Biofrontera Inc. Reports Third Quarter 2022 Financial Results and Provides a Business Update

Rhea-AI Summary

Biofrontera Inc. (Nasdaq: BFRI) reported third quarter revenues of $4.3 million, consistent with Q3 2021, and a 24% increase in revenues for the first nine months of 2022, totaling $18.5 million. The company raised $4.3 million from warrant exercises and strengthened its relationship with Biofrontera AG through an acquisition. Despite a net loss of $2.6 million for Q3 2022, significantly improved from $16.0 million in Q3 2021, adjusted EBITDA for the quarter was negative $5.0 million. The company anticipates revenue growth of 24% to 31% for 2022.

Positive

• Total revenues for the first nine months of 2022 increased 24% to $18.5 million.
• Strong cash position with $27.5 million as of September 30, 2022.
• Raised $4.3 million through warrant exercises.
• Expecting total revenues for 2022 to increase between 24% and 31%.

Negative

• Net loss of $2.6 million in Q3 2022, despite improved from a larger loss in Q3 2021.
• Adjusted EBITDA remained negative at $5.0 million for Q3 2022.

Conference call begins at 11:00 a.m. Eastern time today

WOBURN, Mass., Nov. 14, 2022 (GLOBE NEWSWIRE) -- Biofrontera Inc. (Nasdaq: BFRI), a biopharmaceutical company specializing in the commercialization of dermatological products, today announced financial results for the three and nine months ended September 30, 2022 and provided a business update.

Highlights from the third quarter of 2022 and subsequent weeks include the following:

Financial Highlights

• Total revenues for the third quarter of 2022 were $4.3 million, consistent with the third quarter of 2021
• Total revenues for the first nine months of 2022 were $18.5 million, an increase of 24% from the comparable prior-year period
• Cash and cash equivalents were $27.5 million as of September 30, 2022, compared with $24.5 million as of December 31, 2021
• Raised $4.3 million in net proceeds from the exercise of existing warrants and the issuance of new warrants through a private placement transaction
• Strengthened and aligned the mutually beneficial relationship between Biofrontera Inc. and Biofrontera AG through an acquisition of Biofrontera AG shares
• Adopted a limited duration shareholder rights plan and declared a dividend distribution of preferred stock purchase rights

Clinical and Business Highlights

• Strengthened medical affairs through various initiatives including seminars, medical conferences, prescriber networking and key opinion leader (KOL) engagement
  • Showcased Ameluz^® for the treatment of actinic keratosis (AK) in four poster presentations at the 2022 Fall Clinical Dermatology Conference, where the Company also served as a Gold Industry Sponsor
  • Sponsored an Advisory Board meeting at the Fall Clinical Dermatology Conference consisting of two sessions that provided advanced education on the advantages and current landscape of photodynamic therapy (PDT) and shared real-world PDT utilization experiences by leading clinicians
• Biofrontera Bioscience GmbH was granted a patent in Australia for novel illumination protocols related to the treatment of skin diseases with PDT that combine the lower pain of daylight PDT with the higher cure rates and lower recurrence rates of conventional therapy
• Biofrontera Pharma GmbH received notice of allowance from the United States Patent and Trademark Office for the preparation of nanoemulsions or compositions, describing its use in the treatment of dermatological, virus-associated and cell proliferation diseases, as well as in cosmetics
• Ameluz new marketing campaign earned “Relaunch/Revitalization of the Year” and “Professional Website/Online Initiative of the Year” awards, and Associate Director of Marketing Leslie Hopkins was named 2022 Brand Champion for Dermatology, all by PM360, a publication for marketing decision markets in the pharmaceutical, biotech, diagnostics and medical device industries
• Named Fred Leffler as Chief Financial Officer, bringing to Biofrontera significant leadership, financial management, consulting and operations experience
• Appointed Gerard DiGirolamo as National Sales Director to strengthen our salesforce and execute on our commercial plan and launch planning of BF-RhodoLED XL^®

Management Commentary

“During the third quarter and recent weeks we strengthened our medical affairs initiatives with sponsorship, participation and presentation of our innovative dermatology solutions. Through peer-to-peer interactions and other activities, dermatologists are increasingly choosing our brands for their patients. The variety of our activities and our visibility in the dermatology sector are sharpening our corporate profile as an innovative dermatology company and emphasizing our strong commitment to improving patient care in collaboration with dermatologists. Our success in strengthening patent protection for our products justifies continued investments in marketing and further clinical development,” stated Erica Monaco, Chief Executive Officer of Biofrontera Inc. “Key strategic hires including a CFO and a national sales director will support our continued success. With year-to-date revenues up 24%, we expect total revenues for 2022 to increase between 24% and 31% compared with 2021, inclusive of seasonal strength in the first and fourth quarters. We expect to close 2022 with demonstrated market-share gains as well as with an operational foundation that will position us for increased ROI in 2023.”

Third Quarter Financial Results

Total revenues for the third quarter of 2022 of $4.3 million were consistent with the third quarter of 2021.

Total operating expenses were $8.0 million for the third quarter of 2022, compared with $20.4 million for the third quarter of 2021. Cost of revenues decreased by 3% primarily due to lower Ameluz sales. Selling, general and administrative expenses decreased by $9.3 million, or 54%, compared with the prior year primarily due to a one-time legal settlement expense in 2021, partially offset by higher business insurance and headcount costs as a result of resumed hiring in 2022.

Net loss for the third quarter of 2022 was $2.6 million, or $0.11 per share, compared with a net loss of $16.0 million, or $2.00 per share, for the third quarter of 2021.

Adjusted EBITDA was negative $5.0 million for the third quarter of 2022, compared with negative $3.8 million for the third quarter of 2021. Adjusted EBITDA, a non-GAAP financial measure, is defined as net income or loss excluding interest income and expense, income taxes, depreciation and amortization, and certain other non-recurring or non-cash items.

Nine Month Financial Results

Total revenues for the first nine months of 2022 were $18.5 million, compared with $14.9 million for the first nine months of 2021. The increase of $3.6 million, or 24%, was primarily driven by higher volume of Ameluz orders, which resulted in an increase in Ameluz revenue of $3.2 million, and by an Ameluz price increase, which increased Ameluz revenue by $0.2 million.

Total operating expenses were $31.5 million for the first nine months of 2022, compared with $38.3 million for the same period in 2021. Cost of revenues increased by 25% compared with the prior-year period primarily due to higher sales of Ameluz. Selling, general and administrative expenses decreased by $2.3 million, or 8%, primarily due to a one-time legal settlement expense in 2021, partially offset by higher business insurance and headcount costs as a result of resumed hiring in 2022.

Net income for the first nine months of 2022 was $2.1 million, or $0.11 per diluted share, compared with net loss of $23.2 million, or $2.90 per share, for the first nine months of 2021.

Adjusted EBITDA was negative $14.1 million for the first nine months of 2022, compared with negative $9.5 million for the same period in 2021.

The below table presents a reconciliation of net income (loss) to adjusted EBITDA for the three and nine months ended September 30, 2022 and 2021:

		Three months ended September 30,								Nine months ended September 30,
		2022				2021				2022				2021
Net income (loss)		$	(2,566	)		$	(16,012	)		$	2,145			$	(23,208	)
Interest expense, net			89				86				160				255
Income tax expense			1				6				31				51
Depreciation and amortization			130				134				394				409
EBITDA			(2,346	)			(15,786	)			2,730				(22,493	)
Change in fair value of contingent consideration			(2,200	)			700				(4,100	)			1,698
Change in fair value of warrant liabilities			(1,185	)			-				(15,267	)			-
Legal settlement expenses			-				11,250				-				11,250
Stock-based compensation			400				-				1,469				-
Expensed issuance costs			320				-				1,045				-
Adjusted EBITDA		$	(5,011	)		$	(3,836	)		$	(14,123	)		$	(9,545	)
Adjusted EBITDA margin			-115.9	%			-88.5	%			-76.2	%			-63.9	%

As of September 30, 2022, Biofrontera Inc. had cash and cash equivalents of $27.5 million, compared with $24.5 million as of December 31, 2021. The Company believes its cash and cash equivalents are sufficient to fund operations for at least the next 12 months.

Financial Guidance

Biofrontera Inc. is revising its previously announced financial guidance for 2022, as follows:

• Total revenues for 2022 are expected to increase between 24% and 31% compared with 2021, including typical seasonal strength in the first and fourth quarters
• The commercial focus throughout 2022 will be on achieving deeper sales penetration among current customer accounts and increasing market share.

Conference Call and Webcast

Biofrontera Inc. will hold a conference call today at 11:00 a.m. Eastern time to discuss these results and answer questions.

Date:	Monday, November 14, 2022
Time:	11:00 a.m. Eastern time
Conference call:	877-877-1275 (U.S.) 412-858-5202 (international)
Webcast:	Live and 90-day replay webcast are available here and at investors.biofrontera-us.com

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.

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 Biofrontera Inc.’s (the “Company”) revenue guidance for 2022, the Company’s relationship with Biofrontera AG (including beneficial ownership of Biofrontera AG’s shares and future collaboration between the Company and Biofrontera AG), business and marketing strategy, hiring strategy, development of medical affairs initiatives, growth of the Company’s profile, future operations and business, increased patent protection for our licensed products, potential to expand the label of Ameluz^®, market presence and position of Ameluz^® and ongoing clinical trials conducted by our licensing partners and the future impact of such trials on the market for Ameluz^®. 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, including, but not limited to, the impact of extraordinary external events, such as the current COVID-19 pandemic; 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 the current 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 complete the transition to a public company; 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 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.

Contacts:

Biofrontera Inc.
Anke zur Mühlen
+1 781 486 1539
us-ir@biofrontera.com

LHA Investor Relations
Tirth T. Patel
+1 212 201 6614
tpatel@lhai.com

BIOFRONTERA INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and share amounts)

		September 30, 2022				December 31, 2021
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	27,518			$	24,545
Accounts receivable, net			1,562				3,784
Other receivables, related party			3,503				8,647
Inventories			12,087				4,458
Prepaid expenses and other current assets			3,823				4,987
Total current assets			48,493				46,421
Other receivables long term, related party			2,813				2,813
Property and equipment, net			224				267
Intangible asset, net			3,136				3,450
Other assets			393				268
Total assets		$	55,059			$	53,219
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	253			$	658
Accounts payable, related parties			4,206				282
Acquisition contract liabilities, net			3,242				3,242
Accrued expenses and other current liabilities			9,442				9,654
Total current liabilities			17,143				13,836
Long-term liabilities:
Acquisition contract liabilities, net			5,711				9,542
Warrant liability			3,964				12,854
Other liabilities			5,646				5,649
Total liabilities		$	32,464			$	41,881
Commitments and contingencies (see Note 23)
Stockholders’ equity:
Preferred Stock, $0.001 par value, 20,000,000 shares authorized, zero shares issued and outstanding as of September 30, 2022, and December 31, 2021		$	-			$	-
Common Stock, $0.001 par value, 300,000,000 shares authorized; 23,550,960 and 17,104,749 shares issued and outstanding as of September 30, 2022, and December 31, 2021			23				17
Additional paid-in capital			99,306				90,200
Accumulated deficit			(76,734	)			(78,879	)
Total stockholders’ equity			22,595				11,338
Total liabilities and stockholders’ equity		$	55,059			$	53,219

BIOFRONTERA INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts and number of shares)
(Unaudited)

		Three months ended September 30,								Nine months ended September 30,
		2022				2021				2022				2021
Products revenues, net		$	4,290			$	4,319			$	18,467			$	14,890
Revenues, related party			32				15				63				42
Total revenues, net			4,322				4,334				18,530				14,932
Operating expenses
Cost of revenues, related party			2,127				2,249				9,504				7,630
Cost of revenues, other			98				41				425				339
Selling, general and administrative			7,765				17,090				25,050				27,412
Selling, general and administrative, related party			171				160				612				520
Restructuring costs			-				199				-				654
Change in fair value of contingent consideration			(2,200	)			700				(4,100	)			1,698
Total operating expenses			7,961				20,439				31,491				38,253
Loss from operations			(3,639	)			(16,105	)			(12,961	)			(23,321	)
Other income (expense)
Change in fair value of warrants			1,185				-				15,267				-
Interest expense, net			(89	)			(86	)			(160	)			(255	)
Other income (expense), net			(22	)			185				30				419
Total other income (expense)			1,074				99				15,137				164
Income (loss) before income taxes			(2,566	)			(16,006	)			2,176				(23,157	)
Income tax expense			1				6				31				51
Net income (loss)		$	(2,566	)		$	(16,012	)		$	2,145			$	(23,208	)
Income (loss) per common share:
Basic		$	(0.11	)		$	(2.00	)		$	0.11			$	(2.90	)
Diluted		$	(0.11	)		$	(2.00	)		$	0.11			$	(2.90	)
Weighted-average common shares outstanding:
Basic			22,725,821				8,000,000				19,560,351				8,000,000
Diluted			22,725,821				8,000,000				19,605,014				8,000,000

# # #

FAQ

What were the total revenues for Biofrontera in Q3 2022?

Total revenues for Biofrontera in Q3 2022 were $4.3 million.

What is the expected revenue growth for Biofrontera in 2022?

Biofrontera expects its total revenues for 2022 to increase between 24% and 31% compared to 2021.

What was the net loss reported by Biofrontera in Q3 2022?

The net loss for Biofrontera in Q3 2022 was $2.6 million.

How much cash and cash equivalents did Biofrontera have as of September 30, 2022?

As of September 30, 2022, Biofrontera had cash and cash equivalents of $27.5 million.

What are the financial highlights for the first nine months of 2022 for Biofrontera?

For the first nine months of 2022, Biofrontera reported revenues of $18.5 million, a 24% increase from the previous year.