Biofrontera Inc. Q2 FY2024 earnings call

• Sales growth: Second quarter sales grew 34% y-o-y, with a 8% growth for the half year despite reimbursement challenges.
• Expense management: Total operating expenses in Q2 2024 were $12.9 million vs. $14.5 million in Q2 2023; SG&A expenses in Q2 2024 were $7.9 million vs. $11.6 million in Q2 2023.
• Balance sheet: Paid down all outstanding debt in Q2 2024, and had cash and cash equivalents of $4.4 million as of June 30, 2024.
• RhodoLED XL launch: Sales of FDA-approved RhodoLED XL began on June 10, 2024.
• FDA approvals: Three tube Phase 1 safety study data submitted to FDA for Ameluz label change, expected in Q4 2024. New Ameluz formulation lacking propylene glycol launched.
• License agreement: Renegotiated license and supply agreement reduced Ameluz cost, to take effect when new batches ordered.
• Clinical trials: Transfer of clinical research to Biofrontera Discovery; Phase III trial for superficial basal cell carcinoma close to completion, with data expected for FDA approval; Phase III study for actinic keratosis on extremities neck and trunk and Phase II trial for moderate to severe acne expected to enroll around year-end.

In the second quarter of 2024, total revenues were $7.8 million, a 34% increase year-over-year compared to $5.8 million in Q2 2023. For the first half of 2024, total revenues reached $15.8 million, an 8% increase from $14.6 million in the first half of 2023. Cost of revenues in Q2 2024 was $4.3 million vs. $2.9 million in Q2 2023. SG&A expenses in Q2 2024 were $7.9 million vs. $11.5 million in Q2 2023. The net loss for Q2 2024 was $257,000 compared to a net loss of $9.8 million in Q2 2023. Adjusted EBITDA for Q2 2024 was negative $4.7 million vs. negative $7.9 million in Q2 2023. For the first half of 2024, total operating expenses were $26.3 million vs. $28.8 million in H1 2023, with SG&A expenses decreasing to $17.2 million from $21.4 million. Net loss for H1 2024 was $10.7 million vs. $17.3 million in H1 2023, and adjusted EBITDA was negative $9.3 million vs. negative $11.9 million in H1 2023.

• FDA approval for Ameluz label change including up to three tubes per treatment expected in Q4 2024.
• Royalty savings from renegotiated license and supply agreement expected to become higher than trial costs late Q1 or early Q2 2025.
• Data release from acne and AK extremity trials expected in second half of 2025.
• Data from BCC trial's clinical part expected to be released this year, with follow-up data in first half of 2025.

• Reimbursement challenges related to health care cybersecurity events.
• Potential delays in clinical trial enrollments and data release.
• Inventory management and seasonality affecting business operations.

Q: Can you give numbers on sales of each type of lamp in Q2 and so far in Q3?

A: In Q2, 57 original BF-RhodoLED lamps placed; in last weeks of June, 4 XL lamps shipped. No Q3 data published yet.

Q: What's the price hike percentage on Ameluz on October 1?

A: Price increase for Ameluz will be 5%.

Q: Do you still expect to publicly release data from acne and AK extremity trials in mid-2025 and second half 2025 respectively?

A: Yes, still expect second half of 2025 for both.

Q: When will royalty savings from renegotiated LSA become higher than costs of trials?

A: Attached to inventory ordering in Q4 2024, with savings expected late Q1 or early Q2 2025.

Q: Any update on low-cost portable lamp development?

A: Nearing first prototype, then formal development per FDA design control rules.

Q: How much of Q2 sales rebound was due to change health incident vs. organic growth?

A: Most rebound in April, with May and June more normal, at most half due to rebound effect.

Q: What's the run rate on R&D expense going forward?

A: Expecting ~$1 million per quarter, with spending starting from June 1, 2024.

Q: Will data from BCC trial be released?

A: Expect to release clinical part data this year, with follow-up in first half of 2025.