Biofrontera Inc. Reports Record Fiscal Year 2023 Financial Results and Provides a Business Update
- Record revenues of $34.1M for 2023, up 19% from 2022.
- Operating expenses of $56.7M for 2023, with a 4% revenue increase in Q4 2023.
- Restructured organization to align with business needs and expand teams.
- Initiated strategic account strategy and submitted sNDA for Ameluz®.
- Received FDA approval for improved Ameluz® formulation and entered new R&D agreements.
- Positive progress in Phase 3 clinical studies for various treatments.
- Renegotiation of LSA agreement and cost improvements for future growth.
- None.
Insights
The reported financial results from Biofrontera Inc. show a significant increase in total revenues, which is a positive indicator for investors, reflecting a growing demand for the company's dermatological products. The 19% revenue growth year-over-year is a strong signal of the company's market penetration and effectiveness of its sales and marketing strategies. However, the increase in total operating expenses, particularly the $2.0M in one-time legal expenses, presents a concern as it impacts the net profitability of the company. The restructured organization, designed to reduce operating expenses, demonstrates prudent management which should be closely monitored for its effectiveness in the following quarters.
The strategic account strategy and the sNDA submission for Ameluz are notable for potentially solidifying the company's competitive position and expanding its market share. The renegotiation of the LSA agreement to reduce the transfer price of Ameluz is a significant move to improve cost management, which may positively impact future margins and profitability. The shift to in-house management of US clinical trials could streamline operations and expedite FDA approvals, potentially enhancing the company's ability to bring new products to market more efficiently.
The FDA approval for an improved formulation of Ameluz without propylene glycol and the progress in clinical studies for sBCC and AK treatment, are pivotal developments for Biofrontera. These advancements not only enhance the company's product portfolio but also demonstrate its commitment to addressing unmet medical needs in dermatology. The increased maximum use of Ameluz and the development of a new portable PDT lamp could lead to broader therapeutic applications and increased accessibility for patients, potentially driving future sales growth.
However, it is critical to consider the PDUFA date set for October 2024, as any delays or negative outcomes could impact investor expectations and the company's stock performance. The successful completion of patient enrollment in the Phase 3 clinical study is a step forward, but the actual market impact will depend on the study results and subsequent regulatory approvals.
The dermatological market is highly competitive and Biofrontera's focus on expanding its medical and reimbursement teams could enhance its ability to meet the needs of dermatologists and patients, potentially leading to increased market share. The record placement of RhodoLED lamps indicates a growing acceptance of the company's photodynamic therapy system, which could translate into higher recurrent revenues from the sale of Ameluz tubes used with these lamps.
Investors should consider the long-term benefits of the company's strategic moves, such as the patent acquisitions and R&D agreements for new PDT technology, as these could open up additional revenue streams and partnerships. The emphasis on cost optimization and the pursuit of break-even status are essential for financial sustainability and could be a deciding factor in the company's ability to continue its growth trajectory without the need for significant additional capital.
Conference call begins at 10:00 a.m. Eastern time on Monday, March 18, 2024
WOBURN, MA / ACCESSWIRE / March 15, 2024 / Biofrontera, Inc. (NASDAQ:BFRI) (the "Company"), a biopharmaceutical company specializing in the commercialization of dermatological products, today reported financial results for the three and twelve months ended December 31, 2023.
Highlights from 2023 and subsequent weeks include:
- Record total revenues of
$34.1M reported for 2023, an increase of19% over total revenues for 2022 of$28.7M . - Total operating expenses for the year were
$56.7 million compared with$47.3 million for 2022. Approximately,$2.0M of this increase was driven by one-time legal expenses. - Achieved
4% increase in revenues for fourth quarter 2023 compared with 2022 despite more than doubling sales in third quarter. - Restructured organization to align with business needs including expanding medical and reimbursement teams, contributing to
8% decrease in operating expenses for fourth quarter 2023 compared to 2022. - Initiated a comprehensive strategic account strategy leading to deeper partnerships and multiple annual contracts.
- Submitted sNDA to increase maximum use to 3 tubes of Ameluz® in the treatment of actinic keratosis (AK) on the face and scalp with photodynamic therapy (PDT) using the RhodoLED® XL lamp with PDUFA date of October 4, 2024.
- Completed patient enrollment in Phase 3 clinical study evaluating Ameluz®-PDT with BF-RhodoLED® lamp for the treatment of superficial basal cell carcinoma (sBCC).
- Received approval from the FDA, through our partner Biofrontera Biosciences GmbH, for an improved formulation of Ameluz® without propylene glycol.
- Acquired patents and entered into an R&D agreement to develop a new, low-cost portable photodynamic therapy lamp for use with Ameluz®.
- Announced first patient dosing in Phase 3 multicenter clinical study of safety and efficacy of Ameluz® and RhodoLED® XL for treatment of AK on the extremities, neck and trunk.
"I am pleased to announce 2023 was a record year for revenues," said Hermann Luebbert, Chief Executive Officer and Chairman of Biofrontera. "Our strategy as I took over as CEO in 2023 was to focus on holistic sales and marketing that included continuing to have a strong sales organization and strengthening our medical and reimbursement capabilities so we can provide dermatologists with the most effective support. Our sales growth reflects the strength and commitment of our organization and the partnerships we have.
We have also made progress in key areas in the early part of 2024 to position ourselves for future success. The restructuring of our LSA agreement with our supplier, Biofrontera GmbH, to reduce the transfer price of Ameluz to
"We had a strong 2023. We achieved a record high revenue number and sales volume, placed a record number of RhodoLED lamps, cleaned up our balance sheet, and continued to optimize our cost structure. The renegotiation of the LSA and securing of additional capital have been transformational events to our goal toward break even," added Fred Leffler, Chief Financial Officer of Biofrontera.
Fourth Quarter Financial Results
Total revenues for the fourth quarter of 2023 were
Total operating expenses were
The net income for the fourth quarter of 2023 improved by
Adjusted EBITDA for the fourth quarter of 2023 was negative
Full Year Financial Results
Total revenues for 2023 were
Total operating expenses were
The net loss for 2023 was
Adjusted EBITDA was negative
Conference Call Details
Conference call: Monday, March 18, 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=r1jr13zC
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, as amended to date. 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 conducted by our licensing partners, and educational outreach efforts. 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, the impact of any extraordinary external events; any changes in the Company's relationship with its licensors; the ability of the Company's licensors to fulfill their obligations to the Company in a timely manner; the Company's ability to achieve and sustain profitability; whether global disruptions in supply chains will impact the Company's ability to obtain and distribute its licensed products; changes in the practices of healthcare providers, including any changes to the coverage, reimbursement and pricing for procedures using the Company's licensed products; the uncertainties inherent in the initiation and conduct of clinical trials; availability and timing of data from clinical trials; whether results of earlier clinical trials or trials of Ameluz® in combination with BF-RhodoLED® in different disease indications or product applications will be indicative of the results of ongoing or future trials; uncertainties associated with regulatory review of clinical trials and applications for marketing approvals; whether the market opportunity for Ameluz® in combination with BF-RhodoLED® is consistent with the Company's expectations; the Company's ability to comply with public company requirements; the Company's ability to regain compliance with Nasdaq continued listing standards, the Company's ability to retain and hire key personnel; the sufficiency of cash resources and need for additional financing 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 plan 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.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and share amounts)
| December 31, | ||||||||
| 2023 | 2022 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,343 | $ | 17,208 | ||||
Investment, related party | 78 | 10,548 | ||||||
Accounts receivable, net | 5,162 | 3,748 | ||||||
Other receivables, related party | - | 3,658 | ||||||
Inventories, net | 10,908 | 7,168 | ||||||
Prepaid expenses and other current assets | 425 | 810 | ||||||
Other assets, related party | 5,159 | - | ||||||
Total current assets | 23,075 | 43,140 | ||||||
Other receivables long term, related party | - | 2,813 | ||||||
Property and equipment, net | 134 | 204 | ||||||
Operating lease right-of-use assets | 1,612 | 1,375 | ||||||
Intangible asset, net | 2,629 | 3,032 | ||||||
Other assets | 482 | 320 | ||||||
Total assets | $ | 27,932 | $ | 50,884 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | 3,308 | 1,278 | ||||||
Accounts payable, related parties, net | 5,698 | 1,312 | ||||||
Accounts payable | 5,698 | 1,312 | ||||||
Acquisition contract liabilities, net | - | 6,942 | ||||||
Operating lease liabilities | 691 | 498 | ||||||
Accrued expenses and other current liabilities | 4,487 | 10,864 | ||||||
Short term debt | 3,904 | - | ||||||
Total current liabilities | 18,088 | 20,894 | ||||||
Long-term liabilities: | ||||||||
Acquisition contract liabilities, net | - | 2,400 | ||||||
Warrant liabilities | 4,210 | 2,843 | ||||||
Operating lease liabilities, non-current | 804 | 848 | ||||||
Other liabilities | 37 | 21 | ||||||
Total liabilities | 23,139 | 27,006 | ||||||
Commitments and contingencies | - | - | ||||||
Stockholders' equity: | ||||||||
Preferred Stock, | - | - | ||||||
Common Stock, | 2 | 1 | ||||||
Additional paid-in capital | 104,441 | 103,396 | ||||||
Accumulated deficit | (99,650 | ) | (79,519 | ) | ||||
Total stockholders' equity | 4,793 | 23,878 | ||||||
Total liabilities and stockholders' equity | $ | 27,932 | $ | 50,884 | ||||
BIOFRONTERA INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts and number of shares)
| Three Months Ended December 31, | For the Year Ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Products revenues, net | $ | 10,582 | 10,074 | $ | 34,005 | $ | 28,541 | |||||||||
Revenues, related party | 13 | 70 | 66 | 133 | ||||||||||||
Total revenues, net | 10,595 | 10,144 | 34,071 | 28,674 | ||||||||||||
Operating expenses | ||||||||||||||||
Cost of revenues, related party | 4,975 | 5,114 | 16,789 | 14,618 | ||||||||||||
Cost of revenues, other | 394 | 142 | 655 | 567 | ||||||||||||
Selling, general and administrative | 9,101 | 10,087 | 38,975 | 35,137 | ||||||||||||
Selling, general and administrative, related party | (41 | ) | 121 | 152 | 733 | |||||||||||
Research and development | 33 | - | 77 | - | ||||||||||||
Change in fair value of contingent consideration | - | 300 | 100 | (3,800 | ) | |||||||||||
Total operating expenses | 14,462 | 15,764 | 56,748 | 47,255 | ||||||||||||
Loss from operations | (3,867 | ) | (5,620 | ) | (22,677 | ) | (18,581 | ) | ||||||||
Other income (expense) | ||||||||||||||||
Change in fair value of warrant liabilities | 4,455 | 1,121 | 6,456 | 19,017 | ||||||||||||
Warrant inducement expense | (1,045 | ) | - | (1,045 | ) | (2,629 | ) | |||||||||
Excess of warrant fair value over offering proceeds | (2,272 | ) | - | (2,272 | ) | - | ||||||||||
Change in fair value of investment, related party | (786 | ) | 1,747 | (7,421 | ) | 1,747 | ||||||||||
Gain on legal settlement | 7,385 | - | 7,385 | - | ||||||||||||
Interest expense, net | (211 | ) | (35 | ) | (468 | ) | (195 | ) | ||||||||
Other income (expense), net | (140 | ) | 3 | (75 | ) | 33 | ||||||||||
Total other income (expense) | 7,386 | 2,836 | 2,560 | 17,973 | ||||||||||||
Loss before income taxes | 3,519 | (2,784 | ) | (20,117 | ) | (608 | ) | |||||||||
Income tax expense | (6 | ) | 1 | 14 | 32 | |||||||||||
Net income (loss) | $ | 3,525 | (2,785 | ) | $ | (20,131 | ) | $ | (640 | ) | ||||||
Income (loss) per common share: | ||||||||||||||||
Basic and diluted | $ | 1.65 | $ | (2.13 | ) | $ | (13.02 | ) | $ | (0.61 | ) | |||||
Weighted-average common shares outstanding: | ||||||||||||||||
Basic and diluted | 2,140,400 | 1,290,467 | 1,546,297 | 1,056,988 | ||||||||||||
BIOFRONTERA INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
| Years ended December 31, | ||||||||
| 2023 | 2022 | |||||||
Cash Flows From Operating Activities: | ||||||||
Net loss | $ | (20,131 | ) | $ | (640 | ) | ||
Adjustments to reconcile net loss to cash flows used in operations | ||||||||
Gain on legal settlement | (7,385 | ) | - | |||||
Depreciation | 86 | 101 | ||||||
Amortization of right-of-use assets | 560 | 653 | ||||||
Amortization of acquired intangible assets | 418 | 418 | ||||||
Change in fair value of investment, related party | 7,421 | (1,747 | ) | |||||
Change in fair value of contingent consideration | 100 | (3,800 | ) | |||||
Change in fair value of warrant liabilities | (6,456 | ) | (19,017 | ) | ||||
Warrant inducement expense | 1,045 | 2,629 | ||||||
Excess of warrant fair value over offering proceeds | 2,272 | - | ||||||
Stock-based compensation | 1,045 | 1,852 | ||||||
Provision for inventory obsolescence | - | 100 | ||||||
Provision for doubtful accounts | 122 | 106 | ||||||
Non-cash interest expense | 402 | 358 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (1,536 | ) | (70 | ) | ||||
Other receivables, related party | 6,470 | 4,990 | ||||||
Prepaid expenses and other assets | 174 | 4,154 | ||||||
Other assets, related party | (5,159 | ) | - | |||||
Inventories | (3,750 | ) | (2,810 | ) | ||||
Accounts payable and related party payables | 6,415 | 912 | ||||||
Operating lease liabilities | (657 | ) | (781 | ) | ||||
Accrued expenses and other liabilities | (6,351 | ) | (3,607 | ) | ||||
Cash flows used in operating activities | (24,895 | ) | (16,199 | ) | ||||
Cash flows from investing activities | ||||||||
Purchases of investment, related party | - | (5,118 | ) | |||||
Sales of investment, related party | 624 | - | ||||||
Purchases of property and equipment | (5 | ) | (38 | ) | ||||
Cash flows provided by (used in) investing activities | 619 | (5,156 | ) | |||||
Cash flows from financing activities | ||||||||
Proceeds from line of credit | 21,448 | - | ||||||
Proceeds from short term debt | 3,800 | - | ||||||
Principal payments short term debt, net | (21,344 | ) | ||||||
Proceeds from issuance of common stock and warrants | 4,507 | 9,391 | ||||||
Proceeds from exercise of warrants | - | 4,630 | ||||||
Cash flows provided by financing activities | 8,411 | 14,021 | ||||||
Net decrease in cash and cash equivalents | (15,865 | ) | (7,334 | ) | ||||
Cash, cash equivalents and restricted cash, at the beginning of the year | 17,408 | 24,742 | ||||||
Cash, cash equivalents and restricted cash, at the end of the year | $ | 1,543 | $ | 17,408 | ||||
Supplemental disclosure of cash flow information | ||||||||
Interest paid | $ | 125 | $ | 1 | ||||
Interest paid, related party | $ | 22 | $ | - | ||||
Income tax paid, net | $ | 15 | $ | 32 | ||||
Supplemental non-cash investing and financing activities | ||||||||
Release of start-up cost financing obligation as part of legal settlement | $ | (7,300 | ) | $ | - | |||
Release of contingent consideration obligation as part of legal settlement | $ | (2,500 | ) | $ | - | |||
Transfer of investment as part of legal settlement | $ | 2,415 | $ | - | ||||
Addition of right-of-use assets in exchange for operating lease liabilities | $ | 800 | $ | 234 | ||||
Conversion of warrant liability to equity in connection with exercise of warrants | $ | - | $ | 6,840 | ||||
Issuance of common shares in exchange for investment, related party | $ | - | $ | 3,683 | ||||
BIOFRONTERA INC.
ADJUSTED EBITDA
(In thousands, except per share amounts and number of shares)
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Net income (loss) | $ | 3,525 | $ | (2,785 | ) | $ | (20,131 | ) | $ | (640 | ) | |||||
Interest expense, net | 212 | 35 | 468 | 195 | ||||||||||||
Income tax expense | (6 | ) | 1 | 14 | 32 | |||||||||||
Depreciation and amortization | 125 | 126 | 504 | 519 | ||||||||||||
EBITDA | 3,856 | (2,623 | ) | (19,145 | ) | 106 | ||||||||||
Gain on legal settlement | (7,385 | ) | - | (7,385 | ) | - | ||||||||||
Change in fair value of contingent consideration | - | 300 | 100 | (3,800 | ) | |||||||||||
Change in fair value of warrant liabilities | (4,455 | ) | (1,121 | ) | (6,456 | ) | (19,017 | ) | ||||||||
Warrant inducement expense | 1,045 | - | 1,045 | 2,629 | ||||||||||||
Excess of warrant fair value of warrant liabilities | 2,272 | - | 2,272 | - | ||||||||||||
Change in fair value of investment, related party | 786 | (1,747 | ) | 7,421 | (1,747 | ) | ||||||||||
Legal settlement expenses | - | 381 | 1,225 | 870 | ||||||||||||
Stock-based compensation | 228 | 383 | 1,045 | 1,852 | ||||||||||||
Expensed issuance costs | 422 | - | 422 | 1,045 | ||||||||||||
Adjusted EBITDA | $ | (3,231 | ) | $ | (4,427 | ) | $ | (19,456 | ) | $ | (18,062 | ) | ||||
Adjusted EBITDA margin | -30.5 | % | -43.6 | % | -57.1 | % | -63.0 | % | ||||||||
# # #
SOURCE: Biofrontera Inc.
View the original press release on accesswire.com
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