Biofrontera Inc. Q4 FY2023 earnings call

• Optimized customer-facing teams to provide support and services. - Controlled cost structure and improved balance sheet. - Advanced R&D and assumed all clinical initiatives on Ameluz starting June 2024. - Secured $8 million financing with another $8 million expected in Q2 2024 for commercial organization and clinical activities. - Placed 123 BF-RhodoLED lamps in 2023, showing growth in Ameluz PDT adoption. - Reduced cost structure and invested savings in commercial and support teams. - Planning to launch larger RhodoLED XL lamp in Q2 2024, with FDA approval for use of up to three tubes per treatment by Q4 2024. - FDA approved Ameluz formulation lacking propylene glycol for actinic keratosis treatment. - U.S. Patent granted for less painful PDT protocol, with patents protecting products until 2040 and beyond. - First patient dosed in Phase 3 clinical study for Ameluz and RhodoLED XL in treating actinic keratosis on extremities, neck, and trunk. - Renegotiated license and supply agreement with Biofrontera Group in Germany, reducing transfer price and taking over clinical trials from June 2024.

Biofrontera reported net revenue of $34.1 million for the year 2023, a record and a 19% increase. Ameluz was the primary revenue contributor. In 2023, 123 BF-RhodoLED lamps were placed in physician offices, an 86% increase from 66 in 2022. Of these, 61 sites were existing customers who added more lamps, and 62 were new offices set up for Ameluz BF-RhodoLED PDT. Revenue for Q4 2023 was $10.6 million, up 4% from $10.1 million in Q4 2022. Full-year 2023 revenue was $34.4 million, a 19% increase from $28.7 million in 2022.

• Expect two-digit revenue growth compared to 2023. - Anticipate being cash flow positive within approximately 12 to 18 months depending on spend associated with U.S. clinical studies. - The amended license and supply agreement for Ameluz has reduced transfer price structure, with flat 25% for 2024-2025 for actinic keratosis and non-melanoma skin cancers, and 25% indefinitely for acne-related indications.

Q: About trials, enrollment numbers and timing for acne, peripheral AK, and BCC data?

A: In acne Phase 2 trial, 50%-60% enrolled, expect to complete enrollment by end of 2024 and have data mid-2025. Peripheral AK study enrollment similar, data likely slightly after acne trial data, maybe 2H 2025. Enrollment for BCC study already completed, clinical part of study should be after mid-2024 with follow-up in first half of 2025.

Q: Estimates on when derms might have access to portable lamp?

A: Portable lamp will take some time, expected on market in next two years. It will provide more flexibility for PDT in offices without sufficient space and for live demonstrations.

Q: XL lamp launch timing?

A: XL lamp planned to launch in Q2 2024.

Q: Can sell all annual minimum purchases of Ameluz with new transaction terms?

A: Fred Leffler believes it's a layup, minimums associated with LSA restructuring should be easily achieved.

Q: Sales and marketing changes, sales force numbers and turnover?

A: Reduced sales force slightly in favor of growing other service functions, currently 32 reps and 7 managers. Turnover is below industry average but still working to reduce further.

Q: Sales growth target for coming year?

A: Fred Leffler mentioned CAGR since 2020 is 22%, double-digit growth is a reasonable target.

Q: Price increases timing for 2024?

A: Still evaluating pricing strategy, no concrete decision on price increases yet, seasonality of revenue is assumed to be similar to 2023 unless changes are updated.