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Remember 10 September 2024, when at the interim results Angela Hildreth looked at a piece of paper and suggested that Futura’s full year revenue for 2025 was forecast at circa £19m? On 11 September, Futura was forced to state “the company confirms that the equity analyst consensus market expectations [which it had presumably guided] for revenue for the year ending 31 December 2024 and 31 December 2025 are £13.4 million and £18.6 million respectively”. Today, a year on, and that FY 2025 forecast has vaporized by over 80%, to just £1.3-£1.4m.

Shocking.

Clearly, Hildreth assumed pretty much 100% of sales for channel stocking would actually leave store doors during the year as sales. On top of this bold assumption, she factored in one-off royalties / milestone payments from eg a US patent for Eroxon being issued and a US sales target being met.

Today’s trading update indicated how completely wrong she was on 10 September last year: stock has been slow to move, so restocking is way down (and all the additional costs of extra production capacity are hitting the bottom line). The sales performance payment from Haleon never materialised, ditto a payment from it for a US patent.

Wrong, wrong, and wrong again.

It’s no wonder she has to leave the company. With revenue over 80% down on her figure of a year ago, her credibility as a finance director is completely and totally shot. Had she demonstrated caution and been transparent regarding the composition of overall revenue between sales, and one off (contingent) payments, the share price would not have collapsed as it has. Remember, just two years ago, Futura’s share price was over 50p, before Barder’s famous “looking out of the window” at interims sent it down eventually to as low as 25p. Hildreth’s total inability to provide clear and accurate forecasts has now further torpedoed the share price down to just over 5p. A needless 90% destruction of shareholder value.

Shareholders have been seriously misled by two jokers.

Thank goodness Lombard stepped in and forced them out.

Two out, and now the CFO is a dead man walking. Surely she won’t still be there by year end, given her faltering performances at results, failure to bring in other institutional investors, and joint responsibility with Barder for overseeing the share price slump to an all-time low. No wonder Barder can only state that he is ‘proud’, and not extremely proud of the outcomes of his stewardship. Lombard’s patience has been tested to beyond breaking point, especially since his calamitous performance at the 2023 interims, gazing out of the window, from which the share price nosedived from above 50p to just over 7p today.

His carefully orchestrated video meets with analysts have been of no consequence, as he has dismissed concerns of small investors, and awarded himself options despite awful share price performance.

For a long time, investors could see that the only Futura board member worth having was Ken James. James and Angela have been way out of their depth in a company that needed confident and credible faces that could engage with media and potential investors as it became commercialised. Part of the new strategy of the new interim CEO must be to rid the company of its remaining deadwood, namely the CFO. She is well past her sell-by date, punching well-below her weight, as her performances at results and the share price shows. The new strategy also needs to rid the company of the hopelessly poor investor relations firm, which clearly has not delivered any positive value for shareholders.

If only Futura had executives of the calibre of the CEO and CFO of Haleon - highly knowledgeable and highly confident in front of analysts and investors, not ducking hard questions, not bringing key meetings to premature closes, effectively saying “bring it on” in terms of tell me what you want to know….Alas, it’s CEO and CFO have been the exact opposites, giving highly scripted, truncated performances. Nowhere near good enough.

I’m sure that, shorn of deadwood directors and so-called professional advisers, and with forthcoming new product developments and better commercial traction among women, Futura will become an increasingly attractive acquisition target.

David Hayes, analyst at Jeffries, asked Brian McNamara, Haleon’s CEO “you saw Futura saying few weeks ago that they were cutting their 2025 outlook. Can you give us your perspective on that commentary? Is it being a bit disappointing? And/or in terms of M&A, is that a business that you think you could look to actually fully participate in and maybe sort of change the strategy and maybe improve that momentum if that's something that needs to be done?”

McNamara replied “So, you know, on Eroxon, we did launch in October. I've always said, you know, this is a new OTC category with a new brand, with a new consumer behavior. So we always expected it to be a bit of a slow startup.There's no question that the early trial and results have been slower than we expected. So, you know, we continue, we believe this is a big unmet need for consumers. We're continuing to look at it and understand what happens, but there's no question, I want to be clear, it's a bit below our expectations. Now, that said, that's all incorporated in our 4% to 6% guidance going forward. So, you know, we're still very confident on the full year. Just one comment on M&A and balance sheet is, you know, our capital allocations are very clear, invest in growth. Obviously, we're quite confident in our outlook and our cash flow, hence the increasing dividend and the 500 million of stock buyback. But we still have headroom to be able to do bolt on M&A. If the right thing comes on and it strengthens our portfolio, we'll absolutely have the capability and ability to do that.”

In July 2023, when Futura announced Haleon as its US distribution partner, it stated that it could gain “potential commercial and performance-driven sales milestone payments totalling between $5 million and $45 million payable over the course of several years”. Why potentially pay $45m for just the US when Futura, in terms of worldwide sales and all its IP - including Eroxon Intense, Eroxon Female, Cannabidiol DermaSys, and pending patents - is trading at a market cap of only just over $50m this morning? Hayes asked the obvious, as Haleon could internalise not just US gains but those worldwide in what would essentially be a bolt on acquisition. This would free Haleon from any constraints stemming from its current agreement with Futura, especially important if the current Eroxon offering is found to need a more innovative offering, as with sachets of Sensodyne in India. As well, Haleon could directly sell Eroxon in those countries not yet covered by a commercial agreement, and sell off the parts of Futura of no interest to it.

Given that Haleon stated that “We're working closely with our retail partners to build awareness with the right demographic and we will update on progress in the coming months,” I would expect its Capital Markets Day, on 1 May, to be that update point.

Futura’s profit warning of 30 January for FY 2025 was definitely surprising. Should it have been?

Milestone royalties are a significant but lumpy part of the company’s overall revenue. The easy milestone wins were those triggered by initial launches to fill sales channels, and the biggest of these was the launch in the US, leading to the previous big revenue upgrade for FY 2024.

Initial channel filling is completely different to generating repeat and growing sales. Eroxon is a completely new product in a new product category, and possible buyers have to be made aware of it, then persuaded to buy it. Effective marketing thus becomes vital. There absolutely has to be feedback from the potential and actual buyers to the suppliers - Haleon, Coopers etc - to refine the subsequent messages, to make them more effective. This is a series of cycles, each hopefully producing higher and more self-sustaining sales, as barriers to take up are identified and removed by the next marketing cycle. These cycled are the hard yards of selling.

In an ideal world, Eroxon would be an easy sell, flying off the shelves, with capacity unable to meet demand, but in a competitor space containing off-patent Viagra and Cialis, that’s not the case. Haleon and Coopers are well aware of the challenges of launching new products in new categories, against incumbent products. Those challenges are part of their expertise. There’s always a way to sell, but that way may only reveal itself after multiple iterations.

The US is Eroxon’s biggest target market, so Haleon’s FY 2004 results on 27 February - with analyst Q&A - will provide real insights into sales of Eroxon to date, actions Haleon will be taking to more effectively market Eroxon, as well as its forecast for future US sales of Eroxon. This is all colour Futura cannot provide, with the information vacuum facilitating the share price undershoot.

Despite appearances, Futura was not a bombed-out stock in 2019 at under 8p after MED 2005 failed its Phase 3 trial, and is much less so now, at 13.5p, with the then successful placebo product being marketed and sold by leading consumer health companies, and prescribed by GPs in the UK. There are substantial learnings that need to, and will, be incorporated into subsequent marketing cycles and campaigns that will lift sales and trigger milestone royalties to Futura. As well, new product extensions may come to market in the next 12-15 months, with the female version much less likely to experience barriers to take up, given women are more open to discussing sexual dysfunction experiences and buying products in this space.

It’s not an investment ride most of us wanted or expected. The missing piece now is translating the acknowledged science of causation and proportion of users who report a benefit into expanding sales through effective marketing.

On Tuesday, FUM announced a maiden profit after tax of £1.0m. Yesterday, it highlighted a research note by Trinity Delta, upping its price target to 130p. However, the market marked the shares down to 36.5p tonight, so that the gap between broker and market opinions is 93.5p. With 301.9m shares in issue, according to Trinity Delta, the company is undervalued by £281m.

Which is more important to us as shareholders? A heralded £1m profit or the unspoken of £281m loss? It is the Great Irony that the smaller sum is the figure heralded and back-slapped as more important.

As shareholders, which route provides the quickest and greatest return?

Looking up and yonder to find and secure new (institutional) long term buyers for your shares, to stabilise and grow your share price up and beyond that £1.30 figure?

Or looking down, focusing on day to day operational matters, with much longer and more indirect financial payoffs to shareholders?

Whilst a maiden post tax profit is welcome, the fact is shareholders are no better off. For every FUM share that is sold the seller should, according to Trinity, be receiving 93.5p more. That’s a sum probably greater than FUM will ever pay out in dividends as a quoted public company.

So, when FUM states it’s focused on achieving good returns for shareholders, finding those buyers, to close that 93.5p gap, should be the starting point.

I don’t doubt that day to day operational matters are important, but right now finding new long term buyers of the shares really needs to be in the board’s crosshairs.

That’s the fastest route to improving current shareholder returns, gaining wider support among shareholders, achieving greater financial clout and operational flexibility, protecting the long term independence of FUM, and strengthening its bargaining position in any future sale.

After the Finance Director’s embarrassing slip on the H1 results call yesterday, regarding analysts’ full year revenue expectations, FUM has uncharacteristically issued an after-hours RNS containing not just a link to Trinity Delta’s latest company report, but emphasising that consensus FY 2025 revenue is £18.6m.

I do wonder whether the truncated call yesterday - past calls have been nearer 1 hour - was related to the FD’s faux pas, which immediately drew simultaneous glances from both Ken and James. I wouldn’t have thought they would want to address on screen investor questions about the FD’s £18m-£19m figure….

In Trinity Delta’s valuation model, Europe is worth 42p per share. With Eroxon in H1 still only selling in 10 of 28 (including UK) European countries and, with difficulty, in some Gulf States, the 37p closing price tonight should be due a big re-rating to reflect the 75p per share attributed to the US and a slice of the 18p attributed to the rest of World flowing from the start of sales in Latin America.

Stock markets are supposed to be forward-looking, inherent in the NPV model of Trinity Delta. If, with the benefit of incremental sales from launches in the US, Latin America, and other European countries the share price at end 2024 is anywhere near its closing price tonight I would be astonished. At just over 5x 2025 sales, it would be a sitting duck to be taken over, whether by a private equity house or by a commercial company. (Granted, this figure may be flattered by initial channel-filling.)

Some companies operate an ‘up or out’ policy for their employees - perform well and advance, or you’ll be sacked. We are approaching a possible end game for Futura’s management team. Unless the share price re-rates as the incremental sales hit the accounts, the disparity between company valuation and sales will become too tempting for someone. No buyer would keep the failed management (excluding Ken James) on.

JB et al really need to up their game. Lots of publicly-quoted companies eventually disappear through takeover. The stock market is an unforgiving, Darwinian-style, jungle. In that jungle, FUM’s currency - its share price - is extremely weak, and has been for years. Every corporate action (eg takeovers, raising equity) based on using such a weak currency is more expensive.

Weak currencies are never a good thing to have in the stock market. They limit strategic options, sow investor unrest, and attract corporate opportunists.

Up or out, JB.

The H1 figures appeared good. But with around 250 printed trades out there, and barely any upward movement in the share price, ‘the market’ is still not convinced by Futura.

To me, management looked fearful, desperate to end the visual ordeal of being scrutinised by shareholders. It was disappointing that they didn’t give time for more questions - less than 15 minutes to cover 6 months? Really not good enough. Closing the call after 30 minutes gave the impression that they see dealing with investors’ concerns as an ordeal rather than something they are confident about and relish as a challenge. One has to wonder whether they carry that same lack of confidence into presentations with potential institutional investors, if indeed they have been that brave to face scrutiny by them.

The negative marks on the results scorecard surround the Middle East, South Korea, and China.

As well, a year ago we were promised an update (from memory at full year 2023) of derivative Eroxon products (eg delivery mechanisms, product for women, etc). A year on, we are now promised an update by the end of 2024.

Because questions were closed down so quickly, management limited their scrutiny to these and other important questions and (non) deliverables.

Futura is being very poorly advised in terms of investor relations. It ducked an opportunity for management to convince the Doubting Thomases and sceptics that money invested in Futura is well placed, and will provide excellent return. Companies with strong share price growth trumpet it, but nothing has been said for ages by management about the company’s share price.

At the moment, Futura is like a car whose ignition key is being repeatedly turned by operational progress, but whose engine in terms of share price growth is repeatedly refusing to start. Like with cars, there will be a reason. And that should be discussed at moments like this.

Ducking out of presentations early to avoid ‘hard talk’ won't make the questions go away. Futura’s management and its advisers should realise that, as Einstein is supposed to have said, “insanity is doing the same thing repeatedly and expecting different results.”

Stop simply cranking the car engine and find and deal with the reason the car won’t start!

Around a year ago, James Barder’s interims presentation cratered the FUM share price from north of 50p to around 25p by Christmas.

Whatever facts he tries selling as management and business achievements on 10 September, the stock market equation means they have a sum value now less than half that in Spring 2021, or roughly 42 months ago.

Why? Consultants would undertake a root cause analysis (RCA): analyse the business, including external stakeholders like current and potential investors, to identify why, as its brokers put a value of around £1.20 per share on the business, without US sales, the shares languish at around a third of that level, even with the announcement of US sales from next month.

For months now, Barder has been, ostrich-like, head in the sand, saying nothing to actual and potential investors. Simply not good enough. Worse, when he has addressed them in the past, he has seemed insouciant, gazing out of the window when answering investors’ questions. one cannot imagine him doing the same to the PM, or to King Charles. It was disrespectful.

What is said (and not said) to investors, how it is said (or not said) to investors, and when it is said to investors are all relevant issues in why the share price is languishing at a massive discount to analysts’ targets.

The ultimate responsibility lies with Barder. As shareholders, we have provided him with money and time to achieve more than he has to date. Sales in China, one of the fastest-growing economies, and with almost 1/5th of the world’s population, are years away, perhaps into the next decade, with still no replacement licensee for Co High.

I listened to Brian McNamara, CEO of Haleon, speak a couple of days ago. He was thoroughly credible, able to speak about the operational and financial aspects of the company, justify its forecasts in a global context, etc. Given the time and money Barder has had, yet the huge discount FUM’s shares trade at (representing a loss to shareholders of £250m-£300m with the number of shares in issue), it is increasingly the case that replacement(s) are needed at the top of FUM, with a McNamara type leader as CEO. At a stroke, I’m sure that value gap would close substantially.

James is James. Can he change? I really don’t think he can. He is what he is. Many shareholders are sceptical of him, or simply don’t trust him. FUM still is without another anchor institutional shareholder, with a notifiable stake. All investors are interested in making money. The current management at FUM are, as with China licensing, making a poor fist of key operational issues.

Many of the factors in a RCA of FUM’s current low share price stem, ultimately, from actions, or lack of them, by Barder, by how he’s undertaken them, and when he’s undertaken them (or not).

Here’s hoping you step up to the plate on 10 September, James, and prove me wrong, by scoring a home run for FUM! Win the dressing room back!

“Eroxon® was launched in Norway in February 2024 and has been very well received by Norwegian consumers. After only two weeks in the market, it was the bestseller at an online pharmacy. Strong sales resulted in Eroxon® ranking third on Navamedic’s most sold products in the Consumer Health segment in the first quarter of 2024.

"Eroxon® is a fast, safe and easily available product developed to help men improve not only their sexual health but also their quality of life. We hope for a similar response in Sweden as in the UK and Norway. Over time, we see greater growth potential in Sweden because Eroxon® will be the only non-prescription treatment for erectile dysfunction in the market," says Jack Spira, Medical Director at Navamedic.

Four out of ten men in Sweden have experienced erectile dysfunction at some point, according to a new survey conducted on behalf of Navamedic. Medication is the most common measure, but the vast majority do not seek any help at all[1].

Eroxon® offers a range of features which distinguishes it from other treatments of erectile dysfunction. First and foremost, it is an effective and fast-acting gel which typically helps men get an erection within ten minutes. It has a very good safety profile due to local effect with no systemic absorption. Eroxon® is approved as a treatment for erectile dysfunction in the EU and the US.”

https://navamedic.com/news/navamedic-asa-broad-launch-for-eroxon-in-sweden-today/

Worth looking at p11 here https://mb.cision.com/Main/17619/3970410/2769269.pdf. Worth tracking media coverage in Sweden over next month or so.

According to our FD, the company is now covered by 3 brokers: Trinity Delta, Liberum and Stifel Nicolaus. Respectively, their current valuations for Futura are 121p, 131p, and 125p per share.

Closing market price tonight? 36p.

With c 301m shares in issue, the company is undervalued by the best part of £300m. That’s a whopping amount.

Part of this undervaluation is due to the company being valued on a marginal rather than an average basis. Marginal sellers are ‘happy’ to sell at 36p, because no buyers are currently offering prices in line with analysts’ estimates. But Lombard, which owns just under 30% of the shares will not be a marginal seller if the company is eventually sold. As well, Futura’s executives would point to analysts estimates and say they have a fiduciary duty to seek at least as much as £1.20 a share to agree a sale of the company.

Part of the undervaluation is also due to marginal buyers being unduly influenced by anonymous reviews rather than by solid science. As an example of dodgy reviews, look at https://www.yell.com/biz/pro-energy-ltd-romford-9879988/#:~:text=Pro%20Energy%20team%20was%20on,Pro%20Team%20for%20similar%20work. 145 reviews, 4.9/5 rating. Good eh?

Look again. Look at the names behind the reviews. Anything seem strange? How many are written by eg people called Muhammad? Or are simply Asian?

Unfortunately, too many private investors on this board agonise over information they have easy access to - eg product reviews for Eroxon - rather than seeing beyond the many manufactured reviews to the solid science underpinning Eroxon. Science approved by the EU and FDA, supported by in-house research by Cooper, and which global companies worth billions of dollars are prepared to back with their money. There are now many AI tools that will write bad product reviews. Amazon itself has lots of misleading reviews, attached to the wrong product or, as I have experienced, sellers offering financial inducements to buyers to give a 5 star review for a product that is in reality just plain poor.

These are not the only reasons for the undervaluation. Eroxon is a completely new product, so has imponderables about roll out, penetration, and repeat take-up, for example. Futura has always emphasised the key importance of the US market. Launch there will immediately transform the company into a profit-making one. I would like to see more institutions invested in Futura. Not because that would influence my decision to buy the shares, but rather to have more of the shares owned by professional investors, who see the true value of the science, rather than the private investors on here who agonise over bunkum, or try to get others to buy or sell according to their own trading strategies.

At the moment, the tail is wagging the dog. I hope the actual launch of Eroxon in the US will enable the dog to finally start to control its tail.

Worth noting parts of the summary of analyst coverage today, via Proactive Investors:

“Futura Medical PLC's clinically proven, topical gel treatment for erectile dysfunction, Eroxon, offers a "significant and still underappreciated opportunity", said Stifel as it initiated coverage on the stock with a 'buy' rating.

The shares offer "a compelling investment opportunity" as the US launch approaches, said the brokerage, setting a 125p share price target.

The initiation note also highlighted the ED market is large at $3.5 billion annually and still growing, with Eroxon's key differentiating features versus current treatments being rapid onset of action, cleaner safety profile and unique off-the-shelf status.

Future generated first revenue last year of £3.1 million and Stifel forecasts this rising to £9.2 million this year and £15.8 million in 2025, when it forecasts a first pre-tax profit.

House broker Liberum's estimates are for £10 million sales this year and £18 million in 2025.

Stifel forecasts peak worldwide sales of $364 million for Eroxon in 2029, though a chunk of that will be absorbed by distributors and other middlemen.

The majority of expected sales are seen derived from the US market, around $223 million (£176m) in that year, with Europe peaking at $117 million by 2028.

"Importantly, Futura is fully funded through to profitability, supported by UK and European revenues, with US royalty revenues expected in FY25.

"We note that profitability might come sooner than our current expectations if there is an earlier-than-anticipated US launch in FY24, triggering an estimated $5m launch milestone in the process."

Liberum noted that 2023 revenues had been pre-announced and that gross profit was in line with expectations and that the 57% gross margin "should be indicative of steady state margins.”

News of Eroxon’s launch in the US could arrive at any time, and Futura’s shares gap up very substantially. Those ‘investors’ waiting in the wings for ‘tablets of stone’ from Haleon / Futura can expect to find themselves chasing after a ship that has left port, and - like cruise ship passengers who have missed their ship - will have to rejoin elsewhere, at a much higher share price, reducing their possible return.

Investment is about prospecting through mountains of, often, useless information, recognising and joining the dots of the really key information. It’s a skill, and part of that skill is having patience. As well, part of that skill is recognising the limits of virtually any investor operating on the right side of the law to consistently successfully ‘market time’ buying and selling.

Today’s RNS was disappointing. The investor meet overwhelmingly so. But the FD did provide the clue to the exact moment when Futura will become profitable. That’s worth staying invested for, I think.

So, there it is. Nowt new from Futura.

Or did the RNS alone tell the whole story?

Fast forward to the investor call.

Lots of disappointing “no news”: News on product extensions promised last September did not materialise. China, which accounts for c 1/5th of global population, was another area without news. Futura declares that its strategy has shifted to focus on sexual health, begging the question - no answer provided - what will happen to its cannabidiol assets. Will they be sold?

Gold prospecting among all this and more of disappointing material, for me the golden nugget was the clarity of realising that the Big Bang moment in Futura’s share price will be Haleon announcing the launch of sales in the US. The FD stated more than once that when Haleon launches sales in the US, Futura will become profitable. At a stroke, red ink will become black ink. The US launch “expected by early 2025” point in the RNS was explained by the FD as simply a “read across” from Haleon’s February announcement that it planned to launch Eroxon “within the next year”. “Early 2025” is simply a worst case scenario; the best case is well before then.

Nothing else really matters now. Country launches by Cooper and other distributors will be important, but sparklers rather than the explosive firework provided by Haleon launching sales in the US.

At that point, the “keep delivering” mantra of James et al as a response to poor share price performance will, the company expects, turn red ink to black, and thereby create real fruit for long term shareholders.

We just need to remember James’s parting words - “bear with us”.

The RedX delisting announcement today is a wake up call. Worth over 100p a few years ago, and sub-20p last Thursday, and 6p today - far below its broker valuation of 130p per share.

Sound familiar? Like RedX, Futura has a current share price around £1 lower than its broker valuation.

Being publicly quoted is not for every company, because valuation may become disconnected from progress on fundamentals. It’s a problem that not all company managements and their advisers are up to resolving.

On 10 April, James Barder will no doubt repeat a long list of (known) operational positives over the past year. But one he won’t voluntarily touch on is the share price, which is half its level of 3 years ago, and more than 20% lower than the last time he formally spoke to investors, last September. Quoted companies live or die by their share price. Investors continue to be ‘Doubting Thomases’ with respect to the overall financial worth of Futura’s list of operational accomplishments. He really needs to sing a different song to us on 10 April. We know he’ll re-hash almost verbatim the trading statement, 58% gross margin, additional country launches, tie up with Haleon, blah, blah, blah. We also know he’ll say more about derivatives of Eroxon - packaging, delivery etc, perhaps even usage for women. Will any of this get the share price up to around £1.30, the broker target? I think more will be needed. Actual launch of Eroxon in the US, news of a solid licensing partner in China, sales triggering additional / improved royalties, and news of near term profitability and start of dividend payments. A dividend payout would provide a concrete way of valuing the company, and signal management’s confidence in the company’s financial future, based on its expectations of sales growth and how this will trigger further / higher royalty payments.

It would be very dispiriting to listen to James bumble along as in the past, providing a heavily scripted, largely already known, set of news. It would mean another 6 months at least of a languishing share price. One way or another, that is not a sustainable situation, either for Futura’s executives, or for the company. The far higher value inherent in the company - implicit for years in the broker valuations north of £1 - must be unlocked. If not by the current team and its advisers, then by others with more focus on delivering better share price performance.

In the end, that’s all we really care about as investors.

Welcome news from Boots. Muted price movement today on heavy volume, with average trade size way up.

Not sure we’re clear of the seller, though. A buyer appeared on the order book early this morning for 150,000 shares at 33p, quickly filled by 2 sales of 75,000 each. Rapidly followed by a sale of 65,000 shares to market makers. All this within 13 seconds. 20 minutes later another 75,000 shares sold to market makers. Half an hour later we had 100,000 shares sold, and this afternoon another 200,000. These 6 sells, or 2% of the day’s trades, accounted for over 23% of the day’s overall trading volume, muting the price response today to yesterday’s announcement. Without the big seller, I’m sure the upward price momentum would have brought in more buyers, produced more upward price pressure etc. A virtuous circle.

The big seller spoiled the party.

I’ve no idea how much more big selling there is to come. But we’ve made significant inroads today to finally clearing the imbalance, so that future positive news is likely to have a much bigger positive price impact.

Take a small cap stock with circa 300m shares in issue, then

Add

- a determined seller of up to 9.8 million shares (Co High) +

- up to 2.65m shares that may be sold by company insiders +

- wretchedly poor guidance and communications by its CEO (James Barder)

- poor investor relations, especially over-dependence on Lombard, a lack of success in securing buying interest from the hundreds of investment managers out there, use of Trinity Delta (who they?) for investment coverage

- poor public relations, reflected in choice of ‘fireside chats’ with who’s he? analysts and use of public backwaters (Proactive Investors) rather than eg breakfast TV, or Radio 4’s Today (3 hours listened to every day by major political, economic and social ‘rainmakers’)

- poor corporate / PR advisers, who are simply disconnected from the concerns of rank and file long term investors

Then the circa 40% collapse in the share price since the interims becomes eminently explainable. Note - some companies would by now have issued a statement to the effect that “they are unaware of any reason for the movement in share price...” The fact that hasn’t happened means JB is (painfully) aware of all of the above (to lesser or greater degrees). In his defence, we can’t really expect him to tell us Co High are actively selling down their stake.

Share prices overshoot, in both directions. At sub £100m tonight, against £1.7m H1 sales from two countries and, in the UK, two outlets. Yes, the valuation is ridiculously low. But the seller is determined to exit, especially now Futura has made the market aware the agreement has been terminated. It’s frustrating in the extreme for other shareholders, and awful for those forced to meet their liquidity needs by selling at these prices. It would all have been avoidable IF the other factors above had not meant market demand for Futura’s shares since the interims had not dried up.

Things will improve. BUT the supply-demand imbalance needs to be cleared, so that positive newsflow pushes the share price up rather than, as now, simply facilitating the dumping of more unwanted shares, and a further decline in their market price. This is how markets work. Without an obvious institutional or trade buyer for Co High’s stake, the unwanted shares are flowing through the market, and the price is adjusting downwards as a result.

It’s an ugly, stomach-churning, watch. JB should have strategised this as a threat to the future share price when he sold the shares to Co High in 2021. He has done absolutely nothing to minimise that threat. Strategising is the role of corporate strategy. From memory, Futura has a permanent staff of 15, focused on R&D rather than other functions. It needs to upskill its approach to business, employing people with new skills, in order to protect and grow shareholder value.

For me, JB has made 4 big and costly missteps, that are forming a ‘perfect storm’ to create a backlash among rank and file shareholders.

1. At least 2 1/2 two wasted years caused by his venture with Co High. They delivered nothing. So 30 months of lost sales among hundreds of millions of Chinese men, compounded by selling 9.8m shares to Co High without any restrictions on their sale. Bought at 20p and 22p, termination of the venture has seen these being sold by Co High at a hefty profit, helping trash Futura’s share price.

2. Ignoring the need to build relationships with actual and potential investors. James got too comfortable with the presence of Lombard on the shareholder register, and didn’t actively court other investment institutions. With Lombard maxed out, and without a powerful broker to help find an alternative home, when Co High wanted out, their shares couldn’t be crossed to another institutional, and have instead had to pass through the market, helping to trash the price.

3. Poor information flows / messaging. Futura has signed multiple licensing deals, but licensees have repeatedly tied James’ hands in terms of what he can tell shareholders about royalties, launch timelines, etc. James’ delivery around the interims was poor, and over-cautious. Investors have had to become like gold prospectors at Klondike to find the nuggets within his RNS retreads. Film stars attend premiers to help promote their films. James should have been on Radio 4 Today and breakfast TV telling the world about Futura’s world first, rather than rocking up in the backwater of Proactive Investors, or in ‘fireside chats’. Lost opportunities. Poor flows mean information is not efficiently reaching the needed target audiences - institutional investors and Joe Public. Without their awareness and interest in Futura as an investment, the shares have lost a source of support, and slipped badly. The poor messaging has been further highlighted by the shambles surrounding issuing deeply ‘in the money’ options to insiders, whilst external shareholders nurse losses of up to hundreds of thousands of pounds after the collapse in Futura’s share price over the past 3 weeks.

4. Doing nothing. In Magnum Force, Clint Eastwood opined that “a man’s gotta know his limitations”. James needs to really take the 360 degree feedback being offered by this board and build on it positively. A child of 5 no longer fits into its baby clothes: the old ways of doing things at Futura have to change as it becomes a commercially focused company. James needs to ‘professionalise’ Futura, by bringing in new people with a laser focus on external investors and understanding and satisfying their needs, and pivot away from reliance on Lombard, and seeing them alone as sufficient in terms of institutional presence. They are not, as both the share price debacle of the past 3 weeks and yawning value gap between analyst price and market price demonstrate.

In the 3 weeks since James Barder gave 3 presentations around the interims, Futura’s shares have become Johnny No Friends. Rather than his words instilling excitement among investors, they have simply injected apathy - making the shares unwanted and unloved by investors to such an extent that exit selling by Futura’s former China partner, Co High, has driven the price down around 15p, or around 30%.

The slide has wiped hundreds, thousands, tens of thousands, and hundreds of thousands from the value of private investors’ holdings in the company. This alone has led Futura’s Executive to start losing shareholder support among the rank and file on this board.

That loss of support snowballed yesterday, with the announcement of options for Futura’s Executive and staff. Rather than an alignment of internal and external shareholders’ interest, we were served up the distasteful counterpoint of “in the money” options for internal shareholders versus, today, the 30% loss and counting for external shareholders. No win-win. The words of “We're In The Money” come to mind..

The counterpoint echoes Napoleon’s famous quote in Animal Farm, that “All animals are equal, but some animals are more equal than others.” So, as an internal shareholder, “I win, you (as an external shareholder) lose”. In making this counterpoint, James is akin to Armstrong and Aldrin planting their flag on the moon. He is making it clear external shareholders are not respected, at least not smaller private ones with holdings too low to make him lose sleep at night.

In “The Stretch Goal Paradox”, published in the Harvard Business Review, it is written

“What executive hasn’t dreamed of transforming an organization by achieving seemingly impossible goals through the sheer force of will? We’re not talking about merely challenging goals. We’re talking about management moon shots—goals that appear unattainable given current practices, skills, and knowledge. In the parlance of the business world, these are often referred to as stretch goals.” Contrast this as a target for achieving options with that in Futura’s announcement yesterday: “The main ongoing vesting condition is that the individual remains an employee or Director at the time of vesting.” No moon shots, no stretch goals. Nothing about share price levels, share price growth, or total return to shareholders. Just sit tight for another three years, and ….kerching! You’d think Futura is a private rather than a public company, a private partnership rather than one owned overwhelmingly by external investors.

James dominates Futura, has made missteps in the past (Co High is a case in point), and will do so in the future. He needs to listen more and / or get better advisers / employ someone whose primary task is to filter internal business thinking into its impact on share price / help build a following by quality investment managers.

He has to stop the rot.

Another 25% x 10.6m = 2.65m shares that can now possibly be sold into a market which indigestion for Futura’s shares, forcing the price to reverse from 65p in July to less than 40p tonight. Not good, especially when the big seller for months (I suspect Co High) may not be finished yet. The supply-demand imbalance needs to be reversed, not exacerbated through a possible additional 2.65m shares looking for a new home.

I understand the two events - grant of options and share price fall - are independent. But the optics of granting the options at 20p against this backdrop is slightly bizarre. They will simply reward keeping existing office seats warm rather than behaviours that drive the share price higher.

If there were eager new investors looking to buy Futura’s shares, I’m sure none of us would really care. Apart from licensing in China, Futura’s Executive has pretty much delivered on things within its control. But the shares are currently friendless, with their price the best part of £1 below where its own analysts believe it should be.

“Signalling” is a hugely important factor in business. For example, in insurance, we may opt for a higher voluntary excess, signalling that we are less likely to make a claim, which reduces our premium.

Today, Futura could have sent a signal to the market of its confidence in the future level of its share price by pitching the vesting price for the majority of options much higher - say, 80p, or even £1. It bottled the opportunity, taking the lowest road possible, by granting options with an immediate 100% upside.

That’s not aligning shareholders’ interests (higher price) with employees’ interest, which - whilst also is a higher price - is “already in the money”, so they can still turn around happy at any share price above 20p between now and October 2026. Many shareholders need far higher exit prices to see a profit.

The mood music surrounding Futura has soured since the Haleon deal in general, but the interims in particular. That may simply be (and I feel overwhelmingly is) the Co High “exit effect” (millions of shares being sold after termination of its agreement with Futura).

Currently, we shareholders are not happy bunnies. At all. Now more than ever, James and his team should consider much more carefully the optics of their words and actions on investor sentiment.

Some time ago, I read that Trinity Delta’s modelling for Futura’s shares put a value of 30-40p on a MED3000 patent extension to 2040. Today, after news of the actual extension, the shares inched forward just over one penny.

The good news seeds of consistent operational achievements are falling on a fairly barren investor ground. Rather than producing the high yields we had been led to expect, and rationally ought to expect, the seeds are currently producing very low, and even zero, yields in terms of pushing the share price up. We are left scratching our heads for answers.

Over the past few months, the good news seeds have had to contend with a determined seller. I thought it might have been Lombard, but now the China / SE Asia agreement with Co-High has been terminated, the seller might be the latter. Its 9.8 million shares would not be easy to get rid off when annual daily turnover in Futura shares is vastly lower.

Price action does have a momentum element to it, so the fact that there’s been so much selling, with the shares down over 20p from their peak on news of the Haleon deal, has probably made some would-be buyers cautious. Ditto, James Barder’s recent uber-conservative musings. Ditto, many investors are still unaware of the sales volumes underpinning the £1.7m revenue in H1, and therefore exactly how much each sales unit will likely contribute to profit. Added to all this, there’s no sight of a desperately needed ‘Lombard-light’ institutional investor or investors to counterbalance the selling / wait and see pressure surrounding the shares. Plus, the SETSqx trading platform for Futura’s shares, with many more price quotes, is containing the volatility of the old days, when with just market makers we could have expected a 20%-30% gap up on opening today, rather than today’s unchanged movement.

After so many false dawns - of good news seeds with low yielding results - I do think that, among the levers Futura’s exec team could consider [also] using is releasing overall monthly sales volumes for Eroxon. Airlines like Ryanair, EasyJet and Wizzair publish monthly passenger volumes; mining companies publish monthly production reports. The publication of monthly Eroxon sales volumes could be time bound, say for the next 3 years, until most geographies have sales volumes. We are realising that six months is way too long to be waiting to learn sales volumes for a novel product. Investors desperately need to know that Eroxon is SELLING, whatever negative reviewers might want people to believe.

The absence of regular actual sales volumes is creating an information vacuum that is contributing to fragile investor confidence, so that good news seeds are left yielding very little in terms of upward share price movement.

Gaslighting - denying another person’s reality - is rife in all walks of life. So no surprise it’s present on this board.

Quite a few of us are miffed that - after James Barder gives 3 presentations of essentially the same material, skates over sales volumes, fails to link these volumes to countries and retailer numbers, and provides a super-cautious outlook - the share price slips back over 20%.

Some scribes on here tell us that we are short-termists, and should instead sit back and be quiet, because value will eventually out.

As anyone with Economics 101-level knowledge is aware, markets can fail, so that market prices are no longer ‘efficient’ or even ‘rational’ - perhaps for many years. Hence Keynes’ argument that governments need to intervene in markets with spending, or the presence of regulators to control monopolistic practices….

Far less is known about Futura than, say, Rio Tinto or Tesco. There’s less and poorer quality analyst coverage. With fewer followers, including investors, there’s a much higher probability that Futura’s share price will be inefficient, and can be manipulated through bulletin boards, for example. Just look at the pathetically small volumes that sometimes determine its uncrossing price, and so whether it is up or down on the day.

I first invested in Futura at 8p in early 2020, drawn by the “statistically significant and clinically meaningful top line results” of its placebo used in the MED2005 Phase 3 study. So, a 5x return to date. Therefore, I’m not a short term trader, nor am I an ‘under the water’ investor.

To the gaslighters: my concern is not with Futura’s price since last week, since last month, or even since last year. It is that it has gone nowhere since spring 2021, or for 2-3 years, despite the growing list of important operational objectives achieved by the company. Even James Barder has expressed surprise about this in his interviews.

Can more be done to address this poor share price performance? Of course! The comms is dire. Too many ‘retreads’ of information in RNSs, in interviews / investor meets, too much background information about the company, rather than value-adding information about volumes, revenues, shareholder returns…Why isn’t James Barder on some of these TV / news programmes to tell the world about Eroxon? Why are we not changing to a company broker with more powerful fund management clients, rather than the ‘cheap and cheerful’ ones we have at present that the investment community is simply ignoring?

Futura’s Executive needs to include the share price level as an important strategic objective, and be managing levers within their control to achieve and maintain that level. Personally, I want to see Futura’s share always be on the outside of the envelope of its possible value, not languishing as in the past few years (according to those brokers) way inside, at a fraction of its value.