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

-4.6%

FARN

0.8%

GB Biotechs

-0.2%

GB Market


1 Year Return

254.7%

FARN

3.6%

GB Biotechs

6.1%

GB Market

Return vs Industry: FARN exceeded the UK Biotechs industry which returned 3.6% over the past year.

Return vs Market: FARN exceeded the UK Market which returned 6.1% over the past year.


Shareholder returns

FARNIndustryMarket
7 Day-4.6%0.8%-0.2%
30 Day-20.2%-0.7%-2.7%
90 Day20.3%2.7%3.9%
1 Year254.7%254.7%4.4%3.6%11.8%6.1%
3 Year-40.3%-40.3%6.0%4.3%17.5%2.6%
5 Yearn/a36.1%32.9%34.8%3.7%

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?


In this section, we usually try to help investors determine whether Faron Pharmaceuticals Oy is trading at an attractive price based on the cash flow it is expected to produce in the future. But as Faron Pharmaceuticals Oy has not provided consistent financial data, and the stock also has no analyst forecast or coverage, its intrinsic value cannot be reliably calculated by extrapolating past data or using analyst consensus cash flow predictions.

This is quite a rare situation as 89% of companies covered by Simply Wall St do have a valuation analysis.


Next Steps

  • Take a look at our analysis of FARN’s management and see if the CEO’s compensation is within a reasonable range, who is on the board and if insiders have been trading lately.
  • When valuing a company like this, investors focus more on how they perceive the size of the opportunity, the company's ability to deliver and scale, and the strength of the team. While we are not analysing this type of data at the moment, if you don’t know where to start, we recommend reading through Faron Pharmaceuticals Oy regulatory filings.
  • Explore potentially undervalued companies in the Pharmaceuticals & Biotech industry.

Future Growth

How is Faron Pharmaceuticals Oy forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

19.0%

Forecasted Pharmaceuticals & Biotech industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Faron Pharmaceuticals Oy has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


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 (-4.7%).


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 -38.5% each year


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.8%markettop25%5.1%industryaverage1.0%forecastin3Yearsn/a

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

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure


CEO

Markku Jalkanen (64yo)

13.1yrs

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 ($USD0.00) is below average for companies of similar size in the UK market ($USD325.67K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Yrjö Erik Wichmann
Vice President of Financing & Investor Relations0.7yrs€216.93k0.17% 154.9k
Juho Jalkanen
Chief Development Officer1.1yrs€360.62k2.53% 2.3m
Markku Jalkanen
Founder13.1yrs€226.53k6.72% 6.0m
Toni Hänninen
Chief Financial Officer0.7yrsno datano data
Mikael Maksimow
Vice President of Operations0yrsno datano data
Matti Karvonen
Chief Medical Officer & VP of Drug Development3.8yrsno datano data
Juhana Heinonen
Chief Commercial Officer2.1yrsno datano data
Ilse Piippo
Regulatory Consultant3yrsno datano data

2.1yrs

Average Tenure

61yo

Average Age

Experienced Management: FARN's management team is considered experienced (2.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Markku Jalkanen
Founder13.1yrs€226.53k6.72% 6.0m
Jonathan Kenneth Knowles
Chairman of Matins Scientific Advisory Board1.4yrs€33.69k0.28% 247.4k
Gregory Brown
Non-Executive Director2.8yrs€46.70k0.042% 37.4k
Huaizheng Peng
Board Observer1.4yrs€36.20k0.0092% 8.3k
Frank Armstrong
Non-Executive Chairman4.4yrs€77.79k0.052% 46.5k
Matti Manner
Non-Executive Vice-Chairman4.4yrs€44.42k1.17% 1.1m
John Poulos
Non-Executive Director2.8yrs€48.21kno data
Sirpa Jalkanen
Member of Matins Scientific Advisory Board0.4yrsno datano data
Leopoldo Zambeletti
Non-Executive Director4.4yrs€43.14k0.040% 36.2k
David Adams
Member of Matins Scientific Advisory Board0.4yrsno datano data

2.8yrs

Average Tenure

64yo

Average Age

Experienced Board: FARN's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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%.


Top Shareholders

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£89.828m
  • 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 cancer immunotherapy. The company’s lead product candidate is Traumakine, a recombinant human IFN beta-1a, which is in Phase III clinical trial for the treatment of acute respiratory distress syndrome (ARDS). It also develops Clevegen, an immunotherapy candidate, designed to prevent tumor growth and metastasis that targets the tumor immune suppressor molecule; and D-ARDS, a diagnostic tool to estimate ARDS severity and to follow ARDS outcome. Faron Pharmaceuticals Oy has a collaboration with MediCity unit of Turku University Medical School. The company was founded in 2003 and is headquartered in Turku, Finland. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 22:17
End of Day Share Price2020/02/14 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.