Biofrontera divests Xepi cream license to Pelthos for up to $10 million

WOBURN, Mass. - Biofrontera Inc. (NASDAQ:BFRI) announced Friday it has sold its U.S. license for Xepi (ozenoxacin) Cream to Pelthos Therapeutics Inc. in a deal worth up to $10 million, a significant transaction for the company which has a current market capitalization of just $12.38 million.

The transaction includes $3 million paid at closing, $1 million upon commercial product availability, and potential milestone payments of up to $6 million tied to annual revenue achievements.

Biofrontera will receive $3 million each when Xepi reaches $10 million and $15 million in annual net revenues within the U.S., Puerto Rico and the U.S. Virgin Islands.

"This divestiture further strengthens our balance sheet subsequent to the recent restructuring of our agreement with Biofrontera AG and is expected to fund the Company to profitability," said Dr. Hermann Luebbert, Chief Executive Officer and Chairman of Biofrontera.According to InvestingPro data, Biofrontera currently holds more cash than debt on its balance sheet, though the company has been quickly burning through cash. With analysts not anticipating profitability this year, this transaction could prove crucial for the company's financial stability. InvestingPro's Fair Value assessment suggests the stock may be slightly undervalued at its current price.

Xepi is a topical non-fluorinated quinolone antibiotic approved by the FDA for treating impetigo, a common skin infection caused by Staphylococcus aureus or Streptococcus pyogenes. According to the company, no antibiotic resistance against Xepi is currently known.

The company stated that proceeds from the transaction will support growth of its commercial photodynamic therapy platform and expansion of Ameluz into additional indications. Biofrontera specializes in photodynamic therapy and currently markets Ameluz with the RhodoLED lamp series for the treatment of actinic keratosis.

The announcement follows what the company described as a "strong reduction" in the earnout payable for Ameluz and a related capital investment from healthcare funds.

This information is based on a press release statement from Biofrontera Inc.

In other recent news, Biofrontera Inc. has completed the acquisition of all U.S. rights to its photodynamic therapy products, Ameluz and RhodoLED, from its former parent company, Biofrontera AG. This transaction includes the New Drug Application, manufacturing rights, intellectual property, and related personnel. Under the new agreement, Biofrontera will pay an earnout fee based on U.S. revenues, with 12% on net sales up to $65 million and 15% on sales exceeding that amount. Additionally, Biofrontera stockholders approved proposals for a reverse stock split and preferred share conversions at a recent special meeting. This amendment allows the company to maintain or regain compliance with Nasdaq listing requirements. In terms of product development, Biofrontera announced the completion of a Phase 2b clinical trial for Ameluz in treating moderate to severe acne vulgaris. Benchmark has reiterated its Buy rating on Biofrontera, maintaining a $3.00 price target, while accounting for potential tariff impacts. The company is also working to qualify a second contract manufacturing organization in Germany.

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