TIDMFUM
RNS Number : 3152I
Futura Medical PLC
01 April 2020
Full Year Results for the year ended 31 December 2019
Futura Medical plc (AIM: FUM) ("Futura" or the "Company"), a
pharmaceutical company developing a portfolio of innovative
products based on its proprietary, transdermal DermaSys(R)
technology and currently focused on sexual health and pain, is
pleased to announce its audited results for the year ended 31
December 2019.
Key highlights
-- MED3000 discussions progressing well with regulators; EU filing expected by end of July with good dialogue with
US FDA providing optimism for submission for medical de novo device approval filing by end of Q3 2020
-- Company expects cash runway to be sufficient to Q2 2021, based on significantly reduced R&D spend and current
activities
-- Currently expect limited impact from COVID-19 during 2020
Operational highlights
MED3000 - Topical gel for the treatment of erectile dysfunction
(ED)
-- Top Line Results for European Phase 3 study (FM57) were reported in December 2019 with all treatment arms
consistently meeting all primary endpoints against a pre-treatment baseline and across all ED severities as well
as in a pooled ED patient population.
-- FM57 demonstrated that MED3000 has the potential to be a highly effective, clinically proven, topical treatment
for erectile dysfunction with a rapid onset of action and excellent safety profile in a $5 billion market1.
-- New patent application filed in December 2019 around the novel and surprising effects of the MED3000 formulation
shown in FM57 to potentially provide patent protection until 2040.
-- Ongoing support from Key Opinion Leaders (KOLs) for an effective, fast acting, topically applied ED treatment
with low side effects.
MED3000 - Post period highlights
-- Following positive interactions with an EU Notified Body2 as announced in February 2020 Futura subsequently
commenced formal proceedings for MED3000 to be approved as a medical device for the treatment of ED with expected
submission to EU regulators by the end of July 2020.
-- Recent positive initial pre-submission meeting with US FDA. Futura are awaiting the meeting minutes and expect
to pursue regulatory approval for MED3000 as a medical device with a De Novo Classification in the USA.
TPR100 - Topical non-steroidal anti-inflammatory for the pain
and inflammation associated with sprains, strains and bruises and
soft tissue rheumatism
-- UK partner Thornton & Ross (a subsidiary of STADA AG) received feedback from UK Medicines and Healthcare products
Regulatory Agency (MHRA) in February 2019 requiring additional laboratory work to be conducted to support the UK
submission.
-- Ongoing laboratory work continues with formulation dosing adjustment and in vitro studies to enable TPR100 to
meet the strict criteria established by the MHRA (to avoid the need to conduct a Phase 3 pain relief efficacy
study) delaying the response to the MHRA by at least six months.
-- Ongoing commercial discussions with several potential distribution partners for other countries. Any further
licensing deals are expected to be after UK regulatory approval.
CBD100 - Futura's advanced proprietary transdermal technology,
DermaSys(R) for transdermal delivery of Cannabidiol
-- Joint venture collaboration with CBDerma Technology Limited announced in September 2019.
-- Optimisation work is continuing and on track to deliver first stage development by end July 2020.
Financial highlights
-- GBP8.92 million net loss in the period (31 December 2018: net loss GBP5.88 million).
-- Cash resources of GBP2.51 million at 31 December 2019 (31 December 2018: GBP9.16 million).
-- R&D tax credits of GBP1.36 million for year ending 2018 received in August 2019 (Year ending 2017: GBP0.94
million R&D tax credits received in August 2018).
-- GBP3.25m (gross) fundraising completed post period end in January 2020.
COVID-19 Update
Futura Medical is monitoring closely the rapid development of
events in relation to the coronavirus outbreak and all necessary
steps have been taken to maintain the integrity of the Company's
assets and the health and wellbeing of our employees.
To date we have not seen a material impact as the Company is
used to operating as a virtual business and we have been able to
transition quickly to a fully remote and flexible working model
with ease.
We are currently not conducting any trials requiring the use of
patients or healthy volunteers. All operational activities can be
managed using existing internal resource combined with our
extensive resource of external consultants and sub-contractors
should any of our employees become ill. We therefore currently
expect limited impact from COVID-19 during 2020.
John Clarke, Chairman of Futura Medical, commented: "I would
like to thank all the staff of Futura and external third party
providers who made huge efforts to deliver FM57, on time and on
budget during 2019. The results are hugely exciting for MED3000 as
the implications for a simpler regulatory pathway and broader
commercial potential for a product that, we believe, is not
expected to have contraindications against existing medications
become clearer."
James Barder, Chief Executive of Futura Medical, commented:
"Futura completed extensive and rigorous clinical studies in over
480 patients for MED3000. These have shown MED3000 to be an
extremely effective and differentiated treatment for ED with an
excellent safety profile delivering meaningful clinical benefits
for patients. MED3000 also has a fast onset of action that allows
spontaneity for ED sufferers and their partners. Following positive
feedback after consultations with regulators we are confident
MED3000 has a well-defined path to approval as a medical device as
a clinically proven ED therapy. Futura remains in consultation with
the FDA regarding overall data requirements as we move towards
targeted regulatory submissions for MED3000 in both the US and EU
in the next six months.
"We continue to explore wider commercial opportunities for
MED3000, given its excellent safety and tolerability as a
clinically proven treatment for ED with and without the requirement
of a doctor's prescription, as well as a treatment for those
patients currently unable to take existing oral ED medications or
who find them unsuitable."
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 10am on 1 April 2020.
The webcast will also include an update following the extensive
internal evaluation of the clinical data from the Phase 3 study
(FM57) announced on 10 December 2019, which was previously planned
to be presented at the Investor Seminar on 26 March which was
cancelled due to COVID-19. The Company will provide an update on
ongoing research and analysis of FM57 and MED3000.
Note
1. Manufacturers' Selling Prices 2018: Data available for 75
countries IQVIA IMS Health
2. Notified Bodies are the regulatory authorities that oversee
the approval of medical devices within the EU for all EU countries
including the UK.
For further information please contact:
Futura Medical plc
James Barder, Chief Executive
Angela Hildreth, Finance Director and COO
Email: Investor.relations@futuramedical.com
Tel: +44 (0) 1483 685 670
www.Futuramedical.com
Nominated Adviser and Sole Broker:
Liberum
Bidhi Bhoma/ Euan Brown/ Kane Collings
Tel: +44 (0) 20 3100 2000
For media enquiries please contact:
Optimum Strategic Communications
Mary Clark/ Eva Haas/ Hollie Vile
Email: futuramedical@optimumcomms.com
Tel: +44 (0) 203 950 9144
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(R) technology. Each DermaSys(R)
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, consistently meeting all co-primary endpoints 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.
Futura is based in Guildford, Surrey, and its shares trade on
the AIM market of the London Stock Exchange.
www.futuramedical.com
Chairman and Chief Executive's Review
As an innovative R&D company, Futura's strategy is to
leverage its proprietary patented transdermal technology platform
DermaSys(R) to develop a pipeline of late stage, novel products
that solve clinically meaningful problems for patients,
particularly where they are dissatisfied with existing treatments.
Our current focus is on sexual health and pain .
Meeting this objective goes hand in hand with value creation,
which we seek to maximise by partnering at key inflection points.
As a small, innovative company we are also adaptable and nimble
which allows us to take advantage of new opportunities and
strategies as the need arises.
This year has been an eventful one for Futura. Throughout,
Futura has been continuing research and presenting clinical data
for its erectile dysfunction (ED) treatment at international
medical conferences and in other expert forums as part of an
ongoing educational and outreach programme for physicians and their
patients in the ED field. The reception has been encouraging both
in the USA and Europe with consistent feedback from leading
urologists and practitioners in sexual medicine indicating demand
for an effective topical product that works rapidly and has a very
low side-effect profile.
It was also a huge logistical and organisational undertaking for
our team and third party providers to execute on the substantial
Phase 3 study (FM57) which started in Q4 2018, dosed the last
patient in October 2019 and from which headline data was reported
in mid-December 2019.
The results from the Phase 3 clinical study were unexpected and
surprising. While FM57 did not meet the primary endpoints versus
placebo, we are excited that MED3000 achieved positive results,
with a striking consistency in being significantly statistically
superior to baseline ED for all three co-primary endpoints (using
validated and globally accepted measurement tools), as well as in
each separate cohort of severity (mild, moderate and severe) and at
one, two and three month treatment time points statistically
superior improvement over baseline was achieved. Key secondary
endpoints were also all statistically met compared to the
pre-treatment baseline. Data analysed was also positive on measures
of clinically meaningful benefit which physicians and patients, as
well as regulators view as increasingly important.
Futura intend to submit MED3000 for regulatory approval as a
medical device and continue to target the next six months for
submissions in both Europe and USA. This will present prescription
(Rx) opportunities and in future potentially broader patient
product availability opportunities for MED3000 may be explored that
leverage an excellent safety and tolerability profile, such as
combination use, including with existing oral medications and the
availability Over the Counter (OTC).
DermaSys(R) - Our proprietary patented transdermal technology
platform
Futura's unique patented technology DermaSys(R) is designed to
deliver clinically proven effective medical treatments via the
skin.
DermaSys(R) is a versatile and bespoke technology. Each product
gel is uniquely formulated using the DermaSys(R) 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 - Topical gel for erectile dysfunction ("ED")
MED3000 is now the codename for a formulation of our proprietary
technology DermaSys(R), developed specifically 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 $5 billion ED market(1) , 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, food or other products as well as
providing a potential treatment option for patients
contra-indicated from using existing ED therapies.
ED disrupts the lives of at least 1 in 5 men globally(2) ,
affecting the sexual and emotional health of around 27 million men
and their partners in the USA alone. There has been little
innovation in ED treatments for over ten years and many patients
continue to suffer dissatisfaction with existing treatments, a
statement frequently made by KOLs.
Top line results from the Phase 3 FM57 study announced in
December 2019, demonstrated that MED3000 has the potential to be a
highly effective, clinically proven, topical treatment for ED, with
a fast onset of action. As part of FM57, the Company observed that
MED3000 began to work immediately in some patients, with 60% of
patients seeing onset of their erection within 5-10 minutes of
application. Futura believe MED3000 has a unique evaporative mode
of action which stimulates nerve endings to cause an erection.
Initial Company assessments indicate MED3000's combination of
volatile solvent components creates an evaporative and novel action
that stimulates nerve sensors in the highly innervated glans penis
rapidly leading to smooth muscle relaxation, tumescence and
erection.
FM57 Study
FM57, the Phase 3 study was designed to investigate the efficacy
and safety of topically applied Glyceryl Trinitrate (GTN) (MED2005)
- (DermaSys(R) with 0.2% GTN, DermaSys(R) with 0.4% GTN and
DermaSys(R) with 0.6% GTN) against that of the placebo using
IIEF-EF and SEP 2 & 3 as co-primary clinical endpoints in mild,
moderate and severe ED patients. An ED-specific DermaSys(R)
formulation (now known as MED3000) was used as a control arm
(placebo) following regulatory requirements to have a placebo as
near as possible to the active product.
The 1,000 patient study included approximately 60 centres across
nine Central and Eastern European countries. FM57 was a dose
ranging, randomised, double blind, placebo controlled, home use,
parallel group clinical trial. Patients being enrolled into FM57
for the initial four weeks had to attempt intercourse on at least
four occasions in order to establish the severity of their ED,
known as the pre-treatment 'baseline'.
FM57's protocol had incorporated feedback from potential
commercial partners, opinion-leading physicians, US and EU
regulatory agencies as well as the Company's learnings from the
Phase 2 study (FM53), to support the best chance of clinical
success and to optimise the likelihood of subsequent regulatory
approval as well as the commercial value.
Futura announced study enrolment completion in June 2019 with
last patient dosed in October 2019 .
FM57 Results
FM57 top line results were announced in December 2019. All three
co-primary endpoints (IIEF-EF, SEP2 and SEP3) were statistically
significantly achieved against baseline (pre-treatment) data for
the three MED2005 treatment groups and MED3000 in addition to
important, supporting secondary endpoints in terms of efficacy,
speed of onset, duration of action and clinically meaningful
differences in patient benefit.
However, the control arm used in the study which was Futura's
proprietary transdermal DermaSys(R) formulation (now known as
MED3000) also demonstrated statistically significant and clinically
meaningful top line results meaning that FM57 did not meet primary
endpoints versus placebo. Whilst this placebo does not contain the
active pharmaceutical ingredient, GTN, used in MED2005, it uses the
key ingredients that constitute DermaSys(R)' proven transdermal
technology, specifically formulated for ED, and was shown to be as
effective in the treatment of ED as the active doses. Futura
believe MED3000 was so effective, for example 83% of patients with
mild ED were able to insert their penis into their partner's vagina
(SEP2 Primary Endpoint for FM57), that the likelihood of the study
design showing a consistent and statistically significant
improvement over MED3000 for SEP2 with the inclusion of GTN was
significantly reduced.
FM57 demonstrated that MED3000 has the potential to be a highly
effective, clinically proven, topical treatment for erectile
dysfunction. MED3000 has a unique evaporative mode of action which
the Company believe stimulates nerve endings in the glans penis to
cause an erection. As such, it does not require the inclusion of
GTN.
MED3000 - shown to be an extremely effective treatment for ED
with an excellent safety profile in FM57
MED3000 results demonstrated a highly statistically significant
improvement (with highly statistically significant p values of less
than 0.001 in all instances) in erectile function across 'pooled'
patient severities (mild, moderate, and severe) as well as being
statistically significantly superior within the separate mild,
moderate and severe patient groups, than before treatment, along
with an excellent safety profile.
Importantly, all formulations had a significant clinically
meaningful effect in 60% of patients as calculated using the Rosen
and Araujo statistical method, a standard assessment technique for
measuring Patient Reported Outcomes recognised and accepted by
leading ED experts. Such Patient Reported Outcomes in ED are key
evaluation criteria for regulators as well as physicians and their
patients.
MED3000 begins to work immediately in some patients, with 60% of
patients seeing onset of their erection within 5-10 minutes of
application, substantially faster than sildenafil(3) with
significant benefits for spontaneous rather than pre-planned sexual
intercourse.
Overall the level of efficacy was broadly equivalent to lower
doses of current oral ED treatments. Safety and tolerability data
were also highly positive, with no serious adverse events recorded
in any patient, or their female partner, with a highly favourable
overall side effect profile across all doses against baseline
affirming data from the prior Phase 2a study.
This excellent safety profile, together with a rapid speed of
onset and high efficacy creates a substantial and we believe highly
competitive product opportunity for MED3000.
The results from FM53 and FM57 are expected to support
regulatory applications for MED3000 as a medical device with
clinically proven claims for the treatment of ED. The clinical
study report (CSR) is already available for FM53 and the CSR for
FM57 is expected to be available by the end of April 2020 .
Futura has received strong interest for the marketing rights for
MED3000 and is continuing to progress these discussions now that it
has good insight into the clinical benefits and regulatory pathway
for MED3000.
MED3000 - Medical Device Regulatory Pathway
Europe: The Company announced in February 2020, following
positive interactions with an EU Notified Body(4) , that it had
commenced formal proceedings for MED3000 in Europe. These
proceedings will allow the Company to submit its technical file for
review by the said Notified Body, including the CSR for FM57 and
the Company's Quality Management System by the end of July
2020.
USA: The Company also recently held an initial positive
pre-submission meeting with the US FDA, as a result, we believe
that an application may be made for MED3000 as a medical device
with a De Novo Classification although we await confirmation of the
drafted minutes from the FDA. The Company presented the case for
filing for FDA clearance with the existing clinical evidence from
FM57. FDA agreed to consider this approach pending detailed review
of the CSR for FM57 and offered Futura another pre-submission
meeting to reach final agreement on clinical sufficiency once the
CSR for FM57 is available at the end of April. If successful this
could lead to a submission filing by the end of September 2020 for
FDA review for pre-marketing clearance. The Company has been
advised by its regulatory consultants that the FDA's preference is
to adopt an interactive approach to data requirements with its
clients wherever possible ahead of regulatory submissions.
MED3000 Intellectual Property
After the Phase 3, FM57 study indicated the value and efficacy
of MED3000 (a formulation developed specifically for the treatment
of ED) a new patent application was filed in December 2019 which
has the potential, if successful, to extend protection of MED3000
until 2040. Aside from Futura's current patent lawyers, the Company
recently retained a specialist biotech IP and strategic advice
company to assist in maximising the robustness of the MED3000
intellectual property.
Education and outreach on erectile dysfunction and MED3000
The Company continues to see a positive reception from European
and US Key Opinion Leaders (KOLs) in the field of ED. Following
data announced in December 2019, KOLs have continued to express
interest in a locally acting, fast and new treatment for ED with an
excellent safety profile, and are encouraged by the recent MED3000
Phase 3 data. We believe this data approaches the efficacy of
current first line therapy but with significantly lower adverse
events, and will be of high interest to the medical community for
those patients who are seeking a treatment with a very rapid onset
of action and a very low side-effect profile. This echoes feedback
received following the Company's EU and USA advisory meetings held
respectively at the European Society for Sexual Medicine (ESSM)
congress in Slovenia in February 2019 and at the Sexual Medicine
Society of North America (SMSNA) congress in Nashville, USA in
October 2019.
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 & Ross, one of the UK's largest consumer
healthcare companies and a subsidiary of STADA AG. In February
2019, the UK Medicines and Healthcare products Regulatory Agency
(MHRA) responded to Thornton & Ross's marketing authorisation
application filed in July 2018, with a number of questions
requiring additional laboratory work specifically around the
permeation characteristics of TPR100 to be conducted. This work is
progressing but requires further laboratory formulation adjustment
and in vitro studies to enable TPR100 to meet the strict criteria
established by the MHRA and thereby avoid the need of a Phase 3
pain relief efficacy study. It has delayed the response to MHRA by
at least six months to accommodate this regulatory approach.
CBD100 - Futura's advanced proprietary transdermal technology,
DermaSys(R) for the delivery of Cannabidiol
Futura announced a joint venture collaboration with CBDerma
Technology Limited in September 2019 to explore the application of
Futura's advanced proprietary transdermal technology, DermaSys(R)
for the delivery of Cannabidiol.
CBDerma Technology is a company that has been established and
funded to specifically exploit the therapeutic potential of
Cannabis. The company's management, backers and advisors have
extensive knowledge, expertise and investments in plant derived
product manufacturing.
As part of the agreement, Futura will develop and optimise a
DermaSys(R) cannabidiol formulation as well as establish early
ex-vivo proof of concept studies likely to include certain disease
states most suited for local or regional (non-systemic) topical
treatment such as pain relief. Optimisation work is progressing,
and the first stage of this will complete by the end of July 2020
before the next stage of potential ex-vivo proof of concept studies
are being considered.
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 report by Reports and Data forecasts that the
market for Cannabidiol products is forecast to grow from $1bn in
2018 to $16bn by 2026, at a CAGR of 27.7%, during the forecast
period. The market is primarily driven by the increase in the usage
of Cannabidiol in medical application, supplements, beverages and
skin care.
Corporate & Financial
The GBP3.25 million fundraising in December 2019, with funds
received by the Company post year end in late January, provided
additional working capital to allow the Company to pursue a medical
device regulatory pathway for MED3000 in ED.
The Company believe that further significant clinical cost will
not be required in relation to EU approval based on its past
experience of obtaining EU medical device approval. In the USA,
Futura continues to be in consultation with the Center for Devices
and Radiological Health (CDRH) the medical device arm of the FDA
over data requirements, however the Company does not believe that a
further significant study, similar to FM57, will be required to
support a MED3000 filing, but any additional clinical data and
therefore expenses will depend on the finalised requirements
expected to be agreed by the end of July 2020.
Outlook
Following the analysis of the data from the FM57 clinical study
which completed in December 2019, the Company is well positioned to
deliver further positive news through 2020. The team is focussed on
completion of the regulatory submissions in the US and EU for
MED3000 to be approved as a clinically proven, fast-acting topical
gel for the treatment of ED. We are also increasingly excited at
the financial prospects that an approved MED3000 could bring to
Futura as we progress commercialisation discussions in earnest.
The Company is closely monitoring the rapid development of
events in relation to the coronavirus outbreak. To date we have not
seen a material impact as the Company is used to operating as a
virtual business and we have been able to transition quickly to a
fully remote and flexible working model with ease. We therefore
currently expect limited impact from COVID-19 during 2020.
James Barder
Chief Executive
Notes
1. Manufacturers' Selling Prices 2018: Data available for 75
countries IQVIA IMS Health]
2. EMEA, Withdrawal assessment report for Viagra, 2008
3. Sildenafil is an active pharmaceutical ingredient, sold under
the brand name Viagra among others, as a medication used to treat
ED . " Viagra Connect starts to work in 30-60 minutes" - Viagra
Connect PIL in UK
4. Notified Bodies are the regulatory authorities that oversee
the approval of medical devices within the EU for all EU countries
including the UK.
Financial Review
As outlined in the Chairman and Chief Executive's Review, during
the year we continued to focus our financial resources on the
development programme for our fast-acting topical treatment for ED.
As we carried out the FM57 study, spend on research and development
activities increased with other central and administration costs
remaining broadly the same as the prior year. Gross funds of
GBP3.25 million were raised in December 2019 (completion January
2020) through the combination of subscription for shares through
PrimaryBid and institutional placing to allow the Company to
proceed with MED3000 regulatory approval as a medical device in the
EU and US.
Revenue
The Company continued to focus its financial and human resources
on late stage clinical development of its fast-acting topical
treatment for ED and accelerate progress towards achieving a
significant, continuous revenue stream within a few years. Revenue
recognised was in relation to the CBDerma Technology Agreement.
Research and Development Costs
Research and Development costs for the period ended 31 December
2019 were GBP10.05 million, compared to GBP6.03 million for the
period ended 31 December 2018. The increase of GBP4.02 million is
attributable to the FM57 Phase 3 study which completed on time and
within budget.
There was no capitalisation of R&D costs in 2019.
Administrative Costs
Administrative costs were GBP1.14 million for the period ended
31 December 2019 compared to GBP1.23 million for the period ended
31 December 2018 and were reflective of the Company's strategy to
keep central costs lean and focus cash resources on delivering the
R&D programme.
Tax
It is expected that an R&D Tax Credit of GBP2.22 million
will be claimed in respect of 2019 and the cash refund is expected
to be received mid-2020 from HMRC.
Loss Per Share
The basic loss per share for 2019 was 4.36p (2018: 4.46p).
Details of the loss per share calculations are provided in Note 11
to the consolidated financial statements.
Cash Balance
The cash balance at the end of 2019 was GBP2.51 million (2018:
GBP9.16 million). Gross proceeds of GBP3.25m were received in
January 2020 and the usual refund of R&D tax credits of GBP2.2m
are expected to be received during 2020. Cash burn during the year
was GBP8.01 million (2018: GBP5.63 million) primarily in relation
to the FM57 clinical activities. Cash burn in relation to R&D
activities for 2020 is expected to be significantly lower than 2019
as clinical activities are replaced with low cost regulatory
activities. Futura is funded until Q2 2021.
Post Period Events
The Company completed a fundraising of GBP3.25m in January 2020.
The COVID-19 pandemic arose in February 2020 and we expect the
pandemic to have limited impact on operations in 2020. Further
information in relation to COVID-19 will be available in the Risks
and Mitigations section of the 2019 Annual Report.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2019
Year ended Year ended
31 December 31 December
2019 2018
Notes GBP GBP
============================================= ======= ====================== ======================
Revenue 2.4 31,778 -
Research and development costs (10,051,148) (6,038,941)
Administrative costs (1,144,397) (1,227,547)
Operating loss 6 (11,163,767) (7,266,488)
Finance income 8 22,283 27,576
Loss before tax (11,141,484) (7,238,912)
Taxation recoverable 9 2,222,194 1,358,336
Loss for the year being total comprehensive
loss attributable to owners of the
parent company (8,919,290) (5,880,576)
Basic and diluted loss per share (pence) 10 (4.36 pence) (4.46 pence)
============================================= ======= ====================== ======================
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2019
Share Merger Retained Total
Capital Share Premium Reserve Losses Equity
Notes GBP GBP GBP GBP GBP
============== ===== ================== ====================== ================= ==================== ===================
At 1 January
2018 241,392 44,671,396 1,152,165 (36,959,195) 9,105,758
============== ===== ================== ====================== ================= ==================== ===================
Total
comprehensive
loss for the
year - - - (5,880,576) (5,880,576)
Share-based
payment 18 - - - 146,833 146,833
Shares issued
during
the year 17 167,775 5,312,464 - - 5,480,239
============== ===== ================== ====================== ================= ==================== ===================
Transactions
with owners 167,775 5,312,464 - 146,833 5,627,072
============== ===== ================== ====================== ================= ==================== ===================
At 31 December
2018 409,167 49,983,860 1,152,165 (42,692,938) 8,852,254
============== ===== ================== ====================== ================= ==================== ===================
Total
comprehensive
loss for the
year - - - (8,919,290) (8,919,290)
Share-based
payment 18 - - - 101,404 101,404
Shares issued
during
the year 17 154 19,130 - - 19,284
============== ===== ================== ====================== ================= ==================== ===================
Transactions
with 0wners 154 19,130 - 101,404 120,688
============== ===== ================== ====================== ================= ==================== ===================
At 31 December
2019 409,321 50,002,990 1,152,165 (51,510,824) 53,652
============== ===== ================== ====================== ================= ==================== ===================
Merger reserve represents the reserve arising on the acquisition
of Futura Medical Developments Limited in 2001 via a share for
share exchange accounted for as a group reconstruction previously
using merger accounting under UK GAAP.
Retained losses represent all other net gains and losses not
recognised elsewhere.
Share premium represents amounts subscribed for share capital in
excess of nominal value, less the related costs of share
issues.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2019
As at As at
31 December 31 December
2019 2018
Notes GBP GBP
Assets
Non-current assets
Plant and equipment 11 59,505 47,473
===================================== ===== =================== ===================
Total non-current assets 59,505 47,473
===================================== ===== =================== ===================
Current assets
Inventories 12 7,780 7,780
Trade and other receivables 14 101,192 306,408
Taxation recoverable 9 2,222,194 1,358,192
Cash and cash equivalents 15 2,510,501 9,157,916
===================================== ===== =================== ===================
Total current assets 4,841,667 10,830,296
===================================== ===== =================== ===================
Liabilities
Current liabilities
Trade and other payables 16 (4,847,520) (2,025,515)
===================================== ===== =================== ===================
Total liabilities (4,847,520) (2,025,515)
===================================== ===== =================== ===================
Total net assets 53,652 8,852,254
===================================== ===== =================== ===================
Capital and reserves attributable to
owners of the parent company
Share capital 17 409,321 409,167
Share premium 50,002,990 49,983,860
Merger reserve 1,152,165 1,152,165
Retained losses (51,510,824) (42,692,938)
===================================== ===== =================== ===================
Total equity 53,652 8,852,254
===================================== ===== =================== ===================
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2019
Year ended Year ended
31 December 31 December
Notes 2019 2018
GBP GBP
Cash flows from operating activities
Loss before tax (11,141,484) (7,238,912)
Adjustments for:
Depreciation 11 20,704 19,850
Loss on disposal of fixed assets - 703
Finance income 8 (22,283) (27,576)
Share-based payment charge 18 101,404 146,833
===================================================== ======= ======================== ===================
Cash flows used in operating activities before
changes in working capital (11,041,659) (7,099,102)
===================================================== ======= ======================== ===================
Decrease in inventories 12 - 62,633
(Increase) / decrease in trade and other receivables 204,928 (125,332)
(Decrease) / increase in trade and other payables 16 2,822,004 1,526,375
===================================================== ======= ======================== ===================
Cash used in operations (8,014,727) (5,635,426)
===================================================== ======= ======================== ===================
Income tax received 1,358,480 927,391
===================================================== ======= ======================== ===================
Net cash used in operating activities (6,656,247) (4,708,035)
===================================================== ======= ======================== ===================
Cash flows from investing activities
Purchase of plant and equipment 11 (32,736) (4,510)
Interest received 22,283 27,576
===================================================== ======= ======================== ===================
Cash generated (used in)/by investing activities (10,453) 23,066
===================================================== ======= ======================== ===================
Cash flows from financing activities
Issue of ordinary shares 17 19,284 5,943,421
Expenses paid in connection with share issue - (463,182)
===================================================== ======= ======================== ===================
Cash generated by financing activities 19,284 5,480,239
===================================================== ======= ======================== ===================
(Decrease) / increase in cash and cash equivalents (6,647,415) 795,270
Cash and cash equivalents at beginning of year 9,157,916 8,362,646
===================================================== ======= ======================== ===================
Cash and cash equivalents at end of year 15 2,510,501 9,157,916
===================================================== ======= ======================== ===================
NOTES
For the year ended 31 December 2019
1. Corporate Information
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.
These Group financial statements consolidate those of the
Company and its subsidiaries (together referred to as "the Group"
and individually as "Group entities") for the year ended 31
December 2019.
The consolidated financial statements of the Company and the
Group for the year ended 31 December 2019 were authorised for issue
by the Board of Directors on 31 March 2020.
The Group is principally engaged in the development of
pharmaceutical and healthcare products.
2. Accounting policies
2.1 Basis of preparation
The consolidated financial statements have been prepared on a
going concern basis and under the historical cost convention and
have been prepared and approved by the Directors in accordance with
International Financial Reporting Standards ("IFRSs") as adopted by
the European Union. The principal accounting policies applied in
the preparation of the consolidated financial information are set
out below. These policies have been consistently applied to all
years presented, unless otherwise stated. The board of directors
approved these results on 31 March 2019. The financial information
set out above is abridged and does not constitute the Group's
statutory financial statements for the year to 31 December 2019.
Statutory financial statements for the year ended 31 December 2019
have been reported on by the Group's auditors. The auditors' report
for the year ended 31 December 2019 includes a material uncertainty
in relation to going concern and was otherwise unmodified.
The consolidated financial statements are presented in
sterling.
2.2 Going Concern
For the year ended 31 December 2019, the Group made an operating
loss of GBP11.16m. Cash and cash equivalents at 31 December 2019
were GBP2.51m. The Board has considered the applicability of the
going concern basis in the preparation of the financial statements.
This included the review of internal budgets and financial results
and a review of cash flow forecasts for the 12 month period
following the date of signing the financial statements. Under
current business plans which assume a significant reduction in
R&D spend, the Group's cash resources will extend to Q2 2021.
Based on this, additional funding is expected to be required to
support the Group's and the Company's going concern status.
Dependent upon the funds raised and the level of income generated
from licensing activities, further funding may be required to reach
profitability. The Group completed a GBP3.25m fundraising with
existing and new investors in January 2020. The Directors have a
reasonable expectation that the Group will be able to raise further
financing, which could come from a variety of dilutive and
non-dilutive sources, to support its ongoing activities, following
the anticipated submission of regulatory dossiers for MED3000 in
Europe and the US, both expected in H2 2020. The Directors also
have a reasonable expectation that the Group will be able to
generate significant funding through entering into strategic
collaborations for the commercialisation of MED3000 and its other
products, in the US and Europe.
However, there can be no guarantee that the Group will be able
to raise sufficient funding from existing and new investors, nor
that the Group will be able to secure strategic collaborations for
its product pipeline. In the event that the Group does not
successfully raise new financing, the Directors consider that the
Group would be able to reduce expenditure on its development
programmes, potentially extending the Group's cash resources to
more than 12 months from the date of signing the financial
statements.
Based on the above factors the Directors believe that it remains
appropriate to prepare the financial statements on a going concern
basis. However, the above factors give rise to a material
uncertainty which may cast significant doubt on the Group's and the
Company's ability to continue as a going concern and, therefore, to
continue realising its assets and discharging its liabilities in
the normal course of business. The financial statements do not
include any adjustments that would result from the basis of
preparation being inappropriate.
2.3 Standards, amendments and interpretation to existing
standards
The Directors have considered all new standards, amendments to
standards and interpretations which are mandatory for the first
time for the financial year beginning 1 January 2019. From 1
January 2019 the Group adopted IFRS 16 Leases.
The Group has taken the exemption not to account for short-term
leases on the balance sheet. The Group has elected to account for
short-term leases and leases of low-value assets using the
practical expedients. Instead of recognising a right-of-use asset
and lease liability, the payments in relation to these are
recognised as an expense in profit or loss on a straight-line basis
over the lease term.
2.4 Revenue
To determine whether to recognise revenue, the Group follows a
5-step process:
1 Identifying the contract with a customer
2 Identifying the performance obligations
3 Determining the transaction price
4 Allocating the transaction price to the performance
obligations
5 Recognising revenue when/as performance obligation(s) are
satisfied.
During the year, revenue was recognised on a collaborative
transaction. In accordance with IFRS 15, revenue is calculated
based on the consideration to which the Group expects to be
entitled and is recognised over the length of services provided
under the contract and once performance obligations have been met.
The transaction fee is allocated over the length of the service
being provided in accordance with the project plan. It is
recognised as a contract liability at the time of the initial
transaction and is released over the expected period of service on
the basis of work completed and performance obligations delivered.
The progress is re-evaluated by management at each reporting date
and the revenue recognised is remeasured accordingly. No revenue
was recognised in the prior year.
2.5 Leased assets
As described in Note 2.3, the Group has applied IFRS 16 using
the modified retrospective approach and therefore comparative
information has not been restated. This means that comparative
information is still reported under IAS 17.
For any new contracts entered into on or after 1 January 2019,
the Group considers whether a contract is, or contains a lease. A
lease is defined as a contract, or part of a contract, that conveys
the right to use an asset (the underlying asset) for a period of
time in exchange for consideration. To apply this definition the
Group assesses whether the contract meets three key evaluations
which are whether:
-- The contract contains an identified asset, which is either
explicitly in the contract or implicitly specified by being
identified at the time the asset is made available to the
Group.
-- The Group has the right to obtain substantially all of the
economic benefits from the use of the identified asset throughout
the period of use, considering its rights within the defined scope
of the contract.
-- The Group has the right to direct the use of the identified
asset throughout the period of use. The Group assess whether it has
the right to direct "how and for what purpose" the asset is used
throughout the period of use.
Leases, which contain terms whereby the Group does not assume
substantially all the risks and rewards incidental to ownership of
the leased item are classified as operating leases. Operating lease
rentals are charged to the Consolidated Statement of Comprehensive
Income on a straight-line basis over the lease term. The Group does
not hold any assets under finance leases.
2.6 Intangible assets
Research and development ("R&D")
Expenditure incurred on the development of internally generated
products is capitalised if it can be demonstrated that:
-- it is technically feasible to develop the product for it to be sold;
-- adequate resources are available to complete the development;
-- there is an intention to complete and sell the product;
-- the Group is able to out-license or sell the product;
-- sale of the product will generate future economic benefits; and
-- expenditure on the project can be measured reliably.
2.7 Plant and equipment
Plant and equipment is initially recognised at cost, and
subsequently at cost less accumulated depreciation and any
accumulated impairment losses. Cost includes expenditure that is
directly attributable to the acquisition of the items. Depreciation
is charged to the Consolidated Statement of Comprehensive Income at
rates calculated to write off the cost, less estimated residual
value, of each asset on a straight-line basis over their estimated
useful lives.
Computer equipment 2 - 5 years straight line
Fixtures and fittings 3 - 10 years straight line
The assets' residual values and useful lives are determined by
the Directors and reviewed and adjusted, if appropriate, at each
Consolidated Statement of Financial Position date.
2.8 Impairment of non-financial assets
An impairment review is carried out for assets being amortised
or depreciated when a change in market conditions and other
circumstances indicate that the carrying value may not be
recoverable. The recoverable amount is the higher of an asset's
fair value less costs to sell and value-in-use. For the purpose of
assessing impairment, assets are grouped at the lowest levels for
which they are separately identifiable cashflows.
2.9 Inventories
Inventories are consumable materials to be used in development
and are initially recognised at cost, and subsequently at the lower
of cost and net realisable value. Cost includes materials, related
contract manufacturing costs and other direct costs. Cost is
calculated using the first in, first out method. Net realisable
value is based on estimated selling price, less further costs
expected to be incurred to completion and disposal.
A provision is recognised immediately in the Consolidated
Statement of Comprehensive Income in respect of obsolete or
defective items, where appropriate.
2.10 Financial instruments
i) Recognition and initial measurement
At the year-end, the Group had no financial assets or
liabilities designated at fair value through the consolidated
statement of comprehensive income (2018: GBPnil). Trade receivables
and debt securities are initially recognised when they are
originated. All other financial assets and liabilities are
initially recognised when the Group becomes a party to the
contractual provisions in the instrument. A financial asset (unless
it is a trade receivable without a significant financing component)
or a financial liability is initially measured at fair value plus,
for items not measured at fair value through profit and loss
("FVTPL"), transaction costs that are directly attributable to its
acquisition or issue. A trade receivable without a significant
financing component is measured at the transaction price.
ii) Classification and subsequent measurement
Financial assets
On initial recognition a financial instrument is classified as
measured at: amortised cost, fair value through other comprehensive
income ("FVOCI") or FVTPL. Financial assets are not reclassified
subsequent to their initial recognition unless the Group changes
its business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both
the following conditions and is not designated as FVTPL:
-- it is held within a business model whose objective is to hold
assets to collect contractual cash flows; and
-- its contractual terms give rise on a specified date to cash
flows that are solely the payment of principal and interest on the
principal outstanding.
A debt investment is measured at FVOCI if it meets both the
following conditions and is not designated as FVTPL:
-- it is held within a business model whose objective is
achieved by both collecting contractual cash flows and selling
financial assets; and
-- its contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
On initial recognition of an equity investment that is not held
for trading the Group may irrevocably elect to present subsequent
changes in the investment's fair value in OCI. This election is
made on an investment by investment basis.
Financial assets at amortised cost are subsequently measured at
amortised cost using the effective interest method. The amortised
cost is reduced by impairment losses.
Financial liabilities
Financial liabilities are classified as measured at amortised
cost or FVTPL. A financial liability is classified as FVTPL if it
is held for trading, it is a derivative or it is designated as such
on initial recognition. Other financial liabilities are
subsequently measured at amortised cost using the effective
interest method. Interest expense is recognised in profit or loss.
At the year-end, the Group had no financial assets or liabilities
designated at FVOCI (2018: GBPnil).
iii) Derecognition
Financial assets
The Group derecognises a financial asset when the contractual
rights to the cash flows from the financial asset expire, or it
transfers the rights to receive the contractual cash flows in a
transaction in which substantially all the risks and rewards of
ownership of the financial asset are transferred or in which the
Group neither transfers nor retains substantially all of the risks
and rewards of ownership and it does not retain control of the
financial asset.
Financial liabilities
The Group derecognises a financial liability when the
contractual obligations are discharged or cancelled, or expire. The
Group also derecognises a financial liability when its terms are
modified and the cash flows of the modified liability are
substantially different, in which case a new financial liability
based on the modified terms is recognised at fair value. On
derecognition of a financial liability, the difference between the
carrying amount extinguished and the consideration paid is
recognised in profit or loss.
2.11 Taxation
Income tax is recognised or provided at amounts expected to be
recovered or to be paid using the tax rates and tax laws that have
been enacted or substantively enacted at the Consolidated Statement
of Financial Position date. R&D tax credits are recognised on
an accruals basis and are included as an income tax credit under
current assets.
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability on the Consolidated
Statement of Financial Position date differs from its tax base,
except for differences arising on:
-- the initial recognition of an asset or liability in a
transaction which is not a business combination and which at the
time of the transaction affects neither accounting profit nor
taxable profit; and
-- investments in subsidiaries and jointly controlled entities
where the Group is able to control the timing of the reversal of
the difference and it is probable that the difference will not
reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those
instances where it is probable that taxable profits will be
available against which the difference can be utilised.
The amount of the asset or liability is determined using tax
rates that have been enacted or substantively enacted by the
Consolidated Statement of Financial Position date and are expected
to apply when the deferred tax liabilities/(assets) are
settled/(recovered). Deferred tax balances are not discounted.
Deferred tax assets and liabilities are offset when the Group
has a legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to
taxes levied by the same tax authority on either:
-- the same taxable group company; or
-- different group entities which intend to settle current tax
assets and liabilities on a net basis, or to realise the assets and
settle the liabilities simultaneously, on each future period in
which significant amounts of deferred tax assets or liabilities are
expected to be settled or recovered.
2.12 Foreign currency translation
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at period
end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the Consolidated Statement
of Comprehensive Income in the period in which they arise.
2.13 Employee benefits
Defined contribution plans
The Group provides retirement benefits to all employees who wish
to participate in defined contribution pension schemes. The assets
of these schemes are held separately from those of the Group in
independently administered funds. Contributions made by the Group
are charged to the Consolidated Statement of Comprehensive Income
in the period in which they become payable.
Accrued holiday pay
Provision is made at each Consolidated Statement of Financial
Position date for holidays accrued but not taken, at applicable
rates of salary. The expected cost of compensated short-term
absence (holidays) is charged to the Consolidated Statement of
Comprehensive Income on an accruals basis.
Share-based payment transactions
The Group operates an equity-settled share-based compensation
plan. For all share options awarded to employees, and others
providing similar services, the fair value of the share options at
the date of grant is charged to the Consolidated Statement of
Comprehensive Income over the vesting period. Non-market vesting
conditions are taken into account by adjusting the number of equity
instruments expected to vest at each Consolidated Statement of
Financial Position date so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of share
options that eventually vest. There are no market vesting
conditions. If the terms and conditions of share options are
modified before they vest, the change in the fair value of the
share options, measured immediately before and after the
modification, is also charged to the Consolidated Statement of
Comprehensive Income over the remaining vesting period. The
proceeds received when share options are exercised, net of any
directly attributable transaction costs, are credited to share
capital (nominal value) and the remaining balance to share premium.
All employee share option holders enter into an HM Revenue &
Customs joint election to transfer the employers' national
insurance contribution potential liability to the employee,
therefore no Group asset or liability arises.
Long-term incentive plan
The Group operates a long-term incentive plan for all staff and
Directors. The quantum of any awards receivable will depend on the
Group achieving set milestones and the share price at the time
relative to targets set in advance. The Group plan is intended to
be settled in equity with cash settlement possible at the
discretion of the Board. There was no charge recognised in the year
as the milestones and targets were not met.
2.14 Finance income
Interest income is recognised on a time-proportion basis using
the effective interest rate method.
3. Critical accounting judgements, assumptions and estimates
The preparation of the 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
year.
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. No significant estimates were identified during the
year. Other estimates are disclosed below.
3.1 Estimates and assumptions
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 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 GBP101,404 (2018: GBP146,833), the volatility methodology used
is not expected to have a material impact on these financial
statements. Details of the fair value calculation for options
granted during the year, including other inputs into the Black
Scholes model, are disclosed in Note 19.
3.2 Judgements
Deferred tax recognition
The determination of probable future profits, against which the
Group's deferred tax profits can be offset, requires judgement. To
date no deferred tax assets have been recognised.
R&D tax credits
The current tax receivable as disclosed in Note 9, represents an
R&D tax credit based on an advance claim with HMRC. 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.
Research and Development costs
Management are required to make a judgement about certainty of
commercial success of their products. No Research and Development
costs have been capitalised in the current or prior period and
further details can be found in Note 2.6.
4. Financial Risk
4.1 Financial risk factors
The Group's activities expose it to a variety of financial
risks: market risk (including foreign exchange rate risk, cash flow
interest rate risk and fair value interest rate risk); credit risk
and liquidity risk. It is Group policy not to enter into
speculative positions using complex financial instruments.
(i) Market risk
Foreign exchange rate risk
The Group primarily enters into supplier contracts which are to
be settled in sterling. However, some contracts involve other
currencies including the US dollar and the euro. The Group may use
forward exchange contracts as an economic hedge against currency
risk, where cashflow can be judged with reasonable certainty. There
were no material open forward contracts as at 31 December 2019 or
at 31 December 2018
At 31 December 2019 the Group had trade payables denominated in
a foreign currency totalling GBP101,899 (31 December 2018:
GBP931,532).
Cash flow interest rate risk and fair value interest rate
risk
The Group's interest rate risk arises from short-term money
market deposits.
(ii) Credit risk
Credit risk arises from cash and cash equivalents and money
market deposits as well as credit exposure in relation to
outstanding receivables. The exposure relating to outstanding
receivables is immaterial and the carrying amount of cash balances
is as follows:
31 December 31 December
2019 2018
GBP GBP
Cash at bank and in hand 2,137,599 5,706,519
Sterling short-term money market funds 372,902 3,451,397
========================================= ================== ==================
2,510,501 9,157,916
========================================= ================== ==================
The Directors consider the Group's exposure to credit risk to be
acceptable and normal for a similar entity at its stage in
development.
(iii) Liquidity risk
The Group's approach to managing liquidity is to ensure that, as
far as possible, it will always have sufficient liquidity to meet
its liabilities when due, under both normal and stressed
conditions, without incurring losses or risking damage to the
Group's reputation.
The Group manages all of its external bank accounts centrally
and in accordance with defined treasury policies. The policies
include a minimum acceptable credit rating of relationship bank
accounts and financial transaction authority limits. Any material
change to the Group's principal bank facility requires Board
approval.
4.2 Capital risk management
The Group's policy is to maintain a strong capital base. The
Group does not yet have significant recurring revenues and has
mainly financed its operations through the issue of new shares and
management of working capital. The Group's capital resources are
managed to ensure it has resources available to invest in
operational activities designed to generate future income. These
resources were represented by GBP2,510,501 of cash and fixed term
deposits as at 31 December 2019 (31 December 2018:
GBP9,157,916).
5. Segment Reporting
The Group is organised and operates as one segment. The Group's
R&D costs are analysed by development programme as follows:
Year ended Year ended
31 December 31 December
2019 2018
GBP GBP
MED 8,019,710 3,538,059
TPR 230,639 172,925
CSD 41,554 391,782
Other 183,038 70,217
======== ========================== ==========================
8,474,941 4,172,984
======== ========================== ==========================
6. Operating loss
Year ended Year ended
31 December 31 December
2019 2018
Operating loss is stated after charging: GBP GBP
Depreciation of plant and equipment (note
12) 20,704 19,850
Loss on disposal of plant and equipment - 703
Inventories consumed in R&D - 62,633
Short term leases: property 117,275 114,142
Gain/(Loss) on foreign exchange 8,468 (12,606)
The 2019 fees of the Group's Auditor Grant Thornton LLP (2018:
KPMG LLP) for services provided are analysed below:
Year ended
31 December
2019
Audit services GBP
Parent company 35,000
Subsidiaries 7,000
Other Non-audit services
iXBRL Tagging 1,000
Total fees 43,000
=========================== ===============
The 2018 fees of the Group's Auditor KPMG LLP for services
provided are analysed below:
Year ended
31 December
2018
Audit services GBP
Parent company 33,000
Subsidiaries 9,000
Tax services
Parent company 4,000
Subsidiaries -
================= ==========================
Total fees 46,000
================= ==========================
7. Staff numbers and costs
The average number of persons (including all Executive and
excluding Non-Executive Directors) employed by the Group during the
year, analysed by category, was as follows:
Year ended Year ended
31 December 31 December
2019 2018
R&D staff 8 10
Finance and Administration staff 2 2
Executive Directors 3 3
=================================== ================== ==================
13 15
=================================== ================== ==================
The aggregate payroll costs of these persons were as
follows:
Year ended Year ended
31 December 31 December
2019 2018
GBP GBP
Wages and salaries 1,315,760 1,603,513
Social security costs 181,544 172,805
Other pension and insurance benefits costs 180,342 182,282
============================================= ========================= ========================
Total cash-settled emoluments 1,677,646 1,958,600
Share-based payment remuneration charge 101,404 146,833
============================================= ========================= ========================
Total emoluments 1,779,050 2,105,433
============================================= ========================= ========================
All employees of the Group are employed by Futura Medical
Developments Limited.
Directors' emoluments
Year ended Year ended
31 December 31 December
2019 2018
GBP GBP
Aggregate emoluments 693,353 929,608
Other pension and insurance benefit costs 22,506 19,748
============================================ =============== ===============
Subtotal per remuneration report 715,859 949,356
Share-based payment remuneration charge 47,866 74,647
Employer's national insurance charge 73,811 86,991
============================================ =============== ===============
Total emoluments 837,536 1,110,994
============================================ =============== ===============
In 2019 there were no Directors whose share options were
exercised under the Group share option schemes and no gain was
realised (2018: GBP6,000). In respect of the highest paid Director
the realised gain was GBPnil (2018: GBPnil).
In 2019 there were no Directors (2018: no Directors) who
participated in a private money purchase defined contribution
pension scheme. Emoluments for individual Directors are disclosed
within the Remuneration Committee Report.
The Directors consider that there are no Key Management
Personnel other than the Directors.
Emoluments above include the following amounts in respect of the
highest paid Director:
Year ended Year ended
31 December 31 December
2019 2018
GBP GBP
Aggregate emoluments 235,593 273,855
Employer pension contributions - -
========================================== ========= ======================
Subtotal per remuneration report 235,593 273,855
Share-based payment remuneration charge 18,410 28,711
Employer's national insurance charge 31,680 36,284
========================================== ========= ======================
Total emoluments 285,683 338,850
========================================== ========= ======================
8. Finance income
Interest receivable in 2019 on treasury funds was GBP22,283
(2018: GBP27,576).
9. Taxation
9.1 Current tax
Year ended Year ended
31 December 31 December
2019 2018
GBP GBP
UK corporation tax credit on loss on ordinary
activities 2,222,194 1,358,336
================================================ =========================== ===========================
The tax assessed for the year was lower than the UK corporation
tax rate (2018: higher). The differences are explained below:
Year ended Year ended
31 December 31 December
2019 2018
GBP GBP
Loss on ordinary activities before tax 11,141,484 7,238,912
============================================== ============== =========================
Loss on ordinary activities at an average
standard rate of corporation tax in the
UK of 19% (2018: 19%) 2,116,882 1,375,393
Expenses not deductible for tax purposes (304) (215)
Unrecognised deferred tax (15,701) (29,578)
Unutilised tax losses (841,959) (581,892)
Share scheme deduction - 5,529
R&D expenditure credit (4,969) (3,296)
Loss surrendered for refund (683,072) (417,236)
Additional relief for R&D claims 1,630,136 995,722
============================================== ============== =========================
UK corporation tax credit 2,201,013 1,344,427
Adjustment to tax charge relating to
prior period - (144)
R&D expenditure credit re 2018 - 14,053
R&D expenditure credit re 2019 21,181 -
============================================== ============== =========================
UK corporation tax credit reported in
the
Consolidated Statement of Comprehensive
Income 2,222,194 1,358,336
============================================== ============== =========================
The Group has tax losses of approximately GBP31,265,826 (2018:
GBP26,834,483) available for offset against future taxable
profits.
The corporation tax credit for the year represents research and
development tax credits of GBP2,201,012 (2018: GBP1,344,428),
arising from the surrender of losses (rather than carrying forward
to future years) of GBP15,179,395 (2018: GBP9,271,916) at 14.5%,
under HMRC's small and medium size enterprise scheme. The taxable
loss for the year is in excess of the accounting loss for various
reasons, principally the additional deductions given for tax
purposes on research and development expenditure.
In addition a small claim under the large company Research and
Development Expenditure Credit (RDEC) scheme resulted in a refund
of GBP21,181 (2018: 14,053).
9.2 Deferred tax
Deferred tax assets amounting to GBP5,649,021 (2018:
GBP4,881,640) have not been recognised due to it not being probable
that taxable profits will be available, against which these
deductible temporary differences can be utilised. Reductions in the
UK corporation tax rate from 20% to 19% (effective from 1 April
2017) were substantively enacted on 26 October 2015. The
unrecognised deferred tax asset at 31 December 2019 has been
calculated assuming a prevailing tax rate when the timing
differences reverse of 17% (2018: 17%) and comprises:
Year ended Year ended
31 December 31 December
2019 2018
GBP GBP
Depreciation differential versus capital
allowances (1,770) 2,108
Other short-term timing differences 335,600 317,670
Unutilised tax losses 5,315,191 4,561,862
=========================================== ========================== ==========================
5,649,021 4,881,640
=========================================== ========================== ==========================
10. Loss per share
The calculation of basic and diluted earnings per share ("EPS")
is based on the following data:
2019 2018
Loss for the purposes of basic EPS and
diluted EPS (GBP) 8,919,290 5,880,576
Weighted average of ordinary shares for
purposes of basic and diluted EPS (number) 204,657,741 131,936,761
Loss per share basic and diluted (pence) 4.36 4.46
============================================= =============== ========================
Diluted EPS is calculated in the same way as basic EPS but also
with reference to reflect the dilutive effect of share options in
existence at the year-end which were 7,255,000 (2018: 5,700,000).
The diluted loss per share is identical to the basic loss per
share, as potential dilutive shares are not treated as dilutive
since they would reduce the loss per share.
11. Plant and equipment
Computer Equipment Furniture
and Fittings Total
Cost GBP GBP GBP
At 1 January 2019 86,602 63,285 149,887
Additions 32,736 - 32,736
Disposals - - -
========================== ======================== ==================== =====================
At 31 December 2019 119,338 63,285 182,623
========================== ======================== ==================== =====================
Depreciation
At 1 January 2019 47,495 54,919 102,414
Eliminated on disposals - - -
Charge for year 19,250 1,454 20,704
========================== ======================== ==================== =====================
At 31 December 2019 66,745 56,373 123,118
========================== ======================== ==================== =====================
Net book value
At 31 December 2019 52,593 6,912 59,505
========================== ======================== ==================== =====================
At 31 December 2018 39,107 8,366 47,473
========================== ======================== ==================== =====================
Computer Equipment Furniture
and Fittings Total
Cost GBP GBP GBP
At 1 January 2018 91,243 63,285 154,528
Additions 4,510 - 4,510
Disposals (9,151) - (9,151)
========================== ========================= ================== ==================
At 31 December 2018 86,602 63,285 149,887
========================== ========================= ================== ==================
Depreciation
At 1 January 2018 37,915 53,096 91,011
Eliminated on disposals (8,447) - (8,447)
Charge for year 18,027 1,823 19,850
========================== ========================= ================== ==================
At 31 December 2018 47,495 54,919 102,414
========================== ========================= ================== ==================
Net book value
At 31 December 2018 39,107 8,366 47,473
========================== ========================= ================== ==================
At 31 December 2017 53,328 10,189 63,517
========================== ========================= ================== ==================
All fixed assets of the Group are held in Futura Medical
Developments Limited.
12. Inventories
31 December 31 December
2019 2018
GBP GBP
Consumable materials used for development 7,780 7,780
============================================ ================== ==================
13. Financial instruments by category
The accounting policies for financial instruments have been
applied to the line items below:
Assets as per Consolidated Statement of Financial 31 December 31 December
Position 2019 2018
Loans and receivables at amortised cost GBP GBP
Trade and other receivables (note 15) 59,968 248,426
Cash and cash equivalents (note 16) 2,510,501 9,157,916
==================================================== ========================= =========================
Total receivables 2,570,469 9,406,342
==================================================== ========================= =========================
31 December 31 December
2019 2018
Liabilities as per Consolidated Statement of GBP GBP
Financial Position at amortised cost
Trade and other payables (note 17) 4,847,520 1,246,247
=============================================== ========================== ==========================
Total Payables 4,847,520 1,246,247
=============================================== ========================== ==========================
The Directors consider that there is no material difference
between the carrying values of financial assets and liabilities,
and their fair value.
14. Trade and other receivables
31 December 31 December
2019 2018
Amounts receivable within one year : GBP GBP
Trade receivables 5,627 627
Other receivables 54,341 247,799
======================================= ================== ==================
Financial assets (note 14) 59,968 248,426
Prepayments 41,224 57,982
======================================= ================== ==================
101,192 306,408
======================================= ================== ==================
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.
15. Cash and cash equivalents
31 December 31 December
2019 2018
GBP GBP
Cash at bank and in hand 2,137,599 5,706,519
Sterling short-term money market funds 372,902 3,451,397
========================================= ================== ==================
2,510,501 9,157,916
========================================= ================== ==================
16. Trade and other payables
31 December 31 December
2019 2018
GBP GBP
Trade payables 2,625,359 1,246,247
================================== ================== ==================
Social security and other taxes 39,970 42,684
Deferred Income 218,222 -
Accrued expenses 1,963,969 736,584
================================== ================== ==================
4,847,520 2,025,515
================================== ================== ==================
The increase in payables is reflective of the increase in
research and development activities relating to the Phase 3 study
completed in the year.
17. Share capital
31 December 31 December 31 December 31 December
Authorised 2019 2018 2019 2018
Number Number GBP GBP
Ordinary shares of 0.2
pence each 500,000,000 500,000,000 1,000,000 1,000,000
========================= ============= ============= ================== ==============
Allotted, called up and 31 December 31 December 31 December 31 December
fully paid 2019 2018 2019 2018
Number Number GBP GBP
Ordinary shares of 0.2
pence each 204,660,267 204,583,439 409,321 409,167
========================== ============= ============= ================== ==================
The number of issued ordinary shares as at 1 January 2018 was
120,696,002. During the year ended 31 December 2018, the Company
issued shares of 0.2 pence each as follows:
Shares
Month Reason for issue Gross Consideration Issued
GBP Number
Option exercise at 30.00 pence
January 2018 per share 24,000 80,000
Option exercise at 30.00 pence
January 2018 per share 24,000 80,000
Option exercise at 30.00 pence
May 2018 per share 45,000 150,000
Share placing at 7.00 pence
November 2018 per share 5,600,000 80,000,000
Open Offer placing at 7.00
November 2018 pence per share 250,421 3,577,437
================ ==================================== ===================== ==================
5,943,421 83,887,437
================== ================================= ===================== ==================
The number of issued ordinary shares as at 1 January 2019 was
204,583,439. During the year ended 31 December 2019, the Company
issued shares of 0.2 pence with each ordinary share carrying the
right to one vote as follows:
Shares
Month Reason for issue Gross Consideration Issued
GBP Number
Non-Executive Director Share
January 2019 Award 19,284 76,828
=============== ================================== ===================== ===========
19,284 76,828
================= =============================== ===================== ===========
18. Share options
At 31 December 2019, the number of ordinary shares of 0.2 pence
each subject to share options granted under the Company's Approved
and Unapproved Share Option Schemes were:
Exercise At 1 At 31
Price January Options Options Options December
per Share 2019 Exercised Lapsed Granted 2019
Pence Number Number Number Number Number
Exercise Period
1 October 2014 -
30 September
2019 61.50 310,000 - (310,000) - -
1 October 2015 -
30 September
2020 71.50 620,000 - - - 620,000
1 October 2016 -
30 September
2021 51.75 580,000 - - - 580,000
1 October 2017 -
30 September
2022 30.00 750,000 - - - 750,000
1 October 2018 -
30 September
2023 57.50 960,000 - - - 960,000
1 October 2019 -
30 September
2024 30.50 1,140,000 - - - 1,140,000
7 January 2020 - 6
January
2029 7.20 - - - 212,500 212,500
31 August 2020 - 6
January
2029 7.20 - - - 212,500 212,500
1 October 2020 -
30 September
2025 7.50 1,340,000 - - - 1,340,000
1 October 2021 -
30 September
2026 31.00 - - - 1,440,000 1,440,000
5,700,000 - (310,000) 1,865,000 7,255,000
==================== ============ =========== ==================== ================ ================ ===========
On 12 November 2019 share options over 1,390,000 new ordinary
shares were granted to employees (including Executive Directors) at
a price of 31.00p. The options have a 2 year vesting period and the
exercise period for these options is 1 October 2020 to 30 September
2025.
The share options outstanding at 31 December 2019 represented
3.54% of the issued share capital as at that date (2018: 2.78%) and
would generate additional funds of GBP2,433,900 (2018:
GBP2,159,300) if fully exercised. The weighted average remaining
life of the share options outstanding at 31 December 2019 was 51
months (2018: 52 months) with a weighted average remaining exercise
price of 33.55 pence (2018: 50.26 pence).
The share options exercisable at 31 December 2019 totalled
3,850,000 (2018: 3,220,200) with an average exercise price of 48.48
pence (2018: 51.28 pence) and would have generated additional funds
of GBP1,766,650 (2018: GBP2,318,200) if fully exercised.
The Group's share option scheme rules apply to 6,550,000 of the
share options outstanding at 31 December 2019 (31 December 2018:
5,320,000) and include a rule regarding forfeiture of unexercised
share options upon the cessation of employment (except in specific
circumstances).
Options have historically been issued to advisors under the
unapproved scheme. Such options generally vest immediately and are
exercisable between one and two years after grant. There were
705,000 share options outstanding to advisors at 31 December 2019
(31 December 2018: 380,000).
There were no market vesting conditions within the terms of the
grant of the share options.
The Black-Scholes formula is the option pricing model applied to
the grants of all share options made in respect of calculating the
fair value of the share options.
Share based payments
31 December 31 December
Inputs to share option pricing model 2019 2018
Grant date 17 September 19 November
Number of shares under option 1,390,000 1,340,000
Share price as at date of grant 30.70 pence 6.95 pence
Option exercise price 31.00 pence 7.50 pence
Expected life of options: based on previous 3 years
exercise history 3 years
Expected volatility: based on median fluctuations
over 3 years 82.70% 82.70%
Dividend yield: no dividends assumed 0% 0%
Risk-free rate: yield on 3 year treasury 0.84% p.a
stock as at date of grant 0.48% p.a.
==================================================== ==================== =====================
31 December
2018
Outputs generated from share option pricing 31 December
model 2019
Fair value per share under option 16.19 p 3.57p
Total expected charge over the vesting GBP225,041 GBP47,838
period
================================================ ================== =====================
Recognised in Consolidated Statement 31 December 31 December
of Comprehensive Income 2019 2018
GBP GBP
The share-based remuneration charge comprises:
Share-based payments - employees 32,019 3,016
Share-based payments - consultants - -
================================================= ======================== ======================
Share-based payments 32,019 3,016
================================================= ======================== ======================
The total expense recognised for the year arising from
share-based payments is as follows:
31 December 2019 31 December 2018
GBP GBP
Group equity-settled share based payment expense 101,404 146,833
====================================================== ================== ==================
19. Pension costs
The pension charge represents contributions payable by the Group
to independently administered funds which during the year ended 31
December 2019 amounted to GBP164,458 (2018: GBP86,990). Pension
contributions payable in arrears at 31 December 2019, included in
accrued expenses at the relevant Consolidated Statement of
Financial Position date, totalled GBP10,225 (2018: GBP6,183).
20. Commitments
At 31 December 2019 the Group had operating lease commitments in
respect of property leases cancellable on one month's notice of
GBP9,802 (2018: GBP9,767).
21. Related party transactions
Related parties, as defined by IAS 24 'Related Party
Disclosures', are the wholly owned subsidiary companies, Futura
Medical Developments Limited, 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.
Key management compensation
The Directors represent the key management personnel. Details of
their compensation and share options are given in note 8 and within
the Remuneration Committee Report.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR BIGDXIGXDGGB
(END) Dow Jones Newswires
April 01, 2020 02:00 ET (06:00 GMT)
Futura Medical (LSE:FUM)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Futura Medical (LSE:FUM)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
