Faron Pharmaceuticals Oy – Final Results

Faron Pharmaceuticals Ltd (AIM: FARN), the clinical stage biopharmaceutical company, today reports its full year audited results for the year ended 31 December 2018.

HIGHLIGHTS  

Operational (including post period-end):

Traumakine^® – in development for the treatment of organ failures

• The Company continued to analyse INTEREST trial data following the finding that Traumakine treatment produced inconsistent interferon-beta (IFN-beta) bioactivity across the treatment group.
  –  Data showing that concomitant use of corticosteroids and Traumakine appeared to affect both the mortality and biomarker appearance in the INTEREST study was presented at the ESICM (European Society for Intensive Care Medicine) conference.
  –  Genetic testing identified a subgroup of ARDS patients for Traumakine treatment in the trial showing substantial reduction in mortality among INTEREST trial patients. Approximately 35% of Europeans carry this genetic polymorphism (C/T).
  –  Interim results from the YODA study indicated that IFN-beta, regardless of the method of solubilisation, produced the expected level of bioactivity suggesting that drug formulation was not affecting the outcome of the INTEREST trial.
  –  Further YODA results are expected in Q2 2019 to confirm, in vivo, the observed interference of corticosteroids on IFN-beta bioactivity in the INTEREST study and ex vivo in lung samples.
  –  Top-line data from the Phase III ARDS trial with Japanese partner Maruishi Pharmaceutical Co., Ltd were, as expected, consistent with the INTEREST study results, showing that treatment with Traumakine, in a study group where there was high concomitant glucocorticoid use (77%), did not result in reduced mortality or increased number of ventilator-free survival days when compared to placebo.
• Plans announced in March 2019 for a new global phase III trial of Traumakine in the treatment of ARDS (CALIBER), subject to external funding. The Company is seeking feedback from both the FDA and EMA.
• EMA approved paediatric development plan for Traumakine in paediatric ARDS and updated orphan definition of orphan status in Europe, in which the patient population is now defined according to the Berlin classification of ARDS patients.
• Further recommendations were received from the Independent Data Monitoring Committee (IDMC) to continue the Phase II INFORAAA study for the prevention of Multi-Organ Failure (MOF) and associated mortality of surgically operated Ruptured Abdominal Aorta Aneurysm (RAAA). Advanced interim analysis is expected to take place in Q2 2019.
• Patents to use certain biomarkers to measure the severity and treatment efficacy of ARDS patients were granted in Europe, Japan and Canada. The intravenous (IV) formulation patent of IFN-beta were also approved in Europe and US, and could protect IV use of IFN-beta upto 2035-37 in various territories.

Clevegen^®  – wholly-owned novel cancer immunotherapy in development 

• Completion of successful preclinical toxicity studies which showed good safety profile and potential of Clevegen to block Clever-1 on circulating monocytes.
• Following Clinical Trial Application (CTA) approval from the Finnish Medicines Agency (FIMEA), the first patient was successfully dosed in the phase I/II MATINS study in December 2018. A subsequent approval from the UK’s MHRA saw the trial expand with two further sites opened in the UK.
• Encouraging early observations in the MATINS study on immunity and clinical response indicated potential early clinical benefits in dosed patients together with a switch in their immune profile towards more immune stimulatory function. No safety concerns were seen in the four subjects dosed at 0.3 and 1.0 mg/kg.
• A tumour imaging report from a patient with colorectal cancer indicated significant shrinkage of lung metastasis, classified as a partial response according to the RECIST classification. The same patient also showed a decrease in tumour load marker CEA (carcinoembryonic antigen) and an increase in circulating B-cells which could indicate an antibody-mediated response against the tumour. This patient had previously been treated with six different anti-cancer drugs, which all had failed.
• Colorectal cancer was selected as a first expansion
• Bexmarilimab proposed by WHO as International nonproprietary (INN) name
• New experimental data supporting the immunotherapeutic blockade of Clever-1 as an alternative to, or in combination with, PD-1 checkpoint inhibition to reactivate immunity against immunosuppressive tumours was published in Clinical Cancer Research, a journal of the American Association for Cancer Research.
• Patent granted by the European Patent Office for the use of Clever-1 antibodies, the mechanism behind Clevegen, for the treatment of cancer, extending the existing patent estate for Clevegen until 2030. Further protection for Clevegen epitope itself has been applied that would protect Clevegen use until 2039-40.
• Clever-1 control of B-cell mediated antibody formation in vivo was published by Frontiers in Immunology, re-enforcing the importance of the Company’s program investigating the switching of immune suppression to immune activation in conditions beyond immuno-oncology.  

FINANCIAL  

• On 31 December 2018, the Company held cash balances of €4.1 million (2017: €9.3 million).
• Loss for the period for the financial year ended 31 December 2018 was €20.1 million (2017: €21.1 million loss).
• Net assets on 31 December 2018 were €0.4 million (2017: €4.7 million). The net assets at end March 2019 were €0.7 million.
• Cash preservation program implemented to reduce cash burn and preserve existing resources in order to deliver value to shareholders.
• Raised £15.0 million (net €15.9 million) in February 2018 intended to support preparations for the commercialisation of Traumakine and to advance the clinical development of Clevegen in several indications.
• Post accounting period raised net €2.9 million through placing and subscription in March 2019 by way of new shares at the issue price of 70.2 cents (60 pence)  per share. The placing and subscription were supported by the participation of existing and new institutional shareholders. The proceeds will be used to further the clinical development of both Traumakine and Clevegen. The net proceeds of the fundraise are expected to provide the Company with working capital into Q3 2019. The cash position at the end of March 2019 was €4.9 million. 

CORPORATE

• Faron now has registered subsidiaries in the United States of America and in Switzerland.
• Dr Jonathan Knowles resigned from the Board to take up a position as Chair of the newly formed Clevegen Scientific Advisory Board and Dr Huaihzeng Peng resigned from the Board but will continue as an invited Board Observer. 

Commenting on the results, Dr Markku Jalkanen, CEO of Faron, said: “We have made a number of important discoveries whilst analysing the Traumakine INTEREST data during 2018 which have allowed us to not only believe that there is definitely a future for Traumakine in the treatment of ARDS, but also determine the next steps in its development, including the design of the phase III CALIBER study.  We were also pleased to start dosing the first patients with Clevegen in the MATINS trial, on schedule, and I am greatly encouraged by the promising early observations and data we have seen. I remain very optimistic about the future of Clevegen and the potential clinical benefit it may provide to late stage cancer patients.

“I believe 2019 will be a pivotal year for Faron during which we will continue to expedite Clevegen’s development through clinical trials; seek approval from the FDA and the EMA on the CALIBER trial design for Traumakine whilst also advancing partnering discussions for both product candidates.  I would like to thank everyone working at Faron for their dedication and hardwork over the past year and also our shareholders, both new and existing, for their encouragement and continued belief in the pipeline and management team.”

The 2018 Annual Report and Accounts will be made available shortly, in digital form and on the Company’s website together with the invitation to the Annual General Meeting (AGM).