For immediate release 26 April 2022
Futura Medical plc
("Futura" or "the Company")
Full Year Results for the year ended 31 December 2021
Futura Medical plc (AIM: FUM), a pharmaceutical company developing a portfolio of innovative products based on its proprietary, transdermal DermaSys® drug delivery technology and currently focused on sexual health and pain, is pleased to announce its audited results for the year ended 31 December 2021.
MED3000 - Europe and US regulatory
· In April 2021, the Company received its MDR EU Quality Management Certificate for placing MED3000 on the market as a Class 2B medical device also known as European "CE mark approval".
o Futura's breakthrough, topical gel formulation MED3000, will be the first pan-European topical treatment for erectile dysfunction ("ED") available without the need of a doctor's prescription ("OTC").
· The US Food and Drug Administration ("FDA") agreed that an application could be made for MED3000 as a medical device for ED treatment, with a De Novo classification. A number of productive and positive pre-submission meetings with FDA followed during 2021 to discuss existing Phase 3 clinical data, pathway to OTC status and any additional clinical and non-clinical requirements:
o In March 2021 an agreement was reached between FDA and Futura on the detailed clinical study design (protocol) for a small supplemental clinical trial (known as "FM71").
o In August 2021 the FDA confirmed that to enable OTC classification a non-clinical, "Human Factors" study would need to take place to test the ability of subjects to self-diagnose their ED, correctly select the product based on label information and test their ability to correctly use the product without supervision of a doctor. The FDA asked for a minimum of 15 subjects to complete the study.
o On 14 September 2021 the first patient was enrolled in the FM71 confirmatory clinical study. Patient recruitment was completed at the end of 2021 and the study remains on track for US filing by end of Q3 2022.
o In December 2021 Futura announced successful completion of the Human Factors study, with 32 subjects entering the study. Results supported the regulatory submission for OTC designation and will enable Futura to finalise the OTC product label for a US filing expected to be made after FM71 has completed.
o US marketing authorisation remains on track for potential approval of MED3000 in Q1 2023.
MED3000 - Commercial and Manufacturing
· Joint collaboration agreement for China and South East (SE) Asia with 50/50 share of profits signed in March 2021. Initial submissions have been made to the Chinese National Medical Products Association ("NMPA") initially for determination of the regulatory classification of MED3000 in what is expected to be a three year regulatory process.
· In August 2021 Futura entered into a licensing agreement with m8 Pharmaceuticals, Inc ("m8"), a specialty biopharmaceutical company focused on commercialisation in Latin America, for the rights to exclusively develop and commercialise the Company's MED3000, in the key ED markets of Brazil and Mexico.
· In September 2021 Futura signed a licensing agreement with Labatec Pharma ("Labatec"), a Swiss-based specialty pharma Company with expertise in commercialisation in Europe and the Middle East and North Africa ("MENA") region for exclusive rights to commercialise MED3000 in the Gulf Co-operation ("GCC") region, Jordan, Lebanon and Iraq.
· MED3000 manufacturing capabilities expanded in August 2021 with addition of a new third party, FDA, EMA and UK approved manufacturer and extended shelf life to three years, as Futura strengthens resources in the build up towards initial product launches over the next year.
Post period end highlights
· Entered into a period of exclusivity with an, as yet, unnamed party regarding a potential agreement for the EU and UK marketing rights for MED3000.
· In March 2022 Futura signed a commercial licensing agreement for MED3000 in South Korea with A. Menarini Korea Limited, a subsidiary of Italy-based, multinational specialty pharma company Menarini Group.
· In April 2022, the Company received UKCA mark approval following an application in March 2022 to the UK Notified Body for MED3000 as a Class 2A medical device. This is required before end of June 2023 to replace the CE mark approval which currently covers UK according to Brexit legislation.
· In October 2021 management strengthened the Company's Board with additional commercial expertise with the appointment of two Non-Executive Directors, Jeff Needham and Andrew Unitt as Futura moves into the next phase of MED3000's commercialisation.
· Jonathan Freeman stepped down as Senior Independent Non-executive Director on 31 December 2021 having been on the Board of Futura since the IPO in 2003.
· In May 2021 the Company conducted a £12.00 million (gross) fundraise including retail offer.
· £4.96 million net loss in the period (31 December 2020: net loss £2.41 million).
· Cash resources of £10.37 million at 31 December 2021 (31 December 2020: £1.02 million).
· Current cash runway extends beyond initial MED3000 launches expected over the next year and expected US regulatory approval in 2023, assuming no contributions from milestone payments or other revenues.
James Barder, Chief Executive of Futura, commented: "2021 has been a truly exceptional year for Futura and I am proud of the tenacity, determination and dedication of the entire Futura team. We continue to develop our partner distribution network as we build momentum towards bringing MED3000, our unique clinically proven treatment for erectile dysfunction with a rapid onset, to ED sufferers across the world. MED3000 has CE mark approval in Europe and the UK, a major milestone, and we now have four commercial deals in place for MED3000 and are rapidly transforming from a solely R&D focused operation into a high growth, commercial-stage Company poised for sustainable long-term revenues."
Analyst meeting and webcast
The Executive Team will host a webcast of the presentation which will be available within the Investor Centre section of the Futura company website at www.futuramedical.com from 10 am BST on 26 April 2022. The Company will provide an update on the regulatory pathway of MED3000 in the US, manufacturing and commercialisation progress.
Analysts wishing to speak to the Futura management team can register their interest by emailing email@example.com.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit) Regulations 2019. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.
For further information please contact:
Futura Medical plc
James Barder, Chief Executive
Angela Hildreth, Finance Director and COO
Tel: +44 (0) 1483 685 670
Nominated Adviser and Sole Broker:
Richard Lindley/ Phil Walker/ Kane Collings
Tel: +44 (0) 203 100 2000
For media enquiries please contact:
Optimum Strategic Communications
Mary Clark/ Eva Haas/ Hollie Vile
Tel: +44 (0) 203 950 9144
Notes to editors:
About Futura Medical plc
Futura Medical plc (AIM: FUM), is a pharmaceutical company developing a portfolio of innovative products based on its proprietary, transdermal DermaSys® technology. Each DermaSys® formulation is separately patented and specifically tailored for the selected indication and application, as well as being optimised for clinical efficacy, safety, administration and patient convenience. The products are developed for the prescription and consumer healthcare markets as appropriate. Current therapeutic areas are sexual health, including erectile dysfunction, and pain relief. Development and commercialisation strategies are designed to maximise product differentiation and value creation whilst minimising risk.
MED3000 is Futura's topical gel formulation that is a breakthrough treatment for erectile dysfunction (ED) through a unique evaporative mode of action. Futura has conducted a Phase 3 study using MED3000 in ED, referred to as "FM57". This was a 1,000 patient, dose-ranging, multi-centre, randomised, double blind, placebo-controlled, home use, parallel group study delivering highly statistically significant results compared to pre-treatment baseline of IIEF, SEP2 and SEP3 (internationally accepted clinical trial endpoints in ED) with over 60% of patients experiencing a clinically meaningful improvement in their ED. MED3000 also begins to work immediately in some patients, with 60% of patients seeing onset of their erection within 10 minutes of application. MED3000 is CE marked in Europe and the UK as a clinically proven topical treatment for adult men with erectile dysfunction.
Futura is based in Guildford, Surrey, and its shares trade on the AIM market of the London Stock Exchange. www.futuramedical.com
Evolving towards commercialisation from a position of strength
2021 was a landmark year for Futura Medical with its lead product MED3000 gaining EU approval as a clinically proven treatment for erectile dysfunction ("ED") available without the need of a doctor's prescription and rapidly transforming from a solely R&D focused operation into a high growth, commercial-stage Company poised for sustainable long-term revenues. The MED3000 regulatory approval was an exceptional achievement for the Company especially when you consider it was achieved against the backdrop of a global pandemic.
In June 2021, we completed a £12 million fundraise which was supported by our key existing shareholders as well as new shareholders. Importantly, this enables the Company to complete the remaining clinical development activities expected to be required by the FDA to gain approval in the US. The US is the largest potential market by value over the counter ("OTC") with all the well-known oral treatments such as Viagra® and Cialis® requiring a doctor's prescription. The fundraise also strengthened our balance sheet ahead of partnering discussions.
Our commercialisation strategy continues to be to engage with licensing or distribution partners who have extensive local knowledge of their markets, experience of building brands within the pharmaceutical and OTC sector as well as a strong commitment and belief in MED3000. During 2021, we concluded partnering arrangements in China and South East Asia, Latin America, South Korea, and the Gulf region including Jordan, Lebanon and Iraq. Our intentions for US commercialisation are to successfully complete data requirements for the US and submit for US approval before progressing US commercial options.
We continue to bring new skills and experience to our already highly skilled Board. A great deal of thought and focus was placed on expanding the Company's commercial and business expertise with a particular focus on the US. Futura strengthened the Board with the appointment of two Non-Executive Directors, Jeff Needham and Andrew Unitt. Both bring OTC market expertise and exceptional skills in strategic development and business management which will further enhance our ambition and focus on building a global brand and distribution network to accelerate Company growth.
Jeff, who joined the Board in October 2021 brings a wealth of knowledge and experience to the Board having been at Perrigo Company plc, the US-based manufacturer and marketer of consumer healthcare products, for 36 years, and a board director of the Consumer Healthcare Products Association (US) for 11 years. Andrew, who joined the Board on 1 January 2022, brings strong financial experience having spent eleven years at Boots plc, where he was Finance Director for four years of Boots Healthcare International, its over the counter medicines business. Andrew will chair the Audit Committee as Jonathan Freeman's successor, following Jonathan stepping down at the end of 2021.
I would like to take this opportunity to thank Jonathan for his wise counsel and his huge contribution over the years. He has been a highly valued and appreciated member of the Board and the Board is unanimous in thanking him for all his efforts.
The COVID-19 pandemic continued through 2021 and I would like to thank all of Futura's employees for their dedication, hard work and commitment during several lockdowns and for successfully working from home when required in the last twelve months. Finally, I would like to thank our shareholders for their continued support and belief in our strategy for making a commercial success of MED3000.
Chief Executive's Review
Poised for growth and sustainable long-term revenues
2021 has been a year of transformational progress and momentum for Futura as the Company achieved major milestones in terms of first regulatory approval for our lead product, MED3000, as an approved erectile dysfunction treatment ("ED") and completion of a number of commercial MED3000 licensing deals as we continue to build a global distribution platform.
The Company received CE mark approval from the European regulator for MED3000 in April 2021. The product is a breakthrough, fast-acting topical gel formulation for the treatment of ED. MED3000 now has the potential to become the first globally available, clinically proven, over the counter ("OTC") treatment option available to the 1 in 5 men1 that suffer from a variety of severities of ED worldwide, a market that has seen little innovation in the last two decades.
The Company is now preparing for first product launches over the next year and 2023, not just in Europe but also countries where recognition of the CE mark may allow "fast-track" review, importantly making a highly differentiated treatment option accessible and available to ED sufferers without a doctor's prescription. In line with this, recognising how crucial disciplined supply is, we have recruited key quality, manufacturing and supply talent, and are scaling up production to ensure continuity and certainty of supply for launches and future international sales growth.
The US remains the largest market opportunity globally for ED treatments OTC and we are making steady progress towards completing our US Food and Drug Administration ("FDA") regulatory submission for MED3000 and continue to target filing for approval by the end of Q3 2022. We were pleased to announce completion of patient recruitment for our FM71 study (a confirmatory study stipulated by the FDA) at the end of 2021 and reported in December 2021 that the "Human Factors" study was successfully completed, with results able to support the regulatory submission for OTC designation as well as allowing us to finalise the OTC product label for the US filing.
The Board and its commercial advisors believe that post-US-submission with launches underway in other regions is an optimal, key, de-risked inflection point at which to focus on US commercial discussions in earnest to explore all options to capture long-term value and cashflow for shareholders.
2021 also saw the Company begin to execute upon its strategic plan to leverage commercialisation globally with a network of licensing and distribution partners with brand building strength, healthcare credibility and infrastructure and marketing expertise, choosing partners for the development and commercialisation of MED3000 in major markets for ED. In 2021 this covered China, South East Asia, Latin America and the Gulf region in deals structured to capture significant long-term value.
In 2022 to-date we have signed an agreement covering South Korea bringing the total number of MED3000 commercial deals to four and we have also entered into a period of exclusivity with an, as yet, unnamed party regarding a potential agreement for the EU and UK marketing rights for MED3000, although there can be no guarantee that an agreement can be successfully reached at this stage. A further announcement will be made as appropriate.
We look forward to further updates for shareholders during what we believe will continue to be an exciting 2022 for Futura as we prepare for initial launches of MED3000, further commercial agreements and target US regulatory filing by the end of Q3 2022.
Futura's strategy is to leverage its proprietary and tailored DermaSys® transdermal delivery technology to bring innovative products to market in sexual health and pain, bringing new treatment options to patients particularly in areas of significant unmet need. The Company is accumulating critical know-how, particularly in new market segments of sexual health, including OTC treatments for ED, that it aims to leverage commercially as it continues to build a brand franchise around MED3000 and achieve sustainable revenue growth.
DermaSys® - Our proprietary patented transdermal technology platform
Futura's unique patented technology DermaSys® is designed to deliver clinically proven effective medical treatments via the skin.
DermaSys® is a versatile and bespoke technology. Each product gel is uniquely formulated using the DermaSys® platform with volatile solvent component formulations tailored for each product to suit the specific therapeutic indication and desired speed of onset and duration of action. Such targeted delivery offers an optimised profile in terms of dose, onset time and duration of effect as well as an improved safety profile reducing the risk of side effects. Each product is formulated to maximise its benefits for patients and consumers. Each new unique formulation offers the opportunity for additional patent applications and potential patent protection.
MED3000 - Futura's breakthrough, fast-acting topical gel formulation with the potential to become the first globally available, clinically proven, OTC treatment for ED
MED3000 is a formulation of the proprietary technology DermaSys®, for the treatment of ED. MED3000 has the potential to be a highly differentiated product by addressing significant unmet needs, across all patient severities in the multi-billion dollar ED market2, which include rapid speed of onset enabling spontaneity for both partners, significant clinical benefits alongside excellent safety and low side effects and no interactions with alcohol or food as well as providing a potential treatment option for patients contra-indicated from using existing ED therapies.
The prevalence of ED disrupts the lives of at least 1 in 5 men globally1 with around 23 million men suffering ED in the US and 20 million men in the UK, France, Italy, Spain and Germany3. Whereas there has been little innovation in ED treatments for nearly two decades and many patients continue to suffer dissatisfaction with existing treatments, the market continues to evolve especially within the US with the advent of subscription services such as For Hims and Go Roman, and also in the UK with Numan, which offer a branded concierge service for ED prescription medicines online. These subscription services charge a monthly subscription fee, typically in the region of US$50 in return for a doctor's consultation and ten generic 50mg sildenafil tablets per month. This increased affordability of around US$5 per tablet (to the end user) is driving volumes especially in the US which have increased by 85% between 2018 and 20202.
Studies have shown MED3000 to be an effective treatment for ED with an excellent safety profile. MED3000 has a unique evaporative mode of action which the Company believes stimulates nerve endings in the glans penis to cause an erection. MED3000 helps men get an erection within 10 minutes, substantially faster than on-demand oral tablet phosphodiesterase-5 inhibitors ("PDE5i's"), with significant benefits for spontaneous rather than pre-planned sexual intercourse.
Futura's objective of OTC status as a clinically proven treatment for ED for MED3000, particularly in the US, continues to be a top priority given the potential this offers with the difficulties that PDE5i's seem to be encountering in most major markets to get approval for switch from prescription to OTC status. Most recently in January 2022 BfArM's (the Federal Institute for Drugs and Medical Devices in Germany) Expert Committee for Prescription rejected the prescription to OTC reclassification of sildenafil (50mg) for oral use to treat ED. Sildenafil currently has OTC status only in Ireland, New Zealand, Norway, Poland, and the UK.
MED3000 - approved as the first pan-European topical treatment for ED available with OTC status
Futura's breakthrough, fast-acting topical gel formulation MED3000, is the first clinically proven, pan-European topical treatment for adult men with ED available without a doctor's prescription. In April 2021 the Company announced that it received its MDR EU Quality Management Certificate for the placing on the market of a Class 2B medical device known as MED3000 ("CE mark approval").
The CE mark approval of MED3000 from the EU Notified Body paves the way for approval in many countries around the world, including in Latin America, the Middle East, Africa and the Far East regions with many countries considering "fast-track" review based on recognition of the EU CE mark. Due to post-Brexit arrangements, the EU CE mark can be used to market the product in Great Britain until 30 June 2023 by which time a specific UKCA mark has to be obtained. In anticipation of this Futura filed for a UKCA mark for MED3000 as a Class 2A medical device and received approval in April 2022.
US - the largest potential OTC ED market globally
In 2020, the FDA agreed that an application may be made for MED3000 as a medical device for ED treatment, with a De Novo classification. This was followed by a number of productive and positive pre-submission meetings with the FDA during 2020 and 2021 to discuss existing Phase 3 clinical data, pathway to OTC status and any additional clinical and non-clinical requirements.
In August 2021 Futura agreed with FDA the design of a "Human Factors" study to achieve OTC classification. Successful completion of the Human Factors study was announced in December 2021, with 32 subjects recruited. It was demonstrated that individuals are able to correctly self-diagnose ED and to make correct self-selection decisions by considering their own health history and the instructions for use and warnings on the label. Overall, there was a very high degree of comprehension of the label and leaflet to increase confidence that the product will be used appropriately in an OTC setting. These results therefore support the regulatory submission for OTC designation and will enable Futura to finalise the OTC product label for a US filing.
FM71 - US confirmatory clinical study design
In March 2021 Futura announced that it received official minutes from the FDA agreeing the design for a confirmatory clinical trial. FM71 is a Phase 3, 24-week multicentre, comparative, randomised, open-label, home use, parallel group study in 100 subjects with mild, moderate or severe ED. Co-primary endpoints were agreed with FDA as significant improvement with MED3000 from baseline (pre-treatment) ED, and ensuring that the change from baseline is clinically important, defined as at least a 4-unit change on the internationally recognised IIEF-EF scale. Secondary endpoints include FDA agreed criteria to support fast-acting claims, a key product differentiator. Tadalafil 5mg is also included in the study to provide exploratory end-points and inform FDA of the relative benefit and risk of MED3000 versus a currently marketed product.
FM71 was fully recruited by the end of December 2021 using subjects from Eastern Europe and the US. Timelines remain on track to enable planned US regulatory submission by the end of Q3 2022, and for targeting potential US FDA granting De Novo and OTC classification for marketing authorisation in Q1 2023.
2021 saw the Company enter into several commercial licensing deals in major markets for ED.
In March 2021 Futura announced investment into the Company and joint collaboration with Co-High Investment Management Limited ("Co-High") and certain subsidiaries of Atlantis Group to commercialise MED3000 in China and South East Asia.
Futura also announced in August 2021 that it had entered into a licensing agreement with m8 Pharmaceuticals to commercialise MED3000 in Brazil and Mexico, swiftly followed in September by a licensing agreement with Labatec Pharma ("Labatec") for exclusive rights to commercialise MED3000 in the Gulf region, Jordan, Lebanon and Iraq.
In early 2022 Futura entered into its fourth licensing agreement with A. Menarini to commercialise MED3000 in South Korea.
Futura is establishing a network of licensing and distribution partners with strength in brand building, pharmaceutical credibility and regional infrastructure and marketing expertise for long-term distribution of MED3000 across the globe. With multiple commercial agreements to date Futura now has a strong and expanding distribution platform in place for regions outside the key US market. The Board's US commercialisation strategy is to successfully complete data requirements for the US and submit for US approval before progressing US commercial options which is also expected to be reinforced by validation of initial product launches in other countries. Nevertheless Futura has already received a number of inquiries regarding commercialisation opportunities for MED3000 in the US and the Board and its advisors are keeping an open mind on the best options in order to maximise long-term value and sustainable revenues whilst minimising risk for Futura's shareholders.
China and South East Asia - Co-High
In March 2021 Futura entered into £1.5 million convertible debt and £0.5 million of warrants financing transactions with HT Riverwood Multi-Growth Fund ("Riverwood"), a fund managed by Atlantis Investment Management Limited ("Atlantis"), which provided the Company with £2 million in cash. These financial instruments were respectively converted and exercised by Riverwood in March and April 2021 and there are no further amounts outstanding to Riverwood from Futura.
Atlantis is a 100% owned subsidiary of the Atlantis Group and Co-High is a 60% owned subsidiary of the Atlantis Group. Ms Yang Liu, now Atlantis' Chairperson and Chief Investment Officer, acquired the Atlantis Group in 2009.
Additionally, Futura entered into a licensing agreement with Pride Century Ventures, a special purpose vehicle owned by Co-High for the rights to exclusively develop and commercialise the Company's topical, gel-based ED treatment MED3000, in China and South East Asia (the "Region"). Co-High will provide funding currently estimated to be up to £4 million for the expected remaining R&D work required to gain approval of MED3000 throughout the Region. Futura will be entitled to 50% of profits from the commercialisation of MED3000 within the Region including any profits derived from local partner agreements within the Region.
Atlantis is a leading international asset management company with a focus on the Greater China Region and South East Asia. Co-High is a specialist private equity company in the Greater China region and invests in and collaborates with some of the world's most promising companies which are believed to be poised to enter a hypergrowth phase. Healthcare investment and collaboration is targeted at companies with a clear scientific edge who are working to solve the major unmet medical needs of the Greater China region.
Under the terms of the agreement, Futura and Co-High will work together to develop and commercialise MED3000 as a clinically proven OTC treatment for ED throughout South East Asia.
Discussions are being held with the Chinese regulator, the National Medical Products Administration, to clarify the scope of clinical work required to gain approval in China and initial submissions have been made to determine whether MED3000 will be designated a medical device or drug. Current expectations are that a Chinese clinical trial will be required to establish safety as well as efficacy in Chinese men. The Chinese regulatory process is currently expected to take up to three years inclusive of the likely time required to conduct a local clinical trial although more accurate timings can only be given once designation is complete.
Brazil and Mexico - m8 Pharmaceuticals
In August 2021 Futura entered into a licensing agreement for MED3000 with m8 Pharmaceuticals, Inc ("m8"), a specialty biopharmaceutical company focused on commercialisation in Latin America, for the rights to exclusively develop and commercialise MED3000, in Brazil and Mexico.
Under the terms of the agreement Futura and m8 will work together to gain marketing authorisation and commercialise MED3000 as a clinically proven treatment for ED available OTC in Brazil and Mexico, the two biggest countries and healthcare markets in Latin America. The agreement is for an initial term of 15 years.
m8 will be responsible for all costs related to the regulatory approval and marketing of the product. Futura will provide reasonable ongoing technical support for OTC product development and commercialisation. Futura will receive payments on all sales of MED3000 from m8, and up to four milestone payments totalling US$8.5 million based on cumulative sales volumes within the initial term.
Gulf Co-operation Council ("GCC") region and Middle East - Labatec
In September 2021 Futura entered into a licensing agreement with Labatec Pharma ("Labatec"), a Swiss-based specialty pharma Company focused on commercialisation in Europe and the Middle East and North Africa ("MENA") regions, for the rights to exclusively commercialise MED3000 in the GCC region as well as Jordan, Lebanon and Iraq.
Futura is eligible to receive initial upfront payments, as well as undisclosed milestone payments based on regulatory approval. Labatec will pay an agreed price to Futura for the manufacture and supply of MED3000 by Futura's Contract Manufacturing Organisation ("CMO"), plus royalties on all sales. Labatec is responsible for all local MED3000 development and regulatory costs as well as all launch and marketing expenses. The initial licence agreement term is for eight years with the ability to extend for successive two-year terms by mutual consent.
South Korea - A. Menarini Korea Ltd
In March 2022 Futura announced a licensing agreement with A. Menarini Korea Limited ("Menarini") for the rights to exclusively commercialise MED3000 for the treatment of ED in South Korea. A.Menarini Korea Ltd. is a wholly owned subsidiary of the Italian-based specialty pharma Company Menarini Group. Menarini Group is the world's largest Italian biopharmaceutical company with a heritage of over 135 years and over 17,500 employees in more than 140 countries. Menarini Korea possesses the capability to successfully register, launch and commercialise brands in the market, with key strengths in therapeutic areas such as cardiovascular, hemato-oncology/pain, men's health, consumer Health, and specialty/orphan diseases and is a trusted medicines supplier in the region that is ideally placed to market retail products, with local teams that have a deep understanding and experience of the South Korean market.
Futura is eligible to receive initial undisclosed upfront payments and under agreement terms, will support Menarini to gain marketing authorisation and commercialise MED3000 for ED in South Korea. Menarini will be responsible for all costs related to the regulatory approval and marketing of the product in the region including a clinical bridging study, if required. Futura will provide reasonable technical support for product development and commercialisation and provide manufactured product from Futura's CMO at an agreed price.
Futura's team has been significantly strengthened with key recruitment in both supply and manufacturing expertise and additional quality management as the Company moves from R&D to commercial production and supply for its main product. MED3000 manufacturing scale up and production capacity to meet projected demand is progressing well. We are cognisant that good supply discipline is crucial and are also continuing to work on optimising cost of goods.
In August 2021, the Company announced the addition of a new, US FDA, EMA and UK approved contract manufacturer as Futura works towards initial launches of MED3000 over the next year.
Currently, Futura's approved contract manufacturing facilities are located in the UK as well as the EU. The Company is actively exploring additional manufacturing sites, including in the US, to support continuity of supply for future international sales growth as well as the logistical challenges of inter-market sales. Submissions for further regulatory approvals of MED3000 outside Europe have already started through Futura's partners and manufacturing scale up and validation is well advanced as we move towards manufacturing launch supplies.
Futura now has an approved shelf life for MED3000 of three years across all temperature zones an important feature for markets such as the Middle East where ambient temperatures and humidity are much higher than within the UK.
An initial UK patent was filed in December 2019 around MED3000's clinically significant and novel findings shown in FM57 followed by further supplementary UK filings to establish a priority date prior to a Patent Cooperation Treaty ("PCT") and certain non-PCT patent applications in late 2020. The PCT currently has 153 contracting countries where the Company can seek patent protection claiming priority from an original application such as the UK. An application to the European Patent Office was also made in August 2021 for examination and further national applications in line with normal PCT filing procedure will be made in Q2 2022 in those countries considered necessary to protect the commercial interests of MED3000. If national applications are successful this will provide patent protection until 2040.
TPR100 - Topical non-steroidal anti-inflammatory for the treatment of pain and inflammation associated with sprains, strains, bruises and soft tissue rheumatism
TPR100 is partnered for manufacturing and distribution in the UK with Thornton and Ross, one of the UK's largest consumer healthcare companies and a subsidiary of STADA AG.
Following the Medicines and Healthcare products Regulatory Agency's ("MHRA") request for a Phase 3 study to support the improved skin permeation and potential potency of TPR100 including potential superior efficacy claims, Futura has determined that the feasibility of a clinical study that would satisfy the Phase 3 requirements for both UK and US marketing approval will require a US distribution partner prior to the commencement of any Phase 3 programme. The project is currently on hold as the company focuses its resources on its leading asset, MED3000.
CBD100 - Futura's advanced, proprietary DermaSys® formulation for transdermal delivery of cannabidiol
CBD100 is part of a joint venture collaboration with CBDerma Technology Limited aiming to explore the application of Futura's advanced proprietary transdermal drug delivery technology, DermaSys® for delivery of cannabidiol.
CBDerma Technology is a company that was established and funded to specifically exploit the therapeutic potential of cannabis. Cannabidiol is a major component of the cannabis plant and is generally regarded as non-addictive and non-psychoactive, making it ideal for consideration as a topically delivered molecule for local or regional (non-systemic) use. The market for cannabidiol products is growing rapidly. A 2021 report by Reports and Data forecasts that the market for cannabidiol products is forecast to grow from US$3 billion in 2020 to US$15 billion by 2028, at a Compound Annual Growth Rate of 22.6%, during the forecast period. The market is primarily driven by the increase in the usage of cannabidiol in medical applications and consumer products such as supplements, beverages and skin care cosmetics.
Futura's extensive DermaSys® cannabidiol formulation work has demonstrated highly efficient penetration of cannabidiol into and through the skin, superior to an established, marketed, comparator product. Additionally, cannabidiol is known to be unstable with many common excipients. CBD100 was specially formulated to minimise this issue and has shown encouraging early stability work, which is expected to ensure potency is retained during shelf-life. This work resulted in robust intellectual property filings covering various unique aspects of the CBD100 gel formulation.
As the medical and consumer applications of cannabidiol become more and more accepted and the regulatory environment becomes ever clearer a gel that has been formulated using strict pharmaceutical development principles with strong delivery characteristics, stability and high quality continues to be a very attractive commercial proposition when compared to current market incumbents in either cosmetic or more traditional pharmaceutical markets for cannabidiol such as pain and inflammation. Both options are being examined.
Whilst Futura's resources are focused on key asset MED3000, the Company has received interest in CBD100 and continues to explore commercial opportunities for the product with discussions progressing and further validation work being conducted both internally and externally by a potential partner to validate the power of the DermaSys® technology which may result in a commercial agreement and we intend to update shareholders in due course.
Research and Development
Futura is committed to delivering long-term and sustainable value to the Company allowing a long-lasting growth franchise to be built around MED3000 and other DermaSys® formulated products.
Whereas Futura's priority remains the approval and subsequent successful launch of MED3000 in major markets throughout the world, Futura aims to build a significant MED3000 franchise across sexual health by leveraging and expanding its unique knowledge and expertise in underserved and new categories in sexual health, building upon market research already undertaken to identify product extensions and potentially new market segments for an OTC product treating ED. Futura intends, in due course, to commission further in-market research, especially for the US, to identify commercially attractive product line extension opportunities.
The fundraise in May 2021 was pivotal in terms of strengthening the Company's finances and commercial negotiating positions and so the last year has seen Futura achieve considerable milestones both in the evolution of the Company as it approaches a sustainable revenue stream and in terms of bringing closer the availability of MED3000 to men with ED where treatments that meet their needs are lacking. This includes CE mark approval for Europe and the UK as an ED treatment for adult men without the need for a doctor's prescription and multiple commercial licensing deals in large markets for ED in regions such as China and South East Asia, Latin American, the Middle East and South Korea. The Company has also entered into a period of exclusivity with an, as yet, unnamed party regarding a potential agreement for the EU and UK marketing rights for MED3000, although there can be no guarantee that an agreement can be successfully reached at this stage.
Going forward we will continue to gear up manufacturing and supply in line with expected demand ready for first product launches over the next year, having strengthened the Company's team of direct employees and directors in terms of global commercial, quality, manufacturing and supply experience, as well as gain manufacturing regulatory approvals through regional partners to support international expansion beyond 2022.
We are also firmly focused on the US regulatory pathway for MED3000 with the US confirmatory FM71 clinical trial well underway having fully enrolled patients towards the end of 2021 and the short, non-clinical, "Human Factors" study successfully completed to support US OTC designation. Everything is on track for planned MED3000 regulatory dossier submission in the US by the end of Q3 2022 and a potential marketing authorisation in Q1 2023. The US remains the largest potential OTC market for ED and OTC status would be a first in the US, as it is for the majority of countries within the EU, providing ED sufferers with an accessible, new treatment option, for their ED. We look forward to reporting on these important inflection points to shareholders as the year progresses and Futura gathers increasing momentum as it transitions to commercial operations to capture the value of MED3000.
Strengthened balance sheet enabling robust progress towards commercialisation
As outlined in the Chairman's Statement and Chief Executive's Review, during the year Futura focused its financial resources on MED3000, its fast-acting topical treatment for erectile dysfunction ("ED") concentrating on the US path to regulatory submission, and enabling commercialisation through securing licensing and distribution deals with commercial partners to build and grow a worldwide distribution and marketing network.
In March 2021, the Company concluded a funding transaction which resulted in £1.50 million received upon the issuance of convertible loan notes and in April 2021 the Company received an additional £0.50 million following the exercise of warrants by HT Riverwood Fund (part of the Atlantis Group).
In April 2021 the Company was notified that MED3000 had been approved as a Class 2B medical device in Europe and the FDA confirmed that a further, smaller, supplementary study was required for approval in the US. Following a Placing and Retail Offer in June 2021, securing gross proceeds of £12.00 million, this supplementary study (FM71) commenced in July 2021 with recruitment completing in December 2021 and headline data followed by US regulatory submission expected by the end of Q3 2022.
The Company continued to focus its financial and human resources on late stage clinical development of its fast-acting topical treatment for ED and on accelerating progress towards achieving a significant, continuous revenue stream within a few years. No revenue was recognised in the period.
Research and Development costs
Research and Development (R&D) costs for the period ended 31 December 2021 were £3.77 million, compared to £1.93 million for the period ended 31 December 2020. The increase of £1.84 million is reflective of the commencement and recruitment of the FM71 study and focus on manufacturing scale-up activities ahead of anticipated MED3000 launches.
There was no capitalisation of R&D costs in 2021.
Administrative costs were £2.09 million for the period ended 31 December 2021 compared to £1.00 million for the period ended 31 December 2020. This is an increase on the prior year and partly driven by higher costs associated with expansion of the team and resources relating to commercial, manufacturing and supply chain in readiness for launching MED3000 over the next year. In addition, there were some one-off costs incurred relating to fundraising costs and fees associated with negotiating and concluding commercial arrangements for MED3000.
It is expected that an R&D tax credit of £0.91 million will be claimed in respect of 2021 and the cash refund is expected to be received mid-2022 from HMRC.
Loss per share
The basic loss per share for 2021 was 1.83p (2020: 0.99p). Details of the loss per share calculations are provided in Note 10 to the consolidated financial statements.
The cash balance at the end of 2021 was £10.37 million (2020: £1.02 million). Cash burn during the year was £4.39 million (2020: £6.77 million) primarily in relation to the start and execution of the FM71 clinical study, manufacturing scale-up activities associated with MED3000 and other one-off costs associated with fundraising and the conclusion of commercial agreements with MED3000 licensing and distribution partners.
Current cash runway extends beyond initial MED3000 launches expected over the next year and expected US regulatory approval in 2023, assuming no contributions from milestone payments or other revenues.
Finance Director and Chief Operating Officer
Please see link below to Financial Statements
1. EMA, Withdrawal assessment report for Viagra, 2008
2. IQVIA IMS Health, 2020
3. 2021 JSB Partners estimate based on US Census International Programs Population by age groups and "Prevalence of erectile dysfunction: Massachusetts Male Aging Study", 1987 ± 1989 (n=1626); source Kleinman et al. J Clin Epidemiol 2000.