Biofrontera has entered into a securities purchase agreement with healthcare-focused institutional investors led by Rosalind Advisors.
The Company raised financing of $8M with an additional $8M tied to milestones for aggregate proceeds of $16M gross priced at market per Nasdaq rules.
The stock soared with the announcement, according to media reports.
This private placement is expected to close on or about February 21, 2024.
Biofrontera intends to use the upfront net proceeds to fund the Company’s general business operations and ongoing activities related to expediting the development and approval of additional indications for the Company’s lead product Ameluz. The product is currently approved in conjunction with the BF-RhodoLED lamp series for the treatment of mild to moderate actinic keratosis on the face and scalp (AK). The Company agreed to appoint up to two directors nominated by the lead investor to the board of directors of the Company.
In related news, Biofrontera AG announced a significant restructuring of its agreements with its former parent company, Biofrontera AG. With immediate effect, the transfer price of Ameluz will be reduced 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 U.S Food and Drug Administration (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.
Additionally, effective June 1, the Company will take control of all clinical trials with Ameluz in the US. The reduced LSA transfer price will allow the Company to finance such R&D activities and continue our commercial growth trajectory.
“This amendment provides significant value in both the short and long term. In the short term, we will be paying half of what we had paid in the past for product. In the long term, controlling US clinical trials will enable us to better manage costs and ensure efficiency, which we believe will lead to new indications in the label and increased revenue sooner,” says Hermann Luebbert, Chief Executive Officer and Chairman of Biofrontera Inc., in a news release.
“We believe that the renegotiated terms along with the capital committed in our simultaneous financing accelerate and could be sufficient for the company achieving profitability in 2025. This will be further supported by the potential label change of Ameluz for the use of up to three tubes per treatment currently under review by the FDA with a user fee goal of October 4, 2024.”
