Translation: Original published in Finnish on 6/3/2025 at 7:00 am EEST.

Faron presented the results of the BEXMAB hematological cancer study in a webcast on Monday. We believe the results support advancing to the final, critical clinical Phase III, which we estimate could begin patient recruitment next year. The published results for both end-stage and first-line MDS patients support our previous view on the stock, so we are not making any forecast changes in relation to blood cancers. For other projects, we are moving our timeline estimates forward, which results in a reduction in our target price to EUR 3.0 (was 3.2). We believe the stock is fully priced, so we lower the recommendation to Reduce (was Accumulate).

Treatment responses in late-stage MDS patients were now fully analyzed for the first time

BEXMAB is a clinical phase I/II blood cancer trial focusing specifically on myelodysplastic syndrome (MDS). The study combines Faron's bexmarilimab with standard-of-care azacitidine. The phase II analysis included all 32 r/r MDS patients in the study (whose previous HMA medication is no longer effective). The patients had an overall response rate (ORR) of 47% (IWG2023). The response rate may still increase as treatments continue, as responses sometimes come with a delay. According to Faron, the expected response rate in a similar situation with azacitidine alone, without bexmarilimab, would be around 0-15%. Overall, we believe 47% is a good result and supports the transition of the trial to the pivotal phase (Clinical Phase III). Moving to the final phase requires a positive response from the FDA and securing financing. The combination of bexmarilimab and azacitidine was well tolerated, which was not surprising, as there is already plenty of data on bexmarilimab's favorable safety profile. We note that only the Phase III study is designed to provide reliable information on the efficacy of the drug. Currently, the efficacy data is still preliminary.

Preliminary treatment responses in first-line patients also promising

Faron also reported treatment responses in first-line MDS patients to the combination of bexmarilimab and azacitidine in addition to r/r MDS. Since first-line patients have not received treatment before, the response rates are generally higher than those of end-stage patients. The response rate of the 18 patients now analyzed was 67% (IWG2023), which can also be considered a good result. Composite complete remission was 56%. This percentage of patients had clear treatment responses that correlate positively with life expectancy. To our knowledge, this figure is better than the expected response to azacitidine alone. We would like to remind you that Faron’s trial is at an early stage for first-line patients and the time for more detailed conclusions is later. A Phase III study of the competing combination of azacitidine + venetoclax is also ongoing. Future results of that study may set a standard that bexmarilimab will need to exceed in terms of either efficacy, safety, or both.

Delays bring down forecasts

The BEXMAB results were mainly in line with our expectations, and we believe that they support advancing the study to Phase III. This trend aligns with our previous estimates, so we have no reason to adjust our projections regarding blood cancers at this time. There have been delays in launching projects for solid cancers and other drug candidates, which we take into account in this update. These project delays will reduce the present value of cash flows.

The share is tightly valued

Our DCF model values the stock at EUR 3.0, so the upside is exhausted for now. The stock is also 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 in MDS and the potentially large number of indications. Solid tumors bring longer-term potential to the share.