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.
MED3000 is safe and effective in ED Detailed analysis of the pivotal FM57 data shows remarkably consistent outcomes for MED3000 across all treatment groups. There are clear and statistically meaningful improvements for the three co-primary endpoints, and also statistical superiority over baseline for Mild, Moderate, and Severe forms of ED (erectile dysfunction). The results are consistent when viewed across patient groups, study centres, geographies, and CROs performing the trial.
Regulatory filings expected in H220 Encouraging discussions with regulators in Europe and the US indicate that management targets of first submission in Europe by end-July, followed by a Q320 filing in the US, are realistic. Although difficult to gauge, MED3000’s clinical profile, particularly the clean safety data, suggests a rapid transition to OTC status is probable. With activity approaching that of oral PDE5s such as tadalafil (Cialis), but with a faster onset of action and fewer sideeffects, the commercial potential of MED3000 could be sizeable.
Partnering needs careful consideration The complexities of the ED demographic segments, coupled with differing geographic marketing requirements, means that partnering discussions will not be straightforward. We believe no suitable global company exists, and a collection of strong regional players will likely provide the optimal commercial coverage. We would not expect meaningful dialogues with likely partners to advance until the regulatory status in each market is clearer.
Under-valued and relatively low-risk We value Futura Medical using a riskadjusted DCF model. We expect to revisit our assumptions as regulatory progress is achieved and visibility of the commercialisation strategies improves. Our current valuation is £153.8m (60.9p/share).