Futura Medical PLC

Futura Medical PLC (LON: FUM) is an FTSE AIM All-Share index-listed innovative R&D Company in the pharmaceutical sector, which develops a portfolio of products based on the proprietary, transdermal DermaSys® technology.

Investment Rationale for Valuation – WATCH at GBX 34.40

• Weak Top-line Business: FUM had not produced any revenue for H1 FY21 as its drugs had not been commercialized yet.
• Widening of Net Loss: The Company’s net loss had increased from negative £1.06 million during H1 FY20 to a negative £1.59 million for H1 FY21.
• Significant Progress: FUM has taken one step forward regarding the MED3000 product launches in 2022. The Company remained committed to prioritising commercial deals for the long-term distribution of MED3000 across the globe.
• Sluggish Macroeconomic Indicators: The UK consumer inflation reached a 10-years high during October 2021. Furthermore, the UK GDP witnessed a lower-than-expected growth during Q3 FY21.
• Unfavourable Technical Indicator: From a technical standpoint, the stock price is hovering lower than the 20-days exponential moving average of GBX 35.10, indicating a correction in the stock price.

One Year Share Price Chart 

 (Source: REFINITIV; Analysis done by Kalkine Group)

Conclusion

Based on the weak top-line & bottom-line business during H1 FY21 and unfavourable technical indicators, we have given a “WATCH” recommendation on Futura Medical PLC at the closing market price of GBX 34.40 (as on 19 November 2021), while we will suggest fresh buying after the commercialization of MED3000 happening soon.

*The reference data in this report has been partly sourced from REFINITIV.

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