NASDAQ:BFRI Biofrontera Q1 2024 Earnings Report $0.70 -0.01 (-1.12%) As of 11:52 AM Eastern This is a fair market value price provided by Polygon.io. Learn more. Earnings HistoryForecast Biofrontera EPS ResultsActual EPS-$1.85Consensus EPS -$1.63Beat/MissMissed by -$0.22One Year Ago EPSN/ABiofrontera Revenue ResultsActual Revenue$7.91 millionExpected Revenue$11.52 millionBeat/MissMissed by -$3.61 millionYoY Revenue GrowthN/ABiofrontera Announcement DetailsQuarterQ1 2024Date5/15/2024TimeN/AConference Call DateThursday, May 16, 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)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Biofrontera Q1 2024 Earnings Call TranscriptProvided by QuartrMay 16, 2024 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Welcome to the Biofrontera Inc. 1st Quarter 2024 Financial Results and Business Update Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Andrew Borwicki with Borwicki Investor Relations. Please go ahead. Speaker 100:00:44Good morning, and welcome to Biofrontera Incorporated's Q1 2024 Financial Results and Business Update Conference Call. 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 certain SEC filings. Also, this conference call contains time sensitive information that is accurate only as of the date of this live broadcast, May 16, 2024. Speaker 100:01:34Biofrontera undertakes no obligations 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 references 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 viewed as a substitute for operating results determined in accordance with GAAP. A reconciliation of non GAAP to GAAP results is included in the press release announcing Q1 fiscal year 2024 results. More specifically, management will be referencing adjusted EBITDA, a non GAAP financial measure defined as net income or loss excluding interest income and expense, income taxes, depreciation and amortization and certain non recurring or non cash items. Speaker 100:02:24With that said, I would like to turn the call over to Hermann Lubbert, CEO, morning. On today's call, I'll provide an overview of our Speaker 200:02:38On today's call, I'll provide an overview of our operations during the Q1, some events that occurred since the end of the Q1 and discuss our business strategy for the remainder of the year. Fred Loeffler, our CFO, will follow with a discussion on financial results and then both of us will be happy to answer questions. I would like to start with the most positive event of the Q1. We successfully renegotiated our license and supply agreement for Ameluz with Biofrontera AG, reducing our costs significantly. We will now pay now be paying 25% for Ameluz during 2024 2025 compared to approximately 40% to 50% of our sales price under the prior agreement. Speaker 200:03:32This LSA will gradually step up to 35% by 2,032. Any indication associated with Acta will remain at 25% indefinitely. This represents a transformational event for Biofrontera Inc, significantly increasing our potential to become profitable in the near term. As part of this amendment, we will take over all U. S. Speaker 200:03:58Clinical trials effective June 1, which will allow for more effective cost management and direct oversight of the trial efficacy. The reduced costs of goods will allow us to finance R and D activities while continuing our commercial growth trajectory. With Ameluz making up most of our revenue, we believe this is a unique opportunity moving forward. Furthermore, I'm pleased to announce that in February, we raised $8,000,000 minus financing expenses to support the growth and expansion of the company, including clinical trials. Later, the cost of the clinical trials will be covered in entirety by the savings from the reduced transfer price. Speaker 200:04:46Our February financing deal entailed warrants exercisable upon achievement of certain milestones by April 30th at the earliest. As we confirmed earlier this month, we have already met those milestones and as a result received another $8,000,000 through the exercise of the warrants in early May. Contrary to these positive developments, our quarterly revenues were negatively impacted when in February a cyber attack against Change Healthcare, the largest billing and payment system in the U. S. Affected thousands of medical practices. Speaker 200:05:26According to the AMA, the American Medical Association, 80% of physicians reported lost revenues from unpaid claims. The AMA, which is the nation's largest medical society, said the attack threatened the viability of physician practices across the country with more than half of survey respondents having to use personal funds to cover practice expenses. Healthcare reimbursement is a never ending challenge with many changes occurring on a constant basis purposeful or not. Having said that, I'm extremely proud of our team and the efforts with medical facilities, doctors' offices and insurance companies to tackle working capital issues created by the Q1 change healthcare cyber attacks and to ensure full reimbursement received wherever possible. We are working hand in hand with our customers, whether they are a small single provider office or a large medical facility to ensure they have our products available and are appropriately reimbursed for their service to the patients. Speaker 200:06:38In spite of everybody's efforts, all this culminated in some customers either reducing their orders in Q1 or shifting their orders into Q2, which drove 9% lower Q1 revenue as compared to the Q1 in 2023. However, as we announced earlier, we have begun to see this recovery. And as of year to date, April 30, 2024, compared to the same period last year, we have reported already more than 5% growth in revenues. Our BF Rotor LUT lamps, the devices that are used in combination with Ameluz continue to be placed at physician offices throughout the country. A positive indicator for future growth is that in the Q1 2024, we have placed 28 dams, an increase of 115% compared to the Q1 of the prior year. Speaker 200:07:37The growing number of lambs in the field reflects both 1st time installations and additional labs among dermatology practices already familiar with Ameluz PDT, facilitating growth for new and existing customers. We expect to begin selling the RotorLab XL, our larger 5 panel lamp towards the end of Q2 this year. As part of the agreement with Biofrontera AG, we are in the midst of preparations for the takeover of the clinical trial departments for Biofrontera Bioscience. As of June 1, 2024, members of the clinical trial groups will join our wholly owned German subsidiary Biofrontera Discovery GmbH, which subsequently will be responsible for Alderlet in the United States. At Biofrontera Discovery, we will not only be responsible for future clinical studies, but also for all ongoing trials. Speaker 200:08:43Currently, 2 clinical studies are enrolling patients, one for actinic keratosis on the neck and trunk and the arms and hands, the other for moderate to severe acne. These have recruited 57% and 74% of subjects respectively. The 3rd ongoing study for the treatment of superficial basal cell carcinoma is nearing completion of the 1 year follow-up phase required for FDA submission. We expect the last patient to complete this follow-up phase before the end of the year. As I mentioned in the past, the Food and Drug Administration approved a new formulation of Ameluz without propylene glycol for the treatment of actinic keratosis. Speaker 200:09:32The production of this formulation will begin shortly and we expect delivery of our at our wholesaler in August. This will help improve tolerability for some of our patients, while also reducing the generation of impurities over time, which may result in an extended shelf life once sufficient stability data is collected. With that, I'll turn the call over to Fred to walk through the financial details of the Q1. Fred? Speaker 300:10:06Thank you, Herman. And it is a pleasure to provide a financial update today on our Q1 results. Total revenues for the Q1 of 2024 were $7,900,000 compared with $8,700,000 for the Q1 of 2023. The decrease is due to healthcare reimbursement issues caused by the change healthcare data breach that created cash challenges for the entire healthcare industry throughout the quarter. As Herman mentioned, we have seen recovery and I do not expect this to be a long term issue and we'll continue to monitor for any further developments. Speaker 300:10:42Total operating expenses were $13,400,000 for the Q1 of 2024 compared with $14,200,000 for the Q1 of 2023. Cost of revenue was $4,100,000 for the Q1 of 2024 compared with $4,600,000 for the prior year quarter with a decline in cost of revenue driven by the lower Ameluz sales. I've mentioned in earlier calls that we are burning through inventory that we have on hand for most of 2024. Later this year, once we purchase new inventory, we expect to see the positive impact of the LSA amendment on our cost of revenues. Selling, general and administrative expenses were $9,300,000 for the Q1 of 2024 compared with 9,800,000 dollars for the Q1 of 2023. Speaker 300:11:33The decrease was primarily driven by a $1,100,000 decrease in non recurring legal costs and a $3,000 decrease in sales and marketing expenses. The decrease was primarily offset by a $700,000 increase in fees and issuance costs associated with our most recent private placement transaction as well as a small increase in personnel expenses. The net loss for the Q1 of 2024 was $10,400,000 or a loss of $2.88 per share, compared with a net loss of $7,500,000 or a loss of $5.60 per share for the prior year quarter. I will note that the accounting for the B3 convertible preferred warrants had a large impact on this. We do not expect to have such an adjustment in the future. Speaker 300:12:23Adjusted EBITDA for the Q1 of 2024 was negative $4,600,000 compared with negative $4,100,000 for the Q1 of 2023. This reflects the lower revenues we saw in the Q1 of 2024. We look at adjusted EBITDA, non GAAP financial measure as a better indication of ongoing operations and this measurement is defined as net income or loss excluding interest income and expenses, income taxes, depreciation and amortization and certain other non recurring or non cash items. I'll refer you to the table in the earnings press release and the 10 Q we issued yesterday for a reconciliation of GAAP to non GAAP financial measures. Turning to our balance sheet as of March 31, 2024, we had cash and cash equivalents of $3,800,000 Keep in mind, we received $8,000,000 from the exercise of B3 convertible preferred warrants on Tuesday, so we are in a much stronger position today. Speaker 300:13:21Our inventory balance as of March 31, 2024 was $6,900,000 As I mentioned, we are burning through our inventory and we constantly monitor our inventory levels to ensure deliveries are made in accordance with our forecast and we get to and maintain an industry standard of safety stock. Related to inventory, our assets include $5,200,000 for replacement inventory. This is due to Biofrontera AG deciding on a voluntary recall of 3 batches of Ameluz. 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 these batches in the Q3. Speaker 300:14:02This will not impact our ability to fulfill orders in the meantime. Finally, we had an outstanding balance of $2,400,000 in short term debt that we expect to pay down by early July 2024. With that overview of our business and financial performance, Herman and I are now ready to take questions from our covering analysts. Operator? Operator00:14:48The first question comes from Jonathan Aschoff with ROTH. Please go ahead. Speaker 400:14:55Thank you. Good morning, guys. My first question is, does that greater than 5% Jan through April sales result, is that a big underestimation of the actual growth that simply fits the definition of 1 of the 2 milestones you had to hit to trigger the second $8,000,000 investment or is it actually really close to 5%? Speaker 300:15:22Hi, Jonathan. Fred Laughlin here. I can take that. That was based on the milestone like you said that we had to hit. We didn't issue the specific number, but can give an update on Q2 or we'll give the update on Q2 in August. Speaker 400:15:43Okay. Are you guys still comfortable with cash flow breakeven around the year end 2025 or has that changed a bit? Speaker 300:15:55That is still the expectation. As Herman said, we are taking on the clinical costs and we will start seeing the savings of the LFA amendments later this year through 2025 to help fund that. And as long as we operate and hit our budget numbers, don't foresee that as being an issue. Speaker 400:16:22Okay. Did the last basal cell synoma patient have their final assessment last quarter and therefore you're still expecting to give us data in the Q3 of this year? Speaker 200:16:35That's correct. So the data we would provide we expect to provide are for the clinical phase. And the FDA wants us to submit the 1 year follow-up. So the last patient out there would be in November or December. So the follow-up data would be available early in Q2 and then prepare out for FDA submission. Speaker 400:17:04Okay. And I remember hearing from the prior management that dermatologists, if they had to cover a greater area and only allowed to use one tube, they would use the amylose a little thinner than indicated so they could cover a greater area. Wouldn't that kind of, I don't know, imply that if they can use more than one tube that they would definitely do that so they could get a higher reimbursement per procedure? Speaker 200:17:38Doctors, of course, if they can't tend to use the products according to label and the payers are more and more looking after that. And so our currently ongoing submission, FDA submission for 3 tubes is very relevant in that respect. The timeline there hasn't changed. So we expect some kind of preliminary review results in early August. And then the PDUFA date is in November. Speaker 400:18:19Okay. Could you just help us with the enrollment for acne and peripheral AK? Speaker 200:18:29Yes. So the enrollment for AKTTE and peripheral AK. I have the numbers in the presentation. So for So, for peripheral AK, current enrollment is 57% of the patients. And for acne, it's 74% of the subjects. Operator00:19:18The next question comes from Bruce Jackson with The Benchmark Company. Please go ahead. Speaker 500:19:24Hi, good morning and thanks for taking my questions. I'm trying to kind of sort through the impact from Change Healthcare. So we're up 5% year to date. How do you think the rest of the year unfolds? So, 2nd quarter is generally seasonally weak and then the back half of the year can have other anomalies to it. Speaker 500:19:48But how do you see the sales unfolding for the rest of the year? Speaker 200:19:55Well, as Fred said, we don't expect this to have a long term impact. It was an impact mostly in February March when this actually happened and doctors were not paid for our services. That's when all the services at doctors' offices actually came down, including, of course, PDT with Ameluz. But then in April, we did already see the upswing and could not only make up for those 90% loss, but as we said, it's more than 5% above last year. So we expect we don't expect a long term effect of this and still expect the same kind of growth that we did at the beginning of the year. Speaker 500:20:51Okay. Okay. And then my second question is about the XL Lamp launch. I think I heard you're going to be receiving from the I'm sorry, when is the XL Lamp going to launch? That's my question. Speaker 200:21:06It's going to launch by the end of Q2. Speaker 500:21:09End of Q2. Okay, super. That's it for me. Thank you. Speaker 200:21:16Rich, thank you, Bruce. Speaker 400:21:18Thanks. Thanks, Bruce. Operator00:21:20This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks. Speaker 200:21:29Yes. Well, thank you for everybody's time, participation, the questions And we look forward to our next call where hopefully we can again present positive news. Thank you and have a nice day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallBiofrontera Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) 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.comHere’s How to Claim Your Stake in Elon’s Private Company, xAII predict this single breakthrough could make Elon the world’s first trillionaire — and mint more new millionaires than any tech advance in history. And for a limited time, you have the chance to claim a stake in this project, even though it’s housed inside Elon’s private company, xAI.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 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?Warning or Opportunity After Super Micro Computer's Earnings Upcoming Earnings Monster Beverage (5/8/2025)Coinbase Global (5/8/2025)Brookfield (5/8/2025)Anheuser-Busch InBev SA/NV (5/8/2025)ConocoPhillips (5/8/2025)Shopify (5/8/2025)Cheniere Energy (5/8/2025)McKesson (5/8/2025)Enbridge (5/9/2025)Petróleo Brasileiro S.A. - Petrobras (5/12/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 6 speakers on the call. Operator00:00:00Welcome to the Biofrontera Inc. 1st Quarter 2024 Financial Results and Business Update Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Andrew Borwicki with Borwicki Investor Relations. Please go ahead. Speaker 100:00:44Good morning, and welcome to Biofrontera Incorporated's Q1 2024 Financial Results and Business Update Conference Call. 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 certain SEC filings. Also, this conference call contains time sensitive information that is accurate only as of the date of this live broadcast, May 16, 2024. Speaker 100:01:34Biofrontera undertakes no obligations 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 references 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 viewed as a substitute for operating results determined in accordance with GAAP. A reconciliation of non GAAP to GAAP results is included in the press release announcing Q1 fiscal year 2024 results. More specifically, management will be referencing adjusted EBITDA, a non GAAP financial measure defined as net income or loss excluding interest income and expense, income taxes, depreciation and amortization and certain non recurring or non cash items. Speaker 100:02:24With that said, I would like to turn the call over to Hermann Lubbert, CEO, morning. On today's call, I'll provide an overview of our Speaker 200:02:38On today's call, I'll provide an overview of our operations during the Q1, some events that occurred since the end of the Q1 and discuss our business strategy for the remainder of the year. Fred Loeffler, our CFO, will follow with a discussion on financial results and then both of us will be happy to answer questions. I would like to start with the most positive event of the Q1. We successfully renegotiated our license and supply agreement for Ameluz with Biofrontera AG, reducing our costs significantly. We will now pay now be paying 25% for Ameluz during 2024 2025 compared to approximately 40% to 50% of our sales price under the prior agreement. Speaker 200:03:32This LSA will gradually step up to 35% by 2,032. Any indication associated with Acta will remain at 25% indefinitely. This represents a transformational event for Biofrontera Inc, significantly increasing our potential to become profitable in the near term. As part of this amendment, we will take over all U. S. Speaker 200:03:58Clinical trials effective June 1, which will allow for more effective cost management and direct oversight of the trial efficacy. The reduced costs of goods will allow us to finance R and D activities while continuing our commercial growth trajectory. With Ameluz making up most of our revenue, we believe this is a unique opportunity moving forward. Furthermore, I'm pleased to announce that in February, we raised $8,000,000 minus financing expenses to support the growth and expansion of the company, including clinical trials. Later, the cost of the clinical trials will be covered in entirety by the savings from the reduced transfer price. Speaker 200:04:46Our February financing deal entailed warrants exercisable upon achievement of certain milestones by April 30th at the earliest. As we confirmed earlier this month, we have already met those milestones and as a result received another $8,000,000 through the exercise of the warrants in early May. Contrary to these positive developments, our quarterly revenues were negatively impacted when in February a cyber attack against Change Healthcare, the largest billing and payment system in the U. S. Affected thousands of medical practices. Speaker 200:05:26According to the AMA, the American Medical Association, 80% of physicians reported lost revenues from unpaid claims. The AMA, which is the nation's largest medical society, said the attack threatened the viability of physician practices across the country with more than half of survey respondents having to use personal funds to cover practice expenses. Healthcare reimbursement is a never ending challenge with many changes occurring on a constant basis purposeful or not. Having said that, I'm extremely proud of our team and the efforts with medical facilities, doctors' offices and insurance companies to tackle working capital issues created by the Q1 change healthcare cyber attacks and to ensure full reimbursement received wherever possible. We are working hand in hand with our customers, whether they are a small single provider office or a large medical facility to ensure they have our products available and are appropriately reimbursed for their service to the patients. Speaker 200:06:38In spite of everybody's efforts, all this culminated in some customers either reducing their orders in Q1 or shifting their orders into Q2, which drove 9% lower Q1 revenue as compared to the Q1 in 2023. However, as we announced earlier, we have begun to see this recovery. And as of year to date, April 30, 2024, compared to the same period last year, we have reported already more than 5% growth in revenues. Our BF Rotor LUT lamps, the devices that are used in combination with Ameluz continue to be placed at physician offices throughout the country. A positive indicator for future growth is that in the Q1 2024, we have placed 28 dams, an increase of 115% compared to the Q1 of the prior year. Speaker 200:07:37The growing number of lambs in the field reflects both 1st time installations and additional labs among dermatology practices already familiar with Ameluz PDT, facilitating growth for new and existing customers. We expect to begin selling the RotorLab XL, our larger 5 panel lamp towards the end of Q2 this year. As part of the agreement with Biofrontera AG, we are in the midst of preparations for the takeover of the clinical trial departments for Biofrontera Bioscience. As of June 1, 2024, members of the clinical trial groups will join our wholly owned German subsidiary Biofrontera Discovery GmbH, which subsequently will be responsible for Alderlet in the United States. At Biofrontera Discovery, we will not only be responsible for future clinical studies, but also for all ongoing trials. Speaker 200:08:43Currently, 2 clinical studies are enrolling patients, one for actinic keratosis on the neck and trunk and the arms and hands, the other for moderate to severe acne. These have recruited 57% and 74% of subjects respectively. The 3rd ongoing study for the treatment of superficial basal cell carcinoma is nearing completion of the 1 year follow-up phase required for FDA submission. We expect the last patient to complete this follow-up phase before the end of the year. As I mentioned in the past, the Food and Drug Administration approved a new formulation of Ameluz without propylene glycol for the treatment of actinic keratosis. Speaker 200:09:32The production of this formulation will begin shortly and we expect delivery of our at our wholesaler in August. This will help improve tolerability for some of our patients, while also reducing the generation of impurities over time, which may result in an extended shelf life once sufficient stability data is collected. With that, I'll turn the call over to Fred to walk through the financial details of the Q1. Fred? Speaker 300:10:06Thank you, Herman. And it is a pleasure to provide a financial update today on our Q1 results. Total revenues for the Q1 of 2024 were $7,900,000 compared with $8,700,000 for the Q1 of 2023. The decrease is due to healthcare reimbursement issues caused by the change healthcare data breach that created cash challenges for the entire healthcare industry throughout the quarter. As Herman mentioned, we have seen recovery and I do not expect this to be a long term issue and we'll continue to monitor for any further developments. Speaker 300:10:42Total operating expenses were $13,400,000 for the Q1 of 2024 compared with $14,200,000 for the Q1 of 2023. Cost of revenue was $4,100,000 for the Q1 of 2024 compared with $4,600,000 for the prior year quarter with a decline in cost of revenue driven by the lower Ameluz sales. I've mentioned in earlier calls that we are burning through inventory that we have on hand for most of 2024. Later this year, once we purchase new inventory, we expect to see the positive impact of the LSA amendment on our cost of revenues. Selling, general and administrative expenses were $9,300,000 for the Q1 of 2024 compared with 9,800,000 dollars for the Q1 of 2023. Speaker 300:11:33The decrease was primarily driven by a $1,100,000 decrease in non recurring legal costs and a $3,000 decrease in sales and marketing expenses. The decrease was primarily offset by a $700,000 increase in fees and issuance costs associated with our most recent private placement transaction as well as a small increase in personnel expenses. The net loss for the Q1 of 2024 was $10,400,000 or a loss of $2.88 per share, compared with a net loss of $7,500,000 or a loss of $5.60 per share for the prior year quarter. I will note that the accounting for the B3 convertible preferred warrants had a large impact on this. We do not expect to have such an adjustment in the future. Speaker 300:12:23Adjusted EBITDA for the Q1 of 2024 was negative $4,600,000 compared with negative $4,100,000 for the Q1 of 2023. This reflects the lower revenues we saw in the Q1 of 2024. We look at adjusted EBITDA, non GAAP financial measure as a better indication of ongoing operations and this measurement is defined as net income or loss excluding interest income and expenses, income taxes, depreciation and amortization and certain other non recurring or non cash items. I'll refer you to the table in the earnings press release and the 10 Q we issued yesterday for a reconciliation of GAAP to non GAAP financial measures. Turning to our balance sheet as of March 31, 2024, we had cash and cash equivalents of $3,800,000 Keep in mind, we received $8,000,000 from the exercise of B3 convertible preferred warrants on Tuesday, so we are in a much stronger position today. Speaker 300:13:21Our inventory balance as of March 31, 2024 was $6,900,000 As I mentioned, we are burning through our inventory and we constantly monitor our inventory levels to ensure deliveries are made in accordance with our forecast and we get to and maintain an industry standard of safety stock. Related to inventory, our assets include $5,200,000 for replacement inventory. This is due to Biofrontera AG deciding on a voluntary recall of 3 batches of Ameluz. 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 these batches in the Q3. Speaker 300:14:02This will not impact our ability to fulfill orders in the meantime. Finally, we had an outstanding balance of $2,400,000 in short term debt that we expect to pay down by early July 2024. With that overview of our business and financial performance, Herman and I are now ready to take questions from our covering analysts. Operator? Operator00:14:48The first question comes from Jonathan Aschoff with ROTH. Please go ahead. Speaker 400:14:55Thank you. Good morning, guys. My first question is, does that greater than 5% Jan through April sales result, is that a big underestimation of the actual growth that simply fits the definition of 1 of the 2 milestones you had to hit to trigger the second $8,000,000 investment or is it actually really close to 5%? Speaker 300:15:22Hi, Jonathan. Fred Laughlin here. I can take that. That was based on the milestone like you said that we had to hit. We didn't issue the specific number, but can give an update on Q2 or we'll give the update on Q2 in August. Speaker 400:15:43Okay. Are you guys still comfortable with cash flow breakeven around the year end 2025 or has that changed a bit? Speaker 300:15:55That is still the expectation. As Herman said, we are taking on the clinical costs and we will start seeing the savings of the LFA amendments later this year through 2025 to help fund that. And as long as we operate and hit our budget numbers, don't foresee that as being an issue. Speaker 400:16:22Okay. Did the last basal cell synoma patient have their final assessment last quarter and therefore you're still expecting to give us data in the Q3 of this year? Speaker 200:16:35That's correct. So the data we would provide we expect to provide are for the clinical phase. And the FDA wants us to submit the 1 year follow-up. So the last patient out there would be in November or December. So the follow-up data would be available early in Q2 and then prepare out for FDA submission. Speaker 400:17:04Okay. And I remember hearing from the prior management that dermatologists, if they had to cover a greater area and only allowed to use one tube, they would use the amylose a little thinner than indicated so they could cover a greater area. Wouldn't that kind of, I don't know, imply that if they can use more than one tube that they would definitely do that so they could get a higher reimbursement per procedure? Speaker 200:17:38Doctors, of course, if they can't tend to use the products according to label and the payers are more and more looking after that. And so our currently ongoing submission, FDA submission for 3 tubes is very relevant in that respect. The timeline there hasn't changed. So we expect some kind of preliminary review results in early August. And then the PDUFA date is in November. Speaker 400:18:19Okay. Could you just help us with the enrollment for acne and peripheral AK? Speaker 200:18:29Yes. So the enrollment for AKTTE and peripheral AK. I have the numbers in the presentation. So for So, for peripheral AK, current enrollment is 57% of the patients. And for acne, it's 74% of the subjects. Operator00:19:18The next question comes from Bruce Jackson with The Benchmark Company. Please go ahead. Speaker 500:19:24Hi, good morning and thanks for taking my questions. I'm trying to kind of sort through the impact from Change Healthcare. So we're up 5% year to date. How do you think the rest of the year unfolds? So, 2nd quarter is generally seasonally weak and then the back half of the year can have other anomalies to it. Speaker 500:19:48But how do you see the sales unfolding for the rest of the year? Speaker 200:19:55Well, as Fred said, we don't expect this to have a long term impact. It was an impact mostly in February March when this actually happened and doctors were not paid for our services. That's when all the services at doctors' offices actually came down, including, of course, PDT with Ameluz. But then in April, we did already see the upswing and could not only make up for those 90% loss, but as we said, it's more than 5% above last year. So we expect we don't expect a long term effect of this and still expect the same kind of growth that we did at the beginning of the year. Speaker 500:20:51Okay. Okay. And then my second question is about the XL Lamp launch. I think I heard you're going to be receiving from the I'm sorry, when is the XL Lamp going to launch? That's my question. Speaker 200:21:06It's going to launch by the end of Q2. Speaker 500:21:09End of Q2. Okay, super. That's it for me. Thank you. Speaker 200:21:16Rich, thank you, Bruce. Speaker 400:21:18Thanks. Thanks, Bruce. Operator00:21:20This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks. Speaker 200:21:29Yes. Well, thank you for everybody's time, participation, the questions And we look forward to our next call where hopefully we can again present positive news. Thank you and have a nice day.Read morePowered by