Faron Pharmaceuticals Ltd
("Faron" or the "Company")

Faron announces that US FDA proposes proceeding directly to BLA submission for Traumakine® following completion of European and Japanese Phase III studies

TURKU - FINLAND, 4 September 2017 - Faron Pharmaceuticals Ltd ("Faron") (LON: FARN), the clinical stage biopharmaceutical company, today announces that the FDA has proposed that Faron can proceed directly to Biologics License Application (BLA) submission pending positive results from the two on-going Phase III trials (INTEREST in Europe and MR11A8-2 in Japan) with the Company's wholly-owned product, Traumakine® for the treatment of Acute Respiratory Distress Syndrome (ARDS). In the letter received on 1 September 2017, the FDA proposed that, subject to the FDA being satisfied with data from the trials, the BLA application for Traumakine can be filed purely with data obtained from the ongoing trials outside of the US. In the event of positive outcomes of the ongoing trials this FDA feedback is therefore expected to shorten the time for approval of Traumakine in US.

Commenting on the FDA's advice, Dr Markku Jalkanen, CEO of Faron, said: "We welcome the news that the FDA have proposed that we proceed directly to BLA submission for the US development of Traumakine. This important feedback potentially speeds up the regulatory approval process in the US and brings us one step closer to delivering Traumakine to patients in the world's largest pharmaceutical market. There is currently no approved pharmaceutical treatment for ARDS and Traumakine has the potential to address a significant unmet medical need in terms of mortality and savings for society. We now eagerly await the outcome of our ongoing Phase III trials and continue to build our presence in the US."

ARDS is a severe orphan disease with a reported mortality rate of approximately 30-45%, for which there is currently no approved pharmacological treatment. It is characterised by widespread capillary leakage and inflammation in the lungs, most often as a result of pneumonia (e.g. following a pandemic influenza), sepsis, or significant trauma with around 300,000+ annual cases in Europe and US.

As the INTEREST Phase III study nears completion, Faron plans to initiate an expanded access program for Traumakine to start once the trial is closed to new patients. This will allow compassionate use of Traumakine in eligible named patients at European ICU hospitals, who may benefit from Traumakine treatment ahead of the product's potential regulatory approval. The Company is also considering providing this access to US ARDS patients.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For more information please contact:

Faron Pharmaceuticals Ltd
Dr Markku Jalkanen, Chief Executive Officer
investor.relations@faron.com

Consilium Strategic Communications
Mary-Jane Elliott, Chris Welsh, Philippa Gardner, Lindsey Neville
Phone: +44 (0)20 3709 5700
E-mail: faron@consilium-comms.com

Westwicke Partners, IR (US)
Chris Brinzey
Phone: 01 339 970 2843
E-Mail: chris.brinzey@westwicke.com

Cairn Financial Advisers LLP, Nominated Adviser
Emma Earl, Tony Rawlinson
Phone: +44 207213 0880

Panmure Gordon (UK) Limited, Joint Broker
Freddy Crossley, Duncan Monteith (Corporate Finance)
Tom Salvesen (Corporate Broking)
Phone: +44 207 886 2500

Whitman Howard Limited, Nominated Broker
Ranald McGregor-Smith, Francis North
Phone: +44 207 659 1234

Glossary

BLA: a request for permission to introduce, or deliver for introduction, a biologic product into US commerce.

About Faron Pharmaceuticals Ltd

Faron (AIM:FARN) is a clinical stage biopharmaceutical company developing novel treatments for medical conditions with significant unmet needs. The Company currently has a pipeline focusing on acute organ traumas, vascular damage and cancer immunotherapy. The Company's lead candidate Traumakine, to prevent vascular leakage and organ failures, is currently the only treatment for Acute Respiratory Distress Syndrome (ARDS) undergoing Phase III clinical trials.  There is currently no approved pharmaceutical treatment for ARDS. An additional European Phase II Traumakine trial is underway for the Rupture of Abdominal Aorta Aneurysm ("RAAA"). Faron's second candidate Clevegen is a ground breaking pre-clinical anti-Clever-1 antibody. Clevegen has the ability to switch immune suppression to immune activation in various conditions, with potential across oncology, infectious disease and vaccine development. This novel macrophage-directed immuno-oncology switch called Tumour Immunity Enabling Technology ("TIET") may be used alone or in combination with other immune checkpoint molecules for the treatment of cancer patients. Faron is based in Turku, Finland. 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 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 particular, the outcome of clinical trials (including, but not limited to the Company's INTEREST trial) may not be favourable or clinical trials over and above those currently planned may be required before the Company is able to apply for marketing approval for a product.  In addition,  other factors which could cause actual results to differ materially include 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, 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.