Biofrontera Inc. Restructures Deal with Biofrontera AG Amid Growth Plans
Biofrontera Inc. Restructures Alignment with Biofrontera AG
Biofrontera Inc. has made a pivotal move in its business landscape by signing an agreement to acquire all US assets associated with its core products, Ameluz and RhodoLED, from Biofrontera AG. This strategic acquisition includes invaluable assets such as the New Drug Application (NDA) and related patents, allowing Biofrontera Inc. to solidify its presence in the dermatological market.
Significant Changes in Royalty Agreements
The deal also revolutionizes the financial arrangements between the two organizations. Under the newly established agreement, the royalty rate Biofrontera Inc. will pay has been significantly lowered, moving from a percentage range of 25% to 35% of net sales down to 12% for years when revenue is below $65 million, and 15% when it exceeds that threshold. This reduction is set to facilitate the company in reaching profitability sooner as it navigates the competitive landscape.
Funding to Support Growth
This transaction is further bolstered by an $11 million financing round led by existing investors, Rosalind Advisors and AIGH Capital Management LLC. This funding is designed not only to cover the acquisition costs but also to assist Biofrontera Inc. on its path toward financial stability and growth in the US market.
Shifting Market Responsibilities
In this new chapter, Biofrontera Inc. will take on the complete responsibility for manufacturing Ameluz and the RhodoLED lamp series specifically for the US market. This shift allows Biofrontera Inc. to have full control over the entire operational process, ensuring that they can respond more swiftly to market demands and streamline efficiencies.
Corporate Statement and Forward Strategy
Dr. Hermann Luebbert, President and CEO of Biofrontera Inc., expressed the significance of this acquisition, stating, "This acquisition provides full control and accountability for Ameluz and RhodoLED's success in the US, enabling us to make more agile commercial and operational decisions. By transitioning from a transfer pricing model to a royalty-based framework, we expect a faster route to breakeven and enhanced profitability toward the future."
The agreement also includes a post-money equity stake of 10% in Biofrontera Inc. for Biofrontera AG, which is instrumental in ensuring that both parties have aligned interests as they move forward.
Investment Breakdown and Future Plans
Biofrontera Inc. has structured the investment capital into two tranches for better management. The first tranche of $8.5 million will be accessible immediately with the signing of the royalty agreement. The second tranche, amounting to $2.5 million, is slated for funding upon the completion of a more detailed asset transfer agreement expected later within the year.
Unlocking the Potential of Ameluz
Industry experts, including Dr. Gil Aharon of Rosalind Advisors, have noted that Ameluz presents untapped potential in the US market. The new structure creates necessary clarity and alignment, fostering confidence that Biofrontera Inc. can seize this opportunity and initiate significant growth.
About Biofrontera Inc.
Founded as a biopharmaceutical entity, Biofrontera Inc. is dedicated to addressing dermatological conditions through innovative treatments rooted in photodynamic therapy (PDT). The company's flagship products, Ameluz and RhodoLED, together provide a unique approach to treating actinic keratosis and are part of ongoing clinical trials aimed at extending their application for various skin conditions. As the company moves forward, it remains poised to influence the market positively and expand its product offerings.
Frequently Asked Questions
What did Biofrontera Inc. acquire from Biofrontera AG?
Biofrontera Inc. acquired all US assets related to Ameluz and RhodoLED, including the New Drug Application and associated patents.
How much was the financing for this acquisition?
The acquisition was backed by an $11 million investment led by Rosalind Advisors and AIGH Capital Management LLC.
What changes have occurred regarding the royalty payments?
The royalty payments have been adjusted to 12% for revenue below $65 million and 15% for revenue exceeding that threshold, down from previous rates of 25% to 35%.
What responsibilities did Biofrontera Inc. take over?
Biofrontera Inc. now manages the manufacturing, regulatory compliance, quality control, and commercial responsibilities for its products in the US market.
What are Biofrontera Inc.'s future plans?
The company aims to achieve profitability and is working on FDA submissions for the treatment of superficial basal cell carcinoma, in addition to expanding the use of Ameluz in the US market.
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