BFRI

Business Model Transformation Post Strategic Transaction

• Completed a strategic transaction in October 2025 that granted BioFrontera full ownership and control of all U.S. rights, approvals, and patents for the AMALUS and Rodolet product portfolio.
• Replaced the prior transfer pricing model that required paying 25-35% of revenue with a 12% earn-out on net sales, driving a 920 basis point expansion in gross margin year-over-year.

Commercial Execution

• Q2 2026 AMALUS unit sales grew 30% year-over-year to 33,300 tubes, with incremental revenue growth from a Q4 2025 price increase.
• H1 2026 order count grew 18.6% year-over-year, average tubes per order grew 10%, and 81% of large customers who purchased ahead of the price increase placed additional orders in H1 2026, with reorder volume up 41% for these accounts.
• Added 66 new physician accounts in H1 2026 (near the 69 added in H1 2025; the small dip is attributed to pre-ITC order focus). Inside sales efforts generated ~1,990 total AMALUS tubes from white space accounts and vacant territories in H1 2026.
• Pre-ITC supply restriction customer stockpiling shifted order timing forward, and management expects this to set up a strong Q4 2026.

ITC Ruling Remediation

• The ITC issued a limited exclusion order and cease-and-desist order taking effect July 7 2026, barring import/sale of current Rodolet XL lamps in the U.S. and sale of AMALUS for use with the infringing XL lamp.
• The order only affects Rodolet XL, not the original BF-Rodolet lamp which makes up the substantial majority of the installed base; sales to BF-Rodolet accounts continue normally.
• Management has a remediation plan for a modified non-infringing XL lamp with minor design changes, with an estimated total remediation cost of $500,000, unchanged from prior guidance. The modified lamp has already received FDA confirmation of acceptability via the CB30 pathway, and the company is currently waiting for U.S. border control confirmation that the modified design falls outside the ITC ruling scope.
• The company will appeal the ITC ruling to the Federal Circuit, but its commercial plan does not depend on winning the appeal.

Clinical Pipeline Growth

• The FDA accepted the supplemental NDA (sNDA) for AMALUS PDT for superficial basal cell carcinoma (SBCC), with a PDUFA target date of September 28 2026. If approved, AMALUS will be the first FDA-approved PDT for cancerous skin tumors in the U.S., with full launch planned for Q1 2027 and initial customer outreach in Q4 2026, utilizing the company's existing installed base, sales network and commercial infrastructure.
• Positive statistically significant Phase 3 top-line results were achieved for actinic keratosis (AK) on extremities, neck, and trunk; the sNDA for this label expansion (extending indication beyond face/scalp AK to treatment areas up to 240 cm²) is planned for submission by the end of Q3 2026, with FDA approval expected in Q3 2027. This expansion meaningfully increases the addressable market, as 58 million American adults have at least one AK lesion.
• Phase 2 data for moderate to severe acne showed a 58% reduction in inflammatory lesions (vs 37% for vehicle), and 86% of patients reported they would choose the treatment again. The company is currently prioritizing and designing the next phase of clinical development for this indication.
• All pipeline expansions leverage the existing installed lamp base, sales force, and commercial infrastructure, creating low-capital incremental revenue growth.

• Management reaffirms full-year 2026 revenue guidance, noting that the ITC exclusion order will only affect the timing of Rodolet XL-related orders, not total annual demand, so full-year revenue goals remain unchanged.
• The company continues to target achieving cash flow breakeven in full-year 2026, after reporting significant progress toward this milestone in H1 2026 with adjusted EBITDA near breakeven in Q2 2026, which is a traditionally weaker quarter.
• SBCC launch (if approved) is expected in Q1 2027, with initial customer outreach in Q4 2026.
• AK label expansion sNDA submission is expected by the end of Q3 2026, with approval anticipated in Q3 2027.

BioFrontera reports a single product portfolio focused on AMALUS (photodynamic therapy drug) and BF-Rodolet/Rodolet XL PDT lamps, with all revenue generated from these core products. In Q2 2026, total net product revenue was $12 million, representing a 33% year-over-year increase from $9 million in Q2 2025. For H1 2026, total revenue was $22.1 million, a 25.4% increase from $17.6 million in H1 2025. Gross profit for Q2 2026 was $9.6 million with an 80% gross margin, up from 71% in Q2 2025; H1 2026 gross margin also hit 80%, up from 67% in H1 2025. Q2 2026 adjusted EBITDA was near breakeven at negative $0.2 million, an improvement from a negative $5.1 million adjusted EBITDA in Q2 2025; H1 2026 adjusted EBITDA was negative $3.7 million, compared to negative $9.5 million in H1 2025. Net loss per share was $0.05 in Q2 2026, down from $0.57 per share in Q2 2025. As of Q2 end 2026, the total installed lamp base reached 801 units across 740 physician offices, with approximately 243 of these being Rodolet XL units.

• There is a going concern qualification in the company's financial statements; current cash resources are $4.7 million as of June 30 2026, requiring continued expense discipline and revenue growth to fund expanded operations. The company plans to address potential capital needs via the upcoming $1 million milestone from the Zepi divestiture, and if necessary, securing a working capital line of credit.
• The outcome of the ITC appeal to the Federal Circuit is uncertain, though management has structured its remediation plan to not rely on winning the appeal.
• Litigation costs related to ongoing patent and ITC proceedings can vary quarter to quarter, creating uncertainty for SG&A expenses.
• There is uncertainty around the timing of U.S. border control approval for the modified non-infringing XL lamp, which is required before the redesigned product can be sold in the U.S.
• Clinical trial and FDA approval timelines for new indications are not guaranteed, and actual approval or launch may differ from management's current projections.

Q: What additional preparations are needed for the SBCC launch beyond the existing commercial infrastructure, specifically for reimbursement and sales force training? / A: The SBCC indication aligns perfectly with the company's existing customer base and strategic priorities. Only standard pre-launch steps remain: finalize and get FDA pre-clearance for marketing materials, train the existing sales force, and finalize the reimbursement strategy. No major new investments or infrastructure build are required ahead of launch, and the company is ready to begin selling immediately after approval.

Q: Can the second patent asserted in the ITC case be challenged via inter partes review, and does the Rodolet XL redesign require full FDA re-approval? Will customers notice a performance change? / A: The second patent cannot be challenged via inter partes review due to current U.S. Patent Office policy for patents already involved in ITC proceedings, but both patents will be challenged in the appeal to the Federal Circuit. The redesign only requires a minor change to a hinge component to fall outside the asserted patents, and it has already received FDA acceptance via the CB30 pathway; the only remaining step is border control confirmation of the non-infringing design. Customers will not notice any difference in lamp performance or use.

Q: With ~243 out of 801 total installed lamps being restricted infringing XL units, how can the company maintain full-year 2026 revenue expectations? Will existing customers with XL lamps be able to use their pre-purchased AMALUS inventory? / A: The company had time between the ITC's final ruling and the order's effective date to sell advance inventory to XL lamp customers, so most customers have multiple months of AMALUS stock to use while the redesigned lamp is finalized. Only BioFrontera is restricted from selling new AMALUS for use with the infringing XL lamp; customers that own existing AMALUS and XL lamps are free to use their existing inventory, so demand is only shifted in timing, not eliminated.