22 September 2003
Futura Medical plc Interim Results for the six months ended 31 July 2003
Futura Medical plc ("Futura Medical", "Futura" or "the Company"), the pharmaceutical and medical device group that develops innovative products for the sexual healthcare market, reports Interim Results for the six months ended 31 July 2003.
Highlights
- Completion of £1.7 million private placement, followed by introduction to AIM on 22 July 2003
- Completion of the Phase II study for MED2001; now patent-protected in 22 countries
- Global distribution agreement for CSD500 product
- Boardroom strengthened by two key appointments
- Financial strategy in place, with costs strictly controlled
- Operating loss of £966k (1H 2002 loss of £614k), including £351,000 of AIM admission costs
- Loss per share - basic 2.1p (1H 2002: 1.3p)
- £2.05 million cash at 31 July 2003
Commenting on Futura's first set of Results since listing, James Barder, Chief Executive, said:
"We are well on track in building a successful pharmaceutical and medical device group to serve the growing sexual healthcare market, and I hope to report further progress by the end of the year."
Chairman and Chief Executive Joint Interim Statement
The six months to the end of July were a period of significant transformation for Futura Medical plc ("Futura" or the "Company"), leading to both the Introduction of Futura to the Alternative Investment Market ("AIM") on 22 July 2003 as well as a successful private placement immediately preceding this, which raised £1.7 million.
In addition, development continues apace with the completion of the Phase II double-blind, placebo controlled, escalating-dose study for MED2001 and the signing of a global distribution agreement for CSD500 with LRC Products Limited, (a wholly owned subsidiary of SSL International plc, the distributors of the Durex® brand condom range).
Company Matters - Financial update
Both Richard Drury and Amanda Staveley stepped down from the Board due to their other business commitments and in the knowledge of the increasing workload from Futura following our Introduction to AIM. We would like to take this opportunity to thank them for their contribution to the Board over the past two years.
In their place we welcomed both Jonathan Freeman, a former director of the stockbrokers Beeson Gregory and current partner of Gambit Corporate Finance with over 10 years experience in corporate finance, and Andrew Slater, a former main board director of SSL International plc with over 20 years of international healthcare marketing experience.
We continue to focus on maintaining a tight control on expenditure. Our overall loss for the six months ended 31 July 2003 of £966,334 includes AIM Admission costs of £351,299 (36% of the loss). The balance of operating loss of £615,035 is broadly in line with the prior year. Overall costs continue to be within our internal budgets. Cash at the end of July 2003 was in excess of £2 million.
The Board recently approved a change in our financial year-end, which will now be 31 December as opposed to 31 January. The next set of full financial statements will therefore be for the 11 months ending 31 December 2003. The next Interim statement will be for the 6 months ending 30 June 2004.
Product Development
MED2001 - EroxonT Treatment for Erectile Dysfunction
Following the completion of our Phase II double-blind, placebo controlled, escalating-dose ranging study, we are pleased to report a good safety profile for the product.
The study was conducted to the standards of Good Clinical Practice, as defined by the International Committee on Harmonisation, by internationally renowned and experienced investigators who had conducted previous clinical trials of other drugs for the treatment of erectile dysfunction ("ED"). 67 subjects with an average age of 48 years and average disease duration of two years were recruited. All subjects were diagnosed as suffering from mild to moderate ED (based on medically accepted diagnostic criteria) from psychogenic, organic or "mixed" origins.
The primary purpose of this study was to assess safety on a dose-escalating basis and we were pleased to say that MED2001 was well tolerated. The systemic adverse events, which were mostly mild and moderate headaches in some subjects, were in line with expectations and suggested a dose-related response. Local tolerability was also good.
A secondary objective of the study was to determine if a dose related efficacy response could be seen. Analysis is still ongoing and, although some dose related trends against placebo were seen, these trends did not achieve statistical significance. This was in part due to the large degree of inter and intra subject variability, taken together with an unexpectedly high placebo response of nearly 60% and the limited size of the study. All ED studies show a significant placebo response, typically 30%, which is partly attributed to the psychogenic issues surrounding ED sufferers. The mode of application of MED2001 (a cream being massaged directly onto the glans of the penis versus taking a pill) is thought to have contributed to this unexpectedly high placebo effect. Analyses of the efficacy data using more appropriate statistical techniques to accommodate the large inter and intra subject variability is continuing.
The phase III clinical trial program will recruit larger patient numbers. This is the phase of development where we would expect to generate statistically significant results on efficacy. Given our experience from the Phase II study, close attention will be given to the study design and methods of analysis to manage the placebo response and minimise the impact on the study conclusions.
In the past few weeks, we have conducted a rigorous review of all our clinical studies using appropriate external advisers. In light of this review we have recently modified our regulatory strategy to seek to license MED2001 as a pharmacy line product rather than a prescription only medicine within the EU. ED is understandably considered an embarrassing condition, although the publicity surrounding the launch and promotion of Viagra and more recently Levitra has increased public awareness and acceptability of ED. Nevertheless it is widely recognised that only around one in five men will go to his General Practitioner to seek treatment for ED. We believe that MED2001, as potentially the first ethical 'over the counter' treatment within the EU, will considerably help address the embarrassment problem faced by many ED sufferers. It could also have the added advantage of removing the issues facing many governments over the state funding of what is considered by some to be 'lifestyle' medication.
Our patent applications for MED2001 continue, with the patent now granted in 22 territories.
It has always been our strategy to seek distribution agreements with pharmaceutical distributors once we are at an advanced stage of development with a particular product, thereby maximising the potential royalty stream to the Company. We have been able to adopt this strategy due to the loyalty and financial support of our shareholders. Over the past years we have received significant interest from a number of pharmaceutical groups interested in distribution rights for MED2001 in some 30 different territories throughout the world. Until recently, we have deliberately deferred serious discussions for the reasons already outlined, however we will be working closely with a number of these companies over the next few months with a view to concluding distribution agreements and finalising the necessary development work as we move into the final stages of the completion of the MED2001 dossier.
While both pharmaceutical development and commercial negotiation can proceed slowly, we would hope to report to shareholders further progress by the end of the year.
CSD500 - ZanifilT Condom safety device
Early in the year we signed a global distribution agreement with the world's largest branded condom manufacturer and distributor, SSL International plc (makers of the Durex® condom range) for the lifetime of the patents. The precise terms of the agreement are commercially sensitive and therefore must remain confidential. The non-confidential details were disclosed in our AIM Admission document at the time of our Introduction to AIM. We are delighted to have signed a distribution with such a powerful brand, which should generate significant revenue for the Company once CSD500 is licensed.
Completion of the EU dossier continues, with an anticipated submission in 2004. The approval process in other non-EU territories will be facilitated once approval has been given within the EU. Nevertheless, discussions have already commenced with the FDA and we will be working closely in collaboration with the FDA to achieve regulatory approval within the United States.
FLD500 Female lubrication device
The protocol for a proof of concept study, largely to determine a safe and well tolerated dose, on 10 female subjects has recently been submitted to the necessary authorities for ethical approval. Once this is granted, we anticipate the study commencing at the Porterbrook clinic in Sheffield.
Conclusion
The mandate from our shareholders has always been to seek to develop and license MED2001 and CSD500. One of the reasons for listing Futura on AIM was to increase the public profile of Futura in order to identify potential product distributors and also new development opportunities. As both CSD500 and MED2001 progress to the more advanced stage of their development, we emphasise our continuing interest in identifying and developing other pharmaceutical drugs or devices. They should be related to sexual health and well-being and be able to justify commercially their development costs.
Finally, what has been summarised in this report does little justice to the amount of work undertaken not only by the staff of Futura but also by our small army of extremely professional consultants and advisers, to whom we are extremely grateful.