Dear ladies and gentlemen, welcome to the conference call of Biofrontera AG. At our customers’ request, this conference will be recorded. [Operator Instructions] May I now 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 six months of 2019. Earlier this morning, we issued a press release announcing financial results for the 6 months ended June 30, 2019. We encourage everyone to read today’s press release as well as the earnings report, both of which are 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. All risks and uncertainties are detailed in and are qualified by the cautionary statements contained in Biofrontera’s 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, August 27, 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 Hermann Lübbert, Biofrontera’s CEO. Hermann, go ahead. Hermann Lübbert: Yes. Thank you, Pamela, and thank you very much, ladies and gentlemen, for taking the time today to participate in our call. With me today are Christoph Dünwald, our Chief Commercial Officer and Thomas Schaffer, our Chief Financial Officer. I will briefly summarize the business development, the successful integration of Cutanea and the clinical updates during the reporting period. Christoph Dünwald will then report on the current stages of our sales development, followed by Thomas Schaffer, who will…

Thank you, Christoph, and a warm welcome to all of you. I now like to give you an overview of the financial figures in the first half of 2019 and an outlook for the remainder of the year. I can already say that Biofrontera continues to develop well. Since 2016, sales have been rising steeply, and we are continuing our dynamic sales growth in the current financial year as well. First of all, I would like to discuss the acquisition of Cutanea Life Sciences in order to explain the effects of the consolidation on our income statement. As previously reported, the agreement to acquire Cutanea did not involve any financial risks for Biofrontera. An immediate purchase price of $1 was agreed upon for the acquisition. The previous owner Maruho has been paying all of Cutanea’s existing liabilities and has fully taken on the operating costs in the first 3 months after the acquisition. This also included the costs and the risk of the now completed restructuring period. Maruho is providing up to $7.3 million to finance the marketing of the new acquired drugs, Xepi and Aktipak. Cutanea and its subsidiaries were fully consolidated at the time of acquisition on March 25, 2019. Sales of the new products as well as cost of sales and all operating costs incurred by Cutanea are reported in their respective lines of the income statement. From the date of the acquisition until June 30, 2019, the 2 products contributed approximately €0.5 million to sales. The result from operating activities includes a total of approximately €6 million of operating expenses for the companies of the Cutanea group, the majority of which is attributable to selling expenses. Maruho assumes the costs by paying the cash and cash equivalents held at the time of acquisition or the costs…

Thank you. [Operator Instructions] And we have already received the first question. It is from Thomas Flaten of Lake Street Capital Markets. The line is now open. Please go ahead.

Thank you very much. Thanks, guys for taking the questions. Specific to the Ameluz sales in the U.S., being sequentially down second quarter over first quarter, can you comment a little bit on the reasons for the weakness in those sales and what it is that you’re seeing in the market that would account for a significant rebound in the second half of the year? Christoph Dünwald: Hermann, would you like me to go? Hermann Lübbert: Yes, go ahead. Christoph Dünwald: Okay. So, the second quarter in general for PDT is a slower quarter than the first one, and there’s the certain seasonality in the PDT treatment. So, a lot of dermatologists from the for historic reason and from other products do not treat certain conditions when the summer is there. And some patients actually don’t want to stay out of daylight for 2 days. We had the same problem in Europe with this seasonality, but then of course now the daylight, it sounds, would be heavily around. So, the historic highest quarter then of course is the last quarter of the year for PDT. So, the fourth quarter is always the strongest and has so been for our competition as well in the past always in PDT treatment and also with conventional PDT in Europe. And there is, a few things that probably lead to the whole thing. People have paid their co-payments, so their copayment is zero at the end of the year. And of course, people rather stay inside when it is cold and rainy outside. So, we hold and then of course we hire our people, train people so we can take full advantage of our reduced territory size, and we have more territories now manned than we had last year, so I do expect that we have a very, very good fourth quarter.

Well, then we go to the next question. It’s from Bruce Jackson of Benchmark Company. Your line is now open. Please go ahead.

Hi good morning and thank you for taking my questions. So, to take a close look at the U.S. sales force integration, can you just remind us where you stand right now in terms of total reps, where you’re planning to end up by the end of the year? And then if you could give us some background on the whole integration process. So, if I understand it correctly, you had to realign the sales territories and then complete some cross-training for the new sales force. And if you could tell us when that took place and was there any disruption in revenue because of that? Christoph Dünwald: So, we started the year at around 30 reps and then we had the opportunity to integrate Cutanea. We took the decision, as we explained in the first quarter call in the call that we had about the acquisition of Cutanea and mapped out territories’ news. So smaller territories, 2 products, higher frequency and mapped out 45 territories, of which we then said we’re going to man 41. We interviewed everybody from Cutanea that was on the sales force, and we had our – we made the people that we thought were the right fit offers to come to Biofrontera, some accepted, some did not. But we had already realigned the sales force territory, so we started then immediately to recruit to fill these open positions. And then we trained everybody in June. So Cutanea sales force was continued in the second quarter until the closing date, and Biofrontera was in the second quarter was selling Ameluz. And then we integrated with the starting in July 1. We had only 1 sales force and everybody was trained in June to sell both products. Hermann Lübbert: Well, perhaps to add to this, other aspects of the integration. As Christoph said, the sales force was integrated in the second quarter and then as of the third quarter, we had only one sales force selling both products. Now in the background, the NDAs for Aktipak and Xepi have been transferred to Biofrontera Bioscience in Germany, which is now responsible for handling the regulatory aspects of these two products. The Cutanea site in Philadelphia is still there, but there is only about 10 people on site right now. And the site will be completely sold by the end of this year and by then everybody will be integrated to all functions will be integrated into the Biofrontera organization, most of the commercial functions into Biofrontera, Inc.

Okay, great. That’s very helpful. And then one other Cutanea question, with the Aktipak issue, is this a manufacturing issue? And then when you’re talking about the additional cost, is that for equipment? Or is it a something else? Hermann Lübbert: Yes, it’s a manufacturing issue. There had been 2 batches produced, which could actually not be released because they didn’t fulfill specification. And to improve the respective issues, this would be a major issue with the current manufacturer. Or alternatively, we would have to develop a new manufacturer, which again would take an extended period of time. And at least, currently, we came to the conclusion that this is financially not a good idea.

Okay. And then last question for me. You completed the clinical trial on Ameluz for the extremities. What’s your anticipated filing date with the FDA? Hermann Lübbert: I cannot yet comment with respect to the FDA because we are currently in discussions with the FDA about that, and these discussions are still ongoing. We will, within the next couple of days, actually file with the European authorities.

Alright. Thank you very much. Hermann Lübbert: Thank you.

Thank you. And now we’ve received a follow-up question of Thomas Flaten of Lake Street Capital Markets. Your line is now open. Please go ahead.

Thanks again. Just to follow up on that last question. In the half year report, there’s a I think it states that FDA submission will be made in the third quarter of ‘19. Is that still your expectation based on your response to that last question? Hermann Lübbert: It is yes, it is the expectation, but before we have the answer of the FDA whether they agree to that, I cannot further comment on it.

Got it. And then with respect to development in basal cell carcinoma and acne, could you provide a little bit more time making or update specifically around the enrollment in BCC? I know originally the expectation had been that it’ll be completed in the first half of next year. Is that still the plan? Hermann Lübbert: Yes, that’s still the plan. Enrollment into the BCC trial is not easy because the FDA requests, as a primary endpoint, lesions that are actually dissected after treatment and then histologically analyzed and fully cleared. So basically, a patient would go through all the treatment protocol within the clinical study to then, by the end, have the entire region dissected and then histologically analyzed. So, for the patient, that’s what he could have had in the first place. So, it’s a major inconvenience for the patient to go through the protocol and then basically, by the end, have the same situation that he could have had in the first place. That is something that the FDA has required, and we are, of course, doing that, but it’s difficult for our clinical centers to actually find the patients who agree to that.

And then one final follow-up probably for Christoph, you mentioned in your comments that you have now begun focusing on non-PDT dermatology offices. Can you give a little bit of color on pushback that you’re receiving or success stories or just anything to inform how that effort is going? Christoph Dünwald: Yes. So, we do believe that the right strategy for us is really broaden the base of the doctors that are offering PDT. And due to maybe their experiences they made in the past and everything, they do not offer PDT or have not done so. So, this is probably a little bit slower than if you have a big PDT practice and people like your drug or like the formulation better that you can offer. So, it is really why we have to develop these smaller offices. And it is time-consuming, and it’s probably slower, but we do believe that, that, in the future, will really give us a bigger base for our business. But of course, they will not start with buying huge quantities. We have to explain the light and PDT. What is helping is actually the CPT codes that have been revised once we came to the market and PDT now is profitable is a profitable business for them. And so, once they understand that they can offer actually the best treatment for the patient, but also make some money, they have a good argument. So that is unfortunately, that is not overnight. It is one customer at a time, right?

Great. Thank you very much.

Thank you. As there are no further questions, I would hand over to you. Hermann Lübbert: Yes. I would like to say thank you, again, for participating in our call and taking the time for Biofrontera. Thank you very much.

Thank you very much, everyone. Christoph Dünwald: Thank you.

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