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Operator: Good day, and welcome to the Biofrontera’s First Quarter 2025 Financial Results and Business Update Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Andrew Barwicki. Please go ahead.

Andrew Barwicki: Good morning, and welcome to Biofrontera Inc.’s first quarter fiscal year 2025 financial results and business update conference call. Please note that certain information discussed during today’s call by management is covered under the safe harbor provisions of the Private Securities Litigation Reform Act. We caution listeners that Biofrontera’s management will be making forward-looking statements and that actual results may differ materially from those stated or implied by these forward-looking statements, due to risks and uncertainties associated with the company’s business. All risks and uncertainties are detailed in and are qualified by the cautionary statements contained in Biofrontera’s press releases and SEC filings.

Also, this conference call contains time sensitive information that is accurate only as of the date of this live broadcast, May 16, 2025. Biofrontera undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as required by law. During today’s call, there will be references to certain non-GAAP measures. Biofrontera believes these measures provide useful information for investors, yet should not be considered as a substitute for GAAP nor should they be viewed as a substitute for operating results determined in accordance with GAAP. A reconciliation of non-GAAP to GAAP results is included in the press release that was issued yesterday. More specifically, management will be referencing adjusted EBITDA, a non-GAAP financial measure defined as net income or loss excluding interest income and expense, income taxes, depreciation and amortization and certain other nonrecurring or noncash items.

With that being said, I would now like to turn the call over to Hermann Luebbert, CEO, Chairman and Founder of Biofrontera. Hermann?

Hermann Luebbert: Yes. Thank you, Andrew, and my thanks to everyone joining us this morning. On today’s call, I will provide an overview of our business during the first quarter. Fred Leffler, our CFO, will follow with a discussion on financial results, and then both of us will be happy to answer questions after our prepared remarks. Starting with the business update. Our first quarter was a busy and exciting period for us. We continued our revenue growth while keeping our costs under control. Total revenues for the first quarter of 2025 were $8.6 million, a 9% increase from the same period of the prior year. Both our cost of revenue and our operating costs were lower than in the same period of the previous year, as Fred will explain in much more detail.

We strongly believe our past investments, execution and tremendous efforts to increase the effectiveness of our sales force will allow us to achieve record revenues in 2025 without increasing our costs. On top of the positive financial development, we achieved several more milestones. An important development for our long-term future is the recent granting of a patent on the new formulation of Ameluz. This new formulation, which lacks the potential allergen propylene glycol, has already been approved by the FDA and is in use since last year. Having a patent protection on this Ameluz formulation until December 2043, gives us another 18.5 years of protection from generic competition. We announced the enrollment of the final patient in the Phase III clinical trial evaluating Ameluz for the treatment of mild to moderate actinic keratoses on the extremities, neck and trunk.

Currently, Ameluz is restricted to treatments of AK on the face and scalp. The goal of this study is to extend the label to the entire body. This represents another important cornerstone in our overall strategy, complementing the use of three tubes and the availability of the larger lab, both launched in 2024. As a last building block for this label extension, FDA has requested a Phase I pharmacokinetic study with 16 patients, which started in January and is currently recruiting. Furthermore, we reached a key milestone in the Phase III study for the use of Ameluz and RhodoLED PDT in the treatment of superficial basal cell carcinoma. The last patient completed the one year follow-up visit, which is required for FDA approval, in December 2024.

We believe Ameluz has an additional applications other than actinic keratoses, and we are committed to explore these opportunities. So our next goal is approval for superficial basal cell carcinoma. I can tell you that being able to treat actinic keratoses, which are precancerous lesions that may progress to squamous cell carcinoma, is a wonderful feeling, but to expand beyond that to treating certain skin tumors is very encouraging and exciting for all of us here at Biofrontera. We expect to submit the new data to the FDA in the second half of this year. Following the approvals for AK on the entire body and for superficial basal cell carcinoma, we are aiming to — at getting Ameluz approved for the treatment of moderate to severe acne. Acne is the most frequent indication seen by dermatologists and the treatment options available for the more severely affected patients suffer from very considerable side effects.

This creates a significant medical need for these patients. Our ongoing Phase II study in this indication is close to completing patients — it has completed patient recruitment, and data will be available towards the end of the year. The further development plan will be discussed with the FDA once the data of the study become available. As I look back on the first quarter, in addition to the achievements and milestones, we were able to lower the cost of revenues, total operating expenses and SG&A. We continue to monitor and be very prudent in all aspects of our business and operations. Additionally, we increased EBITDA and gross profit, all of which support our goal of reaching breakeven as quickly as possible. We believe we have built the foundation with the sales team and back end support to continue to improve our results on a consistent basis.

With that, I’ll turn the call over to Fred to walk through the financial details of the second (ph) quarter. Fred?

Fred Leffler: Thank you, Hermann. Pleasure talking with everyone again, and I’ll cover our first quarter 2025 results. Total revenues for the first three months ended March 31, 2025, were $8.6 million, an increase of $0.7 million or 8.7% as compared to the three months ended March 31, 2024. This increase was driven by a $0.5 million increase in Ameluz sales due to an increased unit price and the launch of our RhodoLED XL lamp, which resulted in sales of the XL lamp of $0.2 million. Total operating expenses were $13.1 million for the first quarter of 2025 compared with $13.4 million for the first quarter of 2024. Cost of revenues, related party were $3.1 million for the first quarter of 2025 compared with $4.0 million for the prior year quarter.

This decrease of $0.9 million or 22.1% compared to last year was due to the reduced cost structure under the last amendment of the Ameluz license and supply agreements. Selling, general and administrative expenses for the three years ended — for three months ended March 31, 2025, decreased by $0.6 million or 6.5% as compared to the three months ended March 31, 2024. Selling and marketing expenses decreased by $0.8 million, with a $0.3 million decrease coming from direct sales team personnel expenses due to head count fluctuation and a $0.5 million decrease driven by reduced general marketing activity and spend on conferences. These decreases were partially offset by an increase in legal expenses of $1.2 million due to patent claims which was partially offset by savings of $0.8 million in personnel and financing expenses.

Research and development, R&D expenses for the first three months of 2025 increased by $1.2 million as compared to the first three months of 2024. The increase was — is attributed to our assumption of all clinical trial activities for Ameluz in the United States effective as of June 1, 2024, which allow us to — for more effective cost management and direct oversight of trial efficiency. These increases in R&D expense were and will continue to be offset by a reduction in the transfer price of Ameluz from 50% to 25% for inventory purchases made through 2025. The net loss for the first quarter of 2025 was $4.2 million or $0.47 per share, compared with a net loss of $10.4 million or $2.88 per share for the prior year quarter. The change in net loss reflects a decrease in the non-cash change in the fair value of warrant liabilities driven by a decrease in the outstanding population, a decrease in interest expense due to the payoff of high interest debt in 2024 and the aforementioned decreases in cost of revenues, related party and selling, general and administrative expenses, partially offset by increased R&D spending.

Adjusted EBITDA increased from $4.6 million for the first three months ended March 31, 2024 to $4.4 million — as compared to $4.4 million for the three months ended March 31, 2025. The improvement was driven by an increase in gross profit of $1.5 million, offset by $1.2 million increases in R&D expenses. These changes were driven by the reduced cost structure under the latest amendment of the Ameluz license agreement and the assumption of all clinical activities for Ameluz in the United States. I’ll refer you to the table in the news release we issued yesterday for a reconciliation of GAAP to non-GAAP financial measures. Turning to our balance sheet. As of March 31, 2025, we had cash and cash equivalents of $1.8 million compared with $5.9 million as of December 31, 2024.

Finally, we have $6.5 million of inventory on hand as compared to $6.6 million of inventory as of December 31, 2024. With that overview of our business and recent financial performance, Hermann and I are now ready to take questions from our covering analysts.

Operator: We will now begin the question-and-answer session. [Operator Instructions] Our first question will come from Jonathan Aschoff with ROTH Capital. Please go ahead.

Jonathan Aschoff: Thank you. Good morning. I was curious, over 1Q ’25, how many lamp units did you sell, both the original and the XL? Hello?

Fred Leffler: Yeah. Hey, Jonathan. It’s Fred here. Sorry, I was on mute. So placements as of Q1 were 18 — we placed 18 of the XL lamps.

Jonathan Aschoff: And that’s just in the first quarter?

Fred Leffler: That’s in the first — yes, exactly.

Jonathan Aschoff: Okay. And how about the original ones?

Fred Leffler: The original ones, I will have to double check on that one. I don’t have the original right at my fingertips.

Jonathan Aschoff: That’s fine. My second and last question is any sales force attrition? Just the comment in the press release, savings of $800,000 in personnel and financing expenses. I’m curious what is the current sales force headcount, say, versus the end of the year? Is there any attrition there that explains that drop in expense?

Fred Leffler: Yes. Hermann, do you want me to take that one?

Hermann Luebbert: Yes.

Fred Leffler: Yeah. Well, we are looking at how we’re structuring our commercial team and what types of roles are a good fit for the larger territories and some things like that. So we’re working on bringing in some more — what we call like a more junior rep that’s like ready to be on the road. Some of that comes with a bit lower salary. And then some of it is — has been some turnover, but we’re committed to replacing that and reorganizing the territories and the team to be as efficient as possible to finish out the year strong.

Jonathan Aschoff: All right. Thank you very much.

Operator: The next question will come from Bruce Jackson with The Benchmark Company. Please go ahead.

Bruce Jackson: Hi. Good morning, and thank you for taking my questions. I wanted to take a moment to look at the gross margins. So, you’ve got the change in the transfer pricing, which gave you a little bit of a boost in the first quarter. How is that going to play out over the rest of the year?

Fred Leffler: Yes. So in the first quarter, we did burn off a bit of Ameluz’s inventory that was still under the prior LSA cost structure. So that should — that’s all gone. So we have — all of the inventory we have now is at the 25% transfer price, and that’s what we will see for the rest of the year. It might be offset. So if that was the only thing we sold, then the cost of goods would be 25%. However, there’s going to be some fluctuation in that based on how many lamps we sell because the margin there is lower.

Bruce Jackson: Okay. And then a question on the three tube indication. Sometimes, it takes time for the payers to get the reimbursement information into their databases, can you just kind of give us an update on the status of the reimbursement for the three tube indication? And is that all systems go now for you?

Hermann Luebbert: Yes. We’ve paid a lot of attention to that when — after we got approval and focused initially on Medicare, making sure that Medicare actually covers this and then send out the information to all the private payers. So from what we hear so far, I mean we have to rely on feedback from the market, we are not aware of a single case where a doctor has been refused payment because of using more than one tube. So this seems to be completely solved.

Bruce Jackson: Okay. Great. That’s it for me. Thank you.

Hermann Luebbert: Thank you.

Operator: This will conclude our question-and-answer session. I would like to turn the conference back over to Hermann Luebbert for any closing remarks.

Hermann Luebbert: Yeah. Well, thank you, operator. As you heard, the first quarter has been a very exciting time for us, and we look forward to the rest of the year. Each day, our sales team gets new clients, which is a victory for the customer-facing strategy that we have implemented. I would like to thank everyone for participating in this call, and we look forward to speaking with you again when we report our second quarter results. Thank you, and have a nice day.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.