REG - Futura Medical PLC - Full Year Results 2021

Futura MedicalAnnouncement

26/04/2022 07:00

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RNS Number : 2753J  Futura Medical PLC  26 April 2022

 

 
 
 

 

 

 

 

For immediate release
 
           26 April 2022

 

Futura Medical plc

("Futura" or "the Company")

 

Full Year Results for the year ended 31 December 2021

 

Futura Medical plc (AIM: FUM), a pharmaceutical company developing a portfolio
of innovative products based on its proprietary, transdermal DermaSys(®) drug
delivery technology and currently focused on sexual health and pain, is
pleased to announce its audited results for the year ended 31 December 2021.

 

Key Highlights

 

MED3000 - Europe and US regulatory

 

·     In April 2021, the Company received its MDR EU Quality Management
Certificate for placing MED3000 on the market as a Class 2B medical device
also known as European "CE mark approval".

o  Futura's breakthrough, topical gel formulation MED3000, will be the first
pan-European topical treatment for erectile dysfunction ("ED") available
without the need of a doctor's prescription ("OTC").

·    The US Food and Drug Administration ("FDA") agreed that an application
could be made for MED3000 as a medical device for ED treatment, with a De Novo
classification. A number of productive and positive pre-submission meetings
with FDA followed during 2021 to discuss existing Phase 3 clinical data,
pathway to OTC status and any additional clinical and non-clinical
requirements:

o  In March 2021 an agreement was reached between FDA and Futura on the
detailed clinical study design (protocol) for a small supplemental clinical
trial (known as "FM71").

o  In August 2021 the FDA confirmed that to enable OTC classification a
non-clinical, "Human Factors" study would need to take place to test the
ability of subjects to self-diagnose their ED, correctly select the product
based on label information and test their ability to correctly use the product
without supervision of a doctor. The FDA asked for a minimum of 15 subjects to
complete the study.

o  On 14 September 2021 the first patient was enrolled in the FM71
confirmatory clinical study. Patient recruitment was completed at the end of
2021 and the study remains on track for US filing by end of Q3 2022.

o  In December 2021 Futura announced successful completion of the Human
Factors study, with 32 subjects entering the study. Results supported the
regulatory submission for OTC designation and will enable Futura to finalise
the OTC product label for a US filing expected to be made after FM71 has
completed.

o  US marketing authorisation remains on track for potential approval of
MED3000 in Q1 2023.

MED3000 - Commercial and Manufacturing

·    Joint collaboration agreement for China and South East (SE) Asia
with 50/50 share of profits signed in March 2021. Initial submissions have
been made to the Chinese National Medical Products Association ("NMPA")
initially for determination of the regulatory classification of MED3000 in
what is expected to be a three year regulatory process.

·     In August 2021 Futura entered into a licensing agreement with m8
Pharmaceuticals, Inc ("m8"), a specialty biopharmaceutical company focused on
commercialisation in Latin America, for the rights to exclusively develop and
commercialise the Company's MED3000, in the key ED markets of Brazil and
Mexico.

·      In September 2021 Futura signed a licensing agreement with Labatec
Pharma ("Labatec"), a Swiss-based specialty pharma Company with expertise in
commercialisation in Europe and the Middle East and North Africa ("MENA")
region for exclusive rights to commercialise MED3000 in the Gulf Co-operation
("GCC") region, Jordan, Lebanon and Iraq.

·      MED3000 manufacturing capabilities expanded in August 2021 with
addition of a new third party, FDA, EMA and UK approved manufacturer and
extended shelf life to three years, as Futura strengthens resources in the
build up towards initial product launches over the next year.

Post period end highlights

·     Entered into a period of exclusivity with an, as yet, unnamed
party regarding a potential agreement for the EU and UK marketing rights for
MED3000.

·     In March 2022 Futura signed a commercial licensing agreement for
MED3000 in South Korea with A. Menarini Korea Limited, a subsidiary of
Italy-based, multinational specialty pharma company Menarini Group.

·     In April 2022, the Company received UKCA mark approval following
an application in March 2022 to the UK Notified Body for MED3000 as a Class 2A
medical device. This is required before end of June 2023 to replace the CE
mark approval which currently covers UK according to Brexit legislation.

Board updates

·     In October 2021 management strengthened the Company's Board with
additional commercial expertise with the appointment of two Non-Executive
Directors, Jeff Needham and Andrew Unitt as Futura moves into the next phase
of MED3000's commercialisation.

·     Jonathan Freeman stepped down as Senior Independent Non-executive
Director on 31 December 2021 having been on the Board of Futura since the IPO
in 2003.

 

Financial highlights

·      In May 2021 the Company conducted a £12.00 million (gross)
fundraise including retail offer.

·      £4.96 million net loss in the period (31 December 2020: net
loss £2.41 million).

·      Cash resources of £10.37 million at 31 December 2021 (31
December 2020: £1.02 million).

·      Current cash runway extends beyond initial MED3000 launches
expected over the next year and expected US regulatory approval in 2023,
assuming no contributions from milestone payments or other revenues.

 

James Barder, Chief Executive of Futura, commented: "2021 has been a truly
exceptional year for Futura and I am proud of the tenacity, determination and
dedication of the entire Futura team.  We continue to develop our partner
distribution network as we build momentum towards bringing MED3000, our unique
clinically proven treatment for erectile dysfunction with a rapid onset, to ED
sufferers across the world. MED3000 has CE mark approval in Europe and the UK,
a major milestone, and we now have four commercial deals in place for MED3000
and are rapidly transforming from a solely R&D focused operation into a
high growth, commercial-stage Company poised for sustainable long-term
revenues."

 

Analyst meeting and webcast

The Executive Team will host a webcast of the presentation which will be
available within the Investor Centre
(https://www.futuramedical.com/content/investors/investor_centre.asp) section
of the Futura company website at www.futuramedical.com
(http://www.futuramedical.com) from 10 am BST on  26 April 2022. The Company
will provide an update on the regulatory pathway of MED3000 in the US,
manufacturing and commercialisation progress.

Analysts wishing to speak to the Futura management team can register their
interest by emailing futuramedical@optimumcomms.com
(mailto:futuramedical@optimumcomms.com) .

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit)
Regulations 2019. Upon the publication of this announcement via the Regulatory
Information Service, this inside information is now considered to be in the
public domain.

 

For further information please contact:

Futura Medical plc

James Barder, Chief Executive

Angela Hildreth, Finance Director and COO

Email: Investor.relations@futuramedical.com

Tel: +44 (0) 1483 685 670

 

Nominated Adviser and Sole Broker:

Liberum

Richard Lindley/ Phil Walker/ Kane Collings

Tel: +44 (0) 203 100 2000

 

For media enquiries please contact:

Optimum Strategic Communications

Mary Clark/ Eva Haas/ Hollie Vile

Email: futuramedical@optimumcomms.com (mailto:ziylo@optimumcomms.com)

Tel: +44 (0) 203 950 9144

 

Notes to editors:

 

About Futura Medical plc

Futura Medical plc (AIM: FUM), is a pharmaceutical company developing a
portfolio of innovative products based on its proprietary, transdermal
DermaSys(®) technology. Each DermaSys(®) formulation is separately patented
and specifically tailored for the selected indication and application, as well
as being optimised for clinical efficacy, safety, administration and patient
convenience. The products are developed for the prescription and consumer
healthcare markets as appropriate. Current therapeutic areas are sexual
health, including erectile dysfunction, and pain relief. Development and
commercialisation strategies are designed to maximise product differentiation
and value creation whilst minimising risk.

 

MED3000 is Futura's topical gel formulation that is a breakthrough treatment
for erectile dysfunction (ED) through a unique evaporative mode of action.
Futura has conducted a Phase 3 study using MED3000 in ED, referred to as
"FM57". This was a 1,000 patient, dose-ranging, multi-centre, randomised,
double blind, placebo-controlled, home use, parallel group study delivering
highly statistically significant results compared to pre-treatment baseline of
IIEF, SEP2 and SEP3 (internationally accepted clinical trial endpoints in ED)
with over 60% of patients experiencing a clinically meaningful improvement in
their ED.  MED3000 also begins to work immediately in some patients, with 60%
of patients seeing onset of their erection within 10 minutes of
application. MED3000 is CE marked in Europe and the UK as a
clinically proven topical treatment for adult men with erectile dysfunction.

 

Futura is based in Guildford, Surrey, and its shares trade on the AIM market
of the London Stock Exchange. www.futuramedical.com
(http://www.futuramedical.com)

 

 

 

Chairman's Statement

Evolving towards commercialisation from a position of strength

2021 was a landmark year for Futura Medical with its lead product MED3000
gaining EU approval as a clinically proven treatment for erectile dysfunction
("ED") available without the need of a doctor's prescription and rapidly
transforming from a solely R&D focused operation into a high growth,
commercial-stage Company poised for sustainable long-term revenues. The
MED3000 regulatory approval was an exceptional achievement for the Company
especially when you consider it was achieved against the backdrop of a global
pandemic.

In June 2021, we completed a £12 million fundraise which was supported by our
key existing shareholders as well as new shareholders. Importantly, this
enables the Company to complete the remaining clinical development activities
expected to be required by the FDA to gain approval in the US. The US is the
largest potential market by value over the counter ("OTC") with all the
well-known oral treatments such as Viagra(®) and Cialis(®) requiring a
doctor's prescription. The fundraise also strengthened our balance sheet ahead
of partnering discussions.

Our commercialisation strategy continues to be to engage with licensing or
distribution partners who have extensive local knowledge of their markets,
experience of building brands within the pharmaceutical and OTC sector as well
as a strong commitment and belief in MED3000. During 2021, we concluded
partnering arrangements in China and South East Asia, Latin America, South
Korea, and the Gulf region including Jordan, Lebanon and Iraq. Our intentions
for US commercialisation are to successfully complete data requirements for
the US and submit for US approval before progressing US commercial options.

We continue to bring new skills and experience to our already highly skilled
Board. A great deal of thought and focus was placed on expanding the Company's
commercial and business expertise with a particular focus on the US. Futura
strengthened the Board with the appointment of two Non-Executive Directors,
Jeff Needham and Andrew Unitt. Both bring OTC market expertise and exceptional
skills in strategic development and business management which will further
enhance our ambition and focus on building a global brand and distribution
network to accelerate Company growth.

Jeff, who joined the Board in October 2021 brings a wealth of knowledge and
experience to the Board having been at Perrigo Company plc, the US-based
manufacturer and marketer of consumer healthcare products, for 36 years, and a
board director of the Consumer Healthcare Products Association (US) for 11
years. Andrew, who joined the Board on 1 January 2022, brings strong financial
experience having spent eleven years at Boots plc, where he was Finance
Director for four years of Boots Healthcare International, its over the
counter medicines business. Andrew will chair the Audit Committee as Jonathan
Freeman's successor, following Jonathan stepping down at the end of 2021.

I would like to take this opportunity to thank Jonathan for his wise counsel
and his huge contribution over the years. He has been a highly valued and
appreciated member of the Board and the Board is unanimous in thanking him for
all his efforts.

The COVID-19 pandemic continued through 2021 and I would like to thank all of
Futura's employees for their dedication, hard work and commitment during
several lockdowns and for successfully working from home when required in the
last twelve months. Finally, I would like to thank our shareholders for their
continued support and belief in our strategy for making a commercial success
of MED3000.

John Clarke

Non-executive Chairman

 

Chief Executive's Review

Poised for growth and sustainable long-term revenues

2021 has been a year of transformational progress and momentum for Futura as
the Company achieved major milestones in terms of first regulatory approval
for our lead product, MED3000, as an approved erectile dysfunction treatment
("ED") and completion of a number of commercial MED3000 licensing deals as we
continue to build a global distribution platform.

The Company received CE mark approval from the European regulator for MED3000
in April 2021. The product is a breakthrough, fast-acting topical gel
formulation for the treatment of ED. MED3000 now has the potential to become
the first globally available, clinically proven, over the counter ("OTC")
treatment option available to the 1 in 5 men(1) that suffer from a variety of
severities of ED worldwide, a market that has seen little innovation in the
last two decades.

The Company is now preparing for first product launches over the next year and
2023, not just in Europe but also countries where recognition of the CE mark
may allow "fast-track" review, importantly making a highly differentiated
treatment option accessible and available to ED sufferers without a doctor's
prescription. In line with this, recognising how crucial disciplined supply
is, we have recruited key quality, manufacturing and supply talent, and are
scaling up production to ensure continuity and certainty of supply for
launches and future international sales growth.

The US remains the largest market opportunity globally for ED treatments OTC
and we are making steady progress towards completing our US Food and Drug
Administration ("FDA") regulatory submission for MED3000 and continue to
target filing for approval by the end of Q3 2022. We were pleased to announce
completion of patient recruitment for our FM71 study (a confirmatory study
stipulated by the FDA) at the end of 2021 and reported in December 2021 that
the "Human Factors" study was successfully completed, with results able to
support the regulatory submission for OTC designation as well as allowing us
to finalise the OTC product label for the US filing.

The Board and its commercial advisors believe that post-US-submission with
launches underway in other regions is an optimal, key, de-risked inflection
point at which to focus on US commercial discussions in earnest to explore all
options to capture long-term value and cashflow for shareholders.

2021 also saw the Company begin to execute upon its strategic plan to leverage
commercialisation globally with a network of licensing and distribution
partners with brand building strength, healthcare credibility and
infrastructure and marketing expertise, choosing partners for the development
and commercialisation of MED3000 in major markets for ED. In 2021 this covered
China, South East Asia, Latin America and the Gulf region in deals structured
to capture significant long-term value.

In 2022 to-date we have signed an agreement covering South Korea bringing the
total number of MED3000 commercial deals to four and we have also entered into
a period of exclusivity with an, as yet, unnamed party regarding a potential
agreement for the EU and UK marketing rights for MED3000, although there can
be no guarantee that an agreement can be successfully reached at this stage. A
further announcement will be made as appropriate.

We look forward to further updates for shareholders during what we believe
will continue to be an exciting 2022 for Futura as we prepare for initial
launches of MED3000, further commercial agreements and target US regulatory
filing by the end of Q3 2022.

 

Operational Review

Futura's strategy is to leverage its proprietary and tailored DermaSys(®)
transdermal delivery technology to bring innovative products to market in
sexual health and pain, bringing new treatment options to patients
particularly in areas of significant unmet need. The Company is accumulating
critical know-how, particularly in new market segments of sexual health,
including OTC treatments for ED, that it aims to leverage commercially as it
continues to build a brand franchise around MED3000 and achieve sustainable
revenue growth.

DermaSys(®) - Our proprietary patented transdermal technology platform

Futura's unique patented technology DermaSys(®) is designed to deliver
clinically proven effective medical treatments via the skin.

DermaSys(®) is a versatile and bespoke technology. Each product gel is
uniquely formulated using the DermaSys(®) platform with volatile solvent
component formulations tailored for each product to suit the specific
therapeutic indication and desired speed of onset and duration of action. Such
targeted delivery offers an optimised profile in terms of dose, onset time and
duration of effect as well as an improved safety profile reducing the risk of
side effects. Each product is formulated to maximise its benefits for patients
and consumers. Each new unique formulation offers the opportunity for
additional patent applications and potential patent protection.

MED3000 - Futura's breakthrough, fast-acting topical gel formulation with the
potential to become the first globally available, clinically proven, OTC
treatment for ED

MED3000 is a formulation of the proprietary technology DermaSys(®), for the
treatment of ED. MED3000 has the potential to be a highly differentiated
product by addressing significant unmet needs, across all patient severities
in the multi-billion dollar ED market(2), which include rapid speed of onset
enabling spontaneity for both partners, significant clinical benefits
alongside excellent safety and low side effects and no interactions with
alcohol or food as well as providing a potential treatment option for patients
contra-indicated from using existing ED therapies.

The prevalence of ED disrupts the lives of at least 1 in 5 men globally(1)
with around 23 million men suffering ED in the US and 20 million men in the
UK, France, Italy, Spain and Germany(3). Whereas there has been little
innovation in ED treatments for nearly two decades and many patients continue
to suffer dissatisfaction with existing treatments, the market continues to
evolve especially within the US with the advent of subscription services such
as For Hims and Go Roman, and also in the UK with Numan, which offer a branded
concierge service for ED prescription medicines online. These subscription
services charge a monthly subscription fee, typically in the region of US$50
in return for a doctor's consultation and ten generic 50mg sildenafil tablets
per month.  This increased affordability of around US$5 per tablet (to the
end user) is driving volumes especially in the US which have increased by 85%
between 2018 and 2020(2).

Studies have shown MED3000 to be an effective treatment for ED with an
excellent safety profile. MED3000 has a unique evaporative mode of action
which the Company believes stimulates nerve endings in the glans penis to
cause an erection. MED3000 helps men get an erection within 10 minutes,
substantially faster than on-demand oral tablet phosphodiesterase-5 inhibitors
("PDE5i's"), with significant benefits for spontaneous rather than pre-planned
sexual intercourse.

Futura's objective of OTC status as a clinically proven treatment for ED for
MED3000, particularly in the US, continues to be a top priority given the
potential this offers with the difficulties that PDE5i's seem to be
encountering in most major markets to get approval for switch from
prescription to OTC status.  Most recently in January 2022 BfArM's (the
Federal Institute for Drugs and Medical Devices in Germany) Expert Committee
for Prescription rejected the prescription to OTC reclassification of
sildenafil (50mg) for oral use to treat ED.  Sildenafil currently has OTC
status only in Ireland, New Zealand, Norway, Poland, and the UK.

MED3000 - approved as the first pan-European topical treatment for ED
available with OTC status

Futura's breakthrough, fast-acting topical gel formulation MED3000, is the
first clinically proven, pan-European topical treatment for adult men with ED
available without a doctor's prescription. In April 2021 the Company announced
that it received its MDR EU Quality Management Certificate for the placing on
the market of a Class 2B medical device known as MED3000 ("CE mark approval").

The CE mark approval of MED3000 from the EU Notified Body paves the way for
approval in many countries around the world, including in Latin America, the
Middle East, Africa and the Far East regions with many countries considering
"fast-track" review based on recognition of the EU CE mark. Due to post-Brexit
arrangements, the EU CE mark can be used to market the product in Great
Britain until 30 June 2023 by which time a specific UKCA mark has to be
obtained. In anticipation of this Futura filed for a UKCA mark for MED3000 as
a Class 2A medical device and received approval in April 2022.

US - the largest potential OTC ED market globally

In 2020, the FDA agreed that an application may be made for MED3000 as a
medical device for ED treatment, with a De Novo classification. This was
followed by a number of productive and positive pre-submission meetings with
the FDA during 2020 and 2021 to discuss existing Phase 3 clinical data,
pathway to OTC status and any additional clinical and non-clinical
requirements.

In August 2021 Futura agreed with FDA the design of a "Human Factors" study to
achieve OTC classification. Successful completion of the Human Factors study
was announced in December 2021, with 32 subjects recruited. It was
demonstrated that individuals are able to correctly self-diagnose ED and to
make correct self-selection decisions by considering their own health history
and the instructions for use and warnings on the label. Overall, there was a
very high degree of comprehension of the label and leaflet to increase
confidence that the product will be used appropriately in an OTC setting.
These results therefore support the regulatory submission for OTC designation
and will enable Futura to finalise the OTC product label for a US filing.

FM71 - US confirmatory clinical study design

In March 2021 Futura announced that it received official minutes from the FDA
agreeing the design for a confirmatory clinical trial. FM71 is a Phase 3,
24-week multicentre, comparative, randomised, open-label, home use, parallel
group study in 100 subjects with mild, moderate or severe ED. Co-primary
endpoints were agreed with FDA as significant improvement with MED3000 from
baseline (pre-treatment) ED, and ensuring that the change from baseline is
clinically important, defined as at least a 4-unit change on the
internationally recognised IIEF-EF scale. Secondary endpoints include FDA
agreed criteria to support fast-acting claims, a key product differentiator.
Tadalafil 5mg is also included in the study to provide exploratory end-points
and inform FDA of the relative benefit and risk of MED3000 versus a currently
marketed product.

FM71 was fully recruited by the end of December 2021 using subjects from
Eastern Europe and the US. Timelines remain on track to enable planned US
regulatory submission by the end of Q3 2022, and for targeting potential US
FDA granting De Novo and OTC classification for marketing authorisation in Q1
2023.

MED3000 commercialisation

2021 saw the Company enter into several commercial licensing deals in major
markets for ED.

In March 2021 Futura announced investment into the Company and joint
collaboration with Co-High Investment Management Limited ("Co-High") and
certain subsidiaries of Atlantis Group to commercialise MED3000
in China and South East Asia.

Futura also announced in August 2021 that it had entered into a licensing
agreement with m8 Pharmaceuticals to commercialise MED3000 in Brazil and
Mexico, swiftly followed in September by a licensing agreement with Labatec
Pharma ("Labatec") for exclusive rights to commercialise MED3000 in the Gulf
region, Jordan, Lebanon and Iraq.

In early 2022 Futura entered into its fourth licensing agreement with A.
Menarini to commercialise MED3000 in South Korea.

Futura is establishing a network of licensing and distribution partners with
strength in brand building, pharmaceutical credibility and regional
infrastructure and marketing expertise for long-term distribution of MED3000
across the globe. With multiple commercial agreements to date Futura now has a
strong and expanding distribution platform in place for regions outside the
key US market. The Board's US commercialisation strategy is to successfully
complete data requirements for the US and submit for US approval before
progressing US commercial options which is also expected to be reinforced by
validation of initial product launches in other countries. Nevertheless Futura
has already received a number of inquiries regarding commercialisation
opportunities for MED3000 in the US and the Board and its advisors are keeping
an open mind on the best options in order to maximise long-term value and
sustainable revenues whilst minimising risk for Futura's shareholders.

China and South East Asia - Co-High

In March 2021 Futura entered into £1.5 million convertible debt and £0.5
million of warrants financing transactions with HT Riverwood Multi-Growth Fund
("Riverwood"), a fund managed by Atlantis Investment Management Limited
("Atlantis"), which provided the Company with £2 million in cash. These
financial instruments were respectively converted and exercised by Riverwood
in March and April 2021 and there are no further amounts outstanding to
Riverwood from Futura.

Atlantis is a 100% owned subsidiary of the Atlantis Group and Co-High is a 60%
owned subsidiary of the Atlantis Group. Ms Yang Liu, now Atlantis'
Chairperson and Chief Investment Officer, acquired the Atlantis Group in
2009.

Additionally, Futura entered into a licensing agreement with Pride Century
Ventures, a special purpose vehicle owned by Co-High for the rights to
exclusively develop and commercialise the Company's topical, gel-based ED
treatment MED3000, in China and South East Asia (the "Region"). Co-High will
provide funding currently estimated to be up to £4 million for the expected
remaining R&D work required to gain approval of MED3000 throughout the
Region. Futura will be entitled to 50% of profits from the commercialisation
of MED3000 within the Region including any profits derived from local partner
agreements within the Region.

Atlantis is a leading international asset management company with a focus on
the Greater China Region and South East Asia. Co-High is a specialist private
equity company in the Greater China region and invests in and collaborates
with some of the world's most promising companies which are believed to be
poised to enter a hypergrowth phase. Healthcare investment and collaboration
is targeted at companies with a clear scientific edge who are working to solve
the major unmet medical needs of the Greater China region.

Under the terms of the agreement, Futura and Co-High will work together to
develop and commercialise MED3000 as a clinically proven OTC treatment for ED
throughout South East Asia.

Discussions are being held with the Chinese regulator, the National Medical
Products Administration, to clarify the scope of clinical work required to
gain approval in China and initial submissions have been made to determine
whether MED3000 will be designated a medical device or drug. Current
expectations are that a Chinese clinical trial will be required to establish
safety as well as efficacy in Chinese men. The Chinese regulatory process is
currently expected to take up to three years inclusive of the likely time
required to conduct a local clinical trial although more accurate timings can
only be given once designation is complete.

Brazil and Mexico - m8 Pharmaceuticals

In August 2021 Futura entered into a licensing agreement for MED3000 with m8
Pharmaceuticals, Inc ("m8"), a specialty biopharmaceutical company focused on
commercialisation in Latin America, for the rights to exclusively develop and
commercialise MED3000, in Brazil and Mexico.

Under the terms of the agreement Futura and m8 will work together to gain
marketing authorisation and commercialise MED3000 as a clinically proven
treatment for ED available OTC in Brazil and Mexico, the two biggest countries
and healthcare markets in Latin America. The agreement is for an initial term
of 15 years.

m8 will be responsible for all costs related to the regulatory approval and
marketing of the product. Futura will provide reasonable ongoing technical
support for OTC product development and commercialisation. Futura will receive
payments on all sales of MED3000 from m8, and up to four milestone payments
totalling US$8.5 million based on cumulative sales volumes within the initial
term.

Gulf Co-operation Council ("GCC") region and Middle East - Labatec

In September 2021 Futura entered into a licensing agreement with Labatec
Pharma ("Labatec"), a Swiss-based specialty pharma Company focused on
commercialisation in Europe and the Middle East and North Africa ("MENA")
regions, for the rights to exclusively commercialise MED3000 in the GCC region
as well as Jordan, Lebanon and Iraq.

Futura is eligible to receive initial upfront payments, as well as undisclosed
milestone payments based on regulatory approval. Labatec will pay an agreed
price to Futura for the manufacture and supply of MED3000 by Futura's Contract
Manufacturing Organisation ("CMO"), plus royalties on all sales. Labatec is
responsible for all local MED3000 development and regulatory costs as well as
all launch and marketing expenses. The initial licence agreement term is for
eight years with the ability to extend for successive two-year terms by mutual
consent.

South Korea - A. Menarini Korea Ltd

In March 2022 Futura announced a licensing agreement with A. Menarini Korea
Limited ("Menarini") for the rights to exclusively commercialise MED3000 for
the treatment of ED in South Korea. A.Menarini Korea Ltd. is a wholly owned
subsidiary of the Italian-based specialty pharma Company Menarini Group.
Menarini Group is the world's largest Italian biopharmaceutical company with a
heritage of over 135 years and over 17,500 employees in more than 140
countries. Menarini Korea possesses the capability to successfully register,
launch and commercialise brands in the market, with key strengths in
therapeutic areas such as cardiovascular, hemato-oncology/pain, men's health,
consumer Health, and specialty/orphan diseases and is a trusted medicines
supplier in the region that is ideally placed to market retail products, with
local teams that have a deep understanding and experience of the South Korean
market.

Futura is eligible to receive initial undisclosed upfront payments and under
agreement terms, will support Menarini to gain marketing authorisation and
commercialise MED3000 for ED in South Korea. Menarini will be responsible for
all costs related to the regulatory approval and marketing of the product in
the region including a clinical bridging study, if required. Futura will
provide reasonable technical support for product development and
commercialisation and provide manufactured product from Futura's CMO at an
agreed price.

Manufacturing

Futura's team has been significantly strengthened with key recruitment in both
supply and manufacturing expertise and additional quality management as the
Company moves from R&D to commercial production and supply for its main
product. MED3000 manufacturing scale up and production capacity to meet
projected demand is progressing well. We are cognisant that good supply
discipline is crucial and are also continuing to work on optimising cost of
goods.

In August 2021, the Company announced the addition of a new, US FDA, EMA and
UK approved contract manufacturer as Futura works towards initial launches of
MED3000 over the next year.

Currently, Futura's approved contract manufacturing facilities are located in
the UK as well as the EU. The Company is actively exploring additional
manufacturing sites, including in the US, to support continuity of supply for
future international sales growth as well as the logistical challenges of
inter-market sales. Submissions for further regulatory approvals of MED3000
outside Europe have already started through Futura's partners and
manufacturing scale up and validation is well advanced as we move towards
manufacturing launch supplies.

Futura now has an approved shelf life for MED3000 of three years across all
temperature zones an important feature for markets such as the Middle East
where ambient temperatures and humidity are much higher than within the UK.

Patents

An initial UK patent was filed in December 2019 around MED3000's clinically
significant and novel findings shown in FM57 followed by further supplementary
UK filings to establish a priority date prior to a Patent Cooperation Treaty
("PCT") and certain non-PCT patent applications in late 2020. The PCT
currently has 153 contracting countries where the Company can seek patent
protection claiming priority from an original application such as the UK.  An
application to the European Patent Office was also made in August 2021 for
examination and further national applications in line with normal PCT filing
procedure will be made in Q2 2022 in those countries considered necessary to
protect the commercial interests of MED3000. If national applications are
successful this will provide patent protection until 2040.

 

TPR100 - Topical non-steroidal anti-inflammatory for the treatment of pain and
inflammation associated with sprains, strains, bruises and soft tissue
rheumatism

TPR100 is partnered for manufacturing and distribution in the UK with
Thornton and Ross, one of the UK's largest consumer healthcare companies and
a subsidiary of STADA AG.

Following the Medicines and Healthcare products Regulatory Agency's ("MHRA")
request for a Phase 3 study to support the improved skin permeation and
potential potency of TPR100 including potential superior efficacy claims,
Futura has determined that the feasibility of a clinical study that would
satisfy the Phase 3 requirements for both UK and US marketing approval
will require a US distribution partner prior to the commencement of any Phase
3 programme. The project is currently on hold as the company focuses its
resources on its leading asset, MED3000.

 

CBD100 - Futura's advanced, proprietary DermaSys(®) formulation for
transdermal delivery of cannabidiol

CBD100 is part of a joint venture collaboration with CBDerma Technology
Limited aiming to explore the application of Futura's advanced proprietary
transdermal drug delivery technology, DermaSys(®) for delivery of
cannabidiol.

CBDerma Technology is a company that was established and funded to
specifically exploit the therapeutic potential of cannabis. Cannabidiol is a
major component of the cannabis plant and is generally regarded as
non-addictive and non-psychoactive, making it ideal for consideration as a
topically delivered molecule for local or regional (non-systemic) use. The
market for cannabidiol products is growing rapidly. A 2021 report by Reports
and Data forecasts that the market for cannabidiol products is forecast to
grow from US$3 billion in 2020 to US$15 billion by 2028, at a Compound Annual
Growth Rate of 22.6%, during the forecast period. The market is primarily
driven by the increase in the usage of cannabidiol in medical applications and
consumer products such as supplements, beverages and skin care cosmetics.

Futura's extensive DermaSys(®) cannabidiol formulation work has demonstrated
highly efficient penetration of cannabidiol into and through the skin,
superior to an established, marketed, comparator product. Additionally,
cannabidiol is known to be unstable with many common excipients. CBD100 was
specially formulated to minimise this issue and has shown encouraging early
stability work, which is expected to ensure potency is retained during
shelf-life. This work resulted in robust intellectual property filings
covering various unique aspects of the CBD100 gel formulation.

As the medical and consumer applications of cannabidiol become more and more
accepted and the regulatory environment becomes ever clearer a gel that has
been formulated using strict pharmaceutical development principles with strong
delivery characteristics, stability and high quality continues to be a very
attractive commercial proposition when compared to current market incumbents
in either cosmetic or more traditional pharmaceutical markets for cannabidiol
such as pain and inflammation. Both options are being examined.

Whilst Futura's resources are focused on key asset MED3000, the Company has
received interest in CBD100 and continues to explore commercial opportunities
for the product with discussions progressing and further validation work being
conducted both internally and externally by a potential partner to validate
the power of the DermaSys(®) technology which may result in a commercial
agreement and we intend to update shareholders in due course.

 

Research and Development

Futura is committed to delivering long-term and sustainable value to the
Company allowing a long-lasting growth franchise to be built around MED3000
and other DermaSys(®) formulated products.

Whereas Futura's priority remains the approval and subsequent successful
launch of MED3000 in major markets throughout the world, Futura aims to build
a significant MED3000 franchise across sexual health by leveraging and
expanding its unique knowledge and expertise in underserved and new categories
in sexual health, building upon market research already undertaken to identify
product extensions and potentially new market segments for an OTC product
treating ED. Futura intends, in due course, to commission further in-market
research, especially for the US, to identify commercially attractive product
line extension opportunities.

 

Outlook

The fundraise in May 2021 was pivotal in terms of strengthening the Company's
finances and commercial negotiating positions and so the last year has seen
Futura achieve considerable milestones both in the evolution of the Company as
it approaches a sustainable revenue stream and in terms of bringing closer the
availability of MED3000 to men with ED where treatments that meet their needs
are lacking. This includes CE mark approval for Europe and the UK as an ED
treatment for adult men without the need for a doctor's prescription and
multiple commercial licensing deals in large markets for ED in regions such as
China and South East Asia, Latin American, the Middle East and South Korea.
The Company has also entered into a period of exclusivity with an, as yet,
unnamed party regarding a potential agreement for the EU and UK marketing
rights for MED3000, although there can be no guarantee that an agreement can
be successfully reached at this stage.

Going forward we will continue to gear up manufacturing and supply in line
with expected demand ready for first product launches over the next year,
having strengthened the Company's team of direct employees and directors in
terms of global commercial, quality, manufacturing and supply experience, as
well as gain manufacturing regulatory approvals through regional partners to
support international expansion beyond 2022.

We are also firmly focused on the US regulatory pathway for MED3000 with the
US confirmatory FM71 clinical trial well underway having fully enrolled
patients towards the end of 2021 and the short, non-clinical, "Human Factors"
study successfully completed to support US OTC designation. Everything is on
track for planned MED3000 regulatory dossier submission in the US by the end
of Q3 2022 and a potential marketing authorisation in Q1 2023. The US remains
the largest potential OTC market for ED and OTC status would be a first in the
US, as it is for the majority of countries within the EU, providing ED
sufferers with an accessible, new treatment option, for their ED. We look
forward to reporting on these important inflection points to shareholders as
the year progresses and Futura gathers increasing momentum as it transitions
to commercial operations to capture the value of MED3000.

James Barder

Chief Executive

 

Financial Review

Strengthened balance sheet enabling robust progress towards commercialisation

As outlined in the Chairman's Statement and Chief Executive's Review, during
the year Futura focused its financial resources on MED3000, its fast-acting
topical treatment for erectile dysfunction ("ED") concentrating on the US path
to regulatory submission, and enabling commercialisation through securing
licensing and distribution deals with commercial partners to build and grow a
worldwide distribution and marketing network.

In March 2021, the Company concluded a funding transaction which resulted in
£1.50 million received upon the issuance of convertible loan notes and in
April 2021 the Company received an additional £0.50 million following the
exercise of warrants by HT Riverwood Fund (part of the Atlantis Group).

In April 2021 the Company was notified that MED3000 had been approved as a
Class 2B medical device in Europe and the FDA confirmed that a further,
smaller, supplementary study was required for approval in the US.  Following
a Placing and Retail Offer in June 2021, securing gross proceeds of £12.00
million, this supplementary study (FM71) commenced in July 2021 with
recruitment completing in December 2021 and headline data followed by US
regulatory submission expected by the end of Q3 2022.

Revenue

The Company continued to focus its financial and human resources on late stage
clinical development of its fast-acting topical treatment for ED and on
accelerating progress towards achieving a significant, continuous revenue
stream within a few years. No revenue was recognised in the period.

Research and Development costs

Research and Development (R&D) costs for the period ended 31 December 2021
were £3.77 million, compared to £1.93 million for the period ended 31
December 2020. The increase of £1.84 million is reflective of the
commencement and recruitment of the FM71 study and focus on manufacturing
scale-up activities ahead of anticipated MED3000 launches.

There was no capitalisation of R&D costs in 2021.

 

Administrative costs

Administrative costs were £2.09 million for the period ended 31 December 2021
compared to £1.00 million for the period ended 31 December 2020.  This is an
increase on the prior year and partly driven by higher costs associated with
expansion of the team and resources relating to commercial, manufacturing and
supply chain in readiness for launching MED3000 over the next year. In
addition, there were some one-off costs incurred relating to fundraising costs
and fees associated with negotiating and concluding commercial arrangements
for MED3000.

Tax

It is expected that an R&D tax credit of £0.91 million will be claimed in
respect of 2021 and the cash refund is expected to be received mid-2022 from
HMRC.

Loss per share

The basic loss per share for 2021 was 1.83p (2020: 0.99p). Details of the loss
per share calculations are provided in Note 10 to the consolidated financial
statements.

Cash balance

The cash balance at the end of 2021 was £10.37 million (2020: £1.02
million). Cash burn during the year was £4.39 million (2020: £6.77 million)
primarily in relation to the start and execution of the FM71 clinical study,
manufacturing scale-up activities associated with MED3000 and other one-off
costs associated with fundraising and the conclusion of commercial agreements
with MED3000 licensing and distribution partners.

Current cash runway extends beyond initial MED3000 launches expected over the
next year and expected US regulatory approval in 2023, assuming no
contributions from milestone payments or other revenues.

 

Angela Hildreth

Finance Director and Chief Operating Officer

 

Please see link below to Financial Statements

http://www.rns-pdf.londonstockexchange.com/rns/2753J_1-2022-4-25.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/2753J_1-2022-4-25.pdf)

 

References

1. EMA, Withdrawal assessment report for Viagra, 2008

2. IQVIA IMS Health, 2020

3. 2021 JSB Partners estimate based on US Census International Programs
Population by age groups and "Prevalence of erectile dysfunction:
Massachusetts Male Aging Study", 1987 ± 1989 (n=1626); source Kleinman et al.
J Clin Epidemiol 2000.

 

 

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