Faron drew down the second tranche of the convertible bond

Translation: Original published in Finnish on 12/12/2025 at 07:35 am EET

Faron announced on Thursday that its Board of Directors has decided to draw down the second tranche of the convertible bond. The size of the tranche is 10 MEUR. In November, the company announced that it was going to raise the funding, so the information came as no surprise. The financing extends the company's cash sufficiency to Q2'26 (previously Q1’26), which provides additional time for preparing the continued development of bexmarilimab and for partnership negotiations. The news has no immediate impact on our estimates.

Conversion price EUR 2.42

The 10 MEUR tranche now drawn is the second part of the financing arrangement agreed upon in April 2025. The bonds are issued at 92.5% of their principal amount and carry an interest rate of 7.5% p.a. The conversion price of the convertible bonds was set at EUR 2.42, which corresponds to a 20% premium over the reference price.

The release also mentioned a revision of the conversion price for the first 15 MEUR tranche drawn earlier. The conversion price of the first tranche was lowered to correspond to the level of the second tranche now issued, i.e. EUR 2.42. This mechanism is typical in similar financing arrangements, but it increases potential dilution when the share price is lower than at the time of the original drawdown.

Funding will suffice until Q2 next year

With the funds received, Faron extends its cash sufficiency to Q2'26, assuming that loan amortizations and interest are paid in shares. This gives the company financial leeway to prepare for bexmarilimab's registration study (BEXMAB-02) in myelodysplastic syndrome (HR-MDS). In addition, the strengthened cash position supports the company's negotiating position in ongoing discussions regarding potential partnership agreements.

Focus remains on securing broader funding

The executed withdrawal was expected and is part of the company's existing financing reserve. While the additional funding provides crucial extra time, it does not eliminate the need for significant further funding to conduct the planned extensive Phase II/III study. The company aims to start the study during Q2’26.

Key to the investment case continues to be the development of bexmarilimab’s clinical data and the ability to enter into a commercial partnership or secure another financing solution to cover future extensive studies. The HCM arrangement also includes an option for a third 10 MEUR tranche, which provides an additional element to the company's financing palette.