Faron Pharma Regulatory News (FARN)

Faron Pharmaceuticals Oy

("Faron" or the "Company")

Positive top-line results from the Japanese Phase II study of Traumakine® for the treatment of ARDS

TURKU - FINLAND, 7 January 2016 - Faron Pharmaceuticals Ltd ("Faron") (LON: FARN), the clinical stage biopharmaceutical company, is pleased to announce that its Japanese licensing partner Maruishi Pharmaceutical Co., Ltd. ("Maruishi") has obtained positive results from the Phase II Japanese study for Traumakine® conducted by Maruishi in Japan. Traumakine® is in development for the treatment of acute respiratory distress syndrome ("ARDS"). Based on these results Maruishi is now planning the next pivotal clinical trial to be conducted in Japan. The following is an overview of the study results:

· The open-label trial (JapicCTI-142716) to study safety and initial efficacy of Traumakine® in the Japanese population consisted of 12 patients with moderate ARDS and six patients with severe ARDS with an average APACHE II score of 31.6 (13-49), 18 patients in total.

· Traumakine® (Maruishi code is MR11A8) was safe and well tolerated in all tested dosing groups (daily 2.5 mcg, 5.0 mcg and 10 mcg for six days).

· The all-cause mortality rate at Day 28, being the primary efficacy end point, was 22.2% across all patients (4/18). The typical mortality rate for patients with an average APACHE II score of 31.6, as published by Critical Care Medicine (1985; 13:818-829), is 75%.

· The Day 28 mortality rate across the two highest dosing cohorts (5 mcg and 10 mcg), below which dosing level there is no full drug effect, was 16.6%.

Dr Markku Jalkanen, CEO of Faron, said: "Following the announcement of the first patient recruitment for our pivotal Phase III Pan-European INTEREST trial, we very much welcome the positive news of the Japanese Phase II study. The trial results reported by Maruishi are extremely encouraging, particularly as the trial included very sick ARDS patients, yet still resulted in relatively low mortality rates. We are happy to learn that Maruishi is now planning the next pivotal clinical trial which will enable them to move towards filing of TraumakineÒ marketing approval in Japan."

The Phase II study (JapicCTI-142716) was conducted at 15 intensive care unit facilities in Japan, from February to December 2015. A total of 18 ARDS patients were recruited, 12 of whom had moderate ARDS and six with severe ARDS. There were three cohorts for TraumakineÒ, low (2.5 mcg), medium (5 mcg) and high (10 mcg) doses and all cohorts enrolled a total of six patients. The efficacy primary end point was all-cause mortality at Day 28 and the results for each of the cohorts were 2/6 (33.3%), 0/6 (0%), and 2/6 (33.3%), respectively. The Day 28 mortality of patients, who received 5 mcg or higher of daily MR11A8, was 2/12 (16.7%) and, by severity, 1/9 (11.1%) in moderate and 1/3 (33.3%) in severe patients.

For more information contact:

Faron Pharmaceuticals Oy

Katja Wallenlind

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

Cairn Financial Advisers LLP, Nominated Adviser

Emma Earl, Tony Rawlinson and Rebecca Anderson

Phone: +44 207 148 7900

Whitman Howard Limited, Nominated Broker

Niall Devins, Francis North

Phone: +44 207 659 1234

Hume Brophy, PR

Mary Clark, Eva Haas, Hollie Vile

Phone: +44 203 440 5654

E-mail: faron@humebrophy.com

About Faron Pharmaceuticals Oy

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 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 for which there is currently no approved pharmaceutical treatment. 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. Further information is available at www.faronpharmaceuticals.com.

About Maruishi Pharmaceutical Co., Ltd.

Maruishi, an Osaka-based company with over 120-year history, has a strong presence in the Japanese market as a specialty pharma developing, manufacturing, and marketing anesthetics, disinfectants and as a leading manufacturer and marketer of Japanese Pharmacopeia drugs. In recent years, the company has focused on two specific areas, perioperative drugs and disinfectants/antiseptics, aiming for a more advanced "Specialty Pharma" with a strong presence in these areas. Maruishi continues to be proactively engaged in R&D activities to contribute to the improvement of the quality of life (QOL) of patients.

About ARDS

ARDS is a severe, life-threatening medical condition characterised by widespread inflammation in the lungs and sudden failure of the respiratory system. ARDS causes inflammation of the alveoli in the lungs, which are unable to perform the normal oxygenation of blood. It is characterised by rapid breathing, difficulty getting enough air into the lungs and low blood oxygen levels. Common causes of ARDS are sepsis, pneumonia, aspiration of fumes, food or stomach contents going into the lung or significant trauma. The condition was first described in 1967 and gained wide attention during the Vietnam War when it was nicknamed "white lung" as X-rays presented the lungs of the patients as white.

ARDS is the leading cause of respiratory failure in intensive care unit patients requiring mechanical ventilation and oxygen therapy. Despite progress in critical care medicine ARDS is currently associated with a mortality rate of 30% to 45% depending on the severity of the condition. Although ARDS mortality has decreased in the last decade due to improvements in supportive care and in the treatment of the underlying conditions, it still remains high.

Currently, patients suffering from ARDS are generally treated with lung-protective mechanical ventilation. This treatment is accompanied by ancillary support such as positioning, fluid management, and food restrictions. Extra corporeal support may also be provided depending on the severity of the condition. Complications, which can also arise whilst a patient is being treated for ARDS, include the development of infections, pneumothorax, lung scarring and blood clots, which can develop into a pulmonary embolism. Patients who recover from ARDS may suffer other consequences of ARDS after being discharged from the intensive care unit. A recovering patient's quality of life may be adversely affected by permanent damage to the lungs, respiratory problems, scar tissue, muscle weakness and depression, all of which can have an adverse effect on the patient's quality of life.

About Traumakine®

Faron completed a Phase I/II trial in respect of Traumakine® in 2011 where treatment with Traumakine® was associated with an 81 % reduction in the odds of 28 day mortality in patients with ARDS. These data were published in The Lancet Respiratory Medicine, a leading medical journal (Bellingan et al. 2014).

The scientific rationale for Traumakine® treatment is based on the proprietary use of room temperature stable formulation of interferon-beta-1a (FP-1201-lyo) for the restoration of the endothelial barrier function in ARDS patients. In Phase I/II trials interferon-beta was found to be safe and well tolerated in ARDS patients and the optimal tolerated dose was established. The selected pharmacodynamic marker for interferon-beta bioactivity showed clear dose response and the treatment target molecule CD73 levels were induced during the dosing period.

The Traumakine® research consortium (www.traumakine.eu) led by Faron has received €6 million funding from the European Union Seventh Framework Programme (FP7) targeting European marketing application as a final milestone of the programme.