Futura Medical – Rising Upside Could Well See Shares Doubling By Next February, If Not Before

The Trading Statement at yesterday’s AGM for Futura Medical (LON: FUM), the consumer healthcare company behind the award-winning Eroxon® product, was bullish.

The £108m capitalised group specialises in the development and global commercialisation of innovative and clinically proven sexual health products.

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Futura’s Lead Product

Its lead product is Eroxon, has been developed for the treatment of Erectile Dysfunction, which is the only topical gel treatment for ED available over the counter.

ED impacts 1 in 5 men globally across all adult age brackets, with about half of all men over 40 experiencing ED and 25% of all new diagnoses being in men under 40.

The company considers that Eroxon, which helps men get an erection in ten minutes, addresses significant unmet needs in the ED market.

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Global Distribution Potential

The company has distribution partners in place in a number of major consumer markets including Haleon in the US, which is the largest market for ED in the world, and with Cooper Consumer Health in the European market. 

Importantly, it reported that it was working closely with Haleon, the global consumer healthcare company, on the preparation for the US launch of Eroxon within the next eight months or so.

Considering the size of the company’s target market, along with the initial feedback that the company has received in the markets where it has so far launched, has given its Management great confidence as it looks to make Eroxon® available to more people across the globe and on the path towards profitability in the next 12 months.

AGM Statement

Chairman Jeff Needham stated that:

“FY24 continues to progress well, as previously reported in the Group’s full year results in April.

At the time of the results announcement, we stated that we expected full launches in at least ten countries including key European markets such as France, Italy and Spain during the first half of 2024.

The Company can confirm that these launches have successfully taken place. The Company also confirms that revenues remain in line with market expectations for FY2024.

We also expect further launches in the second half of FY24 in both Europe and Rest of World and therefore plan to give updated guidance on trading FY24 at the time of our Interim results in September.”

Analyst View

Seb Jantet at Liberum Capital rates the group’s shares as a Buy, with a Price Objective of 131p, almost four times higher than the current market price.

His estimates for the current year to end December are for sales of £10.0m (£3.0m), while it is expected to slash its pre-tax loss by some 70% to £2.1m (£6.9m).

However, profits are just around the corner – with Jantet estimating £18.0m sales next year, helping to pump up some £2.6m in profits, worth 0.9p per share in earnings.

For the group’s 2026 trading year the analyst sees £24.0m revenues working to jack up a far healthier £4.1m of pre-tax profits, worth 1.4p per share.

The analyst concludes that Futura starting to generate meaningful EBITDA will remove the final barrier to broader institutional ownership.

My View

In the last year or so these shares have been as high as 67p and as low as 23p.

Now at just 35.90p I consider that there is massive upside potential for the group’s shares, which will become evident as the corporate newsflow increases up to the US launch.

By that time the shares could well have doubled.

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