Faron:

Translation: Original published in Finnish on 3/12/2026 at 8:06 am EET.

Faron's subscription rights will be detached today. The targeted 40 MEUR in the offering has been fully covered by commitments and guarantees already received. This removes the uncertainty related to the offering's success, reducing the financing risk. The subscription price of EUR 0.50 was in line with our estimate, but the net proceeds were below our expectations. According to the company, the funds raised will suffice until November 2027, which should enable the readout of responses from bexmarilimab's Phase II HR-MDS trial. The decrease in financing risk has a positive impact on our view, which is partly balanced by lower net proceeds from the offering than we expected. We raise our target price to EUR 0.75 (was EUR 0.65) in line with the reduced risk level based on the DCF model. We raise our recommendation to Buy (was Reduce).

Full subscription is guaranteed, terms in line with our expectations

Faron is raising 40 MEUR in gross proceeds through an 80 million share issue. The subscription price of EUR 0.50 corresponds to a discount of ~7.5% compared to Monday's closing price. Current shareholders will receive one subscription right for each share held, and 13 subscription rights entitle the holder to subscribe for 9 new shares. Subscription commitments cover around 12 MEUR, and the remaining ~28 MEUR is secured by guarantees. The guarantees practically eliminate the risk associated with the completion of the offering, which is, of course, good news. As a result of the offering, the company's number of shares will increase to around 200 million, representing an increase of about 67% in the number of shares.

Funding enables the next readout

The offering will raise net proceeds of around 32.8 MEUR. This amount is lower than our previous estimate (37–38 MEUR). The company intends to primarily use the funds for a randomized Phase II trial of bexmarilimab in 90 high-risk MDS (HR-MDS) patients. Funding sufficient until November 2027 should cover the readout of responses, based on which decisions can be made regarding the appropriate dosage for the final trial phase and potentially submit an accelerated marketing authorization application. At this stage, we consider the likelihood of an application being submitted to be low. We believe the timeline for response readout is quite tight. In the BEXMAB trial, the recruitment and response readout for 21 patients took roughly one year. The current plan is to recruit 90 patients, and since the trial has not yet started, we consider schedule delays possible. In addition to HR-MDS, the funds will be used to support a maximum of five investigator-initiated trials (IITs) to investigate the efficacy of bexmarilimab in lung cancer, melanoma, and AML, among others.

We reduce our required return in response to lower financial risk

The current offering is significant on Faron’s scale. Although the company secured the offering's completion with guarantees, the net proceeds to be raised will remain below our expectations. In our opinion, there were significant risks associated with the offering's success, which diminished with the guarantees. Accordingly, we are decreasing our required return (WACC) to 12% to reflect the decreased financial risk. In other respects, the changes to the forecast are limited to refinements of details that have no practical significance.

Creating value by refocusing on the clinical program

Based on our DCF model, the share value is EUR 0.75. Our increased target price and improved view are based on the securing of significant financing and a reduction in financing risk. The company can now focus on implementing its research program and thereby creating value by promoting bexmarilimab as a drug candidate.