NASDAQ:BFRI Biofrontera Q4 2023 Earnings Report $0.70 -0.01 (-1.68%) Closing price 03:58 PM EasternExtended Trading$0.70 0.00 (0.00%) As of 06:48 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Biofrontera EPS ResultsActual EPS-$2.33Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/ABiofrontera Revenue ResultsActual Revenue$10.60 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/ABiofrontera Announcement DetailsQuarterQ4 2023Date3/15/2024TimeN/AConference Call DateMonday, March 18, 2024Conference Call Time10:00AM ETUpcoming EarningsBiofrontera's Q1 2025 earnings is scheduled for Tuesday, May 13, 2025, with a conference call scheduled on Friday, May 16, 2025 at 10:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfilePowered by Biofrontera Q4 2023 Earnings Call TranscriptProvided by QuartrMarch 18, 2024 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Welcome to the Biofrontera Incorporated 4th Quarter 2023 Financial Results and Business Update Conference Call. All participants will be in listen only mode. Please note, this event is being recorded. I would now like to turn the conference over to Andrew Barwicki with Barwicki Investor Relations. Please go ahead. Speaker 100:00:42Thank you. Good morning, and welcome to Biofrontera Incorporated's 4th quarter fiscal 2023 financial results and business update conference Please note that certain information discussed during today's call by management is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act. We caution listeners that Biofrontera's management will be making forward looking statements and that actual results may differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the company's business. All risks and uncertainties are detailed in and are qualified by the cautionary statements contained in Biofrontera's press release and SEC filings. Also, this conference call contains time sensitive information that is accurate only as of the date of the live broadcast, March 18, 2024. Speaker 100:01:31Biofrontera undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances after the date of this conference call, except as required by law. During today's call, there will be reference to certain non GAAP financial measures. Biofrontera believes these measures provide useful information for investors, yet should not be considered as a substitute for GAAP, nor should they be reviewed as a substitute for operating rules determined in accordance with GAAP. A reconciliation of non GAAP to GAAP results is included in this Friday's press release. More specifically, management will be referencing adjusted EBITDA and non GAAP financial measures 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. Speaker 100:02:19With that said, I would like now to turn the call over to Herman Lubert, CEO, Chairman and Founder of Biofrontera. Hubert? Speaker 200:02:28Yes. Thank you, Andrew. And my thanks to everyone joining us this morning. On today's call, I'll provide an overview of our accomplishments and private and strategy that occurred during the 2nd part of 2023 and how these changes help lay the groundwork for many value driving initiatives in 2024 and beyond. Additionally, we have had some significant successes already in the first quarter of 2024 that I will touch upon. Speaker 200:03:00Fred Leffler, our CFO, will follow with a discussion on financial results, and then both of us will be available to answer questions after our prepared remarks. Starting with the business update, we have made tremendous progress across 3 critical areas, including 1st, optimizing our customer facing teams to provide the right support and services to our customers. 2nd, controlling our cost structure and improving our balance sheet. And third, advancing R and D and assuming all clinical initiatives on Ameluz starting June 2024. This tremendous progress has been realized by investors following the renegotiation of our license and supply agreement for Ameluz with dramatic reductions in the transfer price we paid to buy Frontera Group in Germany, we very recently secured financing of 8,000,000 and expect another tranche of $8,000,000 in Q2. Speaker 200:04:02These proceeds will be used to finance our ongoing commercial organization and support the clinical activities for further Ameluz development, which as mentioned, we will take over from the German Biofrontera Group in June 2024. I would like to comment all our employees as we announced net revenue of $34,100,000 a record for Biofrontera and a 19% increase for the year. While Ameluz makes up for most of our revenue, we are also proud to share that 123 Bf Rodolad lamps were placed at physician offices during the year compared to 66 placed in 2022, an increase of 86% and the highest number we have ever installed in a single year. The growing number of lamps in the field reflects both first time installations and additional lamps among dermatology practices already familiar with Ameluz PDT, facilitating growth through existing and new customers. More specifically, of the 123 installations, 61 sites already had at least one of our lamps in place and bought a further lamp to provide more Ameluz PDT to their patients. Speaker 200:05:26The remaining 62 offices are now set up to start Ameluz bifraudulent PDT. Lamp placements are a leading indicator for future growth and we are delighted with the increasing recognition of Ameluz PDT as an effective and patient friendly treatment for actinic keratosis and in the future also other diseases. During 2023, we have reduced our cost structure and invested a proportion of the cost savings in our commercial and support teams. We are continuing to optimize our customer facing strategy by shifting resources from a sales force focused organization to invest in marketing, strategic accounts, medical and reimbursement support. Increasing efforts in sales force training will further help our territory managers to be more efficient. Speaker 200:06:23By doing so, we are continuing to develop a team that supports all stakeholders within our customer organizations. We believe this approach will be better suited to supporting our growth in the buy and bill PDT market and bringing new customers into PDT. To explain, buy and bill relates to Ameluz purchases by the doctors' offices, which then need unproblematic patient treatment and reimbursement to make this process financially viable to the office. In December, we settled arbitration regarding a dispute around our acquisition of the Xepi asset. This allowed us to remove significant liabilities from our balance sheet, which Fred will discuss in a moment. Speaker 200:07:15Now turning to new developments, research and development and patents. We expect 2 significant commercial developments for 2024 that will favorably impact our business. We are planning to launch the larger Autolad XL lamp for the treatment of a 3 tube safety study was completed and the data was submitted to and accepted by the FDA for review. We expect to include the use of up to 3 tubes per treatment into the Ameluz label during Q4 of 2024. In combination with the launch of the XL LAMP, this will allow PDT of larger skin areas, constituting a crucial requirement for our further growth. Speaker 200:08:14The U. S. Food and Drug Administration, the FDA, has approved a new formulation of Ameluz lacking propylene glycol for the treatment of actinic keratosis. We expect that production of this formulation will begin in 2024 and help improve tolerability for some of our patients, while also reducing the generation impurities over time, which may result in an extended shelf life. The US Patent and Trademark Office, the US PTO, granted a new patent related to a photodynamic therapy or PDT protocol that is expected to be less painful, but similarly effective to conventional PDT. Speaker 200:09:00Between all our patents currently granted by the U. S. Patent Office, PDT with Ameluz and Autolad is currently protected until 2,040. Further patents are still pending and may extend the protection of our products until 2,043 or even further. In 2024, we purchased 2 additional patents for low cost portable photodynamic therapy lamps for use with Ameluz, and we started development of these lamps. Speaker 200:09:38The planning process for building a prototype is nearing completion, and we expect to begin looking at next steps in the near future. We are also pleased to announce that the first patient has been dosed in a Phase 3 randomized double blind vehicle controlled multicenter clinical studies to evaluate the safety and efficacy of Ameluz and autolad XL in the field directed treatment of actinic keratosis on extremities, the neck and the trunk. This is significant opportunity for our company, as many patients suffer from AK not only on their face and scalp, but also on various exposed areas of the body. The last 2 months have seen transformational developments for our company with the successful renegotiation of our LSA, our license and supply agreement for Ameluz and Rodellet lamps with Biofrontera Group in Germany and the subsequent securing of up to $16,000,000 in financing. According to the amended LSA, we have reduced our Ameluz transfer price. Speaker 200:10:49It is the price we pay to our licensor from 50% of our revenues up to 30,000,000 and 40% from 30,000,000 to 50,000,000 to a flat 25% for 2024 2025. This amount will then step up to 30% in 2026 and stepwise up to 35% in subsequent years. This structure, however, applies only to for any acne related indications. As part of this amendment, Biofrontera Inc. Is taking over all clinical trials as of June 1, 2024. Speaker 200:11:37The additional cost is expected to be only a portion of the savings from the reduced transfer price. This arrangement allows us to more effectively run these trials and control their costs. Finally, we have secured sufficient funding for the company through 2 separate deals. In November 2023, we closed on additional financing of €4,500,000 And in February of this year, we closed on a private placement of up to €16,000,000 that is expected to be paid in 2 tranches. We have received $8,000,000 and expect to meet the requirements to secure the additional $8,000,000 tranche in either May or June 2024. Speaker 200:12:24We look forward to providing updates on all these programs and more on our Q1 2024 call. With that, I'll turn the call over to Fred to walk through the financial details of the Q4 and full year. Fred? Thank you, Herman, Speaker 300:12:42and it is great to be talking with everyone again. I will start with our Q4 2023 results. Total revenue for the Q4 of 2023 were $10,600,000 an increase of $500,000 or about 4% compared with $10,100,000 for the Q4 of 2022. This reflects the continued adoption of Ameluz, but was impacted by impacted more than anticipated by a buy in prior to a price increase at the beginning of the quarter. Total operating expenses were $14,500,000 for the Q4 of 2023 compared with $15,800,000 for the Q4 of 2022. Speaker 300:13:21Cost of revenues were $5,400,000 for the Q4 of 2023 compared with $5,300,000 for the prior year quarter driven by higher Ameluz product revenue. Selling, general and administrative expenses were $9,100,000 for the Q4 of 2023 compared with $10,200,000 for the Q4 of 2022 with a decrease primarily driven by lower personnel costs. Net income for the Q4 of 2023 was $3,500,000 or $1.65 per share compared with a net loss of $2,800,000 or a loss of $2.16 per share for the prior year quarter with all share or with all per share figures on a split adjusted basis. Adjusted EBITDA for the Q4 of 2023 was negative $3,200,000 compared with negative $4,400,000 for the Q4 of 2022, reflecting higher revenues partially offset by increased SG and A costs. 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. Speaker 300:14:34I'll refer you to the table in the news release we issued on Friday, March 15 for a reconciliation of GAAP to this non GAAP financial measure. Now turning to our full year 2023 results. Total revenues for 2023 were $34,400,000 compared to $28,700,000 for 2022, a growth of approximately 19%. The increase was primarily driven by higher volume of Ameluz sales due to a restructured discount program, higher adoption of Ameluz by dermatologists and a higher average Ameluz selling price. Total operating expenses were $56,700,000 for 2023 compared with $47,300,000 for 2022. Speaker 300:15:19Cost of revenues increased from the prior year to $17,400,000 for 2023 from $15,200,000 in 2022, primarily driven by increased Ameluz volume. Selling, general and administrative expenses for 2023 were $39,100,000 compared with $35,900,000 for 2022, an increase of about 9% compared with the prior year, driven by personnel related expenses and higher legal expenses. The net loss for 2023 was $20,100,000 or $13.02 per share compared with a net loss of $600,000 or $0.61 per share for the fiscal year 2022. Adjusted EBITDA was negative $19,500,000 for 2023 compared with negative $18,100,000 for 2022. The decrease was primarily driven by the commercial team expansion that took place in the Q2 of 2023. Speaker 300:16:23Again, please refer to the table in the news release on Friday, March 15 for a reconciliation of GAAP to non GAAP financial measures. Now turning to our balance sheet as of December 31, 1, 2023, we had cash and cash equivalents of $1,300,000 compared with $17,200,000 as of December 31, 2022. Our investment in related parties is $100,000 compared with $10,500,000 as of December 31, 2022. This is due to the increase or the decrease in share price of the investment and the fact that we used a large portion of the shares to settle an arbitration dispute. As a result, we eliminated liabilities of approximately 9,800,000 dollars and recorded a gain of approximately $7,400,000 I have talked about our increasing inventory in 2023 quite a bit and as of today we have received and paid for all orders. Speaker 300:17:23Our inventory balance as of December 31, 2023 is $10,900,000 compared to $7,200,000 on hand as of December 31, 2022. I would like to clarify this amount a bit. We also have an asset for replacement inventory of $5,200,000 as well. This is due to a voluntary recall of 3 batches of Ameluz from our supplier, of which we were notified of the issue in February of 2024. The batches will be replaced at no cost to us and we expect to receive those batches over the summer months. Speaker 300:17:58This will not impact our ability to fulfill orders in the meantime. So we are now in a position to sell off our inventory over 2024 and achieve a reasonable safety stock, which improves our working capital position. We are still not anticipating on making any inventory purchases for until at least the second half of twenty twenty four. And as a result, we will continue to manage our working capital very closely. Finally, we entered into a bridge loan for $4,000,000 at the end of December of 2023 in order to finance company through the most recent capital raise that Herman mentioned earlier. Speaker 300:18:39We will pay down this loan through early July of 2024 and do not expect to need such a facility in the near future. Based on multiple positive indicators for the year, we expect 2 digit growth in revenue compared to 2023 and expect to be cash flow positive within approximately 12 to 18 months depending on our spend associated with our additional spend associated with the U. S. Clinical studies. So with that overview of our business and recent financial performance, Herman and I are now ready to take questions from our covering analysts. Speaker 300:19:15Operator? Operator00:19:45The first question is from Jonathan Aschoff with ROTH. Please go ahead. Speaker 400:19:50Thank you, guys. Good morning. And I want to ask about just your trials. Acne, what is the patient's enrollment number and the timing to data? Speaker 200:20:05Hi, Jonathan. In the ACME Phase 2 trial, about half of the patients are currently enrolled, little more than between 50% 60% are currently enrolled. And we expect to complete enrollment until the end of the year and then have data available in the middle of next year. Speaker 400:20:29Okay. And then how about the same two questions for peripheral AK? Speaker 200:20:39So, peripheral AK study has similar enrollment actually. The data will probably come slightly after the AKNA trial data because the patients are longer in the trial. Speaker 400:21:00But Okay. So 2H25 maybe? Speaker 200:21:02It's not similar. Speaker 400:21:04Okay. Like 2H25 for data you would think? Speaker 200:21:08Yes. Speaker 400:21:08Second half of twenty twenty five. And then how about enrollment for BCC data? Is that still tracking for mid-twenty 24 or like a few months from now, something like that? Speaker 200:21:21Enrollment was completed already. Speaker 400:21:24No. With the data tracking, data time, is that still the middle of this year? Speaker 200:21:30Data should be of the the clinical part of the study should be after the middle of this year and follow-up in the first half of next year. Okay. Speaker 400:21:46So, thank you, Herman. If I may go to the portable lamp, can you make any estimates as to when DERMS might have access to the portable ramp? Speaker 200:21:59The portable ramp will still need some time, of course, before it hits the market. That's not something that we see on the market in the next 2 years, just to be clear. However, we believe that this will be a significantly easier entry into PDT for offices that so far haven't been able to do PDT because they don't have sufficient space. And it will also help our reps to actually take a lump around and do live demonstrations in doctors' offices on label. And furthermore, the doctors will have the chance to take the lab and do offer PDTs in retirement homes. Speaker 200:22:56So it will provide much more flexibility to the way in which PDT can actually be done. Speaker 400:23:03Okay. And I think I missed what you had said. The XL lamp, was that going to come on to the market in force by the end of the year? Is that what you said? Speaker 200:23:13No, Q2. Speaker 400:23:15Q2 of this year? Speaker 200:23:17Of this year, yes. Speaker 400:23:20So guys, can you definitely sell all of the annual minimum purchases of animals and just that you must make with the new transaction terms? Like is that a way up to sell the minimum that you have to buy? Speaker 300:23:37Jonathan, yes, this is Fred. Yes, we believe that is, as you put it, a layup. And yes, the minimums associated with the LSA restructuring should be easily achieved going forward. Speaker 400:23:56Okay. Lastly, you've moved to using the term 2 digit growth. I mean that starts with 10%. I would hope that your growth this year over last year would be double that and that that would not be a stretch. Is that a fair way to look at it that 20% would not be a stretch? Speaker 300:24:20Yes. It ends with 99%, Jonathan. But you're right. I think that we expect similar to growth that we've seen over the past couple of years. And if we maintain that trajectory going forward and as I mentioned depending how we deploy the spend associated with the clinical trials that we're taking over in June, we should be breakeven in approximately 12 to 18 months. Speaker 400:25:01Okay. Thank you very much, guys. Speaker 300:25:05Thank you, John. Again, Operator00:25:14The next question is from Bruce Jackson with The Benchmark Company. Please go ahead. Speaker 500:25:20Hi, good morning. A question about the sales and marketing efforts. So have there been any changes to the sales force in terms of numbers? And is the turnover stable? Speaker 200:25:37Yes, we did in fact decide to reduce the sales force slightly in favor of growing the other service functions that are required to actually make the help the sales force to be successful. So currently, we have 32 reps out there and 7 managers of these 32 reps. What was the second part of the question? Speaker 500:26:12The second, yes. So the question, any change in the turnover, so with the reps that you've got right now, is it stable? Speaker 200:26:24Yes. The turnover is, of course, something that is a problem to every company. When we compare our turnover in the sales force with other companies, so with the industry average, then we are still below that, which is good. On the other hand, we still try to do everything we can to reduce the turnover even further. Speaker 500:26:54Okay, great. And then getting back to Fred's comments on the sales growth for the coming year, the double digit. You've done roughly 19% year over year for the past couple of years. If we like honed in on that number, would that be a reasonable target to begin with? Speaker 300:27:16I think that's a reasonable target. Our CAGR since 2020 has been 22%. So yes, I think those are the two numbers that you could take a look at and I think around there would be a reasonable estimate. Speaker 500:27:37Okay. And then last question for me. Sometimes the timing of the price increases can have an impact on the calendarization of the quarters. So, what would be looking for this year? Would it be similar to 2023 or might there be any differences? Speaker 300:28:00We're still evaluating our pricing strategy and things like that. We haven't made a concrete decision on any price increases yet Speaker 500:28:14for 2024. So in terms of like the seasonality of the revenue by quarter then, should we assume it looks similar to 2023? Speaker 300:28:28Yes. I think that's a good working assumption. And if any changes come to that, we will certainly update everyone. Speaker 200:28:44Thank you, Bruce. Thank you. Operator00:28:47This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks. Speaker 200:28:57Yes. So, we believe that we had a very successful year in 2023 that we had some transformational changes to the company that makes the status of the company and the future of the company look much brighter than what we were looking at a year ago. And with that, I would like to thank all our employees again to taking the company to where we are now. And thank you for taking the time to listen in. Thank you. Operator00:29:35The conference is now concluded. Thank you for attending today's presentation. You may nowRead morePowered by Conference Call Audio Live Call not available Earnings Conference CallBiofrontera Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Annual report(10-K) Biofrontera Earnings HeadlinesBiofrontera Inc. to Report First Quarter FY 2025 Financial Results on May 15, 2025May 6 at 4:56 PM | gurufocus.comBiofrontera Inc. to Report First Quarter FY 2025 Financial Results on May 15, 2025 | BFRI Stock NewsMay 6 at 1:16 PM | gurufocus.comWatch This Robotics Demo Before July 23rdJeff Brown, the tech legend who picked shares of Nvidia in 2016 before they jumped by more than 22,000%... Just did a demo of what Nvidia’s CEO said will be "the first multitrillion-dollar robotics industry."May 7, 2025 | Brownstone Research (Ad)Biofrontera and Almirall Launch the Hats On Challenge to Raise Awareness and Support for Actinic KeratosisMay 1, 2025 | globenewswire.comBiofrontera Inc. (NASDAQ:BFRI) Q4 2024 Earnings Call TranscriptMarch 25, 2025 | msn.comBiofrontera Inc. Reports Record Sales and Strategic AdvancesMarch 24, 2025 | tipranks.comSee More Biofrontera Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Biofrontera? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Biofrontera and other key companies, straight to your email. Email Address About BiofronteraBiofrontera (NASDAQ:BFRI), a biopharmaceutical company, engages in the commercialization of pharmaceutical products for the treatment of dermatological conditions in the United States. The company's products are used for the treatment of actinic keratoses, which are pre-cancerous skin lesions, as well as impetigo, a bacterial skin infection. It offers Ameluz, a prescription drug for use in combination with the RhodoLED lamp series, for photodynamic therapy for the lesion-directed and field-directed treatment of actinic keratosis of mild-to-moderate severity on the face and scalp. The company also provides Xepi, a topical non-fluorinated quinolone that inhibits bacterial growth for the treatment of impetigo. The company was incorporated in 2015 and is headquartered in Woburn, Massachusetts.View Biofrontera ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Disney Stock Jumps on Earnings—Is the Magic Sustainable?Archer Stock Eyes Q1 Earnings After UAE UpdatesFord Motor Stock Rises After Earnings, But Momentum May Not Last Broadcom Stock Gets a Lift on Hyperscaler Earnings & CapEx BoostPalantir Stock Drops Despite Stellar Earnings: What's Next?Is Eli Lilly a Buy After Weak Earnings and CVS-Novo Partnership?Is Reddit Stock a Buy, Sell, or Hold After Earnings Release? 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There are 6 speakers on the call. Operator00:00:00Welcome to the Biofrontera Incorporated 4th Quarter 2023 Financial Results and Business Update Conference Call. All participants will be in listen only mode. Please note, this event is being recorded. I would now like to turn the conference over to Andrew Barwicki with Barwicki Investor Relations. Please go ahead. Speaker 100:00:42Thank you. Good morning, and welcome to Biofrontera Incorporated's 4th quarter fiscal 2023 financial results and business update conference Please note that certain information discussed during today's call by management is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act. We caution listeners that Biofrontera's management will be making forward looking statements and that actual results may differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the company's business. All risks and uncertainties are detailed in and are qualified by the cautionary statements contained in Biofrontera's press release and SEC filings. Also, this conference call contains time sensitive information that is accurate only as of the date of the live broadcast, March 18, 2024. Speaker 100:01:31Biofrontera undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances after the date of this conference call, except as required by law. During today's call, there will be reference to certain non GAAP financial measures. Biofrontera believes these measures provide useful information for investors, yet should not be considered as a substitute for GAAP, nor should they be reviewed as a substitute for operating rules determined in accordance with GAAP. A reconciliation of non GAAP to GAAP results is included in this Friday's press release. More specifically, management will be referencing adjusted EBITDA and non GAAP financial measures 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. Speaker 100:02:19With that said, I would like now to turn the call over to Herman Lubert, CEO, Chairman and Founder of Biofrontera. Hubert? Speaker 200:02:28Yes. Thank you, Andrew. And my thanks to everyone joining us this morning. On today's call, I'll provide an overview of our accomplishments and private and strategy that occurred during the 2nd part of 2023 and how these changes help lay the groundwork for many value driving initiatives in 2024 and beyond. Additionally, we have had some significant successes already in the first quarter of 2024 that I will touch upon. Speaker 200:03:00Fred Leffler, our CFO, will follow with a discussion on financial results, and then both of us will be available to answer questions after our prepared remarks. Starting with the business update, we have made tremendous progress across 3 critical areas, including 1st, optimizing our customer facing teams to provide the right support and services to our customers. 2nd, controlling our cost structure and improving our balance sheet. And third, advancing R and D and assuming all clinical initiatives on Ameluz starting June 2024. This tremendous progress has been realized by investors following the renegotiation of our license and supply agreement for Ameluz with dramatic reductions in the transfer price we paid to buy Frontera Group in Germany, we very recently secured financing of 8,000,000 and expect another tranche of $8,000,000 in Q2. Speaker 200:04:02These proceeds will be used to finance our ongoing commercial organization and support the clinical activities for further Ameluz development, which as mentioned, we will take over from the German Biofrontera Group in June 2024. I would like to comment all our employees as we announced net revenue of $34,100,000 a record for Biofrontera and a 19% increase for the year. While Ameluz makes up for most of our revenue, we are also proud to share that 123 Bf Rodolad lamps were placed at physician offices during the year compared to 66 placed in 2022, an increase of 86% and the highest number we have ever installed in a single year. The growing number of lamps in the field reflects both first time installations and additional lamps among dermatology practices already familiar with Ameluz PDT, facilitating growth through existing and new customers. More specifically, of the 123 installations, 61 sites already had at least one of our lamps in place and bought a further lamp to provide more Ameluz PDT to their patients. Speaker 200:05:26The remaining 62 offices are now set up to start Ameluz bifraudulent PDT. Lamp placements are a leading indicator for future growth and we are delighted with the increasing recognition of Ameluz PDT as an effective and patient friendly treatment for actinic keratosis and in the future also other diseases. During 2023, we have reduced our cost structure and invested a proportion of the cost savings in our commercial and support teams. We are continuing to optimize our customer facing strategy by shifting resources from a sales force focused organization to invest in marketing, strategic accounts, medical and reimbursement support. Increasing efforts in sales force training will further help our territory managers to be more efficient. Speaker 200:06:23By doing so, we are continuing to develop a team that supports all stakeholders within our customer organizations. We believe this approach will be better suited to supporting our growth in the buy and bill PDT market and bringing new customers into PDT. To explain, buy and bill relates to Ameluz purchases by the doctors' offices, which then need unproblematic patient treatment and reimbursement to make this process financially viable to the office. In December, we settled arbitration regarding a dispute around our acquisition of the Xepi asset. This allowed us to remove significant liabilities from our balance sheet, which Fred will discuss in a moment. Speaker 200:07:15Now turning to new developments, research and development and patents. We expect 2 significant commercial developments for 2024 that will favorably impact our business. We are planning to launch the larger Autolad XL lamp for the treatment of a 3 tube safety study was completed and the data was submitted to and accepted by the FDA for review. We expect to include the use of up to 3 tubes per treatment into the Ameluz label during Q4 of 2024. In combination with the launch of the XL LAMP, this will allow PDT of larger skin areas, constituting a crucial requirement for our further growth. Speaker 200:08:14The U. S. Food and Drug Administration, the FDA, has approved a new formulation of Ameluz lacking propylene glycol for the treatment of actinic keratosis. We expect that production of this formulation will begin in 2024 and help improve tolerability for some of our patients, while also reducing the generation impurities over time, which may result in an extended shelf life. The US Patent and Trademark Office, the US PTO, granted a new patent related to a photodynamic therapy or PDT protocol that is expected to be less painful, but similarly effective to conventional PDT. Speaker 200:09:00Between all our patents currently granted by the U. S. Patent Office, PDT with Ameluz and Autolad is currently protected until 2,040. Further patents are still pending and may extend the protection of our products until 2,043 or even further. In 2024, we purchased 2 additional patents for low cost portable photodynamic therapy lamps for use with Ameluz, and we started development of these lamps. Speaker 200:09:38The planning process for building a prototype is nearing completion, and we expect to begin looking at next steps in the near future. We are also pleased to announce that the first patient has been dosed in a Phase 3 randomized double blind vehicle controlled multicenter clinical studies to evaluate the safety and efficacy of Ameluz and autolad XL in the field directed treatment of actinic keratosis on extremities, the neck and the trunk. This is significant opportunity for our company, as many patients suffer from AK not only on their face and scalp, but also on various exposed areas of the body. The last 2 months have seen transformational developments for our company with the successful renegotiation of our LSA, our license and supply agreement for Ameluz and Rodellet lamps with Biofrontera Group in Germany and the subsequent securing of up to $16,000,000 in financing. According to the amended LSA, we have reduced our Ameluz transfer price. Speaker 200:10:49It is the price we pay to our licensor from 50% of our revenues up to 30,000,000 and 40% from 30,000,000 to 50,000,000 to a flat 25% for 2024 2025. This amount will then step up to 30% in 2026 and stepwise up to 35% in subsequent years. This structure, however, applies only to for any acne related indications. As part of this amendment, Biofrontera Inc. Is taking over all clinical trials as of June 1, 2024. Speaker 200:11:37The additional cost is expected to be only a portion of the savings from the reduced transfer price. This arrangement allows us to more effectively run these trials and control their costs. Finally, we have secured sufficient funding for the company through 2 separate deals. In November 2023, we closed on additional financing of €4,500,000 And in February of this year, we closed on a private placement of up to €16,000,000 that is expected to be paid in 2 tranches. We have received $8,000,000 and expect to meet the requirements to secure the additional $8,000,000 tranche in either May or June 2024. Speaker 200:12:24We look forward to providing updates on all these programs and more on our Q1 2024 call. With that, I'll turn the call over to Fred to walk through the financial details of the Q4 and full year. Fred? Thank you, Herman, Speaker 300:12:42and it is great to be talking with everyone again. I will start with our Q4 2023 results. Total revenue for the Q4 of 2023 were $10,600,000 an increase of $500,000 or about 4% compared with $10,100,000 for the Q4 of 2022. This reflects the continued adoption of Ameluz, but was impacted by impacted more than anticipated by a buy in prior to a price increase at the beginning of the quarter. Total operating expenses were $14,500,000 for the Q4 of 2023 compared with $15,800,000 for the Q4 of 2022. Speaker 300:13:21Cost of revenues were $5,400,000 for the Q4 of 2023 compared with $5,300,000 for the prior year quarter driven by higher Ameluz product revenue. Selling, general and administrative expenses were $9,100,000 for the Q4 of 2023 compared with $10,200,000 for the Q4 of 2022 with a decrease primarily driven by lower personnel costs. Net income for the Q4 of 2023 was $3,500,000 or $1.65 per share compared with a net loss of $2,800,000 or a loss of $2.16 per share for the prior year quarter with all share or with all per share figures on a split adjusted basis. Adjusted EBITDA for the Q4 of 2023 was negative $3,200,000 compared with negative $4,400,000 for the Q4 of 2022, reflecting higher revenues partially offset by increased SG and A costs. 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. Speaker 300:14:34I'll refer you to the table in the news release we issued on Friday, March 15 for a reconciliation of GAAP to this non GAAP financial measure. Now turning to our full year 2023 results. Total revenues for 2023 were $34,400,000 compared to $28,700,000 for 2022, a growth of approximately 19%. The increase was primarily driven by higher volume of Ameluz sales due to a restructured discount program, higher adoption of Ameluz by dermatologists and a higher average Ameluz selling price. Total operating expenses were $56,700,000 for 2023 compared with $47,300,000 for 2022. Speaker 300:15:19Cost of revenues increased from the prior year to $17,400,000 for 2023 from $15,200,000 in 2022, primarily driven by increased Ameluz volume. Selling, general and administrative expenses for 2023 were $39,100,000 compared with $35,900,000 for 2022, an increase of about 9% compared with the prior year, driven by personnel related expenses and higher legal expenses. The net loss for 2023 was $20,100,000 or $13.02 per share compared with a net loss of $600,000 or $0.61 per share for the fiscal year 2022. Adjusted EBITDA was negative $19,500,000 for 2023 compared with negative $18,100,000 for 2022. The decrease was primarily driven by the commercial team expansion that took place in the Q2 of 2023. Speaker 300:16:23Again, please refer to the table in the news release on Friday, March 15 for a reconciliation of GAAP to non GAAP financial measures. Now turning to our balance sheet as of December 31, 1, 2023, we had cash and cash equivalents of $1,300,000 compared with $17,200,000 as of December 31, 2022. Our investment in related parties is $100,000 compared with $10,500,000 as of December 31, 2022. This is due to the increase or the decrease in share price of the investment and the fact that we used a large portion of the shares to settle an arbitration dispute. As a result, we eliminated liabilities of approximately 9,800,000 dollars and recorded a gain of approximately $7,400,000 I have talked about our increasing inventory in 2023 quite a bit and as of today we have received and paid for all orders. Speaker 300:17:23Our inventory balance as of December 31, 2023 is $10,900,000 compared to $7,200,000 on hand as of December 31, 2022. I would like to clarify this amount a bit. We also have an asset for replacement inventory of $5,200,000 as well. This is due to a voluntary recall of 3 batches of Ameluz from our supplier, of which we were notified of the issue in February of 2024. The batches will be replaced at no cost to us and we expect to receive those batches over the summer months. Speaker 300:17:58This will not impact our ability to fulfill orders in the meantime. So we are now in a position to sell off our inventory over 2024 and achieve a reasonable safety stock, which improves our working capital position. We are still not anticipating on making any inventory purchases for until at least the second half of twenty twenty four. And as a result, we will continue to manage our working capital very closely. Finally, we entered into a bridge loan for $4,000,000 at the end of December of 2023 in order to finance company through the most recent capital raise that Herman mentioned earlier. Speaker 300:18:39We will pay down this loan through early July of 2024 and do not expect to need such a facility in the near future. Based on multiple positive indicators for the year, we expect 2 digit growth in revenue compared to 2023 and expect to be cash flow positive within approximately 12 to 18 months depending on our spend associated with our additional spend associated with the U. S. Clinical studies. So with that overview of our business and recent financial performance, Herman and I are now ready to take questions from our covering analysts. Speaker 300:19:15Operator? Operator00:19:45The first question is from Jonathan Aschoff with ROTH. Please go ahead. Speaker 400:19:50Thank you, guys. Good morning. And I want to ask about just your trials. Acne, what is the patient's enrollment number and the timing to data? Speaker 200:20:05Hi, Jonathan. In the ACME Phase 2 trial, about half of the patients are currently enrolled, little more than between 50% 60% are currently enrolled. And we expect to complete enrollment until the end of the year and then have data available in the middle of next year. Speaker 400:20:29Okay. And then how about the same two questions for peripheral AK? Speaker 200:20:39So, peripheral AK study has similar enrollment actually. The data will probably come slightly after the AKNA trial data because the patients are longer in the trial. Speaker 400:21:00But Okay. So 2H25 maybe? Speaker 200:21:02It's not similar. Speaker 400:21:04Okay. Like 2H25 for data you would think? Speaker 200:21:08Yes. Speaker 400:21:08Second half of twenty twenty five. And then how about enrollment for BCC data? Is that still tracking for mid-twenty 24 or like a few months from now, something like that? Speaker 200:21:21Enrollment was completed already. Speaker 400:21:24No. With the data tracking, data time, is that still the middle of this year? Speaker 200:21:30Data should be of the the clinical part of the study should be after the middle of this year and follow-up in the first half of next year. Okay. Speaker 400:21:46So, thank you, Herman. If I may go to the portable lamp, can you make any estimates as to when DERMS might have access to the portable ramp? Speaker 200:21:59The portable ramp will still need some time, of course, before it hits the market. That's not something that we see on the market in the next 2 years, just to be clear. However, we believe that this will be a significantly easier entry into PDT for offices that so far haven't been able to do PDT because they don't have sufficient space. And it will also help our reps to actually take a lump around and do live demonstrations in doctors' offices on label. And furthermore, the doctors will have the chance to take the lab and do offer PDTs in retirement homes. Speaker 200:22:56So it will provide much more flexibility to the way in which PDT can actually be done. Speaker 400:23:03Okay. And I think I missed what you had said. The XL lamp, was that going to come on to the market in force by the end of the year? Is that what you said? Speaker 200:23:13No, Q2. Speaker 400:23:15Q2 of this year? Speaker 200:23:17Of this year, yes. Speaker 400:23:20So guys, can you definitely sell all of the annual minimum purchases of animals and just that you must make with the new transaction terms? Like is that a way up to sell the minimum that you have to buy? Speaker 300:23:37Jonathan, yes, this is Fred. Yes, we believe that is, as you put it, a layup. And yes, the minimums associated with the LSA restructuring should be easily achieved going forward. Speaker 400:23:56Okay. Lastly, you've moved to using the term 2 digit growth. I mean that starts with 10%. I would hope that your growth this year over last year would be double that and that that would not be a stretch. Is that a fair way to look at it that 20% would not be a stretch? Speaker 300:24:20Yes. It ends with 99%, Jonathan. But you're right. I think that we expect similar to growth that we've seen over the past couple of years. And if we maintain that trajectory going forward and as I mentioned depending how we deploy the spend associated with the clinical trials that we're taking over in June, we should be breakeven in approximately 12 to 18 months. Speaker 400:25:01Okay. Thank you very much, guys. Speaker 300:25:05Thank you, John. Again, Operator00:25:14The next question is from Bruce Jackson with The Benchmark Company. Please go ahead. Speaker 500:25:20Hi, good morning. A question about the sales and marketing efforts. So have there been any changes to the sales force in terms of numbers? And is the turnover stable? Speaker 200:25:37Yes, we did in fact decide to reduce the sales force slightly in favor of growing the other service functions that are required to actually make the help the sales force to be successful. So currently, we have 32 reps out there and 7 managers of these 32 reps. What was the second part of the question? Speaker 500:26:12The second, yes. So the question, any change in the turnover, so with the reps that you've got right now, is it stable? Speaker 200:26:24Yes. The turnover is, of course, something that is a problem to every company. When we compare our turnover in the sales force with other companies, so with the industry average, then we are still below that, which is good. On the other hand, we still try to do everything we can to reduce the turnover even further. Speaker 500:26:54Okay, great. And then getting back to Fred's comments on the sales growth for the coming year, the double digit. You've done roughly 19% year over year for the past couple of years. If we like honed in on that number, would that be a reasonable target to begin with? Speaker 300:27:16I think that's a reasonable target. Our CAGR since 2020 has been 22%. So yes, I think those are the two numbers that you could take a look at and I think around there would be a reasonable estimate. Speaker 500:27:37Okay. And then last question for me. Sometimes the timing of the price increases can have an impact on the calendarization of the quarters. So, what would be looking for this year? Would it be similar to 2023 or might there be any differences? Speaker 300:28:00We're still evaluating our pricing strategy and things like that. We haven't made a concrete decision on any price increases yet Speaker 500:28:14for 2024. So in terms of like the seasonality of the revenue by quarter then, should we assume it looks similar to 2023? Speaker 300:28:28Yes. I think that's a good working assumption. And if any changes come to that, we will certainly update everyone. Speaker 200:28:44Thank you, Bruce. Thank you. Operator00:28:47This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks. Speaker 200:28:57Yes. So, we believe that we had a very successful year in 2023 that we had some transformational changes to the company that makes the status of the company and the future of the company look much brighter than what we were looking at a year ago. And with that, I would like to thank all our employees again to taking the company to where we are now. And thank you for taking the time to listen in. Thank you. Operator00:29:35The conference is now concluded. Thank you for attending today's presentation. You may nowRead morePowered by