What changed in this filing

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Item 1. Business

2025-03-20 compared with 2024-03-15 · 323 added, 367 removed, 263 unchanged (72% of the section changed)

are a U.S.-based biopharmaceutical company commercializing a portfolio of pharmaceutical products for the treatment of dermatological

conditions with a focus on photodynamic therapy (“PDT”) and topical antibiotics with PDT contribution to the largest amount

of our business.

The Company’s licensed products are used for the treatment of actinic keratoses, which are pre-cancerous skin

lesions, as well as impetigo, a bacterial skin infection.

In May 2023, we began research and development (“R&D”)

activities to support PDT growth and will continue to opportunistically invest in these activities going forward.

program currently aims to improve the capabilities of our BF-RhodoLED® lamps to better fulfill the needs of dermatologists.

is to improve the effectiveness of our commercial team by allowing sales representatives to carry approved devices with them allowing

for easier product demonstrations and evaluations.

Effective June 1, 2024, we will take control of

all clinical trials relating to Ameluz ® in the US, allowing for more effective cost management and direct oversight

of trial efficiency.

includes its wholly owned subsidiary Bio-FRI GmbH, a limited liability company organized under the laws of Germany.

Our subsidiary,

Bio-FRI was formed on February 9, 2022, as a German presence to facilitate our relationship with the Ameluz Licensor.

were formed in March 2015 as Biofrontera Inc., a Delaware corporation, and a wholly owned subsidiary of Biofrontera AG, a stock corporation

organized under the laws of Germany.

On November 2, 2021, we consummated our initial public offering and subsequently we ceased to be

deemed a company controlled by Biofrontera AG.

As of December 31, 2023, Biofrontera AG held 26.4% of the outstanding shares of our common

With our national commercial team, we generate revenue by selling our licensed products directly to dermatology offices and groups.

of December 31, 2023, the company had 85 employees, of which 83 were full-time employees and two were part-time employees.

Approximately

57% are focused on marketing and sales activities.

Our commercial team covers the continental United States, and our headquarters

is in Woburn, MA.

have a wide and diverse customer base with no single customer dominating our revenues.

At December 31, 2023, no customer represented

more than 10% of the net accounts receivable balance.

For the year ended December 31, 2023, no customer represented more than 10% of

net revenues.

principal objective is to improve patient outcomes by increasing the sales of our licensed products.

are a United States based biopharmaceutical company commercializing a portfolio of pharmaceutical products for the treatment of

dermatological conditions with a focus on photodynamic therapy (“PDT”).

The Company’s primary licensed products,

which include Ameluz ® as well as the BF-RhodoLED ® and RhodoLED ® XL lamps (together, the

“RhodoLED ® Lamps”), are used for the treatment of actinic keratoses (“AKs”), which are

pre-cancerous skin lesions.

With our national commercial team, we generate revenue by selling our licensed products directly

to dermatology offices and groups.

We were formed in March 2015 as Biofrontera

Inc., a Delaware corporation, and a wholly owned subsidiary of Biofrontera AG, a stock corporation organized under the laws of

We consummated our initial public offering in November 2021.

Discovery was formed on February 9, 2022, as a German presence

that manages our clinical trial work and facilitates our relationship with the Ameluz Licensor.

We consider the Biofrontera

Group to be a related party.

The Biofrontera Group held more than 5% of the outstanding shares of our common stock until December

10, 2024, and we continue to rely on the Biofrontera Group as the sole supplier of Ameluz ® and the RhodoLED ® Lamps.

June 1, 2024, we assumed control of all clinical trials relating to Ameluz ® in the United States, allowing for more

effective cost management and direct oversight of trial efficiency.

Our research and development (“R&D”) programs

are focused on label expansion for Ameluz ® as well as supporting PDT growth by improving the capabilities of

the RhodoLED ® Lamps to better fulfill the needs of dermatologists.

the third quarter of 2024, the Company reached the decision to divest its Xepi product line and the related intangible asset is

currently held for sale.

Xepi ® (ozenoxacin cream, 1%), is a topical non-fluorinated quinolone that

inhibits bacterial growth.

Currently, no antibiotic resistance against Xepi ® is known and it has been

specifically approved by the Federal Drug Administration (the “FDA”) for the treatment of impetigo, a common skin

infection, due to Staphylococcus aureus or Streptococcus pyogenes.

The Company did not have any sales of Xepi ® during

2024 and generated limited revenue during 2023 from sales of Xepi due to third-party manufacturing delays that have impacted our

commercialization of the product.

Ferrer is in the process of qualifying a new contract manufacturer.

If the new contract

manufacturer is qualified, we believe that it will be able to supply enough of the Xepi ® product line to meet

market demand for as long as we maintain it.

However, the Company is working with a potential purchaser and expects to complete a

sale of the asset within the next three to six months.

The related intangible asset is presented as held for sale under current

assets in the Consolidated Balance Sheets.

Assets Held for Sale , for additional information.

principal objective is to improve patient outcomes through adoption and use of our licensed products.

The key elements of our strategy

include the following:

our sales in the United States of Ameluz ® in combination with the BF-RhodoLED ® lamp series for the

treatment of minimally to moderately thick actinic keratoses of the face and scalp and positioning Ameluz ® to be standard

of care in the United States by focusing on acquisition of new customers and growth of the therapy in our current customer base;

sales of Xepi ® for treatment of impetigo by improving the market positioning of the licensed product;

the potential for future approvals and label extensions of our licensed portfolio products that are in the pipeline for the U.S.

market through our license and supply agreements with the Licensors;

opportunistically

add complementary products or services to our portfolio by acquiring or licensing IP to further leverage our commercial infrastructure

and customer relationships.

executing these four strategic objectives, we will fuel company growth, deepen our trusted relationships in the dermatology community,

and above all, help patients live healthier, more fulfilling lives.

and RhodoLED ® Lamp Series

principal licensed product is Ameluz ® , which is a prescription drug approved for use in combination with the

RhodoLED ® lamp series, for PDT (when used together, “Ameluz ® PDT”).

In the United States,

the PDT treatment is used for the lesion-directed and field-directed treatment of actinic keratoses (“AK”) of

mild-to-moderate severity on the face and scalp.

AKs are premalignant lesions of the skin that can potentially develop into skin

cancer (squamous cell carcinoma) if left untreated.

1 International treatment guidelines list PDT as the

“gold standard” for treating AK, especially multiple AKs and the surrounding photodamaged skin.

currently selling Ameluz ® for this indication in the U.S.

under an exclusive license and supply agreement (as amended

the “Ameluz LSA”) between Biofrontera, Inc.

and the Ameluz Licensors.

are superficial potentially pre-cancerous skin lesions caused by chronic sun exposure that may, if left untreated, develop into a form

of potentially life-threatening skin cancer called squamous cell carcinoma.

AKs typically appear on sun-exposed areas,

such as the face, bald scalp, arms or the back of the hands, and are often elevated, flaky, and rough in texture, and appear on the skin

as hyperpigmented spots.

AKs are typically treated with cryotherapy, topicals, or PDT.

These treatments can be used in combination,

which is the number one indication for those 45 years of age and older.

our sales in the United States of Ameluz ® in combination with the RhodoLED ® Lamps for the treatment of

minimally to moderately thick AKs of the face and scalp and positioning Ameluz ® to be the standard of care in the

United States by leveraging new label indications and focusing on acquisition of new customers and growth of the therapy in our

current customer base;

the potential for future approvals and label extensions of our licensed portfolio products that are in the pipeline for the United States

market with respect to Ameluz and furthering the clinical development of

Ameluz ® after taking over responsibility for certain ongoing clinical trials since

June 1, 2024, pursuant to the Second A&R Ameluz LSA;

strategically

manage our licensed portfolio, including opportunistically adding complementary products or services to our portfolio by acquiring

or licensing intellectual property to further leverage our commercial infrastructure and customer relationships.

executing these strategic objectives and continually evaluating our product portfolio with strategic options to improve our business, we will fuel growth, deepen our trusted relationships in the dermatology community, and

above all, help patients live healthier, more fulfilling lives.

As of December 31, 2024, the Company had 93 employees,

consisting of 92 full-time employees and one part-time employee.

Our commercial team covers the continental United States, and our headquarters

is in Woburn, MA.

Significant Customers

We have a wide and

diverse customer base with no single customer dominating our revenues.

At December 31, 2024, no customer represented more than 10% of

the net accounts receivable balance.

For the year ended December 31, 2024, no customer represented more than 10 %

of net revenues.

and RhodoLED ® Lamps

principal licensed product is Ameluz ® , which is a prescription drug approved for use in combination with the RhodoLED ®

Lamps, for PDT (when used together, “Ameluz ® PDT”).

In the United States, the PDT treatment is

used for the lesion-directed and field-directed treatment of actinic keratosis (“AK”) of mild-to-moderate severity on the

face and scalp.

AKs are premalignant lesions of the skin that can potentially develop into skin cancer (squamous cell carcinoma) if left

1 International treatment guidelines list PDT as the “gold standard” for treating AK, especially multiple

AKs and the surrounding photodamaged skin.

2 We are currently selling Ameluz ® for this indication in the United States

under an exclusive license and supply agreement between Biofrontera Inc.

and the Ameluz Licensor, (the “Second A&R Ameluz LSA”).

the number one indication at a dermatologist visit for those 40 and older, are superficial potentially pre-cancerous skin lesions caused

by chronic sun exposure that may, if left untreated, develop into a form of potentially life-threatening skin cancer called squamous

cell carcinoma.

AKs typically appear on sun-exposed areas, such as the face, bald scalp, arms or the back of the hands, and are often

elevated, flaky, and rough in texture, and appear on the skin as hyperpigmented spots.

AKs are typically treated with cryotherapy, topicals,

These treatments can be used in combination as well.

general, PDT is a two-step process:

3 unchanged sentences

this process, energy from the light activates the photosensitizer.

In PDT, the activated photosensitizer transfers

energy to oxygen molecules found in cells, converting the oxygen into a highly reactive oxygen species (“ROS”), which

destroys or alters the sensitized cells.

PDT can be a highly selective treatment that targets specific cells while

minimizing damage to normal surrounding tissues.

It also can allow for multiple courses of therapy.

Hence the mode of action of

PDT requires destruction of the altered cells, temporary local skin reactions and inflammation of the treated area

might be expected.

The Ameluz ® PDT therapy is highly effective with patients - efficacy is up to 91% clearance after

one or two treatments 3 with limited or no scarring.

The therapy also may provide protection from potentially fatal

progress of mild or invisible AKs.

In PDT, the activated photosensitizer transfers energy to oxygen molecules

found in cells, converting the oxygen into a highly reactive oxygen species (“ROS”), which destroys or alters the sensitized

PDT can be a highly selective treatment that targets specific cells while minimizing damage to normal surrounding tissues.

also can allow for multiple courses of therapy.

Hence the mode of action of PDT requires destruction of the altered cells, and temporary

local skin reactions and inflammation of the treated area might be expected.

The Ameluz ® PDT therapy is highly effective

with patients - efficacy is up to 91% clearance after one or two treatments 3 with limited or no scarring.

The therapy also

may provide protection from potentially fatal progress of mild AKs.

and competitive landscape

currently affects approximately 58 million Americans which lead to roughly 13 million treatments annually.

is the most common precancer;

it affects more than 58 million Americans.

5 Cryotherapy is

7 unchanged sentences

billion for the three therapy types.

Our primary competitor in the PDT space is Levulan ® and the associated light,

goal is to continue expansion in the current PDT market share and focus on converting cryotherapy treatments of more than 14 lesions

as a field therapy such as Ameluz ® PDT could be more effective and lead to better patient outcomes.

This targeted market

is about 11% or $500 million of the total AK market.

6 Ameluz ® PDT is competitive in the market.

We are leveraging

medical affairs, advisory boards, reimbursement resources, and key opinion leaders in order to educate the market on the use and benefits

of Ameluz ® PDT.

Fuchs & Marmur, Dermatol Surg.

Our primary competitor in the PDT space is Levulan ® and the associated light, Blu-U ® .

goal is to continue expansion in the current PDT market and focus on converting cryotherapy treatments of more than 14 lesions to

Ameluz ® PDT as the switch or even combination of cryotherapy and PDT could be more effective and lead to better

patient outcomes.

This targeted market is about 11% or $500 million of the total AK market.

6 Ameluz ® PDT

is competitive in the market.

We are leveraging medical affairs, advisory boards, reimbursement resources, and key opinion leaders

in order to educate the market on the use and benefits of Ameluz ® PDT.

Fuchs, A., & Marmur, E.

The kinetics of skin cancer:

Progression of actinic keratosis to squamous cell carcinoma.

33(9):1099-101

8 unchanged sentences

DOI 10.1111/bjd.

www.skincancer.org/skin-cancer-information/actinic-keratosis

https://www.skincancer.org/skin-cancer-information/skin-cancer-facts

Market data accessible from CMS and IQVIA, 2020

marketing and distribution

are currently selling our portfolio of licensed products in the United States through the use of our own commercial organization.

are currently selling our licensed products in the United States through the use of our own commercial organization.

have a single sales force who markets all our licensed products across the dermatology space.

13 unchanged sentences

Public information regarding CPT reimbursement is available at https://www.cms.gov/medicare/physician-fee-schedule/search?Y=0&T=4&HT=0&CT=3&H1=96574&M=5.

licensors’ R&D programs

are a sales organization with focus on commercializing our portfolio of licensed products that are already FDA-approved.

R&D efforts for label extensions in order to optimize the market positioning of the products are the responsibility of the respective

licensor and are governed by the respective LSAs.

the Ameluz LSA, we hold the exclusive license to sell Ameluz ® and the RhodoLED ® lamp series comprising

the RhodoLED ® and the new, more advanced RhodoLED ® XL (available in the second quarter of 2024) in the United States for all

indications currently approved by the FDA as well as all future FDA-approved indications identified under the Ameluz LSA.

On February 19, 2024, the Ameluz LSA was amended with

the Second Amended and Restated License and Supply Agreement (the “Second A&R Ameluz LSA”), effective February 13.

The Second A&R Ameluz LSA amends and restates the Ameluz LSA, originally dated as of October 1, 2016, between

the Company and Amulez Licensor, which was subsequently amended on July 1, 2019, June 16, 2021, October 8, 2021, December 5, 2023, and

January 26, 2024.

Among other things, the 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 transfer price covers the cost of goods, royalties on sales, and services including all regulatory

efforts, agency fees, pharmacovigilance, and patent administration.

Effective June 1, 2024, the Company will take control of all clinical trials relating to

are a sales organization with a focus on commercializing our portfolio of licensed products that are already FDA-approved.

Second A&R Ameluz LSA, we hold the exclusive license to sell Ameluz ® and the RhodoLED ® Lamps in the

United States for all indications currently approved by the FDA as well as all future FDA-approved indications identified under the Second

A&R Ameluz LSA.

June 1, 2024, in accordance with the Second A&R Ameluz LSA, the Company assumed control of all clinical trials relating to

Ameluz ® in the US, allowing for more effective cost management and direct oversight of trial efficiency.

Ameluz LSA transfer price will allow the Company to finance such R&D activities and continue our commercial growth

summary of our understanding of the Licensor’s clinical trials is below:

to R&D spending will be partially offset by the reduced price we pay per unit for Ameluz ® , based on certain

percentages of the anticipated net selling price, (the “Transfer Price”) that covers the cost of goods, royalties on

sales, and services including all regulatory efforts, agency fees, pharmacovigilance, and patent administration.

This will allow the

Company to finance such R&D activities and continue our commercial growth trajectory.

Our R&D programs are

focused on label expansion for Ameluz ® as well as supporting PDT growth by improving the capabilities of our

RhodoLED ® Lamps to better fulfill the needs of dermatologists.

summary of our clinical trials is below:

basal cell carcinoma

Last-patient-in

treatment phase in August 2023;

Last-patient-out of treatment phase expected in March 2024;

Clinical Study Report (CSR) expected

I safety study applying 3 tubes of Ameluz® to an expanded treatment area of 60 cm²;

completed and submitted to FDA

Last-patient-out

for 1 year follow up completed in December 2024;

Clinical Study Report (“CSR”) expected Q2 – 2025.

to severe acne

II is recruiting;

CSR expected in Q3 2025

Last-patient-out

of treatment phase expected Q3 2025.

CSR for treatment expected in Q2 2026.

& extremities applying 1-3 tubes of Ameluz®;

First patient dosed in Jan 2023;

last patient-in was March 2025.

Last-patient-out of treatment phase expected Q3-2025.

CSR expected in Q2-2026.

2 unchanged sentences

to start enrollment in 2026

late October 2021, the new, larger RhodoLED ® XL was approved by the FDA in combination with Ameluz ® for

the treatment of mild and moderate actinic keratoses on the face and scalp, which corresponds to the current approval of

The new PDT-lamp enables the illumination of larger areas, thus allowing the simultaneous treatment of

several actinic keratoses distant from each other.

The smaller BF-RhodoLED ® model will continue to be offered in the

Additionally, our licensor has been granted a patent for a pain-reduced PDT

procedure that combines daylight and conventional PDT and, if the respective Phase III trial leads to inclusion of the procedure

into the Ameluz ® label, may provide further patent protection beyond 2040.

Furthermore, the FDA recently approved a new formulation of Ameluz ® that lacks propylene glycol and reduces the

new, larger RhodoLED ® XL was approved by the FDA in 2021 for use in combination with Ameluz ® for the treatment

of mild and moderate actinic keratoses on the face and scalp, which corresponds to the current approval of Ameluz ® .

launched the RhodoLED ® XL in June 2024.

The new PDT-lamp enables the illumination of larger areas, thus allowing the simultaneous

treatment of several actinic keratoses distant from each other.

The smaller BF-RhodoLED ® model will continue to be offered

in the United States market.

October 2024, the FDA approved the Company’s Supplemental New Drug Application to increase the maximally approved dosage of Ameluz ® from

one to three tubes per treatment.

This approval allows healthcare professionals greater flexibility in addressing larger or multiple

treatment areas for patients undergoing PDT for AK on the face and scalp, leading to greater convenience for both healthcare providers

and their patients.

In combination with the RhodoLED ® XL Lamp, providers can now treat a patient’s face more

Additionally, the change to the label and the RhodoLED ® XL are both foundational to support trunk and

extremities which we expect to add to the label in the next couple of years.

in October 2024, the Company received results in its Phase III trial evaluating Ameluz PDT as a treatment for superficial basal cell

carcinoma (“sBCC”).

The primary endpoint was a composite of complete clinical and histological clearance of one

preselected “main target” BCC lesion per patient 12 weeks after the start of the last PDT cycle.

According to the phase

III ALA-BCC-CT013 study, Ameluz®-PDT achieved 65.5% success, compared to 4.8% success achieved with placebo-PDT.

histological clearance was seen in 75.9% of these lesions in the Ameluz® arm, compared to 19.0% with placebo.

Complete clinical

clearance was achieved in 83.4% of patients treated with Ameluz® compared to 21.4% with placebo.

Additionally,

our licensor has been granted a patent for a pain-reduced PDT procedure that combines daylight and conventional PDT and, if the respective

Phase III trial leads to inclusion of the procedure into the Ameluz ® label, may provide further patent protection beyond

Furthermore, in 2023, the FDA approved a new formulation of Ameluz ® that lacks propylene glycol and reduces the

accumulation of certain contaminants over time.

The new formulation will be implemented in all US productions of

Ameluz ® starting in 2024.

A corresponding patent application has been filed with the U.S.

and Trademark Office, or USPTO, which, if granted, will extend protection of Ameluz ® to 2043.

source for the Ameluz ® and the RhodoLED ® lamp series is our Licensor, Biofrontera Pharma.

Biofrontera Pharma

is considered the responsible manufacturer for Ameluz ® by the FDA.

Biofrontera Pharma currently manufactures through a

single unaffiliated contract manufacturer in Switzerland, Glaropharm AG, and has recently signed an agreement with a second unaffiliated

contract manufacturer located in Germany, Pharbil Waltrop GmbH, to ensure stability of the supply chain.

Our Licensor is responsible

for all raw materials, product, and shipment of products to our third-party logistics partner (“3PL”), Cardinal Health for

warehousing and distribution.

We centralize our customer sales support and back-office functions through our headquarters in Woburn,

Massachusetts.

intend to continue our development of our sales and marketing infrastructure to effectively target the broad range of dermatologic prescribers.

To further our development, we plan to expand our headcount, increase our investment in market research and brand development, further

develop our distribution capabilities and explore broader payer relationships and coverage.

second prescription drug licensed product in our portfolio is Xepi ® (ozenoxacin cream, 1%), a topical non-fluorinated

quinolone that inhibits bacterial growth.

Currently, no antibiotic resistance against Xepi ® is known and it has been specifically

approved by the FDA for the treatment of impetigo, a common skin infection, due to Staphylococcus aureus or Streptococcus pyogenes.

is approved for use in the United States in adults and children 2 months and older.

We are currently selling Xepi ® for

this indication in the United States under an exclusive license and supply agreement, as amended (“Xepi LSA”), with Ferrer

that was assumed by Biofrontera on March 25, 2019 through our acquisition of Cutanea (the “Cutanea Acquisition”).

is a common and highly contagious bacterial skin infection caused by bacteria.

The bacteria that can cause impetigo include Group A beta-hemolytic

streptococcus and Staphylococcus aureus.

It occurs most frequently in children 2 to 5 years old, but people of any age can be affected

and even more than once.

Impetigo causes red sores that most often appear on the face, neck, arms, and legs.

These sores can turn into

blisters that open and form a yellowish crust.

Transmission of the disease is by direct contact and poor hygiene can increase the spread.

Although impetigo is a year-round disease, it occurs most often during the warm weather months.

complications of impetigo 8 can include:

or spreading of the infection

which is more common with ecthyma

caused by beta-hemolytic strep bacteria can cause:

damage (poststreptococcal glomerulonephritis)

joint, and other problems (rheumatic fever)

impetigo rarely leads to serious complications, effective treatment with drugs like Xepi ® can shorten how long impetigo

and competitive landscape

are more than 3 million cases of impetigo in the United States every year.

5 The market for topical antibiotics is driven by

generics with mupirocin being the top choice of topical antibiotics across all specialties.

In 2021, over 13 million prescriptions were

written for mupirocin for a range of conditions.

According to prescription data from IQVIA, dermatologists account for approximately

12% of the annual topical antibiotic prescriptions written or about 1.4 million prescriptions.

Xepi ® is a prescription

product that is filled by specialty pharmacies nationwide and orders to these specialty pharmacies are fulfilled by our 3PL, Cardinal

Sales to the specialty pharmacies are recognized net of sales deductions, which include expected returns, discounts and incentives

such as payments made under patient assistance programs.

licensors’ R&D programs

there are no clinical trials being conducted for Xepi ® , and we are unaware of any immediate or near-term plans of Ferrer

for a U.S.-market focused development pipeline.

marketing and distribution

are currently selling our portfolio of licensed products in the United States through the use of our own commercial organization.

have a single sales force who markets all our licensed products across the dermatology space.

has been limited revenue during the current reporting periods and issues with the third-party manufacturer that was providing our

supply of Xepi ® impacting the timing of sales expansion and improved market positioning.

However, Ferrer is in

the process of qualifying a new third-party manufacturer in North America.

The expectation is that this process will be completed in

the second half of 2024.

Once the new third-party manufacturer is qualified, we expect the supply of Xepi ® will enable us to market and increase demand.

Xepi ® is distributed through specialty pharmacies and generally covered by most commercial payers

without pre-approval or similar requirements.

Our contracts with third-party payers/pharmacy benefit managers (“PBMs”)

generally require us to provide rebates based on utilization by the patients they cover.

We believe that Xepi ® has

the potential to be another innovative product with a large market potential.

How to Treat Impetigo and Control This Common Skin Infection | FDA

From CLS link to Johns Hopkins Impetigo | Johns Hopkins Medicine

The new formulation was implemented in all US productions of Ameluz ® starting

A corresponding patent application has been filed with the United States Patent and Trademark Office, or USPTO, which, if granted, will

extend protection of Ameluz ® to 2043.

source for the Ameluz ® and the RhodoLED ® Lamps is our Licensor, Biofrontera Pharma, who is considered

the responsible manufacturer for Ameluz ® by the FDA.

Biofrontera Pharma currently manufactures through a single unaffiliated

contract manufacturer in Switzerland, Glaropharm AG, and is in the process of qualifying a second unaffiliated contract manufacturer

located in Germany, Pharbil Waltrop GmbH, to ensure stability of the supply chain.

Our Licensor is responsible for all raw materials,

product, and shipment of products to our third-party logistics partner (“3PL”), Cardinal Health for warehousing and distribution.

We centralize our customer sales support and back-office functions through our headquarters in Woburn, Massachusetts.

do not own any material patents or trademarks.

We license the rights and trademarks related to the products we sell.

and the RhodoLED ® lamp series are approved by the FDA as a combination product, such that the label requires the

use of both products together.

The Licensor has patent protection on its nanoemulsion technology in the United States until 2028 and

three new patent family applications on the BF-RhodoLED ® lamps and general PDT illumination procedures, two of which are

already granted, and one is listed in the Orange Book, that could jointly extend protection until 2040.

Additionally, a new patent regarding

an Ameluz formulation without propylene glycol filed at USPTO in 2023, if granted, extends protection to 2043.

is protected by four patents in the United States held by Ferrer.

The primary patent protecting the active ingredient in Xepi ®

expired in November 2023.

However, there are treatment specific patents for the treatment of impetigo due to Staphylococcus aureus

or Streptococcus pyogenes and a method of treating nasopharynx infections in asymptomatic nasal carriers expiring in 2032 and 2029, respectively.

and the RhodoLED ® Lamps are approved by the FDA as a combination product, such that the label requires the use of

both products together.

The Licensor has patent protection on its nanoemulsion technology in the United States until 2028 and three new

patent family applications on the RhodoLED ® Lamps and general PDT illumination procedures, two of which are already granted,

and one is listed in the Orange Book, that could jointly extend protection until 2040.

Additionally, a new patent regarding an Ameluz

formulation without propylene glycol filed at USPTO in 2024, if granted, extends protection to 2043.

Partners and Agreements

and RhodoLED ® Lamp Series License Service Agreement

the terms of the Ameluz LSA, we are granted an exclusive, non-transferable license to use Biofrontera Pharma and Biofrontera

Bioscience technology to use, import, export, distribute, market, offer for sale and sell Ameluz ® and the

RhodoLED ® lamp series for its approved indications within the United States and certain of its territories.

The price we pay per unit will be based upon our sales history.

LSA will remain in effect for fifteen years and automatically renew for a period of five years, in perpetuity as long as certain minimum

revenues are achieved.

and RhodoLED ® Lamps License Service Agreement

February 19, 2024, the Company entered into the Second A&R Ameluz

LSA with the Ameluz Licensor, effective February 13, 2024.

The Second A&R Ameluz LSA amended and restated the

Ameluz License and Supply Agreement, originally dated as of October 1, 2016, which was subsequently amended on July 1, 2019, June 16,

2021, October 8, 2021, December 5, 2023, and January 26, 2024.

Under the terms of

the Second A&R Ameluz LSA, we have an exclusive, non-transferable license from the Ameluz Licensor technology to use, import, export,

distribute, market, offer for sale and sell Ameluz ® and the RhodoLED ® Lamps for its approved indications

within the United States and certain of its territories.

The Second A&R Ameluz LSA will remain in effect for 15 years from its effective

date and automatically renew for a period of five years, in perpetuity as long as certain minimum revenues are achieved.

Commitments and Contingencies.

addition, under the Ameluz LSA, the Ameluz Licensor agrees to sell us the RhodoLED ® lamp series at cost plus a low

double digit handling fee.

other things, the Second A&R Ameluz LSA reduced 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 indications.

Transfer Price for sales related to acne, another indication currently in development, will remain at 25% indefinitely.

Price covers the cost of goods, royalties on sales, and services including all regulatory efforts, agency fees, pharmacovigilance,

and patent administration.

Effective June 1, 2024, the Company assumed control of all clinical trials with Ameluz ®

in the US, allowing for more effective cost management and direct oversight of trial efficiency.

The reduced Transfer Price in the Second

A&R Ameluz LSA will allow the Company to finance such R&D activities and continue our commercial growth trajectory.

The Ameluz Licensor sell us the RhodoLED ® Lamps at cost plus a low double digit handling fee.

There are no milestones or royalty obligations associated with this agreement.

Any changes to the pricing

of supply of Ameluz ® or RhodoLED ® lamps would require agreement by both contract parties.

Ameluz LSA also provides that we will indemnify the Ameluz Licensor, subject to certain conditions, for any claims related to a breach

of our representations and covenants under the agreement or any other gross negligent, willful or intentionally wrongful act, error or

omission on our part.

Under the terms of the agreement, the Ameluz Licensor will indemnify us, subject to certain conditions, against

claims related to the licensed products.

the Ameluz LSA, the Ameluz Licensor is responsible for obtaining and maintaining the rights to all FDA approvals (and any required maintenance

thereafter) needed for the Ameluz Licensor to manufacture Ameluz ® and/or the RhodoLED ® lamp series and/or

for Biofrontera to sell Ameluz ® and/or the RhodoLED ® lamp series in the United States.

Likewise, the Ameluz

Licensor is responsible to maintain a pharmacovigilance database and to respond appropriately to all relevant queries of any regulatory

authority pertaining to pharmacovigilance (Biofrontera is required to provide reasonable support relating to any regulatory issues relating

to pharmacovigilance and/or product recalls).

Furthermore, the Ameluz Licensor will, in agreement with Biofrontera, perform and finance

clinical trials to promote the Ameluz ® market positioning in the U.S.

market for indications that are identified in the

amendment signed on October 8, 2021, including the clinical studies.

With respect to the indications currently pursued by the Ameluz

Licensor, we have the authority under the Ameluz LSA, in certain circumstances, to take over clinical development from the Ameluz Licensor,

if they are unable or unwilling to perform these functions appropriately and subtract the cost from the transfer price of future shipments.

The pursuit of any additional indications would need to be separately negotiated between us and the Ameluz Licensor.

under the Ameluz LSA, Biofrontera is responsible for obtaining all state licenses or any other similar approvals required to market Ameluz ®

and/or the RhodoLED ® lamp in the United States.

Biofrontera must also carry out all mandatory reporting responsibilities

under federal and state law with respect to compliance with the Prescription Drug Marketing Act, the Sunshine Act, or any other similar

laws and regulations.

Biofrontera is also responsible for all activities related to reimbursement and pricing of the products within

the United States.

Biofrontera is required by the Ameluz LSA to use commercially reasonable efforts and resources to exploit the license

and market Ameluz ® and the RhodoLED ® lamp in the United States (“commercially reasonable efforts”

being defined in terms of comparison against industry standards and practices for a company of comparable size and capability and active

in the same business area).

the Ameluz LSA, if product or lamps are not delivered in conformance with certain specifications of this Agreement and the Quality Assurance

Agreement, and the Ameluz Licensor does not remedy its failure, then we will have the right to organize manufacturing on our own, and

step into contracts with the Ameluz Licensor’s manufacturers, such that we will replace the Ameluz Licensor as a party to these

If we pursue this option, the Ameluz Licensor must use its best efforts to assist with the transferring of these manufacturing

contracts without delay and at its own cost.

No transfer price will be paid to the Ameluz Licensor thereafter for products or lamps that

are manufactured by third parties.

On February 19, 2024, we entered into the Second

A&R Ameluz LSA, which is discussed above in the section entitled “ Ameluz ® and RhodoLED ® Lamp

Series - Our licensors’ R&D programs .

Effective June 1, 2024, the Company will take

control of all clinical trials with Ameluz ® in the US, allowing for more effective cost management and direct

oversight of trial efficiency.

The reduced transfer price in the Second A&R Ameluz LSA will allow the Company to finance such

R&D activities and continue our commercial growth trajectory.

Internacional S.A.

March 25, 2019, we assumed the rights, duties and obligations of Cutanea under the Xepi LSA as part of the acquisition of Cutanea.

the terms of the Xepi LSA, we have been granted an exclusive, royalty-bearing license in the United States and certain of its territories,

including the right to sublicense under certain conditions, to develop, make, have made, use, register, market, promote, sell, have sold,

offer for sale and import Xepi ® .

the Xepi LSA, we are obligated to make payments to Ferrer upon the occurrence of certain milestones.

Specifically, we must pay Ferrer

(i) $2,000,000 upon the first occasion when annual net sales of Xepi ® under the Xepi LSA exceed $25,000,000, and (ii)

$4,000,000 upon the first occasion annual net sales of Xepi ® under the Xepi LSA exceed $50,000,000.

The maximum potential

milestone payments remaining under this agreement total $6,000,000.

These are both sales-based milestones.

There are no development milestones

within the agreement.

terms of the Xepi LSA also provide for us to purchase Xepi ® from Ferrer and pay royalties at a high single digit percentage

based on net sales.

Royalties are paid quarterly when the related sales occur.

There are no other performance obligations required for

royalties to be incurred.

Furthermore, while Ferrer is approval holder for Xepi ® , the administration of the NDA is managed

by Biofrontera Bioscience, a related party.

We are fully dependent on our collaboration with Ferrer for our supply of Xepi ® from their

sole supplier.

Xepi LSA will continue for the longer of (a) 12 years following the first commercial sale of Xepi ® or (b) 12 years from

the date of latest product to launch under the Xepi LSA, concluding in 2030.

However, the Xepi LSA will automatically terminate concurrently

with the termination of Ferrer’s license with Toyama Chemical Co., Ltd., also in 2030.

Ferrer covenants under the agreement to

make commercially reasonable efforts to extend its license agreement with Toyama.

Although recent developments with respect to the third-party

manufacturer that was providing our supply of Xepi ® have impacted the timing of sales expansion and improved market positioning,

we believe that Xepi ® has the potential to be another innovative product with a large market potential in our portfolio.

See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates

—Intangible Assets and Impairment Assessment ” in this Form 10-K.

the Xepi LSA, Biofrontera is required to obtain and maintain all “Marketing Authorizations and Regulatory Approvals” in Ferrer’s

name, as well as to obtain and maintain all other licenses and certificates required for the wholesale and/or retail sale of Xepi ®

in the United States.

Biofrontera must also participate in a “Joint Steering Committee,” which is intended, in part,

to ensure (among other things) that Biofrontera uses commercially reasonable efforts to market and sell Xepi ® in the United

This joint steering committee is required to meet at least once per year, unless agreed otherwise by the parties.

Any changes to the pricing of supply of Ameluz ®

or RhodoLED ® Lamps would require agreement by both contract parties.

Ameluz Licensor is responsible for obtaining and maintaining the rights to all FDA approvals (and any required maintenance thereafter)

needed for the Ameluz Licensor to manufacture Ameluz ® and/or the RhodoLED ® Lamps and/or for Biofrontera

to sell Ameluz ® and/or the RhodoLED ® Lamps in the United States.

Likewise, the Ameluz Licensor is

responsible to maintain a pharmacovigilance database and to respond appropriately to all relevant queries of any regulatory authority

pertaining to pharmacovigilance Biofrontera is required to provide reasonable support relating to any regulatory issues relating to pharmacovigilance

and/or product recalls.

Biofrontera is responsible for obtaining all state licenses or any other similar approvals required to market Ameluz ® and/or

the RhodoLED ® Lamps in the United States.

Biofrontera must also carry out all mandatory reporting responsibilities under

federal and state law with respect to compliance with the Prescription Drug Marketing Act, the Sunshine Act, or any other similar laws

and regulations.

Biofrontera is also responsible for all activities related to reimbursement and pricing of the products within the United

Biofrontera is required to use commercially reasonable efforts and resources to exploit the license and market Ameluz ®

and the RhodoLED ® Lamps in the United States.

product or lamps are not delivered in conformance with certain specifications of this Agreement and the Quality Agreement dated

November 1, 2016, between the Company and Biofrontera Pharma, and the Ameluz Licensor does not remedy its failure, then we

will have the right to organize manufacturing on our own, and step into contracts with the Ameluz Licensor’s manufacturers,

such that we will replace the Ameluz Licensor as a party to these contracts.

If we pursue this option, Ameluz Licensor must use its

best efforts to assist with the transferring of these manufacturing contracts without delay and at its own cost.

No Transfer Price

will be paid to the Ameluz Licensor thereafter for products or lamps that are manufactured by third parties.

and Industry Regulation

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require significant technical expertise and capital investment to ensure compliance.

Drug Development and Review

Cost containment efforts by governmental authorities and health care reform

continue to exert pressure on product pricing and market access.

Pricing pressure continues to be influenced by the power exerted through

entities negotiating on behalf of federal health care programs such as Medicare and Medicaid, as well as managed care programs, and commercial

insurance plans.

We are also seeing government-mandated pricing restrictions aimed at reducing prices and promoting generic drugs adding

increased competition and pricing pressure in the market.

Congress continues to consider and discuss legislation aimed at reducing

health care costs, including lowering the price of drugs and biologics.

States Drug Development and Review

Development Process

Information about the Drug Approval Process and Post-Marketing Requirements

system of new drug and biologics approval is a rigorous process.

United States system of new drug and biologics approval is a rigorous process.

The following general comments about the drug approval process

are relevant to the development activities undertaken by our Licensors.

are relevant to the development activities related to our products.

Investigational

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2 Clinical Trials:

In Phase 2 clinical trials, controlled studies of human patients with the targeted disease are conducted to assess

In Phase 2 clinical trials, controlled studies of human patients with the targeted disease/condition are conducted to assess

the drug’s effectiveness.

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3 Clinical Trials:

This Phase usually involves a larger number of patients with the targeted disease.

This Phase usually involves a larger number of patients with the targeted disease/condition.

Investigators (typically physicians)

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trials require the investment of substantial financial and personnel resources.

The commencement and completion of clinical trials may

be delayed by various factors, including scheduling conflicts with participating clinicians and clinical institutions, difficulties in

identifying and enrolling patients who meet trial eligibility criteria, failure of patients to complete the clinical trial, delays in

accumulating the required number of clinical events for data analysis, delay or failure to obtain the required approval to conduct a

clinical trial at a prospective site, and shortages of available drug supply.

Moreover, the outcome of a clinical trial is often uncertain.

There may be numerous unforeseen events during, or as a result of, the clinical trial process that could delay or prevent regulatory

In addition, the results of early-stage clinical trials do not necessarily predict the results of later-stage clinical trials.

Later-stage clinical trials may fail to demonstrate that a drug product is safe and effective despite having progressed through initial

clinical testing.

Clinical trial data results are susceptible to varying interpretations, and such data may not be sufficient to support

approval by the FDA.

The ability to commence and complete clinical trials may be delayed by many factors that are beyond our licensors

control, including:

The commencement and completion of clinical trials

may be delayed by various factors, including, without limitations, scheduling conflicts with participating clinicians and clinical

institutions, difficulties in identifying and enrolling patients who meet trial eligibility criteria, failure of patients to

complete the clinical trial, delays in accumulating the required number of clinical events for data analysis, delay or failure to

obtain the required approval to conduct a clinical trial at a prospective site, and shortages of available drug supply and clinicians.

the outcome of a clinical trial is often uncertain.

There may be numerous unforeseen events during, or as a result of, the clinical

trial process that could delay or prevent regulatory approval.

In addition, the results of early-stage clinical trials do not

necessarily predict the results of later-stage clinical trials.

Later-stage clinical trials may fail to demonstrate that a drug

product is safe and effective despite having progressed through initial clinical testing.

Clinical trial data results are

susceptible to varying interpretations, and such data may not be sufficient to support approval by the FDA.

The ability to commence

and complete clinical trials may be delayed by many factors that are beyond our control, including:

obtaining regulatory approval to commence a trial;

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conducted, or by the FDA or other regulatory authorities.

Such authorities may impose a suspension or termination of the clinical

trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or

clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting

in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, or failure to demonstrate a benefit from

using a drug.

Such authorities may impose a suspension or termination of the clinical trial

due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or clinical protocols,

inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a

clinical hold, unforeseen safety issues or adverse side effects, or failure to demonstrate a benefit from using a drug.

Post-Approval

Requirements for Approved Drugs

The FDA’s post-market surveillance programs monitor the safety of

drugs once they are approved.

of our licensed drug products that require FDA approvals are subject to continuing regulation by the FDA, including, among other things,

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and educational activities, and requirements for promotional activities involving the internet.

Although physicians may prescribe legally

available drugs for off-label uses, manufacturers may not market or promote such off-label uses.

Under the Second A&R Ameluz LSA,

these requirements are handled by both us and our Licensor.

Although physicians may prescribe legally available drugs for off-label uses,

manufacturers may not market or promote such off-label uses.

addition, quality control and manufacturing procedures must continue to conform to applicable manufacturing requirements after approval.

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and adherence of applicable local, state and federal statutes and regulations.

Safe Medical Devices Act

The Safe Medical Devices Act of 1990, as amended (“SMDA”),

amended the Federal Food, Drug, and Cosmetic Act to require medical device manufacturers and user facilities such as hospitals and ambulatory

surgical centers to report any adverse events associated with a medical device to the FDA.

It provides that FDA with two additional post-market

activities including monitoring of products after market clearance and device tracking for maintaining traceability of certain devices

to the user level.

The SMDA makes it mandatory for facilities, manufacturers, and importers to submit medical device reporting forms to

the FDA after becoming aware of a serious event associated with a device.

Manufacturers are required to submit baseline reports and reports

of deaths, serious injuries, and malfunctions associated with the device to the FDA.

and Abuse Laws

are subject to healthcare anti-fraud and abuse regulations that are enforced by the U.S.

federal government and the states in which we

are subject to healthcare anti-fraud and abuse regulations that are enforced by the United States federal government and the states in which we

conduct our business.

The laws that may affect our ability to operate include:

The laws that may affect our ability to operate include, without limitation:

federal healthcare programs’ Anti-Kickback Law;

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under one or more of such laws.

false claims and false statement laws, including the federal civil False Claims Act, prohibits, among other things, any person or entity

from knowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including Medicare and Medicaid,

claims for items or services, including drugs, that are false or fraudulent or not provided as claimed.

Entities can be held liable under

these laws if they are deemed to “cause” the submission of false or fraudulent claims by, for example, providing inaccurate

billing or coding information to customers, promoting a product off-label, or for providing medically unnecessary services or items.

In addition, activities relating to the sale and marketing of products are subject to scrutiny under this law.

Penalties for the federal

civil False Claims Act violations may include up to three times the actual damages sustained by the government, plus mandatory civil

penalties for each separate false claim, the potential for exclusion from participation in federal health care programs, and, although

the federal civil False Claims Act is a civil statute, False Claims Act violations may also implicate various federal criminal statutes.

false claims and false statement laws, including the federal civil False Claims Act, prohibits, among other things, any person or

entity from knowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including Medicare

and Medicaid, claims for items or services, including drugs, that are false or fraudulent or not provided as claimed.

be held liable under these laws if they are deemed to “cause” the submission of false or fraudulent claims by, for

example, providing inaccurate billing or coding information to customers, promoting a product off-label, or for providing medically

unnecessary services or items.

In addition, activities relating to the sale and marketing of products are subject to scrutiny under

Penalties for the federal civil False Claims Act violations may include up to three times the actual damages sustained by

the government, (commonly referred to as treble damages), plus mandatory civil penalties for each separate false claim, the

potential for exclusion from participation in federal health care programs, and, although the federal civil False Claims Act is a

civil statute, False Claims Act violations may also implicate various federal criminal statutes.

Physician Payments Sunshine Act

The Physician Payments Sunshine Act is a national disclosure program created

by the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 that aims to

increase transparency in payments from medical device manufacturers and pharmaceutical companies to physicians and teaching hospitals.

In 2018, the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act expanded these

covered recipients to include physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists,

anesthesiologist assistants and certified nurse midwives.

Common payments in the industry to physicians and other “covered recipients”

can include consulting fees, honoraria, fees for training and education, research fees, gifts, vacations, food and beverage, travel and

lodging, charitable contributions, grants, ownership and investment interests, royalty or license fees, and compensation for serving as

faculty or a speaker.

Inflation Reduction Act (“IRA”)

The IRA, passed by Congress in 2022, makes significant

changes to how drugs are covered and paid for under the Medicare Program.

Creates financial penalties for drugs whose prices rise faster

than the rate of inflation, makes changes to the Medicare Part D program to require manufacturers to bear more liability for certain drug

benefits, which has taken effect in 2025, and includes government price setting for certain Medicare Part D drugs starting in 2026 and

Medicare Part B drugs starting in 2028.

340B Drug Discount Program and legislative changes

The 340B drug discount program (part of the Public Health Service Act)

requires pharmaceutical manufacturers to sell certain outpatient drugs at significantly reduced prices to eligible healthcare providers

known as “covered entities” that serve a large number of low-income patients.

Participation in this program by manufacturers

is often required in exchange for access to the Medicaid market.

Privacy and Security Laws

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the economic stimulus package, included sweeping expansion of HIPAA’s privacy and security standards called the Health Information

Technology for Economic and Clinical Health Act, or HITECH, which became effective on February 17, 2010.

Among other things, the new

law makes HIPAA’s privacy and security standards directly applicable to “business associates,” independent contractors

Technology for Economic and Clinical Health Act, or HITECH.

Among other things, the HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates,” independent contractors

or agents of covered entities that receive or obtain protected health information in connection with providing a service on behalf of

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also maintain a website at https://www.biofrontera-us.com .

The Information on our website is not incorporated by reference into this

Form 10-K and does not constitute a part of this Form 10-K.

We make available, free of charge, on our website our annual report on Form

10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section

13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such with, or furnish it to, the SEC.

The Information on our website is not incorporated by reference into

this Form 10-K and does not constitute a part of this Form 10-K.

We make available, free of charge, on our website our annual report

on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant

to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such with, or furnish it

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business