Biofrontera's CFO On The Dermatology Biotech's Pipeline, Growth, Acquisitions And More

The dermatology-focused biotech BIOFRONTERA AG/ADR BFRA has made some major steps toward growing its operations in the U.S. and Europe, and Benzinga interviewed CFO Thomas Schaffer about them.

The interview has been edited for length and clarity.

Benzinga: I noticed that Biofrontera is using a technology called Ameluz — what can you tell us about it?

Schaffer: Photodynamic therapy is a combination of drug and light treatment. The substance is included in the drug and is then applied to the affected areas of the skin before being metabolized. We developed the Ameluz technology to solve the problem of molecules being highly unstable in their original environment and penetrating the skin. 

Benzinga: Biofrontera is approved for multiple indications to conduct new tests. Can you outline some of them for us?

Schaffer: We have added our label in Europe, DayLight Photodynamic Therapy, which is used in lieu of artificial light. Our drug is approved to be used in combination with daylight.

We are working on a Phase 3 trial in the U.S. that was requested by the Food and Drug Administration.

Finally, we just finished a Phase 3 study testing the safety and efficiency of Ameluz and photodynamic therapy on the trunk and neck. We used the data already gathered from other parts of the body to apply for a label extension and expect a decision in the next quarter.

Benzinga: Can you tell us about the latest trial results reported for the Phase III trial of Ameluz(R) / BF-RhodoLED(R) for the treatment of actinic keratoses on the extremities, trunk and neck?

Schaffer: On the basis of studies conducted a few years ago, we received the first approval and centralized European approval in late 2011.
Based on these studies, we received FDA approval in 2016. Since then, we have extended our approval by pursuing further trials.

Benzinga: Can you comment on the adoption of Ameluz in the US? Can you also comment on physicians feedback on the technology? 

Schaffer: It's been very well-reviewed so far; we record more than 70% of our revenue in the U.S. It's a huge market for us. The approval of Ameluz in the U.S. is a combination of approvals.

Benzinga: What does the recent Cutanea acquisition add to your product offering? What can we expect going forward?

Schaffer: We acquired Cutanea, which is a company based in Pennsylvania that was 100% owned by Maruho — which was also a strategic shareholder in Biofrontera. We also added two additional products. One is Aktipak for the treatment of acne, and the other is Xepi, for the treatment of skin disease.

Benzinga: Does Biofrontera have any partnerships? If so, what are they and how do they help you?  

Schaffer: While half of our employees are in the U.S., we have a few distributor partnerships in smaller European countries.

We have a strategic partnership with Maruho, a Japanese company.

We are looking to expand Ameluz in Asia with Maruho paying for the development — and we would do the development. This would allow us to sell Ameluz in the United States and Maruho to sell it in Asia.

Benzinga: Any updates on Biofrontera's EU commercial growth plans? 

Schaffer: After the approval of DayCare, that opened up 100% of patients for the company. Photodynamic therapy was only accessible to about 10% of the population that had private insurance. The state-run insurance would not cover it. With the DayLight therapy approval, that has changed.

The therapy and the drug are now reimbursed by public health care. That opens 100% of the patient population to us, and we believe it will allow us to grow much more in Germany than in the last three to four years.

Benzinga: We noticed that Biofrontera reported Q1 EPS and sales results that were up from last year and reported a loss from operating activities. Can you comment on the significance and impact of these figures for the company?

Well, our revenues are up; the loss has been reduced, and we showed income from all activities except interest and X-rays. 

This was our fourth consecutive quarter of growth, and we showed an increase from the first quarter last year by over 46%.

We expect the fourth quarter this year to be a break-even for the company to turn into a profitable business.

Benzinga: Any additional comments? 

Schaffer: We're moving our headquarters to a town near Boston, in a bigger location that is more than double the square footage.

Benzinga: What's the significance of the move?

Schaffer: This will be an excellent way to show our commitment to the U.S. — and that we are serious. 

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Photo: Biofrontera CFO Thomas Schaffer. Courtesy photo.