Faron Pharmaceuticals Oy

• U.S. Food and Drug Administration (FDA) approval of new HIBISCUS study protocol in patients with COVID-19 infection
• Company seeking patent protection for the sequential use of IV interferon beta-1a and corticosteroids
• Pipeline expansion into additional organ protection indications
• CMC scale-up in progress

Company announcement, 26 January 2021 at 9.00 AM (EET)
Inside information

TURKU - FINLAND - Faron Pharmaceuticals Oy (AIM: FARN, First North: FARON), the clinical stage biopharmaceutical company, announces that the U.S. Food and Drug Administration (FDA) has approved the Phase II/III HIBISCUS trial assessing Traumakine, Faron's intravenous (IV) IFN beta-1a, for the treatment of hospitalised patients with COVID-19. In the study Traumakine will be used prior to the current practice of corticosteroids, to prevent systemic inflammatory response syndrome (SIRS) and acute respiratory distress syndrome (ARDS), to improve clinical condition and reduce patient death. The study sponsorship has now been changed to Faron, with Professor Daniel Talmor from Harvard University's Beth Israel Deaconess Medical Center, as the Principal Investigator.

The mode of action of Traumakine is, in addition to a profound antiviral effect, to upregulate the cell surface protein, Cluster of Differentiation 73 (CD73). SIRS may be caused by both infectious assaults such as COVID-19, influenza and other micro-organisms, as well as noninfectious insults, such as trauma, ischemia-reperfusion injury or burns. SIRS is characterised by early excessive inflammatory cytokine production, initiated by extracellular ATP, a potent mediator of inflammation and thrombosis, which can also lead to vascular dysfunction, capillary leak and thrombosis, ultimately leading to life-threatening multiple organ dysfunction syndrome (MODS).

HIBISCUS study

The Human intravenous Interferon Beta-Ia Safety and preliminary efficacy in hospitalized subjects with CoronavirUS (HIBISCUS) phase II/III 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 after Traumakine. Faron has also applied for new patent protection relating to the induction of CD73 for organ protection, followed by the use of steroids for the treatment of systemic inflammation. Hence, the best effects of both drugs are optimised in a sequence for patient benefit.

The study will recruit 140 hospitalised COVID-19 patients with 1:1 randomisation assessing Traumakine against placebo with a primary endpoint of clinical status (WHO 9-point ordinal scale) at day 14. Secondary endpoints are clinical status at day 28, and in-hospital mortality at day 28 and day 90. The study protocol will have an interim analysis once 70 trial subjects have been assessed for the primary efficacy endpoint (clinical status at day 14). A further assessment of the conditional power will also be conducted in the interim analysis based on the observed result and the sample size will be adjusted accordingly, allowing completion of the study with confidence for regulatory compliance.

Dr. Markku Jalkanen, Faron's CEO, said: "We are pleased to have received approval from the FDA to commence our phase II/III HIBISCUS trial of intravenous IFN beta-1a in COVID-19 patients. IFN beta-1a has previously demonstrated a compelling scientific rationale as the body's first line of defense against viral infections and might be advantageous over current standard of care when given intravenously to patients suffering from COVID-19 induced ARDS. This trial will allow us to gain important insights into Traumakine's potential in this particular setting and we believe that this sequential administration of intravenous interferon beta, before corticosteroids, could become a standard of care in the future and as such have filed a patent application to protect the commercial opportunity.

"There have been no innovative new drugs in the field of emergency care for decades and it remains a highly underserved area of medicine in respect to therapeutics.  We strongly believe that vital organs can be better protected by the induction of CD73 and so we are pleased to be continuing the development of Traumakine through a number of important trials and collaborations. As such, we are continuing to scale up our manufacturing process with AGC Biologics as we work to create a new, state of the art manufacturing facility for Traumakine."

Collaboration with US Department of Defense to explore additional organ protection indications

As previously communicated, the U.S. Department of Defense ("DoD") has selected the HIBISCUS Study to receive $6.1 million of funding from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. As part of a working relationship established with Faron, the 59[th] Medical Wing of the US Air Force and the DoD will continue primate studies to evaluate Traumakine's role in preventing multiple organ dysfunction syndrome (MODS) after ischemia-reperfusion injury caused by a major trauma.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 ("MAR").

For more information please contact:

Faron Pharmaceuticals Oy

Dr Markku Jalkanen, Chief Executive Officer

investor.relations@faron.com

Cairn Financial Advisers LLP, Nomad

Sandy Jamieson, Jo Turner, Mark Rogers

Phone. +44 207 213 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

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. The Company currently has a pipeline based on the receptors involved in regulation of immune response in oncology and organ damage. Clevegen (bexmarilimab), its investigative precision immunotherapy, is a novel anti-Clever-1 antibody with the ability to switch immune suppression to immune activation in various conditions, with potential across oncology, infectious disease and vaccine development. Currently in phase I/II clinical development as a novel macrophage checkpoint immunotherapy for patients with untreatable solid tumours, Clevegen has potential as a single-agent therapy or in combination with other standard treatments including immune checkpoint molecules. Traumakine, the Company's pipeline candidate to prevent vascular leakage and organ failures is currently being tested in several Phase III studies around the world against COVID-19. Traumakine is intravenous IFN beta-1a, which is a strong anti-viral and anti-inflammatory agent. Faron is based in Turku, Finland. Further information is available at www.faron.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", "hope", "seek", ''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 and expectations discussed in the forward-looking statements, many of which are beyond the control of the Company. In particular, the early data from initial patients in the MATINS trial may not be replicated in larger patient numbers and the outcome of clinical trials may not be favourable or clinical trials over and above those currently planned may be required before the Company is able to apply for marketing approval for a product.  In addition,  other factors which could cause actual results to differ materially include the ability of the Company to successfully licence its programmes within the anticipated timeframe or at all, 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 or other sources of funding, reliance on key personnel, uninsured and underinsured losses and other factors. 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.