CONQUERING ACUTE RESPIRATORY DISTRESS SYNDROME (ARDS) AND CANCER IMMUNITY - Faron Pharmaceuticals Interim Results 2016 05 September 2016
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CONQUERING ACUTE RESPIRATORY DISTRESS SYNDROME (ARDS) AND CANCER IMMUNITY Faron Pharmaceuticals Interim Results 2016 05 September 2016
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The contents of this presentation have not been approved by an authorised person within the meaning of Section 21 of the Financial Services and Markets Act
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Certain statements included herein express Faron’s expectations or estimates of future performance and constitute “Forward-looking Statements”. Forward-
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significant business, economic and competitive uncertainties and contingencies. Such Forward-looking Statements involve known and unknown risks,
uncertainties and other factors that may cause the actual financial results, performance or achievements to be materially different from estimated future
results, performance or achievements expressed or implied by those Forward-looking Statements and, as such, the Forward-looking Statements are not
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The foregoing applies to this presentation, any oral presentation of the information in this document by any person on behalf of the Company and any question-
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05/09/2016 2
FARON
Late Stage Clinical Development Pipeline Targeting Significant Unmet Medical Needs
• Successful IPO November 2015, raising €14.2 million (£10 million)
• Lead drug Traumakine® in Phase III INTEREST trial in Acute Respiratory Distress Syndrome
(ARDS)
• Generated strong results in UK-based Phase I/II trial, including a 81% reduction in the odds of
mortality; data published in The Lancet Respiratory Medicine 2014
• European Orphan Drug Designation status granted; 10 years market exclusivity from marketing
approval +2 years subject to making a paediatric application
• Three regional pharma licensing deals: Maruishi in Japan, China Medical Systems in Greater
China and Pharmbio in Korea
• Pipeline includes novel cancer immunotherapy – Clevegen®, to remove immune
suppression around tumours caused by tumour associated macrophages (TAM)
• Clevegen indication expansion + value creation through platforms available for licensing or
partnering
– Tumour Immunity Enabling (TIET)
– Chronic Infection Removal therapy Program (CIRT)
– Vaccination Response Enhancement Technology (VRET)
• Experienced Management Team and Board with successful track record in Drug
Development
05/09/2016 3
FARON PIPELINE BASED ON FARON R&D DAY ON JUNE 14, 2016 2.9.2016 05/09/2016 4
INTERIM RESULTS 2016 05/09/2016 5
KEY OPERATIONAL HIGHLIGHTS (INCLUDING POST PERIOD-END)
Lead product development on track
Traumakine®
• Phase III pan-European INTEREST trial progressing to plan. In June 2016, Faron received the first
IDMC recommendation to continue the study.
• Positive Phase II Japanese study results reported by Faron’s Japanese licensing partner, Maruishi in
January 2016.
• Further strengthened the Company’s protection of its novel Traumakine formulation (FP-1201-lyo)
for the intravenous treatment of ARDS and other vascular diseases by filing a patent application in
Finland
• Patent filings will be expanded over c. 2 years to most countries worldwide via the Patent Co-
operation Treaty (“PCT”).
• Aim is to protect Traumakine rights for the next 20 years.
• Asian distribution expanded: Pharmbio Korea licensing agreement in June 2016 for the
development and commercialisation of Traumakine in Korea supplements agreements in place for
Japan and China.
05/09/2016 6
KEY OPERATIONAL HIGHLIGHTS (INCLUDING POST PERIOD-END)
Extending the range of Clevegen indications through the TIET Platform
Clevegen®
• Filed two new patent applications for novel cancer immunotherapy candidate Clevegen in April
2016 in Finland.
• Under the PCT, patent filings will be expanded globally over the next few years.
• Applications open up new opportunities for wider application of this antibody in conditions
where removal of suppression of the local or systemic immunity is desired.
• Expanded development strategy for Clevegen indications
• Extended Clevegen indications through the new Tumour Immunity Enabling Technology
Platform (TIET) announced in May 2016.
• Directors believe TIET can be evaluated alone or in combination with other immune
checkpoint molecules where it could provide a meaningful boost to efficacy of cancer
treatment without significant risk of increased adverse events.
• The TIET platform may allow licensing opportunities and wider use of Clevegen as part of
combination cancer therapies, maximising value to cancer patients
• High quality cGMP manufacturing of Clevegen was assured through an agreement with Abzena plc
for the manufacture of Clevegen in July 2016
05/09/2016 7
KEY FINANCIAL HIGHLIGHTS (INCLUDING POST PERIOD-END)
• Received a €750,000 upfront fee from Pharmbio Korea Inc. as part of the licensing agreement for
the development and commercialisation of Traumakine in Korea; recorded as H1 2016 revenue.
• Faron will be entitled to receive further development milestone payments and one third of
the profits from Traumakine sales in Korea.
• Recorded significant other operating income of €1.0 million for the period from the Company’s
existing European Union FP7 Traumakine grant, in-line with the Company’s strategy to utilise non-
dilutive funding sources to support the Company’s R&D program where possible.
• As at Period-end, the Company held cash balances of €8.9 million.
• The cash position at Period-end was stronger than anticipated. In the future the Company will
continue it active and successful strategy to utilise various forms of public funding – both grants
and loans.
• The operating loss for the Period was €2.6 million.
• Net assets as at Period-end were €8.4 million.
05/09/2016 8INTERFERON-BETA TREATMENT OF ARDS AND OTHER ISCHAEMIC REPERFUSION INJURIES TRAUMAKINE® 05/09/2016 9
DEVELOPMENT STATUS UPDATE FOR TRAUMAKINE
Currently in Pivotal Stage in Europe and Japan
UK Phase II - FPCLI001 (completed)
• Preliminary evaluations of safety, pharmacodynamics and efficacy in UK ALI/ARDS patients with
significant reduction in D28 mortality (Lancet Res. Med. 2014: 2: 98)
Japanese Phase II - MR11A8 (completed)
• Preliminary evaluations of safety, pharmacodynamics and efficacy in Japanese moderate and
severe ARDS patients, comparable results with FPCLI001 study
Pan-European Phase III INTEREST - FPCLI002 (on-going)
• A phase III double-blind, randomised, parallel-group comparison of efficacy and safety of FP-1201-
lyo and placebo in 300 moderate and severe ARDS patients
• Pan-European recruitment on-going, results expected in H2-2017
Japanese Phase III - MR11A8 (planned H2 2016)
• Based on FPCLI002 protocol and aiming at metric combination with FPCLI002 study via meta-
analysis
• Trial planned and approved by PMDA. Patient recruitment expected to be initiated in H2-2016
05/09/2016 10DEVELOPMENT STATUS UPDATE FOR TRAUMAKINE
Expanding Territories and Indications
US Safety - FPCLI005 (planned 2017)
• Preliminary safety study in US according to FDA advice and BLA guidance
• An open study with dose escalation on 10-15 ARDS patients in each group
• Similar protocol as in FPCLI002 (INTEREST trial)
• Faron is currently setting up US based collaborations
• The US OOPD has informed Faron that Traumakine is not currently eligible to be granted ODD in the US as
according to OOPD’s view there is insufficient nationwide evidence to demonstrate that the US incidence of ARDS
is less than the statutory “orphan” limit of 200,000 patients per year. Faron intends to continue to file additional
material in further support of its claim
RAAA - FPCLI006 (planned 2017)
• Preliminary evaluations of safety, pharmacodynamics and efficacy in RAAA (Rupture of Abdominal Aorta
Aneurysm)
• RAAA patients die from multi organ failure (MOF) similar to ARDS patients
• High mortality (+50 %) among operated patients during first 5-10 days
• Total incidence 13.6/100,000 population
• Post-surgery dose regimen similar to ARDS (once a day for six days)
• Faron is currently preparing CTA for FIMEA (The Finnish Regulatory Authority)
05/09/2016 11TRAUMAKINE 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 If compelling results
(completed) (under planning) 5
Potential
4 Tox 4 4 5
Phase II FDA advice Phase III/3 BLA
(completed)
1 Pivotal pan-European trial with 300 patients. CRO appointed and 3 The size of the Phase III/2 trial is expected to be determined following
first patient recruited in December 2015. If statistically significant interim analysis of the Phase III/1 trial (28 day mortality). The Phase III/2 trial
28 day reduction of mortality then a conditional MAA filing will be includes an interim stop for early efficacy
pursued as advised by the EMA
4 Primate tox trial completed. Small Phase II safety trial in the US. Seek FDA
2 If conditional MAA granted, a post-approval pharmacovigilance advice in the US if the Phase III/1 provides positive indications in order to
study will take place (Phase IV) in order to collect additional data clarify the need and structure of a Phase III/3 trial to obtain a BLA, which if
relating to the safety of Traumakine granted, provides 12 years of data exclusivity
5 Potential for trials following the pan-European Phase III/1 to become a global
trial combining several territories at the same time via meta-analyses
05/09/2016 12NEW TECHNOLOGIES TO CONTROL IMMUNE SUPPRESSION IN VARIOUS CONDITIONS CLEVEGEN® 05/09/2016 13
CONTROL OF IMMUNE REACTION SAVES US Ability to Balance Immune Activation and Suppression – Huge Business Opportunity 1. Immune activation is our first line defense against any foreign element (e.g. infections, foreign molecules, transformed cells) 2. Immune suppression is an elementary part of our immune balance as it controls the magnitude of immune reaction tolerated by the host (defective immunosuppression in autoimmune diseases) 3. Long term immunity always requires immunosuppression following immune activation (e.g. vaccinations) 4. Significant unmet medical need and business opportunity caused by diseases which result from disturbed immune balance (e.g. cancers, chronic infections, etc.) 5. Few cell types have immunosuppressive properties (regulatory T-cells (Treg), myeloid- derived suppressor cells (MDSC), type 2 macrophages) 05/09/2016 14
MACROPHAGE M2 M1 CONVERSION IS AN IMPORTANT IMMUNE CHECKPOINT EVENT 05/09/2016 15
M2 MACROPHAGES AT SITES OF IMMUNE SUPPRESSION
Evidence Supports Involvement in Physiological and Pathological Processes
Clever-1 positive macrophages M2 macrophages are present
Clever-1 positive M2
are present when when pathogens want to hide
macrophages promote tumour
physiological immune from host immune system and
growth and metastasis
suppression is needed build chronic infections
• Placenta (Palani et al., J. • Tuberculosis mycobacteria • M2 M1 conversion
Immunol. 2016; 196; 115) (TB) (Lopes et al., PLoS One reduce tumour growth
• Wounds and tissue 2014; 10; 1371; 0113441) (Karikoski et al., Clin. Cancer
regeneration (Tarzemany et • Borrelia bacteria (Lyme Res. 2014; 20; 6452)
al., PLoS One. 2015; 10(1): disease) (Lasky et al., • High content predict bad
e0115524) Infection Immunity 2015; prognosis (Algars et al., J.
83; 2627) Int. Cancer 2012; 131; 864)
• Resistant hospital infections
(MRSA) (Nakamura et al.,
Cytokine 2015; 73; 8)
05/09/2016 16MACROPHAGE CLEVER-1, A NEW IMMUNE CHECKPOINT MOLECULE
Clever-1 Targeting Provides Significant Technology and Business Opportunities
Tumour Immunity Enabling • Removal of local immune suppression around tumours or in cancer
Technology (TIET- patients
programme) • Analysis of patient immune status from blood (liquid biopsy)
Vaccination Response
• Removal of local immune suppression at vaccination sites
Enhancement Technology
(VRET-programme) • Priming for vaccination to increase the vaccination efficacy
• Removal of host immune suppression to activate immune system
Chronic Infection Removal
against persistent infections
Therapy (CIRT-programme)
• Combined use with antibiotics
05/09/2016 17TIET (TUMOUR IMMUNITY ENABLING TECHNOLOGY) UPDATE CLEVEGEN® 05/09/2016 18
CANCER IMMUNOTHERAPY BASED ON TAM ELIMINATION
Promising Approaches to Intervene in Tumour Immune Suppression
Clevegen limits function of tumour activated macrophages (TAM), a known
immunosuppressive cell group in tumours
Circulation CURRENT LANDSCAPE
Bone marrow
Activation of T-cells
Stem cell Monocyte (eACT), ~$3 billion Activation of T-cells
Activation of T-cells market cap (T-CAR), $3+ billion
(ImmTACs), Private, est. market cap
Recent series A raised
$320 million
T helper cells Thymus
Faron: Blocking
Tumour
macrophage cell CAR-T Memory T cells
penetration and technology,
~$1.0 billion Natural killer T cells
function* market cap
M1 + Regulatory T cells
Tumour TAM-2
PD-1 inhibitors, sales and
sales potential, $30.0+ billion
05/09/2016 *Karikoski et al. (2014) Clin. Cancer Res. 20:6452-64 19CURRENT CLEVEGEN DEVELOPMENT PATHWAY SUPPORTED WITH
€1.5 MILLION NON-DILUTIVE LOAN FROM TEKES
1 2 3
Antibody
GMP Primate Full size
Research humani-
production
Phase I/II
sation
tox study Phase II
Completed Completed In progress Planning Not initiated Not initiated
1 Faron has excellent IP-coverage on Clever-1 target and function blocking
antibodies
2
Faron has carried out anti-Clever-1 antibody humanisation in collaboration with
antibody technology company
3 Fully humanised anti-Clever-1 antibody (Clevegen, FP-1305) production clones are
in preparation. High yield cell clones will be used in early GMP production to
obtain material for toxicology studies, supported by a €1.5 million loan from
TEKES
05/09/2016 20HEPATOCELLULAR CARCINOMA (HCC)
Maximize Treatment Success with Right Target Group
1. High presence of type M2 macrophages predict poor prognostic outcome
• Low presence of CD86+ TAMs (M1) and high presence of CD206+ TAMs (M2) correlate well with aggressive
HCC and poor survival outcome (Dong et al., Int. J. Mol. Sci. 2016: 17: 320)
2. Cancer type with strong inflammatory phenotype
• Persistent inflammation of liver in more than 90% of the patients (Bishayee, Adv. Exp. Med. Biol. 2014:
816: 401)
• M2 but not M1 macrophages drive HCC development in an orthotopic animal model (Yeung et al., J.
Hepatol. 2015:62: 607)
3. Significant unmet medical need – one of the lowest five year outcomes (< 30 %)
• Around 500,000 new cases and deaths every year (Ha et al., Cancer 2016: in press)
4. Key collaborators are also key opinion leaders
• Prof. David Adams from Birmingham is a world Leader in liver diseases
• Prof. Alberto Mantovani from Milan is a world Leader in TAM research
5. First-in-man trial
• NIHR Birmingham Liver Biomedical Research Unit under CTA from UK Authorities (MHRA)
05/09/2016 21FINANCIALS 05/09/2016 22
INCOME STATEMENT
EUR 000s Unaudited six months Unaudited six months
ended 30 Jun 2016 ended 30 Jun 2015
Revenue 1,169 454
Cost of Sales (357) (50)
GROSS PROFIT 813 404
Administrative expenses (974) (1,074)
Research and development expenses (3,439) (1,681)
Other operating income 968 -
OPERATING RESULT (2,632) (2,350)
NET FINANCIAL COSTS (305) (40)
Loss before income taxes (2,936) (2,390)
Income tax expense (75) (42)
TOTAL COMPREHENSIVE INCOME (3,011) (2,432)
Loss per share attributable to equity holders of the
(0.13) (0.15)
Company Basic and diluted loss per share, euro
05/09/2016 23BALANCE SHEET
EUR 000s Unaudited six months Unaudited six months
ended 30 Jun 2016 ended 30 Jun 2015
Property, plant and equipment 24 0
Intangible assets 926 1,180
NON-CURRENT ASSETS 950 1,180
Inventories 1,021 649
Trade and other receivables 3,836 647
Cash and cash equivalents 8,862 2,276
CURRENT ASSETS 13,719 3,572
TOTAL ASSETS 14,669 4,753
CURRENT LIABILITIES 4,207 1,631
NON-CURRENT LIABILITIES 2,057 1,691
TOTAL LIABILITIES 6,265 3,322
NET ASSETS 8,404 1,431
05/09/2016 24NEWS FLOW
Focus on Project Progress (Traumakine® and Clevegen®) since IPO
Traumakine
a• Pan-European INTEREST clinical trial set up
a• First patient recruited in December 2015
a• Phase II results in Japan (Maruishi)
a• New formulation patent filed in Q1-2016
a• Korean licensing deal
• Recruitment completion anticipated during 2016–2017, efficacy results expected H2-2017
• FDA feedback for orphan status and IND
Significant news on Clevegen
a• Clever-1 suppresses the activation of Th1-lymphocytes
a• Non-dilutive funding from Tekes for €1.5 million to cover 50% of the budgeted pre-clinical
costs
a• Important further patent filings in Q2-2016
a• Introduction of TIET-program
a• GMP manufacturing agreement with Abzena
• Clinical development plans (H2-2016)
05/09/2016 25SUMMARY
Faron represents a de-risked near market opportunity offering patients hope
Faron offers investors multiple opportunities through Traumakine® and Clevegen®
Traumakine® can cure patients rather than just slow disease progression
Huge unmet need among critically ill patients
De-risked: Drug substance already used in MS treatment with no adverse effects
Significant IP protection and EU Orphan status gives further 10 years market exclusivity
Positive phase I/II results –> mortality in ARDS reduced by over 80% = lives saved
Substantial market with up to 400,000 patients globally; potential $bn opportunity
No competition – Faron are the sole player in the ARDS pharmaceutical market
Clevegen® represents further long-term upside with potential immunotherapy
products across oncology, infectious disease, and vaccination
05/09/2016 26APPENDIX 05/09/2016 27
EXECUTIVE DIRECTORS & SENIOR MANAGEMENT TEAM
Experienced Team with Successful Track Record in Drug Development
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., NASDAQ-listed life science company. Adviser to Finnish Life Sciences Fund, Inveni
Capital
• PhD in Medical Biochemistry and Docent (lecturer) in Biochemistry and Molecular and Cell Biology
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, Stockholm and Helsinki stock exchanges. Masters in Economics
SENIOR MANAGEMENT
Dr Ilse Piippo, Dr Mikael Maksimow, Dr Matti Karvonen,
VP Drug Development, VP Operations VP Medical Director
Chief Medical Officer
• MD with expertise in Pharmaceutical Medicine • Expert in autoimmune diseases and • Background in clinical neurology
and holds an MSc in Pharmaceutical Chemistry T cell biology • Held several positions in
• Over 30 years’ experience in drug • Manages Faron’s scientific network, international pharmaceutical
development both with NCEs and biologics collaborators and out-sourcing organisations, including Roche,
• Numerous drugs to different stages of operations Biogen Idec and Novartis
development
05/09/2016 28NON-EXECUTIVE DIRECTORS Dr Frank Armstrong, Non-Executive Chairman • Significant industry experience at big pharma including Bayer and Zeneca as well as CEO roles with five biotechnology companies (public and private). Also holds several Chairmanships and Non-Executive positions • Member of the Scientific Advisory Board of Healthcare Royalty Partners, a Fellow of the Royal College of Physicians Matti Manner, Vice-Chairman • Significant experience in national and international business deals, corporate law and M&A • Holds several trustee posts including Presidency of the Finnish Bar Association during 2001-04 Dr Juho Jalkanen, Non-Executive Director • Consultant in vascular surgery at Turku University Hospital • Degree in International Marketing Leopoldo Zambeletti, Non-Executive Director • Long standing career in investment banking having led the European Healthcare Investment Banking team at JP Morgan and Credit Suisse • Non-Executive Director of Summit, Nogra Pharma Dr Huaizheng Peng, Non-Executive Director • General Manager of China Medical System Holdings • Former global investor and investment banker specialising in life science, biotechnology and pharmaceuticals Dr Jonathan Knowles, Non-Executive Director • Former President of Group Research and a Member of the Executive Committee at Roche for 12 years • Chairman of Adaptimmune and Immunocore, and a Director of several public and private companies • Distinguished Professor in Personalized Medicine at the University of Helsinki, Finland 05/09/2016 29
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