Yes, borrowed shares can be sold there like anywhere else; I did not find sources supporting your claim. Only “naked shorting”, i.e., selling shares without first borrowing them from somewhere, is prohibited.
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Then provide a couple of sources.
That’s like demanding sources for which is better, gasoline or diesel. Both have their advantages and neither design is dominantly better.
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Let’s start with the one you already claimed to have read. Please read it completely, but most importantly:
Results
Phase II/III dose-optimization designs are capable of controlling family-wise type I error rates and achieving appropriate statistical power with substantially smaller sample sizes than the conventional approach while also reducing the number of patients who experience toxicity. Depending on the design and scenario, the sample size savings range from 16.6% to 27.3%, with a mean savings of 22.1%.
“…while also reducing the number of patients who experience toxicity”. This is with a seamless phase 2/3 design. In the best interest of patients.
Conclusions
While there are unique statistical, regulatory, and operational considerations for seamless designs they are also uniquely suited to many development settings. These include, for example, addressing dose selection under FDA’s Project Optimus and addressing the growing use of biomarkers and personalized medicine approaches in cancer treatment.
Project Optimus was already discussed earlier, but as a recap:
“The Oncology Center of Excellence (OCE) Project Optimus is an initiative to reform the dose optimization and dose selection paradigm in oncology drug development. Too often, the current paradigm for dose selection—based on cytotoxic chemotherapeutics—leads to doses and schedules of molecularly targeted therapies that are inadequately characterized before initiating registration trials. “
So the conclusion is that seamless design is suitable for taking into account FDA’s Project Optimus dose selection perspectives. And Project Optimus itself calls for patient benefit.
But most importantly:
Here is an entire white paper that addresses the issue. I could put many excerpts from it, but I would rather you read it yourself. The most important excerpt is an entire paragraph, so that this topic no longer remains unclear:
“Why Are Seamless Trials Important for Rare Cancers?
Seamless trials are particularly valuable for rare cancers because they help to:
• Minimize redundancy and enrollment delays: Avoiding separate protocols and site start-up processes helps preserve momentum, which is particularly important in rare cancers where recruitment is difficult, and patients may only be eligible for a single trial.
• Reduce patient exposure to ineffective therapies: By integrating early indicators of activity, seamless designs can identify ineffective interventions sooner, placing patient well-being at the center of trial efficiency.
• Enable real-time learning and adaptation: Seamless designs can accommodate multiple objectives from early and later stages, such as moving from early phase questions about dosage to objectives aimed at registration based on emerging signals.
• Maximize insights per patient enrolled: Given the limited number of eligible patients, integrating data across trial stages ensures that no clinical evidence is lost and data collected in early stages can inform later decisions and inferences.
• Support intermediate clinical endpoints or early measures of activity: Seamless trials allow incorporation of early signals to guide trial progress and inform dosage or cohort decisions.
• Leverage regulatory flexibility and enhance efficient evidence: Recent published FDA guidance reflects openness to well-justified, innovative trial designs.1–4 Seamless trials may align well with approval pathways when thoughtfully planned and appropriately justified. For example, FDA OCE’s Project FrontRunner highlights opportunities for using a seamless randomized approach to generate evidence for accelerated approval and verify clinical benefit for subsequent traditional approval in the front-line advanced/metastatic setting.
• Facilitate faster patient access to promising therapies: By aiming to reduce pauses between phases and integrate registrational intent earlier, seamless trials can shorten timelines and provide patients with earlier access to potentially effective therapies
This should be enough evidence to show why Faron’s chosen path of seamless trial design is in the best interest of both Faron and the patients. And not a red flag, as it is being tried to be painted here. If Faron follows the patients’ best interests in its research, I am more than satisfied.
Instead, I want to understand your agenda. Why do you say that Faron should meekly conduct a classic phase 2? When it is not in the best interest of the patients, nor even Faron’s interest (see all of the above). If you are merely an observer who does not own shares, shouldn’t the patients’ best interest be your primary concern?
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You are absolutely right about that, because for example, Admicom has been shorted while it was listed on First North. However, no shorting of Faron has been reported to the Financial Supervisory Authority (Finanssivalvonta) in a size exceeding 0.5% of the share capital, so any alleged short selling is too small a phenomenon to be significant.
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You’ve mixed things up. Seamless design goes together with Optimus, but Optimus is naturally not the same as seamless design.
That article talks about the benefits of seamless, so what? It also has its problem areas. Neither design dominates.
Look at how things happen in practice. Most registrational studies go one phase at a time. Seamless is more common in phase 1/2, as Faron already did.
As investors, we are interested in whether the plan is feasible, and whether it is one that could attract a good partner and a deal.
Here are all the possible risks: first-in-class, so far control-group-less mediocre data, a little-known target, a small firm with no experience in registrational studies, a difficult indication, long trial duration, seamless design is being planned, and now it’s indirectly indicated that it will succeed independently with a CRO.
It is certainly easier to find a financier for a separate phase 2. If one doesn’t understand this, one is not in touch with reality.
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Hi Clark. Thanks for your comments, although I somewhat disagree with many of them. A small follow-up question regarding the above. Do you have concrete experience in large negotiations (in some role) in the M&A field, or in any field? Regarding the absoluteness of your comments, I think they must surely be based on solid experience.
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Faron’s situation seems appealing and the potential for opportunities “limitless”. The risk level, however, is another matter, and the investment amount in relation to the risk tolerance now seems to unsettle many investors.
Everyone makes their own risk assessment and has different relative and absolute risk tolerance, but it is somewhat unnecessary for everyone to express this on this channel as a reflection of their own risk level. It feels like the discussion regarding faron has strayed into side issues, and more factual data is scarce, and the fervor is high - either to express their nervousness, to add to it with reflections on side issues, and to sigh in fright at the potential of every setback.
This writing is equally worthless, but consistently, faith in Faron has been sufficient. Let’s hope for good, further clarifying news, for which there seems to be a crying need here.
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In the summer, you wrote in a tone that the Verona trial is a very promising study and will be one of Bex’s biggest threats. Venetoclax has been learned to dose over the years, etc., I recall reading something like this.
Could you compare Faron’s path to Verona’s? Was it, in your opinion, “properly conducted,” if we don’t take a stance on its outcome for now.
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HCM’s pot of 517,795 shares received yesterday falls just below that reporting threshold, so it’s impossible to know how they operate. Today, however, so many shares have hit the buy side that it’s quite possible they didn’t short everything in advance.
I found the First North rulebook, and it mentions this particular operating model as very risky for the share price, and on the other hand, attractive for the lender. Page 5. Gubrick probably already explained this in the spring. Fortunately, the price has held up quite well, however.
“In combination with this arrangement and prior to invoking conversion, the lender can have borrowed shares and sold these in the market, so-called short selling, which creates incentives for the lender to make the share price fall in the pricing period.”
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Heh. We are wisest in hindsight.
Phase 1b had 107 patients, from which they proceeded directly to phase three. One might ask if a phase two should have been done, where OS would also have been monitored with a smaller dataset. Or different subgroups tested. Now they have been identified post hoc. Perhaps a failed large phase three would have been avoided.
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Faron is not a stock to be shorted in any case.
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Just because it can’t be shorted on Nordnet doesn’t mean it can’t be shorted.
edit. and shorting is generally quite difficult to prevent. In principle, I could agree with Pertti, who owns 100,000 shares, that Pertti sells the shares and I later sell the shares back to Pertti at the same price. One can then buy the shares back from the stock exchange (“close the short”) and sell them back to Pertti outside the stock exchange with an agreed trade. From a tax perspective, it’s quite an undesirable method, but if there’s a will, it’s possible.
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My trust is 7/10 and I am investing heavily in Faron. The remaining three points are due to risk-taking. I am more interested in the published research results. And it is excellent that the Jalkaset have succeeded in raising funding.
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The funding raised by Faron for the different phases of the Bex study has been so scarce that the trials have had to be conducted with a minimal group size. In many oncology comparator studies, a control group has been used already in phase 2 trials. Faron tried to offer historical data as a ‘comparison group,’ but of course, it was not accepted by the FDA. Perhaps precisely for this reason, the FDA required conducting a 1mg vs 3mg extension to phase two. This also slows down the progress of the Faron train, as there will be an extra station where it has to stop for a while.
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2 cents on the shorting discussion: an understanding has formed over the years that very few professional operators aiming for profit with short positions get involved with these biotechs, at least not in a way where the trade form would be traditional stock lending. Simply because the mere “overnight risk” is massive: a takeover bid, partner announcement, or other catalyst can come any morning, and the magnitude of the loss is too poorly manageable for most operators’ taste.
Risk management etc. they tend to say comes before everything else. Options/other structures for shorting are a discussion of their own.
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I have also been thinking about this valuation of Faron myself. In addition, I have been weighing my trust in the company’s management.
I have observed that quite a few investors have a very bullish view on this company and the value of its drug candidate. It seems that the finished drug is assumed to achieve a potentially very large market position, and that the drug’s sales would easily amount to billions of euros per year for years. I have also read about truly hefty expectations for royalty percentages. As a skeptic, I’m putting a bit of a damper on these high expectations.
A billion euros in annual sales for a finished drug is a tremendous achievement. It’s not achieved just like that. New cancer drugs are constantly being developed, so large market shares are not guaranteed either. About one-third of blood cancer drugs have achieved blockbuster status. About two-thirds have not. If Bex, after partnering, were to achieve even close to this level, it would already be a truly fine achievement. Many estimates have been based on continuous annual sales of several billion euros, which would certainly be heavenly, but extremely rare and unlikely. And Bex’s status as a combination drug does not increase annual sales, as the per-patient budget will likely be shared among the drug products at some level.
The royalties paid by a potential future partner to Faron are likely based, as almost always, on a certain percentage of sales. I have seen expectations of up to 20% for royalties among investors, and was it even mentioned in Jalkanen’s speeches, but it’s worth remembering that most drug development companies that have partnered at the Phase 2 stage receive royalties at a level of 5-15% of sales. This, combined with the ambiguity of potential solid tumors, may, in my opinion, be precisely the major difficulty why partnership negotiations are not progressing. Faron does not appear to be in a negotiating position where the royalty would be at the top end. As for milestone payments, I see no value in the company’s value development, as they only finance the completion of Phase 2 or 3.
It is at least somewhat unclear to me whether Phase 2 is actually well on its way to completion and how certainly. Should Bex be treated as a Phase 2 ready drug candidate? If I put on my big skeptic hat, I can state that the company really only has Phase 1 truly completed. This further increases the risks and the unlikelihood that Phase 3 will ever be completed, because Phase 2 is still ongoing. Therefore, getting a good partner deal is still difficult and time-consuming, leading to share dilution.
If I calculate the company’s current value based on future cash flows and their probabilities, my calculation looks roughly like this:
Drug sales €1,000 M/year
Sales over 15 years €12,000 M (if sales start 2028 and patent until 2040)
Royalties 10% of sales
Royalties in 15 years €1,200 M
Present value of royalties discounted at 7% annual interest €648 M (if cash flow is evenly distributed)
Probability of Phase 2 and Phase 3 success and securing a partner 0.5
The company’s risk-adjusted value is €324 M.
If I assume that the stock will still experience 20% dilution due to an issue or financing arrangements paid with shares. Then the dilution-adjusted value would be €259 M.
Today’s market capitalization is €230 M.
Many risk factors and variables are also not taken into account here: delays in Phase 2 and 3 studies, delays in partnering, changes in competitive situation, possibility of drug withdrawal from the market after approval, decrease in drug sales over the years, failures and delays in future studies (such as the current Phase 2 study which has been partially unsuccessful and partially poorly designed).
Considering these other risk factors, I would see that partnering is indeed priced in. And just as likely, in my opinion, the drug will sell 2 billion a year as 0.5 billion a year, meaning that a potential upside always has a corresponding downside.
For me, the biggest problem at the moment is the company’s management and its communication. The company has not been able to conduct the Phase 2 study correctly. This is not just bad luck, but a matter of skill in understanding the requirements and designing the studies correctly. This is the company’s core competence, and they have not succeeded in it.
In addition, communication has been lacking. Some companies at a similar stage are significantly more open, for example, in communicating about partnership negotiations. As an investor, I need to get at least a rough idea of where the negotiations are. How many negotiating partners are there, and some hint as to where things stand. “Soon” does not convince me. I sold my Faron shares about a month ago. I wish them all the best, but I am not prepared to keep my money in this.
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This was interesting. Timo would have sold about 100k shares, but the flagging threshold was only fallen below later due to shares granted by HCM. If I interpreted correctly.
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If one of the main owners sells 0.6% of their shares, is that grounds for speculation? However, now they can sell just under 1/3 of their shares throughout December without worry and don’t need to inform about it…
And the position of the owner in question has grown by 202,004 shares after October 8, 2025, even when this sale is taken into account…
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So, Timo’s holdings have decreased by about 100k shares. The disclosure threshold was crossed due to that offering, but before that, those shares have been sold, donated, or otherwise transferred.
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