Biofrontera Inc. (BFRI:NASDAQ), which offers investors potential significant return, is expected this year to greatly increase its revenue and work to expand approved indications for one of its on-the-market therapeutics, reported ROTH Capital Partners analyst Jonathan Aschoff in a May 25th research note.
This Massachusetts-based biopharma is commercializing pharmaceutical products for the treatment of dermatological conditions, concentrating on photodynamic therapy and topical antibiotics. Its currently approved drugs are Ameluz, a gel used in combination with photodynamic therapy (PDT) using the BF‑RhodoLED lamp for actinic keratosis, and Xepi, a cream for impetigo.
ROTH's price target on Biofrontera, based on projected future U.S. revenue from those two pharmaceuticals, is $20 per share. In comparison, the current share price of this life sciences company is around $2.68.
Biofrontera guided to generating 30% more revenue this year than last, but according to Aschoff, ROTH finds that estimate "very conservative." The investment bank anticipates Biofrontera's 2022 revenue growth to be more like 50%. To boost revenue, Biofrontera plans a push, through the rest of 2022, to generate more sales from its existing customers. The company is aggressively marketing Ameluz-PDT at dermatological conferences, too.
"Biofrontera also created a dedicated key accounts team to address the changing landscape of the dermatology industry and advanced plans for a new model of inside sales support to expand reach and frequency to newer and smaller accounts in the future," wrote Aschoff.
Already the company is showing progress in growing revenue. Its Q1/22 revenue was 106% higher than that in Q1/21, coming in at $9.8 million ($9.8M). Additionally, Biofrontera's best month ever was March of this year.
"We look forward to favorable YOY growth in quarterly revenue," Aschoff commented, adding the caveat that sequential quarterly revenue can be misleading given the seasonal nature of Ameluz-PDT treatments.
Biofrontera has $30.8M on the balance sheet, enough to fund operations to profitability according to ROTH's forecasts, Aschoff pointed out.
Regarding Ameluz-PDT, the outlook for market expansion is positive, Aschoff purported, and capturing greater market share would generate additional revenue. The combination therapy currently holds about 26% of the actinic keratosis treatment market and potentially could increasingly capture cryotherapy's share, "especially given Ameluz-PDT's advantages related to efficacy and level of reimbursement."
Aschoff added, "We view Ameluz-PDT as the most effective therapy for mild-to-moderate actinic keratosis."
To better position Ameluz-PDT in the actinic keratosis market and expand its indications, three clinical trials are underway:
1) A Phase 1 safety trial evaluating the use of three tubes of Ameluz applied at once followed by illumination with the BF-RhodoLED XL PDT lamp versus the currently approved use, one Ameluz tube with illumination by the smaller BF-RhodoLED lamp. Simultaneous application of three tubes of Ameluz would save clinicians time and thus, afford Ameluz-PDT another advantage over competing treatments. This study is expected to be completed this year, with results to follow either in late 2022 or early 2023.
2) A Phase 2b trial in moderate to severe acne, comparing one-hour and three-hour incubations of Ameluz before illumination. Completion of enrollment, underway, is expected by year-end 2022 (YE22).
3) A Phase 3 trial evaluating Ameluz-PDT in superficial basal cell carcinoma. Enrollment, now about 75% done, should also be completed by YE22.
Additionally, recent news bodes well for Ameluz's future, Aschoff noted. The U.S. Food and Drug Administration approved the laboratory of Biofrontera's partner in Germany, Biofrontera Pharma, responsible for the commercialization of Ameluz outside of the U.S. At the lab, batch control and stability testing of the product will be conducted. Ultimately, Biofrontera will have greater control of Ameluz, as these processes will be able to be done in-house rather than by a third party.
Also positive for Ameluz are newly released skin cancer statistics. This year, about 3.4 million people in the U.S. could be diagnosed with a nonmelanoma form of it, according to American Cancer Society data. In addition, the global market for this indication is expected to grow at a rate of 5.8%, or by $180M, through 2026, a survey by ReportLinker showed.
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Disclosures for Roth Capital Partners, Biofrontera, Inc., May 25, 2022
Within the last twelve months, ROTH Capital Partners, or an affiliate to ROTH Capital Partners, has received compensation for investment banking services from Biofrontera, Inc. ROTH makes a market in shares of Biofrontera, Inc. and as such, buys and sells from customers on a principal basis. Shares of Biofrontera, Inc. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities. Within the last twelve months, ROTH Capital Partners, or an affiliate to ROTH Capital Partners, has managed or co-managed a public offering for Biofrontera, Inc.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH.
