Biofrontera target cut to $16 from $25 on second-quarter results
On Thursday, Roth/MKM adjusted its outlook on Biofrontera Inc (NASDAQ:BFRI), reducing the price target to $16.00 from the previous $25.00 while maintaining a Buy rating on the stock. The firm based its decision on the company’s financial report for the second quarter of 2024, which showed that Biofrontera ended the quarter with $4.4 million in cash reserves. This amount is expected to sustain the company’s operations into early 2025.
Biofrontera reported sales of $7.8 million in the second quarter of 2024. Despite the adjustment in the price target, Roth/MKM continues to anticipate a 20% year-over-year revenue growth for Biofrontera in 2024. The firm’s outlook remains positive due to strategic moves made by the company earlier in the year.
In the first quarter of 2024, Biofrontera restructured its agreement with Biofrontera AG concerning Ameluz, a key product in their portfolio. The renegotiation resulted in a reduced transfer price for Ameluz and granted Biofrontera Inc control over all U.S. clinical trials for the product. This restructuring is expected to have a favorable impact on the company’s finances and operational control.
The company is also awaiting an important regulatory date, with the sNDA PDUFA for Ameluz scheduled for October 4, 2024. The anticipation of this event is significant for the company as it could potentially lead to an increase in the volume of Ameluz used per treatment.
Additionally, Biofrontera’s recent launch of the RhodoLED XL lamp, which is designed to accommodate larger Ameluz volumes, aligns well with the expected approval. This product launch is seen as a strategic step to capitalize on the forthcoming regulatory decision and enhance the company’s market offering.
In other recent news, Biofrontera has been making significant strides in its operations. The company reported Q1 2024 financial results, revealing a 9% decrease in quarterly revenues year-over-year due to a cyberattack. However, Biofrontera has since rebounded with over 5% in revenues year-to-date April 2024.
The company also reported a net loss of $10.4 million with total operating expenses of $13.4 million but anticipates cash flow breakeven by year-end 2025.
Biofrontera has launched its RhodoLED XL red light source lamp, which has received FDA approval for use with Ameluz in treating mild-to-moderate actinic keratoses. The firm Roth/MKM maintained its Buy rating on the company following this development.
The launch of this new medical device aligns with the expected Prescription Drug User Fee Act (PDUFA) date in early Q4 2024, when the FDA will decide on approving the use of three tubes of Ameluz per treatment.
The company has also renegotiated its supply agreement for Ameluz, reducing costs from 40-50% to 25% for 2024 and 2025. This strategic move, along with the raising of $8 million to support growth and clinical trials, underscores Biofrontera’s commitment to growth and innovation.
InvestingPro Insights
As Biofrontera Inc (NASDAQ:BFRI) navigates through its financial and operational milestones, InvestingPro data provides a snapshot of the company’s current market standing. With a modest market capitalization of $5.8 million, Biofrontera’s stock reflects a significant price drop, trading at a low revenue valuation multiple. This could be seen as an opportunity for investors looking for potential growth stocks at a bargain, especially considering the company’s 20.23% revenue growth over the last twelve months as of Q1 2024.
However, the road ahead might be challenging. According to InvestingPro Tips, the company is quickly burning through cash and analysts do not anticipate profitability within this year. Additionally, the stock has taken a substantial hit over the last week, yet it has seen a large price uptick over the previous six months. This volatility is important for investors to consider when evaluating the company’s stock performance.
For those interested in a deeper analysis of Biofrontera’s financial health and future prospects, InvestingPro offers additional tips and insights. Currently, there are 9 more InvestingPro Tips available that could guide investors in making more informed decisions. The service provides a comprehensive view on stocks, including Biofrontera, with tailored financial data and expert analysis.
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