Key Publication in Journal of Immunology

Faron Pharmaceuticals Oy

("Faron" or the "Company")

Key Publication on Novel Cancer Immunotherapy Mechanism Related to Clevegen in Journal of Immunology

Immunosuppressive drug-target Clever-1 controls Th1 mediated immunity

TURKU - FINLAND 30 November 2015 - Faron Pharmaceuticals Ltd ("Faron") (LON: FARN) is pleased to announce a key publication on Clever-1 function related to its novel cancer immunotherapy antibody Clevegen, in the Journal of Immunology, the highly ranked journal of the American Association of Immunology. The article is available at doi:10.4049/jimmunol.1500257.

The Journal of Immunology paper outlines the functional role of Clever-1 (also known as Stabilin-1) in immune responses. According to this Palani et al. study (2016), the study data defines Clever-1 as a new immunosuppressive molecule and suggests that Clever-1 may dampen pro-inflammatory reactions in vivo, especially when expressed on the surface of monocytes/macrophages. Pro-inflammatory reactions are necessary to stimulate immunological attacks by the body against tumour. The study also showed anti-Clever 1 treatment (using preclinical versions of Clevegen) led to an increase in pro-inflammatory molecules, including tumor necrosis factor-a (a cytokine with well known anti-cancer properties).

Clevegen targets these Clever-1 cell surface receptors which are involved in cancer growth and spread. When Clever-1 is blocked, tumour-associated macrophages (TAM) cannot enter the tumour site and their function in the tumour as an immune suppressive cell is diminished. Both these events change the tumour environment from immune suppression to immune stimulation, allowing the host immune system to fight the tumour cells.

Markku Jalkanen, CEO of Faron Pharmaceuticals said: "It is well known that tumours use similar immunosuppressive mechanisms to escape from the control of the host immune system. Therefore we are very excited about these findings which demonstrate the importance of Clever-1 as an immuosuppresive molecule and supports the use of Clevegen as an immunotherapy product. Our collaborators are working actively to show similar suppression with cells from cancer patients. We are working hard to advance our Clevegen programme, as announced recently, towards clinical use as a new onco-immunological alternative."

Clever-1 can be found on selected endothelial cells and alternatively activated M2 macrophages, especially when present in tumours where they are called tumour-associated macrophages (TAM).

Palani´s functional experiments with monocytes/macrophages expressing either low or high amounts of Clever-1 resulted in a clear difference in antigen-mediated immunity (Th1). The experiments with Clever-1 blocking antibodies (preclinical versions of Clevegen) revealed a very significant increase in Th1-mediated immune response under their influence. High numbers of Clever-1-positive monocytes/macrophages were also found in the blood and placenta during normal pregnancy. This suggests that the Clever-1 positive monocytes/macrophages can contribute to the immune tolerance between an embryo and maternal tissues, which is needed to prevent rejection of the foetus.

Referenced article: Palani S, Elima K, Ekholm E, Jalkanen S and Salmi M (2016) Monocyte Stabilin-1 Suppresses the Activation of Th1 lymphocytes. J. Immunol., in press.

For more information, please 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 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.

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 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