AIM:FARN

Stock Analysis Report

Executive Summary

Faron Pharmaceuticals Oy operates as a clinical stage drug discovery and development company in Finland.

Risk Analysis

Earnings have declined by -38.24% per year over past 5 years

Has less than 1 year of cash runway

Makes less than USD$1m in revenue (€176K)

Currently unprofitable and not forecast to become profitable over the next 3 years

+ 2 more risks


Snowflake Analysis

Weak fundamentals or lack of information.

Share Price & News

How has Faron Pharmaceuticals Oy's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FARN's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-22.0%

FARN

1.0%

GB Biotechs

2.3%

GB Market


1 Year Return

281.1%

FARN

19.1%

GB Biotechs

10.7%

GB Market

Return vs Industry: FARN exceeded the UK Biotechs industry which returned 19.1% over the past year.

Return vs Market: FARN exceeded the UK Market which returned 10.7% over the past year.


Shareholder returns

FARNIndustryMarket
7 Day-22.0%1.0%2.3%
30 Day9.4%8.5%2.9%
90 Day118.3%13.6%2.5%
1 Year281.1%281.1%20.0%19.1%16.4%10.7%
3 Year-12.3%-12.3%32.4%29.9%21.3%5.8%
5 Yearn/a53.4%49.5%41.0%8.7%

Price Volatility Vs. Market

How volatile is Faron Pharmaceuticals Oy's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Faron Pharmaceuticals Oy undervalued compared to its fair value and its price relative to the market?


Share Price vs. Fair Value

Below Fair Value: FARN (£2.33) is trading above our estimate of fair value (£0.15)

Significantly Below Fair Value: FARN is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: FARN is unprofitable, so we can't compare its PE Ratio to the Biotechs industry average.

PE vs Market: FARN is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate FARN's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: FARN has negative assets, so we can't compare its PB Ratio to the GB Biotechs industry average.


Next Steps

Future Growth

How is Faron Pharmaceuticals Oy forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

-171.0%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if FARN's forecast earnings growth is above the savings rate (0.5%).

Earnings vs Market: Insufficient data to determine if FARN's earnings are forecast to grow faster than the UK market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: FARN is forecast to have no revenue next year.

High Growth Revenue: FARN is forecast to have no revenue next year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if FARN's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Faron Pharmaceuticals Oy performed over the past 5 years?

-38.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FARN is currently unprofitable.

Growing Profit Margin: FARN is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: FARN is unprofitable, and losses have increased over the past 5 years at a rate of -38.2% per year.

Accelerating Growth: Unable to compare FARN's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: FARN is unprofitable, making it difficult to compare its past year earnings growth to the Biotechs industry (5.4%).


Return on Equity

High ROE: FARN's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Faron Pharmaceuticals Oy's financial position?


Financial Position Analysis

Short Term Liabilities: FARN has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: FARN has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: FARN has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: FARN's has negative shareholder equity, so we do not need to check if its debt has reduced over time.


Balance Sheet

Inventory Level: FARN has a low level of unsold assets or inventory.

Debt Coverage by Assets: FARN has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: FARN has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: FARN has less than a year of cash runway if free cash flow continues to reduce at historical rates of -26.2% each year


Next Steps

Dividend

What is Faron Pharmaceuticals Oy's current dividend yield, its reliability and sustainability?

0.54%

Forecast Dividend Yield


Dividend Yield vs Market

companyn/amarketbottom25%1.9%markettop25%5.1%industryaverage1.0%forecastin3Years0.5%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate FARN's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate FARN's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if FARN's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if FARN's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of FARN's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

What is the CEO of Faron Pharmaceuticals Oy's salary, the management and board of directors tenure and is there insider trading?

1.9yrs

Average management tenure


CEO

Markku Jalkanen (64yo)

12.9yrs

Tenure

€226,532

Compensation

Prof. Markku Jalkanen, Ph.D., serves as a Partner and Advisor at Inveni Capital. Prof. Jalkanen founded Faron Pharmaceuticals Corp. (formerly Faron Pharmaceuticals Ltd.) in 2006 and Chief Executive Officer ...


CEO Compensation Analysis

Compensation vs Market: Markku's total compensation ($USD0.00) is below average for companies of similar size in the UK market ($USD333.40K).

Compensation vs Earnings: Markku's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

1.9yrs

Average Tenure

61yo

Average Age

Experienced Management: FARN's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.


Board Age and Tenure

4.3yrs

Average Tenure

64yo

Average Age

Experienced Board: FARN's board of directors are considered experienced (4.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 14.2%.


Management Team

  • Markku Jalkanen (64yo)

    Founder

    • Tenure: 12.9yrs
    • Compensation: €226.53k
  • Yrjö Erik Wichmann (61yo)

    Vice President of Financing & Investor Relations

    • Tenure: 0.5yrs
    • Compensation: €216.93k
  • Ilse Piippo (70yo)

    Regulatory Consultant

    • Tenure: 2.8yrs
  • Mikael Maksimow (43yo)

    Vice President of Operations

    • Tenure: 0yrs
  • Juho Jalkanen (41yo)

    Chief Development Officer

    • Tenure: 0.9yrs
    • Compensation: €360.62k
  • Matti Karvonen

    Chief Medical Officer & VP of Drug Development

    • Tenure: 3.6yrs
  • Juhana Heinonen

    Chief Commercial Officer

    • Tenure: 1.9yrs
  • Toni Hänninen

    Chief Financial Officer

    • Tenure: 0.5yrs

Board Members

  • Markku Jalkanen (64yo)

    Founder

    • Tenure: 12.9yrs
    • Compensation: €226.53k
  • Greg Brown (65yo)

    Non-Executive Director

    • Tenure: 2.6yrs
    • Compensation: €46.70k
  • Huaizheng Peng (57yo)

    Board Observer

    • Tenure: 1.3yrs
    • Compensation: €36.20k
  • Frank Armstrong (62yo)

    Non-Executive Chairman

    • Tenure: 4.3yrs
    • Compensation: €77.79k
  • Matti Manner (66yo)

    Non-Executive Vice-Chairman

    • Tenure: 4.3yrs
    • Compensation: €44.42k
  • John Poulos (64yo)

    Non-Executive Director

    • Tenure: 2.6yrs
    • Compensation: €48.21k
  • Leopoldo Zambeletti (51yo)

    Non-Executive Director

    • Tenure: 4.3yrs
    • Compensation: €43.14k

Company Information

Faron Pharmaceuticals Oy's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Faron Pharmaceuticals Oy
  • Ticker: FARN
  • Exchange: AIM
  • Founded: 2003
  • Industry: Biotechnology
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: UK£100.651m
  • Shares outstanding: 43.29m
  • Website: https://www.faron.com

Number of Employees


Location

  • Faron Pharmaceuticals Oy
  • Joukahaisenkatu 6
  • Intelligate
  • Turku
  • Finland Proper
  • 20520
  • Finland

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FARNAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPNov 2015
FARONHLSE (OMX Nordic Exchange Helsinki)YesOrdinary SharesFIEURNov 2015

Biography

Faron Pharmaceuticals Oy operates as a clinical stage drug discovery and development company in Finland. It has a pipeline of drug development projects focusing on acute organ traumas, vascular damage, and ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/14 21:39
End of Day Share Price2019/12/13 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.