Investors will be invited to drive a hard bargain later this month when a firm specialising in treatments for erectile dysfunction floats on the Alternative Investment Market.

Futura Medical, a Guildford-based pharmaceuticals firm, hopes to raise £30m by launching itself on the AIM. It has a portfolio of "sexual healthcare" products in development, including a cream which is intended to offer an over the counter alternative to Pfizer's Viagra.

James Barder, the firm's chief executive, explained yesterday that he wants to tap into demand from men who suffer from erectile dysfunction but are too embarrassed to visit their GP and ask for prescription treatments.

"If you've got a bad back, and you go to a dinner party, you say, 'I've got a bad back'," he said. "If you've got erectile dysfunction, you don't talk about it."

Futura has already struck a conditional distribution deal for the cream, at this stage just called MED2001, which is also aimed at angina sufferers, for whom Viagra can interfere with other drugs. Mr Barder said massaging in the cream, based on the active ingredient glycerol trinitrate, was "more conducive to foreplay" than popping a pill such as Viagra.

The firm said it was also conducting a "robust development programme" for its "erection-enhancing condom", CSD500, which is intended to prevent "potential slippage" during intercourse.

Mr Barder said the firm believed it already had enough funding to see its current drugs pipeline through to profitability, but investors were pressing for a flotation to increase Futura's public profile and allow it to develop new products more quickly.

None of the firm's treatments has reached the market, but existing investors have agreed to inject £1.7m in extra funding provided it reaches flotation by mid-August.