REG - Futura Medical PLC - Futura Medical - Interim Results 2023

Futura MedicalAnnouncement

18/09/2023 07:00

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RNS Number : 6621M  Futura Medical PLC  18 September 2023

18 September 2023

 Futura Medical plc

("Futura" or the "Company")

 

Interim Results for the Six Months ended 30 June 2023

 

Futura Medical plc (AIM: FUM), the pharmaceutical company developing
innovative sexual health products, is pleased to announce its unaudited
interim results for the six months ended 30 June 2023 ("H1 2023").

 

MED3000, under the brand name Eroxon®, is the first pan-European clinically
proven topical treatment for Erectile Dysfunction ("ED") available without the
need of a doctor's prescription ("OTC").

 

Operational Highlights

 

MED3000 - Successful product launches and FDA approval

·    EU:  Eroxon® launched in April 2023 in Belgium and the UK

o  Positive launch sales in the UK and Belgium indicate around 20% market
share of clinically proven ED treatments.

o  Sales predominantly incremental to existing clinically proven ED
treatments highlighting patient demand for Eroxon®'s key product
characteristics and supporting the positioning of Eroxon as a new category.

o  Positive initial signs of repeat consumer demand.

·    USA: In June 2023, MED3000 was granted marketing authorisation by
the FDA to be legally marketed in the USA, the biggest consumer healthcare
market globally, as the first effective, clinically proven OTC treatment for
ED.

 

Financial highlights

·    Initial Revenues generated by sales of Eroxon® of £1.7 million H1
2023 (H1 2022: nil)

·    Net loss of £1.76 million (H1 2022: £2.46 million)

·    Cash position at 30 June 2023: £7.8 million (30 June 2022: £6.68
million)

·    Cash position as at 31 August 2023: £9.36 million which includes $4
million upfront milestone payment from Haleon plc ("Haleon").

 

Post period highlights

·    USA: Futura entered into a ground-breaking licensing agreement in
July 2023 with Haleon, the world leading consumer healthcare company, for
exclusive rights to commercialise MED3000 in the USA.

o   Under the agreement, Futura received an upfront payment of $4 million
and will receive royalty payments on all sales, and potentially up to a
further $45 million in commercial and performance driven sales milestone
payments.

·    Middle East: MED3000 marketing authorisation granted in six Middle
Eastern countries.

o  Marketing authorisation under the Eroxon® brand name recently granted in
the Kingdom of Saudi Arabia, one of the top ten ED markets in the world by
value.

o  Initial Middle East launch planned in Q4 2023.

 

 

 

Board updates

·       Jeff Needham appointed Chairman in July 2023. Jeff, has been a
member of Futura's Board since October 2021 and succeeds John Clarke. The
search for a new Non-Executive Director is at an advanced stage.

 

James Barder, Chief Executive Officer, Futura Medical said: "Futura has
maintained the momentum achieved over the past three years by delivering its
first significant recurring revenues. The Company has achieved major
milestones including the successful launches of Eroxon® in the UK and Belgium
and most recently online in Italy, France and Spain, received US FDA approval
of MED3000 and signed the subsequent US commercialisation agreement with
Haleon, one of the largest consumer healthcare companies in the world. We look
forward with growing confidence to the remainder of 2023 and are now on the
path towards sustained profitability by 2025.

 

Jeff Needham, Chair of Futura Medical commented: "The Company has made
significant progress during the first half of the year and the Futura team is
excited to be building a valuable, high-quality brand and profitable business.
As Futura enters an exciting new chapter in its development, on behalf of the
Board I would like to thank our shareholders for their continued support. I
also wish to extend our thanks to John Clarke for his service to the Company
as Chairman over the years. He leaves the Company in a strong position, poised
for rapid growth."

 

Webcast

The Executive Team have hosted a pre-recorded webcast presentation which is
now available within the Investor Centre section of the Futura company website
at  https://www.futuramedical.com/ (https://www.futuramedical.com/) .

 

For further information, please contact:

 

Futura Medical plc

James Barder, Chief Executive Officer

Angela Hildreth, Finance Director, and COO

Email: investor.relations@futuramedical.com
(mailto:Investor.relations@futuramedical.com)

Tel: +44 (0) 1483 685 670

www.futuramedical.com (http://www.futuramedical.com/)

 

Nominated Adviser and Sole Broker:

 

Liberum

Phil Walker/ Richard Lindley/ Ben Cryer

Tel: +44 (0) 20 3100 2000

 

For media enquiries please contact:

 

Optimum Strategic Communications

Nick Bastin/ Jonathan Edwards/ Zoe Bolt/ Elena Bates

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

Tel: +44 (0) 203 882 9621

 

 

About Futura Medical plc

 

Futura Medical plc (AIM: FUM), is a pharmaceutical company developing
innovative products based on its proprietary, transdermal
DermaSys® technology.

 

MED3000, the Company's breakthrough treatment for erectile dysfunction ("ED")
has a unique evaporative mode of action and is clinically proven as an
effective topical treatment for adult men with ED, with a key claim of
"Helps you get an erection within 10 minutes". Eroxon® is available Over the
Counter ("OTC") without a doctor's prescription. www.eroxon.com
(http://www.eroxon.com) .

 

MED3000 is being manufactured and commercialised under the brand name Eroxon®
and has been granted marketing authorisation by the FDA in the US, CE marked
in Europe, UKCA marked in the UK and is gaining regulatory approval in a
growing number of countries across the world. Futura has commercial agreements
with Haleon for the US market and Cooper Consumer Health for Europe.

 

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/) .

 

Operational Review

 

MED3000 - Potential to become the market leader in a new OTC category in the
global sexual health market

 

MED3000 is Futura's breakthrough, fast acting topical gel formulation for the
treatment of erectile dysfunction ("ED").

 

MED3000 has been granted marketing authorisation by the FDA in the US, CE
marked in Europe, UKCA marked in the UK and is gaining regulatory approval
in a growing number of countries across the world. Saudi Arabia and Australia
are the latest countries to approve MED3000 as a clinically proven topical
treatment for adult men with ED that helps men get an erection within 10
minutes. Studies have shown MED3000 to be an effective treatment for ED with
an excellent safety profile. The treatment has a unique evaporative mode of
action which stimulates nerve endings in the glans penis to cause an erection.

 

The topical treatment is faster than on-demand oral tablet phosphodiesterase-5
inhibitors ("PDE5i's" - oral treatments for the treatment of ED such as
Viagra®, Levitra ® and Cialis ® and their generic equivalents), MED3000 has
significant benefits allowing spontaneous rather than pre-planned sexual
intercourse.

 

The global prescription erectile dysfunction market is valued at around $3.1
billion(1) with one in five men(2) suffering from it, including around 22
million in the USA, and 20 million across the UK, Germany, France, Italy and
Spain(3).

 

Futura's achievement of OTC status for MED3000 as a clinically proven
treatment for ED in key global regions, in particular the USA and Europe,
continues to be one of two powerful differentiating factors given the limited
availability of OTC PDE5i's around the world, along with its rapid speed of
action, helping men get an erection within 10 minutes.

 

Building a global network and brand

 

Futura has made significant progress in establishing a network of licensing
and distribution partners with strength in brand building, pharmaceutical
credibility and regional infrastructure and marketing expertise for long-term
profitable distribution of MED3000 across the globe.

 

The Company recently announced an agreement with global consumer healthcare
Company Haleon plc, to commercialise MED3000 in the USA, the largest potential
ED market OTC in the world.

 

This ground breaking deal adds to existing commercial agreements in place in
other key markets, including the EU, UK, Switzerland, South Korea, Brazil,
Mexico and the Middle East, and has seen the successful launch of MED3000,
under the brand name Eroxon®, in both the UK and Belgium, as well as more
recent online launches in Italy, France and Spain.

 

 

The Company continues to receive significant interest from a number of
credible parties for the remaining geographic marketing rights that are as yet
unlicensed.

 

With further commercial agreements and product launches planned through the
remainder of 2023 and beyond, Futura is well positioned to continue on its
growth trajectory, bringing a new OTC ED breakthrough treatment to sufferers
globally.

 

UK and Europe - Successful Eroxon® launch

 

MED3000, under the brand name Eroxon®, is the first pan-European clinically
proven topical treatment for ED and is available and now on sale OTC
in Belgium and the UK. With 33 million ED sufferers(3) who use 355 million
treatment doses(1) per year situated in the UK and Europe, this is a
significant market for Futura.

 

In March 2023, Futura's EU and UK distribution partner initiated pre-launch
activities of Eroxon® ahead of an online and retail launch in the UK and
Belgium, supported by marketing and promotional advertising and more recently
an initial online only launch in Italy, France and Spain.

 

Upon launch in April 2023, Eroxon was exclusively available within Boots for
Pharmacy sales in the UK, where Eroxon® is available in over 1,000 stores
across the country. Our distributor is now rolling Eroxon® out across other
key retailers and we expect Eroxon® to be available in over 2,500 stores
across the UK by the end of 2023. This represents a distribution reach, in the
UK, of around 70%.

 

Eroxon® sales to date have exceeded targets

Following its initial launch online across Europe in March 2023 and being made
available to purchase in Belgium and in retail pharmacies in the UK in April
2023, whilst early days, our distributor has reported strong sales and the
Futura Board believes this underlines the unique product differentiators that
Eroxon® brings to clinically proven ED treatment options. As reported during
our investor seminar in late June, feedback from our distributor noted that in
its first week of sales, Eroxon® was the fastest selling product on
Boots.com, at a rate of "one sold every 30 seconds" and was the most
successful OTC launch Boots had seen in a long time.

 

Eroxon® sales are on track to exceed expectations versus its original first
year forecasts, with Eroxon® expected to gain around a 20% share of the
clinically proven ED treatment market, with these being  largely incremental,
demonstrating encouraging signs of consumer acceptance and repeat purchase.
Feedback has been positive, with a very low level of complaints received
regarding lack of efficacy and side effects, which the Futura Board believes
illustrates a high degree of consumer satisfaction.

 

Over the next six months or so, our distributors will look to move into the
next phase of its rollout and launch of Eroxon® with at least a further ten
new country launches.

 

USA - World leading consumer healthcare Company, Haleon, to commercialise
MED3000

 

In June 2023, MED3000 was granted marketing authorisation to be legally
marketed in the USA, the biggest consumer healthcare market globally, as the
first topical gel treatment for ED available OTC. It has been approved as an
effective, clinically proven treatment for ED along with a fast acting
10-minute claim.

 

Following the FDA approval, the Company announced in July that it had entered
into a ground breaking licensing agreement with world leading consumer
healthcare Company Haleon for the rights to exclusively commercialise MED3000
in the USA. As part of the agreement, Futura received an initial upfront
payment of $4 million, will receive further royalty payments on all sales, and
potential commercial and performance driven sales milestone payments totalling
between $5 million and $45 million payable over the course of several years.

 

Haleon will be responsible for all investment activities related to the launch
and marketing of the product in the USA, with Futura providing ongoing
technical support for OTC product development and commercialisation
opportunities.

 

With the USA being the largest potential ED market OTC in the world and the
majority of ED sufferers in the country currently not treating their
condition, MED3000 has the opportunity to meet the needs of many of these ED
sufferers by providing access to an effective and fast-acting treatment with
an excellent safety profile that can be purchased without a prescription.

 

US commercial opportunity

Independent Ipsos market research from 2022, commissioned by Futura,
demonstrated dissatisfaction from ED sufferers with PDE5i's, especially among
Viagra® users.

 

The research has further shown that US men with ED spend between $600 and
$3,500 per year on the treatment of their ED (including out of pocket cost for
medication, doctor visits, refills and extra costs for additional doses)(4).
The price difference being made up by whether the patient is prescribed
generic or more expensive branded PDE5i's. The research also indicated that
the average US man with ED attempts intercourse around 70 times per year.
Assuming a $5-$8 cost per single dose tube, this would equate to $350-$560 per
year - making MED3000 a cost effective solution.

 

Gulf Co-operation Council ("GCC") region and other Middle Eastern countries -
Further approvals received

 

Eroxon has now been granted marketing authorisation in six Middle Eastern
countries, including the key markets of Saudi Arabia and the United Arab
Emirates (UAE), with an initial launch planned in Q4 2023. Saudi Arabia is
one of the top ten ED markets in the world by value(5).

 

Our distributor will hold a launch symposium showcasing Eroxon® at the 20
(https://www.uaa2023.org/) (th (https://www.uaa2023.org/) ) Urological
Association of Asia Congress 2023 (https://www.uaa2023.org/) , which is being
held from 28 September to 1 October 2023 in conjunction with the
12th Emirates International Urological conference in Dubai, UAE.

 

China and South East Asia - Termination of commercial agreement

 

In March 2021 Futura announced a Joint Collaboration with Co-High for the
regulatory development, approval and commercialisation of MED3000 in South
East Asia. Unfortunately, this collaboration has not progressed as Futura had
hoped and, as a consequence, Futura has recently terminated the agreement with
Co-High due to their non-performance of contractual obligations.

 

The region remains a significant commercial opportunity and Futura continues
to receive a growing number of enquiries, especially following the recent FDA
approval of MED3000. Futura's corporate advisors have been progressing
discussions with a number of credible potential distributors and we look
forward to updating shareholders in due course. Nevertheless, further
clinical trials will be required, as previously disclosed, for MED3000 to gain
marketing authorisation in the key ED market of China.

 

Manufacturing

 

MED3000 supply is ISO 13485 accredited with a competitive cost of goods. One
of Futura's key objectives is ensuring a robust and competitive supply chain
through contract manufacturing organisations ("CMO"). Futura engaged a US FDA,
EMA ("European Medicines Agency") and UK approved CMO in 2021 and scaled up
manufacturing for sufficient production capacity to meet initial demand.
Orders have already been received and fulfilled from Futura's existing
partners. A second CMO has now been added to meet projected sales demand.

 

Intellectual Property: patents, trademarks and exclusively supplied, critical
ingredients

 

Futura's corporate strategy is to develop layers of protection around its
products and in particular MED3000, and the Company continues to work with
specialist patent and trademark advisors to further refine and optimise this
strategy. MED3000 patents are now filed in all major ED markets considered
necessary to protect the commercial interests of MED3000. Patent protection
will extend to 2040, once granted.

 

In consumer health and over-the-counter markets, an established brand name is
paramount to ensuring product price and sales volume stability for many years.
Futura is working with commercial partners to help establish global awareness
of the Eroxon® trademark, consumer trust and build worldwide brand integrity.

 

Research and Development

 

Futura's priority remains to fully leverage MED3000's significant potential in
major markets throughout the world as marketing approvals for ED treatment
accumulate and regional and country product launches take place. Futura has
received feedback from commercial partners indicating interest in expanding
the MED3000 brand with innovative product line extensions and 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. Market research has already been undertaken to identify product
extensions and potentially new market segments for an OTC product within the
sexual health category.

 

Development is now progressing to expand our research and development pipeline
whilst balancing these costs against our ambitions to become a highly
profitable company. Further updates will be provided to shareholders in due
course.

 

Board changes

 

Futura benefits from the extensive knowledge and experience of its highly
skilled Board. In July 2023 Non-Executive Chairman, John Clarke, who was
instrumental in driving the Company's strategy and success, stepped down. His
departure was part of a planned transition with Independent Non-Executive
Director, Jeff Needham, succeeding John as Chairman.

 

Prior to Jeff joining the Company as a Non-Executive Director of the Company
in October 2021, he had been President of Perrigo Consumer Self-Care
Americas (including USA) and Executive Vice President at Perrigo Company
plc, the US-based manufacturer and largest marketer of generic consumer
healthcare products.

 

A search for a new Non-Executive Director is at an advanced stage and an
announcement will be made in due course. Andrew Unitt, as Senior Independent
Director, has assumed the Chair of both the Remuneration and the Nominations
Committees, in addition to his existing role as Chair of the Audit Committee
until a new Non-Executive Director is appointed.

 

Outlook

 

Futura has made rapid progress in achieving an expansive global network of
licensing and distribution partners for MED3000, which now includes the USA,
the largest potential ED market OTC in the world and has now transformed
itself from wholly development-focused, into a commercially-focused
organisation that is selling its innovative lead product. There is strong
interest for the remaining countries where MED3000 has not yet been licensed
and the Company, along with its advisors, are progressing discussions with
potential interested parties.

 

As local marketing approvals are being granted, the focus has switched to
preparation and execution of product launches, to growing and accelerating
revenue generation, as well as ensuring secure, competitive and scalable
product supply.

 

Looking forward, we are proud that increasing numbers of ED sufferers will
have the chance to benefit from MED3000 as the roll out is expanded into other
geographical markets, including the USA. The Company anticipates reaching
around a break-even position in 2024, reflecting the receipt of gross profits
from Eroxon® sales in the Middle East, UK and EU, as well as the upfront US$4
million milestone payment received from Haleon in July 2023, which is expected
to be recognised in 2024. The launches to date have put the Company on the
path towards profitability and the upfront payments received ensure that the
Company is well funded to deliver on its potential.

 

 

Financial Review

 

Revenue

Revenue of £1.7 million (H1 2022: nil) was recorded during the period and is
wholly related to sales of Eroxon® as Futura's European commercial partner
launched Eroxon® in the UK and Belgium in April 2023.

 

Research and Development costs

The consolidated statement of profit and loss includes development expenditure
of £0.8 million (H1 2022: £1.9 million) and mainly relates to costs incurred
generating additional data to support the responses to questions raised by the
FDA in relation to MED3000. In addition, other research costs relating to
manufacturing were incurred as part of an assessment of manufacturing
capacity. Further capital expenditure in supply chain is planned to be
incurred in 2023 and 2024 to increase capacity to meet demand.

 

Administrative costs

Costs totalling £2.0 million in the period (H1 2022 £0.9 million) include
£0.65 million of non-cash share based payment charges (H1 2022 £0.1 million)
and other one-off advisory costs relating to the conclusion of the US
commercial agreement. Other costs incurred related to the supply chain along
with some marketing costs incurred supporting our commercial partners ahead of
the launch of Eroxon®. In the period there was no change to overall headcount
however the increase in administrative costs and commensurate decrease in
R&D costs relate to the change in allocation of cost of internal personnel
as a result of the commercialisation of Eroxon® following the launches in
Europe. Futura maintains its commitment to keep tight control of a central
cost base.

 

Tax

A tax credit of £0.2 million (H1 2022: £0.35 million) is related to an
estimate of R&D tax credits that can be claimed in respect of the period.
This is a reduction on the previous period as R&D activities have reduced
whilst resources have been focused on supporting Eroxon® through the early
stages of commercialisation.

 

Loss per share

The basic loss per share for the period ending 30 June 2023 was 0.61p (H1
2022: 0.87p). Details of the loss per share calculations are provided in Note
5.

 

Balance Sheet

Net assets at 30 June 2023 were £8 million (H1 2022: £7.3 million),
including cash of £7.8 million H1 2022: £6.68 million). This followed the
receipt of £4.37 million of funds received from an institutional investor
upon exercise of 10,375,500 warrants at a price of £0.40 per ordinary share.

 

Going concern

The Directors have prepared the financial statements on a going concern basis.
Further information is described in Note 3.

 

Post period events

In July 2023, Futura entered into a commercial licencing agreement with Haleon
in respect of Eroxon. Upon execution of this agreement, Futura received $4
million (£3.2 million) in the form of an upfront milestone payment which is
to be recognised as a Contract Liability until satisfaction of the performance
obligations. The key performance obligation, which is expected to be met in
2024, will materially cause all of the £3.2 million to be recognised as
revenue at that point in time on the Consolidated Statement of Comprehensive
Income.

 

Notes

(1)(. ) Manufacturers' Selling Prices 2020: Data available for 75
countries IQVIA IMS Health

2 EMA, Withdrawal assessment report for Viagra, 2008

(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; source Kleinman et al. J Clin
Epidemiol 2000.

(4) Ipsos research commissioned by Futura, 2022

(5) National Library of Medicine
(https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9717721/#:~:text=Erectile%20dysfunction%20is%20known%20as,Saudi%20married%20males%20is%2010.45%25.)

 

Angela Hildreth

Finance Director and Chief Operating Officer

 

Interim Results - click below to view Futura Medical's Interim Results

 

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