Shares in a small British biotech based in leafy Surrey more than doubled after a gel the company has been developing for 15 years to treat erectile dysfunction aced late stage clinical trials.

The gel, called Eroxon, dramatically improved erectile dysfunction in 232 men taking part in a double-blind placebo study. The drug was safe and also worked fast, with 82pc of patients noticing a difference within 10 minutes and 54pc in just five minutes.

"This is a game-changer for us," said James Barder, chief executive of Futura Medical, the Aim-listed company behind the gel. "If and when we get global approval, a 20pc market share is not unreasonable, which could lead to $1bn in annual sales."

Eroxon contains glyceryl trinitrate, which isn't a new drug. In fact, it has been around for years and is used to treat angina by dilating the blood vessels. In Britain, the drug is available in tablet format without a prescription.

What Futura Medical has done is to take the active drug and combine it with a technology it has developed, called DermaSys, which drives the drug through the skin, almost like an injection.

"With most gels and creams, only 10pc to 15pc of the active component goes through the skin," explained Mr Barder. "The advantage of DermaSys is that we can have a very low dose in the gel but drive it efficiently through the skin."

The other advantage is that Eroxon can be applied just before intimacy. Sildenafil, the active ingredient in Pfizer's blockbuster drug Viagra, has to be taken an hour before intercourse.

"We did a big survey in the US of patients and doctors and the main level of dissatisfaction with existing products - 20pc to 30pc of respondents stated this - is that you have to plan ahead. There is no spontaneity. This product can be part of foreplay and allows you to be spontaneous."

Mr Barder also believes that people who already take medication to treat angina will be able to use Eroxon without any adverse side-effects. Currently, 7.5pc of patients who suffer from erectile dysfunction take medication for angina and cannot, therefore, take Viagra.

Analysts at N+1 Singer said: "We believe the market potential is significant. In our view, the product addresses a significant unmet need."

The global market for erectile dysfunction remedies is worth roughly $5bn. The biggest player, Viagra, generated $1.7bn in sales in 2015 in the US, and $57m in Europe, where generic competition has been present since 2013.

The company is now meeting with UK and US health authorities to discuss regulatory filing. The hope is to launch in Britain first, where Eroxon could be made available without a prescription, before rolling it out to other territories.

It’s unlikely, however, that Futura Medical will launch the product. The aim is to licence it out to a third party, such as a consumer health brand or pharmaceuticals firm, which will commercialise the product and pay Futura Medical royalties.

"There is a great opportunity for this to become a consumer healthcare product," said Mr Barder. "This product is very safe, works well in patients with mild erectile dysfunction and would be ideal candidate for a consumer healthcare product to buy over the counter."

Futura Medical, which floated on the Aim market in 2001, has other products in the pipeline, including pain relief gels using ibuprofen and diclofenac. The latter will be filed with regulators next year.

It already has one product on the market - a condom that uses the Eroxon gel in a different formulation to help maintain erection in men.

"Nearly a third of men when wearing a condom don't maintain an erection and as a consequence, they don’t always wear a condom," Mr Barder said.