S-1/A: Biofrontera Inc. Files Amendment No. 1 to Form S-1 Registration Statement for Share Resale by Selling Stockholders

Biofrontera Inc. has filed an amendment to its registration statement for the resale of up to 9,310,678 shares of common stock by selling stockholders.

Summary

• Biofrontera Inc., a biopharmaceutical company, has filed Amendment No. 1 to its Form S-1 registration statement with the SEC.
• The registration statement pertains to the offering and resale of up to 9,310,678 shares of common stock by selling stockholders.
• These shares include 2,516,785 shares issued upon conversion of Series B-1 Convertible Preferred Stock and up to 6,793,893 shares issuable upon conversion of outstanding Series B-1 or Series B-2 Preferred Stock.
• Biofrontera will not receive any proceeds from the sale of these shares by the selling stockholders.
• The company's common stock is quoted on the Nasdaq Capital Market under the symbol BFRI, with the last reported sale price on March 18, 2024, at $1.26 per share.
• The selling stockholders may sell their shares at prevailing market prices or privately negotiated prices.
• Biofrontera is classified as an emerging growth company and a smaller reporting company, allowing it to comply with certain reduced public company reporting requirements.
• The company's principal licensed product is Ameluz, used for photodynamic therapy (PDT) in treating actinic keratoses (AK).
• Another licensed product is Xepi (ozenoxacin cream, 1%), a topical antibiotic for impetigo treatment.
• Effective June 1, 2024, Biofrontera will take control of all clinical trials relating to Ameluz in the US.
• The Second Amended and Restated License and Supply Agreement (Second A&R Ameluz LSA) reduces the transfer price of Ameluz from 50% to 25% for all purchases in 2024 and 2025.
• Starting on January 1, 2026, until 2032 there will be stepwise increases in the transfer price from 25% to 35% for sales related to actinic keratosis and, if approved by the FDA, basal cell carcinoma and squamous cell carcinoma.
• The transfer price for sales related to acne, another indication currently in development, will remain at 25% indefinitely.
• The company's strategy includes expanding sales of Ameluz, leveraging potential label extensions, and strategically managing its licensed portfolio.
• As of March 19, 2024, Biofrontera AG holds approximately 7.9% of the outstanding shares of Biofrontera Inc.'s common stock.

Sentiment

Score: 6

Explanation: The document is primarily factual, outlining the details of a securities registration and related agreements. While there are some positive elements, such as the reduced Ameluz transfer price, there are also risks and uncertainties associated with the company's business. The sentiment is neutral to slightly positive.

Positives

• The reduced Ameluz LSA transfer price will allow the Company to finance R&D activities and continue commercial growth.
• Taking control of Ameluz clinical trials in the US effective June 1, 2024, will allow for more effective cost management and direct oversight of trial efficiency.
• The new formulation of Ameluz that lacks propylene glycol and reduces the accumulation of certain contaminants over time will be implemented in all US productions of Ameluz starting in 2024.
• The company has the potential for future approvals and label extensions of its licensed portfolio products.

Negatives

• The company is not receiving any proceeds from the sale of shares by the selling stockholders.
• The company faces significant competition from other pharmaceutical and medical device companies.
• The company has a history of operating losses and anticipates continuing to incur operating losses in the future.
• The company is dependent on its collaboration with the Ameluz Licensor for its supply of Ameluz and RhodoLED lamps and future development of the Ameluz product line, and on its collaboration with Ferrer for its supply of Xepi and future development of Xepi.

Risks

• The company's sole source of revenue is from sales of products it licenses from other companies.
• Generic versions of Ameluz may enter the market following the recent expiration of certain important patents.
• The Ameluz Licensor depends on a single unaffiliated contract manufacturer to manufacture Ameluz.
• Insurance coverage and medical expense reimbursement may be limited or unavailable for the company's licensed products.
• The company may be unable to support the levels of marketing it currently spends on Ameluz or complete the commercialization of Xepi and other products it may license if it fails to obtain additional financing.
• If the company fails to regain compliance with applicable listing standards, its common stock and publicly-traded warrants could be delisted from Nasdaq.
• Future sales of the company's common stock in the public market could cause its share price to fall.
• The company has issued several warrants and Series B Convertible Preferred Stock, which, if exercised or converted, could substantially increase the number of shares eligible for future resale and result in dilution to stockholders.

Future Outlook

The company aims to improve patient outcomes by increasing the sales of its licensed products, expand its sales in the United States of Ameluz, leverage the potential for future approvals and label extensions of its licensed portfolio products, and strategically manage its licensed portfolio.

Industry Context

The document provides context on the market for actinic keratosis (AK) treatments, noting that cryotherapy is the most common treatment (86% of the market), followed by topical medications (12%) and PDT (2%). The total market size is estimated at roughly $4 billion. The company aims to expand its PDT market share and target the cryotherapy market for treatments of more than 14 lesions.

Comparison to Industry Standards

• The document mentions Levulan and the associated light, Blu-U, as Biofrontera's primary competitor in the PDT space.
• The document references market data accessible from CMS and IQVIA, 2020.

Stakeholder Impact

• Shareholders may be impacted by the potential dilution from the conversion of preferred stock and exercise of warrants.
• Customers (patients and healthcare providers) may benefit from the company's efforts to expand sales of Ameluz and leverage potential label extensions.
• Employees may be impacted by the company's strategic management of its licensed portfolio and potential acquisitions or divestitures.

Next Steps

• The selling stockholders may sell all or a portion of the shares of common stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents.
• The company will take control of all clinical trials relating to Ameluz in the US, effective June 1, 2024.
• Ferrer is qualifying a new third-party contract manufacturer in North America, expected to be completed in the second half of 2024.
• The company plans to start enrollment in various Ameluz clinical trials in the coming years.

Key Dates

Keywords

Biofrontera, Ameluz, Xepi, Common Stock, Series B Preferred Stock, Selling Stockholders, Registration Statement, Photodynamic Therapy, Actinic Keratosis, Private Placement, Warrants, Nasdaq