Futura Medical (FUM) 

Price           35.8p (£107.9m)
Date            25 April 2024

Futura Medical’s investment case has shifted firmly onto commercial execution. The highly successful initial launches of Eroxon, its novel topical gel for ED (erectile dysfunction), by partner Cooper Consumer Health in the UK and Belgium are now being followed by roll-outs across the major European markets. The much-anticipated launch in the commercially important US market by consumer healthcare giant Haleon is expected before February 2025. Launches in Other Regions are anticipated  throughout 2024. Eroxon offers a unique proposition, being a clinically proven, fast-acting, and safe product that can be easily bought over-the-counter. The market for ED treatments is significant and Eroxon appears ideally placed to carve a sizeable niche for itself. Our updated Futura valuation is £371m, equivalent to 123p per share.
  • All eyes on the key US launch Partner Haleon is working towards US launch and whilst visibility on precise launch timings is limited, and is likely to remain so, this is expected to occur before February 2025, but could potentially come earlier. Haleon has committed significant financial resources and we believe is working on numerous pre-launch activities including market research, messaging and building a robust supply chain to ensure a successful roll-out, all of which take time.
  • Other launches in progress Successful pilot launches in the UK and Belgium provide a blueprint and important learnings for ongoing and planned additional launches in Europe and Other Regions. Full launches in 16 countries are expected to have occurred by end June 2024, with further launches planned for H224. As an OTC product that can effectively be purchased anonymously and from a variety of sources, until launches are more established, reliable data on uptake and repeat use is not readily available.
  • Profitability in sight, initially driven by US launch Futura has a clear growth strategy and one of the key near-term priorities is to deliver revenue growth plus profitability within the next 12 months. The former will likely be driven by sales expansion in existing markets where Eroxon is already launched, plus new geographic launches, notably the US. If a US launch milestone is triggered, as we expect, this should propel Futura to profitability.
  • Valuation updated to £371m (123p/share) Our NPV-based valuation is driven by our Eroxon peak sales forecasts across key markets. We have updated following FY23 financial results, which leads to an updated valuation of £371m (from £363m) or 123p/share. The US, where we forecast launch in early-2025, is the main component of our valuation, worth more than Europe and Other Regions combined.

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Analysts 

Philippa Gardner pgardner@trinitydelta.org
Lala Gregorek lgregorek@trinitydelta.org
Franc Gregori fgregori@trinitydelta.org