Hello everyone, and thank you all for joining us during the Lytham Partners Fall 2025 Investor Conference. My name is Ben Shamsian, Vice President of Lytham Partners, and today we welcome Biofrontera . Fred Leffler, CFO, will be presenting, followed by a brief fireside chat. Biofrontera trades under BFRI on the NASDAQ. If anyone would like to set up a meeting with the company, please email me at shamsian@lythampartners.com. S-H-A-M-S-I-A-N at lythampartners dot com. With that, let's get started. Fred, welcome, and I'll turn the floor over to you for your presentation.
Thank you, Ben, and great to be here and presenting. As Ben mentioned, I'm Fred Leffler, CFO of Biofrontera , and would like to introduce the company and go through what we do and some recent financial performance and where we're going from here. To quickly introduce the company, Biofrontera specializes in photodynamic therapy, and we market Ameluz and RhodoLED lamps. It's a combination product that treats actinic keratosis, or I'll refer to them as AKs, which can progress to cancer and become more of an issue. This is also the number one indication for dermatologist visits, AKs are, for those 45 and over. Additionally, we're running trials to extend the Ameluz platform into other dermatologic and oncologic indications. We have Ameluz PDT, it's FDA approved, it's on the market, we have patent protection until 2043, and we have very good established efficacy and reimbursement with our doctors.
We have a strong pipeline for label expansion. We have ongoing clinical trials for non-melanoma skin cancers as well as acne, and I'll note that that's one of the top indications for those visiting the dermatologists that are under 45. We want to get sort of the whole breadth there. In the AK space, we have an estimated $500 million of market opportunity, which I'll go into more a little bit in a moment. We have more than 750 devices in the field. As I mentioned, it's a light and drug combination, so we continue to place those lights and get doctors in the RhodoLED and Ameluz ecosystem. Our 2024 revenue was $37.3 million. Our long-term gross margin is expected to be 80%- 85%, and we've gone through some transactions in the recent past that I'll touch on as well.
We signed a binding term sheet in Q2 of 2025 to take over all of the IP and NDA rights needed for the U.S. market. Historically, we were licensing Ameluz and the RhodoLED series lights. This transaction, which is still in progress, will make us a vertically integrated U.S. pharmaceutical company. We will take care of all of the manufacturing, commercial, as we've been doing since 2016, and continue with R&D, which we have taken over as of mid-2024. The benefit here is shown on the right-hand side of this slide. Historically, under our previous LSA agreement, our gross margins were in the high 40s or low 50s. After we complete this, we'll have margins closer to a normal spec pharma company of 80%- 85%. As I mentioned, we had $37.3 million in revenue in 2024. We launched it very late in 2016, and we've been generally growing revenues.
This is an in-office treatment, so COVID, not only is it in-office, but it's also targeted for older populations, so COVID and the shutdowns and things sort of paused the growth, but since then, we've been growing by about 19% CAGR and expect the growth to continue in 2025 and beyond. I wanted to briefly touch on how photodynamic therapy, or PDT, works. The process can be used for multiple indications. I'll just go over what we're doing for AK, but it's generally the same for anything else, whether it's non-melanoma skin cancers or disinfecting wound healing and things like this. Ameluz is applied to the skin. There is an incubation period. The active ingredient in Ameluz is converted to a light-sensitive substance called protoporphyrin IX, and it is metabolized much faster in damaged cells than in the healthy cells.
This builds up in the damaged cells, it's very selective. The red light is activated, as you can see on the right-hand side here, and depending on which light is used, a patient is under the light for 10 to about 13.5 minutes. This activates the protoporphyrin IX, and it destroys the cells as the red light hits that active ingredient. It looks like a bad sunburn, I would say. It can range, but sort of the worst case will be a bad sunburn, and the patient's skin will begin to heal, and they'll be all healed up after a few days. Double-clicking on AKs a little bit more, as I mentioned, that is our indication right now. We are planning on adding more indications, which I'll get into in just a moment.
Field therapy, we are the only drug that has field therapy or PDT drug that has field therapy in the label, which means you can treat visible and sort of the lesions that are under the skin or "invisible." Cryotherapy is the most traditional and common form of treatment, but it does not allow for field therapy, and it generally is used just to treat the big crusty lesions. You can see an example of that down on the right-hand side here in the before treatment. AKs can turn into squamous cell carcinoma or other non-melanoma skin cancers, and that's why it's really important to treat these as they're coming up. Here's a before and after, after they go through the treatment cycle that I just mentioned. The skin looks very healthy. You can see where there was some scarring, some sort of white spots.
That's from cryotherapy treatments, and the skin condition is actually improved after the photodynamic therapy with Ameluz. Okay, I want to touch on the efficacy because we are the best-in-class product. We have 91% clearance after one to two treatments. This is significantly better than other options that are out on the market. I wanted to touch on the 63% down here. This is also a very good outcome, and those who have the clearance of 91% are clear 12 months post the Ameluz treatment. Now, this is a chronic disease once you have it, and you'll always have to come back, but these outcomes are much better than some of the cryotherapy or topical solutions or treatments that are out there right now.
Just to click on the technology, the ALA is a pretty unstable or not a stable molecule, and this nanoemulsion technology actually holds it in a water soluble state, and we have better absorption into the skin compared to some of the other treatments out there, which allows us to continue and do other things such as treat cancers, acne, and whatnot because we have better penetration through the skin. The market is quite large. As I mentioned, AKs are the number one indication at dermatologists for those 45 and over. We believe that the total addressable market is about $4 billion, but we're focusing on a $5 million-$ 520 million market that is very well suited to field therapy. That is the current photo PDT market plus the cryo of 14 lesions or more. Just a note on that.
If someone's coming in and they have 10 lesions on their scalp, most likely if you're hitting those crusty things, there's damaged skin in between that, and the dermatologist should be doing a field therapy to treat all of that. We're pursuing that market, and we believe all in that's about $520 million. We have good reimbursement. We have an established profile and a J-code for Ameluz. The current price is $363. Doctors are generally reimbursed at the $363 or maybe if they buy in bulk and get discounts from us, they can make a little bit on the drug, but doctors are primarily reimbursed and make money on the CPT code. Our CPT code or the one our drug has debridement in it. Every time that a qualified healthcare professional, doctor, PA, etc., performs the PDT treatment, they get an average of $262 per treatment.
The cryo 14 lesion treatments is $100 less at $162. Just a note, if a non-qualified, so a nurse or someone else does this, the doctor or the office can still make $128. We have strong intellectual property. The nanoemulsion technology that I mentioned is patented until February of 2028, but we have a new formulation that Ameluz, an Ameluz formulation without propylene glycol, and that has been filed and granted and extends patent protection to 2043. We have a pretty long life of patent protection for our drug and device combination. To get into indications, we are continuing clinical research and R&D to expand our label. We have conventional PDT . Our competitor has that as well. We can treat the face and scalp. Our competitor can do that as well. Where we need to get parity is on the extremities, neck, and trunk.
We have completed phase three recruiting, and I'll go into when we expect that to be in our label in a moment, but that'll sort of give us parity with our PDT competitor out in the field. We have field-directed treatment. Our competitor does not, and we are preparing for an FDA submission for SPCC. Next year we will be able to say that we treat cancers, and we are wrapping up acne recruiting. We want to continue pushing that and expanding the treatment potential of Ameluz to those 45 and younger, which, as I mentioned, acne is the number one indication for that population. To wrap up, we want to continue to drive growth, and that's going to come in a few ways. The three most important are the first three. We want to optimize Ameluz PDT . We've obtained the patent's NDA, which strengthens the company.
We are going to continue to convert new customers to Ameluz from other therapies, as I mentioned. We want to maximize existing pull-through and make sure that's integrated into the dermatology practice as a whole, and we've continued to launch a RhodoLED XL lamp. That's a bigger lamp, so when we do get the trunk and extremity indication, there's a bigger light source that can cover like a back or a chest or both arms, etc. We're continuing to improve salesforce productivity. This is a buy-and-bill drug, and it's a little bit different of a sale. It's not just going in and asking doctors to write prescriptions.
It's really integrating the PDT into the practice, and that's ensuring that there's field reimbursement support, training, so that our reps know how to integrate this into the practice, get scheduling done, and make sure the offices are running smoothly so they don't have any issues with the therapy. I just wanted to go into a few near-term growth drivers. Late 2025 or early 2026, we expect to have clinical trial phase II data for our acne trial completed. Fall of 2026 is when we expect the PDUFA date for the basal cell carcinoma indication. We're estimating we submit that to the FDA at the end of this year. By mid-2027, we expect to have the PDUFA date for the trunk and extremities indication, and we're working on that now, and submission is estimated in late Q2 or early Q3 of 2026.
As usual, we're looking for inorganic growth opportunities, any late-stage or commercial products that complement support PDT and our buy-and-bill structure. There's limited opportunities there, but we're always on the lookout. As I mentioned, revenue has progressed steadily over the past several years. We had $37.3 million of revenue in 2024. Year-over-year, year-to-date revenue was $17.6 million in 2025 for Q2 versus $15.8 million. I touched on the gross margin. As we sort of burn through the last bit of inventory that is under the old LSA agreement, we're going to continue to see this ticking up into the low to mid-80% for gross margin. You can see that in our year-to-date gross margin at 71% Q2 year-to-date 2025 versus 45% in 2024. Adjusted EBITDA generally continues to improve.
I will note the year-over-year adjusted EBITDA for 2025 is about flat with last year, and that is due to some one-time legal expenses that we incurred in the first half of 2025 that are winding down, and we don't expect to see such expenses next year going forward. Just to touch on our cap table, we have about 11.1 million shares outstanding, and we have several series of preferred shares. If these are all converted, which they theoretically could be at any time, there would be 41.6 million shares outstanding. If the convertible note that we have is converted, that would be about 5.7 million shares. For a total of sort of a fully converted number of 47.3 million shares, at our current share price of about $0.84, that's a market cap of approximately $40 million if everything was converted today.
We have $3.5 million of cash on hand, and as I mentioned, we have some long-term convertible debt, and that is $4.3 million. We have a strong leadership team. Professor Hermann Luebbert founded Biofrontera and has grown the company. He is currently the CEO, and he heads up our clinical trials as well as overseeing all operations of the company. George Jones is our Chief Commercial Officer. He joined in Q3 of this year, and he is going to help continue to look at different channels and bring his expertise to make sure we're launching our new indications appropriately, we're in the right channels, whether adding a pharmacy channel is needed, and help to continue the commercial team's efficiency. I'm Fred, as I mentioned. Sam Widdicombe is our VP of Corporate Strategy and Key Accounts.
She focuses on the big PE firms and larger practices as we're continuing to see consolidation throughout the derm office environment. Jon is our VP of Scientific and Medical Affairs, and he also manages our medical liaison team who works with our customers as needed and helps out with clinical trials and the site work in the U.S. With that overview of the company and our recent performance and leadership team, I'll turn it back over to you, Ben, to wrap up or ask any questions you might have.
All right. Great. Thanks. Just that we have a little bit of time, I wanted to ask, can you expand a little bit more on the competitive landscape and sort of the advantages that you guys bring in?
Yes. Let me go back to a slide here just to help with that. The competitive landscape, as I mentioned, cryo is the number one indication, but it's certainly, in our viewpoint, not the most effective indication. Additionally, there are topicals, so those are prescriptions, and those are prescribed and then put on at home. Many of the topicals are either, one, painful, or two, they can make your skin look pretty bad after a while, and you need to use these for weeks and weeks and weeks. There are large compliance issues with the topicals. Cryo, while there's not compliance issues, it's not treating the lesions that are aside from those big ones that you saw earlier. PDT is hands down the best. There is another, we have a competitor, Levulan, but they are only indicated for spot treatment.
We are the only PDT drug that is formulated for field treatment, and as I mentioned, our water soluble technology will allow us to move into other treatments, which our competitor will not be able to move into because it's an alcohol-based and blue light therapy that just, one, doesn't penetrate. The drug doesn't penetrate as well into the skin, and two, the blue light doesn't penetrate as deep as red light.
Okay. Let's talk about just a couple of catalysts over the next 12 to 18 months. Label expansion, new indications, what can we see here?
Yeah. I think we're going to continue to push AKs and develop the AK market, but we're really excited about adding basal cell carcinoma to the label because for a few reasons. One, we'll be able to say we treat cancer. Two, it'll make the drug or Ameluz more, it'll be a more optimal therapy to treat that because dermatologists will know that even if there's an AK there, if there is BCC around it, they can do the field therapy and know that they're getting both the AK and the BCC. Finally, it'll help with continuing to move into residency programs and other teaching hospitals to train the next generation of dermatologists on the benefits of PDT and how it works.
Finally, the mid-2027 trunk and extremities, that's going to be the last pin against our competitor Levulan. Once we have that, we will have essentially pulled away and have not only a more effective drug, but we'll have a much wider label as well.
Okay. Finally, let's talk about the balance sheet and how you see your capital needs in the near and medium term.
Yeah. With the deal that I mentioned earlier that came up with an $11 million financing, $8.5 million has been issued or received, and another $2.5 million is expected upon the execution of the transfer agreement and finalization of all the legal documents and things like this. With modest growth that we have seen, we expect to be break-even in 2026 and certainly in 2027 as we get the trunk and extremity indication into our label. I will note that PDT is generally done in the winter months because you do have to stay out of the sun for a few days.
We have a bit of a cyclical revenue pattern where Q4 and Q1 are our best quarters generally, and it dies off a little bit during the summertime because people are traveling, and sometimes people don't want to just stay out of the sun for three or four days or whatever the doctor recommends. We will be break-even in 2026 over the whole year with our current balance sheet and revenue targets.
Thank you, Fred, and thank you everyone for watching. If you have any questions or would like to schedule a meeting with Biofrontera, please send me an email at shamsian@lithuanpartners.com.