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Leverkusen (pta025/29.11.2024/18:14) - "Biofrontera AG (ISIN: DE000A4BGGM7), an international biopharmaceutical company, today announced its financial results for the first nine months ended September 30, 2024.
Key Financial Figures and Business Performance for the First nine months of 2024 (unaudited)
"Our growth strategy in Europe is performing in line with our budget and expectations. The cumulative figures up to the end of September indicate a growth of nearly 20% for the second consecutive year. This performance, combined with our proactive efforts to seek out new products in the dermatological field to incorporate into our portfolio, allows us to remain optimistic about achieving our primary goal: building a profitable European company that leads the dermatology sector. The recent agreements signed with Leo Pharma and Galenica, for the commercialization of some of their product portfolios in Germany and the UK respectively, underscore the company's commitment to optimizing its structure and expanding its portfolio efficiently.
Regrettably, a shift in inventory policy by our U.S. partner, Biofrontera Inc., has led to a significant reduction in our revenues during 2024. However, the inventory adjustments already implemented by our U.S. partner and their recently announced growth lead us to foresee a return to normal sales levels in 2025. The robust and sustainable growth the company is experiencing in Europe, the implementation of its product expansion strategy, along with its cost-containment policy, position us to be highly optimistic about the company's growth and profitability potential...," commented Pilar de la Huerta, CFO of Biofrontera AG, on the nine-month results released today.
Biofrontera reported total revenue of 10,724 TEUR for the period from January 1 to September 30, 2024, compared to 24,799 TEUR in the first nine months of 2023, representing a 56.8 % decline. The revenue decrease is due to significantly reduced income from the U.S. licensing business. Biofrontera Inc., the U.S. licensee, changed its inventory policy at the end of the last fiscal year and did not order any AMELUZ during the reporting period. As a result, U.S. revenue decreased by 88%. The positive revenue development in Europe could not fully offset this decline. We will deliver new AMELUZ orders to Biofrontera Inc in Q4 2024.
In Germany, revenue increased by 929 TEUR to 5,497 TEUR during the reporting period, representing a 20% increase. This positive development underscores the strong market position of Ameluz® in Biofrontera AG's home market. The product has successfully adapted to patient needs and market conditions through continuous adjustments. Ameluz® remains the market leader in the photodynamic therapy (PDT) segment, and we expect to keep this growth during the full year.
In Spain, the revenue level has returned to its previous growth momentum after the repeal of the regulatory price decree in 2022. Revenue generated in Spain are in line with the revenues generated last year, only a minor decrease of 40 TEUR due to an increase in the mandatory rebates. After ten years in the market, with no generic approved, the Spanish authorities forced the companies to apply a higher mandatory rebate to all prescription products.
The direct sales business in the United Kingdom achieved 16% growth, reaching 696 TEUR, reflecting the initial positive effects of significantly increased coverage of NHS hospitals since last year.
With European licensees, Biofrontera generated revenue of 1,164 TEUR in the first nine months of 2024, compared to 848 TEUR in the same period of 2023, representing a significant increase of 37%. The in-market sales of license partners in Austria, the Nordic countries, and Switzerland continue to show very solid growth.
On the cost side, research and development expenses decreased by 26.5% to 4,583 TEUR during the reporting period compared to 6,241 TEUR in the prior-year period. The company expects to keep a relevant reduction as the clinical program was transferred to Biofrontera Inc, with June 1st effect. General administrative expenses amounted to 3,276 TEUR in the first nine months of 2024, representing a total decrease of 1,177 TEUR compared to the prior-year period (4,453 TEUR). This decline is not as high as expected due to the legal lawsuit SunPharma Pharmaceuticals filed against us and Biofrontera Inc due to some lamp patents potential infringement in the US market. Sales and marketing expenses amounted to 4,995 TEUR in the first nine months of 2024, compared to 5,168 TEUR in the prior-year period. All these reductions are due to a very aggresive cost reduction policy implemented by the company to partially offset the high decrease in US revenues.
The Group's EBITDA decreased by 9,311 TEUR to -4,460 TEUR in the first nine months of 2024, compared to 4,851 TEUR in the prior-year period. EBIT also showed a significantly more negative result at -5,063 TEUR (prior-year period: 4,349 TEUR). These results are attributable to the significantly reduced USA revenue level, which has deteriorated due to the changed inventory policy of our U.S. licensee.
Cash and cash equivalents amounted to 1,849 TEUR as of September 30, 2024 (December 31, 2023: 3,080 TEUR), following the successful capital increase with net proceeds of approximately 3.3 million EUR.
Outlook
At the end of June, Biofrontera AG and Biofrontera Inc were sued by a competitor in the United States, alleging that Biofrontera infringed certain lamp patents of this competitor. The competitor has filed two separate cases, one for two patent infringements in front of the District Court and a second in front of the ITC (International Trade Commission) with the goal of banning the import of the Biofrontera XL lamp into the United States. Biofrontera AG and its subsidiaries have entered into a joint defense agreement with Biofrontera Inc. to share legal costs. The costs of the ITC proceedings are expected to amount to 5 million USD over a period of 18 months, which will be shared between the two companies. The defense of the other processes will be around 1.5 to 3 million. Although all these expenses will be generated and paid during the next years ( between 18 to 36 months) the accounting policies forced us to provision most of them in 2024. In the forecast for the 2024 fiscal year has been adjusted based on this new information.
The revised forecasted key performance indicators are as follows:
| Forecast as at first half-year 2024 Revised Forecast 2024 | |||
| Group Revenue | 20-23 million EUR | 20-23 million EUR | |
| EBITDA | -2 million to 0 million EUR | -4,5 million to -2,5 million EUR | |
| EBIT | -3 million to -1 million EUR | -5,5 million to -3,5 million EUR | |
| Cash and Cash Equivalents as of Dec 31 | 1-3 million EUR | 1-3 million EUR |
Based on the current 2024 business plan, the Group will have sufficient liquidity to meet all obligations for an additional 12 months from the date of preparation. Assuming expenses and revenues develop as planned and considering the previously mentioned capital measure, the Group expects to have cash and cash equivalents of between 1 and 3 million EUR as of December 31, 2024."
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emitter: Biofrontera AG
address: Hemmelrather Weg 201, 51377 Leverkusen
country: Germany
contact person: Investor Relations
phone: +49 (0) 214 87 63 20
e-mail: ir@biofrontera.com
website: www.biofrontera.com
ISIN(s): DE000A4BGGM7 (share)
stock exchanges: regulated market in Dusseldorf, Frankfurt; free market in Munich, free market in Stuttgart; open market in Berlin, Tradegate