Dear, ladies and gentlemen, welcome to the conference call of Biofrontera AG. At our customers’ request, this conference will be recorded. As a reminder, all participants will be in listen-only mode. After the presentation, there will be an opportunity to ask questions. [Operator Instructions]. Now, may I hand you over to Pamela Keck, Head of Investor Relations, who will lead you through this conference. Please go ahead.

Thank you. Good morning and welcome to Biofrontera’s earnings conference call for the first quarter 2020. Yesterday, we issued a press release announcing financial results for the three months ended March 31, 2020. We encourage everyone to read the press release as well as the quarterly report, both of which are available on our website at www.biofrontera.com. Please note that certain 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. All risks and uncertainties are detailed in and are qualified by the cautionary statements contained in Biofrontera’s 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 on May 20, 2020. Biofrontera 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 Lübbert, our CEO. Hermann Lübbert: Well, thank you, Pamela. And thank you today very much, ladies and gentlemen, for taking the time to participate in today’s call. With me today is Thomas Schaffer, our CFO. He will present the final -- financial results in a second. I will then summarize the general business development and clinical updates and will provide an update on the current status of our commercial efforts. I will then also briefly comment on the upcoming Annual General Meeting and the proposed capital measures. But first, let's have a look at the financial results of the first quarter. For that, I would like to hand over to Thomas Schaffer.

Thank you, Hermann. Good morning, good afternoon, everyone on the call. Welcome to Biofrontera. And thanks for joining us today. I would like to start by giving you an overview of the financial results for the first quarter of 2020. For the period from January 1st to March 31, 2020, consolidated sales of EUR 6.5 million reflect a decrease of 5% compared to the same period of last year, following the fourth quarter of 2019, which was the best quarter in the company's history to-date. We experienced a mixed business performance in the first quarter. In early 2020, sales in our largest market, the United States, were slightly lower than expected due to stockpiling of Ameluz by doctors at the end of 2019 prior to the price increase effective as of January 1st. Between mid-February and mid-March 2020, we were then able to generate sales revenues in line with our original budget. However, due to the coronavirus crisis in the second half of March, revenue dropped close to zero. While we were able to achieve product sales of EUR 4.2 million in our largest market in the first quarter, this represents a decline in sales of 19% compared to EUR 5.2 million in the same period last year. Sales in Germany kicked off the New [Year] very strongly, clearly exceeding our expectations. Despite falling sales figures in March, product sales in the first quarter of 2020 rose by 22% to EUR 1.3 million. Contributing to this positive development were our marketing and sales activities in connection with the label extension for Ameluz approved by the European Commission in March. We also succeeded in increasing our sales in the other European countries during the reporting period from EUR 0.6 million in Q1 2019 to EUR 0.8 million this year. Apart from…

[Operator Instructions]. Our first question is from Bruce Jackson from The Benchmark Company.

A couple of questions for Thomas. On the cash flow, for the first quarter, do happen to have the operating cash flow number and the CapEx number?

The CapEx is pretty much zero since we are typically a company that doesn't need capital expenditures for its business. We don't need any production equipment and so on. And other than this, we do not prepare cash flow statements on a quarterly basis. We would do this on the semiannual report.

And then, with the income statement going forward, and in particular the operating expense line, I know that you've instituted a number of cost management programs. You've also -- you've had some change in your litigation expense. Do you have like a general target for operating expenses going forward? Is it going to be down to first quarter, about the same or at some point will keep moving back up?

So won't be able to [spot an extra audit]. New item in the operating expenses, which is the EUR 2 million in terms of Xepi license, which is provided under sales cost this year. If you take that out of the equation, we would still expect that our operating expenses go down, would become lower in Q2. Simply because the measures we've taken, the cost reduction measures we've taken were effective beginning of mid-March. So at least in January and February, before the crisis, we were still operating kind of at full expenses. So in general G&A and sales costs will be reduced in Q2 and going forward. With regard to legal expenses, these are already significantly lower than the quarterly level we experienced in 2018 and in 2019. However, it's difficult to predict how these are going to turn out in the future, simply because the most important -- the most expensive trial is the DUSA litigation in Massachusetts. For that one we're waiting for the judge in Massachusetts to rule on further proceedings and on the timeline. Currently, there is hardly or no activity on that trial, and therefore, almost zero expenses these days.

And then Hermann, you mentioned that -- you talked a little bit about Xepi. Can you just remind us where you are on the marketing plans for that product? I know there are some things that need to be put in place in terms of the marketing framework and distribution. And is that something that you're ramping up right now? Hermann Lübbert: Yes. It's clearly something that we intend to ramp up in the course of the year. After we took it over -- or when we took it over last year, Xepi wasn't covered by a single insurance company in the United States and because of that created a loss with every tube sold. And we are far away from this, now more than 150 million U.S. citizens are actually covered for Xepi without any pre-condition. And that, of course, changes the situation with Xepi drastically. So we do expect that now once the corona crisis is over and our reps can go out and start talking about it, in really the first time that really intensively that we see sales for Xepi also coming up rapidly.

[Operator Instructions]. Moving on to the next question from Thomas Flaten of Lake Street Capital Markets.

Hermann, one for you. You mentioned the FDA feedback on the acne study design. Could you provide a little bit of detail on what that study might look like? And I know timing is dependent on capital. But just some more information on -- any color that you could provide would be great? Hermann Lübbert: Well, that's really straightforward. So the FDA gave us indications for some details that they like to see, which didn't really change our plan. So, basically what we tried to do is, we tried to stick with the same concentration of the active ingredient that we also use in the current Ameluz and -- but we play with the incubation time. So we do the clinical trials, the different incubation times -- the phase II trial, there’s different incubation times, and then placebo, select the best incubation time for phase III trials.

And if we assume that starts -- let me ask it differently. What -- over what time period do you think that could be completed the phase II studies assuming the capital was in place? Hermann Lübbert: I think the study can be performed relatively quickly because there's so many patients out there who would be willing to go into the study. The phase II study also doesn't have an extensive follow-up, which of course, would be an interesting question to ask, but we reserved that question to the phase III trial. So this could actually be done probably in about a year's time.

Great. And then with respect to the to the U.S. salesforce, could you comment on how many reps are currently employed? And the second question to that is, during the crisis, have they been engaging with the customers virtually or have they been largely at a standstill given office closures et cetera? Hermann Lübbert: In the U.S., we currently have 30 reps over there. So we reduced the number of reps slightly when we went into cost cutting measures. It also gave us an opportunity, of course, to optimize the sales territories at the same time. And during the crisis, basically they did three things. They did stay in contact with the doctors virtually where that was possible, a number of -- a large number of the dermatology offices were just closed, but others stayed open and the reps did have a chance to actually be in touch. But they also prepared -- and that was the major task for them, they prepared for the time after. So basically, categorize and prioritize the customer base in the territories and plan for the time when they can actually go out physically again. And in parallel, they were trained by our new marketing staff about the sales efforts and where we want to put our core efforts afterwards. So that kept them busy during those times. And now, as I said before, in some states perhaps can already start to go out. In Germany, we -- just on the side, in Germany, we have the reps starting to go out this week. So it's all sort of loosening up a little bit. Obviously, not everywhere in the United States, the Northeast is still pretty much closed, we’re somewhere in the centre, and also in the Southeast or in the West. First visits are already possible again.

Thanks for all that detail. Just one final one from me. Following up on Bruce's question about Xepi. Over the -- well pick a time period, that I'm just trying to understand what the magnitude of that sales opportunities for you whether that's this year, next year, whatever time period you think is appropriate, what kind of sales goals are you looking at for that product?

Well, I'd say EUR 1.5 million to EUR 2 million revenue this year provided that we we come back to normal fairly soon in the United States. But that certainly is not going to be peak sales. That's something we're going to experience in a couple of years only. But I would say that certainly there’s more than double-digit, millions in revenue numbers on an annual basis.

Thank you. [Operator Instructions]. As there are no further questions at this moment, I'll hand the session back to you Pamela. Please go ahead.

Thank you, everyone, for joining us today. And enjoy the rest of your day. Hermann Lübbert: Yes, thank you very much.

Thank you.

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