Futura Medical PLC (LON:FUM), the maker of a breakthrough gel for erectile dysfunction, has unveiled plans to raise £12mln.
It will do so via what’s called an accelerated book-build orchestrated by the City broker N+1 Singer with the shares set to be sold at 57p each.
The cash will be used to commercialise MED2002 (the gel) and to develop its pain relief portfolio.
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“The placing is expected to allow the group to continue to fund additional product and commercial development activities and to seek additional licence agreements on more favourable terms than would otherwise be available,” the company said.
“Such agreements, coupled with the pursuit of sustainable income streams from existing and new licensed applications of the group's advanced proprietary trans-dermal technology, are expected to facilitate the creation of material shareholder value over the longer term.”
Last month, Futura Medical doubled in value after it announced a pivotal clinical trial of its gel had been a resounding success.
It means the firm now has a differentiated product in a market worth US$5bn currently dominated by top-selling drugs such as Viagra and Cialis have limitations.
Need for an alternative
Research commissioned by Futura found a widespread dissatisfaction with the current crop of ED pills, with the speed of onset being the most common complaint.
MED2002 provides a far more rapid solution to what's out there currently. It takes five to ten minutes before the effect is felt versus 20 for the likes of Viagra.
All of this provides an opportunity: a ready-made market of men who either can’t or don’t like taking the current help available.
It is probably more appropriate to classify Futura as a med-tech rather than a traditional pharma or biotech firm. And this is a crucial distinction.
For what it has created is a mode of action that gets drugs through the skin more quickly and effectively than other gels of this type.
It is a patented delivery method. For erectile dysfunction, it is incorporated with glyceryl trinitrate, which has been used to treat angina for decades.
Product pipeline
You won’t be surprised to learn, then, the technology is being developed to carry traditional and well tolerated painkillers quickly and effectively to the point they are most needed.
It means the company is not a one trick pony – it has a pipeline of quick-to-market products that have consumer and medical indications.
On the market already is its CSD500 range of condoms, which are designed to help men maintain an erection and maximise penile size.
As is normal when a company announces plans to raise equity, the share price eased, though only a little (5%) to 61.87p a share. That values the business at £61mln. In the year to date, the stock is up 189%.