Futura Medical shares soar on strong first revenues from innovative ED treatment

Futura Medical (FUM) Follow | FUM, a consumer healthcare company, issued a trading update for the year ended December 31, 2023 (FY23). During the period, the company successfully launched its over-the-counter topical treatment for erectile dysfunction Eroxon through its distribution partners in the UK, Belgium, and the UAE.

Futura said it has been encouraged by significant initial revenues and broader market success of the UK launch, being a catalyst for "significant strategic progress" across multiple markets, and proving the treatment is helping satisfy an unmet need in the market. Futura reported over 20% market share in the UK and Belgium within 12 months of launch, based on early data.

Eroxon was also granted FDA approval in the US during the period, the largest market for ED in the world. Futura signed a distribution agreement with Haleon in the US, and secured a US$4m upfront payment to be recognised in FY24. The product launched in the UK and Belgium through Cooper Consumer Health with a licensing agreement subsequently extended until 2029. In the EU, Eroxon was granted a patent until 2040 in all European markets.

Futura expects to report first meaningful revenues generated from product sales in FY23 of c. £3.1m, followed by a further £0.5m of orders received in January. Gross margin was approx. 58% and the company ended the period with a strong cash position of £7.7m.

"I am incredibly proud to report that we have delivered on the three key objectives that we set out in 2023: achieving regulatory approval in the US; progressing commercial discussions by securing a standout distribution partner in Haleon for the largest consumer healthcare market in the world and reporting our first meaningful revenues. The delivery of this progress, alongside the fact that we have an award-winning product, has given us a robust and broad platform to build upon in the year ahead." said James Barder, CEO of Futura.

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Impressive first revenues from Futura's innovative ED treatment, and a robust cash position at the end of FY23 carrying strong momentum into FY24. Revenues of £3.1m plus £0.5m in January (originally scheduled for December) exceed market forecast of c. £3.4m. Likewise, gross margin of 58% exceeds Trinity Delta's 53% margin target, suggesting an improvement in H2 to over 63%. A comfortable cash position at period-end of £7.7m is also above Trinity Delta's £6.5m forecast, and should be sufficient to fund current operations and near-term expansion.

FUM shares soared 37% on the news.

Through its distribution agreement with Cooper Consumer Healthcare, Futura achieved a remarkable 20% market share in the UK and Belgium within the first 12 months of launch. Further launches are planned for France, Italy, and Spain before April 2024. The initial 5-year agreement with Cooper was extended until January 2029, demonstrating the success of the partnership and strong interest from Cooper.

During the year, Futura also received approvals in Saudi Arabia, Mexico, and Australia, and also launched in the UAE in October. Furthermore, Futura's partnership with M8 Pharmaceuticals was expanded beyond Brazil and Mexico, to include another 14 countries in Central and South America.

The biggest prize remains the US, which is the largest market for ED in the world. FDA approval was granted in FY23 and an upfront US$4m payment was received from distribution partner Haleon. If Eroxon's initial success in Europe is indication, the US launch may be a significant value inflection point for the company. Trinity Delta is currently forecasting the US launch for FY25.

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