Translation: Original published in Finnish on 2/28/2025 at 8:00 am EET.

During the period, Faron updated its plans for the blood cancer trial BEXMAB based on feedback from the FDA. The October Capital Markets Day provided further details on future plans for both blood cancers and solid tumors. Patient enrollment in the BEXMAB study was completed in January after the period had ended, and future highlights include the planned readouts in April, which will now include all HMA-failed MDS patients for the first time. Faron also reported that bexmarilimab has received positive European Medicines Agency's opinion on Orphan Drug Designation. Solid tumor trials are expected to begin in 2025. Faron raised 12 MEUR in a directed issue in early February and the current cash runway lasts until December 2025, according to the company. In terms of numbers, we were surprised by the low level of the company's expenses. We reiterate our Accumulate recommendation and target price of EUR 2.8.

BEXMAB blood cancer study enters mature phase

The next significant news expected is the topline readout of responses from the BEXMAB study, which will be announced in April and include all end-stage MDS patients. Responses and their duration will also be monitored in the Q3'25 readout. Response data from some of the first-line MDS patients may also be available in April. We expect statistically more significant results from first-line patients during H2’25. The start of the pivotal Phase III MDS study is not yet known, but it can be expected at the earliest in H1’26. In solid tumors, the first investigator-initiated study (BLAZE) is scheduled to start in Q2'25.

At the beginning of February, Faron completed a 12 MEUR rights issue, as a result of which the company expects to have sufficient liquidity until December 2025. The funds will be used to continue the follow-up of patients in the BEXMAB trial. As part of the 31 MEUR offering last summer, the company expected to sign a partnership agreement during 2024, which did not materialize. Understandably, no new information on partnering was provided in the context of the financial statements. We expect the April readout to be an important milestone for the negotiations.

Costs were lower than expected

The company’s costs were clearly lower than our expectations. As a result, EBIT of -7.4 MEUR was better than our forecasts (-14.8 MEUR). Faron had cut both its administrative and R&D costs. In particular, the decrease in R&D costs surprised us as BEXMAB patient enrollment remained active in H2.

Estimate changes are minor

Our EBIT forecast for the current year is clearly improved by lower costs. Based on the earnings webcast, the cost level will increase towards the end of the year. Our forecasts are in line with the company's reported cash runway. We leave our forecasts for the coming years largely unchanged, as we do not see any material changes in the outlook. Our forecasts do not include the partnership agreement that Faron has said it is seeking. Depending on the terms, the agreement could have a significant impact on the company’s financial position for the coming years.

Valuation picture is unchanged

Based on our DCF model, the share value is EUR 2.8. The stock is highly valued relative to its Nordic peers. We believe that the valuation premium is partly justified based on Faron's potential to move quickly towards commercialization, including in first-line MDS, and the potentially large number of indications. Solid tumors bring longer-term potential.