Biofrontera 2026 Q3 Earnings Call

Please go ahead. Good morning, and welcome to Biofrontera's Third Quarter 2026 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.

Forward-looking statements on today's call include statements regarding the timing and success of the commercial launch of Ameluz, of superficial basal cell carcinoma, the company's supplemental New Drug Application for actinic keratosis on the extremities, neck, and trunk, the effects of the International Trade Commission orders, the company's remediation plan, and the RhodoLED XL-C, the outcome of pending appeals and patents proceedings, the company's liquidity, its ability to continue as a going concern, and its plans to address that condition, and the company's compliance with Nasdaq continued listing standards.

All risks and uncertainties are detailed in and are qualified by the cautionary statements contained in the Biofrontera's press releases and SEC filings, including the company's quarterly report on the Form 10-Q for the quarter ended September 30, 2026, which the company expects to file later today, and the company's annual report on the Form 10-K for the year ended December 31, 2025. Also, this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast. 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 financial 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 issued today and is available on the company's website at www.biofrontera-us.com under the Investor Relations section. Please note, management will be referencing Adjusted EBITDA, a non-GAAP financial measure defined as net loss excluding interest expense, net income taxes, depreciation and amortization, and certain other non-recurring or non-cash items, including changes in fair value of warrant liabilities and of the related party investment, patent remediation expense, and ITC-related inventory write-downs, and stock-based compensation. With that said, I would now like to turn the call over to Hermann Luebbert, CEO, Chairman, and Founder of Biofrontera. Hermann, please proceed. Sir, is your line on mute perhaps?

Yes, I was on mute. Thank you. Well, thanks, Ben, and thanks everyone for joining us this morning. Do you hear me now?

Great. The third quarter changed what the company is able to sell and to whom, with two things happening within five days of each other in September, and I want to start with both of them before we get to the numbers. On September 9, the FDA approved Ameluz photodynamic therapy for the treatment of superficial basal cell carcinoma in adults. That makes Ameluz the first PDT approved in the U.S. to treat a skin cancer. Until now, our label has been limited to mild to moderate actinic keratosis on the face and scalp. We now have a second indication. Superficial basal cell carcinoma represents up to 20% of all basal cell carcinomas, the most common cancers in the U.S. Many of these patients are today treated surgically.

Ameluz PDT gives dermatologists a non-surgical option with a favorable cosmetic outcome that they can deliver with the red lamp that is already in the office. Furthermore, we believe that the approval to treat a skin cancer will convince more doctors to introduce Ameluz PDT as a routine treatment in their offices and purchase one of our red lamps. On September 14, four days after the superficial BCC approval, U.S. Customs and Border Protection ruled that our redesigned large field lamp, which we called RhodoLED XL-C, does not infringe the asserted claims of the DUSA Pharmaceuticals patents and is not subject to the exclusion order issued by the International Trade Commission, or ITC, earlier in the year. Let me put that into context. The ITC orders took effect on July 6.

From that date, we could not import or sell the original RhodoLED XL, and we could not sell Ameluz for use with it. Customers whose only lamp was the RhodoLED XL were temporarily unable to buy Ameluz from us. In light of the September 14 CBP ruling, we can now sell the RhodoLED XL-C, providing our prior RhodoLED XL customers with a large five-panel lamp that is unrelated to the ITC orders to go alongside our smaller BF-RhodoLED lamp, which is similarly not affected by the ITC orders. Of course, we can continue selling Ameluz to any customers who have either an XL-C or a BF-RhodoLED lamp. By September, the number of customers ordering from us was back to the level of a year ago.

I said on our last call that we will not allow our commercial plan to depend on winning in court, and that is how it turned out. We designed around the patents, obtained the favorable ruling, had no objections from the FDA, and are working through the remediation of the affected lamps in the field, which we expect to be substantially complete by the end of the second quarter of 2027. We will furthermore file our appeals with the Federal Circuit, both of the commission's determination and of the Patent Office director's decision. I will not speculate on the timing or outcome of those appeals. This matter did cost us in the quarter. Fred will take you through the detail, but legal fees, remediation costs, and inventory write-downs tied to the ITC matter are the main reason our operating loss was larger than in the second quarter.

I regard most of this as the cost of getting to the other side of the problem. Now to the pipeline, because it is the clearest picture of how this company grows in 2027 and beyond. First, superficial basal cell carcinoma. We expect to begin commercializing Ameluz for sBCC with a full launch in the first quarter of 2027 after receiving FDA feedback on our anticipated marketing material. The launch goes into our existing installed base of lamps and our existing dermatology call points. George will describe the preparation. Second, actinic keratosis on the extremities, neck, and trunk. In early October, we submitted our supplemental New Drug Application to expand the Ameluz label beyond the face and scalp to treat AK on the entire body. FDA has confirmed a PDUFA date of August 5, 2027, and initiated its preliminary review.

AK is, in most cases, a UV light-induced disease and occurs on all body parts frequently exposed to the sun. Such body parts can be larger than face and scalp, and we applied for a treatment field of up to 240 square centimeters, supported by the positive phase III results we announced earlier this year. As PDT on larger areas is often associated with more pain, we furthermore filed with FDA an illumination protocol expected to reduce this pain. With approximately 58 million American adults having at least one AK lesion, treating the extremities, neck, and trunk meaningfully expands the use of Ameluz in every one of our customers' offices and on every lamp already in the field. The picture is this. One year ago, we had one indication and a transfer price that took 25%-35% of our revenue away.