THIS ANNOUNCEMENT AND THE
INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, NEW
ZEALAND, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, SINGAPORE,
HONG KONG OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE,
PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT CONTAINS
INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION
596/2014 ("MAR") AND ARTICLE 7 OF MAR AS IT FORMS PART OF DOMESTIC
LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018 ("UK MAR").
Faron Pharmaceuticals
Ltd
("Faron" or the
"Company")
Inside
Information:
Announcement of Placing of
Newly Issued Treasury Shares to Raise EUR 4.8 Million and
of
PDMR
Dealings
Company announcement, 4 April 2024 at 7:00 a.m. BST/ 9:00 a.m.
EEST
Inside information
Key
highlights
- The Company has
conducted a private placement directed to a limited number of
institutional and other investors to raise EUR 4.8 million to
secure the required and previously communicated short-term bridge
financing totalling EUR 8 million (incl. the EUR 3.2 million
convertible loan announced on 4 March 2024).
- Upon receipt of these
proceeds, the Company continues to satisfy the required covenant
levels and expects to have sufficient working capital into June
2024.
- The Placing was
supported by both new and existing shareholders such as European
Innovation Council (EIC Fund) and other Finnish and international
investors.
- To complete the
enrolment of the phase 2 of the BEXMAB study with interim and final
readouts and to obtain regulatory feedback from the FDA between now
and Q1/2025, the Company expects to need an additional EUR 27
million in total (accounting for the raised EUR 8 million in early
March and this Placing).
- The Company continues active endeavours and preparations to secure
longer term funding. The Company's Board of Directors has proposed
to the Annual General Meeting scheduled to be held on 5 April 2024
an authorization for a larger share issuance contemplated to be
launched as a public offering (with planned allocation preferences
to existing shareholders and bridge finance lenders) as soon as
practicable once the required preparations and approvals are in
place. The targeted size of the contemplated share issue is planned
to be set accordingly, to meet cash runway needs for
2024.
TURKU, FINLAND / BOSTON,
MA -
Faron Pharmaceuticals Ltd (First North: FARON, AIM:
FARN), a clinical stage biopharmaceutical
company pioneering macrophage reprogramming for effective anticancer
immunotherapies, today announces that it has
conducted a placement of 3,200,298 newly issued treasury shares
("Placing Shares") to
raise EUR 4.8 million before expenses to a limited number
of institutional investors and other investors ("Placing"). Upon receipt of these proceeds,
the Company continues to satisfy the required covenant levels and
expects to have sufficient working capital into June 2024. Carnegie
Investment Bank AB (publ), Finland Branch is acting as
sole bookrunner and lead manager in the Placing.
The Placing was carried out as
a private placement by way of a firm placement of Placing
Shares to a limited number of institutional and other investors. To
implement the Placing, the Board of Directors of Faron (the
"Board") has decided
to issue 3,200,298 shares to Faron itself without
consideration ("Treasury
Shares") and, subject to the registration of the
Treasury Shares, further convey such Treasury
Shares as Placing Shares to the participating investors. The
subscription price per Placing Share of EUR 1.50 (the
"Issue Price") represents a
11.2 % discount to the close price on 3 April 2024 on Nasdaq
Helsinki First North ("First
North"). The settlement of the Placing (delivery
against payment) trades is expected to complete on or around 9
April 2024. The Placing was supported by both new and existing
shareholders such as European Innovation Council (EIC Fund) and
other Finnish and international investors.
"This fundraise will enable us to meet our
immediate financing needs and continue our ambitious bexmarilimab
development program, with a focus on delivering next
milestones," said Dr. Markku Jalkanen, Chief Executive
Officer of the Company. "These
funds are part of the larger financing plan to secure cash runway
into beginning of 2025 and to complete Phase II study and receive
FDA's guidance for the pivotal study part. We would like to thank
all our investors for their support in developing this novel
immunotherapy, especially for myeloid leukemia with very few
treatment options".
As was announced by the Company on 4
March 2024 following its receipt of the EUR 3.2 million binding
commitments for convertible loans to secure the Company's immediate
short-term financing needs until the end of March 2024 and allowing
the Company to make critical payments to third parties under agreed
waiver ("Waiver") with IPF
Fund II SCA, SICAV-FIAR ("IPF"), the Company has continued active
endeavours to secure its short and longer-term financing needs. The
now announced Placing covers the required and previously
communicated short-term bridge financing totalling at least EUR 8
million (incl. the EUR 3.2 million convertible loan announced on
March 4, 2024) to secure continued compliance with the cash
covenants agreed in the Waiver. As part of the Waiver, the minimum
cash covenant remains at the lowered level of EUR 4.5 million until
30 April 2024 and thereafter it returns to the previously agreed
level (being the higher of the Company's cash runway for the past
three (3) calendar months and the Company's expected cash runway
for the following three (3) calendar months). The Company continues
active endeavours and preparations to secure longer term
funding.
As previously announced, the Board
has proposed to the Annual General Meeting scheduled to be held on
5 April 2024 an authorization for a larger share issuance
contemplated to be launched as a public offering (with planned
allocation preferences to existing shareholders and bridge finance
lenders including conversion of loans) (the "Public Offering") as soon as
practicable once the required preparations and approvals are in
place. The receipt of long-term financing is necessary to secure
funding for 2024 and especially the uninterrupted continuation of
the Company's BEXMAB study to full read out of the Phase II study
and FDA feedback on registrational study design during 2024. The
targeted size of the contemplated Public Offering is planned to be
set accordingly, to meet these cash runway needs for 2024. The
Company is also evaluating and continuously negotiating several
business development alternatives that may result in non-dilutive
funding.
USE
OF PROCEEDS
Faron has completed an overall cost
reduction plan that eliminated over 20% of operating expenses
including a 25% reduction in employee-related expenditure. Cash
burn for the first half of 2024 is estimated at EUR 2.5 million per
month declining to approximately EUR 2.0 million per month in the
second half of the year.
Key activities
o Continuation of BEXMAB Phase 2 Study.
o Obtaining FDA advice on registrational Study
design.
o Maintaining GMP status for manufactured bexmarilimab and preparing it for
registrational Trial.
o Short term funding needs to satisfy the IPF covenant and
bridge operations into June 2024 before a long-term financing is in
place.
o Short term IPF related financing costs.
DETAILS OF THE PLACING AND SHARE ISSUES
The Placing is carried out within
the authorization granted to the Board by shareholders at the
Company's Annual General Meeting held on 24 March 2023 to issue up
to 12,500,000 new shares in aggregate in the Company, as well as
the conveyance of up to the same maximum number (twelve million
five hundred thousand (12,500,000)) of treasury shares in the
possession of the Company, including the right to deviate from the
shareholders' pre-emptive subscription right. The Company has
decided to first issue the Treasury Shares to itself without
consideration and then immediately convey such Treasury Shares as
Placing Shares to the participating investors against their payment
of the Issue Price (delivery against payment of the Issue Price in
full).
A total of 3,200,298 Treasury Shares
(representing approximately 4.7 per cent of all the issued shares
and votes in the Company immediately prior to the Placing) have
been issued and registered in the Finnish Trade Register today on 4
April 2024. Following the issuance, the aggregate number of
ordinary shares in the Company is 72,007,497. As a part of the
Placing, the 3,200,298 Placing Shares are further conveyed to
investors with payment and settlement (delivery against payment of
the Issue Price in full) expected to be completed on or about 9
April 2024. The Placing Shares confer a right to dividends and
other shareholder rights from the payment and settlement to
investors. One Placing Share entitles the holder to one vote in the
general meeting of the Company (save for the Annual General Meeting
scheduled to be held on 5 April 2024, the record date of which was
22 March 2024). Following, and subject to, the completion of the
settlement in full, the Company will have no shares in treasury and
therefore, the total number of voting rights in Faron will be
72,007,497 (the "New Number of
Shares and Votes"). This figure may be used by shareholders
as the denominator for the calculations by which they will
determine whether they are required to notify an interest in, or a
change to their interest in, the New Number of Shares and Votes of
the Company.
Furthermore, to align the Issue
Price to the possibly lower subscription price per share to be
applied in the potential Public Offering or (in the absence of the
Public Offering) other equity round completed before 10 June 2024
(the "Other Equity Round"),
subject to the Annual General Meeting
scheduled to be held on 5 April 2024 making
the required resolutions and granting the authorisation, and the
Company completing such Public Offering or Other Equity Round, the
Company would, in connection with (or following) the Public
Offering or the Other Equity Round grant the subscribers in the
Placing either new shares in the Company free of charge or other
instruments to achieve the same net effect from both the Company's
and the said subscribers' perspective. Such additional shares or
other instruments would be granted as soon as practicable after the
completion of the Public Offering or the Other Equity Round,
estimated on or about 15 June 2024.
In assessing the Placing and its
terms and concluding that there are weighty financial and value
creation reasons for the Company to deviate from the shareholders'
pre-emptive subscription right, the Board has carefully assessed
the timing, structure, size, price, participants and other terms of
the Placing from the Company's and all of its shareholders'
perspective, also in light of e.g. available alternatives,
consultation and market feedback received, as well as the
information, circumstances, timing, needs and planned action to
secure the required short and long term financing previously and
consistently announced and updated by the Company.
As previously announced by the
Company on 28 March 2024 and 18 November 2022, respectively, the
Company has issued to IPF special rights which entitle them to
subscribe for new ordinary shares in the Company ("Warrants"). Pursuant to the terms and
conditions of the Warrants, the subscription price per share on the
exercise of a) a total of 319,944 Warrants shall be the lower of
either EUR 1.85 (equivalent to issue price of the placing announced
by the Company on 14 October 2022) or the subscription price per
share in any subsequent share offering undertaken by the Company
and b) a total of 613,496 Warrants shall be the lower of either EUR
1.63 (equivalent to the terms of a waiver received from IPF) or the
subscription price per share in any subsequent share offering
undertaken by the Company. As the Issue Price is EUR 1.50, the
subscription price per share of the aforementioned aggregate amount
of 933,440 Warrants shall be adjusted to EUR 1.50. The Company has
also resolved to issue an additional 53,570 Warrants to IPF (with
the same subscription price per share of EUR 1.50).
Further, pursuant to the terms of
the warrant holder agreement entered into between the Company and
IPF as announced on 28 March 2024, the number of warrants to be
issued to IPF ( currently 613,496 Warrants) may be further
increased upon (and subject to) agreed adjustment events so that
the total number of new shares in the Company (issued as a result
of the exercise of the increased number of warrants) multiplied by
the (adjusted) subscription price per share in any subsequent share
offering undertaken by the Company is equal to EUR 1,000,000 (minus
any amounts already paid). The Company will separately publish an
announcement on the issuance of the additional warrants.
ADMISSION
The Company will
make applications for the admission of the Placing Shares to
trading on First North and AIM with said admissions expected to
become effective and trading to commence on or around 9 April
2024 (the "Admissions").
RELATED PARTY AND PDMR DEALING
Timo Syrjälä, an existing
shareholder in the Company, has subscribed for and been allocated
133,333 Placing Shares in aggregate (subscribed for by himself and
through Acme Investments SPF Sarl ("Acme"), an entity wholly owned by Mr.
Syrjälä), for an aggregate subscription value of
approximately EUR 0.2 million at the Issue Price.
Following the completion of the Placing, Mr. Syrjälä's total
holding in the Company's shares, which includes his indirect
holding through Acme, will be 13,432,335 shares, representing 18,65
per cent of the issued shares and votes of the Company following
the Placing. Mr Syrjälä is a "Substantial Shareholder" in the
Company for the purposes of the AIM Rules for Companies (the
"AIM Rules"). His
subscription for Placing Shares pursuant to the Placing is a
related party transaction for the purposes of the AIM Rules. The
Directors of the Company, all of whom are independent of Mr
Syrjälä, having consulted with Cairn Financial Advisers LLP, the
Company's nominated adviser for the purposes of the AIM Rules,
consider the terms of the participation by Mr. Syrjälä in the
Placing to be fair and reasonable insofar as shareholders are
concerned.
In addition, Markku Jalkanen and
Tuomo Pätsi, directors of the Company, as well as Scientific
Advisor Sirpa Jalkanen have subscribed for 33,333, 13,333 and
33,333 shares respectively. Their beneficial interests in the
issued shares and votes of the Company are set out
below:
|
Before the Placing
|
|
Following the Placing
|
Director
|
Number of ordinary shares
held
|
% of issued shares and
votes
|
Number of Placing Shares subscribed
for
|
Number of ordinary shares
held
|
% of issued shares and
votes
|
Markku Jalkanen
|
2,175,266
|
3.16
|
33,333
|
2,208,599
|
3.07
|
Sirpa Jalkanen
|
1,138,168
|
1.65
|
33,333
|
1,171,501
|
1.63
|
Tuomo Pätsi
|
11,765
|
0.02
|
13,333
|
25,0980
|
0.03
|
The participation of Markku Jalkanen
and Tuomo Pätsi ("Directors'
Participation") in the Placing
constitute related party transactions for the purposes of the AIM
Rules. The independent directors for the purpose of the Directors'
Participation, being Dr Frank Armstrong, John Poulos, Christine
Roth, Marie-Louise Fjällskog and Erik Ostrowski, having consulted
with Cairn Financial Advisers LLP, the Company's nominated adviser
for the purposes of the AIM Rules, consider the terms of the
Directors' Participation in the Placing to be fair and reasonable
insofar as shareholders are concerned.
Notification of a Transaction pursuant to Article 19(1) of
Regulation (EU) No. 596/2014
|
1
|
Details of the person discharging managerial
responsibilities/person closely associated
|
a.
|
Name
|
a) Markku Jalkanen
b) Sirpa Jalkanen
c) Tuomo Pätsi
|
2
|
Reason for notification
|
|
a.
|
Position/Status
|
Directors
|
b.
|
Initial notification/
Amendment
|
Initial Notification
|
3
|
Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
|
a.
|
Name
|
Faron Pharmaceuticals Oy
|
b.
|
LEI
|
7437009H31TO1DC0EB42
|
4
|
Details of the transaction(s): section to be repeated for (i)
each type of instrument; (ii) each type of transaction; (iii) each
date; and (iv) each place where transactions have been
conducted
|
a.
|
Description of the financial instrument, type of
instrument
Identification Code
|
Ordinary shares
ISIN: FI4000153309
|
b.
|
Nature of the transaction
|
Purchase of ordinary shares
|
c.
|
Price(s) and volume(s)
|
|
Average
|
|
|
|
|
Price(s)
|
Volume(s)
|
|
a) 1.50
b) 1.50
c) 1.50
|
a)
33,333
b)
33,333
c)
13,333
|
|
|
d.
|
Aggregated information
-
Aggregated Volume
-
Price
|
79,999
1.50
|
e.
|
Date of the transaction
|
3
April 2024
|
f.
|
Place of the transaction
|
Nasdaq First North Growth Market
|
|
|
|
|
|
|
|
| |
For more information please
contact:
Investor Contact,
US
LifeSci Advisors
Daniel Ferry
Managing Director
daniel@lifesciadvisors.com
+1 (617) 430-7576
Investor Contact, EUR
Faron Pharmaceuticals
Yrjö E K Wichmann
SVP, Funding & Investor
Relations
yrjo.wichmann@faron.com
investor.relations@faron.com
Phone: +358 (0) 40 5868
979
Cairn Financial Advisers LLP,
Nomad
Sandy Jamieson, Jo Turner
Phone: +44 (0) 207 213
0880
Sisu Partners Oy, Certified Adviser
on Nasdaq First North
Juha Karttunen
Phone: +358 (0)40 555
4727
Jukka Järvelä
Phone: +358 (0)50 553
8990
ICR Consilium
Mary-Jane Elliott, David Daley,
Lindsey Neville
faron@consilium-comms.com
Phone: +44 (0)20 3709
5700
THIS ANNOUNCEMENT IS NOT FOR
PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES OF AMERICA. THIS ANNOUNCEMENT IS NOT AN
OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES. THE
LOANS, ANY SECURITIES ISSUED UPON CONVERSION OF THE LOANS AND ANY
SECURITIES ISSUED IN THE INVESTMENT ROUND (COLLECTIVELY, THE
"SECURITIES") HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT
BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN OR INTO
OR FROM THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION
OF THE UNITED STATES. THERE IS NO INTENTION TO REGISTER THE
SECURITIESIN THE UNITED STATES OR TO MAKE A PUBLIC
OFFERING IN THE UNITED STATES. ANY SALE OF THE SECURITIES
IN THE UNITED STATES WILL BE MADE SOLELY TO "QUALIFIED
INSTITUTIONAL BUYERS" AS DEFINED IN RULE 144A IN RELIANCE ON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE U.S. SECURITIES ACT.
About BEXMAB
The BEXMAB study is an open-label
Phase 1/2 clinical trial investigating bexmarilimab in combination with
standard of care (SoC) in the aggressive hematological malignancies
of acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS).
The primary objective is to determine the safety and tolerability
of bexmarilimab in combination with SoC (azacitidine) treatment.
Directly targeting Clever-1 could limit the replication capacity of
cancer cells, increase antigen presentation, ignite an immune
response, and allow current treatments to be more effective.
Clever-1 is highly expressed in both AML and MDS and associated
with therapy resistance, limited T cell activation and poor
outcomes.
About Bexmarilimab
Bexmarilimab is Faron's wholly owned,
investigational immunotherapy designed to overcome resistance to
existing treatments and optimize clinical outcomes, by targeting
myeloid cell function and igniting the immune
system. Bexmarilimab binds to Clever-1,
an immunosuppressive receptor found on macrophages leading to tumor
growth and metastases (i.e. helps cancer evade the immune system).
By targeting the Clever-1 receptor on
macrophages, bexmarilimab alters the tumor microenvironment, reprogramming macrophages
from an immunosuppressive (M2) state to an immunostimulatory (M1)
one, upregulating interferon production and priming the immune
system to attack tumors and sensitizing cancer cells to standard of
care.
About Faron Pharmaceuticals
Ltd.
Faron (AIM: FARN, First North:
FARON) is a global, clinical-stage biopharmaceutical company,
focused on tackling cancers via novel immunotherapies. Its mission
is to bring the promise of immunotherapy to a broader population by
uncovering novel ways to control and harness the power of the
immune system. The Company's lead asset is bexmarilimab, a novel anti-Clever-1
humanized antibody, with the potential to remove immunosuppression
of cancers through targeting myeloid cell
function. Bexmarilimab is being
investigated in Phase I/II clinical trials as a potential therapy
for patients with hematological cancers in combination with other
standard treatments. 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", ''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 completion and use of proceeds from
the Placing, 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 addition, other
factors which could cause actual results to differ materially
include the ability of the Company to successfully licence its
programmes, 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.