Q1 2021 Biofrontera AG Earnings Call
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Yeah.
Hey, Ben.
From Idaho.
The conference is now being recorded since of the private Securities Litigation Reform Act.
We caution listeners that during this call Biopharma <unk> management will be making forward looking statements.
Actual results could differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the Companys business.
All risks and uncertainties are detailed in and qualified by the cautionary statements contained in <unk> press releases and SEC filings.
This conference call contains time sensitive information that is accurate only as of the date of this live broadcast today May 12, 2021 by a frontier undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this conference call.
With that I would now like to turn the call over to Hermann <unk> our CEO.
Yeah. Thank you Pamela.
And thank you very much ladies and gentlemen for taking the time to participate in today's call.
With me today as Ludwig <unk>, our CFO.
He will present the financial results in the second following that I would like to share with you. The current activities regarding market development sales on clinical development.
But first of all to the financial results of the first quarter for that I would like to hand over to Ludwig.
Thank you Herman and thank you all for joining us today I would like to start by providing you with an overview on the financial results for the first quarter of 2021.
During the first three months, we achieved total revenues of $5 5 million a decrease of 15% compared to last year's figure of $6 5 million. However, the COVID-19 pandemic still had a major impact on our business, especially at the beginning of the year independent make your 2020, the crisis became apparent in terms of.
Decreasing sales starting in the second half of March However, in March 2021, which was still on the current pandemic situation. We already we were already able to increase our sales compared to March 2020 by about 46%, which is quite encouraging and indicate a clear recut.
<unk> of our situation and our sales markets, which continued throughout April and I will give you more details on debt in a moment.
Let's start with the first quarter and our largest sales market. The U S. We achieved total product sales of $3 8 million in the first quarter of 2021 compared to $4 2 million in the prior year period, a decline of 9%.
Sales in Germany improved to $41 4 million compared to the first quarter of the previous year on increase actually of 7% and other European countries sales decreased by 68% on a small level euros 0.3, compared to <unk> 8 million euros in the same period of the previous year.
Last Thursday, we published preliminary figures for April 2021 revenues are very fair positive trend. This month supports our expectation of a general recovery in sales preliminary pure product revenues by our hotel group in the month of April 2021 amounted to approximately $2 5 million.
Compared to zero price point.
5 million euros.
On April 2020, an increase of 406% now the magnitude is of course, mainly due to the pandemic for.
For better comparability, we therefore also take a look at.
The monthly sales development prior to the pandemic in 2019, showing an 8% increase in product sales on average for all markets in April compared to 2019.
This is comprised of 3% a 3% increase in sales in the U S, 25% increase in Germany, 20% increase in our remaining other European markets.
Back to the first quarter gross profit was euro.
$4 6 million compared to $5 7 million in the first quarter of 2020, the gross margin decreased slightly to 84% compared to 88% in the previous year at $1 3 million euros research and development expenses were at previous year's level. These costs include clinical trials.
<unk> as well as the cost per obtaining maintaining and expanding our product marketing authorizations.
Our G&A expenses amounted to $2 5 million euros in the reporting period compared to $2 2 million euros in prior year's periods.
Sales and marketing expenses were $4 8 million.
A significant decrease of 45% compared to prior year's quarter. The strong decrease is mainly due to the impairment of our <unk> license of 2 million euros into leads and yet last year's figure as well as the large impact of cost savings measures implemented in 2020 due to the COVID-19 pandemic.
In general our sales and marketing expense this may.
Moving to the cost per hour on sales force in Germany, Spain, the United Kingdom in the U S as well as our marketing expense.
Spencers.
And the 2021 final financial year, EBITDA and EBIT.
Earnings before interest and taxes had been introduced as key performance indicators for reporting purposes.
What has become established internationally target metrics and will replace the previously reported key performance indicator profit loss from operations.
Going forward grouping.
Group EBITDA includes earnings before interest and taxes depreciation of property plant and equipment as well as amortization of intangible assets and decreased by 0.50 point $5 million or 19% to a loss of $3 2 million euros in Q1 2021 compared to a loss.
<unk> of $2 6 million euros in the prior year period.
EBIT includes earnings before interest and taxes and improved by 29% year on year to a loss of $4 million compared to a loss of $5 6 million in prior year period.
This was due to high depreciation amortization on the previous year as a result of deep on scheduled amortization of the <unk> license.
Earnings before income taxes amounted to a loss of $4 9 million euros to the same three in the same three months of 2021, an improvement of 622000 euros compared to a loss of five 5 million in the same periods of the previous year again, mainly due to the aforementioned impairment of the Zip.
The license in 2020.
Cash and equivalents amounted to $37 3 million as on.
March 31, 2021, an increase of $27 million compared to December 31, 2020 that includes gross proceeds of $24 $7 million from the capital increase executed in February of 2021. So from today's perspective buyer from Tara group does have sufficient liquidity available and.
The upcoming 12 months to execute on the group's corporate strategy.
And with this summary, I would like to hand over to her back to Herman who will update you now on the operational progress.
Thank you Ludwig.
The March and April revenue development leaves us quite confident that the pandemic related impact on our business.
Is increasingly becoming much less severe.
We expect that in particular are already well established flagship product on <unk> will benefit from this in the near future.
So no significantly advanced in vaccination rates in Europe, but even more so in the United States leads us to expect further easing of Lockdowns and a return to a certain degree of normality.
With a marketing campaign planned towards the middle of the year.
We intend to take advantage of the upturn to push on the loose presence among U S dermatologists.
<unk> is positioned in the market environment with enormous growth potential.
We have one of the most effective products for the treatment of <unk> skin damage and we aim at aligning on a product with market requirements such that we can convert its enormous potential potential into commercial success.
Our medium term clinical development strategy focuses on adapting on the loose even better to market on patient needs of the U S market.
<unk>. So we aim not only to improve the positioning of our news within the photodynamic therapy market segment, but in particular to drive its expansion into the segment of other treatment options.
This has already been achieved to a large extent so that we have been able to show a consistently positive sales trend year after year, even despite the severe restrictions of the past year.
Fox CP, our second product marketed in the USA.
Campaign is being prepared to market sapiens of course of the second half of the year.
It was considerably greater effort than was previously possible on the pedantic pandemic conditions. Following the extensive opening of dermatology practices to patient and field visits.
Despite the significantly higher price than the generic competitor products all the major private payers have agreed to provide unrestricted reimbursement folks therapy.
This together with the new co payment pulled on that we introduced on April one 2020 forms a solid basis for the planned marketing campaign.
Unfortunately last year marketing measures larger leases without especially at the beginning of the pandemic and we need to Mega fresh start.
On the regulatory side we.
We've made some significant positive orders in the first quarter of this year in February and March we announced two submissions to the U S.
Food and drug administration the FDA.
For the use of up to three tubes of on the newest between <unk> and the other for approval over larger lamp.
In agreement with the FDA meeting to be held in June for both submissions to determine how to proceed.
An important milestone in the first quarter was the capital increase which we completed and fully placed in February 'twenty, one with gross proceeds of $24 7 million euros.
The issuance of the new chefs, who also see fits considerable enthusiasm on both sides of the Atlantic.
This was confirmed by a significant oversubscription, especially in the U S capital markets.
The flesh injection of capital will enable the company to further improve amyloidosis market positioning and thus consistently pursue the group's medium term strategy.
Better focuses on better exploiting the existing market potential for on the news <unk> therapy in the U S market.
Additionally, clinical trials intended to pave the way for opening up potential new growth markets, such as the treatment of basal cell carcinoma acne with on the loose in the U S market.
Despite the setbacks cost both on <unk>, the structural growth drivers on which Vodafone tail on will benefit in the long term remain unchanged.
Actinic keratosis is a vast market both in the U S and in Europe reimbursement modalities in the U S are developing favorably for photodynamic therapy.
From a loose the continuously obtain important label extensions.
Daylight PDT is experiencing increasing acceptance in Europe.
And the unconditional need for new topical antibiotics is undisputed.
Business performance in the first quarter of 'twenty, one most in line with our expectations and encouraging developments since mid March leaves us very positive.
The company's fully maintained the guidance for the 'twenty one financial year published on April 12.
Accordingly, we expect annual sales between $25 million and 32 million euros as well as EBIT EBITDA.
Loss of between 11, and 14 million euros, an EBIT loss of between 13 and $16 million day.
<unk> on the forecast can be found in our annual report 2020.
Overall, the biopharm sales local is exceptionally well positioned for the anticipated growth after the pandemic.
We have all of this time on leased primarily to our employees who have used the unplanned downtime caused by the pandemic to sharpen our profile and our processes.
I would like to express my severe gratitude to all our employees for this.
With this I would now like to open the line for questions.
Thank you and we will now begin the question and answer session.
If you have a question from CJS.
Zero and one on your telephone keypad now turn to the key.
What's your name of spin announced you can ask a question.
Your final question is answered just wanted to touch on just the kitchen Zara and true to Paul for your question.
Using speaker equipment today, please lasalle chassis from Nike.
Question.
The amendment please for the first question.
On the first question on these procedures from Jackson Benchmark Company. Your line is now open. Please go ahead.
Hi, Thank you for taking my question.
Last year there were.
Some some reorganization of the United States sales force can you just kind of remind us where you stand right now in terms of the number of reps who are on staff and then.
Just give us a general sense of the preparedness and.
Are you ready to.
Net yield adds now it's generally.
The reception right now in terms of practices to our open and ready to meet with people percentage would be good.
Currently we have.
32 lips Alta.
Some of them.
Most of the offices.
Actually opening up some and more and more on all receiving visits from the field.
So this is a value positive trends to be to be observed.
Okay, and then just briefly a question about about Zappy. So all of the payers are providing reimbursement under any.
Our formulary restriction on the silver.
Thank you Candice.
Treatment restrictions in terms of.
Physicians being able to.
Safi.
Yes.
Actually no such restrictions.
That's all purely obviously coal payment.
But we agreed upon with them on this coal plant has softened for the patients by our by our Copay card program.
As there are no requirements that the insurance companies need.
From a prescription on Saturday.
Alright, great. Thank you very much.
Pleasure.
Thank you. The next question is from Thomas Flaten Lake Street Capital markets. Your line is net income. Please go ahead.
Great. Thank you so much for taking the questions.
Herman I wanted to go back to the June meeting with FDA to discuss to discuss the three tubes.
The large land could you just give us some insight into what prompted that meeting and what you expect the outcome of that will be.
Okay.
Sure.
Yes.
We don't really know what on what.
Driving the FDA.
And I have no idea what the outcome of that meeting is going to be.
In the end.
It comes down.
Two to what the FDA expects from.
On.
From the new data that we presented for these two changes the data on that we have.
Is that.
That we have presented to the FDA and EU PK study with <unk> tubes performed with 32 patients half of the face on scope and half on deposit fairly low deposit for the for the color on the pool, but it's not so relevant towards non live in this phase on Scarlet because currently that's <unk>.
<unk> is approved.
Some.
And we don't see why this shouldnt be sufficient because thats strictly following FDA guidelines for.
For the land.
We have Sean extensive technical.
Earnings for this low that the existing lamps.
Following both our own label on the <unk> label.
View process by the FDA doing during submission.
Everything that we presented to the FDA should be sufficient for approval.
Sure.
So we.
We are very positive about the outcome of the meeting.
Some.
We'll see.
How the FDA is going to position itself.
So is it safe to say you were surprised by the meeting request or had you expected it.
It's difficult to say so.
These needs on law.
And then just one question on guidance, if we look at the significant activity in April and use that as a guide for the rest of the year, even with a soft first quarter. It puts you well into the guidance range well above the lower end what.
Factors are you looking for that would give you confidence in perhaps updating that guidance to be a bit more aggressive, particularly on the low end or are there are there things out there that still give you pause with respect to the pandemic reopening or is this just a question of time.
On a tsunami.
Businesses all of us being value.
Very much focused on the on the last quarter of the year.
And we fully agree with the with the March and April numbers also.
Also very positive that we will.
Relative in the guidance.
I was just looking at those six weeks, we don't feel that we have.
Enough enough evidence now to change the guidance on to the to the more positive side.
Got it and then just one final question is the <unk> study is still on track to start in the second half of this year.
Yes.
Excellent. Thank you so much for taking the questions.
Pleasure.
Thank you at the moment there are no further questions. So as a reminder to ask a question you have to press the gyro and one on your telephone keypad.
We haven't received any further questions. So I would like on.
<unk>.
And I would like to say goodbye to everybody on thank you for taking the time to participate in our call.
Thank you. Thank you talk to you next time.
Ladies and gentlemen, thank you for your attendance. This call has been concluded you may disconnect.
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