Dear ladies and gentlemen, welcome to the conference call of Biofrontera AG. 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 Pamela Keck, Head of Investor Relations who will lead you through this conference. Please go ahead, madam.

Thank you, Judith. Good morning, and welcome to Biofrontera's earnings conference call for the first nine months of 2019. Earlier this morning, we issued a press release announcing financial results for the nine 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 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, November 19, 2019. 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 Prof. Dr. Hermann Lübbert, our CEO. Hermann, go ahead. Hermann Lübbert: Thank you, Pamela. And thank you very much, ladies and gentlemen, for taking the time today to participate in today's call. With me here is Thomas Schaffer, our CFO. Christoph Dünwald, our Chief Commercial Officer, excuses himself today for health reasons. I will summarize the general business development and clinical updates during the reporting period and will provide an update on the current status of our commercial efforts. Mr. Schaffer with then present the financial results…

Thank you, Hermann. And a warm welcome to everyone on the line. I would now like to give you an overview of the financial results for the first nine months of 2019 and then the outlook for the rest of the financial year. First of all, I'd like to say that Biofrontera continues to develop. Since our market entry in the US, sales have been rising steadily. And in the current financial year, we're continuing our dynamic revenue growth. As Herman mentioned at the beginning, continuous strong growth does not always happen in a linear fashion. This is nothing unusual in growing a business, especially in a company with such a short history as Biofrontera. Let us now turn to the financial figures for the Biofrontera Group. In the reporting period, we achieved a total revenue of around €19.1 million compared to around €14.6 million in the nine months of 2018. This corresponds to an increase of 31%. The reason for this was again mainly the strong growth in the US, flanked by the dynamic growth in Germany. Our most important pillar by far, however, is and remains the US market. Sales in the US improved in the reporting period by 33% to around €13.6 million compared to €10.2 million in the same period last year. Sales in Germany amounted to around €3.3 million in the first nine months of this year compared to €2.1 million in the same period in 2018. This corresponds to an increase of 59%. Our sales in the other European countries decreased in the reporting period by 14% to approximately €1.8 million compared to €2.1 million in 2018. This decline was due to a decline in deliveries to license partners. I would like to emphasize at this point in time that, despite the substantial price…

Thank you. [Operator Instructions]. First question is from Bruce Jackson, The Benchmark Company. Your line is now open.

Hi. Good morning. Thank you for taking my questions. The first thing I want to get into is the extra-large lamp. Is that going to be a 510(k)? And when do you think that might be on the market? Hermann Lübbert: Well, this is not a 510(k) because it's part of a combination product that's driven by the drug side of the FDA. So, we think that we'll be able to submit this lamp in the middle of next year to the FDA. And then, if everything goes according to plan and the UFDA agrees with our thinking on this, then we should have the approval within about six months.

Okay. So, the ramp is going to be then tied to the drug – it's a combination product. Okay. And then, secondly, with the basal cell carcinoma trials, specifically, do you have a rough idea of when you might complete enrollment for that trial? Hermann Lübbert: I don't think that we will have the results of that trial prior to 2021.

Okay. And then, one last question on the shares that the management team tendered earlier this year, what are your current holdings in the company? And then, do you still have the intent of, at some point, buying back into the shares that you've previously tendered? Hermann Lübbert: Yes. We have already bought in to a certain amount back in. I have, together with my life personally, hold now around, I don't know the exact number, but it's around 90,000 shares. And Thomas has currently purchased 10,000 shares. And we do intend to acquire more shares. But we are, obviously, waiting for also the results of the upcoming shareholder meeting.

Okay. Okay. Alright. That's all I needed. Thank you very much. Hermann Lübbert: Thank you.

The next question is from Russ Blair, Arik Securities [ph]. Your line is now open.

Hi there. Thank you for taking my questions. Just a couple today. Firstly, could you possibly provide a comment on what was driving the slower-than-expected sales in the US during the summer months? Secondly, what do you anticipate your capital requirements for next year might be? And lastly, what – could you also provide comment on what your legal costs have been this year and what you might expect for next year as well? Thank you very much. Hermann Lübbert: If I start with questions one, on the slower development in the summer months, last year, we had a price increase on October 1st, which was heavily driving September sales, particularly in the last three weeks. And when we were planning this year's sales, we simply underestimate the general seasonality in Q3 because last year's results were sort of obstructed by that effect. And these were the only – this was the only basis for comparison we had in planning. When we look at what happened, then we were actually behind the results of last year only in the last three weeks of September and all other weeks prior to that were higher than previous year. So, this is clearly related to the price increase in October.

Thank you.

And, unfortunately, we cannot at this point in time, give an outlook or forecast or anticipation for next year. And to your question around legal costs, so far in 2019, we have incurred some €5 million already.

Perfect. And are you able to give an estimate on what you expect legal costs to be next year?

Not yet. We cannot unfortunately give any estimates for any period beyond 2019 at this point in time.

I understand. Thank you very much.

You're welcome. Hermann Lübbert: Thank you.

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

Good afternoon, guys. Thanks for taking the questions. Can you – given the significant increase in legal costs, have there been developments in the DUSA litigation beyond what you had anticipated? Any color that you could provide there? Hermann Lübbert: This is difficult because a lot of this is done between the lawyers and it's also lot of the material that has been exchanged is also confidential to us. It's I think fair to say that DUSA is not interested at a settlement we would like to settle or we have been offered to settle a long time ago because any kind of settlement would be cheaper than the legal costs. But this is clearly not the intention of Sun Pharma.

Great. And then, the updated guidance of €28 million to €31 million, does that include Cutanea. I think previously you had excluded Cutanea from your revenue guidance. I just wanted to clarify if that was included or excluded from them. Hermann Lübbert: No. That range includes Cutanea product, which is basically only one left.

Okay. And then, final question, the gross margin in the third quarter was reduced sequentially. Could you comment on that? What led to the reduction in gross margin?

Well, it's a blended margin. So, it's a mix of the various margins on the products. And then the mix of – and the rate of the various products within a given period of time on the one hand. It's further geared to the mix of in which markets we are selling our products. We sell into various markets with our own sales force, however with different prices. And then, we have only 50% on average of the revenue or of the price when we sell to license partners. And then, finally – of course, this is changing to some extent the amount of other sales cost or cost of sales that we incur. Like, for instance, upgrading our manufacturing facilities.

Thank you, guys.

It's within the range where our margins usually are still.

Thank you.

Thank you, Thomas. Hermann Lübbert: Thank you.

At the moment, there are no further questions. [Operator Instructions]. As there are no further questions, I would like to hand back to Ms. Keck.

Thank you, Judith, one more time. Thank you all for joining the call today. Hope we were able to answer your questions and provide some color on the Q3 and nine-month numbers. And wish you a nice rest of the day. Thank you. Hermann Lübbert: And also, thank you from my side for taking the time today and being a Biofrontera shareholder. Thank you very much.

Thank you. And have a good day, everyone.

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