Faron updated its research and financing plans

Translation: Original published in Finnish on 02/12/2026 at 07:49 am EET

Faron updated its business plans, and the related webcast can be viewed here. We interviewed management about updated research plans and the planned share issue of 40 MEUR. From the perspective of the stock's valuation, the next key milestone is the clarification of the terms of the upcoming share issue, which we expect in the near future. We will update our research when key information is available.

Updates to the registration trial plan, but the framework remains unchanged

The company previously planned a continuous Phase II/III trial in high-risk myelodysplastic syndrome (HR-MDS) as a first-line treatment. According to the company, plans changed following discussions at the American Society of Hematology (ASH) conference in December. According to Faron, they had an advanced understanding of a partnership with a larger pharmaceutical company, but the potential partner withdrew from the project based on the results of the Phase III VERONA study presented at the meeting. In VERONA, the combination of the BCL2 inhibitor venetoclax and azacitidine was compared to azacitidine alone. Due to the negative results, Faron changed its plans for the structure of the future trial, and the project's financing plan shifted to rely on equity financing. The new plan is based on a more traditional two-phase model, where Phases II and III are separate.

According to the new plan, the company intends to first conduct a Phase II study with 90 patients in three groups of 30 (a control group and two different dosage groups of bex+aza). The previous plan was for 3x40 patients, meaning the planned number of patients is one-quarter lower than before. This limits both Faron's costs and the statistical power of the study, i.e., the probability of achieving a statistically significant difference between the treatment and control groups. Faron plans to propose the use of complete remission (CR) combined with duration of response as the primary endpoint for the study to the FDA. This is in line with the FDA's guidance issued at the end of 2025. In addition, a potential primary endpoint could be progression-free survival. Overall survival would thus be left out. If realized, the strength of the new plan is a smaller number of patients and faster throughput, as the patient follow-up period is shortened. Naturally, the costs would also be lower. In our opinion, the risk caused by the smaller number of early-stage patients, where potential differences between groups may not emerge due to weaker statistical power, is a deterioration from the previous situation.

Significant financing effort ahead

The planned rights issue of 40 MEUR is a significant effort for Faron. The market has been expecting the financing of further research through a partnership agreement. The company has also fueled these expectations with its communication. The market has been very disappointed with the issue-based financing plans, as a result of which the share price has fallen sharply. This increases the likelihood of an issue being carried out at a low share price, which would further significantly increase the number of shares. The share price decline also means a larger increase in the number of shares than previously estimated through the conversion of the bond. Financing, therefore, involves significant risks. However, Faron presented alternative plans for how the company can advance its goals even if the funding round falls short. Successfully raising the targeted amount in the issue would be crucial for the company to ensure the advancement of its research program. We expect the terms of the offering to be finalized in the coming weeks and will update our estimates once additional essential information becomes available.