Trinity Delta Key takeaways from Investor Seminar

Key takeaways from Investor Seminar

Lighthouse | 26 June 2023

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The Investor Seminar on 22 June provided useful insights into Eroxon, Futura Medical’s OTC (over-the-counter) treatment for ED (erectile dysfunction). UK key opinion leaders (KOLs) in sexual health explained that despite PDE5is (eg Cialis and Viagra) having transformed ED treatment, they have drawbacks. These include: (1) adverse events often leading to discontinuation; (2) potential for drug interactions limiting which patients can use a PDE5i; and (3) the 30-60 minute onset leading to a lack of spontaneity, one of the major issues. KOLs agreed that Eroxon provides a useful treatment addition, that initial feedback is positive and that subsequent attempts with Eroxon can improve benefits, and that Eroxon could potentially have synergistic effects with other treatments that would merit further exploration.
Cooper Consumer Healthcare, the EU and UK distribution partner, outlined their Eroxon marketing strategy, aiming to build a credible brand by educating and working with healthcare professionals, to focus distribution to ensure accessibility, and to drive consumer demand. There are early signs of success with the pilot launches in Belgium and the UK, and there are plans to roll out via Amazon in other EU countries from July. Ceuta (Cooper’s UK partner) provided details on the UK launch via Boots, with Eroxon exceeding all targets, generating £1m of retail sales after 42 days, now approaching £2m. Boots are pleased with the launch, noting there have been occasions where one has been sold every 30 seconds, and Boots remain enthusiastic.
US market research by Ipsos echoed many of the KOL comments in terms of current treatment limitations, with MED3000’s rapid 10-minute onset of action seen as a key benefit and differentiator. The research highlighted that sales in the US could reach >$400m by 2028, substantially above our $250-300m peak forecast. Interestingly, despite the availability of generics, costs for ED treatment remain high in the US. Hence if pricing in the US is similar to Europe, this seems unlikely to be a barrier to uptake, in our view.
Futura recently guided to net Eroxon revenues of ≥£1.5m for H123; however, we note that these and future net reported revenues are unlikely to directly correlate with retail sales given Futura receives an undisclosed transfer price on delivery of orders to Cooper, rather than on in-market sales.

Trinity Delta view: The Investor Seminar provided confidence in the launch and potential of Futura Medical’s Eroxon. Clinicians highlighted that Eroxon provides a useful addition to current ED treatment options, particularly given issues with PDE5is, notably the lack of spontaneity. This was echoed by US market research where the rapid 10-minute onset of action was seen as a key benefit. These unique attributes of Eroxon, coupled with its OTC status (without a prescription) appear to be translating into a successful early launch, with commercial partners outlining that UK sales have so far exceeded all expectations. The next key step for Futura Medical is to secure a US commercial deal(s). Our last valuation was £270m, equivalent to 94p per share (published before the US FDA authorisation); we expect to review this once there is clarity on plans for launching in the US.

Lighthouse

26 June 2023


Price	59.00p
Market Cap	£176.45m
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 as an OTC product for ED (erectile dysfunction) in Europe and the US.

Analysts

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

Philippa Gardner
pgardner@trinitydelta.org
+44 (0) 20 3637 5042

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