice"), unless the context provides otherwise.

TURKU - FINLAND, 8 November 2019 - Faron Pharmaceuticals Oy ("Faron" or the "Company") (AIM: FARN), the clinical stage biopharmaceutical company, is pleased to announce that the Bookbuild, announced on 7 November 2019, is now closed and the Company has accepted subscriptions for 3,935,500 Placing Shares, which number also corresponds to the minimum number of ordinary shares initially intended to be issued in the Placing. The Placing comprises the issue of 3,935,500 Placing Shares at an Issue Price of GBP 190 pence per Placing Share. This is equivalent to an Issue Price of EUR 2.198 per Placing Share.

The Placing Shares to be issued amount to approximately 10.0 per cent. of the issued shares and votes in the Company, immediately prior to the Placing. The Company raises aggregate gross proceeds of GBP 7.48 million (EUR 8.65 million) in the Placing.

The Placing Shares will confer a right to dividends and other shareholder rights from their registration with the trade register kept by the Finnish Patent and Registration Office (the "Trade Register") which is expected to be on or about 12 November 2019 ("Registration"). Following Registration, the Placing Shares will subsequently be entered in the book-entry system maintained by Euroclear Finland Oy and registered in the book-entry accounts of each investor. Trading in the Placing Shares is expected to commence on the AIM market of the London Stock Exchange on or about 14 November 2019.

Following issue and Registration of the Placing Shares, the number of shares in Faron will be 43,290,747 ordinary shares with voting rights attached. The Company has no shares in treasury; therefore the total number of voting rights in Faron will be 43,290,747 (the "New Number of Shares and Votes"). This figure may be used by shareholders as the denominator for the calculations by which they will determine whether they are required to notify an interest in, or a change to their interest in, the New Number of Shares and Votes of the Company.

Commenting on the successful Placing, Dr Markku Jalkanen, CEO of Faron, said: "We are very pleased to have received such a tremendous support from new and existing shareholders, employees and Company directors in this transaction. We are very happy to have a significant number of new Nordic shareholders. This financing will allow us to further progress our clinical programme on Clevegen with a view to clarifying its full potential, either alone or in combination with existing cancer treatments. This is very important as many, if not all, cancer patients have reduced immune capacity to defend them against cancer spread and may potentially be focal information in terms of specifying our goals for the ongoing partnering discussions."

Use of Proceeds

The net proceeds raised in the Placing will be used to further the clinical development of Clevegen® as described in the Launch Notice. The net proceeds of the Placing are expected to provide the Company with twelve months' working capital.

Related Party and PDMR Transactions

Timo Syrjälä, an existing shareholder in the Company, has subscribed for 113,282 Placing Shares in aggregate (subscribed for through Acme Investments SPF Sarl ("Acme"), an entity wholly owned by Mr Syrjälä), for an aggregate subscription value of EUR 248,994 (GBP 215,235) at the Issue Price. Following the Placing, Mr Syrjälä's total holding in the Company's shares, which includes his indirect holding through Acme, will be 6,086,855 shares, representing 14.06 per cent. of the New Number of Shares and Votes. Mr Syrjälä is a "Substantial Shareholder" in the Company for the purposes of the AIM Rules for Companies (the "AIM Rules"). His subscription for Placing Shares pursuant to the Placing is a related party transaction for the purposes of the AIM Rules. The independent directors for the purpose of the Placing, being Gregory Brown, John Poulos, Leopoldo Zambeletti, Markku Jalkanen and Matti Manner, all of whom are independent of Mr Syrjälä, having consulted with Panmure Gordon, the Company's nominated adviser for the purposes of the AIM Rules, consider the terms of the participation by Mr Syrjälä in the Placing to be fair and reasonable insofar as shareholders are concerned.

Dr Frank Armstrong, chair of the Board of Directors, has subscribed for 9,063 Placing Shares at the Issue Price. The beneficial interests of the directors in the issued shares and votes of the Company is set out below:

The participation of Dr Frank Armstrong in the Placing constitutes a related party transaction for the purposes of the AIM Rules. The independent directors for the purpose of the Placing, being Gregory Brown, John Poulos, Leopoldo Zambeletti, Markku Jalkanen and Matti Manner, have consulted with the Company's nominated adviser, Panmure Gordon, and consider that the terms of the related party transaction are fair and reasonable insofar as the shareholders are concerned. 

Other persons discharging managerial responsibilities ("PDMRs") also participated in the Placing; these include Maria Lahtinen, Toni Hänninen and Yrjö Wichmann who subscribed for 2,226; 6,797 and 6,797 Placing Shares respectively. Further details are provided below.

In addition to the subscriptions made by the directors and PDMRs above, members of the personnel of the Company have also subscribed for 14,046 Placing Shares.

Exchange rate

Unless otherwise specified, this notice contains certain translations of euros into amounts in pounds sterling for the convenience of the reader based on the exchange rate of EUR 1 = GBP 0.86442, being the published exchange rate by the European Central Bank at the close of business on 7 November 2019 (the latest practicable date prior to the date of this notice).

The information contained within this notice constitutes inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014.

For more information please contact:

Faron Pharmaceuticals Oy

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com 

Carnegie Investment Bank AB, Financial Adviser

Mika Karikoski (Corporate Finance)

Phone: +358 9 6187 1295

Panmure Gordon (UK) Limited, Nomad and Broker

Emma Earl, Freddy Crossley (Corporate Finance)

James Stearns (Corporate Broking)

Phone: +44 207 886 2500

Consilium Strategic Communications

Mary-Jane Elliott

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