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Investing.com - Biofrontera Inc. (NASDAQ:BFRI), a pharmaceutical company with $38 million in trailing twelve-month revenue and a market capitalization of $6.72 million, announced a favorable restructuring of its agreement with Biofrontera AG (ETR:B8FKn) and completed an $11 million financing agreement with existing investors. The stock has shown strong momentum, gaining 11% in the past week.
The restructuring will allow Biofrontera Inc. to acquire all U.S. assets related to Ameluz and take over U.S. manufacturing, regulatory, quality management, and pharmacovigilance responsibilities.
As part of the agreement, Biofrontera AG will receive a 10% post-money equity stake in Biofrontera Inc., aligning long-term interests between the two companies.
The deal changes the financial arrangement from transfer pricing to a royalty-based agreement, reducing the effective royalty rate to 12% of net sales (15% on revenue greater than $65 million), down from the previous 25-35% range.
For the financing component, Biofrontera Inc. expects to receive $8.5 million upon signing the new royalty agreement and an additional $2.5 million upon finalizing a detailed asset transfer program, with management indicating these actions should help the company reach profitability. While the company maintains a healthy gross margin of 53.26% and a current ratio of 1.4, InvestingPro analysis reveals additional key metrics and insights available to subscribers, including 8 more ProTips that could help evaluate this restructuring’s potential impact.
In other recent news, Biofrontera Inc. reported a 9% increase in Q1 2025 revenues, reaching $8.6 million, though this fell short of Benchmark’s projection of $10.6 million. The company also announced a patent extension for its propylene glycol-free Ameluz formulation, which will now be protected until 2043, potentially reducing allergic reactions for some patients. In a strategic move, Biofrontera is in talks with its parent company, Biofrontera AG, regarding a possible merger or adjustments to their existing agreements, which could impact rights and obligations between the two entities. Analyst firm Benchmark recently cut Biofrontera’s stock price target to $2.75 from $7.00, while maintaining a Buy rating, citing the company’s revenue shortfall. Additionally, Biofrontera revised its Proxy Statement to clarify stockholder voting implications, encouraging shareholders to review the updates. The company aims to expand the use of Ameluz for treating superficial Basal Cell Carcinoma and Actinic Keratoses on extremities, with market introductions planned for 2026 and 2027. Biofrontera’s management remains optimistic about achieving record revenues in 2025, supported by new product labeling and strategic cost management.
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