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/.
For further information, please contact:
Futura Medical plc
James Barder, Chief Executive Officer
Angela Hildreth, Finance Director, and COO
Email: investor.relations@futuramedical.com
Tel: +44 (0) 1483 685 670
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
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.
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.
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 billion1 with one in five men2 suffering from it, including around 22 million in the USA, and 20 million across the UK, Germany, France, Italy and Spain3.
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 sufferers3 who use 355 million treatment doses1 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 value5.
Our distributor will hold a launch symposium showcasing Eroxon® at the 20th Urological Association of Asia Congress 2023, 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
Angela Hildreth
Finance Director and Chief Operating Officer
Interim Results - click below to view Futura Medical's Interim Results
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