Faron Pharmaceuticals Regulatory News (FARN)

Faron Pharmaceuticals Oy

("Faron" or the "Company")

IDMC recommends Traumakine® Phase III ARDS study to continue as planned

~ Traumakine compassionate use program to be initiated as trial nears completion of recruitment ~

TURKU - FINLAND, 4 August, 2017 - Faron Pharmaceuticals Ltd ("Faron") (LON: FARN), the clinical stage biopharmaceutical company, provides an update on the INTEREST Phase III study treating patients with moderate to severe Acute Respiratory Distress Syndrome (ARDS) with its lead product Traumakine, following a meeting of the trial's Independent Data Monitoring Committee (IDMC) on 1 August 2017.

At this fifth and advanced meeting, the IDMC has recommended that the trial should continue as planned with no changes, consistent with the previous four IDMC recommendations. Faron anticipates that recruitment of the targeted 300 patients will complete during the fourth quarter of 2017.

As the INTEREST Phase III study nears completion, Faron plans to initiate an expanded access program for Traumakine to start once the trial is closed to new patients. This will allow compassionate use of Traumakine in eligible named patients at European ICU hospitals, who may benefit from Traumakine treatment ahead of the product's potential regulatory approval.

ARDS is a severe orphan disease with a reported mortality rate of approximately 30-45%, for which there is currently no approved pharmacological treatment. It is characterised by widespread capillary leakage and inflammation in the lungs, most often as a result of pneumonia (e.g. following a pandemic influenza), sepsis, or significant trauma with around 300,000 annual cases in Europe and US.

Dr Markku Jalkanen, Chief Executive Officer of Faron Pharmaceuticals, commented: "We are very pleased to receive the IDMC's recommendation that the INTEREST study should continue as planned. The trial is now moving into its final stages and we look forward to closing recruitment during the fourth quarter of 2017. Given this imminent completion, and based on the potential benefits that Traumakine could offer, further supported by another successful safety review, we plan to set up a compassionate use program for named patients with this severe disease following closure of the trial. The aim of this program is to provide continued access to Traumakine once the INTEREST trial sites close, until conclusion of the regulatory approval process."

The INTEREST trial is a Phase III double-blind, randomised, parallel-group comparison of efficacy and safety of Traumakine (FP-1201-lyo) and placebo in the treatment of patients with moderate to severe ARDS. The study, designed to include up to 300 patients, is currently being conducted in 60 hospital intensive care units (ICU) in Belgium, Finland, France, Germany, Italy, Spain and UK. The primary efficacy endpoint in the INTEREST trial is the all-cause mortality rate at day 28, the only accepted primary end point for marketing approval by EMA. The INTEREST trial protocol is targeting a 50% reduction in all cause mortality at day 28 between placebo and treatment arm (from 30% to 15%).

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.

- END -

For more information, please contact:

Faron Pharmaceuticals Oy

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faronpharmaceuticals.com

Consilium Strategic Communications

Mary-Jane Elliott, Chris Welsh, Philippa Gardner, 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

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.