10 September 2024
Futura Medical plc
("Futura" or the "Company")
Unaudited interim results for the six months ended 30 June 2024
Maiden profit and US launch delivered ahead of market expectations
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, is pleased to announce its unaudited interim results for the six months ended 30 June 2024 ("H1 2024").
Financial Highlights
| · | Revenue growth of over 300% to £7.0 million (H1 2023: £1.7million) | |
| | o | generated from £3.8 million of product sales (H1 2023: £1.7 million) and £3.2 million following the recognition of US commercial milestone received in 2023 |
| · | Maiden profit after tax of £1.0 million (H1 2023: Operating loss of £2.0 million) | |
| | o | excluding the non-cash expense share-based payments charge, profit after tax is £2.3 million |
| · | Strong cash position at 30 June 2024 of £3.9 million (HY2023: £7.8 million) which management anticipates will be strengthened further by a milestone payment due from Haleon on US launch in October 2024 | |
| · | The Board is confident in the outlook for the remainder of the year and confirms that both revenue and profit will significantly exceed market expectations* for the full year | |
Operational Highlights
| · | Successful launches in over ten countries including key European markets such as France, Italy and Spain, with further launches expected in the second half of 2024 in both Europe and Rest of World |
| · | Two new contract manufacturers in place to strengthen supply chain and boost capacity |
| · | Extension of licencing agreement with Cooper to 2029 |
| · | Independent consumer studies validate the strength of Eroxon® and provide valuable consumer insight |
Post-period end
| · | Haleon confirms pan-US launch under the Eroxon® brand with Eroxon® already available for pre-order online for delivery in October and availability in stores in the US from October. This triggers the next milestone payment, which is of a similar scale to the previous one |
| · | M8 Pharmaceuticals, Inc ("M8") confirms first Latin American country launch in Mexico under the Eroxon® brand |
*Note: The Company believes that, prior to this announcement, market expectations for 2024 performance in terms of revenue and loss after tax were £9.50 million and £2.63 million respectively.
James Barder, Chief Executive Officer, commented:
"It is a significant milestone to be able to announce our first profit, a year after the initial pilot launch of Eroxon®, and well ahead of market expectations. We believe that this is just the beginning for Eroxon®, our highly differentiated treatment for erectile dysfunction which helps users get an erection within ten minutes, as we look to build a new product and new category within the underserved sexual health market.
"In the past year, Futura has transitioned from a loss-making R&D business to a profitable consumer healthcare company. This is a tremendously proud moment for me and the entire Futura team.
"We look forward with excitement to the second half of 2024 with further launches already underway for Eroxon® and in particular the launch in the US, the largest consumer healthcare market in the world, by our distribution partner Haleon."
Investor Presentation
The Company will be hosting a webinar for retail investors via the Investor Meet Company platform on 10 September 2024, at 9:00am BST. Investors can register for the presentation via the following link: https://www.investormeetcompany.com/futura-medical-plc/register-investor
Contacts:
| Futura Medical plc
| James Barder Chief Executive Officer Angela Hildreth Finance Director and COO
| investor.relations@futuramedical.com +44 (0)1483 685 670
|
| Panmure Liberum Nominated Adviser and Broker
| Emma Earl, Will Goode, Mark Rogers (Corporate Finance) Rupert Dearden (Corporate Broking) | +44 (0)20 3100 2000
|
|
| | |
| Stifel Joint Broker
| Alan Selby Ben Maddison Ben Good | +44 (0)207 710 7600
|
|
| | |
| Alma Strategic Communications | Rebecca Sanders-Hewett Sam Modlin Will Ellis Hancock | +44 (0)20 3405 0205 futura@almastrategic.com |
| | | |
Notes to Editors:
Futura Medical plc (AIM: FUM) is the developer of innovative sexual health products, including lead product Eroxon®. Our core strength lies in our research, development and commercialisation of topically delivered gel formulations in sexual health products.
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.
ED impacts around 20% of men globally across all adult age brackets, with approximately 50% of all men over 40 experiencing ED and around 25% of all new diagnoses being in men under 40.
Futura has distribution partners in place in a number of major consumer markets including Haleon in the US, the largest consumer healthcare market in the world, and Cooper Consumer Health in Europe. Eroxon® has been nominated for a number of healthcare industry awards and has won several to-date.
Forward-looking statements
This document contains certain projections and other forward-looking statements with respect to the financial condition, results of operations, businesses, and prospects of Futura. The use of terms such as "may", "will", "should", "expect", "anticipate", "project", "estimate", "intend", "continue", "target" or "believe" and similar expressions (or the negatives thereof) are generally intended to identify forward-looking statements. These statements are based on current expectations and involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. Any of the assumptions underlying these forward-looking statements could prove inaccurate or incorrect and therefore any results contemplated in the forward-looking statements may not actually be achieved. Nothing contained in this document should be construed as a profit forecast or profit estimate. Investors or other recipients are cautioned not to place undue reliance on any forward-looking statements contained herein. Futura undertakes no obligation to update or revise (publicly or otherwise) any forward-looking statement, whether as a result of new information, future events or other circumstances.
Chief Executive's Review
A period of continued progress
The first half of 2024 has seen us build upon the progress achieved in 2023, in which we delivered our first meaningful revenues from our lead product Eroxon®. I am delighted to be reporting on a period that has seen us declare our maiden profit, a significant milestone for both the Company and its shareholders, whilst delivering further revenue growth.
Eroxon® initially launched in early Q2 2023 in two markets and is now on sale in more than ten countries, including many key EU markets. To be able to walk into leading Pharmacy and Health retailers across Europe, see our product on the shelves, and be able to purchase it without the need for a prescription, is testament to the progress we have made. Each launch has provided insightful learnings to our distribution partners which we are able to build upon and continue to execute against our key priorities and help improve future launches and rollouts in what is an exciting new category in most countries.
Post-period end, we were pleased to announce that Haleon had confirmed that it expected Eroxon® to be available in the US before the end of this year. As announced in late August, as of 1 September 2024, Eroxon® is available for pre-order online for delivery in October and will also be available in stores at the same time, a major milestone on our journey to addressing the growing needs within the over-the-counter ("OTC") sexual health market. The US launch in turn triggers the next milestone payment which the Company will receive from Haleon.
Delivering further revenue growth and maiden period of profit
In the period, not only did revenue grow by over 300% but importantly, we delivered our maiden profit. Revenue was made up of significantly increased product sales ,as the European roll-out continued and key territories were launched in the period, as well as recognition of the US commercial milestone received in 2023. Our cash position is robust and will enable us to execute on the global commercialisation of Eroxon®.
Eroxon®, a disruptive product
Erectile dysfunction ("ED") should not be underestimated. Globally it impacts approximately 20% of men1, affecting all age ranges, with approximately 50% of men over 40 experiencing ED2 and around 25% of new diagnoses being in men under 403. Moreover, with a globally ageing population, this is a large market that is expected to continue to grow. Research shows this is an under-served market with the majority of those affected yet to be diagnosed, whilst within the cohort that have been diagnosed, there is a high proportion that are not on treatment or stop treatment after one year. Our market research shows slow onset of action, side effects, ease of access and costs as the main sources of their dissatisfaction with current treatment options4.
Our lead product, Eroxon®, addresses many of these needs. Clinically proven, it is the only topical gel treatment for ED available OTC and helps men get an erection in ten minutes. As a "drug-free" treatment it is absent of the many side-effects associated with alternative therapies. Cost and embarrassment can be a blocker to seeking a solution to ED, particularly in many parts of the world where ED still holds a significant stigma within society. Eroxon®, is a clinically proven treatment available without the need of consulting with a doctor or healthcare practitioner ("HCP"), reducing the need for consultation fees and significantly improving ease of access for men and their partners.
The treatment of ED in the form of Eroxon® is a new OTC category in most countries where current first line treatment options are predominantly PDE5i's which require a prescription. As expected and as with any major new OTC category, whilst this represents a major business opportunity there are normal challenges in building brand awareness and educating consumers in the best use of the product without the direction of an HCP. Also, social, cultural and buying habits are different from one country to the next which will all influence sales uptake with patterns varying by country, something not always easy to predict. Nevertheless, we are very pleased with the overall performance of the launches of Eroxon® so far with the product being well received and key learnings being assimilated as we roll out into new geographies to ensure a sustainable and profitable business going forwards.
To identify key learnings, our distribution partners, who pay for and are responsible for all advertising and promotional spend, have independently conducted four "home-user" studies with over 600 users to validate the strength of the proposition. This has confirmed results that are aligned with the Eroxon® clinical efficacy data (>60% success rate) and provided real world evidence to further refine the marketing positioning. This is to augment the early repurchase information from the UK which is notoriously difficult to estimate with men and their partners able to purchase the treatment as well as over 5,000 different retail outlets (which don't necessarily track individual purchases) but we believe to be in the region of 15% to 20%. The UK is also the only major country where PDE5i's; Viagra Connect and Cialis Together are classified as OTC presenting a highly competitive market which may impact the repurchase rate. This contrasts with the United States and the majority of EU member countries where no PDE5i products are available OTC.
Latest market research has highlighted some interesting learnings to augment consumer education and product positioning:
| · | Futura's clinical studies showed that Eroxon® used as part of foreplay improved satisfaction / efficacy by around 30% yet only one in two men are using Eroxon® as part of foreplay |
| · | Satisfaction levels are higher in men less than 60 years old and especially in the 30 to 45 age group |
| · | Satisfaction levels are also higher between couples rather than in single men using Eroxon® on a date or solo use |
| · | With PDE5i treatments, men are used to trying to pre-empt when they are going to have sex and consequently, we are seeing one in five of men unnecessarily adopting the same approach with Eroxon®, rather than using the treatment spontaneously or indulging in foreplay |
| · | Men frequently seek prescriptions for the maximum PDE5i dosage and then cut the tablet in two to optimise value. Again, we are seeing some men adopting the same economic approach with Eroxon® and not using the entire contents of the single dose Eroxon® tube |
| · | Side effect profile remains extremely low with a reported incidence rate of less than one in 14,000 packs with all side effects that have been reported are non-serious. |
It is important that these learnings are absorbed and acted upon, making each launch and the continuous marketing campaigns, utilising both social media and traditional marketing methods more effectively as our distribution partners continue to build awareness and brand value.
In the category where there has been little innovation in two decades, education is needed for consumers and HCPs, and we expect to gain further knowledge from additional launches that will then enable us and our partners to continuously refine our approach as we progress with further market expansion across the globe.
Continued progress against our key priorities
2023 saw us move from a pre-revenue R&D company to a business with first meaningful revenues being generated from commercial sales of Eroxon®. This was a significant step forward and therefore, as announced at our last set of results, it felt appropriate to refine our strategy as follows:
To commercialise innovative and clinically proven products for the OTC sexual health market. We will partner with leading consumer healthcare partners who are well resourced to commit significant marketing spend and expertise to engage effectively with consumers.
This approach is aligned with the demographic changes of ageing populations, increasing prosperity and the expectation of people to lead a full and active life no matter their age.
With our proven innovative R&D team, we will look to fulfil the needs of the large, underserved OTC sexual health market.
As previously disclosed, we are now reporting against three strategic pillars:
| 1. | Address the growing needs within the OTC sexual health market |
| 2. | Broaden the Company's clinically proven product range leveraging its innovative and experienced R&D capability whilst being mindful of costs and focusing on ROI. |
| 3. | Commit to delivering strong returns for shareholders, sustained profitability and financial discipline
|
In our 2023 Annual Report we set out three priorities for the year ahead, and I am delighted to say that we have made good progress in line with these so far, with more to come in the second half of the financial year.
As a reminder, our priorities for 2024 were:
| · | Address - Address worldwide demand for Eroxon® through strengthening our supply chain and commercial network whilst achieving further regulatory approvals and further launches across the world |
| · | Broaden - Explore other range extensions as well as new innovative products within the sexual health category to meet further unmet demand, supported by clinical data whilst remaining mindful of costs |
| · | Commit - Deliver further revenue growth and progress on the path towards profitability in the next 12 months |
Address:
In April, we stated that we expected to have commenced full launches in at least ten countries including key European markets such as France, Italy and Spain during the first half of 2024, and I am pleased to confirm that these launches have successfully taken place alongside our partner Cooper Consumer Health.
In what is a major milestone for Futura, Haleon has confirmed that Eroxon® is now available to pre-order online and will be available throughout all major US retailers next month. As is the case with all our distribution partners Haleon will both fund and be responsible for all advertising and promotional activities related to the launch and marketing of the product in the US. We believe Haleon, with its strong capabilities in brand-building and marketing through an unrivalled breadth of channels, as well as its connections and market reach, makes the ideal partner to introduce Eroxon® to the millions of men with ED in the US.
We are working closely with our distribution partner for the Middle East, Labatec Pharma, who has launched in two markets. Nevertheless, they face some challenges to the acceptance of Eroxon® predominantly due to the existing widespread availability of highest dose PDE5i's within the region as well as the cultural approach to their use.
Our distribution partner for Central and Latin America, M8, in the past month commenced a digital launch in Mexico which will be followed up shortly with an in store roll out across the country.
In Korea, the regulators the Ministry of Food and Drug Safety ("MFDS") were looking to classify Eroxon® as a drug which would have likely entailed additional clinical studies. This was not considered a priority for us at the moment considering the cost of any additional clinical study in relation to the size of the opportunity South Korea represents. We have therefore decided not to progress in this market for the time being and by mutual agreement have agreed with Menarini to terminate our single country agreement
Discussions are progressing well in several other key Asian markets with potential commercial partners. Mindful of the regulatory stance adopted by the MFDS we are clarifying the regulatory pathway in the applicable countries before we finalise terms and will update shareholders in due course.
To ensure that we have a robust supply chain in place, which is able to provide greater supply certainty, as well as additional capacity based on both Futura and distribution partners' sales projections, we have commenced working with two new contract manufacturers ("CMO"), one located in the US and the other in the EU to supply product to our commercial partners. These supply chain partners will be central to the long-term success of the product, and we are working closely with them to deliver continuity of supply, with a product of high quality at the lowest cost possible. Production previously supplied from a UK CMO has now ceased.
We continue to progress both our patent grants and trademark registrations ("IP") across the world's key markets. The initial interest and success of the Eroxon® launches is perhaps reflected in the fact that to-date the company retained by Futura to protect our IP interests has so far taken down over 1,200 sites that have been selling product that has been infringing our rights. We will not only continue to develop new IP of value for shareholders but will aggressively protect what we have already established.
Broaden
We believe that having follow-on brand extensions and new products within the OTC sexual health category is vital to demonstration both innovation and provide long-term growth. As such, we are exploring other range extensions as well as new innovative products within the sexual health category to meet further unmet demand, supported by clinical data whilst remaining mindful of costs. Proof of concept work is underway and assuming this progresses well we expect to provide shareholders more information by the end of 2024.
Commit
We are proud to have announced our maiden profit a year after delivering our first revenues and we will continue to drive growth as well as R&D innovation. In this early stage of launches, whilst we expect growth, it will not be a matter of simply multiplying the prior periods together and will vary period on period. This is due to new launches, the recognition of milestone payments, channel fill, different revenue models with our partners as well as different cultural and regulatory challenges from one country to the next. We are committed to driving significant growth and have an exceptionally important period ahead which will provide us with a platform for further growth and profits in the years ahead.
Looking ahead with confidence
H1 2024 has been another progressive period for Futura, delivering significant revenue growth and our first period of profitability. We have also continued to execute in line with our strategy and we are well on our way to successfully commercialising Eroxon® across the globe.
Over the next six weeks we will deliver on a key milestone in the Company's history, launching in the US, and we are extremely excited to see the reaction in the market to Eroxon®. We will update shareholders in due course on the first phase of the US launch.
With first mover advantage already showing its benefit, alongside the size of the target market and the continuous progress we are making, we look forward to the year ahead with growing confidence.
James Barder
Chief Executive Officer
Sources:
1. EMA, Withdrawal assessment report for Viagra, 2008
2. Feldman HA et al. J Urol 1994; 151: 54 - 61
3. Pozzi, J of Sexual Medicine, Volume 20, 2022,
4. Ipsos research carried out on behalf of Futura in the US, 2022
Financial Review
Futura has transitioned from a pre-revenue R&D company to a consumer healthcare product company with significant commercial sales. It is extremely pleasing therefore to report that we are now profitable, cash generative and we have sufficient cash on our balance sheet to allow us to continue the global commercialisation of Eroxon®.
In the first half of 2024 we made important decisions to invest in protecting our supply chain to ensure flexibility and continuity of supply. This investment will continue into mid-2025 and whilst this has resulted in a slight decrease in margin in H1 2024 and some additional exceptional General & Administrative costs which will continue into 2025, we believe this was an important step, at the right time in our journey, to ensure we are protected and well invested to handle the capacity needs in the period ahead.
Revenue
Total revenues reported of £7.0 million (H1 2023: £1.7 million) representing an increase of over 300%. Revenue was generated from product sales of £3.8 million (H1 2023: £1.7 million) and recognition of a commercial milestone payment received in 2023 of £3.2m (H1 2023: nil)
Reported product sales of Eroxon® for the half year were up 130% to £3.8 million (H1 2023: £1.7 million) as the European roll-out continued and key territories were launched in the period including France, Italy, Spain and Portugal. Product revenues in newly launched territories always include an element of channel fill so are not always an accurate representation of product sales in the initial stocking period. As our commercial distributors continue to roll out launches across further countries, it will remain challenging to predict exact timing of revenues and royalties especially given non-linear nature of channel fill and launch timelines. Neverthless, we expect further launches in the second half of 2024 and will provide updates as appropriate.
In July 2023, the group signed an exclusive commercial agreement with Haleon to commercialise Eroxon® in the USA and an upfront payment of £3.2 million (US$4.0 million) was received in 2023 upon execution of the agreement. As previously disclosed, the payment was recognised in the current period. Further milestone payments are expected as this relationship progresses, alongside royalty payments on all sales by Haleon.
Post-period end Haleon confirmed the pan US launch under the Eroxon® brand would be going live in October 2024, with online pre-ordering already available. This triggers the next milestone payment, which is of a similar scale to the previous milestone payment, and is recognisable upon receipt in 2024.
Cost of Sales
Cost of sales rose by 175% to £2.2 million (H1 2023: £0.8 million) reflecting the rise in sales volumes. Gross profit on Eroxon® sales increased by 90% to £1.7 million (H1 2023: £0.9 million) Gross profit margins on Eroxon® sales reduced to 44% (H1 2023: 54%) reflecting, as previously disclosed, an increase in manufacturing costs in order ensure we meet increased capacity requirements, which is expected to normalise in 2025.
Operational costs
Total operational costs were £4.0 million (H1 2023: £2.9 million) and comprised of research and development costs of £0.6 million (H1 2023: £0.8 million) and operating expenses of £3.4 million (H1 2023: £2.1 million) which included non-cash share-based payments charge of £1.3 million (H1 2023: £0.7 million) with the remaining rise in costs predominantly relating to the short-term investment into supply chain, investment required to increase manufacturing capacity and ensure continuity of supply. Other core operating costs remain relatively static.
Research and development costs
Research and Development ("R&D") costs for the period were in line with those at the 2023 year-end (£2.1 million) reflecting the focus shifting towards commercialisation of Eroxon® as headcount costs are now allocated to administrative expenses. In the second half of the financial year these are expected to increase slightly as we commence some proof-of-concept projects on new products.
Profit after tax
Total profit after tax for the period was £1.0 million (H1 2023: loss after tax £1.8 million). Excluding non-cash share-based payments, profit after tax would be £2.3 million (H1 2023: loss after tax £1.1 million)
Cash
The cash balance as at 30 June 2024 was £3.9 million (H1 2023: £7.8 million) reflecting normal working capital requirements, the investment into manufacturing and the US commercial milestone which was received in 2023 but recognised in H1 2024.
Overall, management remain confident to exceed expectations for the full year to 31 December 2024.
Going concern
The Directors have prepared the financial statements on a going concern basis.
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.
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2024
| | | Unaudited 6 months ended 30 June 2024 | Unaudited 6 months ended 30 June 2023 | Audited year ended 31 December 2023
|
| | Notes | £ | £ | £ |
| Revenue | | 7,000,693 | 1,703,447 | 3,100,968 |
| Cost of Goods | | (2,180,023) | (794,386) | (1,326,743) |
| Gross profit | | 4,820,670 | 909,061 | 1,774,225 |
| Research and development costs | | (609,294) | (819,474) | (2,045,988) |
| Administrative costs | | (3,391,674) | (2,048,659) | (6,692,007) |
| Operating profit/(loss) | | 819,702 | (1,959,072) | (6,963,770) |
| Finance income | | 46,939 | - | 71,797 |
| Profit/(loss) before tax | | 866,641 | (1,959,072) | (6,891,973) |
| Taxation | 10 | 135,000 | 200,000 | 379,074 |
| Total comprehensive profit/(loss) for the period attributable to owners of the parent company |
| 1,001,641 | (1,759,072) |
(6,512,899) |
| | |
| | |
| Basic profit/(loss) per share (pence) | 5 | 0.33 | (0.61) | (2.21) |
| Diluted profit/(loss) per share (pence) | 5 | 0.32 | (0.61) | (2.21) |
Consolidated Statement of Financial Position
As at 30 June 2024
| | | Unaudited 30 June 2024 | Unaudited 30 June 2023 | Audited 31 December 2023 |
| | Notes | £ | £ | £ |
| Assets | |
| | |
| Non-current assets | |
| | |
| Plant and equipment | | 3,248,057 | 1,099,640 | 2,484,748 |
| Total non-current assets | | 3,248,057 | 1,099,640 | 2,484,748 |
| | |
| | |
| Current assets | |
| | |
| Inventories | | 140 | 809 | 339 |
| Trade and other receivables | 6 | 1,795,635 | 1,070,366 | 1,240,174 |
| Current tax asset | | 501,910 | 197,836 | 376,910 |
| Cash and cash equivalents | 7 | 3,920,326 | 7,838,889 | 7,714,182 |
| Total current assets | | 6,218,011 | 9,107,900 | 9,331,605 |
| | |
| | |
| Liabilities | |
| | |
| Current liabilities | |
| | |
| Trade and other payables | 8 | (1,657,291) | (2,195,326) | (6,339,534) |
| Total liabilities | | (1,657,291) | (2,195,326) | (6,339,534) |
| Total net assets | | 7,808,777 | 8,012,214 | 5,476,819 |
| | |
| | |
| Capital and reserves attributable to owners of the Parent Company | |
| | |
| Share capital | 11 | 603,727 | 598,143 | 602,812 |
| Share premium | | 71,091,260 | 70,930,527 | 71,068,945 |
| Merger reserve | | 1,152,165 | 1,152,165 | 1,152,165 |
| Retained losses | | (65,038,375) | (64,668,621) | (67,347,103) |
| Total equity | | 7,808,777 | 8,012,214 | 5,476,819 |
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2024
| |
| Share Capital | Share Premium | Merger Reserve | Other Reserve | Retained Losses | Total Equity |
| | Note | £ | £ | £ | £ | £ | £ |
| At 1 January 2023 - audited |
| 576,093 | 66,545,796 | 1,152,165 | 165,868 | (63,720,369) | 4,719,553 |
| Total comprehensive loss for the period | | - | - | - | - | (1,759,072) | (1,759,072) |
| Share-based payment | | - | - | - | - | 644,952 | 644,952 |
| Shares issued during the period | | 175 | 31,606 | - | - | - | 31,781 |
| Convertible loan notes and warrants conversion and exercise | 12 | 21,875 | 4,353,125 | - | (165,868) | 165,868 | 4,375,000 |
| Transactions with owners |
| 22,050 | 4,384,731 | - | (165,868) | 810,820 | 5,051,733 |
| At 30 June 2023 - unaudited |
| 598,143 | 70,930,527 | 1,152,165 | - | (64,668,621) | 8,012,214 |
| Total comprehensive loss for the period | | - | - | - | - | (4,753,827) | (4,753,827) |
| Share-based payment | | - | - | - | - | 2,075,345 | 2,075,345 |
| Shares issued during the period | | 4,669 | 138,418 | - | - | - | 143,087 |
| Transactions with owners |
| 4,669 | 138,418 | - | - | 2,075,345 | 2,218,432 |
| At 31 December 2023 - audited |
| 602,812 | 71,068,945 | 1,152,165 | - | (67,347,103) | 5,476,819 |
| Total comprehensive loss for the period | | - | - | - | - | 1,001,641 | 1,001,641 |
| Share-based payment | | - | - | - | - | 1,307,087 | 1,307,087 |
| Shares issued during the period | | 915 | 22,315 | - | - | - | 23,230 |
| Transactions with owners |
| 915 | 22,315 | - | - | 1,307,087 | 1,330,317 |
| At 30 June 2024 - unaudited |
| 603,727 | 71,091,260 | 1,152,165 | - | (65,038,375) | 7,808,777 |
Consolidated Statement of Cash Flows
For the six months ended 30 June 2024
| | Unaudited 6 months ended 30 June 2024 | Unaudited 6 months ended 30 June 2023 | Audited year ended 31 December 2023 |
| | £ | £ | £ |
| Cash flows from operating activities |
| | |
| Profit/(loss) before tax | 866,641 | (1,959,072) | (6,891,973) |
| Adjustments for: |
| | |
| Depreciation | 59,411 | 65,282 | 130,272 |
| Loss on disposal of fixed assets | 513 | - | 48,865 |
| Finance Income | (46,939) | - | (71,797) |
| Share-based payment charge | 1,307,087 | 644,952 | 2,720,297 |
| Cash flows generated by/(used in) operating activities before changes in working capital |
2,186,713 |
(1,248,838) |
(4,064,336) |
|
|
| | |
| Decrease / (increase) in inventories | 200 | (809) | (339) |
| Increase trade and other receivables | (555,461) | (804,682) | (974,490) |
| (Decrease) / increase in trade and other payables | (4,682,240) | 442,217 | 4,586,424 |
| Cash used in operations | (3,050,788) | (1,612,112) | (452,741) |
|
|
| | |
| Income tax received | - | 1,024,994 | 1,022,994 |
| Net cash generated by/(used in) operating activities | (3,050,788) | (587,118) | 570,253 |
|
|
| | |
| Cash flows from investing activities |
| | |
| Purchase of plant and equipment | (823,233) | (6,886) | (1,505,849) |
| Interest received | 46,939 | - | 71,797 |
| Cash used in investing activities | (776,294) | (6,886) | (1,434,052) |
|
|
| | |
| Cash flows from financing activities |
| | |
| Issue of ordinary shares | 23,230 | 4,406,781 | 174,868 |
| Exercise of warrants | - | - | 4,375,000 |
| Cash generated by financing activities | 23,230 | 4,406,781 | 4,549,868 |
|
| | | |
| (Decrease)/ Increase in cash and cash equivalents | (3,803,852) | 3,812,777 | 3,686,069 |
| Cash and cash equivalents at beginning of period | 7,714,182 | 4,026,112 | 4,026,112 |
| Net foreign exchange differences | 9,996 | - | 2,001 |
| Cash and cash equivalents at end of period | 3,920,326 | 7,838,889 | 7,714,182 |
Notes to the Consolidated Interim Financial Statements
For the six months ended 30 June 2024
1. Corporate information
The interim condensed consolidated financial statements of Futura Medical plc and its subsidiaries (the "Group") for the six months ended 30 June 2024 were authorised for issue in accordance with a resolution of the Directors on 9 September 2024. Futura Medical plc (the "Company") is a public limited company incorporated and domiciled in the United Kingdom and whose shares are publicly traded on the AIM Market of the London Stock Exchange. The registered office is located at Surrey Technology Centre, 40 Occam Road, Guildford, Surrey, GU2 7YG.
The Group is principally engaged in the development and sale of pharmaceutical and healthcare products.
2. Accounting policies
The accounting policies applied in these interim financial statements are consistent with those of the annual financial statements for the year end 31 December 2023, as described in those financial statements except for the new accounting policies described below.
These condensed interim consolidated financial statements for the six months ended 30 June 2024 and for the six months ended 30 June 2023 do not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006 and are unaudited.
The Group's financial information for the year ended 31 December 2023 has been extracted from the financial statements of the statutory accounts ("Annual Report") of Futura Medical plc, which were prepared by the Directors in accordance with UK-adopted International accounting standards ("IFRS") in conformity with the requirements of the Companies Act 2006 that were applicable for the year ended 31 December 2023 and does not constitute the full statutory accounts for that period. The Annual Report for 2023 has been filed with the Registrar of Companies. The Independent Auditor's Report on those financial statements was unqualified and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006; though it did include a reference to a matter to which the Independent Auditor drew attention by way of emphasis without qualifying their report in relation to going concern. It does not comply with IAS 34 Interim financial reporting, as is permissible under the rules of AIM.
3. Estimates and judgements
The preparation of the interim condensed consolidated financial statements in conformity with IFRS requires management to make certain estimates, assumptions and judgements that affect the application of accounting policies and the reported amounts of assets and liabilities and the reported amounts of income and expenses in the period.
Critical accounting estimates, assumptions and judgements are continually evaluated by the Directors based on available information and experience. As the use of estimates is inherent in financial reporting actual results could differ from these estimates.
Going concern
The Group has reported a profit after tax for the six months ended 30 June 2024 of £1.00 million (six months ended 30 June 2023: loss of £1.76 million, year ended 31 December 2023: loss of £6.51 million). The Group holds cash balances of £3.92 million at 30 June 2024 (30 June 2023: £7.84 million, 31 December 2023: £7.71 million).
The Directors have considered the applicability of the going concern basis in the preparation of the financial statements. This includes the review of internal budget, financial results and cashflow forecasts for the 12 months' period following the date of signing the financial statements. These forecasts show that the Group has sufficient funds to allow the business to continue in operations for at least 12 months from the date of approval of these financial statements.
Based on the above factors the Directors believe that it remains appropriate to prepare the financial statements on a going concern basis. The financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.
Share-based payments
The Group operates an equity-settled share-based compensation plan for employee (and consultant) services to be received and the corresponding increases in equity are measured by reference to the fair value of the equity instruments as at the date of grant. The fair value determination is based on the principles of the Black-Scholes model, the inputs of which uses an input of volatility based on historical data. Historical volatility may not be indicative of future volatility, yet the Directors judge this to be the most appropriate method of calculation. Given the share option expense of £1.31 million for the six months ended 30 June 2024 (six months ended 30 June 2023: £0.64 million, year ended 31 December 2023: £2.72 million), the volatility method used is not expected to have a material impact on these financial statements. Details of the fair value calculation for options granted during the period, including other inputs into the Black-Scholes model, are disclosed in Note 13.
R&D tax credits
The current tax receivable represents an estimate of the anticipated R&D tax credit in respect of claims not yet submitted for the 2024 financial year. The final receivable is subject to the correct application of complex R&D rules and HMRC approval. Historically, claims have been successful, and the Group expects the current year to be successful too.
4. Segment reporting
The Group is focussed on the development and commercialisation of Eroxon® and therefore operates as one segment. The Group derives revenue from the transfer of goods and services over time and at a point in time in the following geographical split:
| | | | | ||||||||||||||||||||||||||||
| | | | ||||||||||||||||||||||||||||
| | | | ||||||||||||||||||||||||||||
| | | | |
5. Profit/Loss per share (pence)
The Group reports basic and diluted earnings per common share. Basic earnings per share is calculated by dividing the profit attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period.
Diluted earnings per share is determined by adjusting the profit attributable to common shareholders by the weighted average number of common shares outstanding, taking into account the effects of all potential dilutive common shares, including share options and the issue of shares under the long-term incentive share option scheme to the extent that they are deemed to be issued for no consideration in accordance with IAS 33.
Where a loss is attributable to equity holders of the Company, the calculation of the fully diluted loss per share is identical to that used for calculating the basic loss per share. The exercise of share options, or the issue of shares under the long-term incentive share options scheme, would have the effect of reducing the loss per share and is therefore anti-dilutive under the terms of IAS 33 'Earnings per Share'.
|
| Unaudited 30 June 2024 | Unaudited 30 June 2023 | Audited 31 December 2023 |
| | £ | £ | £ |
|
|
| | |
| Total comprehensive income attributable to the owners of the company | 1,001,641 | (1,759,072) | (6,512,899) |
| Weighted average number of shares | 301,503,380 | 288,974,155 | 294,912,404 |
| Basic profit/(loss) per share (pence) | 0.33 | (0.61) | (2.21) |
|
|
| | |
| Total comprehensive income attributable to the owners of the company | 1,001,641 | (1,759,072) | (6,512,899) |
| Weighted average number of shares | 301,503,380 | 288,974,155 | 294,912,404 |
| Dilutive effect of share options | 15,933,376 | - | - |
| Weighted average number of diluted shares | 317,436,756 | 288,974,155 | 294,912,404 |
| Diluted profit/(loss) per share (pence) | 0.32 | (0.61) | (2.21) |
6. Trade and other receivables
|
| Unaudited 30 June 2024 | Unaudited 30 June 2023 | Audited 31 December 2023 |
| | £ | £ | £ |
| Amounts receivable within one year: |
| | |
| Trade receivables | 1,338,899 | 994,742 | 1,147,709 |
| Other receivables | 247,225 | 10,440 | - |
| Financial assets | 1,586,124 | 1,005,182 | 1,147,709 |
| Prepayments | 209,511 | 65,184 | 92,465 |
| | 1,795,635 | 1,070,366 | 1,240,174 |
Trade and other receivables do not contain any impaired assets. The Group does not hold any collateral as security and the maximum exposure to credit risk at the Consolidated Statement of Financial Position date is the fair value of each class of receivable.
7. Cash and cash equivalents
|
| Unaudited 30 June 2024 | Unaudited 30 June 2023 | Audited 31 December 2023 |
| | £ | £ | £ |
| Cash at bank and in hand | 3,920,326 | 7,838,889 | 7,714,182 |
| | 3,920,326 | 7,838,889 | 7,714,182 |
8. Trade and other payables
|
| Unaudited 30 June 2024 | Unaudited 30 June 2023 | Audited 31 December 2023 |
| | £ | £ | £ |
| Trade payables | 404,067 | 675,229 | 1,006,054 |
| Social security and other taxes | 160,379 | 198,032 | 71,850 |
| Contract liability | 621,061 | 644,110 | 3,847,716 |
| Accrued expenses | 471,784 | 677,955 | 1,413,914 |
| | 1,657,291 | 2,195,326 | 6,339,534 |
9. Related party transactions
Related parties, as defined by IAS 24 'Related Party Disclosures', are the wholly owned subsidiary companies: Futura Medical Developments Limited and Futura Consumer Healthcare Limited and the Board. Transactions between the Company and the wholly owned subsidiary companies have been eliminated on consolidation and are not disclosed.
10. Taxation
The Group's tax credit in the six months ended 30 June 2024 was £0.14 million (six months ended 30 June 2023: £0.20 million, year ended 31 December 2023: £0.38 million). The tax credit balance of £0.14 million relates to anticipated R&D tax credits in respect of claims not yet submitted 2024 financial year.
11. Share capital
| Authorised | 30 June 2024 | 30 June 2023 | 31 December 2023 | 30 June 2024 | 30 June 2023 | 31 December 2023 |
| | Number | Number | Number | £ | £ | £ |
| Ordinary shares of 0.2 pence each | 500,000,000 | 500,000,000 | 500,000,000 | 1,000,000 | 1,000,000 | 1,000,000 |
| Allotted, called up and fully paid | 30 June 2024 | 30 June 2023 | 31 December 2023 | 30 June 2024 | 30 June 2023 | 31 December 2023 |
| | Number | Number | Number | £ | £ | £ |
| Ordinary shares of 0.2 pence each | 301,863,641 | 299,071,457 | 301,405,950 | 603,727 | 598,143 | 602,812 |
The number of issued ordinary shares as at 1 January 2024 was 301,405,950. During the period of six months ended 30 June 2024, the Company issued 457,691 ordinary shares of 0.2 pence with each ordinary share carrying the right to one vote as follows:
|
| |
£ |
Number |
| January 2024 | Non-Executive Director share award at 51.50 pence per share | 22,402 | 43,500 |
| June 2024 | Exercise of share options at 0.2 pence per share | 828 | 414,191 |
| | | 23,230 | 457,691 |
12. Exercise of warrants
The balance of the warrant reserve as at 1 January 2023 related to a warrant instrument issued in January 2020, as part of a wider share issue to raise funds under a subscription agreement. The Company issued 10,937,500 warrants. The warrants were issued at a price of 40 pence per ordinary share and were exercised in full in June 2023, resulting in funds received of £4,375,000. As a result of this exercise the warrant reserve was transferred to retained earnings.
13. Share based payments
The Black-Scholes formula is the option pricing model applied to the grants of all share options in the period made in respect of calculating the fair value of the share options.
|
|
|
| Grant date | 19 April 2024 |
| Number of shares under option | 2,176,000 |
| Vesting period ends | April 2027 |
| Share price as at date of grant | 35.50p |
| Option exercise price | 35.50p |
| Expected volatility | 86.63% |
| Dividend yield | 0% |
| Risk-free investment rate | 4.61% |
| Exercisable from/to | April 2027 - March 2034 |
| Expected life of options | 4 years |
| |
|
| Fair value per share at grant date | 23.03p |
14. Post -period balance sheet events
There were no post-period balance sheets events.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
