10 September 2024
Futura Medical
plc
("Futura" or the
"Company")
Unaudited interim results for
the six months ended 30 June 2024
Maiden profit and US launch
delivered ahead of market expectations
Futura Medical plc (AIM: FUM), the
consumer healthcare company behind Eroxon®, that
specialises in the development
and global commercialisation of innovative and clinically
proven sexual health products, is pleased to announce its
unaudited interim results for the six months ended 30 June 2024
("H1 2024").
Financial Highlights
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·
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Revenue growth of over 300% to £7.0
million (H1 2023: £1.7million)
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o
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generated from £3.8 million of
product sales (H1 2023: £1.7 million) and £3.2 million following
the recognition of US commercial milestone received in
2023
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·
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Maiden profit after tax of £1.0
million (H1 2023: Operating loss of £2.0 million)
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o
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excluding the non-cash expense
share-based payments charge, profit after tax is £2.3
million
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Strong cash position at 30 June 2024
of £3.9 million (HY2023: £7.8 million) which management anticipates
will be strengthened further by a milestone payment due from Haleon
on US launch in October 2024
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·
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The Board is confident in the outlook for the
remainder of the year and confirms that both revenue and profit
will significantly exceed market expectations* for the full
year
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Operational Highlights
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·
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Successful launches in over ten
countries including key European markets
such as France, Italy and Spain, with further
launches expected in the second half of 2024 in both Europe and
Rest of World
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·
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Two new contract manufacturers in
place to strengthen supply chain and boost capacity
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·
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Extension of licencing agreement
with Cooper to 2029
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·
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Independent consumer studies
validate the strength of Eroxon® and provide valuable
consumer insight
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Post-period end
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·
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Haleon confirms pan-US launch under
the Eroxon® brand with Eroxon® already
available for pre-order online for delivery in October and
availability in stores in the US from October. This triggers the
next milestone payment, which is of a similar scale to the previous
one
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|
·
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M8 Pharmaceuticals, Inc ("M8")
confirms first Latin American country launch in Mexico under the
Eroxon® brand
|
*Note: The Company believes that,
prior to this announcement, market expectations for 2024
performance in terms of revenue and loss after tax were £9.50
million and £2.63 million respectively.
James Barder, Chief Executive Officer,
commented:
"It is a significant milestone to be able to
announce our first profit, a year after the initial pilot launch of
Eroxon®, and well ahead of market expectations. We
believe that this is just the beginning for Eroxon®, our
highly differentiated treatment for erectile dysfunction which
helps users get an erection within ten minutes, as we look to build
a new product and new category within the underserved sexual health
market.
"In the past year, Futura has transitioned from a loss-making
R&D business to a profitable consumer healthcare company. This
is a tremendously proud moment for me and the entire Futura
team.
"We look forward with excitement to the second half of 2024
with further launches already underway for Eroxon® and
in particular the launch in the US, the largest consumer healthcare
market in the world, by our distribution partner
Haleon."
Investor Presentation
The Company will be hosting a
webinar for retail investors via the Investor Meet Company platform
on 10 September 2024, at 9:00am BST. Investors can register for the
presentation via the following link: https://www.investormeetcompany.com/futura-medical-plc/register-investor
Contacts:
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Futura Medical plc
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James Barder
Chief Executive Officer
Angela Hildreth
Finance Director and COO
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investor.relations@futuramedical.com
+44 (0)1483 685 670
www.futuramedical.com
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Panmure Liberum
Nominated Adviser
and Broker
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Emma Earl, Will Goode, Mark
Rogers (Corporate Finance)
Rupert Dearden (Corporate
Broking)
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+44 (0)20 3100 2000
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Stifel
Joint Broker
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Alan Selby
Ben Maddison
Ben Good
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+44 (0)207 710 7600
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Alma Strategic Communications
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Rebecca Sanders-Hewett
Sam Modlin
Will Ellis Hancock
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+44 (0)20 3405 0205
futura@almastrategic.com
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Notes to Editors:
Futura Medical plc (AIM: FUM) is the
developer of innovative sexual health products, including lead
product Eroxon®. Our core strength lies in our research,
development and commercialisation of topically delivered gel
formulations in sexual health products.
Eroxon®, Futura's
clinically proven lead product, has been developed for the
treatment of Erectile Dysfunction ("ED"). The highly
differentiated product, which is the only topical gel treatment for
ED available over the counter and helps men get an erection in ten
minutes, addresses significant unmet needs in the ED
market.
ED impacts around 20% of men
globally across all adult age brackets, with approximately 50% of
all men over 40 experiencing ED and around 25% of all new diagnoses
being in men under 40.
Futura has distribution partners in
place in a number of major consumer markets including Haleon in the
US, the largest consumer healthcare market in the world, and Cooper
Consumer Health in Europe. Eroxon® has been nominated
for a number of healthcare industry awards and has won several
to-date.
Forward-looking statements
This document contains certain projections and other
forward-looking statements with respect to the financial condition,
results of operations, businesses, and prospects of Futura. The use
of terms such as "may", "will", "should", "expect", "anticipate",
"project", "estimate", "intend", "continue", "target" or "believe"
and similar expressions (or the negatives thereof) are generally
intended to identify forward-looking statements. These statements
are based on current expectations and involve risk and uncertainty
because they relate to events and depend upon circumstances that
may or may not occur in the future. There are a number of factors
that could cause actual results or developments to differ
materially from those expressed or implied by these forward-looking
statements. Any of the assumptions underlying these forward-looking
statements could prove inaccurate or incorrect and therefore any
results contemplated in the forward-looking statements may not
actually be achieved. Nothing contained in this document should be
construed as a profit forecast or profit estimate. Investors or
other recipients are cautioned not to place undue reliance on any
forward-looking statements contained herein. Futura undertakes no
obligation to update or revise (publicly or otherwise) any
forward-looking statement, whether as a result of new information,
future events or other circumstances.
Chief Executive's Review
A period of continued
progress
The first half of 2024 has seen us
build upon the progress achieved in 2023, in which we delivered our
first meaningful revenues from our lead product Eroxon®.
I am delighted to be reporting on a period that has seen us declare
our maiden profit, a significant milestone for both the Company and
its shareholders, whilst delivering further revenue
growth.
Eroxon® initially
launched in early Q2 2023 in two markets and is now on sale in more
than ten countries, including many key EU markets. To be able to
walk into leading Pharmacy and Health retailers across Europe, see
our product on the shelves, and be able to purchase it without the
need for a prescription, is testament to the progress we have made.
Each launch has provided insightful learnings to our distribution
partners which we are able to build upon and continue to execute
against our key priorities and help improve future launches and
rollouts in what is an exciting new category in most
countries.
Post-period end, we were pleased to
announce that Haleon had confirmed that it expected
Eroxon® to be available in the US before the end of this
year. As announced in late August, as of 1 September
2024, Eroxon® is
available for pre-order online for delivery in October and will
also be available in stores at the same time, a major milestone on our journey to addressing the growing
needs within the over-the-counter ("OTC") sexual health market. The
US launch in turn triggers the next milestone payment which the
Company will receive from Haleon.
Delivering further revenue
growth and maiden period of profit
In the period, not only did revenue
grow by over 300% but importantly, we delivered our maiden profit.
Revenue was made up of significantly increased product sales ,as
the European roll-out continued and key territories were launched
in the period, as well as recognition of the US commercial
milestone received in 2023. Our cash position is robust and will
enable us to execute on the global commercialisation of
Eroxon®.
Eroxon®, a
disruptive product
Erectile dysfunction ("ED") should
not be underestimated. Globally it impacts approximately 20% of
men1, affecting all age ranges, with approximately 50%
of men over 40 experiencing ED2 and around 25% of new
diagnoses being in men under 403. Moreover, with a
globally ageing population, this is a large market that is expected
to continue to grow. Research shows this is an under-served market
with the majority of those affected yet to be diagnosed, whilst
within the cohort that have been diagnosed, there is a high
proportion that are not on treatment or stop treatment after one
year. Our market research shows slow onset of action, side effects,
ease of access and costs as the main sources of their
dissatisfaction with current treatment
options4.
Our lead product,
Eroxon®, addresses many of these needs. Clinically
proven, it is the only topical gel treatment for ED available OTC
and helps men get an erection in ten minutes. As a "drug-free"
treatment it is absent of the many side-effects associated with
alternative therapies. Cost and embarrassment can be a blocker to
seeking a solution to ED, particularly in many parts of the world
where ED still holds a significant stigma within society.
Eroxon®, is a clinically proven treatment available
without the need of consulting with a doctor or healthcare
practitioner ("HCP"), reducing the need for consultation fees and
significantly improving ease of access for men and their
partners.
The treatment of ED in the form of
Eroxon® is a new OTC category in most countries where
current first line treatment options are predominantly PDE5i's
which require a prescription. As expected and as with any major new
OTC category, whilst this represents a major business opportunity
there are normal challenges in building brand awareness and
educating consumers in the best use of the product without the
direction of an HCP. Also, social, cultural and buying habits are
different from one country to the next which will all influence
sales uptake with patterns varying by country, something not always
easy to predict. Nevertheless, we are very pleased with the overall
performance of the launches of Eroxon® so far with the
product being well received and key learnings being assimilated as
we roll out into new geographies to ensure a sustainable and
profitable business going forwards.
To identify key learnings, our
distribution partners, who pay for and are responsible for all
advertising and promotional spend, have independently conducted
four "home-user" studies with over 600 users to validate the
strength of the proposition. This has confirmed results that are
aligned with the Eroxon® clinical efficacy data (>60%
success rate) and provided real world evidence to further refine
the marketing positioning. This is to augment the early repurchase
information from the UK which is notoriously difficult to estimate
with men and their partners able to purchase the treatment as well
as over 5,000 different retail outlets (which don't necessarily
track individual purchases) but we believe to be in the region of
15% to 20%. The UK is also the only major country where PDE5i's;
Viagra Connect and Cialis Together are classified as OTC presenting
a highly competitive market which may impact the repurchase rate.
This contrasts with the United States and the majority of EU member
countries where no PDE5i products are available OTC.
Latest market research has
highlighted some interesting learnings to augment consumer
education and product positioning:
|
·
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Futura's clinical studies showed
that Eroxon® used as part of foreplay improved
satisfaction / efficacy by around 30% yet only one in two men are
using Eroxon® as part of foreplay
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·
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Satisfaction levels are higher in
men less than 60 years old and especially in the 30 to 45 age
group
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·
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Satisfaction levels are also higher
between couples rather than in single men using Eroxon®
on a date or solo use
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·
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With PDE5i treatments, men are used
to trying to pre-empt when they are going to have sex and
consequently, we are seeing one in five of men unnecessarily
adopting the same approach with Eroxon®, rather than
using the treatment spontaneously or indulging in
foreplay
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·
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Men frequently seek prescriptions
for the maximum PDE5i dosage and then cut the tablet in two to
optimise value. Again, we are seeing some men adopting the
same economic approach with Eroxon® and not using the
entire contents of the single dose Eroxon®
tube
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·
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Side effect profile remains
extremely low with a reported incidence rate of less than one in
14,000 packs with all side effects that have been reported are
non-serious.
|
It is important that these learnings
are absorbed and acted upon, making each launch and the continuous
marketing campaigns, utilising both social media and traditional
marketing methods more effectively as our distribution partners
continue to build awareness and brand value.
In the category where there has been
little innovation in two decades, education is needed for consumers
and HCPs, and we expect to gain further knowledge from additional
launches that will then enable us and our partners to continuously
refine our approach as we progress with further market expansion
across the globe.
Continued progress against
our key priorities
2023 saw us move from a pre-revenue
R&D company to a business with first meaningful revenues being
generated from commercial sales of Eroxon®. This was a
significant step forward and therefore, as announced at our last
set of results, it felt appropriate to refine our strategy as
follows:
To
commercialise innovative and clinically proven products for the OTC
sexual health market. We will partner with leading consumer
healthcare partners who are well resourced to commit
significant marketing spend and expertise to engage effectively
with consumers.
This approach is aligned with the
demographic changes of ageing populations, increasing prosperity
and the expectation of people to lead a full and active life no
matter their age.
With our proven innovative R&D
team, we will look to fulfil the needs of the large, underserved
OTC sexual health market.
As previously disclosed, we are now
reporting against three strategic pillars:
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1.
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Address the growing needs within the
OTC sexual health market
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2.
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Broaden the Company's clinically
proven product range leveraging its innovative and experienced
R&D capability whilst being mindful of costs and focusing on
ROI.
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3.
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Commit to delivering strong returns
for shareholders, sustained profitability and financial
discipline
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In our 2023 Annual Report we set out
three priorities for the year ahead, and I am delighted to say that
we have made good progress in line with these so far, with more to
come in the second half of the financial year.
As a reminder, our priorities for
2024 were:
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Address - Address
worldwide demand for Eroxon® through strengthening
our supply chain and commercial network whilst achieving further
regulatory approvals and further launches across the
world
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Broaden - Explore other
range extensions as well as new innovative products within the
sexual health category to meet further unmet demand, supported by
clinical data whilst remaining mindful of costs
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Commit - Deliver further
revenue growth and progress on the path towards profitability in
the next 12 months
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Address:
In April, we stated that we expected
to have commenced full launches in at least ten countries including
key European markets such as France, Italy and Spain during the
first half of 2024, and I am pleased to confirm that these launches
have successfully taken place alongside our partner Cooper Consumer
Health.
In what is a major milestone for
Futura, Haleon has confirmed that Eroxon® is now
available to pre-order online and will be available throughout all
major US retailers next month. As is the case with all our
distribution partners Haleon will both fund and be responsible for
all advertising and promotional activities related to the launch
and marketing of the product in the US. We believe Haleon, with its
strong capabilities in brand-building and marketing through an
unrivalled breadth of channels, as well as its connections and
market reach, makes the ideal partner to introduce
Eroxon® to the millions of men with ED in the
US.
We are working closely with our
distribution partner for the Middle East, Labatec Pharma, who has
launched in two markets. Nevertheless, they face some challenges to
the acceptance of Eroxon® predominantly due to the
existing widespread availability of highest dose PDE5i's within the
region as well as the cultural approach to their use.
Our distribution partner for Central
and Latin America, M8, in the past month commenced a digital launch
in Mexico which will be followed up shortly with an in store roll
out across the country.
In Korea, the regulators the
Ministry of Food and Drug Safety ("MFDS") were looking to classify
Eroxon® as a drug which would have likely entailed
additional clinical studies. This was not considered a
priority for us at the moment considering the cost of any
additional clinical study in relation to the size of the
opportunity South Korea represents. We have therefore decided not
to progress in this market for the time being and by mutual
agreement have agreed with Menarini to terminate our single country
agreement
Discussions are progressing well in
several other key Asian markets with potential commercial partners.
Mindful of the regulatory stance adopted by the MFDS we are
clarifying the regulatory pathway in the applicable countries
before we finalise terms and will update shareholders in due
course.
To ensure that we have a robust
supply chain in place, which is able to provide greater supply
certainty, as well as additional capacity based on both Futura and
distribution partners' sales projections, we have commenced working
with two new contract manufacturers ("CMO"), one located in the US
and the other in the EU to supply product to our commercial
partners. These supply chain partners will be central to the
long-term success of the product, and we are working closely with
them to deliver continuity of supply, with a product of high
quality at the lowest cost possible. Production previously supplied
from a UK CMO has now ceased.
We continue to progress both our
patent grants and trademark registrations ("IP") across the world's
key markets. The initial interest and success of the
Eroxon® launches is perhaps reflected in the fact that
to-date the company retained by Futura to protect our IP interests
has so far taken down over 1,200 sites that have been selling
product that has been infringing our rights. We will not only
continue to develop new IP of value for shareholders but will
aggressively protect what we have already established.
Broaden
We believe that having follow-on
brand extensions and new products within the OTC sexual health
category is vital to demonstration both innovation and provide
long-term growth. As such, we are exploring other range extensions
as well as new innovative products within the sexual health
category to meet further unmet demand, supported by clinical data
whilst remaining mindful of costs. Proof of concept work is
underway and assuming this progresses well we expect to provide
shareholders more information by the end of 2024.
Commit
We are proud to have announced our
maiden profit a year after delivering our first revenues and we
will continue to drive growth as well as R&D innovation. In
this early stage of launches, whilst we expect growth, it will not
be a matter of simply multiplying the prior periods together and
will vary period on period. This is due to new launches, the
recognition of milestone payments, channel fill, different revenue
models with our partners as well as different cultural and
regulatory challenges from one country to the next. We are
committed to driving significant growth and have an exceptionally
important period ahead which will provide us with a platform for
further growth and profits in the years ahead.
Looking ahead with
confidence
H1 2024 has been another progressive
period for Futura, delivering significant revenue growth and our
first period of profitability. We have also continued to execute in
line with our strategy and we are well on our way to successfully
commercialising Eroxon® across the globe.
Over the next six weeks we will
deliver on a key milestone in the Company's history, launching in
the US, and we are extremely excited to see the reaction in the
market to Eroxon®. We will update shareholders in due
course on the first phase of the US launch.
With first mover advantage already
showing its benefit, alongside the size of the target market and
the continuous progress we are making, we look forward to the year
ahead with growing confidence.
James Barder
Chief Executive Officer
Sources:
1. EMA, Withdrawal assessment report for Viagra,
2008
2. Feldman HA et al. J Urol 1994; 151: 54 -
61
3. Pozzi, J of Sexual Medicine, Volume 20,
2022,
4. Ipsos research carried out on behalf of Futura in the
US, 2022
Financial Review
Futura has transitioned from a
pre-revenue R&D company to a consumer healthcare product
company with significant commercial sales. It is extremely pleasing
therefore to report that we are now profitable, cash generative and
we have sufficient cash on our balance sheet to allow us to
continue the global commercialisation of
Eroxon®.
In the first half of 2024 we made
important decisions to invest in protecting our supply chain to
ensure flexibility and continuity of supply. This investment will
continue into mid-2025 and whilst this has resulted in a slight
decrease in margin in H1 2024 and some additional exceptional
General & Administrative costs which will continue into 2025,
we believe this was an important step, at the right time in our
journey, to ensure we are protected and well invested to handle the
capacity needs in the period ahead.
Revenue
Total revenues reported of £7.0
million (H1 2023: £1.7 million) representing an increase of over
300%. Revenue was generated from product sales of £3.8 million (H1
2023: £1.7 million) and recognition of a commercial milestone
payment received in 2023 of £3.2m (H1 2023: nil)
Reported product sales of
Eroxon® for the half year were up 130% to £3.8 million
(H1 2023: £1.7 million) as the European roll-out continued and key
territories were launched in the period including France, Italy,
Spain and Portugal. Product revenues in newly launched territories
always include an element of channel fill so are not always an
accurate representation of product sales in the initial stocking
period. As our commercial distributors continue to roll out
launches across further countries, it will remain challenging to
predict exact timing of revenues and royalties especially given
non-linear nature of channel fill and launch timelines.
Neverthless, we expect further launches in the second half of 2024
and will provide updates as appropriate.
In July 2023, the group signed an
exclusive commercial agreement with Haleon to commercialise
Eroxon® in the USA and an upfront payment of £3.2
million (US$4.0 million) was received in 2023 upon execution of the
agreement. As previously disclosed, the payment was recognised in
the current period. Further milestone payments are expected as this
relationship progresses, alongside royalty payments on all sales by
Haleon.
Post-period end Haleon confirmed the
pan US launch under the Eroxon® brand would be going
live in October 2024, with online pre-ordering already available.
This triggers the next milestone payment, which is of a similar
scale to the previous milestone payment, and is recognisable upon
receipt in 2024.
Cost of Sales
Cost of sales rose by 175% to £2.2
million (H1 2023: £0.8 million) reflecting the rise in sales
volumes. Gross profit on Eroxon® sales increased
by 90% to £1.7 million (H1 2023: £0.9 million) Gross profit margins
on Eroxon® sales reduced to 44% (H1 2023: 54%)
reflecting, as previously disclosed, an increase in manufacturing
costs in order ensure we meet increased capacity requirements,
which is expected to normalise in 2025.
Operational costs
Total operational costs were £4.0
million (H1 2023: £2.9 million) and comprised of research and
development costs of £0.6 million (H1 2023: £0.8 million) and
operating expenses of £3.4 million (H1 2023: £2.1 million) which
included non-cash share-based payments charge of £1.3 million (H1
2023: £0.7 million) with the remaining rise in costs predominantly
relating to the short-term investment into supply chain,
investment required to increase manufacturing capacity and
ensure continuity of supply. Other core operating costs remain
relatively static.
Research and development costs
Research and Development ("R&D")
costs for the period were in line with those at the 2023 year-end
(£2.1 million) reflecting the focus shifting towards
commercialisation of Eroxon® as headcount costs are now
allocated to administrative expenses. In the second half of the
financial year these are expected to increase slightly as we
commence some proof-of-concept projects on new products.
Profit after tax
Total profit after tax for the
period was £1.0 million (H1 2023: loss after tax £1.8 million).
Excluding non-cash share-based payments, profit after tax would be
£2.3 million (H1 2023: loss after tax £1.1 million)
Cash
The cash balance as at 30 June 2024
was £3.9 million (H1 2023: £7.8 million) reflecting normal working
capital requirements, the investment into manufacturing and the US
commercial milestone which was received in 2023 but recognised in
H1 2024.
Overall, management remain confident
to exceed expectations for the full year to 31 December
2024.
Going concern
The Directors have prepared the
financial statements on a going concern basis.
The information
communicated in this announcement contains inside information for
the purposes of Article 7 of the Market Abuse Regulation (EU) No.
596/2014 as amended by the Market Abuse (Amendment) (EU Exit)
Regulations 2019.
Consolidated
Statement of Comprehensive Income
For
the six months ended 30 June 2024
|
|
|
Unaudited
6 months
ended
30 June
2024
|
Unaudited
6 months
ended
30
June
2023
|
Audited
year
ended
31
December
2023
|
|
|
Notes
|
£
|
£
|
£
|
|
Revenue
|
|
7,000,693
|
1,703,447
|
3,100,968
|
|
Cost of Goods
|
|
(2,180,023)
|
(794,386)
|
(1,326,743)
|
|
Gross profit
|
|
4,820,670
|
909,061
|
1,774,225
|
|
Research and development
costs
|
|
(609,294)
|
(819,474)
|
(2,045,988)
|
|
Administrative costs
|
|
(3,391,674)
|
(2,048,659)
|
(6,692,007)
|
|
Operating profit/(loss)
|
|
819,702
|
(1,959,072)
|
(6,963,770)
|
|
Finance income
|
|
46,939
|
-
|
71,797
|
|
Profit/(loss) before tax
|
|
866,641
|
(1,959,072)
|
(6,891,973)
|
|
Taxation
|
10
|
135,000
|
200,000
|
379,074
|
|
Total comprehensive profit/(loss) for the period attributable
to owners of the parent company
|
|
1,001,641
|
(1,759,072)
|
(6,512,899)
|
|
|
|
|
|
|
|
Basic profit/(loss) per share
(pence)
|
5
|
0.33
|
(0.61)
|
(2.21)
|
|
Diluted profit/(loss) per share
(pence)
|
5
|
0.32
|
(0.61)
|
(2.21)
|
Consolidated
Statement of Financial Position
As
at 30 June 2024
|
|
|
Unaudited
30 June
2024
|
Unaudited
30 June
2023
|
Audited
31 December
2023
|
|
|
Notes
|
£
|
£
|
£
|
|
Assets
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Plant and equipment
|
|
3,248,057
|
1,099,640
|
2,484,748
|
|
Total non-current assets
|
|
3,248,057
|
1,099,640
|
2,484,748
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Inventories
|
|
140
|
809
|
339
|
|
Trade and other
receivables
|
6
|
1,795,635
|
1,070,366
|
1,240,174
|
|
Current tax asset
|
|
501,910
|
197,836
|
376,910
|
|
Cash and cash equivalents
|
7
|
3,920,326
|
7,838,889
|
7,714,182
|
|
Total current assets
|
|
6,218,011
|
9,107,900
|
9,331,605
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
8
|
(1,657,291)
|
(2,195,326)
|
(6,339,534)
|
|
Total liabilities
|
|
(1,657,291)
|
(2,195,326)
|
(6,339,534)
|
|
Total net assets
|
|
7,808,777
|
8,012,214
|
5,476,819
|
|
|
|
|
|
|
|
Capital and reserves attributable to
owners of the Parent Company
|
|
|
|
|
|
Share capital
|
11
|
603,727
|
598,143
|
602,812
|
|
Share premium
|
|
71,091,260
|
70,930,527
|
71,068,945
|
|
Merger reserve
|
|
1,152,165
|
1,152,165
|
1,152,165
|
|
Retained losses
|
|
(65,038,375)
|
(64,668,621)
|
(67,347,103)
|
|
Total equity
|
|
7,808,777
|
8,012,214
|
5,476,819
|
Consolidated Statement of Cash Flows
For
the six months ended 30 June 2024
|
|
Unaudited
6 months
ended
30
June
2024
|
Unaudited
6
months
ended
30 June
2023
|
Audited
year
ended
31 December
2023
|
|
|
£
|
£
|
£
|
|
Cash flows from operating activities
|
|
|
|
|
Profit/(loss) before tax
|
866,641
|
(1,959,072)
|
(6,891,973)
|
|
Adjustments for:
|
|
|
|
|
Depreciation
|
59,411
|
65,282
|
130,272
|
|
Loss on disposal of fixed
assets
|
513
|
-
|
48,865
|
|
Finance Income
|
(46,939)
|
-
|
(71,797)
|
|
Share-based payment
charge
|
1,307,087
|
644,952
|
2,720,297
|
|
Cash flows generated by/(used in) operating activities before
changes in working capital
|
2,186,713
|
(1,248,838)
|
(4,064,336)
|
|
|
|
|
|
|
Decrease / (increase) in
inventories
|
200
|
(809)
|
(339)
|
|
Increase trade and other
receivables
|
(555,461)
|
(804,682)
|
(974,490)
|
|
(Decrease) / increase in trade and
other payables
|
(4,682,240)
|
442,217
|
4,586,424
|
|
Cash used in
operations
|
(3,050,788)
|
(1,612,112)
|
(452,741)
|
|
|
|
|
|
|
Income tax received
|
-
|
1,024,994
|
1,022,994
|
|
Net
cash generated by/(used in) operating activities
|
(3,050,788)
|
(587,118)
|
570,253
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
Purchase of plant and
equipment
|
(823,233)
|
(6,886)
|
(1,505,849)
|
|
Interest received
|
46,939
|
-
|
71,797
|
|
Cash used in investing activities
|
(776,294)
|
(6,886)
|
(1,434,052)
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
Issue of ordinary shares
|
23,230
|
4,406,781
|
174,868
|
|
Exercise of warrants
|
-
|
-
|
4,375,000
|
|
Cash generated by financing
activities
|
23,230
|
4,406,781
|
4,549,868
|
|
|
|
|
|
|
(Decrease)/ Increase in cash and cash
equivalents
|
(3,803,852)
|
3,812,777
|
3,686,069
|
|
Cash and cash equivalents at beginning of
period
|
7,714,182
|
4,026,112
|
4,026,112
|
|
Net foreign exchange
differences
|
9,996
|
-
|
2,001
|
|
Cash and cash equivalents at end of period
|
3,920,326
|
7,838,889
|
7,714,182
|
Notes to the Consolidated Interim Financial
Statements
For
the six months ended 30 June 2024
1. Corporate
information
The interim condensed consolidated
financial statements of Futura Medical plc and its subsidiaries
(the "Group") for the six months ended 30 June 2024 were authorised
for issue in accordance with a resolution of the Directors on 9
September 2024. Futura Medical plc (the "Company") is a public
limited company incorporated and domiciled in the United Kingdom
and whose shares are publicly traded on the AIM Market of the
London Stock Exchange. The registered office is located at Surrey
Technology Centre, 40 Occam Road, Guildford, Surrey, GU2
7YG.
The Group is principally engaged in
the development and sale of pharmaceutical and healthcare
products.
2. Accounting
policies
The accounting policies applied in
these interim financial statements are consistent with those of the
annual financial statements for the year end 31 December 2023, as
described in those financial statements except for the new
accounting policies described below.
These condensed interim
consolidated financial statements for the six months ended 30 June
2024 and for the six months ended 30 June 2023 do not constitute
statutory accounts within the meaning of section 434(3) of the
Companies Act 2006 and are unaudited.
The Group's financial information
for the year ended 31 December 2023 has been extracted from the
financial statements of the statutory accounts ("Annual Report") of
Futura Medical plc, which were prepared by the Directors in
accordance with UK-adopted International accounting standards
("IFRS") in conformity with the requirements of the Companies Act
2006 that were applicable for the year ended 31 December 2023 and
does not constitute the full statutory accounts for that period.
The Annual Report for 2023 has been filed with the Registrar of
Companies. The Independent Auditor's Report on those financial
statements was unqualified and did not contain a statement under
Section 498 (2) or (3) of the Companies Act 2006; though it did
include a reference to a matter to which the Independent Auditor
drew attention by way of emphasis without qualifying their report
in relation to going concern. It does not comply with IAS 34
Interim financial reporting, as is permissible under the rules of
AIM.
3. Estimates and
judgements
The preparation of the interim
condensed consolidated financial statements in conformity with IFRS
requires management to make certain estimates, assumptions and
judgements that affect the application of
accounting policies and the reported amounts of assets and
liabilities and the reported amounts of income and expenses in the
period.
Critical accounting estimates,
assumptions and judgements are continually evaluated by the
Directors based on available information and experience. As the use
of estimates is inherent in financial reporting actual results
could differ from these estimates.
Going concern
The Group has reported a profit
after tax for the six months ended 30 June 2024 of £1.00 million
(six months ended 30 June 2023: loss of £1.76 million, year ended
31 December 2023: loss of £6.51 million). The Group holds cash
balances of £3.92 million at 30 June 2024 (30 June 2023: £7.84
million, 31 December 2023: £7.71 million).
The Directors have considered the
applicability of the going concern basis in the preparation of the
financial statements. This includes the review of internal budget,
financial results and cashflow forecasts for the 12 months' period
following the date of signing the financial statements. These
forecasts show that the Group has sufficient funds to allow the
business to continue in operations for at least 12 months from the
date of approval of these financial statements.
Based on the above factors the
Directors believe that it remains appropriate to prepare the
financial statements on a going concern basis. The financial
statements do not include any adjustments that would result from
the basis of preparation being inappropriate.
Share-based payments
The Group operates an
equity-settled share-based compensation plan for employee (and
consultant) services to be received and the corresponding increases
in equity are measured by reference to the fair value of the equity
instruments as at the date of grant. The fair value determination
is based on the principles of the Black-Scholes model, the inputs
of which uses an input of volatility based on historical data.
Historical volatility may not be indicative of future volatility,
yet the Directors judge this to be the most appropriate method of
calculation. Given the share option expense of £1.31 million for
the six months ended 30 June 2024 (six months ended 30 June 2023:
£0.64 million, year ended 31 December 2023: £2.72 million), the
volatility method used is not expected to have a material impact on
these financial statements. Details
of the fair value calculation for options granted during the
period, including other inputs into the Black-Scholes model, are
disclosed in Note 13.
R&D tax credits
The current tax receivable
represents an estimate of the anticipated R&D tax credit in
respect of claims not yet submitted for the 2024 financial year.
The final receivable is subject to the correct application of
complex R&D rules and HMRC approval. Historically, claims have
been successful, and the Group expects the current year to be
successful too.
4. Segment
reporting
The Group is focussed on the
development and commercialisation of Eroxon® and therefore operates
as one segment. The Group derives revenue from the transfer
of goods and services over time and at a point in time in the
following geographical split:
|
|
|
|
|
|
|
Unaudited
30 June
2024
|
Unaudited
30 June
2023
|
Audited
31 December
2023
|
|
|
£
|
£
|
£
|
|
|
|
|
|
|
EU and UK
|
2,759,209
|
1,703,447
|
2,725,475
|
|
Rest of world
|
1,014,830
|
-
|
375,493
|
|
USA
|
3,226,654
|
-
|
-
|
|
|
7,000,693
|
1,703,447
|
3,100,968
|
|
|
|
|
|
|
Unaudited
30 June
2024
|
Unaudited
30 June
2023
|
Audited
31 December
2023
|
|
|
£
|
£
|
£
|
|
|
|
|
|
|
Revenue recognised at a point in
time
|
7,000,693
|
1,703,447
|
3,044,075
|
|
Revenue recognised over
time
|
-
|
-
|
56,893
|
|
|
7,000,693
|
1,703,447
|
3,100,968
|
|
|
|
|
|
|
|
|
|
5. Profit/Loss per share
(pence)
The Group reports basic and diluted
earnings per common share. Basic earnings per share is calculated
by dividing the profit attributable to common shareholders of the
Company by the weighted average number of common shares outstanding
during the period.
Diluted earnings per share is
determined by adjusting the profit attributable to common
shareholders by the weighted average number of common shares
outstanding, taking into account the effects of all potential
dilutive common shares, including share options and the issue of
shares under the long-term incentive share option scheme to the
extent that they are deemed to be issued for no consideration in
accordance with IAS 33.
Where a loss is attributable to
equity holders of the Company, the calculation of the fully diluted
loss per share is identical to that used for calculating the basic
loss per share. The exercise of share options, or the issue of
shares under the long-term incentive share options scheme, would
have the effect of reducing the loss per share and is therefore
anti-dilutive under the terms of IAS 33 'Earnings per
Share'.
|
|
Unaudited
30 June
2024
|
Unaudited
30 June
2023
|
Audited
31 December
2023
|
|
|
£
|
£
|
£
|
|
|
|
|
|
|
Total comprehensive income
attributable to the owners of the company
|
1,001,641
|
(1,759,072)
|
(6,512,899)
|
|
Weighted average number of
shares
|
301,503,380
|
288,974,155
|
294,912,404
|
|
Basic profit/(loss) per share (pence)
|
0.33
|
(0.61)
|
(2.21)
|
|
|
|
|
|
|
Total comprehensive income
attributable to the owners of the company
|
1,001,641
|
(1,759,072)
|
(6,512,899)
|
|
Weighted average number of
shares
|
301,503,380
|
288,974,155
|
294,912,404
|
|
Dilutive effect of share
options
|
15,933,376
|
-
|
-
|
|
Weighted average number of diluted
shares
|
317,436,756
|
288,974,155
|
294,912,404
|
|
Diluted profit/(loss) per share (pence)
|
0.32
|
(0.61)
|
(2.21)
|
6. Trade and other
receivables
|
|
Unaudited
30 June
2024
|
Unaudited
30 June
2023
|
Audited
31 December
2023
|
|
|
£
|
£
|
£
|
|
Amounts receivable within one year:
|
|
|
|
|
Trade receivables
|
1,338,899
|
994,742
|
1,147,709
|
|
Other receivables
|
247,225
|
10,440
|
-
|
|
Financial assets
|
1,586,124
|
1,005,182
|
1,147,709
|
|
Prepayments
|
209,511
|
65,184
|
92,465
|
|
|
1,795,635
|
1,070,366
|
1,240,174
|
Trade and other receivables do not
contain any impaired assets. The Group does not hold any collateral
as security and the maximum exposure to credit risk at the
Consolidated Statement of Financial Position date is the fair value
of each class of receivable.
7. Cash and cash
equivalents
|
|
Unaudited
30 June
2024
|
Unaudited
30 June
2023
|
Audited
31 December
2023
|
|
|
£
|
£
|
£
|
|
Cash at bank and in
hand
|
3,920,326
|
7,838,889
|
7,714,182
|
|
|
3,920,326
|
7,838,889
|
7,714,182
|
8. Trade and other
payables
|
|
Unaudited
30
June
2024
|
Unaudited
30 June
2023
|
Audited
31 December
2023
|
|
|
£
|
£
|
£
|
|
Trade payables
|
404,067
|
675,229
|
1,006,054
|
|
Social security and other
taxes
|
160,379
|
198,032
|
71,850
|
|
Contract liability
|
621,061
|
644,110
|
3,847,716
|
|
Accrued expenses
|
471,784
|
677,955
|
1,413,914
|
|
|
1,657,291
|
2,195,326
|
6,339,534
|
9. Related party
transactions
Related parties, as defined by IAS
24 'Related Party Disclosures', are the wholly owned subsidiary
companies: Futura Medical Developments Limited and Futura Consumer
Healthcare Limited and the Board. Transactions between the Company
and the wholly owned subsidiary companies have been eliminated on
consolidation and are not disclosed.
10. Taxation
The Group's tax credit in the six
months ended 30 June 2024 was £0.14 million (six months ended 30
June 2023: £0.20 million, year ended 31 December 2023: £0.38
million). The tax credit balance of £0.14 million relates to
anticipated R&D tax credits in respect of claims not yet
submitted 2024 financial year.
11. Share capital
|
Authorised
|
30 June
2024
|
30
June
2023
|
31
December 2023
|
30 June
2024
|
30
June
2023
|
31
December 2023
|
|
|
Number
|
Number
|
Number
|
£
|
£
|
£
|
|
Ordinary shares of 0.2 pence
each
|
500,000,000
|
500,000,000
|
500,000,000
|
1,000,000
|
1,000,000
|
1,000,000
|
|
Allotted, called up and fully paid
|
30 June
2024
|
30
June
2023
|
31
December 2023
|
30 June
2024
|
30
June
2023
|
31
December 2023
|
|
|
Number
|
Number
|
Number
|
£
|
£
|
£
|
|
Ordinary shares of 0.2 pence
each
|
301,863,641
|
299,071,457
|
301,405,950
|
603,727
|
598,143
|
602,812
|
The number of issued ordinary shares
as at 1 January 2024 was 301,405,950. During the period of six
months ended 30 June 2024, the Company issued 457,691 ordinary
shares of 0.2 pence with each ordinary share carrying the right to
one vote as follows:
|
|
|
£
|
Number
|
|
January
2024
|
Non-Executive Director share award
at 51.50 pence per share
|
22,402
|
43,500
|
|
June
2024
|
Exercise of share options at 0.2
pence per share
|
828
|
414,191
|
|
|
|
23,230
|
457,691
|
12. Exercise of
warrants
The balance of the warrant reserve
as at 1 January 2023 related to a warrant instrument issued in
January 2020, as part of a wider share issue to raise funds under a
subscription agreement. The Company issued 10,937,500 warrants. The
warrants were issued at a price of 40 pence per ordinary share and
were exercised in full in June 2023, resulting in funds received of
£4,375,000. As a result of this exercise the warrant reserve was
transferred to retained earnings.
13. Share based
payments
The Black-Scholes formula is the
option pricing model applied to the grants of all share options in
the period made in respect of calculating the fair value of the
share options.
|
|
|
|
Grant date
|
19 April
2024
|
|
Number of shares under
option
|
2,176,000
|
|
Vesting period ends
|
April 2027
|
|
Share price as at date of
grant
|
35.50p
|
|
Option exercise price
|
35.50p
|
|
Expected volatility
|
86.63%
|
|
Dividend yield
|
0%
|
|
Risk-free investment rate
|
4.61%
|
|
Exercisable from/to
|
April 2027 - March
2034
|
|
Expected life of options
|
4
years
|
|
|
|
|
Fair value per share at grant
date
|
23.03p
|
14. Post -period balance sheet
events
There were no post-period balance
sheets events.