Faron Pharmaceuticals crashes on results of disappointing study

Faron Pharmaceuticals shares plummeted 85% in early trade on Tuesday as it reported widening annual losses and disappointing results from a respiratory drug trial.

Losses at the AIM-quoted firm ballooned 108% to €21.2m for the past calendar year, but the revelation that top-line data from its pan-European Phase III 'Interest' trial did not meet the day-28 primary efficacy results was a larger cause of concern for investors.

The Interest trial, a double-blind, randomised, parallel-group comparison to assess the efficacy and safety of Traumakine, which targets the treatment of acute respiratory disease, recruited 300 patients across 64 hospital intensive care units around Europe, but was unable to show an increased number of ventilator-free survival days or a reduced mortality rate when compared to placebo.

The median number of ventilator-free days at day-28 was 10 days in patients treated with Traumakine and 8.5 days in the placebo group and at day-90 all-cause mortality in the Traumakine group was 32.6% compared to 31.6% in the placebo group.

Dr Markku Jalkanen, chief executive of Faron, said, "We are incredibly disappointed and surprised by these results. We need to further analyse the data in order to understand how this study differs from our previous positive results with ARDS patients, both in terms of Traumakine's efficacy, and in the unusually low mortality rate observed in the placebo arm."

Elsewhere, the Finland-based firm saw cash balances contract 19.1% to €9.3m, and net assets decline 44% to €4.7m, with Faron's board noting its increased focus on reducing cash burn and preserving its existing resources.

Net debt fell 25.9% to €6.88m despite Faron reporting no revenue for the year and a 107% increase in research and development costs at €19.1m.

As of 0840 BST, Faron shares had crashed 84.99% to 108.80p.