Trinity Delta EU Notified Body recommends MED3000 approval

EU Notified Body recommends MED3000 approval

Lighthouse | 19 March 2021

Share this note

Futura Medical has reported that the designated EU Notified Body has completed its review of MED3000’s Technical Dossier and recommends its certification as a Class 2b approved medical device. The certificate is expected to be issued before the end of May, which is ahead of the timings we had expected (we had estimated mid-2021 in our modelling). This makes MED3000, a proprietary topical gel for erectile dysfunction (ED), the first clinically proven OTC treatment to be approved across Europe.
We continue to view MED3000’s European approval as a key near-term determinant for the negotiation of various commercial partnerships. The CE Mark is seen as a gateway for rapid product introductions in several markets globally, including many countries in Latin America, Middle East and South East Asia. Management has confirmed that it has received commercialisation proposals from a number of parties, and we suspect that these will now be progressed to completion relatively swiftly.
We believe the Latin America and Middle East regions will likely be covered through traditional deals that involve royalty payments, fees and milestones. The diverse nature of OTC marketing in Europe, coupled with differing cultural attitudes, suggest we will see several partnerships and no one single pan-European approach will be pursued. Interestingly, EU approval will allow Co-High, the SE Asian partner announced recently, to address a number of its markets quickly. Additionally, when formal approval is granted, should Futura Medical’s share price exceed 30p for a month, the £1.5m in convertible loan notes will mandatorily convert into equity.
The fourth meeting with the FDA to clarify MED3000’s regulatory pathway in the US took place in late-February and management is awaiting the official minutes. We expect the new US trial, to be known as FM71, will involve c 100 patients with ED. Around 20 will be in the US and the balance similar to those who took part in the FM57 Phase III trial. The primary endpoint is efficacy against baseline assessment. The secondary endpoints will likely relate to speed of onset of effect and adverse events. There is no placebo and a comparison arm, using 5mg tadalafil (Cialis), will be employed.

Trinity Delta view: MED3000’s regulatory approval in Europe de-risks the Futura Medical investment case, removing a major uncertainty and paving the way for commercialisation discussions for a number of geographies to proceed at pace. The major sensitivities in these markets now shift from regulatory risk to execution risk. In the US, the outcome of the fourth meeting with the FDA is awaited, but it is unlikely any major unknowns will be revealed. We are maintaining our Futura Medical valuation, based on conservative assumptions, at £181.5m or 73.1p per share (71.3p fully diluted) until we have further clarity on the likely structure and economics of commercialisation deals across EU (and other) markets.

Lighthouse

19 March 2021


Price	18p
Market Cap	£44.2m
Primary exchange	AIM
Sector	Healthcare
Company Code	FUM

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, a topically applied gel (MED3000), has been approved in Europe as a medical device for ED (erectile dysfunction), with the US awaiting a final confirmatory study.

Analysts

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

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

Disclaimer

Trinity Delta Research Limited (“TDRL”; firm reference number: 725161), which trades as Trinity Delta, is an appointed representative of Equity Development Limited (“ED”). The contents of this report, which has been prepared by and is the sole responsibility of TDRL, have been reviewed, but not independently verified, by ED which is authorised and regulated by the FCA, and whose reference number is 185325.

ED is acting for TDRL and not for any other person and will not be responsible for providing the protections provided to clients of TDRL nor for advising any other person in connection with the contents of this report and, except to the extent required by applicable law, including the rules of the FCA, owes no duty of care to any other such person. No reliance may be placed on ED for advice or recommendations with respect to the contents of this report and, to the extent it may do so under applicable law, ED makes no representation or warranty to the persons reading this report with regards to the information contained in it.

In the preparation of this report TDRL has used publicly available sources and taken reasonable efforts to ensure that the facts stated herein are clear, fair and not misleading, but make no guarantee or warranty as to the accuracy or completeness of the information or opinions contained herein, nor to provide updates should fresh information become available or opinions change.

Any person who is not a relevant person under section of Section 21(2) of the Financial Services & Markets Act 2000 of the United Kingdom should not act or rely on this document or any of its contents. Research on its client companies produced by TDRL is normally commissioned and paid for by those companies themselves (‘issuer financed research’) and as such is not deemed to be independent, as defined by the FCA, but is ‘objective’ in that the authors are stating their own opinions. The report should be considered a marketing communication for purposes of the FCA rules. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. TDRL does not hold any positions in any of the companies mentioned in the report, although directors, employees or consultants of TDRL may hold positions in the companies mentioned. TDRL does impose restrictions on personal dealings. TDRL might also provide services to companies mentioned or solicit business from them.

This report is being provided to relevant persons to provide background information about the subject matter of the note. This document does not constitute, nor form part of, and should not be construed as, any offer for sale or purchase of (or solicitation of, or invitation to make any offer to buy or sell) any Securities (which may rise and fall in value). Nor shall it, or any part of it, form the basis of, or be relied on in connection with, any contract or commitment whatsoever. The information that we provide is not intended to be, and should not in any manner whatsoever be, construed as personalised advice. Self-certification by investors can be completed free of charge at www.fisma.org. TDRL, its affiliates, officers, directors and employees, and ED will not be liable for any loss or damage arising from any use of this document, to the maximum extent that the law permits.