Translation: Original published in Finnish on 11/25/2025 at 8:45 am EET.

On Monday, Faron announced its intention to draw down an additional 10 MEUR from the previously agreed 35 MEUR convertible bond arrangement. No other financing solutions have been announced and the additional tranche has been part of the company's existing financing reserve, so the release does not come as a particular surprise. Faron had communicated that its funding was sufficient until Q1'26 before the draw-down, so drawing down the additional tranche provides the company with temporal leeway. However, the additional tranche now raised does not eliminate the need for broader research funding, as Faron is preparing to start a Phase II/III study of bexmarilimab in first-line MDS in Q2’26.

Additional funding buys time, but does not eliminate the need for broader research funding

Faron intends to issue a second tranche of convertible bonds totaling 10 MEUR to an entity managed by Heights Capital Management (HCM). This is part of a financing arrangement announced in April 2025, which included a first tranche of 15 MEUR and options for two additional tranches of 10 MEUR. According to the company, the funds now being raised provide it with flexibility for operational activities and preparation for the registration trial of high-risk MDS (HR-MDS) patients. The final implementation of the arrangement is still subject to certain conditions, such as the stability of the market situation.

The additional tranche has been part of Faron's existing financing reserve, and the company has not announced other financing solutions, so its drawdown is not a particular surprise. According to Faron's previous estimate, its cash (before drawing the additional tranche) would have been sufficient until Q1'26, so the tranche now being drawn will, in our assessment, extend the funding runway until at least Q2'26. However, the arrangement does not cover the entire costs of the next Phase II/III first-line MDS trial aiming for marketing authorization, which the company plans to start in Q2'26. Implementing a large randomized study still requires significant additional funding for the company. In our view, the core of Faron's investment story continues to be the clinical development of bexmarilimab and securing broader research funding.

Faron is still seeking a cooperation agreement with a larger pharmaceutical company to finance the trial. The tranche now being raised will, in our view, give the company more backing in negotiations and more time to conclude a possible agreement. However, other financing options and combinations thereof are also possible. The HCM financing arrangement includes another 10 MEUR drawdown, which will provide Faron with additional flexibility in the future.