Biofrontera (NASDAQ:BFRI) reported higher first-quarter 2026 product revenue and improved gross margins as management said the company began to see the full impact of a strategic transaction that reshaped its cost structure and U.S. rights to its core dermatology products.
The company posted product revenue of $10.1 million for the quarter ended March 31, 2026, up about 17% from $8.6 million in the prior-year period. Chief Executive Officer and Chairman Hermann Luebbert said the quarter marked “the first full quarter reflecting our new cost structure” following the company’s transaction with Biofrontera AG.
Revenue Growth Driven by Ameluz Volume and Pricing
Chief Commercial Officer George Jones said first-quarter revenue growth was primarily driven by approximately 16% growth in Ameluz unit volume, along with a price increase implemented in the fourth quarter of 2025. Ameluz unit volume rose to approximately 29,000 tubes in the first quarter from about 25,000 tubes a year earlier.
Jones said the company’s commercial strategy is focused on increased accountability, refined customer segmentation and data-driven targeting assisted by artificial intelligence. He also cited increased in-person sales activity and lower sales force turnover as contributors to the quarter’s performance.
During the quarter, Biofrontera shipped approximately 32 RhodoLED lamps, increasing its installed base to approximately 773 lamps across 709 dermatology offices as of March 31. Jones said the company also began the full rollout of an inside sales program that was piloted in the fourth quarter of 2025 to cover vacant territories, white space and smaller accounts.
Gross Margin Expands Under New Cost Structure
Chief Financial Officer Fred Leffler said cost of revenues decreased by about 40% year over year, falling to $1.8 million from $3.1 million. The improvement reflected the company’s new earn-out agreement, which replaced a prior transfer pricing model.
Under the new structure, Biofrontera pays 12% of net sales when annual U.S. Ameluz revenue is at or below $65 million and 15% when it exceeds that level. The prior transfer pricing model was 25% to 35% of revenue, according to Luebbert.
Biofrontera recognized $1.2 million of earn-out expense during the quarter. Gross margin on product sales improved to approximately 80%, compared with 62% in the first quarter of 2025. Leffler said the company is tracking toward its longer-term gross margin target of 80% to 85%.
Total operating expenses were $14.4 million, compared with $13.1 million a year earlier. Excluding cost of revenues, operating expenses were $12.3 million, up from $9.9 million. Selling, general and administrative expenses increased to $11.0 million from $8.7 million, driven by higher sales activity, legal expenses tied to ongoing patent-related claims and manufacturing-related costs assumed in connection with the strategic transaction.
Research and development expenses declined to $0.9 million from $1.2 million, which Leffler attributed primarily to certain clinical trials reaching substantial completion during the quarter.
Net Loss Widens, Adjusted EBITDA Improves
Biofrontera reported an operating loss of $4.3 million, compared with a loss of $4.5 million in the prior-year quarter. The quarter included $0.4 million of patent remediation expense, which the company excluded from its underlying operating loss calculation.
Net loss was $4.8 million, or $0.41 per share, compared with a net loss of $4.2 million, or $0.47 per share, in the first quarter of 2025. Leffler said the comparison was affected by the patent remediation expense and a non-cash swing in the fair value of warrant liabilities.
Adjusted EBITDA, a non-GAAP measure, improved to negative $3.6 million from negative $4.4 million a year earlier. The adjusted EBITDA margin improved to negative 35% from negative 51%.
Biofrontera ended the quarter with $6.3 million in cash and cash equivalents, compared with $6.4 million at the end of 2025. Cash used in operating activities was just $70,000, down sharply from $4.1 million in the prior-year quarter. Leffler said the improvement reflected higher revenue, the lower cost structure and favorable working capital changes, including a $3.4 million collection of accounts receivable.
Leffler also noted that the company has included a going concern qualification in its statements. He said Biofrontera plans to address its capital needs through continued Ameluz revenue growth, a planned $1 million milestone payment from the 2025 Xepi divestiture and, if necessary, a working capital line of credit or similar financing.
Regulatory Pipeline Focuses on Label Expansion
Management highlighted several clinical and regulatory milestones for Ameluz photodynamic therapy, or PDT.
- Superficial basal cell carcinoma: Luebbert said the FDA accepted the company’s supplemental New Drug Application in February 2026, with a PDUFA target action date of September 28, 2026. He said approval would make Ameluz “the first PDT drug approved to treat a cancer in the U.S.”
- Actinic keratosis beyond the face and scalp: The company announced positive and statistically significant top-line results from a Phase 3 trial evaluating Ameluz for actinic keratosis on the extremities, neck and trunk. Biofrontera plans to file a supplemental NDA in the third quarter of 2026 for treatment fields up to 240 square centimeters.
- Moderate to severe acne vulgaris: The company reported Phase 2 results in March 2026 showing that a three-hour incubation protocol led to a 58% reduction in inflammatory lesions with Ameluz, compared with 37% with vehicle gel in the per-protocol population. Luebbert said Biofrontera plans to discuss a future Phase 3 program with the FDA in the second half of 2026.
During the question-and-answer session, analyst Jonathan Aschoff of ROTH Capital Partners asked about off-label use of Ameluz. Luebbert said the company is aware of some off-label use but does not have clear numbers and believes current use outside the approved actinic keratosis indication on the face and scalp is small. Leffler added that Biofrontera markets the product only on label.
Asked by Bruce Jackson of Stonex about launch readiness if the superficial basal cell carcinoma indication is approved, Jones said no additional preparation is required before marketing can begin. He said the company is preparing now, with initial medical and commercial rollout expected in the fourth quarter and acceleration into the first quarter of the following year.
Nasdaq Compliance and Outlook
Luebbert said Biofrontera received written notification from Nasdaq on May 6, 2026, confirming that it had regained compliance with the exchange’s minimum bid price requirement after its common stock closed at or above $1 per share for 10 consecutive business days.
He also said the company is monitoring global trade developments, including tariffs on imports from certain countries, because its products are imported exclusively from Europe. Biofrontera is assessing potential impacts on its supply chain, product costs and pricing strategy.
In closing remarks, Luebbert said the company remains focused on reaching cash flow breakeven and building long-term shareholder value. He also said Biofrontera has planned studies in squamous cell carcinoma in situ and reduced-pain PDT, while noting that its patent protection extends through 2043.
About Biofrontera (NASDAQ:BFRI)
Biofrontera AG is a specialty biopharmaceutical company focused on the research, development and commercialization of products for dermatological applications. The company’s core expertise lies in photodynamic therapy (PDT), a treatment modality that uses a photosensitizing agent activated by a specific light source to target diseased skin cells while sparing surrounding healthy tissue.
The flagship product in Biofrontera’s portfolio is Ameluz (aminolevulinic acid hydrochloride 10 % gel), which has received marketing approval in the European Union for treatment of actinic keratosis and basal cell carcinoma, and in the United States for actinic keratosis.
