Biofrontera Inc. (BFRI): Business Model Canvas [Dec-2025 Updated]

You're digging into Biofrontera Inc.'s strategy as of late 2025, trying to see past the noise to the actual engine driving the business. Honestly, it boils down to one FDA-approved drug-device combination-Ameluz and the RhodoLED lamp-and whether their direct-to-dermatologist sales model can overcome the $\mathbf{\$29.6}$ million in Selling, General, and Administrative (SG&A) expenses they burned through in the first nine months of the year to hit that $\mathbf{\$24.6}$ million revenue mark. With U.S. patents locked in until $\mathbf{2043}$, the long-term value proposition is clear, but the near-term cash position, sitting at $\mathbf{\$3.4}$ million as of September 30, 2025, makes every move critical. Dive below to see exactly how their key partnerships and cost structure map out their path forward.

Biofrontera Inc. (BFRI) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that underpin Biofrontera Inc.'s operations in the U.S. market as of late 2025. These aren't just handshake agreements; they involve concrete financial commitments and operational shifts that directly impact the company's path to profitability.

Biofrontera AG for Ameluz/RhodoLED Manufacturing and Supply

The relationship with Biofrontera AG, the former parent company, underwent a significant transformation in mid-2025, shifting Biofrontera Inc. to full control over U.S. assets and changing the cost structure for Ameluz®. This is a big deal for gross margins.

Under the new royalty agreement, effective after the June 2025 restructuring, Biofrontera Inc. pays a monthly royalty on U.S. Ameluz® revenue:

• 12% royalty rate when U.S. Ameluz® revenue is less than $65 million annually.
• 15% royalty rate when U.S. Ameluz® revenue exceeds $65 million annually.

This new structure replaces the prior transfer pricing model, which required payments ranging from 25% to 35% of the net sales price per tube. For the fiscal year 2025, the cost structure was governed by the prior agreement's reduced transfer price of 25% for inventory purchases, which covered cost of goods, royalties, and services like regulatory efforts, as per the February 2024 amendment. Biofrontera AG also received a 10% post-money equity stake in Biofrontera Inc. as part of the asset acquisition.

For the RhodoLED® portfolio of lamps, Biofrontera Inc. acquires them at cost plus a low double-digit handling fee.

Financing Partners: Rosalind Advisors and AIGH Capital Management LLC

Securing capital to fund the U.S. asset acquisition and support operations to profitability came via an $11 million investment led by these two funds. This capital was structured to be provided in two distinct payments:

The new capital was delivered as preferred shares convertible into common shares at a price of $0.6249 per share, based on the closing price of June 26, 2025. This financing was critical to executing the strategic restructuring with Biofrontera AG.

Pelthos Pharmaceuticals Inc. for Xepi Divestiture

Biofrontera Inc. divested its U.S. license for Xepi® (ozenoxacin) Cream, 1% to Pelthos Therapeutics Inc. in November 2025, bringing in contingent, near-term cash. This deal is expected to bolster the cash position and help fund Biofrontera Inc. to profitability.

The total potential value is up to $10 million, broken down as follows:

• Upfront Payment at Closing: $3 million.
• Payment upon Commercial Product Availability: $1 million.
• Sales-Related Milestone Payments: Up to $6 million total.

The $6 million in milestones is structured around specific annual net revenue targets within the U.S., Puerto Rico, and the U.S. Virgin Islands:

• $3 million tied to achieving $10 million in annual net revenues.
• $3 million tied to achieving $15 million in annual net revenues.

To be fair, Pelthos also paid $1.2 million to Ferrer Internacional as part of the overall transaction.

Clinical Trial Sites and Investigators in the U.S. for R&D

A key element of the Biofrontera AG restructuring was Biofrontera Inc. assuming full control of all U.S. clinical trials for Ameluz® effective June 1, 2024, allowing for direct oversight and cost management. The R&D focus in late 2025 centers on label expansion.

As of the first half of 2025, the study report for the Phase 3 trial (ALA-BCC-CT013) for superficial basal cell carcinoma (sBCC) was prepared following the completion of the one-year follow-up phase in December 2024. Furthermore, patient recruitment was completed for the Phase 2b study (ALA-ACV-CT014) for moderate to severe acne vulgaris by May 2025. Another Phase 2 trial (ALA-AK-CT019) for expanded field actinic keratosis also completed recruitment.

The company is progressing with its U.S. clinical development, with the Phase 3 trial for actinic keratoses on the extremities, neck, and trunk having enrolled its final patient in Q1 2025. Management plans to submit new data to the FDA in the second half of 2025 for expanded label indications.

Here's a snapshot of the R&D focus and associated trial statuses as of late 2025:

Finance: draft 13-week cash view by Friday.

Biofrontera Inc. (BFRI) - Canvas Business Model: Key Activities

You're looking at the core engine driving Biofrontera Inc.'s value now that they've taken full control of their U.S. assets. The key activities center on maximizing the existing Ameluz-PDT franchise while pushing pipeline assets through regulatory hurdles.

Commercializing Ameluz-PDT drug-device combination in the U.S.

This activity is about driving product utilization across the existing customer base, which now includes approximately 750 RhodoLED lamps installed in dermatology offices. The focus is on recurring, high-margin sales of Ameluz gel.

Financial performance related to this core commercial activity shows some near-term volatility:

The cost structure improvement is significant due to the new royalty agreement, which replaced the former transfer pricing model. The new royalty is 12% or 15% of U.S. net sales, down from the previous 25% to 35%.

Managing U.S. clinical trials for new indications (sBCC, AK body)

Managing the late-stage clinical work is crucial for unlocking the next phase of growth for the Ameluz franchise. This involves overseeing the final stages of studies for new indications.

• Phase 1 pharmacokinetic (PK) study for Actinic Keratoses (AK) on the neck, trunk, and extremities completed its final patient visit on November 24, 2025.
• The Phase 3 study for superficial basal cell carcinoma (sBCC) involved 187 patients and showed a clearance rate of 65.5% for Ameluz-PDT versus 4.8% for placebo.
• The Phase 2b trial for moderate to severe acne vulgaris (AV) completed patient participation.

Direct sales and marketing to dermatology practices

The sales and marketing effort is now underpinned by a revamped approach centered on refined customer segmentation. This activity is reflected in the Selling, General, and Administrative (SG&A) spend, which saw some offsetting adjustments in Q3 2025.

SG&A expenses for Q3 2025 were $10.4 million, an increase from $8.4 million in Q3 2024, driven by legal costs, but partially offset by personnel savings within the direct sales team of $0.5 million. The company is focused on driving adoption of the RhodoLED XL lamp, having placed 100 units since its June 2024 launch through the end of 2024.

Regulatory filings, including sNDA submission for superficial basal cell carcinoma (sBCC)

This is the gatekeeping activity that translates clinical success into market access for new indications. The company is actively pursuing label expansions.

• The sNDA submission for sBCC is planned for the 'coming weeks' following the Q3 2025 update.
• The sNDA for expanding Ameluz to treat AKs on all peripheral body areas (neck, trunk, extremities) is planned for Summer of 2026, based on the Phase 1 PK study completion.

Supply chain management for Ameluz gel and RhodoLED lamps

Following the acquisition of U.S. assets, Biofrontera Inc. now holds full responsibility for the manufacture of Ameluz and the RhodoLED portfolio for the U.S. market. This internal control is key to margin enhancement.

Inventory management is a factor, with inventories reported at approximately $6.5 million as of March 31, 2025. The cost of revenues for the first nine months of 2025 was $8.0 million, a significant reduction from $13.3 million in the prior year period, largely due to the renegotiated cost structure with Biofrontera AG.

Biofrontera Inc. (BFRI) - Canvas Business Model: Key Resources

You're looking at the core assets that drive Biofrontera Inc.'s value proposition in the U.S. market, especially following the recent asset purchase. These are the tangible and intellectual pillars supporting their photodynamic therapy (PDT) commercialization strategy.

The most critical resource is the FDA-approved drug-device combination: Ameluz (aminolevulinic acid HCl topical gel) used with the RhodoLED lamp series. This combination is the foundation for treating actinic keratosis (AK).

Intellectual Property (IP) provides a significant moat. Biofrontera Inc. secured exclusive U.S. rights, approvals, and patents for Ameluz and RhodoLED following the asset purchase closing on October 23, 2025, taking full responsibility for the New Drug Application (NDA) and all related IP from the former parent company. Furthermore, the patent for the revised, propylene glycol-free formulation of Ameluz is listed in the FDA Orange Book, extending market exclusivity for that specific formulation until December 8, 2043.

The physical asset base-the installed lamps-is also a key resource, driving recurring drug sales. While the prompt suggested a figure, the latest confirmed data point relates to the newer model's adoption.

Here's a quick look at the hard numbers underpinning these resources as of late 2025:

The operational control gained in October 2025 is a major shift, meaning Biofrontera Inc. now directly manages the commercialization and regulatory compliance for the entire U.S. portfolio, which includes both the RhodoLED XL and the predecessor BF-RhodoLED lamps.

The key elements of the drug-device combination that form this resource base include:

• FDA approval for Ameluz for lesion/field-directed PDT of mild to moderate AK on the face and scalp.
• FDA approval allowing the use of up to three tubes of Ameluz per treatment, effective October 2024.
• The RhodoLED lamp series, including the newer RhodoLED XL which offers a larger illumination area.
• The revised Ameluz formulation, which is propylene glycol-free, addressing allergic reaction concerns for sensitive patients.

Finance: review the Q4 2025 cash burn projection against the $3.4 million balance by next Tuesday.

Biofrontera Inc. (BFRI) - Canvas Business Model: Value Propositions

Non-surgical, field-directed Photodynamic Therapy (PDT) for Actinic Keratoses (AK) is a core value proposition, building on the existing FDA approval for the face and scalp.

High efficacy for sBCC treatment (65.5% clearance in Phase 3 trial) is supported by data from the double-blind, randomized, placebo-controlled Phase 3 study involving 187 patients with superficial basal cell carcinomas (sBCC). The submission for expanded indication was made to the FDA on November 28, 2025.

The efficacy results against placebo for the primary endpoint (complete clinical and histological clearance of a main target lesion at 12 weeks) are detailed below:

The treatment protocol is clinically proven and FDA-controlled, with the sNDA submission seeking to expand the Ameluz label for sBCC using the BF-RhodoLED or RhodoLED XL red light lamps.

The value proposition includes potential for improved cosmetic outcomes, as one-year follow-up data showed that 85.5% of patients rated overall treatment satisfaction and aesthetic outcomes as very good or good.

The RhodoLED XL lamp facilitates expanded treatment area capabilities, which is critical given that more than 3 million BCC cases are diagnosed annually in the United States, and 58 million US adults have at least one AK lesion.

• The RhodoLED XL lamp features 5 illumination panels versus 1 for the existing lamp.
• In a Phase 1 study for AK on peripheral body areas, the lamp supported treatment of an area of approximately 240 cm² under maximal use conditions.

Further regulatory protection supports the long-term value, with a new formulation of Ameluz receiving patent approval extending protection through to December 2043.

Biofrontera Inc. (BFRI) - Canvas Business Model: Customer Relationships

You're looking at how Biofrontera Inc. manages the relationship with the dermatologists who use Ameluz and the RhodoLED lamps. It's a mix of direct, high-touch engagement and data-driven efficiency, especially after taking full control of the U.S. assets in 2025.

Dedicated direct sales force for physician engagement

The commercial team covers the continental United States, and management has been actively refining its structure. In Q1 2025, the company was reorganizing territories, utilizing more junior representatives, and managing some turnover, while remaining committed to filling those roles to finish the year strong. This focus on the sales force effectiveness is a key driver for maintaining revenue stability. For instance, in the third quarter of 2025, Selling, General, and Administrative (SG&A) expenses saw personnel savings of $0.5 million within both the direct sales team and general administrative staff compared to Q3 2024, partially due to headcount fluctuations. The overall SG&A expenses for Q3 2025 were $10.4 million, compared to $8.4 million in Q3 2024, with the increase largely driven by legal costs, not sales force expansion.

Training and support for RhodoLED lamp installation and use

The relationship is cemented by ensuring physicians can use the capital equipment effectively. The CEO noted that customers were 'very complimentary about the level of service we have delivered both in the lead up to installation, and with the training and support afterwards' for the RhodoLED XL lamp. The installed base of these devices is a critical touchpoint. As of late 2025, Biofrontera Inc. reported approximately 750 RhodoLED lamps in dermatology offices. This installed base is the foundation for recurring product sales.

The placement of these devices has been a focus since the launch of the XL model in mid-2024:

• RhodoLED XL lamps placed since June 2024 through December 31, 2024: 100
• BF-RhodoLED lamps placed during 2024: 72
• RhodoLED XL lamps placed in Q4 2024: 52

Data-driven sales execution and refined customer segmentation

Biofrontera Inc. implemented a 'revamped sales approach centered on refined customer segmentation and more focused commercial strategy and data-driven sales execution.' This strategy proved effective in maintaining stable year-to-date revenues of $24.6 million through September 30, 2025, even without the benefit of a price increase in 2025, unlike the prior year. This focus suggests a move away from broad outreach to targeting the highest potential prescribers.

The success of the product combination is evident in the device adoption relative to the drug usage base:

Long-term relationship with customers for recurring Ameluz reorders

The core of the long-term relationship is the recurring purchase of the consumable, Ameluz gel. Management confirmed in Q1 2025 that they 'continue to see current customers reordering as well as new medical offices coming on board.' This recurring revenue stream is structurally supported by the June 2025 acquisition of all U.S. Rights, which replaced the prior transfer-pricing/earnout structure with a new royalty agreement. This new structure is designed to strengthen long-term profitability by reducing the cost burden on Biofrontera Inc. The new royalty rate is 12% of U.S. net sales when revenue is below $65 million, stepping up to 15% when revenue exceeds $65 million.

Biofrontera Inc. (BFRI) - Canvas Business Model: Channels

Direct sales force to U.S. dermatology clinics and physicians

Personnel savings within the direct sales team for the third quarter of 2025 were $0.5 million compared to the third quarter of 2024. Selling, general and administrative expenses for the third quarter of 2025 were $10.4 million. The installed lamp base supporting recurring gel demand is approximately 750 units. Revenues for the first nine months of 2025 totaled $24.6 million.

The effectiveness of the commercial channel can be viewed through recent revenue performance:

• Total revenues for the first nine months of 2025: $24.6 million.
• Total revenues for the first nine months of 2024: $24.8 million.
• Total revenues for the third quarter of 2025: $7.0 million.
• Total revenues for the third quarter of 2024: $9.0 million.

Specialty pharmaceutical distributors and wholesalers

The business structure involves a transition in the cost basis related to product supply. The cost of revenues for the nine months ended September 30, 2025, decreased to $8.0 million, down from $13.3 million for the same period in 2024, due to a reduced transfer price agreement in February 2024. Furthermore, the company closed the purchase of all Ameluz and RhodoLED U.S. Assets, establishing a new earnout structure with a payment rate of 12%-15% of U.S. net sales, down from the previous 25%-35%.

Clinical trial network for product development and label expansion

The company uses its clinical network to expand indications. The final patient completed the active treatment phase of the Phase 3 clinical trial evaluating Ameluz for mild to moderate actinic keratoses on the extremities, neck and trunk. The final patient in the Phase 2b clinical trial evaluating Ameluz for moderate to severe acne vulgaris completed participation. The company is targeting an FDA application submission for superficial basal cell carcinoma (sBCC) in the second quarter of 2026, with commercialization efforts for sBCC expected by the end of 2026.

Investor relations for capital market access and financing

Capital access is managed through equity and asset transactions. The cash balance as of September 30, 2025, was $3.4 million. In October 2025, the company received the final $2.5 million tranche of an $11 million financing round led by existing investors. The divestiture of the Xepi antibiotic cream to Pelthos Pharmaceuticals included a payment of $3 million at closing, $1 million upon commercial availability, and up to $6 million in milestone payments.

Key financial metrics related to capital structure and operations as of late 2025:

Biofrontera Inc. (BFRI) - Canvas Business Model: Customer Segments

U.S. Dermatologists and Dermatology Clinics (primary prescribers)

This segment drives the recurring, high-margin sales of Ameluz gel through the use of the installed base of RhodoLED lamps. The company has approximately 750 RhodoLED lamps installed in dermatology offices as of late 2025. These prescribers operate within a market context where the Global Actinic Keratosis Treatment Market was valued at USD 7.18 billion in 2025. The U.S. Actinic Keratosis treatment market size was valued at USD 2.94 billion in 2023. Biofrontera Inc. is focused on educating these providers on the clinical benefits of Ameluz and Photodynamic Therapy (PDT) with Red Light.

Patients with mild-to-moderate Actinic Keratoses (AK) on face/scalp

This is the core patient population currently indicated for Ameluz PDT treatment on the face and scalp. The prevalence of AK in the U.S. is substantial, affecting more than 40 million Americans. The estimated prevalence rates are 26.5% in males and 10.2% in females. In 2021, an estimated 13.2 million AK treatments were performed in the U.S..

Patients with potential future indications (sBCC, AK on extremities, acne)

Biofrontera Inc. is actively pursuing label expansions to address a wider patient pool. Key pipeline activities target these future segments:

• Patients with superficial basal cell carcinoma (sBCC) with successful Phase 3 study results reported.
• Patients with AK on extremities, neck, or trunk, with the final patient visit for the relevant pharmacokinetic study occurring on November 24, 2025.
• Patients with moderate to severe acne, with 116 participants enrolled in the relevant clinical trial as of early 2025.

Institutional and individual investors (defintely a key segment)

This segment provides the necessary capital to fund operations and strategic initiatives, such as the acquisition of U.S. Ameluz and RhodoLED rights. The financial performance and liquidity position directly impact investor sentiment and capital availability. Biofrontera Inc. reported a cash balance of $3.4 million as of September 30, 2025. The net loss for the third quarter of 2025 was $6.6 million. The company secured an $11 million investment from institutional investors, with $2.5 million received after the end of the reporting period. The market capitalization was approximately $9.24 million as of late 2025 data.

Here's the quick math on recent revenue performance for context:

The new U.S. asset royalty structure is 12% below $65M and 15% above, which is expected to improve gross margins.

Biofrontera Inc. (BFRI) - Canvas Business Model: Cost Structure

The Cost Structure for Biofrontera Inc. is heavily influenced by the recent acquisition of U.S. assets and the shift in its relationship with Biofrontera AG, moving from a transfer pricing model to a royalty-based structure, alongside ongoing operational expenses like legal defense and clinical development.

Cost of revenues: Royalty payments to Biofrontera AG (12% to 15% of net sales)

The cost structure related to product supply has been significantly altered following the acquisition of all U.S. Ameluz and RhodoLED assets. The new arrangement replaces the former transfer pricing model, which required payments of 25% to 35% of net sales per tube, with a royalty structure.

The Cost of Revenues for the nine months ended September 30, 2025, was $8.0 million, a decrease from $13.3 million for the same period in the prior year, reflecting the benefit of the reduced transfer price negotiated in February 2024 related to taking over clinical development costs, which precedes the full royalty implementation.

Selling, General, and Administrative (SG&A) expenses: $29.6 million for 9 months 2025

Selling, General, and Administrative expenses totaled $29.6 million for the nine months ended September 30, 2025, an increase compared to $25.6 million in the prior year period.

• The increase in SG&A was primarily driven by higher legal expenses related to patent claims.
• For the third quarter of 2025 alone, SG&A expenses were $10.4 million compared to $8.4 million in the third quarter of 2024.
• In the second quarter of 2025, SG&A was $10.5 million, which included a $3.4 million increase in legal costs.

High legal expenses due to patent claim-related costs

Significant legal expenses are a notable component of the cost structure, stemming from patent claim-related legal costs. In the first quarter of 2025, legal expenses increased by $1.2 million due to patent claims. These increased legal costs were partially offset by savings in personnel expenses and other administrative costs across the reporting periods.

Research and Development (R&D) costs for clinical trials

Research and Development spending increased due to Biofrontera Inc. assuming responsibility for all U.S. clinical trials.

• R&D expenses rose by $1.2 million year-over-year for the first quarter of 2025, attributed to taking over the U.S. clinical trial activities for Ameluz.
• The company completed patient enrollment in its Phase 3 clinical trial for mild to moderate actinic keratoses (AKs) on the extremities, neck and trunk, and the final patient completed the Phase 2b trial for moderate to severe acne vulgaris (AV).

Manufacturing and supply costs for Ameluz and RhodoLED lamps

With the acquisition of U.S. rights, Biofrontera Inc. assumed complete responsibility for the manufacture of Ameluz and the RhodoLED portfolio of lamps for the U.S. market. The cost impact is reflected in the lower Cost of Revenues figure for the nine months ended September 30, 2025, at $8.0 million, down from $13.3 million the prior year, due to the reduced transfer price agreement in place before the full royalty structure took effect. The company placed 52 RhodoLED XL lamps in the fourth quarter of 2024, with 100 placed since launch through December 31, 2024.

Biofrontera Inc. (BFRI) - Canvas Business Model: Revenue Streams

You're looking at the core money-makers for Biofrontera Inc. as of late 2025. The business model centers on product sales, which are the recurring, high-margin engine, supported by one-time and contingent payments from asset transactions.

The primary recurring revenue streams flow from the sales of Ameluz topical gel and the placement or sale of the associated RhodoLED and RhodoLED XL photodynamic therapy (PDT) lamps. The installed base for the lamps is now approximately 750 RhodoLED lamps in dermatology offices, which drives repeat Ameluz usage.

For the first nine months of 2025, Biofrontera Inc. reported total revenues of $24.6 million. This figure was achieved while the company navigated the absence of a price increase effect seen in the prior year. To give you context on the recent quarter, revenues for the third quarter of 2025 were $7.0 million, compared to $9.0 million in the third quarter of 2024, a 22% year-over-year decline attributed to customers advancing purchases ahead of the October 2024 price increase.

A significant, non-recurring revenue component comes from the recent divestiture of the US license for Xepi Antibiotic Cream to Pelthos Therapeutics Inc. in November 2025. The total proceeds from this deal are structured to be up to $10 million. This breaks down into immediate cash and contingent payments.

Here's the quick math on the Xepi deal structure:

The total contingent amount, which you noted, is up to $7 million, composed of the $1 million commercial availability payment and the up to $6 million in sales-related milestones.

The acquisition of the full U.S. rights for Ameluz and RhodoLED from Biofrontera AG also directly impacts the margin profile of the recurring revenue streams. This structural change is key to future profitability.

• New effective royalty rate on U.S. net sales: 12% (for sales up to $65 million) or 15% (for sales above $65 million).
• This new rate replaces the former transfer pricing model of 25% to 35% of net sales.
• The transaction was supported by an $11 million investment, with the final tranche of $2.5 million received in October 2025.

The company expects the combination of the Xepi proceeds and financing to fund Biofrontera Inc. to cash flow breakeven for fiscal year 2026.