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Futura Medical PLC
Ansell Capital Corp
Church & Dwight Co Inc
Condoms have long allowed couples to enjoy sex with few worries about pregnancy or disease. In recent years, erectile dysfunction drugs such as Viagra and Cialis have helped men improve their sexual performance. Now Britain’s Reckitt Benckiser (RBGPY) and its partner Futura Medical (FAMDF) think there could be big demand for a product that does both.
A condom under development by Reckitt Benckiser, the maker of Durex brand prophylactics, contains a dose of a Futura-produced gel called Zanifil inside the tip to stimulate blood flow within the penis. The two companies say their product helps men achieve firmer, larger erections and longer-lasting lovemaking. And unlike Pfizer’s (PFE) Viagra impotence pill, which requires a prescription, the soon-to-be-named Zanifil-enhanced condom will be sold over the counter at stores in Europe next year. “It’s essentially Viagra in a condom,” says Polar Capital Holdings’ Daniel Mahony, who owns shares of Futura Medical.
Futura aims to widen the condom market by winning over men who normally avoid them because of decreased sensitivity or partial loss of erection, says Chief Executive Officer James Barder. (Futura-funded research by Acupoll found that up to 22 percent of healthy men sometimes suffer a partial loss of erection during intercourse while wearing a condom.) Almost half of people who don’t use condoms would be interested in buying the product, Futura says.
Zanifil, like Futura’s other experimental drugs, relies on a patented delivery system known as DermaSys that allows medicine to permeate the skin rapidly. The drug, based on chest pain treatment nitroglycerin, widens the blood vessels by relaxing the muscles in the vessel walls, increasing blood flow. A company study found a significant portion of men and women reported firmer erections with a Zanifil condom, as well as larger penis size and longer-lasting sex.
The condoms aren’t the only sex-enhancing products in Futura’s pipeline. A topical anesthetic spray that helps delay ejaculation is due to hit U.S. stores next year through Futura’s partnership with Australian condom maker Ansell (ANCCF), which sells the Lifestyles brand. Also in development is a version of Zanifil to be sold as a standalone erectile dysfunction treatment.
Futura and Reckitt Benckiser haven’t disclosed how they will name, price, or split sales of the Zanifil condoms, though Barder says the product will carry a “premium” price tag. Currently, a dozen regular Durex condoms cost about $14 to $17 in the U.K.
Durex leads the global condom market, which market researcher Key Note values at $11.5 billion annually. But in the U.S. it lags behind Church & Dwight’s (CHD) Trojan brand. Trojan logs about 75 percent of U.S. over-the-counter condom sales, while Durex gets only 6 percent to 8 percent, says William L. Howe, president of PolyTech Synergies, a consultant to the condom industry. Barder says Futura and Reckitt Benckiser, which also sells Clearasil skin care items and household products such as Lysol cleaners, are “exploring the approval process” in the U.S. and other markets for a Zanifil-laced condom but haven’t decided how they’ll proceed. Condoms are considered medical devices in the U.S. and typically do not require the extensive testing demanded of pharmaceuticals. “The unique selling point may well help it in territories where Durex is not strong,” he says.
Futura, a money-losing company, has waited years for a chance at profitability. An earlier partnership with condom maker SSL International (SLSLY) to introduce the Zanifil condom was stalled when SSL, in 2008, went through a restructuring. That led to delays in Zanifil’s application for approval by European drug regulators. Reckitt Benckiser bought SSL last year, but hasn’t yet brought the product to market, even though Zanifil in August was cleared for sale in 29 European countries, including the U.K., Germany, and France.
Coming up with the right sales strategy for Zanifil-laced condoms will be tricky, according to CEO Barder, who points out that 40 percent of condoms are purchased by women. Marketing materials need to strike the right balance between men’s and women’s attitudes about sex. “If the packaging says it will give you a bigger penis, and a woman gives it to a man, it might cause a reaction, like ‘What, you’re saying my penis is small?’ ” Barder says. “This area does have sensitivities.”
The bottom line: Futura Medical and Reckitt Benckiser are developing a premium-priced condom that includes an erection enhancement gel in its tip.