Release Date: November 14, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Biofrontera Inc (NASDAQ:BFRI) reported a significant increase in the total number of Ameluz tubes ordered, alongside a reduction in costs.
• The company improved its FDA label, allowing the use of up to three tubes of Ameluz per treatment, enhancing flexibility for healthcare providers.
• Outstanding clinical results were achieved for a new indication, with a high degree of statistical significance in the superficial BCC phase three study.
• The launch of the RDO LED XL lamp has been successful, with 105 new lamps installed in the first three quarters of 2024.
• Biofrontera Inc (NASDAQ:BFRI) has taken control over clinical trials, leading to a reduced transfer price for Ameluz, which is expected to improve profitability.

Negative Points

• Revenues in the third quarter were impacted by delayed shipments due to Hurricane Milton, affecting growth figures.
• The net loss for the third quarter of 2024 was $5.7 million, although this was an improvement from the previous year.
• Adjusted EBITDA for the third quarter was negative $4.6 million, reflecting higher general and administrative costs.
• Legal expenses increased by $0.8 million due to complaints filed by Doa Pharmaceuticals, impacting financial performance.
• The company is still not cash flow break-even and anticipates reaching this milestone towards the end of 2025 or early 2026.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Signs with BFRI.

Q: When will the cost of revenue start to reflect the new 25% rate rather than the older 50% rate? A: Fred Leffler, CFO: We expect to see that impact in the fourth quarter as we needed to go through our older inventory first.

Q: Do you still expect to be cash flow break-even by the end of next year and to grow revenue by 20% over 2023? A: Fred Leffler, CFO: We expect revenue growth similar to prior years, in the mid to high 10s, and anticipate reaching cash flow break-even towards the end of 2025 or early 2026.

Q: With the shipments delayed to October, did you apply the October 1 price hike or maintain the older price? A: Fred Leffler, CFO: We grandfathered in the older price as all orders were placed in Q3, despite the shipping delays caused by weather.

Q: Can you provide the enrollment numbers for the Acne and peripheral AK trials? A: Herman, CEO: Enrollment for the peripheral AK trial is 130 of 165 patients, and for the Acne study, it is 106 of 126.

Q: How do you see the fourth quarter developing in terms of revenue after the price increase? A: Fred Leffler, CFO: We expect growth in line with prior years, with a strong Q4 anticipated. The price increase was 5%, similar to last year, and Q4 is typically our strongest quarter.

Q: Has there been any customer response to the new three tubes approval? A: Herman, CEO: We have not seen a response yet as we wanted to ensure reimbursement processes were in place before promoting the new labeling. We expect to see uptake starting in December.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.