Biofrontera Inc. Reports First Quarter 2024 Financial Results and Provides a Business Update
Biofrontera has reported its Q1 2024 results, indicating a 9% revenue decline to $7.9M compared to Q1 2023. Contributing factors include reimbursement issues stemming from the Change Healthcare data breach. The company secured $8M through a private placement and an additional $8M via warrant exercises. Operational costs were reduced through a renegotiated Ameluz agreement reducing transfer prices. Despite a net loss of $10.4M, cash reserves increased to $3.8M. Sales of the new RhodoLED XL lamp are expected to begin in Q2 2024. An FDA decision on Ameluz dosage is anticipated by October 2024.
- Cash and cash equivalents increased to $3.8 million from $1.3 million.
- Gross proceeds of $8 million from a private placement with healthcare-focused institutional investors.
- Additional $8 million secured through the exercise of warrants.
- Ameluz license renegotiation reducing transfer prices to 25%, stepping up to 35% by 2032.
- Management and cost control of US clinical trials for Ameluz starting June 1, 2024.
- Anticipated sales of new RhodoLED XL lamp starting in Q2 2024.
- FDA issued a 'no filing review issues identified' letter for increasing Ameluz dosage, with a decision expected by October 4, 2024.
- Total revenues decreased by 9% to $7.9 million compared to Q1 2023.
- Net loss for Q1 2024 was $10.4 million, up from $7.5 million in Q1 2023.
- Adjusted EBITDA was negative $4.6 million compared to negative $4.1 million in Q1 2023.
- Sales decline attributed to reimbursement issues due to the Change Healthcare data breach.
- Total operating expenses were $13.4 million, slightly reduced from $14.2 million in Q1 2023.
Insights
The financial results for Biofrontera Inc. show a mixed picture. On one hand, there is a 9% decrease in total revenues for the first quarter of 2024 compared to the same period last year, bringing revenue down to
The company's cash and cash equivalents have significantly improved, rising to
Furthermore, the private placement of preferred stock and subsequent warrant exercise have brought in
However, the net loss for the quarter has widened to
While the financials indicate some areas of concern, the influx of cash and improved liquidity are positive signs.
The update on Biofrontera's operational milestones reveals some strategic moves that could have long-term benefits. The renegotiated Ameluz® license and supply agreement (LSA) to reduce the transfer price is a important step. By reducing the transfer price from 40-50% to 25%, stepping up to 35% by 2032, Biofrontera can better manage its product costs and invest more in R&D and commercial activities. This renegotiation will likely improve profit margins, which is beneficial for both the company and its shareholders.
Additionally, taking over the management of US clinical trials for Ameluz from June 1, 2024, provides Biofrontera with more direct control over their execution and costs. This could lead to more efficient trial processes and quicker time-to-market for new indications, which is a positive development for long-term growth.
Moreover, the company achieved a 123% increase in the placement of BF-RhodoLED® lamps in Q1 2024 compared to Q1 2023. This indicates strong demand and market acceptance, which bodes well for future sales growth, especially with the anticipated launch of the new RhodoLED XL® lamp in the next quarter.
The FDA's "no filing review issues identified" letter regarding the supplementary New Drug Application to increase the maximally approved dosage from one to three tubes of Ameluz® per treatment is encouraging. If approved, this could expand the usage of Ameluz and potentially increase sales.
Conference call begins at 10:00 a.m. Eastern time on Thursday, May 16, 2024
WOBURN, MA / ACCESSWIRE / May 15, 2024 / Biofrontera Inc. (NASDAQ:BFRI) (the "Company"), a biopharmaceutical company specializing in the commercialization of dermatologic products, today reported financial results for the three months ended March 31, 2024 and provided a business update.
Highlights from the first quarter of 2024 and subsequent weeks included the following:
- Total revenues for the first quarter of 2024 were
$7.9 million , a9% decrease from the same period of the prior year primarily driven by reimbursement headwinds our customers experienced due to the Change Healthcare data breach - Cash and cash equivalents were
$3.8 million as of March 31, 2024, compared with$1.3 million on December 31, 2023 - The Company completed a private placement of preferred stock with healthcare focused institutional investors for gross proceeds of
$8 million - Met operational and commercial milestones to secure an additional
$8 million through the exercise of warrants in connection with the private placement mentioned above - Renegotiated the Ameluz® license and supply agreement (LSA) to reduce the transfer price of Ameluz® for 2024 and 2025 from 40 -
50% to25% , stepping up to35% by 2032 for Ameluz® prescribed in actinic keratosis and non-melanoma skin cancer indications; product costs associated with any acne indication will be25% indefinitely - In connection with the LSA amendment, the Company will take over the management and costs of US clinical trials relating to Ameluz on June 1st, 2024, allowing more direct control and cost management
- The Company anticipates that sales of its new RhodoLED XL® lamp will begin in the second quarter of 2024
- U.S. Food and Drug Administration (FDA) issued a "no filing review issues identified" letter regarding the supplementary New Drug Application submitted by our Ameluz licensor Biofrontera Bioscience GmbH to increase the maximally approved dosage from one to three tubes of Ameluz® per treatment. We expect a final decision from the FDA on or around October 4, 2024
Hermann Luebbert, Chief Executive Officer and Chairman of Biofrontera Inc., stated, "Although we are disappointed with the decrease in sales during the quarter compared to the same period in 2023, we believe general healthcare reimbursement issues affecting the entire industry were a major factor. Our team continues to work with insurers and medical providers to help minimize these challenges. As we have already announced, we have managed to make up the sales shortage and as of April 30th our 2024 YTD revenue growth is over
"We have focused much of our efforts over the last year on developing new accounts and in the first quarter of this year we placed 29 BF-RhodoLED® lamps, an increase of
First Quarter Financial Results
Total revenues for the first quarter of 2024 were
Total operating expenses were
The net loss for the first quarter of 2024 was
Adjusted EBITDA for the first quarter of 2024 was negative
Please refer to the table below which presents a GAAP to non- GAAP reconciliation of Adjusted EBITDA for the first quarters of 2024 and 2023.
Conference Call Details
Conference call: Thursday, May 16, 2024 at 10:00 AM ET
Toll Free: 1-877-877-1275 (U.S. toll-free)
International: 1-412-858-5202
Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=XHBE0SOB
About Biofrontera Inc.
Biofrontera Inc. is a U.S.-based biopharmaceutical company commercializing a portfolio of pharmaceutical products for the treatment of dermatological conditions with a focus on photodynamic therapy (PDT) and topical antibiotics. The Company's licensed products are used for the treatment of actinic keratoses, which are pre-cancerous skin lesions, as well as impetigo, a bacterial skin infection. For more information, visit www.biofrontera-us.com and follow Biofrontera on LinkedIn and Twitter.
Contacts
Investor Relations
Andrew Barwicki
1-516-662-9461
ir@bfri.com
Forward-Looking Statements
Certain statements in this press release may constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements relating to the Company's revenue guidance, business and marketing strategy, revenue growth, development and expansion of the Company's sales force and commercial infrastructure, sales force productivity, growth strategy, liquidity and cash flow, potential to expand the label of Ameluz®, available market opportunities for Ameluz®, ongoing clinical trials, educational outreach efforts, and other statements that are not historical facts. The words "intends," "may," "will," "plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential", "target", "goal", "assume", "would", "could" or similar words are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We have based these forward-looking statements on our current expectations and projections about future events; nevertheless, actual results or events could differ materially from the plans, intentions and expectations disclosed in, or implied by, the forward-looking statements we make. These risks and uncertainties, many of which are beyond our control, include, but are not limited to, our reliance on sales of products we license from other companies as our sole source of revenue; the success of our competitors in developing generic topical dermatological products that successfully compete with our licensed products; the success of our principal licensed product, Ameluz; the ability of the Company's licensors to establish and maintain relationships with contract manufacturers that are able to supply the Company with enough of the licensed products to meet our demand; the ability of our licensors or their manufacturing partners to supply the licensed products that we market in sufficient quantities and at acceptable quality and cost levels, and to fully comply with current good manufacturing practice or other applicable manufacturing regulations; the ability of our Licensors to successfully defend or enforce patents related to our licensed products; the availability of insurance coverage and medical expense reimbursement for our licensed products; the impact of legislative and regulatory changes; competition from other pharmaceutical and medical device companies and existing treatments, such as simple curettage and cryotherapy; the Company's ability to achieve and sustain profitability; the Company's ability to obtain additional financing as needed to implement its growth strategy; the effect of the COVID-19 global pandemic; the Company's ability to retain and hire key personnel; and other factors that may be disclosed in the Company's filings with the Securities and Exchange Commission ("SEC"), which can be obtained on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date on which they are made and reflect management's current estimates, projections, expectations and beliefs. The Company does not undertake to update any such forward-looking statements and expressly disclaims any duty to update the information contained in this press release, except as required by law.
(Tables follow)
BIOFRONTERA INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and share amounts)
| March 31, 2024 | December 31, 2023 | |||||||
| (Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 3,817 | $ | 1,343 | ||||
Investment, related party | 23 | 78 | ||||||
Accounts receivable, net | 3,520 | 5,162 | ||||||
Other receivables, related party | 171 | - | ||||||
Inventories, net | 6,905 | 10,908 | ||||||
Prepaid expenses and other current assets | 560 | 425 | ||||||
Other assets, related party | 5,159 | 5,159 | ||||||
Total current assets | 20,155 | 23,075 | ||||||
Property and equipment, net | 120 | 134 | ||||||
Operating lease right-of-use assets | 1,416 | 1,612 | ||||||
Intangible asset, net | 2,556 | 2,629 | ||||||
Other assets | 328 | 482 | ||||||
Total assets | $ | 24,575 | $ | 27,932 | ||||
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | 2,717 | 3,308 | ||||||
Accounts payable, related parties | 4,044 | 5,698 | ||||||
Operating lease liabilities | 690 | 691 | ||||||
Accrued expenses and other current liabilities | 4,230 | 4,487 | ||||||
Short term debt | 2,355 | 3,904 | ||||||
Total current liabilities | 14,036 | 18,088 | ||||||
Long-term liabilities: | ||||||||
Warrant liabilities | 11,731 | 4,210 | ||||||
Operating lease liabilities, non-current | 621 | 804 | ||||||
Other liabilities | 33 | 37 | ||||||
Total liabilities | 26,421 | 23,139 | ||||||
Commitments and contingencies (Note 17) | - | - | ||||||
Mezzanine equity: | ||||||||
Series B-1 Convertible Preferred Stock, | 3,570 | - | ||||||
Series B-2 Convertible Preferred Stock, | - | - | ||||||
Series B-3 Convertible Preferred Stock, | - | - | ||||||
Stockholders' equity: | ||||||||
Preferred Stock, | - | - | ||||||
Common Stock, | 5 | 2 | ||||||
Additional paid-in capital | 104,666 | 104,441 | ||||||
Accumulated deficit | (110,087 | ) | (99,650 | |||||
Total stockholders' equity | (5,416 | ) | 4,793 | |||||
Total liabilities, mezzanine equity and stockholders' equity | $ | 24,575 | $ | 27,932 | ||||
BIOFRONTERA INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts and number of shares)
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
Products revenues, net | $ | 7,901 | $ | 8,715 | ||||
Revenues, related party | 11 | 18 | ||||||
Total revenues, net | 7,912 | 8,733 | ||||||
Operating expenses | ||||||||
Cost of revenues, related party | 3,946 | 4,547 | ||||||
Cost of revenues | 170 | 51 | ||||||
Selling, general and administrative | 9,250 | 9,800 | ||||||
Selling, general and administrative, related party | (4 | ) | 27 | |||||
Research and development | 17 | - | ||||||
Change in fair value of contingent consideration | - | (200 | ) | |||||
Total operating expenses | 13,379 | 14,225 | ||||||
Loss from operations | (5,467 | ) | (5,492 | ) | ||||
Other income (expense) | ||||||||
Change in fair value of warrant liabilities | (3,429 | ) | 1,028 | |||||
Change in fair value of investment, related party | 3 | (2,941 | ) | |||||
Loss on debt extinguishment | (316 | ) | - | |||||
Interest expense, net | (1,407 | ) | (35 | ) | ||||
Other income (expense), net | 180 | (33 | ) | |||||
Total other income (expense) | (4,969 | ) | (1,981 | ) | ||||
Loss before income taxes | (10,436 | ) | (7,473 | ) | ||||
Income tax expense | 1 | 5 | ||||||
Net loss | $ | (10,437 | ) | $ | (7,478 | ) | ||
Loss per common share: | ||||||||
Basic and diluted | $ | (2.88 | ) | $ | (5.60 | ) | ||
Weighted-average common shares outstanding: | ||||||||
Basic and diluted | 3,623,593 | 1,334,950 | ||||||
BIOFRONTERA INC.
GAAP TO NON-GAAP ADJUSTED EBITDA RECONCILIATION
(In thousands, except per share amounts and number of shares)
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
Net loss | $ | (10,437 | ) | $ | (7,478 | ) | ||
Interest expense, net | 1,407 | 35 | ||||||
Income tax expenses | 1 | 5 | ||||||
Depreciation and amortization | 128 | 127 | ||||||
EBITDA | (8,901 | ) | (7,311 | ) | ||||
Loss on debt extinguishment | 316 | - | ||||||
Change in fair value of contingent consideration | - | (200 | ) | |||||
Change in fair value of warrant liabilities | 3,429 | (1,028 | ) | |||||
Change in fair value of investment, related party | (3 | ) | 2,941 | |||||
Legal settlement expenses | - | 1,118 | ||||||
Stock based compensation | 228 | 351 | ||||||
Expensed issuance costs | 354 | - | ||||||
Adjusted EBITDA | $ | (4,577 | ) | $ | (4,129 | ) | ||
Adjusted EBITDA margin | -57.9 | % | -47.3 | % | ||||
SOURCE: Biofrontera Inc.
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FAQ
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