Preliminary Results for the year ended 31 December 2017
Futura Medical plc (AIM: FUM), the innovative healthcare company focused on advanced transdermal technology, is pleased to announce its preliminary results for the year ended 31 December 2017.
- Chairman's and Chief Executive's Review
- Group Statement of Comprehensive Income
- Group Statement of Changes in Equity
- Group Statement of Financial Position
- Group Statement of Cash Flows
MED2002: Eroxon® - Treatment for erectile dysfunction ("ED")
- Key meetings held and positive feedback received from US & European regulators on the two phase III trials planned in our clinical development programme
- Interim pharmacokinetic data indicates that at least two higher strength doses of MED2002 are eligible for the planned Phase III clinical studies compared with the dose used in the successful Phase II study
- Commercial out-licensing discussions at an advanced stage
CSD500: Erectogenic condom
- Successful product launch in Saudi Arabia with further order placed and in production
- Further launches in 2018 underway
TPR100 (diclofenac) and TIB200 (ibuprofen): Pain relief products
- First out-licensing agreement signed for TPR100
- Commercial out-licensing discussions continuing for other countries
Organisational and Financial Highlights:
- Appointment of Angela Hildreth as Finance Director and Chief Operating Officer
- Net loss of £3.90 million (2016: Net loss of £3.70 million), reflecting planned increase in R&D expenditure on the MED2002 clinical programme
- Cash resources of £8.36 million at 31 December 2017 (31 December 2016: £12.35 million)
James Barder, Futura's Chief Executive, commented: "2018 has started well particularly with the progress of our Phase III clinical programme for MED2002, our breakthrough erectile dysfunction gel. The positive interim data announced yesterday from our pharmacokinetic study indicates that we will be able to include at least two higher strength doses of MED2002 in our Phase III clinical studies along with the dose used in our earlier Phase II study thereby offering the potential for improved efficacy. Commercial discussions, especially with MED2002, are advancing well and further CSD500 launches are underway."
Analyst meeting and webcast
A meeting for analysts will be held at 11.00am this morning, 14 March 2018, at the offices of Buchanan, 107 Cheapside, London EC2V 6DN. There will be a live webcast of the analyst presentation. To listen to the webcast, please log on to the following web address approximately 5 minutes before 11.00am:
A recording of the webcast will be made available at www.futuramedical.com following the results meeting.
Substantial progress was made in 2017 with MED2002, our topical gel for erectile dysfunction ("ED"), particularly in advancing the product into its Phase III clinical programme. MED2002 offers major and disruptive potential in terms of prescription sales and a subsequent over-the-counter switch. The rapid onset of action of MED2002 differentiates it from existing treatments and gives it the potential to be the world's fastest-acting treatment for ED. Also during the year, we continued to advance the commercialisation of CSD500, our novel erectogenic condom, and to progress our pain relief franchise.
Following our breakthrough Phase II clinical results announced in September 2016, our key objective for 2017 was to progress MED2002 both clinically and commercially. Discussions towards the out-licensing of MED2002 advanced materially during the year and, as previously stated, we believe that a commercial out-licensing agreement will be announced in the first half of this year though, of course, the timing will also be determined by the detail of negotiations.
The quality of the Phase II results was underlined in January 2018 when the leading, peer-reviewed scientific publication for sexual health, the Journal of Sexual Medicine, published its analysis of the data from the study, which had met its primary endpoint in showing a statistically significant improvement in erectile function in men compared with placebo. During the year we finalised the design of our Phase III programme, comprising a pharmacokinetic ("PK") study and two Phase III studies. We were very pleased yesterday to report positive interim data from the PK study, which commenced in November last year. The data indicated that we would be able to use at least two higher doses of MED2002 than the dose used in the Phase II study. This creates the potential for increased efficacy in the Phase III studies with the objective of being able to treat patients experiencing more severe ED.
CSD500 is now actively marketed in the Middle East, where more than 500,000 condoms have been supplied to date under the Manex brand; in the test market of Benelux countries more than 100,000 CSD500 condoms have been sold under the Blue Diamond brand. Whilst these sales are encouraging, our commercialisation plans in North America and certain European countries were impacted by Church & Dwight's decision to return licensing rights to the product to Futura owing to a strategic change at their business. We continue in commercial discussions for those countries without a distribution partner for CSD500, including those that formed part of the Church & Dwight agreement.
As previously announced the commercialisation of our pain relief products continues, with the UK regulatory dossier submission of TPR100, our diclofenac gel for topical pain relief, close to completion with filing expected in Q2 of this year by Thornton & Ross, a UK subsidiary of STADA Arzneimittel AG ("STADA"). We are at an advanced stage of discussions in connection with a further regional licensing deal for TPR100 with an additional prospective partner.
Our balance sheet remains strong with cash resources of £8.36 million at 31 December 2017 (31 December 2016: £12.35 million). We will continue to use these cash resources prudently through careful consideration of the timing and design of our clinical trial programmes.
Portfolio updates - Sexual healthcare
MED2002: Eroxon® Treatment for erectile dysfunction
MED2002, which uses our DermaSys® drug delivery system, is the development name for our topical gel for the treatment of men with ED. We hold patents to the product in a market worth US$5.6 billion1 for currently available treatments and have registered the brand name Eroxon®, though potential distributors may choose to use other brand names. MED2002's rapid onset of action, with speed of onset within 10 minutes in 70 percent of intercourse attempts in our Phase II clinical trial, means that it has the potential to be the world's fastest-acting treatment for ED.
The breakthrough clinical results announced in September 2016 were discussed with regulators in the UK, Europe and US during 2017 with a view to confirming the optimal clinical study pathway to achieve marketing approval throughout Europe and in the US. As a result of these interactions, we decided to begin the Phase III programme with an enlarged PK study, which was designed to assess the tolerance of 40 healthy subjects to a range of doses of MED2002, including higher doses than the dose used in the breakthrough results study.
The PK study, which commenced in November 2017, is evaluating the dose of 0.2% w/w glyceryl trinitrate ("GTN") used in the previously reported successful Phase II clinical study, and higher doses of 0.4%, 0.6% and 0.8% to assess their suitability for maximising efficacy in the two planned Phase III studies.
One of the key goals of the PK study was to demonstrate that the blood plasma concentrations of GTN of at least some of the higher doses fall within the plasma concentrations of a US reference product, Nitrostat®, which is used to treat angina. Demonstrating this equivalence enables the Company to use the FDA 505(b)(2) route to regulatory approval where at least some of the safety information required for approval comes from studies not conducted by or for Futura saving both time and money.
We were pleased to report yesterday that in this phase of the study in 30 subjects, the 0.2%, 0.4% and 0.6% doses met this requirement. The 0.8% dose had similar but slightly higher levels of GTN in the blood plasma than Nitrostat®, this and other data will be further evaluated in the second phase of the PK study before the Company decides the final doses to be included in the first Phase III study. Additionally, as the dose of MED2002 was increased, the plasma concentrations increased demonstrating that absorption occurs in a predictable and reliable manner thereby providing further safety reassurance and underlining the potency and versatility of Futura's DermaSys® transdermal technology.
Adverse events were also monitored during this phase of the study and all four doses were well tolerated. In particular, the level of headache (the main side effect normally seen) between each different MED2002 dose and Nitrostat® was broadly similar, mostly being mild and self-limiting.
The remaining part of the PK study is analysing the residual amounts of MED2002 left on the penis five minutes after application to evaluate the risk of transference of the active ingredient from the male to the female sexual partner. The results from this part of the study, along with the full results of the safety data, are expected within the next month.
We have also recently received written endorsement from the US Food and Drug Administration of the adaptive design of our two Phase III trials for MED2002; the design has already been reviewed by the UK's Medicines and Healthcare products Regulatory Agency and the Medicines Evaluation Board in the Netherlands.
Our current plan is for the first patient in the first Phase III trial to be dosed early in Q3 this year, though the timing could be influenced by the signing of a commercial out-licensing agreement. As previously mentioned, we believe that a commercial out-licensing agreement will be announced in the first half of this year.
Awareness of MED2002, and interest in its potential, has grown considerably in the medical community. Market research carried out by a leading healthcare strategy firm, Cello Health Consulting, indicated that more than 60 per cent of physicians in the US consider that MED2002 is an improvement over current ED therapies. The research also revealed that at least 10 per cent of ED patients were contra-indicated to PDE5 inhibitors (such as Viagra® or Cialis®) because of their existing nitrate medication, a larger percentage than the 7.5 per cent historically stated by the Company based on previously conducted research. The online survey was based on interviews with a total of 200 doctors in the US, Germany and France.
As previously mentioned, the publication of our Phase II clinical data in the Journal of Sexual Medicine underlines the scientific and medical interest in MED2002; the article can be viewed at this link: http://www.jsm.jsexmed.org/article/S1743-6095(17)31852-0/fulltext. The publication of this data forms part of our strategy to increase the awareness of MED2002 in the medical and pharmaceutical community and attracted significant interest with widespread coverage in the mainstream press and features in the medical and pharmaceutical media, highlighting the level of potential media interest in a future launch of MED2002.
MED2002, as a topically applied gel with a very rapid speed of onset, has the potential to be a significant product with combined peak sales of more than US$1 billion in a market currently dominated by Viagra® and Cialis®, which are taken orally and do not take effect for at least 30 minutes, and typically one hour or more2.
MED2002's patent protection runs until August 2028 in the USA and August 2025 in Europe. An additional patent filing announced in 2017 could extend patent protection through to 2038.As an innovator product filed under Article 8(3) of 2001/83/EC, MED2002 will also benefit from 10 years European regulatory data and market exclusivity.
Note 1: 15 Key markets, IMS Health Data (2016) Manufacturers' Selling Price
Note 2:US patient information for Viagra® and Cialis®
CSD500: Condom containing the erectogenic Zanifil® gel
CSD500 benefits from three clinically proven claims: the maintenance of a firmer erection, maximised penile size and a longer lasting sexual experience for women. CSD500, which is CE Marked, represents real innovation in an industry where there has been limited new product development. Futura's unique intellectual property for CSD500 is protected in the world's most important markets by the filing and granting of key core patents.
CSD500 benefits from a total of seven licensing agreements, covering more than 27 countries worldwide. The most recent agreement was signed in March last year, when F Lima SA gained exclusive rights to market CSD500 in Portugal.
The planned commercialisation of the product in North America and certain European countries was impacted by the decision by Church & Dwight to return licensing rights to those countries as announced in August 2017. Whilst immensely frustrating, it was reassuring that Church & Dwight had confirmed they had no concerns around clinical and safety risks and the decision was the result of a change in strategic direction at its business. We continue in commercial discussions on out-licensing CSD500 in a number of countries including those that formed part of the Church & Dwight agreement. As we have discounted making an online launch by ourselves, we are exploring a number of potential commercial approaches, including jointly licensing MED2002 and CSD500 in some countries.
CSD500 was launched in Saudi Arabia in the first half of 2017 by our distributor Kabey and further launches in the MENA region are planned as soon as the necessary regulatory approvals on a country by country basis are granted. Kabey is using the Manex brand name and its promotion is based on direct retail marketing.
We have been pleased with the continued safety data and positive feedback and are encouraged by the low level of customer complaints from more than 600,000 CSD500 condoms which have been supplied to date to the MENA region and Benelux test market. A further order has been placed and is currently in production.
Our two manufacturing partners - TTK in India and our European manufacturer - have the required approvals to ship CSD500 to any country in which the product is approved. Last year TTK received regulatory approval from the relevant EU Notified Body to manufacture an extended shelf life product and we continue to work closely with regulators to gain approval for an extended shelf life product for our European manufacturer. We remain hopeful of approval by the end of H1 2018 from the same EU Notified Body for an extended shelf life product for our European based manufacturer, which will be based on two years', real time data.
As highlighted in our previous Interim Report, the regulatory process in Europe has been slowed by the changing structure of EU regulatory bodies. We continue to work closely with regulators to overcome these challenges and to prioritise certain of our submissions and to enable the launch of CSD500 in a number of countries during 2018 and beyond.
Portfolio updates - Topical pain relief
The rapid skin permeation rates offered by Futura's transdermal delivery system, DermaSys®, have created a major opportunity in topical pain relief. Rapid and increased skin permeation offers potential benefits in pain management including: improved onset of action, duration and degree of pain relief.
Futura has previously demonstrated statistically significant results over placebo from its two non-steroidal anti-inflammatory drug ("NSAID") programmes, TPR100 (2% diclofenac gel) and TIB200 (10% ibuprofen gel), in a clinical study.
The UK regulatory submission of TPR100, our diclofenac gel for topical pain relief, is close to completion with filing expected in Q2 of this year by Thornton & Ross, a UK subsidiary of STADA. Under the terms of its licensing agreement, Thornton & Ross holds rights to manufacture, market and distribute TPR100 in the UK for the lifetime of the product's patents, which run to 2028 in the UK.
We are also in discussions with several potential distribution partners for further licensing deals for TPR100 in countries outside of the UK. As previously stated, we do not intend to conduct any further clinical work, required primarily for the US market, without a clear indication of interest and commitment from potential commercial partners.
Our objective is for our pain relief products to be best-in-class. The rationale for this is that the National Institute for Health and Care Excellence (NICE) gives clear guidance to physicians to prescribe topical NSAIDs in the first instance for joint pain associated with osteoarthritis, in preference to oral NSAIDs, owing to concerns over the long term use of oral NSAIDs. This means that the best-in-class topical treatment should be the first choice for doctors in the initial treatment of pain and therefore represents a substantial opportunity in a market with global sales estimated at US$2.9 billion3.
Note 3: 2015 IMS Health estimate
At the year end, Futura had 14 employees, (excluding Non-Executive Directors), (2016: 12), with the increase reflecting the strengthening of our in-house regulatory function.
Post the period-end, we were delighted to welcome Angela Hildreth to the Company as Finance Director, Chief Operating Officer and Company Secretary as announced on 20 February 2018. Her appointment followed the decision by Derek Martin, who had served as Finance Director for almost 10 years, to resign from the Company. We would again like to thank Derek for his contribution to the development of the Company and wish him well.
2018 has started well particularly given the progress of the Phase III clinical programme of our breakthrough erectile dysfunction gel, MED2002. The positive interim data announced yesterday from the pharmacokinetic study indicates that we will be able to include at least two higher-strength doses of MED2002 in our Phase III clinical studies along with the dose used in our earlier Phase II study thereby bringing the potential for improved efficacy. Commercial discussions, especially with MED2002, are advancing well, further CSD500 launches in 2018 are planned and we therefore look forward to the year ahead with confidence.
|John Clarke||James Barder|
The financial information set out below does not constitute the Company's full statutory accounts for the year ended 31 December 2017 (or year ended 31 December 2016) but it is derived from those accounts that have been audited. Statutory accounts for 2016 have been delivered to the Registrar of Companies and those for 2017 will be delivered after the forthcoming Annual General Meeting. The independent auditors have reported on those accounts; their report was unqualified, did not include an emphasis of matter statement and did not contain any statements under section 498 of the Companies Act 2006.
|Year ended 31 December 2017||Year ended 31 December 2016|
|Research and development costs||(4,100,453)||(3,509,680)|
|Loss before tax||(4,836,628)||(4,539,359)|
|Loss for the year being total comprehensive loss
attributable to owners of the parent company
|Basic and diluted loss per share (pence)||9||(3.23 pence)||(3.65 pence)|
|At 1 January 2016||198,185||33,053,345||1,152,165||(29,617,464)||4,786,231|
|Total comprehensive loss for the year||-||-||-||(3,697,113)||(3,697,113)|
|Shares issued during the year||16||42,105||11,957,895||-||-||12,000,000|
|Cost of share issue||-||(559,495)||-||-||(559,495)|
|At 31 December 2016||240,290||44,451,745||1,152,165||(33,260,172)||12,584,028|
|Total comprehensive loss for the year||-||-||-||(3,900,284)||(3,900,284)|
|Shares issued during the year||16||1,102||219,651||-||-||220,753|
|At 31 December 2017||241,392||44,671,396||1,152,165||(36,959,195)||9,105,758|
Share premium represents amounts subscribed for share capital in excess of nominal value, less the related costs of share issues.
Merger reserve represents the reserve arising on the acquisition of Futura Medical Developments Limited in 2001 via a share for share exchange accounted for as a group reconstruction using merger accounting under UK GAAP.
Retained losses represent all other net gains and losses not recognised elsewhere.
|Plant and equipment||10||63,517||21,351|
|Total non-current assets||63,517||21,351|
|Trade and other receivables||13||181,076||138,989|
|Cash and cash equivalents||14||8,362,646||12,352,978|
|Total current assets||9,541,382||13,417,854|
|Trade and other payables||15||(499,141)||(855,177)|
|Total net assets||9,105,758||12,584,028|
|Capital and reserves attributable to
owners of the parent company
|Cash flows from operating activities|
|Loss before tax||(4,836,628)||(4,539,359)|
|Share-based payment charge||17||201,261||54,405|
|Cash flows from operating activities before changes in working capital||(4,641,255)||(4,493,421)|
|Decrease in inventories||11||13,228||80,126|
|(Increase) / decrease in trade and other receivables||(42,087)||16,981|
|(Decrease) / increase in trade and other payables||15||(356,036)||101,284|
|Cash used in operations||(5,026,150)||(4,295,030)|
|Income tax received||851,343||997,036|
|Net cash used in operating activities||(4,174,807)||(3,297,994)|
|Cash flows from investing activities|
|Purchase of plant and equipment||10||(55,594)||(7,483)|
|Cash (used in) / generated by investing activities||(36,278)||22,173|
|Cash flows from financing activities|
|Issue of ordinary shares||16||220,753||12,000,000|
|Expenses paid in connection with share issue||-||(559,495)|
|Cash generated by financing activities||220,753||11,440,505|
|(Decrease) / increase in cash and cash equivalents||(3,990,332)||8,164,684|
|Cash and cash equivalents at beginning of year||12,352,978||4,188,294|
|Cash and cash equivalents at end of year||14||8,362,646||12,352,978|
The Notes to the Group Financial Information are contained in the full results which is available to download in PDF format
Page last updated: 14 March 2018