Trinity Delta AGM statement confirms MED3000 filings on track

Futura Medical

AGM statement confirms MED3000 filings on track

Update | 29 June 2020

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Futura Medical confirms the timelines for the regulatory filings for MED3000, its novel erectile dysfunction (ED) treatment, are on track. Dialogues with both the US FDA and European Notified Body have been constructive. The EU Notified Body has begun its review of the supporting documentation and the FDA filing is still expected by end-Q320. There have been no COVID-19 related delays but, in our view, these remain a consideration. We assume the review processes will take a minimum of 12 months in both cases, so have approvals pencilled in for Q421. Commercialisation discussions are expected 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.

Year-end: December 31	2018	2019	2020E	2021E
Sales (£m)	0.0	0.0	0.0	0.0
Adj. PBT (£m)	(7.2)	(11.1)	(4.8)	(3.9)
Net Income (£m)	(5.9)	(8.9)	(4.0)	(3.9)
Adj. EPS (p)	(4.5)	(4.4)	(1.6)	(1.3)
Cash (£m)	9.1	2.5	1.0	3.1*
EBITDA (£m)	(7.2)	(11.1)	(4.8)	(3.9)

Source: Trinity Delta Note: Adjusted PBT excludes exceptionals, Cash includes short-term investments. *FY21e cash includes assumed additional funding of £5m.

Regulatory filings for MED3000 on track Productive discussions with the FDA and the European Notified Body suggest that our expectations of first MED3000 approvals in Q421 are realistic. A date for the second FDA pre-submission meeting to discuss the final clinical requirements has been agreed and, if successful, could result in a filing by end-Q320. The EU Notified Body has started to review the QMS (Quality Management System) documentation, with management confident the TD (Technical Dossier) will be complete when the Notified Body requests it. COVID-19 has not, to date, impacted Futura Medical’s operations or its dealings with the regulatory agencies; however, this remains a sensitivity to be considered.
MED3000 has an attractive clinical profile MED3000’s proven clinical efficacy, coupled with a rapid onset of action and a clean side-effect profile, suggests that it is well placed to capture a meaningful share of a large, and growing, ED market. The complexities of the ED demographic segments, coupled with differing geographic marketing requirements, means we do not expect partnering discussions to be straightforward. Importantly, in our view, serious dialogues will likely advance once the regulatory status in each region is clearer.
Undervalued and relatively low risk We continue to value Futura Medical at £153.8m (60.9p/share) using a risk-adjusted DCF model with conservative assumptions. We expect to revisit our assumptions as further regulatory progress is achieved and as the visibility of the commercialisation and partnering strategies improves.

Update

29 June 2020


Price	16.25p
Market Cap	£39.9m
Enterprise Value	£28.3m
Shares in issue	245.6m
12 month range	7.16-47.9p
Free float	62%
Exchange	AIM London
Sector	Healthcare
Company Code	FUM.L

Corporate client	Yes

Company description

Futura Medical is an R&D driven small pharma company, with a novel DermaSys transdermal delivery platform. The lead programme, MED2005, is a topically applied gel that is in Phase III trials for erectile dysfunction (ED). A pain relief gel, TPR100, is awaiting UK approval.

Analysts

Lala Gregorek
lgregorek@trinitydelta.org
+44 (0) 20 3637 5043

Franc Gregori
fgregori@trinitydelta.org
+44 (0) 20 3637 5041

Exhibit 1: Summary of financials

Source: Company, Trinity Delta Note: Adjusted numbers exclude exceptionals. The funding requirement is shown as short-term debt in FY21e, until transaction type, source and size are confirmed.

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