U.S. stocks edge higher; solid earnings season continues
On Monday, Benchmark analysts reiterated their Buy rating and $7.00 price target for Biofrontera stock (NASDAQ:BFRI), which currently trades at a notably low revenue multiple according to InvestingPro data. The firm’s stance remains unchanged despite the company’s fourth-quarter revenue falling short of expectations. Biofrontera reported a revenue of $12.6 million, which did not meet Benchmark’s $13.9 million projection or the $14.6 million market consensus. The company’s full-year revenue reached $37.3 million, marking a 9.5% year-over-year increase but still below the three-year compound annual growth rate (CAGR) of 15.5%. The stock has experienced significant pressure, declining nearly 15% in the past week and trading well below its 52-week high of $2.43.
Biofrontera’s management is optimistic about the future, expecting growth to reaccelerate in 2025 due to new labeling that permits a higher dosage of Ameluz, increasing from one tube to three tubes per treatment. Further revenue growth acceleration is anticipated with the introduction of new indications for Ameluz. The treatment for superficial Basal Cell Carcinoma (sBCC) is expected to hit the market in 2026, followed by Actinic Keratoses (AK) of the extremities in 2027. InvestingPro analysis shows the company maintains a healthy current ratio of 1.72 and holds more cash than debt on its balance sheet, though it’s currently burning through cash reserves rapidly.
The company achieved a significant milestone in October 2024, announcing preliminary results from a Phase 3 study of Ameluz in treating sBCC. The results were highly statistically significant for all primary and secondary endpoints. Biofrontera plans to file a supplemental New Drug Application (sNDA) for sBCC treatment in the third quarter of 2025, with approval expected by mid-2026.
Benchmark’s revised revenue estimate for Biofrontera in 2025 is now $43.1 million, a decrease from the previous $46 million forecast. This new estimate is based on the assumption that Biofrontera will return to the 15.5% growth rate. Despite the adjustment in revenue expectations, Benchmark has made no changes to its stock rating or price target for Biofrontera.
In other recent news, Biofrontera Inc. reported a 9.5% increase in total revenues for 2024, reaching $37.3 million, with a notable 18.5% year-over-year increase in Q4 revenues. Despite this growth, the company reported a net loss of $17.8 million for the year but improved its cash position and adjusted EBITDA. Biofrontera’s cash reserves rose to $5.9 million by the end of 2024. In terms of strategic developments, Biofrontera achieved FDA approval for using up to three tubes of its product, Ameluz, per treatment, and made significant progress in its Phase III study for treating superficial basal cell carcinoma. The company also renegotiated agreements with its former parent company, reducing the transfer price of Ameluz, which is expected to positively impact gross margins in 2025. Additionally, the analyst firm Roth Capital noted a 2% increase in Ameluz unit growth in Q4 2024. Biofrontera’s ongoing efforts include expanding the label for Ameluz and focusing on becoming cash flow positive in 2025.
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