Financial statement release January 1 to December 31, 2020
- Clevegen® (bexmarilimab) Phase I/II MATINS study has shown early clinical benefits in six hard-to-treat solid cancers with further combination studies planned
- Intravenous interferon beta-1a Traumakine®, for organ damage protection, now also investigated as potential COVID-19 treatment
- Company’s balance sheet strengthened by successful share placings of €14 million and €15 million (post period)
- Additional grants of €3.3 million and €4.6 million loans and loan guarantees awarded to drive R&D and CMC programmes
Financial statement release, 25 March 2021 at 9.00 AM (EET)
Inside information
TURKU - FINLAND – Faron Pharmaceuticals Oy (AIM: FARN, First North: FARON), the clinical stage biopharmaceutical company, today reports its financial statements for the year ended 31 December 2020 and H2 2020.
HIGHLIGHTS
Operational (including post period):
Clevegen® (bexmarilimab) – Faron’s wholly-owned, novel precision cancer immunotherapy candidate, in Phase I/II development for difficult-to-treat cancers.
- Strong patient recruitment continues in Part II of the Phase I/II MATINS trial, investigating the potential of bexmarilimab in patients with solid tumours who have exhausted all treatment options. 10 cancer types – cutaneous melanoma, uveal melanoma, ovarian cancer, colorectal cancer (CRC), hepatocellular cancer, ER+ breast cancer, pancreatic cancer, gastric cancer, cholangiocarcinoma, anaplastic thyroid carcinoma – are currently under investigation.
- Clinical benefits have been observed across six cancer types to date – CRC, ovarian cancer, cutaneous melanoma, hepatocellular cancer, cholangiocarcinoma and gastric cancer. These are primary candidates to become expansion cohorts for Part III of the study.
- More frequent dosing, beyond the original three week dosing interval, is being explored in all six cohort types showing early signs of clinical benefit in order to confirm the optimum dosing regimen for pivotal studies, following analysis of key pharmacokinetic and pharmacodynamic biomarkers indicating the potential for increased bexmarilimab efficacy.
- Clinical expansion trials will investigate bexmarilimab’s potential in additional clinical settings, with trials expected to start later in 2021 – in combination with standard of care (SOC) as a first-line therapy in selected advanced solid tumours and haematological malignancies. Additionally, trials will also investigate bexmarilimab as a standalone neoadjuvant therapy for patients with early stage CRC and and clear cell renal cell carcinoma.
- Established soluble Clever-1 as potential inhibitor of T cell activation through the testing of MATINS patients’ plasma. New findings suggest that their high levels of free, soluble Clever-1 can act as a direct inhibitor of T cell activation, thereby providing a broader immunosuppressive effect than previously expected. This suggests that the inactivation of Clever-1 could be more broadly applicable, potentially enabling patients to benefit from immuno-oncology therapies which have previously been ineffective. A new patent application has been filed seeking global protection for these findings and related applications.
- Commercial scale manufacturing contract for the development and manufacturing of bexmarilimab was established with AGC Biologics.
- €3.3 million grants to support the development of bexmarilimab were received in 2020 from the European Innovation Council (EIC) Accelerator pilot scheme (€2.5 million) and the Finnish Cancer IO consortium (€0.8 million).
- Scientific learnings on bexmarilimab were shared at key global conferences including the virtual American Society of Clinical Oncology (ASCO20) Annual Meeting, the European Society of Medical Oncology (ESMO) Virtual Congress and ESMO’s Immuno-Oncology Virtual Congress 2020.
Traumakine® - Faron’s investigational intravenous (IV) interferon beta-1a therapy is in development for the treatment of acute respiratory distress syndrome (ARDS) and other ischemic or hyperinflammatory conditions.
· Supported the global search for potential treatments for COVID-19, with Traumakine’s inclusion in two global initiatives in 2020 – the global REMAP-CAP (Randomized, Embedded, Multifactorial Adaptive Platform Trial for Community-Acquired Pneumonia), which is ongoing across more than 200 sites and 19 countries, and the WHO’s Solidarity trial. The WHO trial determined in October 2020 that subcutaneous IFN beta-1a was ineffective in reducing overall mortality in hospitalised COVID-19 patients. At the time of analysis, too few patients had received an IV formulation of IFN beta to enable interpretation of the data and to draw any conclusions on its effect. WHO has yet to provide the Company with detailed dosing and safety information which is a normal regulatory requirement for drug testing and use.
· On track to initiate a Faron-sponsored trial investigating the potential of Traumakine to treat COVID-19. The Phase II/III HIBISCUS (Human intravenous Interferon Beta-Ia Safety and preliminary efficacy in hospitalised subjects with CoronavirUS) study will be conducted in approximately 5-10 study sites across the US in hospitalised patients with COVID-19, who do not yet require mechanical ventilation, but maximally low flow oxygen support. Use of corticosteroids concomitantly with Traumakine is not possible in the study setting but enabled in a sequenced manner, following Traumakine treatment. Post period the Company received $6.1 million of funding from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, granted by the US Department of Defense, to support HIBISCUS.
· Building on Faron’s already strong IP portfolio for Traumakine, the Company applied for additional patent protection for Traumakine relating to the induction of CD73 for organ protection, followed by the use of corticosteroids for the treatment of systemic inflammation. In this sequence, the best effects of both drugs are optimised in a sequence for patient benefit. This order is strongly supported by molecular analysis of IFN-beta signaling pathways in many published articles over recent months.
· Partnership established with the 59th Medical Wing of the U.S. Air Force and U.S. Army and U.S. Army Institute of Surgical Research to explore the use of Traumakine for organ protection in combat wounds leading to multi-organ failure from ischemia and reperfusion.
· To support Traumakine’s potential future commercial use, AGC Biologics was selected to be the new manufacturing house for commercial scale production. A €2.1 million low interest rate loan from Business Finland and a €2.5 million loan guarantee from Finnvera, the official Export Credit Agency of Finland, are supporting the establishment of a new cell line for the manufacturing process.
· Detailed analyses into the deleterious effects of glucocorticoids on Traumakine activity, undertaken following the INTEREST trial results in 2018, were published in Intensive Care Medicine, a world-leading journal in the field of critical care, in May 2020.
Haematokine® – An AOC3 (amine oxidase copper containing 3) protein inhibitor in development for use in regenerative medicine and to treat hematological malignancies.
- Faron acquired rights for this potential use of AOC3 inhibitors in March 2020 and will be responsible for the future development of Haematokine and for the management, prosecution, maintenance and filing of patent applications.
- IND-enabling studies for this programme are continuing and, following a first review by the Finnish patent office, the Company believes global patent protection could be possible for the Haematokine project.
Corporate
· Faron hosted a virtual R&D Day presenting the Company’s R&D strategy and insights into its two clinical stage programmes. Alongside Dr Markku Jalkanen, Chief Executive Officer, and members of the Executive Leadership and senior management teams, external perspectives were provided by Prof. Alberto Mantovani, Humanitas University, Milan, Italy; Ass. Prof. Maija Hollmén, MediCity, Turku University, Finland and Dr. Petri Bono, Terveystalo, Helsinki, Finland.
Impact of COVID-19
- During the pandemic the Company’s ability to secure funding and remote working operations has been key to continued success. Even during exceptional circumstances, Faron has been able to continue to operate its business almost normally and the development of its clinical trials proceeded as planned.
- Additionally, Faron closely followed and strictly complied with the regulations and recommendations of the Finnish National Institute for Health and Welfare (THL) and other relevant authorities to ensure the safety for its employees, study subjects and partners.
Financial
- On 31 December 2020, the Company held cash balances of €4.1 million (2019: €7.1 million).
- Loss for the period for the financial year ended 31 December 2020 was €16.9 million (2019: €13.3
million).
- Net assets on 31 December 2020 were €-1.8 million (2019: €1.6 million).
- In April 2020, the Company successfully raised a total of €14.0 million gross (€13.0 million net) from new and existing shareholders, through issuance of total of 3,500,000 new ordinary shares. The majority of these proceeds are being used to expand Clevegen in additional targets in the MATINS trial, support Traumakine in the ongoing REMAP-CAP trial and to strengthen the Company’s balance sheet.
- The Company received a combination of grants, loans and loan guarantees totalling €7.9 million from Business Finland (May 2020: Grant €0.8 million, June 2020: Loan €2.1 million), The European Innovation Council (June 2020: Grant €2.5 million), Finnvera (Aug 2020: Loan guarantee €2.5 million). A total of €2.2 million of these funds were received during the period and the rest will continue to be received post period.
- Post period in February 2021, the Company raised €15 million gross (approximately €14.4 million net) from new and existing shareholders through an issuance of 3,521,127 new ordinary shares.
Consolidated key figures, IFRS
|
€’000 |
Unaudited 7-12/2020 |
Unaudited 7-12/2019 |
1-12/2020 |
1-12/2019 |
|
Revenue |
0 |
0 |
0 |
0 |
|
Other operating income |
1,379 |
185 |
2,122 |
185 |
|
Research and Development expenses |
(8,345) |
(5,255) |
(13,879) |
(10,237) |
|
General and Administrative expenses |
(2,543) |
(1,688) |
(4,897) |
(3,049) |
|
Loss for the period |
(9,603) |
(6,850) |
(16,946) |
(13,262) |
|
|
Unaudited 7-12/2020 |
Unaudited 7-12/2019 |
1-12/2020 |
1-12/2019 |
|
|
|
|
|
|
|
Loss per share EUR |
(0.22) |
(0.18) |
(0.37) |
(0.36) |
|
Number of shares at end of period |
46,896,747 |
43,290,747 |
46,896,747 |
43,290,747 |
|
Average number of shares |
44,606,204 |
38,551,293 |
45,712,111 |
36,850,577 |
|
€’000 |
Unaudited 30 Jun 2020 |
Unaudited 30 Jun 2019 |
31 Dec 2020 |
31 Dec 2019 |
|
Cash and cash equivalents |
11,627 |
2,892 |
4,108 |
7,059 |
|
Equity |
7,313 |
(1,761) |
(1,849) |
1,610 |
|
Balance sheet total |
14,343 |
5,103 |
8,367 |
10,209 |
Commenting on the results, Dr Markku Jalkanen, CEO of Faron, said: “The past year has been one of the most significant in Faron’s history, with rapid expansion of our clinical development programme for bexmarilimab, our novel Clever-1 targeting precision immunotherapy. Seeing the latest data from the MATINS trial, showing clinical benefit across six different tumour types, has been highly rewarding and gives us great confidence in the future of this next-generation immunotherapy. Our growing understanding of Clever-1 as an immune suppressive molecule and its role in the systemic inhibition of T-cells only adds to our confidence in bexmarilimab and its potential as a breakthrough therapy with broad application for patients with hard-to-treat cancers or those who no longer respond to current immunotherapies.
“I am very pleased that we have been able to support ongoing global research efforts to find the much needed, effective treatments for COVID-19 patients. The science behind Traumakine, our intravenous interferon (IFN) beta-1a, and its potential to prevent multi-organ failure by upregulating the key endothelial enzyme CD73, is compelling. We continue to believe that an intravenous formulation of IFN beta-1a is what patients need, to strengthen the body's own IFN beta signaling – the first line of defence against viral infection – and provide optimal exposure to the lung vasculature. With evidence emerging of increased interferon resistance among COVID-19 variants, suggesting the virus is evolving with new ways to evade our innate immune defences, research into the potential of exogenous interferon to reduce severe disease and mortality in COVID-10 patients remains critical.
”The Company’s successful fundraising in 2020 and, post period, in February this year, puts us in a strong position to continue the progress of our pipeline and brings us closer to our goal of developing ground-breaking new treatments from our unique scientific discoveries. I’d like to thank our shareholders for their continued support and the entire team at Faron for their exceptional efforts during a challenging year.”
Board of Directors’ Proposal on the Dividend
The Group’s loss for the accounting period was 16,946,261.84 euro (2019: 13,261,911.93 euro).
The Board of Directors does not recommend the payment of a dividend (2019: nil).
24 March 2021
Faron Pharmaceuticals
Board of Directors
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 ("MAR").
A virtual briefing and Q&A session for analysts will be hosted by Dr. Markku Jalkanen, Chief Executive Officer, and Toni Hänninen, Chief Financial Officer, at 12:00 pm GMT / 2:00 pm EET / 8:00 am EST on the day of results. The Full-year results release for 2020, presentation, webcast details, and Annual Report 2020 will be made available at www.faron.com/investors. A replay of the analyst briefing will be made available shortly afterwards.
Webcast link: https://www.lsegissuerservices.com/spark/FaronPharmaceuticalsOy/events/04110470-3c65-4dad-ba56-54b27e83f27f
For more information please contact:
Faron Pharmaceuticals Oy
Dr Markku Jalkanen, Chief Executive Officer
Cairn Financial Advisers LLP, Nomad
Sandy Jamieson, Jo Turner, Mark Rogers
Phone. +44 (0)20 7213 0880
Panmure Gordon (UK) Limited, Broker
Rupert Dearden
Phone: +44 207 886 2500
Sisu Partners Oy, Certified Adviser on Nasdaq First North
Juha Karttunen
Phone: +358 (0)40 555 4727
Jukka Järvelä
Phone: +358 (0)50 55 38 990
Consilium Strategic Communications
Mary-Jane Elliott, David Daley, Lindsey Neville
Phone: +44 (0)20 3709 5700
E-mail: faron@consilium-comms.com
Stern Investor Relations
Julie Seidel
Phone: +1 212 362 1200
Email: julie.seidel@sternir.com
Publication of financial information during year 2021
The half-year financial report for the period 1 January to 30 June 2021 is scheduled to be published on 26 August 2021. Faron’s financial statements for full year 2020 will be published on 25 March 2021 and will also be available on the Company’s website at https://www.faron.com/investors/results.
The Annual General Meeting is planned for 23 April 2021. A separate stock exchange notice will be issued by Faron’s Board of Directors to convene the meeting.
About Faron Pharmaceuticals Ltd
Faron (AIM: FARN, First North: FARON) is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs caused by dysfunction of our immune system. The Company currently has a pipeline based on the receptors involved in regulation of immune response in oncology, organ damage and bone marrow regeneration. Bexmarilimab, a novel anti-Clever-1 humanised antibody, is its investigative precision immunotherapy with the potential to provide permanent immune stimulation for difficult-to-treat cancers through targeting myeloid function. Currently in phase I/II clinical development as a potential therapy for patients with untreatable solid tumours, bexmarilimab has potential as a single-agent therapy or in combination with other standard treatments including immune checkpoint molecules. Traumakine is an investigational intravenous (IV) interferon beta-1a therapy for the treatment of acute respiratory distress syndrome (ARDS) and other ischemic or hyperinflammatory conditions. Traumakine is currently being evaluated in global trials as a potential treatment for hospitalised patients with COVID-19 and with the 59th Medical Wing of the US Air Force and the US Department of Defense for the prevention of multiple organ dysfunction syndrome (MODS) after ischemia-reperfusion injury caused by a major trauma. Faron is based in Turku, Finland. Further information is available at www.faron.com
Editor Details
-
Name:
- Harpreet Virdi
