Biofrontera Inc. (BFRI:NASDAQ) ended last year with pro forma cash of US$8.8 million, which included US$7.4 million in net proceeds raised in the first quarter of 2024, noted Roth MKM analyst Dr. Jonathan Aschoff in a March 19 research note.
Biofrontera restructured its Ameluz agreement with Biofrontera AG, reducing the transfer price paid by BFRI from 50% to 25% for purchases in 2024 and 2025.
However, from 2026 until 2032, there will be step-wise increases in the transfer price from 25% to 35% for all non-acne sales if approved. Additionally, BFRI will also eventually take control of all U.S. Ameluz trials. The sNDA PDUFA for Ameluz was set for October 4, 2024.
Financial Results and Projections
The report noted that Biofrontera shared it had a record revenue for 2023 of US$34.1 million, which was up 19% year-over-year) and US$10.6 million (up 4% year-over-year) for the fourth quarter of 2023.
"We project a 20% year-over-year increase in revenue for 2024, after which we believe that revenue growth will pick up owing to an improved competitive position for Ameluz, in part due to the commercial launch of the larger RhodoLED XL lamp in 2Q24, which will better utilize both the patient's and physician's time by treating a larger surface area at once," Aschoff wrote.
The company is expected to be cash flow breakeven in about 12-18 months.
Recent Business Developments
Aschoff reported that Biofrontera had restructured its organization to align with its business needs, including expanding its medical and reimbursement teams, which, along with cost reductions, had resulted in an 8% year-over-year reduction in operating expenses for the fourth quarter of 2023.
The company had also initiated an account strategy leading to deeper partnerships and multiple annual contracts. In mid-February, Biofrontera restructured its Ameluz agreement with its former parent company (Biofrontera AG), reducing the transfer price paid by BFRI for purchases in 2024 and 2025. The FDA had accepted for review the sNDA submitted by BFRI's licensor Biofrontera Bioscience GmbH to increase the approved maximum dosage from one to three tubes of Ameluz per treatment, with a PDUFA date set for October 4, 2024.
Valuation and Upside Drivers
Dr. Aschoff wrote that he believes Biofrontera's stock had significant upside potential, with a target price of US$25, which was substantially higher than the current price of US$1.26.
The analyst expects the company to achieve profitability in the second half of 2025, especially if the FDA approves the Ameluz sNDA in the fourth quarter of 2024, making the drug more commercially competitive. The successful development and approval of a new, low-cost portable PDT lamp for Ameluz-PDT could also drive growth for the company.
Want to be the first to know about interesting Biotechnology / Pharmaceuticals investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter.
Subscribe
Important Disclosures:
- This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
- This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.
For additional disclosures, please click here.
Disclosures for Roth MKM, BioFrontera Inc., March 19, 2024
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Disclosures: 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.. 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.
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. Copyright 2024. Member: FINRA/SIPC.
