Dear ladies and gentlemen, welcome to the conference call to discuss Q1 2019 results. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. [Operator Instructions]. May I now hand you over to Ms. Keck who will lead you through this conference. Please go ahead, madam.

Thank you. Good morning and welcome to Biofrontera's first quarter 2019 earnings conference call. E Earlier this morning, Biofrontera issued a press release announcing financial results for the three months ended March 31, 2019. We encourage everyone to read today's press release, as well as Biofrontera's quarterly report which has been published on our website. The company's press release is also available on Biofrontera's website at www.biofrontera.com. Please note that certain of the information discussed on the call today is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act. We caution listeners that, during this call, Biofrontera's 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 company's business. These forward-looking statements are subject to a number of risks, including risks related to fluctuations in our financial result, our ability to attract and retain key personnel, risks of our clinical trial, the timing and our ability to submit applications for, obtain and maintain regulatory approvals for our product candidates, and others detailed in, and qualified by, cautionary statements contained in our press releases and SEC filings, including our annual report on Form 20-F and subsequent filings. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, today on May 29, 2019. Biofrontera undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. With that, I would now like to turn the call over to Dr. Hermann Lübbert. Biofrontera's Chief Executive Officer. Hermann, go ahead. Hermann Lübbert: Yeah. Thank you, Pamela. And thank you everyone for joining us today for Biofrontera's first quarter 2019 earnings conference call. Today, I'm joined…

Thank you, Christoph. And good afternoon, good morning to everyone on this conference call today. I would like to briefly review our financial performance in the first quarter of the 2019 financial year. For the first quarter ended March 31, 2019, we reported total revenue of €6.8 million compared to €4.7 million in the same period in 2018, representing a 46% increase year-over-year primarily due to strong growth in the United States. Revenue in the US grew significantly to €5.2 million for the first quarter 2019 compared to €3.4 million the same period last year, representing a 52% increase. Revenue in Germany amounted to €1.1 million for the first quarter of 2019 compared to €0.6 million for the first quarter of 2018. That represents a 72% increase. And this increase was primarily driven by the approval and marketing of Ameluz for daylight PDT. Our revenue in the remainder of Europe remained essentially flat at €0.6 million for the first quarter 2019 compared to the €0.6 million in the same period in 2018. That is due to the elimination of reimports within the EU that we encountered in the first quarter of 2018. Our gross profit on sales increased by €1.8 million to reach €5.8 million in the first quarter 2019 compared to €4.0 million in the first quarter 2018. The gross margin was stable at 86% in the first three months of 2019 compared to the previous year. Going forward, we will have the opportunity to improve our gross margins earned from Ameluz thanks to the recent approval from the EMA and FDA to upscale our batch sizes for the production of Ameluz fivefold. Not only will this improve our gross margins, but it will also allow us to ensure a secure supply of Ameluz as we work to further…

[Operator Instructions]. The first question is from Bruce Jackson, The Benchmark Company. Your line is now open. Please go ahead.

Hi. Good day. And congratulations on all of the progress. Hermann Lübbert: Thanks.

Yes. So, in terms of the Cutanea revenues, so you're officially going to have the combined sales force going in the third quarter. What happens with the second quarter revenue? Do you get to book that or does that go to Maruho?

No, we book the revenues in our books.

Okay.

Yeah. Cutanea is owned by Biofrontera since March 25th. So, Maruho is going to reimburse us for costs as agreed, but revenues are consolidated in our P&L.

Okay. Okay. And then, with regard to the acne development project with Maruho, you've got the letter of understanding. What's the next step in that project? And do you have a – you said meeting with the FDA, and do you have a meeting set up yet? Hermann Lübbert: We have not yet set up a meeting with the FDA. We are in the process of preparing the acne clinical trial with the clinical investigators in the US.

Okay. Do you have a rough idea of when that might happen? Would it be third quarter, fourth quarter, second half of the year, something like that? Hermann Lübbert: Second half of the year, yes.

Okay, all right. That's it for me. Thank you very much. Hermann Lübbert: Thanks, Bruce. Christoph Dünwald: Thank you, Bruce.

The next question is from Thomas Flaten, Lake Street Capital Markets. Your line is now open. Please go ahead.

Thank you. Good afternoon, guys. Just a follow-up on the prior question about acne. Do you have a sense of the duration of the initial Phase II and what size of study we can anticipate or is it too early to ask that question? Hermann Lübbert: We think that the study – the size of the study will be somewhere between 150 and 200 patients. And the duration of the study, each study participant will probably be in the study for four months. So, if we can manage to recruit these patients within, let's say, nine months to a year, we are basically looking at a study duration of approximately one-and-a-half years.

Great. And then, I just wanted to confirm your comments during the call. And you think two Phase III studies will be required for approval. Do you have a sense of size of study for those? Hermann Lübbert: No. I cannot have an idea about that. This really depends on the results of the Phase II trials and they will be needed to do the power calculations to then calculate the size of the Phase III trials.

And then, just the last question for me, the most recent comments that came out of Deutsche Balaton, do you have a comment to that? Hermann Lübbert: Comments that came out of Deutsche Balaton with respect to what?

With respect to changes to management that were announced late last week? Hermann Lübbert: We are facing this kind of comments through Deutsche Balaton since quite a while. And it's typical for Deutsche Balaton to do this kind of things with the companies they invest in. And it's certainly not the opinion of the majority of the shareholders as has been expressed in multiple shareholder meetings where their proposals have never found any majority.

Great. Thank you, guys. Appreciate it. Christoph Dünwald: Thank you, Thomas.

The next question is from Ross Blair, Bryan, Garnier & Co. Your line is now open. Please go ahead.

Hi there. Thank you for taking my questions. And just two today. The first question being how much of the US revenue growth do you believe is based on the implementation of the new CPT codes? And in your outlook for this year, if you could give a rough estimate on the number of scripts you need for the revenue outlook. Thank you.

Okay. So, the CPT code definitely is helping. This is based on discussions that we have with our KOLs that work with us. Up to 75% of the people are actually using the highest CPT codes when using Ameluz. So, definitely, that is helping – establishing Ameluz as a PDT drug. The overall number of prescriptions that we need for breakeven, everything – that is all baked in our budget and in the guidance. So, if we achieve the guidance of $35 million to $40 million, we will achieve the breakeven.

Perfect. Thank you very much. Christoph Dünwald: Thank you, Ross.

There are currently no further questions. [Operator Instructions]. And we've received a further question from Gary Waanders, Bryan, Garnier & Co. Your line is now open. Please go ahead.

Hi there. Just a question on sort of the breakdown between modalities of delivering PDT. Do you have any sense of, over time, or in this quarter, what proportion of patients are receiving daylight PDT versus a lamp-based PDT? Thanks. Hermann Lübbert: Okay. So, daylight PDT is only available in Europe and it's reimbursed in our markets yet. And this is actually depending on the season. So, in Germany, for instance, it's only possible between March and October. And, therefore, what I said in our talk earlier, in our explanations earlier, many, many doctors now have started using artificial daylight, daylight-simulating PDT treatments with a variety of different lights. So, it really depends. If you're in a hospital setting like in Spain and in the UK where treatment is done, then of course during the daylight season, that could be up to 100% for certain hospitals. And then, in the winter, it goes down to the conventional PDT. Already have it in Germany where you have a private sector that is fully reimbursing PDT where these private patients are throughout the year receiving conventional PDT and the publicly insured patients are receiving daylight PDT. So, there is no easy answer to that question, what percentage. But we definitely have seen, in the past also – obviously, it dipped during the summer months for PDT treatments, which is completely gone also, almost reversed now with daylight PDT available.

And in the US, ultimately, will daylight – or do you expect daylight PDT to be covered by the same sort of codes? Would there be any preference on dermatologists to use one or another modality? Hermann Lübbert: Well, in the US, the situation is different, in that conventional PDT is paid for. So, the doctor, if he does the PDT procedure, he can get paid for that through the CPT codes, which isn't the case in most settings in Europe. When we look at daylight PDT and at the clinical data, it's not quite as good as conventional PDT. So, it's still a very good treatment of actinic keratosis compared to other treatment options, but not compared to conventional PDT. So, there is – currently no desire in the US from the medical point of view to actually introduce daylight PDT as a treatment modality.

Okay, understood. Thank you very much. Hermann Lübbert: Sure. Christoph Dünwald: Thank you, Gary.

And we have a follow-up question from Bruce Jackson, The Benchmark Company. Your line is now open. Please go ahead.

Hi. Just one quick question for Christoph. I wanted to know if the publication of the reimbursement rates has helped you in terms of commercial uptake in the United States, especially with the new doctors. Christoph Dünwald: Well, growth is 52%. So, definitely, this is also helping. Once the average selling price is published, reimbursement really gets easier. And definitely that helped. And we were trying to get [indiscernible] published for the last three years and were actually quite happy that that finally happened effective 1 January. So, definitely, helpful.

Okay, thank you very much. Christoph Dünwald: Thank you, Bruce.

There are no further questions. Hermann Lübbert: So, if there are no further questions, then we thank you all very much for taking the times to participate in the telephone conference and wish you a nice remaining day. Thank you very much. Christoph Dünwald: Thank you very much, everyone.

Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.