Shares of Futura Medical plc. (LON: FUM) rallied 8.3% despite raising over £12 million via a discounted share placement to fund a small confirmatory study required for the approval of its MED3000 erectile dysfunction gel in the United States.
The pharmaceutical company raised over £10 million via a book-building process targeted primarily at institutional investors. In comparison, a further £2 million will be raised via the PrimaryBid platform targeted at retail shareholders.
Futura Medical intends to use the money raised to fund a small confirmatory study of its MED3000 topical gel formulation required by the US Food and Drug Administration (FDA) to approve the treatment as a DeNovo medical device.
The company will use some of the funds to scale up its manufacturing activities to lower its overall marketing costs in the EU and other regions.
According to a research note issued by investment bank Liberum, Futura Medical has a price target of 80p after the EU approved MED3000 for over-the-counter use, which will make it more accessible compared to being a prescription drug.
Liberum is Futura’s in-house broker and was the sole bookrunner for the recent bookbuild.
The company’s future appears quite promising given recent developments, and its shares are attractive at current prices, given that the market opportunity for MED300 is pegged at nearly a billion pounds.
Futura Medical share price.
Futura Medical shares rallied 8.31% higher to trade at 48.20p, rising from its opening price of 44.50p.
Should you invest in Futura Medical shares?
Futura Medical shares are traded on the London stock exchange’s AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Futura shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies