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Futura Medical price has doubled, but is this just the beginning?

Last updated: 14:51 13 Sep 2016 BST, First published: 13:51 13 Sep 2016 BST

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All the signs are looking good for Eroxon.

Shares in Futura Medical PLC (LON:FUM) have advanced more 140% in the last week, valuing the business at £68mln.

However, there is an argument, based on the company’s own research, that the current market capitalisation barely scratches the surface.

The uptick in Futura’s fortunes coincided with some very positive data from a 232-strong trial of its erectile dysfunction drug, MED2002.

Okay, there may be a couple of hurdles to be cleared before it goes on sale under the brand name Eroxon.

(In fact, the firm may have to carry another study, according to the City broker N+1 Singer). 

But it boasts one advantage that marks it out from the current treatments - pills such as Viagra and Cialis - and that’s speed of onset.

For while the little blue pill can take up to 30 minutes to work its magic, Eroxon, a gel applied directly to the nether regions, takes effect in as little as five minutes.

Citing Futura’s own market research, N+1 suggests that based on this superior onset of action, the safety profile and the switch to selling Eroxon over the counter, annual revenues could be in excess of £380mln (US$500mln).

Remember sales of drugs treating erectile dysfunction currently stands at £3.8bn (US$5bn).

If the new discovery does achieve anywhere near its potential, then the bout of profit-taking witnessed Tuesday (the stock was down 11% at 65.5p in mid-afternoon trade) may be misplaced.

Anyway, high-flying Futura isn’t a one-trick pony.

In fact, the same delivery mechanism used for Eroxon, a gel that penetrates the skin, could be used to deliver all sorts of drugs, including pain relief.

And earlier, the company said shelf-life problems with its CSD500 condoms, which are designed to help men maintain an erection and maximise penile size, had been solved.

Regulatory submissions to enable an extended shelf life of at least 18 months have been filed for both its European manufacturer and for TTK Protective Devices Limited, the Indian manufacturer with whom it has also signed a distribution agreement.

The company said it is also making progress with out-licensing talks for the topical pain relief gels, and it is now at the heads-of-terms stage with a number of potential partners.

Futura ended June with £2.9mln in cash, down from £7.23mln a year earlier.

As for the profit & loss account, the numbers are not very meaningful for a company at this stage of its development, as evidenced by a fourfold increase in revenue from the year before that still only lifted the top line to £66,900.

Loss before tax narrowed to £2.26mln in the first half of 2017 from £3.02mln the year before, as research and developments costs reduced to £1.79mln from £2.48mln last year.

"We continue to make good progress in the clinical and commercial development of our portfolio of product opportunities. This was highlighted last week with the announcement of positive clinical study results for MED2002,” said chief executive James Barder.

We are increasingly excited about MED2002's commercial potential as well as the first partner launch of CSD500 later in the year and the first pain relief out-licensing deal."

Futura Medical marks pivotal year with first meaningful revenue from Eroxon...

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