Biofrontera(BFRI -3.01%) reported fiscal second quarter results for the period ended June 30, 2025, with total revenues rising to $9 million from $7.8 million a year earlier, representing a 15% year-over-year increase. The company highlighted transformative progress toward operational independence, margin expansion, and late-stage clinical advances that could expand its addressable market. The following insights examine margin transformation, commercial execution, and long-term growth drivers for investors.
Margin expansion accelerates as Biofrontera shifts to royalty model
Cost of revenues (GAAP) declined by 42% year-over-year in the fiscal second quarter, driven by a structural shift from a 25%-35% transfer price to a 12% royalty as part of the restructuring with Biofrontera AG. This change, effective for the 2025 fiscal year to date, materially improves unit economics as Ameluz volume reaches all-time highs and provides a buffer against potential tariff impacts as manufacturing transitions in-house.
"Shifting to the royalty model now will not only dramatically decrease our cost of sales further but also significantly delay the time of the payments. The importance of this for our future was recognized by our investors, who financed this transformation with the required $11 million."
-- Hermann Luebbert, CEO, Chairman, and Founder
This cost structure evolution positions the company for sustainable gross margin improvement and enhances financial resilience by aligning royalties with realized U.S. revenues.
Commercial execution drives record Ameluz sales and device placement
Ameluz unit sales volume increased by 9.5% in fiscal 2025 over the prior year, surpassing 50,000 tubes sold in the first half, supported by new sales strategies such as revised hiring criteria and enhanced data analytics. Lamp placements, a key leading indicator, reached an all-time high installed base of more than 700 units as of the fiscal second quarter, including 40 XL RhodoLED lamps placed in 2025 and initial entries into new physician offices nationwide.
"For the first time, we sold more than 50,000 tubes of Ameluz in the first half of the year. We transformed our customer segmentation, focused our strategy, and used more extensive data analysis to support our sales team effectively. Furthermore, we have changed the hiring approach for our sales team, giving attitudinal factors and emotional intelligence priority over dermatology experience."
-- Hermann Luebbert, CEO, Chairman, and Founder
This signals deepening market penetration and improved commercial execution, which are critical for long-term revenue growth.
Pipeline advances aim to expand addressable U.S. dermatology market
The company completed enrollment in a Phase III trial for Ameluz in actinic keratosis (AK) on the trunk, neck, and extremities during the reporting period, and finalized Phase III plus one-year follow-up for superficial basal cell carcinoma, two major label expansion efforts. Ameluz also received patent extension coverage through December 2043, and the Centers for Medicare and Medicaid Services (CMS) now lists reimbursement for up to three tubes per treatment, effective July 1, 2025, enabling broader usage.
"During this reporting period (Q2 FY2025), we completed enrollment in a Phase III study to demonstrate the efficacy and safety of Ameluz for treating actinic keratosis on the trunk, neck, and extremities. Once the results become available, we plan to submit them to the FDA to expand our label and allow doctors to treat AK on the entire body. In parallel, we aim to include new indications into our label. The first one is going to be superficial basal cell carcinoma. Our Phase III trial for this indication is completed, including the one-year follow-up data that the FDA has requested for this tumor indication."
-- Hermann Luebbert, CEO, Chairman, and Founder
If approved, these label expansions would allow the company to compete beyond the face and scalp, accessing an estimated two-thirds more U.S. AK treatment volume and entering new oncology markets where no photodynamic therapy drug is currently approved.
Looking Ahead
Management indicated that top-line clinical data readouts for both actinic keratosis (trunk, neck, extremities) and moderate-to-severe acne vulgaris are expected in the fourth quarter of 2025. The FDA submission for superficial basal cell carcinoma is planned for the second half of 2025, with patent protection for Ameluz newly extended through December 2043. No further price increases are planned for Ameluz in fiscal 2025, and selling, general, and administrative expenses are expected to normalize as legal expenses related to patent litigation decline in the second half of the year.
