Faron Pharmaceuticals (LSE: FARN) - Biotech&Money, November 2017 London, UK CONQUERING ACUTE RESPIRATORY DISTRESS SYNDROME (ARDS) AND CANCER IMMUNITY
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CONQUERING ACUTE
RESPIRATORY DISTRESS
SYNDROME (ARDS) AND
CANCER IMMUNITY
Faron Pharmaceuticals (LSE: FARN)
Biotech&Money, November 2017
London, UK
1
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2
FARON OVERVIEW
Building a global business in major markets
• Faron aims to become a global leader in organ protection and control of harmful immune suppression
• Recent positive FDA advice expedites Traumakine® route to U.S. markets following successful clinical results in Europe and Japan,
which could remove all clinical development in U.S.
• Unique immune switch antibody Clevegen® moves to clinics post primate animal toxicology studies
• Traumakine® (end-stage Phase III) could be the first ever drug for Acute Respiratory Distress Syndrome (ARDS)
upon approval with blockbuster potential
• Addressing a significant real unmet medical need in terms of reducing mortality and savings for healthcare systems
• Expedited market entry for Traumakine® in Europe (ODD), US (FDA advice) and Japan (ODD to be applied)
• Market education ongoing through a close network of international key opinion leaders (KOLs)
• Establishing early access program to satisfy demand post trial closure
• Clevegen®, a potential game-changer in immuno-oncology targeting tumour-associated type-2 macrophages in
control of cancer immunity
• Removes immune suppression around tumours caused by tumour associated type-2 macrophages
• In house opportunity for solid tumour monotherapy development and third party combination therapies with immune check
point molecules
• Expand Clevegen use to chronic infections and vaccinations in need of removal of immune suppression
• Significant potential value inflection points during next twelve months
• Traumakine® study (INTEREST) completion and read out
• Potentially revolutionary immune switch antibody Clevegen® against non-curable solid tumour cancers entering clinics
3
PERFORMANCE AND FUNDS RAISED
One of the best performing biotech stocks in Europe since IPO and well financed
1000
900
800 Major institutional shareholders (%)
700
A&B (HK) Company 11.69
600
Price (p)
500
Aviva Investors 5.22
400 Legal & General IM 5.13
300
Polar Capital 4.43
200
100 City Financial Investment 4.02
Nov-15 Mar-16 Jul-16 Nov-16 Mar-17 Jul-17 Nov-17
Faron Pharmaceuticals Euro Biotech Index
Source: Rx Securities
£33m raised since IPO
November 2015 (IPO) £10m
Faron Pharmaceuticals Oy
September 2016 £8.0m
AIM: FARN
March 2017 £5m
Mkt Cap GBP 244m October 2017 £10m
Cash (HY ending 30 June 2017) EUR10.3m
Footnotes 4
LEADERSHIP OVERVIEW
Experienced team building internal medical and business intelligence
EXECUTIVE DIRECTORS
Dr Markku Jalkanen, Chief Executive Officer & Founder
• Over 25 years’ experience in biomedical research, biotech development and the biopharmaceutical industry
• Former CEO of Biotie Therapies Corp. (formerly NASDAQ-listed life science company, currently part of Acorda Therapeutics). Adviser to Finnish
Life Sciences Fund, Inveni Capital
• PhD in Medical Biochemistry and Docent (lecturer) in Biochemistry and Molecular and Cell Biology
• “One of Finland’s biotechnology pioneers”*
Yrjö Wichmann, Chief Financial Officer
• Over 20 years’ experience in financing and investment banking in the life science and biotechnology sector
• Member of Investment Committee at Dasos Timberland Fund I and the Innovation Board of Helsinki University which oversees the venture
capital portfolio of Helsinki University Funds
• Public company experience with London (Inion), Stockholm (Pöyry) and Helsinki (several) stock exchanges. Masters in Economics
SENIOR MANAGEMENT
Dr Matti Karvonen Dr Mikael Maksimow, Dr Jami Mandelin Dr Juho Jalkanen
Chief Medical VP Operations Director, Research VP Business
Officer Development
• Background in clinical • Expert in autoimmune diseases • Expert in inflammation, • Holds degrees in both
neurology and T cell biology immune response modulation business and medicine
• Held several positions in • Manages Faron’s operations, and in immuno-oncology • Expert in vascular biology and
international pharmaceutical especially the vast vendor • Manages Faron’s scientific surgery
organisations, including Roche, network network and pre-clinical drug • Faron Board member
Biogen Idec and Novartis development between 2013 and 2017
* Source: Bloomberg
5
WE FIND BARRIERS AS OPPORTUNITIES
Faron pipeline is based on endothelial receptors involved in regulation of immune
responses and vascular dysfunctions
CD73 controls capillary
Clever-1 regulates
leakage and escalation of
tissue immune status
inflammation
AOC3 escalates
inflammation and
vascular damage*
*AOC3 inhibitor currently on hold
The endothelial surface of exhaustive capillary networks controls fluid and cell balance between circulation
and tissues, and is a factor in many devastating diseases like organ failures and cancer metastasis
6
MULTI-ASSET PIPELINE TARGETING AREAS OF SIGNIFICANT UNMET
MEDICAL NEED
*
* US ARDS open trial under consideration with US experts following FDA recommendation that Faron can proceed directly to BLA pending
7
positive results in Europe and Japan
INTERFERON-BETA TREATMENT OF ARDS AND OTHER ISCHAEMIC REPERFUSION INJURIES TRAUMAKINE®
ACUTE RESPIRATORY DISTRESS SYNDROME – POTENTIALLY SIGNIFICANT OPPORTUNITY
Orphan lung disease with no available drug treatment
ARDS is a rare disease characterised by vascular leakage and inflammation of the
lungs and acute but persistent loss of lung function
Causes include: pneumonia (bacteria/virus), sepsis, aspiration of fumes, food or stomach contents into the lung
and trauma (e.g. accidents) Chest X-ray of ARDS
patient i.e. “white lung”
• ARDS is the leading cause of respiratory failure in ICU patients who require mechanical
ventilation
• Annual ARDS incidence in Europe is c. 125,000 and in the US is c. 300,000 patients
• High mortality rate of 30 to 45% and survivors suffer long term mental and physical problems
• Significant unmet medical need – currently no approved drug treatment; only supportive care
and non-invasive or mechanical ventilation
Normal Lung
• 70% of patients estimated to be eligible for potentially life-saving treatment
• Subject to regulatory approvals and other factors which may exist at the relevant time,
treatment pricing is expected to be based on value creation for the patient, hospital and
society
• Saving lives of ARDS patients
• Reducing ICU days
• Reducing need for long term recovery support ARDS Patient Lung
• Speeding up return to normal life including job continuation
9
TRAUMAKINE MODE OF ACTION
Prevention of lung capillary leakage and escalation of inflammation
Normal Expression
The first
proprietary intra-
venous
formulation of
interferon-beta to
provide a precise
daily dosing of 10
µg for six
consecutive days
Abnormal Expression
following ARDS
diagnosis and to
return the lost
capillary CD73
expression and
lung function
10COMPELLING PHASE I/II TRIAL RESULTS
Data published below comparable to Japanese clinical trial
Reduction in ICU stay from 28 to 16 days, saving money and improving ICU capacity
Primary endpoint: significant drop in mortality*
A B
100 Traumakine® treated (n=37, APACHE II of 22)
Phase I/II trial showed a significant
Mortality 8% reduction in mortality with
positive secondary endpoints
75 P = 0.01 (28 day)
Control group, standard treatment (n=59, APACHE II of 23)
Survival (%)
Mortality 32%
50
World leading peer reviewed
article (Bellingan et al. (2014) The
25 Lancet Respiratory Medicine 2: 98-
Untreated 107) has already reached the
Treated intensive care community
p=0·01 p=0·02
0
0 5 10 15 20 25 30 0 5 10 15 20 25 30
Number at risk
No safety issues Positive secondary endpoints
Untreated 59 54 49 45 44 42 41 59 54 49 45 44 42 41
§ Interferon
Treated 37 Beta,
37 has good
36 safety profile
35 and in
35 chronic use Mortality 26
35 with 34 § 26 at six months
26 was lower
25 than expected
25 25 24
MS patients worldwide § Improvement in lung function and functional assessments
§ COptimal tolerated dose established Daligned with improvement in lung function and general
§100
Short treatment period dysfunction
§ Efficacy improvements are consistent with a reduction in
vascular leakage
75
*Of the 37 patients treated with Traumakine®, 32 were diagnosed with ARDS (PaO2/FiO2 ≤200 mmHg) and 5 patients were diagnosed with ALI (PaO2/FiO2
≤300 mmHg). 30% of the treated patients were diagnosed with sepsis and 41% with pneumonia. The study was carried out in 8 ICU centers in the UK
11
)INTEREST - PAN-EUROPEAN PHASE III TRIAL NEAR COMPLETION
Targeting MAA/BLA in Europe/USA in 2018 and progressing as planned
• Randomised, double-blind, 300
moderate/severe ARDS patients in seven
countries across 60+ hospital sites
• Seeking a reduction of all-cause mortality and
days on ventilator as a primary end point
• Targeting 50% reduction in all-cause mortality at
D28 and improvement of quality of life at 6
INTEREST
months
• Final stage of recruitment ongoing and expected
to close during Q4 2017
• Five IDMC interim recommendations received to
continue the trial as planned without any safety
concerns
• Pre-MAA/BLA meetings with EMA/FDA as soon
as possible post results read out
12TRAUMAKINE PHASE III TRIALS – ROAD TO COMMERCIALISATION
Trials phased according to regions – enables a cost controlled approach
Conditional MAA filing if overwhelmingly Post-approval pharmacovigilance
positive Phase III/1 results cohort trial
Phase I/II 1 INTEREST 2 Phase IV
MAA
(completed) (on going)
Size depends on
Phase III/1 data
3 Phase III/2
Phase II Phase III
(completed) (on going)
5 Pending positive results
4 Tox 4 FDA advice BLA
(completed)
Primate tox trial completed. Phase II safety trial advise resulted in a proposal
1 Pivotal pan-European trial with 300 patients. Recruitment closing from FDA to skip the planned safety trial and to proceed directly to BLA filing
4
in Q4-2017. If statistically significant 28 day reduction of mortality using data from European and Japanese phase III studies pending positive
then the pre-MAA meeting and filing in Europe results. Current BLA rules can provide up to 12 year exclusivity via data
protection for any approved biologics.
2 If conditional MAA granted, a post-approval pharmacovigilance
study will take place (Phase IV) in order to collect additional data Japanese phase III-results are expected to become available in H1-2018 and
relating to the safety of Traumakine 5 can be used in combination with European INTEREST trial due to same
protocol.
3 The size of the possible Phase III/2 trial is determined following
analysis of the Phase III/1 trial (28 day mortality). The Phase III/2
trial includes an interim stop for early efficacy
1317.11.201
7
THE ENDOTHELIAL BARRIER IS EVERYTHING
It’s important that
barriers can do their
job
Traumakine is the first drug to target the
endothelial barrier to reduce mortality in
patients with ARDS.
By enhancing CD73 expression and
adenosine production, capillary leakage
is prevented and normal gas exchange
returns.
Traumakine is currently in two pivotal
phase trials in Europe and Japan.
Traumakine
Target the endothelial barrier.
Reduce ARDS mortality
Footnotes 14NOVEL TECHNOLOGIES TO CONTROL IMMUNE SUPPRESSION IN VARIOUS CONDITIONS CLEVEGEN®
CANCER IMMUNOTHERAPY BASED ON TYPE II MACROPHAGE (M2)
ELIMINATION
Clevegen limits the function of tumour associated type II macrophages ( M2 TAM), a
known immunosuppressive cell group in tumours
Circulation CURRENT LANDSCAPE
Bone marrow
Activation of T-cells
Stem cell Monocyte (eACT), $10.3 billion Activation of T-cells
Activation of T-cells market cap (T-CAR), $4.7
(ImmTACs), Private, est. billion market cap
Faron: Blocking type Recent series A raised
II macrophage $320 million
penetration and T helper cells Thymus
function with Tumour
Clevegen* cell CAR-T Memory T cells
à technology,
ACTIVATION OF €828 million Natural killer T cells
market cap
ANTI-TUMOUR
IMMUNE RESPONSE M1 + Regulatory T cells
Tumour M2
PD-1 inhibitors, sales and
*Karikoski et al. (2014) Clin. Cancer Res. 20:6452-64 sales potential, $30.0+ billion
16CLEVEGEN MODE OF ACTION IN CANCER FIGHT Footnotes 17
MACROPHAGE DEPENDENT CANCER IMMUNOTHERAPY
18CURRENT CLEVEGEN DEVELOPMENT PATHWAY
1 2 3 4 5
Antibody
GMP Protocol
Research humani- Phase I/II Phase II
sation
production design
Completed Completed In progress In progress 2017-2019 2019-2021
1 Excellent IP-coverage on Clever-1 target and function blocking antibodies
The product is an anti-Clever-1 antibody (Clevegen, FP-1305) humanised in collaboration with
2
an antibody technology company Antitope (Cambridge, UK)
3
Manufactured by Abzena (San Diego, CA) in high production clones prepared by Selexis
(Geneva, Switzerland).
4 Primate tox studies on going. MHRA and FIMEA advise in late 2017/early 2018 for adaptive
protocol focusing on safety and early efficacy.
5
Phase I/II safety and initial efficacy focused study in HCC (hepatocellular carcinoma) and
other solid tumours (pancreatic and ovarian cancers as well as metastatic melanoma) is
anticipated to start in 2018
19CLEVEGEN VALUE DRIVERS
Provides stand-alone or immune combination therapies to combat cancer
Novel mode of action to remove immune suppression around tumours
• Targets unique immune switch molecule Clever-1 on the surface of tumour associated type 2 macrophages
(TAM-2)
• No expected abnormalities following in vivo studies due to the nature of Clevegen as a humanised antibody and
the presence of Clever1 in normal tissues and physiological processes, supported by primate tox data
Maximizing treatment success using liquid biopsy for Clever-1 positive monocytes/macrophages
Targeting Clever-1 positive cancer patient populations with significant unmet need
Cancer type Cases/year* Clever-1** Potential treatments Pancreatic ductal
EU (EUCAN) US (NIH) EU US adenocarcinoma***
Liver 40,710 42,783 80% 32,568 34,226 Total number
Pancreas 53,670 51,924 70% 37,569 36,347 of treatments
Ovarian 22,440 65,538 65% 14,586 42,600 per year
Total 116,820 160,245 84,723 113,173 197,896
Commercial upside significant if the clinical program demonstrates better safety profile than other
IO products and high efficacy in selected cancer patients
• New cancer treatments highly priced
• Verified in significant licensing deal values (e.g. Five Prime, Jounce)
*Number of new cases (2014) in Europe and USA (Source: NIH Cancer Institute and EUCAN European Cancer Surveillance)
**Population percentage of Clever-1 positive macrophages in human tumour samples (Source: Company information)
***Brownish stain indicates Clever-1 positive TAM’s. Courtese by Dr. Shishir Shetty, The Centre for Liver Diseases, The University of Birmingham, UK 20SUMMARY
Phase III asset in lead drug, Traumakine, currently undergoing trial in Acute
Respiratory Distress Syndrome (ARDS), closing in Q4 2017
Building Traumakine business for Europe, USA and Japan because of the
expedited approval possibility
Second lead asset of novel immune switch drug Clevegen, targeting tumour-
associated type-2 macrophages to remove immuno suppression
Adequate liquidity to execute on operational plan through value inflection
points
Highly experienced management team to take Faron forward
21Footnotes 22
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