REG - Futura Medical PLC - FY24 Trading Update and FY25 Outlook

Futura MedicalAnnouncement

30/01/2025 07:00

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RNS Number : 1983V  Futura Medical PLC  30 January 2025

30 January 2025

 

Futura Medical plc

("Futura" or the "Company")

FY24 Trading Update and FY25 Outlook

Futura Medical plc (AIM: FUM), the consumer healthcare company behind Eroxon,
that specialises in the development and global commercialisation of
innovative and clinically proven sexual health products, today provides an
unaudited trading update for the year ended 31 December 2024 ("FY24") and an
update on the outlook for the year ending 31 December 2025 ("FY25").

 

Key points

 

 ·             Continued launch of Eroxon during the second half of 2024
               ·                                         Initial launch of Eroxon in October 2024 in the US through Futura's commercial
                                                         distribution partner Haleon, triggering a milestone payment of $5.0m which was
                                                         received in H2 FY24
               ·                                         Eroxon now launched in 15 countries across the Americas, Middle East and
                                                         Europe and on track to have launched Eroxon in 20 countries by the end of 2025
               ·                                         Launches continue to provide learnings for our commercial partners, helping
                                                         inform and develop future rollouts and the marketing strategy undertaken by
                                                         our partners
               ·                                         Strong sell-in to the retailer driving initial demand reflects the previous
                                                         unmet consumer need for men with erectile dysfunction ("ED")
               ·                                         FY24 Revenue and Profit after Tax ahead of market expectations(1)
 ·             New product development R&D pipeline progressing with positive results for
               Eroxon Intense and WSD4000, for the treatment of symptoms in women with sexual
               dysfunction
 ·             US sales in FY25 expected to be lower than previously anticipated based on the
               pace of initial consumer uptake and general awareness resulting in FY25
               revenue and profits to be materially below current market expectations
 ·             The Company remains well capitalised with a robust balance sheet supporting
               organic investment in new product development

 

FY24 Trading Update

 

The Board expects to deliver FY24 Revenue and Profit after Tax ahead
of market expectations. Following the launch of Eroxon across a number of key
markets, including the US, Europe and Latin America, revenues grew
significantly in the year to at least £13.7 million (2023: £3.1 million).
The Company delivered a blended gross margin(2) of approximately 73% and net
cash at year end was £6.6 million (2023: £7.7 million).

 

Eroxon

 

Since the half year, Eroxon has continued to be launched in new markets
alongside Cooper Consumer Health, helping to further address the growing needs
within the OTC sexual health market.

 

October's launch in the US, one of the largest ED markets in the world, was a
landmark for the Company.  Following the October 2024 US launch, early signs
are promising with positive retailer uptake and strong retail launch execution
performance feedback and all parties remain confident that there is a
significant market opportunity to address. Consumer data from the first
quarter post launch has provided insights and learnings and Haleon is
committed to implementing those learnings to optimise their next phase of the
launch, including removing barriers to purchase, such as lockboxes that
prevent theft but require the intervention of a shop assistant when purchasing
and therefore impact sales. Haleon continues to deploy significant investment
with marketing campaigns continuing, including TV advertising that refines
consumer messaging and targets those men where research suggests Eroxon is
most effective.

 

Whilst Eroxon is now available in many major markets across Europe and the UK,
the timing of further launches within the EU have been slower than originally
anticipated and we are working closely with our commercial partner Cooper
Consumer Healthcare in accordance with our commercial agreement to address
these issues and gain greater visibility around the challenges Cooper faces in
generating greater consumer awareness in the potential target market for
Eroxon.

 

 

New Product Development Pipeline

 

Broadening the Company's clinically proven product range, whilst being mindful
of costs and focusing on return on investment for shareholders remains a
strategic objective for the Board. FY24 saw the business make good progress,
with the expansion of its new product development pipeline. Eroxon Intense,
which is on track for marketing authorisation by the end of 2025, will broaden
the existing Eroxon range and benefit those men who would prefer a stronger
sensation while using the product. WSD4000, a topical gel for the treatment of
symptoms of sexual dysfunction in women, represents an opportunity to address
a large and underserved market and has delivered positive results from its
Home User study, details of which can be found in the Company's announcement
of 15 January 2025.

 

FY2025 Outlook

 

Futura and its partners remain confident in the opportunity to address the
unmet need of accessible erectile dysfunction treatment in our target markets.
Whilst sales levels are satisfactory for such an early stage in the product
journey, the rate of consumer sales expansion is falling short of early
estimates.  As previously noted, Eroxon is an entirely new product in an
entirely new category and therefore predicting the sales, royalties and
milestones is particularly challenging, with milestone payments very
significant and unpredictable in their timing.  Whilst launches have been
well executed and met with strong retailer commitment, there have been
learnings which require marketing strategies to be optimised in the period
ahead. This, along with some launch delays in markets outside of the US has
resulted in a slower ramp-up and expansion of retail sales.  While early in
the new fiscal year and early in the launch phase, the Board believes the
prudent approach to FY25 is to revise its forecasts accordingly.

 

Noting the above, the Company currently anticipates product sales and
royalties in FY25 will be approximately 50% lower than previously expected and
that the Company is unlikely to meet the requirements for the sales-based
milestone payments expected during FY25. As a result, the Company now expects
FY25 revenue will be materially below expectations and as a result will make a
loss after tax in FY25 against previous expectations of profitability(3)

 

The Group's balance sheet remains robust with cash of £6.6 million at 31
December 2024 which provides working capital through to H2 2026.

 

James Barder, CEO of Futura, commented:

"2024 saw us bear the early fruit of the hard work and disciplined investments
we made to successfully bring a new, unique product to market. The results we
achieved last year, with maiden profit delivered, are thanks to the hard work
and expertise of our teams and partners. The launches of Eroxon around the
world, including the US, for a large and underserved market, were significant
milestones for Futura and provide the springboard for further growth.

Whilst it has been slower than anticipated to generate consumer awareness, and
resulting sales, in a completely new product in a new consumer market that
naturally has some stigma attached to it, we, and our partners, remain
confident in the future prospects for Eroxon. Our commercial partners are
committed to building the Eroxon brand based upon the learnings gleaned
post-launch, especially within the key US market, as we look to meet the unmet
demand for a product of this nature and take advantage of the opportunities
available to us."

 

The Company expects to report its full year results in April 2025.

(1) The Company believes that, prior to this announcement, market expectations
for 2024 performance in terms of revenue and   profit after tax were £13.4
million and £0.5 million respectively

(2) Blended gross margin across product sales, royalties and milestones

(3) The Company believes that, prior to this announcement, market expectations
for 2025 performance in terms of revenue and   profit after tax were £18.5
million and £6.3 million respectively

 

 

The information communicated in this announcement contains inside information
for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014
as amended by the Market Abuse (Amendment) (EU Exit) Regulations 2019.

Contacts:

 Futura Medical plc             James Barder                                            investor.relations@futuramedical.com

                                                       (mailto:Investor.relations@futuramedical.com)
                                Chief Executive Officer

                                                       +44 (0)1483 685 670
                                Angela Hildreth

                                                       www.futuramedical.com (http://www.futuramedical.com/)
                                Finance Director and COO

 Panmure Liberum                Emma Earl, Will Goode, Mark Rogers (Corporate Finance)  +44 (0)20 3100 2000

 Nominated Adviser              Rupert Dearden (Corporate Broking)

 and Broker

 Stifel                         Alan Selby                                              +44 (0)207 710 7600

 Joint Broker                   Ben Maddison

                                Ben Good

 Alma Strategic Communications  Rebecca Sanders-Hewett                                  +44 (0)20 3405 0205

                                Sam Modlin                                              futura@almastrategic.com

                                Will Ellis Hancock

 

Notes to Editors:

Futura Medical plc (AIM: FUM) is the developer of innovative sexual health
products, including lead product Eroxon(®) and products WSD4000 and
Eroxon(®) Intense. Our core strength lies in our research, development and
commercialisation of topically delivered gel formulations in sexual health
products.

Sexual health issues are prevalent in both men and women. ED impacts 1 in 5
men globally across all adult age brackets, with approximately half of all men
over 40 experiencing ED and 25% of all new diagnoses being in men under 40.
Around 60% of women experience at least one symptom of sexual dysfunction, and
only one in four women seek professional help, and remain chronically
underserved.

Eroxon(®), Futura's clinically proven lead product, has been developed for
the treatment of Erectile Dysfunction ("ED"). The highly differentiated
product, which is the only topical gel treatment for ED available over the
counter and helps men get an erection in ten minutes, addresses significant
unmet needs in the ED market. Eroxon(®) has been nominated for a number of
healthcare industry awards and has won two to-date.

Futura has distribution partners in place in a number of major consumer
markets including Haleon in the US, the largest market for ED in the world,
and Cooper Consumer Health in Europe.

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