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Futura issued a downbeat trading update this morning with revenue for the year likely to come in between £1.3m and £1.4m and cash running out in early FY26E. The strategic review has been broadened to cover all options. This is clearly a challenging time for the company. On one hand it has an OTC FDA approved treatment for ED that clearly serves an unmet need. On the other hand its partners have found it challenging to commercialise Eroxon, especially in the key US market. In addition in WSD4000 the company has an interesting product aimed as the underserved female sexual health market albeit that it is still in development. Our sense is that there is potential value in the assets, but the challenged is quantifying that value and finding a way to unlock it. We put our recommendation, forecasts and TP under review until there is more clarity on the path forwards.
Futura Medical plc
Trinity Delta view: Futura Medical’s investment case centres on the commercial potential of Eroxon, particularly in the US where the market for ED treatments is sizeable and where even modest commercial success could be transformational for Futura. Investor sentiment was dented by the slower than expected sales ramp announced in January’s trading statement; however, the company and its commercial partners are working to address this through revised promotional positioning – with partners also committed to at least three years of advertising and promotional spend. Launch data is still early: Eroxon has only been available in most markets for less than 12 months (six months in the US) and several new launches are anticipated during 2025. In addition, the first range extension, Eroxon Intense, is on track for marketing authorisation by end-2025, which could help capture market attention. Mid-term, WSD4000, a topical gel similar to Eroxon, could open an equally attractive novel, and significant female category.
Futura is in something of a period of limbo. We know that there is demand for new ED treatments and Eroxon has made some inroads but it is clear from the progress made to date that there is a need to improve patient expectation management and focus on younger users, where satisfaction levels are higher. Futura’s partners are making course corrections but it will take time for evidence to come through. We reintroduce forecasts, halving our FY25E product sales estimates and removing any further milestones from our numbers, but remain of the view that there is a sizeable market for Eroxon and that Futura has the right partners in place to maximise the opportunity. We’ve also revised our NPV valuation factoring in a more cautious ramp and reducing peak penetration by 3pp, which gives a revised fair value of 50p. We set our TP at 30p to factor in the forecast risk, but remain Buyers, with the shares looking oversold at these levels.
Trinity Delta view: Our investment case for Futura Medical is heavily weighted towards the US market, which is the main component of our sum-of-the-parts NPV valuation, worth more than Europe and RoW combined. Investor attention has, rightly, focused on Eroxon’s market traction, particularly repeat purchases, where there remains limited visibility. The slower than expected sales ramp is disappointing and future sentiment now hinges on the success of the revised promotional positioning. However, launch data is still early (particularly in the US where Eroxon has only been on market for three months) and as the market for ED treatments is sizeable even modest commercial success in the US would be transformational for Futura. Line extensions could help capture market attention, with the first, Eroxon Intense, on track for marketing authorisation by end-2025. In addition, new development product, WSD4000, a topical gel similar to Eroxon, could open an equally attractive novel and significant female category. As is usual in such cases, we suspend our forecasts and valuation. For context, our previous valuation was £392m, equivalent to 130p/share.
While FY24E looks like it will come in a touch ahead of expectations, FY25E looks like it will be more challenging. The initial US launch has gone well but, as with all launches there are some hits and misses. As a result, Haleon is working to refine its messaging and while it remains committed to Eroxon, this will mean a slower than expected uptake in FY25E, impacting both royalty and milestone revenues. The net result is we expect Futura to be loss making in FY25E. We put our forecasts under review until we have more information. The company has plenty of cash on the balance sheet so there is no imminent funding risk. While these delays may well prove to be nothing more than delays, we expect that investors will need to see evidence of progress and we put our TP under review until we’ve updated our forecasts.
Trinity Delta view: Futura Medical has successfully transitioned into a commercial healthcare company that is profitable and cash generative. Investor attention is focused on the market traction being gained by Haleon in the US, where even modest commercial success would be transformational. There is no market data for the rate of repeat purchases in Europe, which means, as discussed previously, revenues are impossible to forecast with any accuracy. Additional challenges include unpredictable launch dynamics and limited disclosure from partners. However, it is known that the market for ED treatments is sizeable. Now the female use data for WSD4000, whilst early, suggest it appears ideally placed to carve an attractive place for itself in a novel and significant female category. Our Futura Medical valuation of £392m, equivalent to 130p/share, currently includes no contribution for female use.
We have upgraded our revenue forecasts and valuation following interim results and the earlier and imminent US launch by partner Haleon, which we previously anticipated in 2025. The US launch, expected in October, will trigger a milestone and recurring royalties on net Eroxon sales. Commercial success in the US will be transformational, ensuring Futura’s sustainable and growing profitability. Meanwhile, existing partners outside of the US continue to execute on launches, with Eroxon now available in over ten countries and further launches planned in H224 and into 2025. Real-world evidence remains consistent in terms of Eroxon’s efficacy, and learnings from initial launches are being effectively utilised to refine marketing strategies in order to optimally target key audiences. This will likely be key for Eroxon’s success, with encouraging signs from initial, albeit limited, repurchase rate data from first launches. Our Futura Medical valuation is increased to £392m, or 130p per share.
Futura has delivered a really strong set of interims. All of the key numbers were ahead of expectations and this together with the earlier than expected US launch is triggering material upgrades to our forecasts as well as a reduction in forecast risk, with revenue now coming from multiple partners / territories. The company has delivered against the key milestones required to support the US launch and we would expect further progress over the next twelve months. We think it is high time investors revisited the Futura investment case – the story has changed significantly over the last two years and it is now a profitable and cash generative consumer healthcare focused company. In our view, the current price doesn’t recognise this transformation. We leave our TP unchanged at 131p and remain Buyers.
Futura issued a reassuring AGM statement this morning. Futura’s partners have launched Eroxon in 10 countries in H1 FY24E, including key European markets such as France, Italy and Spain, with more to come in H2 FY24E. The US also remains on track for launch by February 2025, at the latest. Trading remains in line with expectations and the company intends to update guidance with September’s interims. We remain of the view that there is upside potential to our FY24E forecasts, but we leave them unchanged for now. We continue to value the company at 131p and see plenty of catalysts over the next few months. Specifically we think that Futura starting to generate meaningful EBITDA will remove the final barrier to broader institutional ownership.
Futura Medical’s investment case has shifted firmly onto commercial execution. The highly successful initial launches of Eroxon, its novel topical gel for ED (erectile dysfunction), by partner Cooper Consumer Health in the UK and Belgium are now being followed by roll-outs across the major European markets. The much-anticipated launch in the commercially important US market by consumer healthcare giant Haleon is expected before February 2025. Launches in Other Regions are anticipated throughout 2024. Eroxon offers a unique proposition, being a clinically proven, fast-acting, and safe product that can be easily bought over-the-counter. The market for ED treatments is significant and Eroxon appears ideally placed to carve a sizeable niche for itself. Our updated Futura valuation is £371m, equivalent to 123p per share.
Today’s results serve as a timely reminder of the extensive progress made by Futura over the last 12 months and with FY24E set to be an equally transformative year, showing further progress in Europe and potentially a US launch by Haleon, there is plenty more to come. We leave our FY24E revenue forecasts unchanged, although some one-off costs around moving CMO and higher than expected share-based payments do hit EBIT. However, we are putting through significant upgrades to FY25E, as we start to incorporate US royalties and milestone payments into our formal forecast. Even after these upgrades, our forecasts remain conservative, based on realistic market share supported by the initial launches. We leave our TP unchanged at 131p and remain buyers.
Trinity Delta view: Following the recent Trading Update, there are few surprises within Futura’s FY23 financial results, with costs remaining tightly controlled. Focus on the potential US launch by partner Haleon is understandable, given the US commercial opportunity is likely the most significant. Hence, comments that preparations towards the US launch are progressing well, together with Haleon confirming launch is expected within 12 months, are reassuring. Whilst there continue to be limited insights into re-ordering patterns, we believe partner Cooper could provide more details in due course as EU launches become more established. We continue to believe Futura is uniquely placed within UK healthcare, with no near-term cash needs, and a clear pathway to profitability and sustainable cash generation. Our current valuation is £363m, or 121p/share.
Trinity Delta view: Revenues appear to be broadly tracking just ahead of our expectations, even with the challenges of forecasting first launches. Re-ordering patterns will be a key determinant of longer-term success, and whilst visibility is not unexpectedly limited given the early stage of launch, we believe the commitment shown by Cooper through extension of the existing agreement is an encouraging sign and likely reflects initial in-market success and trends, in our view. We continue to believe Futura is uniquely placed within UK healthcare, with a better-than-expected cash position and a clear pathway to profitability and sustainable cash generation from 2025. Our valuation of £363m, equivalent to 121p per share, suggests that the Eroxon opportunity is not reflected in the current share price. Our model includes peak US sales of $350m with partner Haleon and $100-130m in each of Europe and in Other Regions, with the key valuation driver being the peak overall opportunity rather than precise launch timings. Preliminary FY23 results will be released in April.
Aside from a little timing difference that has already reversed out, Futura is progressing in line with expectations and today’s trading update is a timely reminder of how much progress the company has made and how little credit it has been given for this progress. Futura is now a revenue generating consumer health company, with a healthy balance sheet and should be breakeven in FY24E and start generating cash from FY25E onwards. The current share price implies that Futura will take less than 4% of the European ED market and none of the US market – those assumptions are completely at odds with progress to date, with Eroxon taking 20% of the UK and Belgium markets. We think the shares are worth 131p and remain Buyers.
An impressive stage has been set by Futura Medical for successful commercialisation of MED3000 (Eroxon in Europe), with consumer healthcare giant Haleon now secured as the ideal US commercial partner. Initial European launches via partner Cooper Consumer Health in the UK and Belgium have exceeded expectations, providing confidence in Eroxon’s potential, with the focus now on expansion of retailers, new launches, and repeat orders. Whilst there are no details on US launch timings, we believe preparations will take some time, and hence conservatively do not expect US launch until 2025. However, precise timings do not impact our overall investment case, with the sales potential for MED3000 more critical. The market for erectile dysfunction (ED) treatments remains significant, and as outlined by ED key opinion leaders, MED3000 is ideally placed to overcome the limitations of mainstay PDE5s. Our Futura Medical valuation is increased to £363m, equivalent to 121p per share.
The pieces of the puzzle have fallen neatly into place over the last year, with Futura obtaining US marketing authorisation and signing up Haleon as its US marketing partner, largely completing the steps towards commercialisation. As Futura enters a new phase, we carry out detailed analysis of the market opportunity in ED both from the top down, calculating TAM, SAM and SOM, and from the bottom up, showing the potential revenues from each of Futura’s marketing partners. We have also updated our forecasts to reflect the progress made to date. A more cautious stance on peak penetration means we reduce our target price from 152p to 131p. This still represents upside of more than 150% and we remain Buyers.
Futura announced this morning that it has signed a deal with Haleon to commercialise MED3000 in the US. This is a significant deal for Futura and comes hot on the heels of last month’s FDA approval. Haleon is, in our view, an excellent partner with an ideal mix of scale, experience and appetite. Signing such a high-profile US partner also shows the attractiveness of MED3000 and certainly reduces risk. From a financial perspective the deal looks to be in line with expectations, with Futura deriving revenues from a mix of milestones (worth between $5m to $45m) and royalties. We’ve adjusted our forecasts to take into account the $4m upfront payment and increased our price target from 142p to 152p. We still see significant upside despite the strong recent performance and remain Buyers.
Trinity Delta view: We knew 2023 was going to be pivotal for Futura Medical, and this earlier than expected US commercialisation partnership is the third major event so far (following Eroxon’s successful maiden launch in Europe, as confirmed at the June investor event, and FDA clearance of MED3000 as a unique OTC treatment for ED). The quality of Haleon as a commercial partner is beyond doubt and, in our view, validates the entire MED3000 investment case. Our valuation, once seemingly ambitious, is £270m, equivalent to 94p per share; however, we expect to review this as soon as forecasting visibility improves.
Futura hosted a well-attended CMD last week which gave a lot of colour around the Erectile Dysfunction (ED) market. For us the key takeaways were that: clinicians are of the view that ED is increasing and that current treatments aren’t really hitting the mark; that the initial launches have gone very well and that one should take some of the online reviews with a pinch of salt; and that the US opportunity remains sizeable, with Eroxon well placed to take a substantial market share. Futura has posted a flurry of good news over the last few weeks and while the shares have performed, we think there is still more to go. We remain Buyers with an unchanged 142p Target Price.
Trinity Delta view: The Investor Seminar provided confidence in the launch and potential of Futura Medical’s Eroxon. Clinicians highlighted that Eroxon provides a useful addition to current ED treatment options, particularly given issues with PDE5is, notably the lack of spontaneity. This was echoed by US market research where the rapid 10-minute onset of action was seen as a key benefit. These unique attributes of Eroxon, coupled with its OTC status (without a prescription) appear to be translating into a successful early launch, with commercial partners outlining that UK sales have so far exceeded all expectations. The next key step for Futura Medical is to secure a US commercial deal(s). Our last valuation was £270m, equivalent to 94p per share (published before the US FDA authorisation); we expect to review this once there is clarity on plans for launching in the US.
Trinity Delta view: We had long expected 2023 to be a pivotal year for Futura Medical, and Eroxon’s successful maiden launch in Europe, coupled with the FDA’s clearance of MED3000 as an over-the-counter treatment for ED, have been major milestones. As the picture for consumer acceptance and market uptake unfolds from the initial launch markets, we should be able to better assess likely future sales. The early indications are encouraging, particularly from just two launches for a few months, and suggest suitable partnerships for the US market will be struck. Our last valuation was £270m, equivalent to 94p per share, which was published before the US FDA authorisation; we expect to review this once there is clarity on plans for launching in the US.
Today’s positive AGM statement comes hot on the heels of last week’s US approval and includes the news that the initial Eroxon launch has gone well and guidance that revenues in H1FY23E will be at least £1.5m. This is the first time that Futura has issued any revenue guidance and we have updated our forecasts accordingly. This, together with the funds received from last week’s warrant exercise removes any lingering concerns around the balance sheet. Today’s CMD should provide further colour. We leave our TP unchanged at 142p but view today’s statement as further evidence that Futura is maturing into a revenue generating and, ultimately profitable company.
Trinity Delta view: 2023 is proving to be a pivotal year for Futura Medical and the FDA’s clearance of MED3000 as an over-the-counter treatment for ED is another significant milestone. The clearance is the best hoped for, with MED3000 available without a prescription, and includes the rapid 10-minute onset of action claim, faster than typical oral PDE5 treatments (which take around 30 minutes). Both of these should position MED3000 favourably in the sizeable US market, with the US opportunity alone broadly underpinning the current share price. A commercial partner in the US is the key next step and we anticipate a deal(s) this year. Meanwhile, we expect an update on initial EU launches at the upcoming investor event on 22 June. Even modest success in any of the regions targeted for launch would be transformational for Futura Medical. Our valuation is £270m, equivalent to 94p per share.
Futura announced this morning that it has received FDA approval for MED3000. This will be the first OTC treatment for ED approved in the US and has, in our view, the potential to take a significant market share. We’ve increased our TP from 121p to 142p to reflect the fact that this partially derisks US revenues. The next catalyst will be June’s CMD and Futura announcing a US market partner, hopefully before the end of FY23E. Today’s news is a significant landmark for Futura and, in our view makes the investment case even more compelling. Buy.
Trinity Delta view: Futura Medical is set for a pivotal 2023. FDA clearance, which is anticipated in Q223, would position MED3000 as the first OTC (over-the-counter, ie without a doctor’s prescription) clinically proven treatment for ED in the US. A commercial partner for the important US market will be key, hence it is highly encouraging that several discussions are active and ongoing. With partners already secured for multiple major ex-US markets and first launches in progress, commercial momentum is growing. As we have noted previously, the market opportunity for MED3000 given the differentiated and rapid onset of action (ahead of typical oral PDE5 treatments) could be significant, and the US opportunity alone more than underpins the current share price. Even modest success in any of the regions targeted for launch would be transformational for Futura Medical. Our valuation is £270m, equivalent to 94p per share.
The prelim results were broadly in line with expectations. Encouragingly, as the launch of Eroxon builds in Europe, Futura expects to generate maiden commercial revenues this year. Given the lack of visibility with regards to either timing or quantum of these revenues, we haven’t yet factored them into our forecasts, but these, together with other potential sources of income mean that we are very comfortable that Futura is well funded to deliver without needing to turn to equity markets. We leave our forecasts largely unchanged. The shares continue to trade at a discount to our estimate of fair value, and we see the FDA decision on US market authorisation in Q2 as an important catalyst to closing this. We remain Buyers with an unchanged target price of 121p.
Trinity Delta view: The first launch of Eroxon marks the start of what should be a pivotal year for Futura Medical. Cooper is known to have high expectations for Eroxon’s commercial potential and its roll-out across Europe is keenly anticipated. The slippage of the expected FDA approval into Q223 is not unexpected, such novel products are often subject to requests for clarification. The more important aspect is that management reports these discussions as active and constructive. As we have noted previously, the market opportunity as the first clinically proven erectile dysfunction (ED) treatment available OTC (over-the-counter) and with a differentiated and rapid onset of action (ahead of typical oral PDE5 treatments) could be significant. Even modest success would be transformational for Futura Medical. Our valuation is £264m, equivalent to 94p per share.
Futura Medical issued a short update this morning indicating that an FDA regulatory clearance decision is now expected in Q2 2023 (previously by end of Q1 2023). This small delay comes after some minor non-clinical questions were raised, and confirmatory data requested by the FDA. The company expects to fully respond and submit requested data to the FDA by the end of the month. We have spoken to management and remain highly confident of US approval. In fact, given that the only issues flagged by the FDA were minor, we are even more confident. Additionally, Eroxon™ has now launched in EU initially online through Futura’s partner Cooper Consumer Health, before a launch into retail pharmacies commences next month. We remain buyers with a target price of 121p.
Trinity Delta view: 2023 is set to be a pivotal year for Futura Medical, with first potential launches of MED3000/Eroxon. These include in the key regions of Europe during H123, and in the US, once marketing authorisation has been granted; this continues to be expected by end-Q123. US commercialisation will be dependent on securing a partner, and it is encouraging that discussions are ongoing. First approvals in the Middle East is a positive step towards broadening Eroxon’s reach, although we continue to see the biggest potential for MED3000 in the US and in Europe, as outlined in our November 2022 Update. Successful commercialisation in either of these territories could transform Futura Medical, in our view. The market opportunity as the first clinically proven erectile dysfunction (ED) treatment available OTC (over-the-counter) and with a differentiated and rapid onset of action (ahead of typical oral PDE5 treatments) could be significant. Our Futura Medical valuation is £270m, equivalent to 94p per share, with the US opportunity alone more than underpinning the current share price.
Positive progress continues at Futura Medical, with MED3000 now under formal review at the FDA and decision on marketing authorisation expected by the end of Q1 2023. Management continues to set the foundations for the launch and commercial scale up of MED3000, with launches in Europe to commence in H1 2023 and in the Middle East later next year. We believe Eroxon®, the brand name of MED3000, has the potential to become a global name as a potential first-in-class OTC treatment for erectile dysfunction. We reiterate our BUY and our 121p target price, and point to the FDA decision and the conclusion of a US licensing agreement as potential catalysts for further value creation.
During 2022 Futura Medical successfully delivered on several key MED3000 related events, including the highly positive FM71 longer-term clinical data, which are needed to enter the US market and importantly reinforced MED3000’s differentiated and rapid onset of action. In addition, a number of commercial deals were executed, notably the European and UK deal with Cooper Consumer Health. The next steps are EU launches (due to start during H123), FDA marketing clearance (potentially by end Q123), and securing a US partner. These should be the final elements in converting MED3000 into a revenue generating OTC product for ED, transforming Futura Medical’s prospects. Pending visibility on both US and European launches, our updated model conservatively does not include any near-term MED3000 related revenues. Our Futura Medical valuation is now £270m, equivalent to 94p per share.
Trinity Delta view: The positive outcome of the critical US FM71 longer-term study for MED3000 removes clinical uncertainty, shifting the focus to regulatory and commercial execution. The MED3000 regulatory package for the OTC treatment of erectile dysfunction, including data from FM57, is expected to be submitted to the FDA by end-September and following five pre-submission meetings, a rapid review for a decision by end Q123 is hoped for. In parallel, the search for a US commercial partner has commenced, whilst in Europe a widespread deal with Cooper Consumer Healthcare is already in place. Our last published Futura Medical valuation was £264m, equivalent to 92p per share.
Today’s interim results come on the back of Futura Medical’s success in its FM71 US study. With this hurdle cleared, MED3000 is on track for regulatory approval in the US in early 2023, whilst in Europe, where MED3000 is already approved, Futura’s partner Cooper Consumer Health continues to progress towards a H1 2023 launch. The period-end cash balance of £6.7m leaves the company well-financed significantly beyond initial launches and potential FDA approval. Our forecasts are unchanged and we reiterate a target price of £1.21 pointing to an attractive 160% upside.
Trinity Delta view: The successful outcomes from the critical FM71 study pave the way for MED3000 to be submitted for FDA review, as a De Novo medical device, for the OTC treatment of erectile dysfunction. The dossier, including data from FM57, is expected to be submitted by end-September, with US marketing authorisation likely by end-Q123. The excellent safety and tolerability profile, coupled with the rapid onset of action and now demonstrated longer-term efficacy, means MED3000 is well positioned to become a clearly differentiated ED product. These clinical results now shift the focus from regulatory aspects to execution, much as the European CE Mark did in April 21. We expect discussions to address the commercially important US market will now begin in earnest. We currently value Futura Medical at £264m, equivalent to 92p per share but expect to review this as visibility on expected launch timings and likely commercial potential in the various markets increases.
Futura Medical has released highly positive data for MED3000 as an OTC treatment for erectile dysfunction. FM71 was a Phase III confirmatory study, but data meets all our expectations and highlights several key differentiating attributes vs. the current standard-of-care. In our opinion, MED3000’s ideal benefit/risk profile offers patients an elegant OTC solution for erectile dysfunction. Today’s release means that MED3000 has passed a key investor test and Futura Medical is now on the home straight for FDA marketing authorisation. If authorised by the FDA, on course for Q1 2023, MED3000 is poised to become the first OTC medical device treatment authorised in the US for erectile dysfunction and subsequently creates a new category of OTC medicines. We have unwound our risk-adjustment to 95% driving an 11% upgrade in our target price to 121p. With interim results due in early September, we continue to recommend buying the shares.
Today’s AGM reiterates the strategical progress management made this last year in commercialising MED3000 signing five agreements. We met with management ahead of the AGM, and management have set the scene for another period of key news flow, fine-tuning expectations for data from the registration-enabling FM71 clinical study in the US in September 2022. This sets up a possible FDA approval by end of Q1 2023 unlocking a £250m OTC opportunity. Our target price remains at 109p, representing over 3x upside based on the global value of MED3000. We reiterate Buy.
Futura has signed its European deal for MED3000. The deal is rightly designed to be collaborative and to generate long-term profitability. Cooper appears a very credible PE-backed partner and has already funded a successful Consumer In-Use study of MED3000 and has committed further capital to invest into the MED3000 launch. The deal validates management’s partnering strategy and adds confidence to the 40p/share value we assign to MED3000 across Europe underwriting the current market valuation. Eyes now turn to the commercial launch (next 12 months) to extract this value for Futura, and to the US, where management aim to complete the same after FM71 study data in H2. Today gives some visibility of MED3000’s value and we have revised up our target price to 109p, offering >3x upside and reiterate BUY.
Trinity Delta view: The deal with Cooper for the commercially important EU (including UK) markets is a critical milestone that could be transformative for Futura Medical. The depth of due diligence suggests a strong commitment from Cooper, that should be sustained in the longer term given contractual marketing spend. We currently value Futura Medical at £264m, equivalent to 92p per share but expect to review this as visibility on expected launch timings increases and also when the results of the FM71 trial are made public.
Trinity Delta view: Last April’s CE Mark grant materially de-risked the ex-US investment case, with the focus shifting from regulatory aspects to execution. FY21 results reassure that Futura Medical has sufficient cash to reach key value inflection points including, pending successful FM71 clinical data, beyond potential MED3000 US approval in Q123. A European deal is anticipated eagerly and so it is highly encouraging that exclusive discussions are underway. We believe a US deal is likely once FDA approval visibility improves. Although the timings, and financial terms, of potential Europe and US deals remain uncertain at this point, and not without risks, we continue to believe that Futura Medical’s share price does not reflect the commercial potential of MED3000. We maintain our Futura Medical valuation of £264m (92p per share).
Full year results show that Futura Medical remain fully funded with all eyes on meaningful licensing deal news at any point, and the FM71 study in the US with all-important data expected in H2 2022. MED3000 is a breakthrough therapy for erectile dysfunction (ED). It works much faster than existing therapies, has a better side-effect profile and can be sold over the counter (OTC). It is already approved in the EU, where encouraging progress with signing an agreement has been made. However, unlocking the US market, with success in the ongoing FM71 study, alone could enable >90% upside on the current share price. Ahead of this potential pivotal milestone, we reiterate Buy, TP of 104p.
Trinity Delta view: Futura Medical’s various commercialisation deals will allow for broad geographic availability of MED3000 once launched. Europe partnership(s) are anticipated in the near-term; however, in the key US market, deal timing is likely to be after FDA approval. The FDA will review MED3000 as a De Novo classification with a small confirmatory clinical trial being the only outstanding requirement. This c 100 patient study, known as FM71, began patient enrolment in September 2021 and is expected to complete in Q222. FM71 has a similar mix of mild, moderate, and severe ED patients to the earlier FM57 study but is performed over a 24-week period, compared to a three-month duration for FM57. The aim is to reassure the FDA that efficacy does not diminish over a longer period. A positive trial outcome and subsequent approval would open the door to commercial discussions for the important US market. Our view remains that, whilst not without risks, Futura Medical’s share price does not reflect likely prospects. Our valuation is £264m, equivalent to 92p per share.
Today Futura has announced a commercialisation deal for MED3000 with Menarini. Specifically, Menarini’s South Korea subsidiary will assume responsibility for the approval and marketing of MED3000 in this geography. Futura will receive an undisclosed up-front payment and will sell MED3000 to Menarini at a pre-agreed price. This adds to three previously signed deals (Asia, Latin America and the Middle East). We anticipate further deals, including progress in Europe, in the coming months ahead of launch later this year. BUY, target price of 102p.
Today Futura Medical has provided an update on the US regulatory progress for MED3000. Previously, the FDA asked for two further studies to support an OTC approval. The short “human factors” study with 32 subjects has now completed and has delivered positive results that support the OTC designation. Meanwhile, recruitment into the larger FM71 clinical study is on track, with over 100 patients enrolled. With just 10 more patients to recruit, FM71 will close to enrolment within weeks. This means Futura is on track for the MED3000 US submission target of Q3 2022, underpinning a potential US OTC approval in Q1 2023. Our SOTP price target of 102p and BUY recommendation are unchanged.
Futura Medical’s H121 results provide a timely reminder of the progress achieved this year. MED3000 was approved in Europe, with the CE Mark granted in April 2021. Collaboration agreements are in place for China and the Far East, Brazil and Mexico, and the Gulf/Middle East. The US regulatory pathway has been established, with the confirmatory FM71 study now underway. The £12m equity raise in May removes a major uncertainty, providing a cash runway through to expected US OTC approval (as early as Q123). The next major event should be announcement of the first European partner(s), followed by first MED3000 launch expected during H222. Updating our model to reflect this progress generates a Futura Medical valuation of £264m, equivalent to 92p per share
Futura has made excellent progress towards realising the value of MED3000. In the first half the company raised £14m, and now has a cash runway beyond the anticipated US approval. On the regulatory front, the company gained European approval for MED3000, and agreed the regulatory pathway towards US approval with the FDA. Attention now turns to commercialisation plans, and the company has already signed three deals (Asia, Latin America and the Middle East). We anticipate further deals in the second half, including progress in Europe, ahead of launch in 2022. BUY, target price of 102p, offering over 150% upside.
Today Futura Medical announced a deal to license MED3000 in Brazil and Mexico. Their chosen partner, m8 Pharmaceuticals, is a specialty pharma company based in the US but focused on commercialisation in Latin America. This deal covers the two largest markets in the area, Brazil and Mexico. Limited financials were released but Futura will be eligible for up to $8.5m in milestones plus sales related payments over the initial 15 year deal term. We expect further commercialisation deals in coming months as Futura builds out the global network. BUY, TP 102p.
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MED3000 is a breakthrough therapy for erectile dysfunction (ED). It works much faster than existing therapies, has a better side-effect profile and can be sold over the counter. However, the market has been sceptical on management’s ability to secure a major European out-licensing deal and to complete a small US study due to its cash constrained position. Following the completion of £12m fundraise Futura is funded through to at least the end of 2024 which includes several major catalysts over the next 12-18 months. We raise our TP to £1.02 to reflect this significant de-risking.
Futura Medical announced on Friday afternoon its intention to raise £10m (gross) through an institutional placing at 40p per share, representing a 20.6% discount to the previous closing price. Part of the placing is directed to VCT (Venture Capital Trusts), with the shares being deemed eligible and a qualifying holding for the purposes of VCT tax benefits. The new shares are expected to trade from 8am on June 3.
Futura received full EU approval for MED3000 this morning following indicative approval last month. This removes the last hurdle to signing meaningful commercial agreements in our view. We have reassessed our sales forecasts to account for its over-the-counter rather than prescription status which drives longer-term upgrades. This more valuable commercial proposition helps to drive an upgrade of our TP to £0.80 (c.80% upside) from £0.68. We expect the start of the US study, regulatory approvals in other regions and commercial deals over the coming 6-12 months to crystalise further value and drive a re-rating.
Futura Medical has received the approval certificate for MED3000 from the designated EU Notified Body. The CE Mark as a Class II(b) medical device means MED3000, a proprietary topical gel for erectile dysfunction (ED), the first clinically proven OTC treatment is approved across Europe.
Futura Medical reported FY20 results in line with expectations, with net loss reduced from £8.9m to £2.4m. Net cash of £1.0m, coupled with £2.0m received in connection with the China and Far East MED3000 collaboration agreement and a £0.5m R&D tax credit, provides a cash runway that extends to Q122. The major events centre on MED3000’s progress along the respective regulatory paths in Europe and the US, with CE Marking expected by end-May. The FDA’s requirement is confirmed as a small study, FM71, involving 100 patients over six months. FY21 should see several commercialisation agreements established, notably in Latin America, Middle East, and Europe. Updating our model generates a valuation of £190.3m, equivalent to 76.6p (74.4p fully diluted) vs £181.5m and 73.1p (71.3p fully diluted) previously.
Futura has had a transformative few months with it securing European approval for MED3000, signing an out-licensing deal for Asia and agreeing a final structure for a small confirmatory US study. The shares have responded, up 261% YTD. However, we believe there are further significant catalysts to come including potential EU and RoW licensing deals, regulatory approval in smaller Asian markets and the start of the all-important US confirmatory study in H2. We expect the shares to further re-rate as management crystallises the value of MED3000 over the coming 6-18 months. Reiterate BUY.
Futura has received the final minutes from its fourth pre-submission meeting with the FDA. We believe these provide a clear pathway for Futura to start work on a small confirmatory study with first patient dosing expected in H2 2021. The US opportunity is worth at least twice that of the European opportunity where Futura received confirmation of approval (due by the end of May) last Friday. Today’s announcement removes the uncertainty around the clinical trial structure for the US and adds to the significant momentum at Futura.
After several years of clinical development, Futura announced this morning that it received a positive opinion from the EU regulator which will ensure full approval for MED3000 by the end of May. MED3000 will be approved as a clinically proven over-the-counter (OTC) therapy for erectile dysfunction, providing a novel, more convenient and in our view safer alternative to existing therapies (almost all of which are prescription products). We expect today’s announcement to lead to significant out-licensing deals in the coming months with management already in discussions with interested parties. On the back of this and the recent Asian deal, we raise our TP significantly to 68p (was 55p). BUY.
Futura Medical has reported that the designated EU Notified Body has completed its review of MED3000’s Technical Dossier and recommends its certification as a Class 2b approved medical device. The certificate is expected to be issued before the end of May, which is ahead of the timings we had expected (we had estimated mid-2021 in our modelling). This makes MED3000, a proprietary topical gel for erectile dysfunction (ED), the first clinically proven OTC treatment that is approved across Europe.
Futura Medical has struck an innovative deal with Atlantis Group to market its MED3000 topical gel for erectile dysfunction throughout China and South East Asia. Atlantis, and its associated companies, will fund any registration studies and commercialisation costs in the region, with the resulting profits being split 50:50. Atlantic will also invest £2.0m in Futura Medical through £1.5m as Convertible Loan Notes and £0.5m in warrants, with a conversion price of 20p and exercise price of 22p respectively. The collaboration addresses market access to the largest target population for MED3000. Updating our model to reflect this deal, our new valuation is £181.5m, equivalent to 73.1p per share (71.3p fully diluted), from £153.8m (60.9p a share), previously.
Futura has secured £1.5m from convertible loan notes with a Hong Kong based PE fund. There is potential for a further £0.5m through warrants. It has also signed a commercial deal for its erectile dysfunction product MED3000 for certain Asian countries including China. Under the deal its partner will fund all development and related costs with Futura set to receive 50% of future profits. Lastly, its EU regulatory filing remains on-track with approval likely in the coming months in our view. We think this update gives management the room to deliver an EU approval which can unlock a major out-licensing deal whilst it also secures costless access for the Asian opportunity. This will put the firm on a strong footing to execute its US study this year that should lead to a further value inflection. BUY.
Futura Medical has reported details of its third meeting with the FDA that firmed up the format of the six-month confirmatory study. The new trial, known as FM71, will involve c 100 patients with erectile dysfunction (ED). Around c 20 will be in the US and the balance will be similar to those who took part in the FM57 Phase III trial. The primary endpoint is efficacy against baseline assessment. The important secondary endpoints relate to speed of onset of effect and adverse events. There is no placebo and a comparison arm, using 5mg tadalafil (Cialis), will employ the same endpoints and provide an appropriate reference frame for an overall MED3000 risk/benefit analysis.
Futura provided an update this morning on the regulatory and commercial progress of MED3000, its topical treatment for erectile dysfunction. Following a 3rd pre-submission meeting with the FDA, management believes it has a clear structure for a follow-up study (FM71), that we estimate will cost just £2-3m, to gain US approval. In Europe the filing is under review by the regulator and management continues to expect approval in 2021. Lastly, the company confirmed that partnership interest is growing with discussions having advanced for an outlicensing deal in one specific region which we believe could fund the FM71 study if completed in the near-term.
Futura Medical’s H120 results confirm progress is maintained as expected. The key developments with MED3000, its novel treatment for erectile dysfunction (ED), suggest that European OTC approval is likely during 2021 and in the US, pending a small six-month trial to show longer term efficacy, is expected in 2022. The format of this supplementary trial will be discussed at the next FDA meeting, expected before end-October. Current funds of £2.62m (at end-June 2020) provide a cash runway to Q221, although this does not include the costs of the US study. We value Futura Medical at £153.8m, equivalent to 60.9p a share.
Futura Medical (FUT.L): Interim results | Shield Therapeutics (STX.L): Interim results
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The MED3000 (erectile dysfunction) story has advanced meaningfully from the start of the year. In Europe, Futura has filed MED3000 as a medical device, and is on track for approval in 2021. Recent discussions with the FDA have opened up the likelihood that MED3000 can be approved as an over the counter (OTC) treatment for ED – a unique product offering in the US. With MED3000 likely becoming a commercial reality within months, the company has retained advisors to help with ongoing partner discussions. The company ended H1 with £2.6m of cash at hand, sufficient funding through to Q2 next year. However, with a clear commercial product close to market the company has plenty of options to crystallise this value and close the gap to our 55p target price. Reiterate BUY, FDA update in Q4 next important catalyst.
Futura Medical’s update on MED3000, its novel treatment for erectile dysfunction (ED), confirms progress is in line with our expectations. The regulatory filings with both the US FDA and European Notified Body are progressing well. Importantly, the FDA has indicated there is a pathway for MED3000 to be launched as an OTC product in the US. This will require an additional, albeit modest, supplementary clinical trial to demonstrate longer term efficacy. More details should be known by the time of H120 results, likely in early-September. Our DCF-based model, using conservative assumptions, values Futura Medical at £153.8m, equivalent to 60.9p a share.
Futura Medical (FUT.L): Regulatory update | EKF Diagnostics Holdings plc (EKF.L): Trading update
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Futura announced this morning that it has submitted a filing for the approval of MED3000 as a medical device in Europe and anticipates a decision in 2021. We expect approval in early 2021 although at this stage a late 2020 approval remains possible.
Futura Medical confirms the timelines for the regulatory filings for MED3000, its novel erectile dysfunction (ED) treatment, are on track. Dialogues with both the US FDA and European Notified Body have been constructive. The EU Notified Body has begun its review of the supporting documentation and the FDA filing is still expected by end-Q320. There have been no COVID-19 related delays but, in our view, these remain a consideration. We assume the review processes will take a minimum of 12 months in both cases, so have approvals pencilled in for Q421. Commercialisation discussions are expected to start in earnest once the status of the regulatory approvals is known. Our DCF-based model, using conservative assumptions, values Futura Medical at £153.8m, equivalent to 60.9p a share.
Futura has released a positive update ahead of its AGM this morning. The company remains on-track to file MED3000 for approval in the EU in the coming months providing the potential for an end of 2020 or early 2021 approval.
Futura Medical is approaching a key point as the first of the regulatory filings for its novel erectile dysfunction (ED) treatment, MED3000, is expected within the next few months. MED3000 is a fast-acting gel that has proven clinical efficacy, a fast onset of action, and an attractive commercial profile. The ED market opportunity is sizeable, especially once MED3000 becomes widely available over the counter (OTC). Optimally addressing the various elements of the demographic segments and needs of the different geographies will, in our view, require careful selection of commercial partners. We expect the partnering discussions to start in earnest once the status of the regulatory approvals is known. Our DCF-based model, using conservative assumptions, values Futura Medical at £153.8m, equivalent to 60.9p a share.
Futura has a commercially differentiated and clinically proven product that can be used as a first line therapy for erectile dysfunction (ED). The company is pursuing a medical device approval pathway and we expect US/EU approval by mid-2021 at the latest given the quality and quantity of its data.
Futura Medical has presented detailed data from the pivotal FM57 Phase III Erectile Dysfunction (ED) study in a webcast. The headline results were released in December 2019 (see Update note). These showed no statistical difference between the three GTN dose arms and the DermaSys (placebo) arm, yet a strongly statistical difference vs baseline. These results suggested that this specific DermaSys formulation, now known as MED3000, was effective in its own right.
Futura has released its 2019 preliminary results this morning, updating the market after a very busy 12 months with its all important FM57 study delivering exciting and commercially relevant data in December. On this front management is hosting a webcast presentation that will be available on the company website later this morning to provide more colour on the study.
Futura Medical reported FY19 results in line with expectations and provided an update on positive developments with progressing MED3000 as a medical device for the treatment of erectile dysfunction (ED). As most operational activity centres on collating FM57 data and preparing regulatory submissions for MED3000, the impact of COVID-19 on corporate activities is limited.
Futura Medical has announced that it has had positive discussions with the European regulators regarding the approval of MED3000 as a medical device for the treatment of erectile dysfunction (ED). MED3000 is the project name for the base MED2005 DermaSys formulation used as the placebo in the pivotal FM57 Phase III study.
Futura has published an update on its progress with the EU and US regulators today. Following positive conversations with an EU Notified body (regulator) it began formal proceedings yesterday to get MED3000 (control arm in FM57 study) approved as a medical device in Europe and is on-track to submit its technical file for approval in mid-2020.
In late December Futura Medical raised a total of £3.25m (gross of expenses) through the issue of 40.6m shares at 8p a share. £1.5m of the raise was carried out through PrimaryBid, a platform open to retail investors. A further £1.75m was subscribed for directly by Lombard Odier. The new shares represent circa 16.66% of the enlarged share capital. ▪ The funds will be used for working capital purposes, including the closing out costs for the pivotal FM57 study, and to pursue a medical devices pathway for the regulatory approvals of DermaSys gel in the treatment of erectile dysfunction (ED). ▪ This follows publication of the top-line results of the FM57 Phase III trial for MED2005, an erectogenic gel containing glyceryl trinitrate (GTN). The study showed MED2005 met the primary endpoints against baseline and, rather surprisingly, also demonstrated a significant clinical benefit for DermaSys gel alone. However, as a consequence, there was no statistical difference between MED2005 and the placebo arm. ▪ Management is exploring the regulatory pathways for the DermaSys gel alone to be approved for the treatment of ED. It believes no further significant clinical work will be required for European approval as a medical device. The situation in the US is expected to be similar but cannot be confirmed until a meeting with the FDA has happened (likely during Q120). ▪ The fund raise, along with existing cash resources, means that Futura Medical has sufficient working capital for at least 12 months on current plans. This is based on assuming that approval of the DermaSys formulation for treating ED would not require material additional clinical studies to be performed.
Futura announced on Friday evening that it proposed to raise £3.25m by way of a subscription and primary bid offer at a price of £0.08 per share. The fundraising was fully subscribed but subject to a claw back to meet additional demand from new and existing shareholders.
Futura Medical has presented details of the pivotal Phase III study (FM57) results for its lead compound, MED2005. All doses achieved all primary endpoints against baseline (p<0.001) throughout the 12-week period, with secondary endpoints also being met. However, the placebo arm, consisting of the DermaSys formulation alone, achieved similarly impressive results. Dose-dependent variation in side-effects should allay fears that administration errors may be to blame. These data suggest that the DermaSys gel alone has a significant clinical effect across the three severities of ED (Erectile Dysfunction) examined. Clearly the data needs to be digested, but this would appear to open up new opportunities, especially in terms of regulatory pathways, patent life, and commercial potential. Until we have greater visibility, we suspend our valuation and forecasts; for context we valued Futura Medical at £127m (62p a share).
Futura Medical has reported the results of the pivotal Phase III study (FM57) for its lead compound, MED2005. Whilst all doses achieved all primary endpoints against baseline (p<0.001) at 12 weeks, there was no differentiation between any active arms and placebo. The placebo arm consisted of the DermaSys formulation and these results suggest that this proprietary gel has an effect comparable to the active arms at all three glyceryl trinitrate doses (0.2%, 0.4%, and 0.6%). This data is clinically relevant and suggests that DermaSys alone may be effective in treating Erectile Dysfunction (ED). Clearly the data needs to be digested before licensing discussions with possible partners continue. Equally, the commercial opportunity, especially the OTC potential, will need to be assessed. Until we have greater visibility, we suspend our valuation and forecasts; for context our model valued Futura Medical at £127m (62p a share).
Futura announced P3 results from its FM57 study testing MED2005 in 3 doses (0.2%, 0.4% and 0.6%). None of the doses showed superiority in improving erectile dysfunction outcomes vs. placebo.
Futura is set to report headline data from its P3 FM57 study in erectile dysfunction (ED) in December. We believe that the trial is significantly de-risked and hence estimate a >70% probability of some form of positive outcome.
Futura Medical is rapidly approaching a major inflection point as the results of a pivotal Phase III study (FM57) for its lead compound, MED2005, are due to read out in December. MED2005 is a fast-acting glyceryl trinitrate gel that addresses erectile dysfunction (ED). The FM57 data is expected to be positive and will influence the design of the remaining Phase III trial (FM59) required for US approval (and possibly Europe too). This data will also fuel licensing discussions with potential partners. The commercial opportunity in ED is sizeable, although addressing the various elements of the market segments and different geographies optimally will, in our view, be critical. Our DCF-based model employs conservative assumptions and currently values Futura Medical at £127m, equivalent to 62p a share.
DP Eurasia, Futura Medical, Galliford Try, SMID Market Highlights
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Futura announced HY2019 results today. It continues to deliver to plan with the key P3 FM57 study on-track to read-out in December and over 500 patients (of 1,000 in total) having completed the study already.
Futura has announced the establishment of a joint venture (JV) with CBDerma Technology, a company that has been created and funded to exploit the therapeutic potential of Cannabis. The JV is exploring the potential of using Futura's proprietary transdermal drug delivery technology DermaSys® for the delivery of Cannabidoil (CBD).
Ceres Power Initiation, Futura Medical CEO Video, Millennial Lithium CEO Video, AFH Financial, Costain, PayPoint, Travis Perkins, Unite Group, Superdry, Market Highlights
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In these three short videos Futura Medical CEO, James Barder discusses the ED market, MED2005 and the on-going P3 study and why it's so important.
Futura has announced that its P3 trial of MED2005 for the treatment of erectile dysfunction (ED) is now fully enrolled, on budget and on-track to read-out by the end of the year. This is an important milestone as the study is the key catalyst for the shares.
Futura Medical - Initiation, Capital Goods In Depth, Staffline, Tyman, Pendragon, SMID Market Highlights
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Futura Medical - Initiation, Capital Goods In Depth, Mining Update, Staffline, AMS, Tyman, Pendragon, Market Highlights
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The multi-billion dollar market for erectile dysfunction (ED) therapies continues to be dominated by PDE-5 inhibitors, despite a slow onset of action and negative side-effects. We believe Futura’s MED2005 addresses these issues and expect positive P3 data in December.
Today’s FY results highlight in particular the positive development momentum for MED2005, Futura’s GTN-based topical therapy for Erectile Dysfunction (ED). MED2005 is currently being evaluated vs. placebo in an approx. 1,000-patient Phase III trial (‘FM57’) in Europe. We continue to believe that MED2005 is a differentiated product with significant commercial potential in both prescription and, over time, OTC markets. We look forward to top-line FM57 data by the end of 2019, and reiterate our highly positive stance.
Futura Medical’s Capital Markets Day on 11th February highlighted the substantial clinical unmet need in the erectile dysfunction (ED) market, with Key Opinion Leader (KOL) Prof. David Ralph highlighting the practitioner and patient preference for a safe, inexpensive, faster-acting and topically administered alternative to oral therapy. We continue to believe that MED2005, the company’s glyceryl trinitrate (GTN) based ED programme, is a differentiated product with significant commercial potential. We look forward to data from the Phase III ‘FM57’ trial, expected in December 2019.
Yesterday’s Capital Markets Day highlighted the substantial clinical unmet need in the management of erectile dysfunction (ED), and provided further confidence that MED2005 (topical ED therapy in Phase III) is a differentiated product with significant commercial potential in prescription and, over time, OTC markets. We look forward to top-line Phase III results expected in December 2019e, and reiterate our positive stance.
We have reinstated forecasts following a year of transition, during which Futura Medical successfully re-focused on its pipeline of topical therapies. The company is now funded to progress the development of MED2005, a topical treatment of Erectile Dysfunction (ED), to top-line Phase III data, expected in December 2019. In our view, the product’s rapid onset of action and strong safety profile provide commercially relevant differentiation vs. existing ED therapies. We reiterate our positive stance.
Futura Medical (FUM LN) First patient enrolled in Phase III trial of MED2002 | i-nexus Global (INX LN) Licence to execute | River and Mercantile Group (RIV LN) AuM +3% in Q1, positive flows in Equity Solutions | SDL (SDL LN) Capital Markets Event: clear strategy for profitable growth
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Futura Medical (FUM LN) Thornton & Ross files TPR100 for UK approval | Instem (INS LN) Positive H1 update shows SEND momentum building strongly | Restore (RST LN) Encouraging H1 update and CMA development
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Following Derek Martin’s resignation as FD, Angela Hildreth (formerly UK FD of Shield Therapeutics), has joined Futura Medical in the role as FD and COO. Meanwhile we reiterate our positive stance on Futura Medical and continue to look forward to the start of the first Phase III trial for MED2002 (Eroxon®), a topical, fast-acting treatment of Erectile Dysfunction, in H1 2018, following completion of the ongoing PK trial.
Additional data from the Phase II trial of MED2002 (Eroxon®), which completed in 2016 and met its primary efficacy endpoint, has been published in Journal of Sexual Medicine. The data re-confirms the product’s market-leading fast onset of action and excellent tolerability profile. In addition, the trial met a number of relevant secondary efficacy endpoints. We continue to view MED2002 (Eroxon®) as a differentiated product with significant commercial potential in both prescription and, over time, OTC markets. We reiterate our positive stance on Futura Medical and look forward to the start of the first Phase III trial in H1 2018.
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The start of the 40-subject PK trial of MED2002 (Eroxon®) is in line with expectations. The trial will provide additional safety and tolerability data for Eroxon® and inform the choice of dose range for the subsequent Phase III programme. Meanwhile we look forward to a first out-licensing agreement for Eroxon®, currently expected before the start of Phase III in H1 2018. We continue to view Eroxon® as a differentiated product with significant commercial potential in both prescription and, over time, OTC markets. We reiterate our positive stance on Futura Medical.
The positive market research results for Eroxon®, released this morning, provides further support for the company’s ongoing partnering efforts. We continue to believe that MED2002 is a differentiated product with significant potential in both prescription and OTC markets, and look forward to further PK data followed by Phase III start in H1 2018.
Recent H1’s highlighted ongoing licensing discussions for multiple products. In our view, MED2002 (topical treatment for Erectile Dysfunction) in particular is a differentiated product with significant potential in both prescription and OTC markets, and the revised trial schedule further de-risks the programme. We look forward to PK data followed by Phase III start in H1 2018.
Futura Medical provided a detailed insight into its key aspects of the clinical development and commercial potential of MED2002 (Eroxon®), the group’s topical gel for erectile dysfunction, yesterday. The group received constructive feedback from regulators in May as to the design of its Phase III trial which is expected to commence in Q4 2017. We continue to believe that Eroxon® is a differentiated product with significant near-term licensing potential and longer-term OTC potential, supported by its superior safety profile versus sildenafil (Viagra®). We retain a highly positive stance on Futura Medical.
Futura Medical is at exciting juncture, with the second pivotal trial of Eroxon® (erectile dysfunction) due to start in Q4 2017 and licensing discussions ongoing for multiple products, including Eroxon® and topical pain relief products TPR100 (diclofenac) and TIB200 (ibuporofen). Longer term, we believe that the OTC market for Eroxon® could represent a significant opportunity, over and above our current prescription-only estimates. We reiterate our positive stance and unchanged 93p/share intrinsic value.
Although the performance of UK-listed Big Pharmas is closely linked to changing US market dynamics, the impact on our UK smallcap life science universe will likely be more muted given its early-stage nature. Nevertheless, potential changes to drug pricing and healthcare provision resulting from the likely reversal of the Affordable Care Act (Obamacare) could impact a number of companies in our universe. We highlight Summit Therapeutics (Corporate), ReNeuron (Buy), Vectura (Buy), Verona Pharma (Corporate) and Futura Medical (Corporate) as potential beneficiaries of a less adverse pricing environment, whilst Craneware (Hold) and AMS (Hold) could be negatively affected by potential US hospital spending delays.
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Following excellent results from the first pivotal trial of MED2002 (Eroxon™) we have included the programme in our valuation. The net result is a major intrinsic value upgrade from 56p/share to 113p/share. In this note we detail our assumptions not only for the MED2002 programme but also for the CSD500/Blue Diamond™ franchise and the topical pain relief products TPR100 & TIB200. With pain relief deals and further CSD500 launches expected in the near term, we retain a very positive stance.
Futura Medical has announced stellar data from the first clinical trial of MED2002 (Eroxon™). The data shows not only strong efficacy vs. placebo (p=0.0001), but also an excellent safety & tolerability profile and a faster onset of action than currently approved ED products. We believe the market potential is significant, and will update our forecasts as soon as the commercialisation strategy for the product has been clarified. In our view, the product addresses a significant unmet need: it has been reported that sildenafil (Viagra® and generics) is contraindicated in c. 7.5% of patients otherwise eligible for therapy. In addition, a proportion of patients will likely prefer Eroxon™ over sildenafil as a result of its fast onset of action and topical administration. We re-iterate our highly positive stance on Futura Medical.
The manufacturing and licensing agreement with TTK, a major player in the Indian condom market, represents a further step towards global commercialisation of CSD500, Futura’s novel erectogenic condom. TTK has extensive experience in cost-efficient condom manufacture, having previously supplied Durex condoms to SSL International globally prior to its acquisition by Reckitt. In addition, CSD500 in our view represents an excellent fit for TTK’s fastgrowing SKORE condom brand in India. We maintain a positive stance.
The closure of recruitment into Futura’s pivotal trial of Eroxon® (the company’s topical treatment of Erectile Dysfunction) is a positive development that provides a firm timeline for the expected release of headline data in Q3 (from Q2). The strategy for commercialising the product (beyond the UK Specials programme with Quantum Pharma) will be based on the trial outcome. As we highlighted in our note ‘Eroxon® data ahead’ on 5th April, the product could drive significant valuation upside subject to positive data. We reiterate our positive stance.
Futura Medical is at an exciting juncture, with pivotal Eroxon® data due by mid-2016 and EU filings of TPR100 & TIB200 targeted for the end of the year. Regulatory approval of the change in manufacturing process for CSD500 (enabling a longer shelf life) is also expected this year. We have adopted a more conservative stance on the CSD500 rollout through partners, incl. first significant revenue in 2017e (from 2016).
Futura has today announced FY results broadly in line with expectations, and provided a comprehensive update on the status of its development pipeline and product portfolio. Significant news includes a first commercial order for CSD500 (erectogenic condom) from an existing partner and the appointment of advisers to manage the out-licensing process for TPR100 and TIB200 (topical pain relief), for which regulatory dossiers will be submitted by year-end. We note that the European market for OTC topical pain relief products has been estimated at $750m. Meanwhile, the first pivotal trial for MED2002 (EroxonTM) remains on track to deliver headline data by mid-2016.
The appointment of Ken James (formerly SVP, GSK Healthcare R&D) to the Board of Futura Medical represents a timely step by the company, supporting the commercialisation of its strong portfolio of OTC and prescription products. We continue to expect exciting newsflow ahead: first regulatory approval of CSD500 following a successful shelf life extension project and headline data from the clinical trial of MED2002 are both expected in Q2 2016, and a near-term commercial deal for a topical pain relief product is in our view increasingly likely. We note that no further efficacy studies are likely to be required for regulatory approval of TIB200 (topical ibuprofen) in Europe. We retain a positive stance.
Yesterday’s Capital Markets Event provided a highly encouraging overview of the company’s development and commercialisation plans for its key products (the erectogenic condom CSD500, the MED2002 topical gel for erectile dysfunction, and the topical pain relief products TPR100/diclofenac and TIB200/ibuprofen). We continue to expect exciting newsflow ahead: first regulatory approval of CSD500 following a successful shelf life extension project and headline data from the clinical trial of MED2002 are both expected in Q2 2016; and a near term commercial deal for a topical pain relief product is in our view looking increasingly likely. We note that no further efficacy studies are likely to be required for regulatory approval of TIB200 in Europe. We retain a positive stance.
The announcement that an extended shelf life has been achieved for CSD500 is very encouraging. A regulatory filing for the change in manufacturing process is expected shortly, and the company is currently engaging with its commercial partners to agree the timetable for launch of CSD500 (branded Blue Diamond™ in some geographies). We continue to expect a commercial launch through partners in H2 2016.
FUM has advanced transdermal technology which can be incorporated into formulations of well characterised drugs to improve performance and extend their uses. 2015 was expected to be a busy year for the company and three recent announcements show that management is delivering on these expectations. Clarity of the EU regulatory pathway for the pain portfolio products is an important milestone, and rapid recruitment in the pivotal MED2002 trial, both add to the de-risking of the prodcuts and enhance the prospects of securing commercial partners.
Today’s announcement by Futura Medical that no further efficacy studies are likely to be required for European approval of its topical pain relief products is very encouraging as it could shorten the time to market for the products, both of which (TPR100/diclofenac and TIB200/ibuprofen) have demonstrated excellent efficacy in a controlled clinical trial. We note that the market in Europe for OTC topical pain relief products has been estimated at over $750m. We retain a positive stance on Futura Medical at this exciting time in the company’s development.
Today’s trial update for MED2002 (topical treatment for erectile dysfunction, ED) is very encouraging, indicating that recruitment is on target and that no serious adverse events have been reported to date. Patient recruitment from additional EU sites is expected to commence in early 2016, subject to regulatory approval. We remain positive on MED2002, which can potentially be used to treat all men with ED, including the significant proportion (c. 7.5%) of sufferers who cannot be prescribed sildenafil (Viagra®) due to contraindications. We continue to expect first launch of MED2002 as a Special in the UK this year.
The decision by the NHS to reimburse MED2002 (Futura’s topical treatment for erectile dysfunction) marks an important step towards the launch of the product as a Special (unlicensed medicine) in the UK later this year. The announcement follows the recent news that Futura had out-licensed UK manufacturing and distribution rights to MED2002 as a Special to Quantum Pharma. We are excited about the upcoming launch, as MED2002 can be used to treat the significant proportion (c. 7.5%) of patients with erectile dysfunction who cannot be prescribed sildenafil (Viagra®) due to contraindications.
Futura Medical has advanced transdermal technology which can be incorporated into formulations of well characterised drugs to improve performance and extend their uses. MED2002 is a topical gel of glyceryl trinitrate (GTN) in FUM’s proprietary DermaSys technology. It is applied with a specially designed single-use applicator directly to the glans of the penis, rapidly absorbed to increase blood flow giving a fast onset of action, for the treatment of erectile dysfunction. It is very safe to use because local application eliminates many of the side effects associated with systemic prescription drugs (eg Viagra), such as headache and flushing.
The agreement with Quantum Pharma is an important step towards the commercial launch of MED2002, a topical treatment of erectile dysfunction, in the UK as an unlicensed medicine (‘Special’). MED2002 can be used to treat the significant proportion (c. 7.5%) of erectile dysfunction patients who cannot be prescribed sildenafil (Viagra®) due to contraindications. Quantum Pharma has a leading position in the UK Specials market and we view the company as an ideal partner for Futura Medical. We continue to anticipate launch of MED2002 by the end of this year.
Futura Medical has advanced transdermal technology which can be incorporated into formulations of well characterised drugs to improve performance and extend their uses. 2015 was expected to be a busy year for the company and interim results show that management is delivering on expectations Despite that, market reaction to the headline data from the pain portfolio trial was disappointing, as this reduced risk and provided a catalyst to value appreciation. Further data analysis has demonstrated that neither topical nor oral formulations of commercial comparator products outperformed the equivalent FUM NSAID.
Interims show strong progress towards the launch of the CSD500 condom through multiple partners in 2016. Combined with the expected H2 launch of MED2002 as a UK Special and potential partnering deals for the company’s topical pain relief products, this bodes for an exciting year ahead. We have downgraded forecasts to reflect the delayed condom launch by C&D in Europe and Kabey Consumer Health. However, near-term partnering deals could potentially drive substantial valuation upside.
Futura Medical has proprietary transdermal technology which can be incorporated into formulations of well characterised drugs to improve performance and extend their uses. Headline results from a clinical trial assessing its three pain portfolio products suggest that its anti-inflammatory drugs applied locally are ‘not inferior’ to formulations of the established gold standards. These should provide a value inflection point, with further potential uplift when management concludeslicensing deals with commercial partner(s).
The headline data from the clinical trial of the company’s topical pain relief products TPR100 (diclofenac) and TIB200 (ibuprofen) is very positive, suggesting superiority against placebo and similarity vs. both oral and topical forms of currently marketed products. In our view, the performance vs. oral products in particular provides strong validation for the DermaSysTM delivery system and confirms the significant commercial opportunity presented by the company’s topical pain relief portfolio, which we believe could generate multiple commercialisation deals in multiple geographies.
The near-term progression of MED2002 into pivotal clinical trials represents a major step for Futura Medical. The enlarged trial will be powered to demonstrate the potential efficacy of MED2002 vs. placebo. Due to the planned increase in sample size, the results of the trial are now expected in H1 2016 (from Q4 2015), following which the company may seek a commercial partner. The market opportunity for MED2002 is substantial as the product could potentially be used by all men, including the estimated 7.5% of ED sufferers for whom PDE5 inhibitors (including ViagraTM) is contraindicated. We note that Futura has received interest from commercial partners for the product and look forward to trial results with anticipation.
Futura’s AGM statement demonstrates continued progress. A regulatory filing of an extended shelf life version of the CSD500 erectogenic condom is planned for later this year, and the clinical trial of topical erectile dysfunction product MED2002 is at an advanced stage of preparation. Most importantly at this stage, the clinical trial of the company’s topical pain relief portfolio is on track to deliver headline data by mid-July. We retain a positive stance.
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