Earnings call transcript Q3 2022

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Operator

Good day, and welcome to the Biofrontera Inc.

Third Quarter Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Tirth Patel of Investor Relations. ahead. go Please

Tirth Patel

risks covered those and welcome caution Results actual in stated and and cautionary associated that Inc.'s uncertainties Quarter forward-looking be that Litigation results management Third information of statements press harbor may Biofrontera's Good Private that due materially the Business to and Biofrontera's Update forward-looking statements Financial Securities is and by contained statements call and during company's to Act. note implied the Conference XXXX safe discussed provisions We or and morning, the Reform SEC from uncertainties by with the risks business. today's Biofrontera filings. these making under differ listeners in releases qualified All Call. certain by detailed will Please management are

to this call, accurate is undertakes live today, information required date November conference XX, of conference circumstances of forward-looking after events only by the or as as obligation or time-sensitive call Biofrontera the Also, the date statements to broadcast revise this that XXXX. law. reflect except update any contains of no

expense, morning's amortization in loss nonrecurring adjusted reconciliation or defined items. During today's release. of non-GAAP income measures net measures. EBITDA, yet measure in non-GAAP depreciation, financial with and or viewed this be certain for useful results specifically, interest references press call, non-GAAP substitute as management excluding be operating these substitute investors, taxes, other to considered included GAAP. believes determined should accordance is be noncash and nor will a information for be as results should they More to provide not certain will referencing A GAAP Biofrontera a financial GAAP income there income for as a

the to Inc. With call that, Monaco, Officer Executive Biofrontera would to Erica Erica? of Chief over turn like I

Erica Monaco

to welcome, and Tirth, everyone, conference our quarter you, third Thank call.

will review Officer. Chief to I'd and results, like our business today then Fred say a our recent the newly first, I'll In Fred few moment, Leffler, Joining But appointed discuss financial a is Financial me strategy. and words.

and of I'm growing our proud Biofrontera hard-working team.

made our and third reflect quarters developing palpable. our and Our results the sales sales advocacy, in Market investments The past our of Team team medical path are strengthening over financial outlook affairs Biofrontera feelings infrastructure the momentum couple profitability. securing toward of on and quarter we've

of During we weeks, our sector dermatologists. brands visibility corporate our the and activities innovative variety our for strengthened other of medical choosing company, and sponsorship, increasingly third recent emphasizing care Through interactions initiatives activities, in solutions. the an participation their and our collaboration dermatology strong The affairs with our are in with patient dermatology to peer-to-peer and and presentation patients. our commitment quarter profile are our improving innovative dermatology sharpening dermatologists as

strengthening for and clinical With continued patent over Our I'll turn QX justifies financial that, marketing our protection to our products development. call to success discuss investments in Fred Fred? in and results. year-to-date further the

Fred Leffler

speaking part to good with team, pleased everyone the Biofrontera I'm and you, Thank be everyone. Erica, and thrilled to be morning, today. I'm of

Before performance, background. bit share like review I little to our I'd a financial about my

job I spent business of and Biofrontera, I much half management my second the in When what career I I career approach, of shareholder and roles, optimize value. liked make presented team. the and applied strategy analytical that in whereas to very same with recommendations opportunity the consulting, at and first finance and saw execution and the accounting half my in evaluate my to business

secure future on apply focus our within my support and direction guide our expertise and tremendous. shareholders is build company's forward build as to business with the with analysts further time and opportunity working we successes. Biofrontera's awareness potential current upon in I is our all interacting evaluating investment help the options look the basic while to an community success. ideal and building now And blocks place, and to

terms third performance, in results. our of So our recent I'll review a with financial quarter start of

first revenues compared decrease in high line operating record were that million of to the were our revenues, of of which for selling, costs last XXXX which achievement the decline primary and business insurance million sales quarter because Total third The This third XXXX. million quarter of annual was revenues $X.X by for with million, legal headcount hiring XXXX expenses, offset lower partially X%, half administrative SG&A and in $X.X third with of driver the of was decreased lower XX% prior was driven third quarter the one-time or slightly resumed compared primarily quarter. decreased XXXX. was quarter year's due by expenses Following year. which general $XX.X of by Cost expense, $X the in during the XXXX. by to settlement higher

$X.XX or XXXX negative negative compares The XXXX. and for Adjusted for the of million the loss million this compared quarter $X million quarter XXXX. net loss XXXX the quarter $X net a third per was for or per $X.X of share third for was with EBITDA the $X.X $XX of share, with million quarter of third third of

the seasonality Ameluz million by first by year in X rate $XX.X or price was to of revenues of to increase resulted increase a material results million better versus growth a an Cost between about can increased which Ameluz. which of increases revenues $X.X Ameluz by an by amount prior with XXXX higher $X.X of due price of year, revenue our $XX.X Total of of volume turning business increase quarterly the Ameluz and year-to-date XX%. revenues XX% sales the million of our an performance for our higher million. view in financial revenue primarily of quarters. provides timing months driven X-month by The increased in orders, Now revenues Ameluz year-to-date results. increase, period primarily is last representing shift million were $X.X This versus there and as a some the

$XX.X decreased or million expenses months X expense for and partially XXXX. with X%, Total XXXX. hiring resumed in a same again business compared of by million in reflecting million $X.X settlement were $XX.X of the first result insurance for costs headcount by incurred the SG&A one-time XXXX, offset as operating legal period in a XXXX higher expenses

issued Net XXXX. loss the per negative the first months was for months or income $X.XX this $XX.X or $X.XX per X $XX.X for of EBITDA with and XXXX net share, million X was share diluted first of Adjusted $X.X a the million compares of for GAAP a I the release to to financial refer months measures. million this reconciliation with in negative X XXXX. same XXXX table earlier compared non-GAAP period morning for of million you the news first we the of for $X.X in

SOX does Investor EBITDA $X.X Relations, adjusted $XX.X XXXX totaled negative million which insurance, million. audit of public of increased costs company and include

regarding for positioning As and and to quickly, growth sufficient XXXX, cash includes intend XX, operations scale ourselves strategic opportunities. position, to our our fund cash new next position mitigate business potential routinely financing But activities believe least of to Biofrontera company, XX and risk had cash strengthen September we growth opportunistic our pursue we this be months. business as more is of the and equivalents million, at $XX.X a

Erica. With over I'll to that, it back turn

Erica Monaco

team. welcome and Biofrontera again. Fred, to the you you, We're have on Thank thrilled

results. some additional will with that, those color I on So provide

contributed sales Despite tactical momentum, that to brand QX I'd like revenue. all year-to-date year-over-year, execution revenues to recognition and higher being flat point improved strengthened out

seasonal XXXX over versus up year us X-month typical the yearly up with is year, to weeks quarters. are Fred or predictability full heavily orders up the shipping of compared where XX% track strength the in achieve our guidance These quite more total the of last revenues XX% As on than can and fourth are XXXX XX%, put record because even and results pre-COVID a of year We recognition. XX% revenue mentioned, delays weather-related revenues revised XX% on growth between XXXX. XXXX and of inclusive impact of first and more than the few the our results handful weighted in

sales trusted accounts market been increasing share. share Biofrontera of our XXXX. more of among efforts current with said, is our our among growth field on a increasing reimbursement patients this capped. supported which with to focus both strategy, both current deeper throughout by awareness and customer compared affairs AK been supports our and XXXX efficacy PDT, partner That is penetration utilization commercial commercial cryotherapy expand with customer and on high than market growth is achieving and when raising Educating with products' successful We've the lesions strengthening customers. therapy Underlying our importance establishing dermatologists has especially to medical XX as of for

strategy We have favored treatment should treatments. believe This shifts therapy recent expand of this in and we pressure cryotherapy field-directed productivity accounts. reimbursement, earlier enhances deepen but date that towards support to PDT commercial to for relationships and cryotherapy reimbursement force launched year, sales and of guideline because reach customer includes our inside while sales smaller new a field model allowing of some support sales our newer to inside frequency by dermatologists

good made progress reacting data practices to and potential. key large database and buying Ameluz's and groups. account management initiatives developed our key evolution a the to account team building PDT analytic X support account The corporate adoption. in We've effectively robust opportunities new These team our industry key to expand of tools evaluate to has the

clinics. The of to of the optimization first the account PDT initiative expansion implementation key territory and managers adoption PDT positions our support within

clinics will PDT to program second other targeted serve account as then for initiative implementation the identify The model clinic is key PDT be the and within flagship a model The clinics. replicated within accounts. will flagship

the this initiative we team their to this Our deployed key account strategy beginning we of move are QX year, impact during into and measure XXXX. of the as field in

validation and impactful success. and equips enhance rolled training sales ago of sales force view as has force a more results performance increased enhanced sales these The with the initiated to I valuable process. information their about effectiveness year that last data-driven development evaluations out our program we we quarter approach enables

growth We program on have immediate beginning impact next on to expect year. the this ROI training

turnover XX to at X companies can organization develop rep. with a months. In the X/X many months staff of and our for COVID, it sales last our joined force the post Almost sales have sales fully retraining. need faced within our As we take least model,

While we we still rewarding and top programs, are are foundation. strengthen further incentivizing attracting our and compensation and stabilize to creating working talent

in increased addition expansion in sales any force for plans ROI looking existing be our will from out to We we roll XXXX. future

health educating seminars, furthered including quarter, care to conferences, and engagement commitment providers the leaders. Throughout we initiatives, events key opinion medical third various prescriber with through networking our

example, Dermatology showcasing and a in and Conference Vegas, engaged for dermatologist-focused activities. and Clinical sponsor corporate the in products Biofrontera marketing Las booth As Fall as upcoming we a current hosted an served our

of as label and interest clinical the interest Investigator-initiated studies, support investigator-initiated our We initiatives. also areas products studies PDT presented skin X of community. to expansion align conditions posters use performed getting being credence real-world which are we're on clinical on treat the to component of a and further work with medical as well the our that lends our from education critical

support posters scientific of to improve address commitment our the independent further we medical strengthen initiated We presented, and ahead Biofrontera's to industry. patient of damage advance Through our to profile that were reinforced Biofrontera's patient and the within mission. events like non-melanoma and and helping innovation outcomes, therapy get research, to cancer, spotlight the advocacy to solar brand thereby and awareness patient-focused skin questions

Biofrontera's Fall we providing dermatologists. simultaneous as PDT of landscape the consisted the AK allows lamp surface the treatment sponsored showcased PDT and from of lesions At current among scalp. another. experiences sessions, are Ameluz are as therapy, a on combination of meeting advanced conference, BF-RhodoLED distant the larger of XL. an one area, advisory we for the with the At that larger sharing that of approved well patient's also the AK in treatment for The leading advantages Clinical, photodynamic utilization X XL on mild-to-moderate real-world for illumination enabling RhodoLED use new named and of board thereby RhodoLED Both education

we timing on feel were by costs a and was and that lamp those was year. outset. the costs correct the Delaying product, affect that disruptions have made well launch great launch beginning decision get as to the set Manufacturing right pushed from chain initial need the of to some and but and by potentially But lightly. a we not updates. it pricing We the have previously launch. inflationary suppliers to we customers next back as to to know right is sales we supply we due increased This don't pricing, push

Biofrontera dermatology sales more in our Director. building sales help on our us with DiGirolamo particular sales in appointed to National and prior as brings a well force To preparation influencers. strengthen he third this experience marketing, during a plan, Sales by as aligns key dermatology. joined their in our commercial with quarter than device this of to and collaborating September U.S. and managers the of affairs, successful with launch for with launch year, opinion recent combination our in execution expertise and built at role the In we approach XX Pharmaceuticals, as tactical Gerard This mission of plans commercial drug teams pharmaceutical Verrica our Gerard leaders commercial years infrastructure a national and product. involving medical

Fall Targeted conferences medical not Clinical business also research opportunities. and share with only as such academic partnering to community us our development the allow the to opportunities explore potential but

and research laying success by the our that groundwork are We and product dermatology strengthening both interacting commercial with advances potential. leaders, brand clinical for investigator-initiated directly supporting company-sponsored

an Ameluz that offering positioning indications approximately open new treatment I accelerate X the providing single the treatments BCC sales and more ongoing with for To now enrollment Phase and for provide growth. update enrolled. to on market AK The XX% superficial focuses development to strategy opportunities include help study study, confidence Clinical XX%. on I'll that is patients our stands the complements favorable share our market Phase at expanding trial the you, Expanding increasing to now Ameluz, in label options. new tubes will more commercial by III

to a of should the the which added forward. Additionally, pace site trial study, has this new been moving accelerate

discussions trial and an investigators have of XXXX. year. protocol. QX a with protocol we We slowly during of The Phase in believe and learned throughout We've the severity this has determination our II be have acne recruiting the as and been on that this patient will we been acne FDA now time selection fine-tune the lot ready in optimal

this will help and to with in forward knowledge Moving the accelerate improvement enrollment XXXX.

more the tremendous our on We available. the recognition potential in X all first put even they're and and become on these we'll to they half have as of I'm to proud our studies within of the protection news soon that commercial not also but ongoing only strategy those Biofrontera year, and expect positive patent impact this as updates future offer teams hard XXXX, continuing work in receive. provide the

for PMXXX, a of came Initiative marketing the biotech earned of was Relaunch/Revitalization medical These the recognitions as example, Website/Online XXXX marketing brand the diagnostics analyst new as Award campaign Year makers the Associate For Marketing, Director pharmaceutical well in our device a named Year of and decision Award, Hopkins, Professional for champion dermatology. the and Leslie from publication industries.

just topic, final we in. $X.X in a recent I'd current some through also of partly point with Biofrontera position market value ownership to about with we shares addition of participated QX, AG transactions As a cash. tendering in equity the business like Inc., a In strategic I've Biofrontera mostly X.XX% discussed, operations out million, to acquired

with an Biofrontera on developed all ALA have long-term to Ameluz relating at We exclusive that is perpetual license AG. PDT technology and

our in of support our product, label in For the of improvements opportunity between this of the the to our and U.S. market and agreement, optimizing revenues AG XX% gets XX% order quality

at a PDT improving for further and aligning are both clinical will to illumination indications of development formulations AG of for by ownership forefront we facilitate A render in investment influence stake in the significant that companies. protocols. improving is significant in position will By and market. future AG a beneficial further be development adding U.S. in and and collaborations drug technology, holding beneficial goals AG, the to our most the AG stake

avenues Biofrontera path to affairs positive as demonstrates partner we development a exploring to opportunities, in dermatologists. growth to accelerate planning impact future sales roll initiatives, year-to-date So to and profitability. out trusted our conclusion, are strengthening and corporate of the medical our certainly for establishing development The continuing multiple

therapies strong, by in to in expansion label position put look out an and Biofrontera up financial setting our closing We forward XXXX advancing our XXXX. through footing stronger even

questions. ready That QX. concludes to again time for our to now in we take call. Thank taking participate conference are update Operator, the this business for you

Operator

the come Jonathan And Instructions]. Aschoff ROTH [Operator Partners. from Capital question with first will

Jonathan Aschoff

curious, function that's you region, salespeople, facilitate accurate? their expand reap sales I not exactly is to customers capital and do of which be at customers a from to push the in present, overwhelmingly existing some guess markets raising the what the with Would right, I the of force. can that capital existing was

Erica Monaco

-- focus missed think few So the first current I Do I is think on the the you accounts words. the due to current margin? reach existing capital

Jonathan Aschoff

Right.

Erica Monaco

I and no. yes would say

all demonstrated forward inside I think in steps before position there. this in and this and base side. to year we our seen push strengthen the strengthen And expand. goal enhanced to of on year placements we've going into sales, were terms training, we that existing was our intentional The key always success accounts, that strategic put

look need Jonathan. yes, to financing is continually expand, does and market we in best determine a and play analyze and driver, we evaluate not have in we connector As our strategy, overall how it the only the -- to we when but

So that answers question. hopefully, your

Jonathan Aschoff

Yes. next biggest just so revenue, late guidance weeks which reasonable. is there's the our guarantee nothing of lower factor inability in in It's is couple XXXX is timing And to to just in inability the one that the and last and your else the last just so of year? guarantee, that. The

Erica Monaco

well. new ready And the to they're next fact for sales out. of we year play I did the the with and at to play XX%, growth, -- is range I of is determining sure think will that right force as the a guidance into how year key the can XX% developed and of the want a we're in XX% relatively I go did organization. to previous hovering we're think factor those highlight say. to least around was making But I X/X also what results end That factor still the mean

Operator

Benchmark will question with come next The Jackson from The Company. Bruce

Bruce Jackson

out and of team. all new building a hires on the Congratulations

first expense my on question is the So profile. operating

you've on to Now few profile ex expense the a the the for X next got look payroll, like what's members quarters? going forward going operating

Erica Monaco

quarters, the you're for few think stable a run next I rate pretty forward Going looking for us. at

We in besides expansion place have positioned take scale to that the any commercial would business XXXX. almost

of rate forward. So QX from in a see is run and we what you're all what in different seeing terms What isn't moving you'll that saw consistent. QX

Bruce Jackson

Okay.

of what in in that's that Okay, forward headed? going million, to us puts is we range. terms what guide, the year. XX% revenue assuming great. Should That's long-term rate kind $XX growth range also then kind line $XX And growth of million the that last of rate kind top roughly that be a you the did of

Erica Monaco

No. I would say, no, we should that. be assuming not

growth I the you developing fact of we've we develop given enhancements on can this think new type X/X haven't yet. And sales we're those implemented further ROI from least year what strategies, that XXXX strengthen in seen the performance our true our is at of opportunity. that efforts of some expect all and will and force plus

Bruce Jackson

So acceleration we're looking for next year?

Erica Monaco

Yes.

Bruce Jackson

just office for market. general then generally, offices. about staffing -- there And the to dermatology? access changes How the some physician There's shortages questions Okay. just be couple market been in you dermatology conditions are and finding a any of are in

Erica Monaco

Sure.

the think a now advocacy of in to within recently to have I question, of get all concept dermatologists. And with the on what's on that's derm as pulse space, -- dealing that recovered out of I ask there. the retraining. the And they're organization it's certainly, mean, same important have PDT, time staffing with the that but We seems that's going to teams Bruce. good a the

regaining those rebuild. and of want sort pioneers that it is so charge internally to of a take And bit the a lead

instead a actually good showing quite and very things schedule do access, -- virtually, increased doing has regularly. our audience -- terms logistically, you been team of able And in medical of reach about or some you efficiency to more up broader virtually. a our But bit which now yourself there's we've

in of different say I'd maybe how So and to just terms be. access, it than it's back just used

Bruce Jackson

last then question Okay. And for me.

about You talking on established base. your focus the were

you're that [indiscernible] these offices. also lesion it's really patients greater-than-XX that with idea You've leading been the

less-than-XX the are With started or while, the using still into lesion lesion to Ameluz use extend like the of for accounts have a patient product market? that XX-plus on that been your they focused they patient

Erica Monaco

[indiscernible]? The say reps, did you

Bruce Jackson

[Indiscernible] lesion into the use extending population? patient the less-than-XX

Erica Monaco

$X able so -- market. XXXX least cryo into some think performance because there forward like precise to would some It's shifts be to numbers. I updated XX% to billion get percentages it's some very in at I go difficult measure of to with more this

some slightly that a So move into metrics of when we for our can it we look with really KPIs as a XXXX we certainly have favor, number. in time cryo. we will percentage to try numbers hard quantifying out But develop that in roll

Operator

As sir. questions, like Mr. Patel Please turn no call for audio further to would ahead, the are questions I over online. to there go any

Tirth Patel

you. Thank

that the We submitted have asked three Thank We've most received Investor Relations questions team. commonly shareholders to were e-mailed additional our to questions. who all some themes compiled into you them.

is, a is investment step AG, first strategy? question in Biofrontera first broader the Our in your

Erica Monaco

Sure. Thank you, Tirth.

of call PDT our at AG As forefront illumination further by AG and in I formulations United light adding improving the drug Ameluz Biofrontera earlier, and investment improving further mentioned is of to indications strengthen the PDT technology States. protocols. and red on step is the position and in developing the strategic a the

ways believe ownership of that them further investment in by we a the a will position development AG to most holding be AG, market. the render U.S. beneficial Biofrontera help So we will stake in in and influence significant for

Tirth Patel

strategies question, increasing can on provide per sales involved the second color you in rep? Our more

Erica Monaco

accounts and sales our bandwidth evolving inside offer functions harder tools in resource Yes, to we of account this our But sales key specialized provide additional added support enhanced department, call These have will on sure. in previous I a they'll existing a the I And to XXXX, we department. added our the on might lower provide value-added They'll to industry. and training our to questions. sales touched think for volume, some and reps. sales access even management added We functions.

sales more allowing impactful provide We efforts. our efficient expect and planning and strategic more deeper and to and tools intentional insight their to reps in even these more be

Tirth Patel

do pace how be plan what's to XXXX? in in force hiring? your those hires, field you And And sales reps that is XXXX? come With fully many of Or our more the will it staffed? final is, to question hire

Erica Monaco

Good question. Thank you, Tirth.

So expansion the we the overall of size strategy. like with analyze way, continually this sales of force. to planning the and best determine step This the every includes for market need our

this As largely customer our seen our optimal force we strong in determine share commit a strengthening we've before by market year, existing to base, size already growth of number. we PDT need our sales placement of still to the specific and

We And details are working roll year. little expansion expect those enter materialize to numbers bit soon let XXXX. we out with see as we a the And which in on will our and plans, course, as that. more on we we expand have of new me as locations, just actually,

I -- Tirth, just thinking. think sorry,

we if then think the that for expand, XXs is probably getting publicly like and size before floated around to there's range getting the numbers into range most the optimal into have I were XXs us.

will where Although land X to number, is this over we -- in do years, in will probably the somewhere long-term think to I a X XXs don't to a commit couple I that do in strategic want way. finite to a of years

Tirth Patel

questions. you. That our submitted concludes Thank

Operator

back to For question-and-answer management this to session, any I would like closing the remarks. for concluding our turn conference over

Erica Monaco

additional Thank you questions, everybody. for those

in early January. forward to I Fred So commercial our and I our on we and our San Francisco investors meeting the laser-focused conference in goals. look all that during analysts financial closing, say with Hermann, and wanted in business, just are to JPMorgan our

XX. on like. to Investor X LHA, if will site contact arrange meetings for there available agency, Relations and to from our be you Please January a We one-on-one meeting

Beyond quarter us speaking thank JPMorgan, forward you again April. and financial In the XXXX report when for we meantime, to today. you our with results full again look fourth we joining in year early

Operator

for attending The conference Thank presentation. has now you concluded. today's

disconnect. now may You

Biofrontera (BFRI) 14 Nov 222022 Q3 Earnings call transcript