Futura Medical – ready to go up again

It is going to take a long time, it is getting larger, and it is wanted all over the world.

That sounds just like a Christmas Cracker question, but it isn’t.

I profiled this one over two years ago and it has grown since then.

The business

Set up over twenty years ago, Futura Medical (LON:FUM), which is based in Guildford, Surrey, is a pharmaceutical company that is concentrating upon researching and developing drugs and medical devices.

It is focussed upon the consumer healthcare markets supplying sexual health and pain management.

In its portfolio the group currently has a pipeline of innovative products in late-stage development. Its strategy is then to partner with major groups globally to take those products further into the marketplace.

It is an expert in topical formulations and transdermal delivery and has developed DermaSys, its own advanced proprietary transdermal technology.

It is a versatile normally clear, odourless gel uniquely formulated using permeation and penetration enhancer components tailored for each product, to suit the specific therapeutic indication and desired speed of onset and duration of action. Each product is formulated to maximise its benefits for patients and consumers.

Breakthrough product

The company’s breakthrough product is MED3000, which is a topical gel formulation for the treatment of erectile dysfunction.

The group considers that it has the potential to become the first such product to be a globally available, clinically proven, over the counter treatment for erectile dysfunction.

It is taking a long time

MED3000 has already been approved as the first pan-European topical treatment for ED available without the need of a doctor’s prescription. 

However, the US market could well be the largest ED market globally. Accordingly, the company’s objective of OTC status for MED3000 continues to be a top priority given its potential to be the first OTC clinically proven treatment for ED.

It has already advanced to various approval stages but is now aiming to go for US regulatory submission by the end of September next year, then targeting US OTC FDA approval in the first quarter of 2023.

Its benefits

Obviously, there are many benefits to Futura’s product, they will spring to mind quite quickly.

It is considered to be well tolerated, with no systemic side-effect potential.

MED3000 could well have the fastest reaction time, some five to ten minutes to be effective.

This application method removes the ‘planning time’ for sex, especially when compared to oral medication.

Importantly, it is expected to increase intimacy through its topical application.

It is getting larger

As it develops the group is expending ever more of its funds, with its operating losses getting larger.

In due course we should expect contributions to scale-up of the group’s manufacturing and production capacity, especially as MED3000 gets launched in certain countries later next year.

Global demand

Already in 2021, the company has entered into several large commercial licensing deals. It is aiming at the ED markets in the Middle East, China, Latin America and South-East Asia.

The company is now in negotiations with multiple interested parties for other countries and major regions. Details can be expected early next year.

Recent Update Statement

Earlier this week the £100m capitalised company published a US regulatory and commercial update for MED3000.

In that Update, James Barder, Chief Executive of Futura Medical, commented: “We are continuing to make good progress with the regulatory process for MED3000 in the US. We are also executing upon our strategic plans to leverage commercialisation globally with a network of licensing and distribution partners with brand building strength, healthcare credibility and regional infrastructure and marketing expertise.”

Its equity split

There are some 287m shares in issue.

Larger shareholders include Lombard Odier Asset Management (Europe) (25.00%), Hargreaves Lansdown Stockbrokers (8.00%), T Adams (6.91%), Henderson Global Investors (5.42%), WT Lamb Holdings (4.47%), UBS Asset Management (UK) (4.06%), RA Lamb (3.28%), Chelverton Asset Management (3.01%), Hargreaves Lansdown Asset Management (2.98%) and finally Atlantis Investment Management (HK) (2.77%).

Broker’s View

Analyst Alistair Campbell, at the group’s brokers Liberum Capital, has rated the group’s shares, now 34.5p, as a ‘buy.’
His estimate is that the year to the end of this month will see the company reporting a £4.7m loss (£2.9m), while he goes for a bigger £4.9m loss next year.

However, he has made certain calculations as to the company’s ‘sum of the parts’ valuation – coming out with a 102p per share figure.

My View

Over the next few months, taking us up to the Spring of next year, I would expect Futura Medical to publish various update comments on both product progress and its global collaborations.

That will keep the company in front of investors in early 2022.

It should also give the shares a bit of an upward kick.

In the last year or so they have touched 84p, having risen firmly since my early 2019 profile.

At that time, I did not give out my price objectives, but today I will.

My new Target Price for Futura Medical is that the shares, now 34.5p, will hit 50p in 2022, if not even higher, especially as US approval is sought later in the year.

(Profile 14.03.19 @ 15p set no Target Price)