Futura Medical plc

Good morning and welcome to the Futura Medical PLC 4-year results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and they can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Simply tap in your questions and press send. The company may not be in a position to answer every question or issue during the meeting itself. However, the company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll, and I would now like to hand you over to CEO James Bader. Good morning to you.

Good morning. My name is James Bader, and I am the CEO of Futura Medical, and I'm joined for today's presentation of the 23-year-old results by Angela Hillgrist, who is the Finance Director and Chief Operating Officer of Futura. Futura specialises in the development and commercialisation of innovative and proprietary sexual health products. Our lead product being Evoxon, a clinically proven breakthrough treatment for erectile dysfunction. We also describe ourselves as experts in research, development, and commercialization of topical liver cell formulations. I appreciate that for those longer-term shareholders, this is a change from a future of previous focus. Following the success of Oroxone, this is a deliberate change in strategy to concentrate our efforts and resource exclusively within the area of over-the-counter sexual health treatments. Erectile dysfunction, or ED, is a large underserved market with only a limited number of treatment options. Furthermore, there has not really been any new innovation in the treatment of erectile dysfunction in the past 20 years. Nothing really since the approval of Viagra, Cialis, and Levitra some two decades ago. A group of ED treatments collectively known as PD5 inhibitors. ED impacts roughly 20% of men across all ages. Even though older men are more severely impacted by ED, there is a growing number of younger men presenting to doctors. Even men as young as 18 are now seeking treatments for their rectal dysfunction. And whereas historically ED was always considered an old man's condition, this is very much no longer the case. In 2023, the global market for ED in prescription terms was worth around $3.5 billion. In spite of ED being a multi-billion dollar market, only around 20% of men are on treatments. So why such a low takeout? Viagra and Silo, don't get me wrong, are very successful and effective drugs. However, they do have some drawbacks. Firstly, planning is required for those types of drugs as they can typically at least have an effect, thereby removing the optional spontaneity within the bedroom. Secondly, you generally require some form of interaction with the doctor to obtain a prescription. In the UK, Viagra and SARS are now available over the counter. But it is important to understand this still requires the amount of completed questionnaire, which depending on his answers, can be up to 41 questions in the case of Cialis, before the pharmacist can supply the medication. This has both the cost and embarrassment implications. Some men will just not want to talk about their ED as an admission to themselves they have a problem, let alone discuss it in front of other people in the pharmacy. Finally, on paedophiles and side effects. Paedophiles are effective in around about 75% of men, but up to 20% of men will experience side effects, typically in the form of a headache or flushing. Aside from the issues associated with men using PD5s, we believe the real opportunity lies in the 80% of men that are not treated. We believe the main reason behind this is that around about 20% of men are unable to use the PD5 inhibitors as they are contraindicated because of their existing cardiovascular medication. Many men, as I've already said, too embarrassed to talk about ED. Certainly, they will not want to go and see a doctor, which requires admission that they have a problem. Cost. Even though the cost of PD5s has dropped since their initial launch some 20 years ago, this doesn't factor in the expense of a doctor's consultation, typically twice a year, which can be quite considerable, obviously, depending on the market, especially in markets like America, which is a negative factor when patients are weighing up the options. Finally, many partners want to have an active sex life as well. However, many ED sufferers will simply back away from any form of intimacy. They will not even want to kiss their partner in the fear this will lead in a direction they do not want to go. The partner in turn worries they are having an affair, no longer find them attractive and so on. A treatment where there are no medical restrictions on whether the buyer is a sufferer or not represents a huge opportunity. Eroxon, this is Futura's breakthrough clinically proven treatment for rectal dysfunction. Available without the need for doctor's prescription or any interaction with a healthcare practitioner. So this is truly an over-the-counter treatment and can literally just be taken off the shelf without having to discuss the condition with anybody. And also can be done by your partner as well. Helps you get an erection within 10 minutes. This is a key differentiating claim and also allows spontaneity to be brought back into the bedroom. Again, important, Eroxon is a clinically proven gel to treat erectile dysfunction. Finally, I would like to add that Eroxon has an extremely favourable side effect profile with less than 1% of men experiencing any form of side effect. Andrew.

Thanks, James. We thought it might be useful to summarize some data generated by an Ipsos study in 2022 for the US market. And what we wanted to show you is how huge the opportunity for Eroxon is and how that compares to the overall current ED treatment spectrum. Whilst there was a huge amount of data compiled, we wanted to try and distill it down into something that was quite simple and also show where there are potential upsides on the assumptions used. We know that there are approximately 20 million men in the US who suffer from ED. The exact number is likely to be higher. In fact, the current number is thought to be around 23 million. We also know that the prevalence of ED in younger men is increasing. A recent study suggested that at least 14% of men aged between 18 and 31 now suffer from some form of ED. And with the problem of ED growing, along with the prevalence of anxiety, obesity, causing diabetes and other health conditions, and in addition to that an ageing population who wish to enjoy a healthy sex life later in life than ever before, it is anticipated that an additional 7 million men in the US will suffer from ED by 2042. Moving down, the IPSOS data suggests that iroxon could be a solution for around 7% of men who suffer from ED by year 5. The 7% is based on a number of factors, including purchase intent, adoption rate, response to the iroxon concepts, and it includes an assumption of $5 per dose for the purposes of this survey. I do need to be clear that the $5 per dose is an indicative price used for this research. The price of the US market has not yet been confirmed. The research does suggest a higher price point could be worn before you start to see volume erosion, but the US commercial partner will ultimately decide on pricing strategy for that region. What I can tell you is that it is currently for sale in the UK for £5 per dose and around $10 per dose in the Middle East. Looking at that 7% uptake, this does not seem unreasonable when you consider PD5s, Viagra, Cialis, etc., have an uptake of around 20%. And then add that to the fact that there is around 80% of men with ED who are not treating as James touched on before. The IPSOS study also collected data from female partners. And as the Roxxon is available without the need for a doctor's prescription, the partner would be able to purchase it. And the data suggests that ED sufferers were highly likely to try Roxxon if their partner purchased it and asked them to. And that this could result in around 15% uplift to the 7% just discussed. We have then conservatively assumed that an ED sufferer might use the product on average once per week. The fact is, We really don't know how many tubes or doses per year will be consumed by each ED sufferer. The Ipsos data suggests that the number of uses per year could be on average around 114, especially if the product is used by a younger population who engage in sexual activity more frequently, and clearly this would have an impact on overall peak sales estimates as well. There are other factors that come into play when we're looking at the overall forecast or the overall potential for the U.S. market, such as the level of distribution, the spend on advertising and promotion. But we're quite comfortable that our U.S. partner has the resources and capability to satisfy some of those of the basic assumptions. So you'll see, with the assumptions I've taken you through, Ipsos quite comfortably arrives at a potential peak sales opportunity in excess of $350 million for the US market. We obviously focus that data on the US, but this data can be extrapolated out quite easily for other regions. So how are we going to maximise that opportunity to deliver long-term shareholder value? Well, we've shown you that there is a large addressable market when you look at men with ED and how many of them are currently not treating at all. James talked to you about how Eroxon is highly differentiated against other treatments, especially given its availability, OTC, and its speed of action. We are going to come to our market strategy with leading consumer healthcare companies who can deploy significant marketing expertise and resources. And why that partnering strategy provides us with a low-cost opportunity to broaden the availability of Aroxon globally, and how that de-risks it for Futura. We're currently at an inflection point, given the generation of first meaningful revenues and a clear pathway to profitability. And all of this is supported by a healthy cash balance, an efficient cost base, which provides efficient financial resources for our growth strategy. We continue to use our innovative and highly experienced R&D team to look at ways we can broaden the Aroxon range with you and other extension products. We're not saying too much about this currently, but we will update you when we're in a position to. And finally, Iroxon is well protected from competition with the EU patent granted in 23 and patent applications filed in other key markets, including the US. 2023 was quite the year for Feetora. US FDA granted marketing authorisation of Iroxon as an OTC product and the US is the biggest OTC market in the world. Halion became our commercial partner for the US market with a $4 million milestone already received and further milestones to come. I'll talk about Halion itself in more detail shortly in the presentation. Our European and UK partner, Consumer Healthcare, successfully launched in the UK and Belgium and they followed that up with further launches in other key European markets since. Early data showed that Eroxon obtained a market share of around 20% across approved ED products in the UK. Eroxon received a number of industry awards and Huber then extended their agreement out to 2029. We generated revenues of £3.1 million in 2023 and we achieved a growth margin of 57%. We ended 2023 with a cash balance of £7.7 million, which we believe is sufficient to to fund the business beyond the US launch expected in early 2025. And especially as we touched on before, all advertising promotional spend is borne by our commercial partners. To summarise, the foundations were laid in 2023 and early signs are showing significant potential. We also thought it might be useful to quickly touch upon our commercial partners. Our strategy was always to partner with companies who have experience and track record of launching new products, especially in the OTC arena. And also partners who have the financial resources and expertise to commit to those launches. This is extremely important for a product like Eroxon. It's a new product, a new brand, And in the US and most of the markets, it's creating a whole new category within OTC, as current ED treatments require a doctor's prescription in the main. Firstly, let's take a look at Halien. Halien are a world-leading consumer healthcare company. Anyone not familiar with Halien will certainly be familiar with some of their brands, which include, amongst others, Sensitine and pain relief products such as Voltaren, Advil and Panadol. In particular, Hayden are incredibly experienced when it comes to switching products from prescription to OTC, and this is of huge benefit to Eroxon, which will launch OTC, but given all of the oral treatments such as Viabra and Cialis require a doctor's prescription, that knowledge is going to be hugely beneficial. Moving on to Cooper. Another leading healthcare company in the EU and UK, Coupa have a lot of experience launching OTC products. They're well versed with the nuances of the different routes to market within the individual countries, such as the retail chain store model, like Boots in the UK, and the independent pharmacy model you see across France, for example. The launches so far have gone well. We're seeing some early signs of repeat purchases, but it is still a little too early in the European rollout to provide any solid data. Then, so far across the rest of the world, we have Lavatech, who cover the Middle East and the Gulf states. We have Moksha 8, or M8, who cover Central and South America. And we have Menorini, who will be covering South Korea. It's likely that in most of these regions, iroxan will be sold through pharmacy outlets, but we also know that whilst PDE5s remain prescription only, unapproved purchasing of PDE5s does exist in some of those markets, and that may have an impact on the uptake within those regions. However, these partners have successfully obtained approvals in nine countries, including Saudi Arabia and Mexico, which are the biggest markets, Labrador Tech have launched in some of the Middle Eastern regions and the other partners will be gearing up to launch soon. I'm going to now pass you on to James, who will walk you through the strategic progress that has been made.