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Related Party Transactions | 12 Months Ended
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Dec. 31, 2024
Related Party Transactions [Abstract] |
Related Party Transactions | 13. Related Party Transactions We consider Biofrontera AG and its consolidated subsidiaries, (“the Biofrontera Group”) to be a related party. The Biofrontera Group held more than 5% of the outstanding shares of our common stock until December 10, 2024, and we continue to rely on the Biofrontera Group as the sole supplier of Ameluz® and the RhodoLED® Lamps. License and Supply Agreement Under the Second A&R Ameluz LSA, the Company has an exclusive, non-transferable license to market and sell the licensed products, Ameluz® and RhodoLED® Lamps, in the United States and must purchase the licensed products exclusively from Biofrontera Pharma. The Second A&R Ameluz LSA, among other things, amended the Ameluz LSA to: (i) updated the price we pay per unit, based on certain percentages of the anticipated net selling price, (the “Transfer Price”) that covers the cost of goods, royalties on sales, and services, including all regulatory efforts, agency fees, pharmacovigilance, and patent administration, as follows:
| ● | Twenty-five percent of the anticipated net selling price per unit through 2025;
| ● | Thirty percent of the anticipated net selling price per unit for 2026 to 2028;
| ● | Thirty-two percent of the anticipated net selling price per unit for 2029 to 2031;
| ● | Thirty-five percent of the anticipated net selling price per unit for 2032 and beyond, subject to a minimum dollar amount per unit; and
| ● | The Transfer Price for sales related to acne, another indication currently in development, will remain at twenty-five percent of the anticipated net selling price per unit indefinitely.
(ii) provided for the transfer of responsibilities for clinical trials relating to Ameluz® in the US on June 1, 2024, including the Company assuming related contracts and transferring key personnel from the Ameluz Licensor to the Company. The Company entered into a Release of Claims with the Ameluz Licensor, dated February 13, 2024, pursuant to which the Company agreed to release the Ameluz Licensor from all claims and liabilities arising out of or relating to any failure by the Ameluz Licensor to perform certain obligations under the Second A&R Ameluz LSA with respect to clinical trials for which the Company assumed responsibility. On February 9, 2024, Biofrontera was notified that the Ameluz Licensor had initiated a voluntary recall of a limited number of lots of Ameluz® due to a manufacturing defect in the impacted product’s packaging, which is provided by an unaffiliated supplier. In its communications, the Ameluz Licensor confirmed that the recalled product is not likely to cause adverse health consequences. The Company did not bear any financial responsibility for the costs associated with this recall and it did not have a material financial impact on its business as a result of the recall. As of December 31, 2023, in connection with the voluntary recall by the Ameluz Licensor, the Company recorded an inventory write-off of $5.2 million with a corresponding asset for the anticipated replacement from the licensor to other assets, related party. As of July 23, 2024, we received the full amount of the replacement inventory for the recalled Ameluz®. Purchases of licensed products, inclusive of estimated and actual purchase price adjustments during the years ended December 31, 2024 and 2023 were $8.3 million and $23.4 million, respectively and recorded in inventories in the consolidated balance sheets, and, when sold, in cost of revenues, related party in the consolidated statements of operations. Amounts due and payable to Biofrontera Pharma as of December 31, 2024 and December 31, 2023 were $5.3 million and $8.5 million, respectively, and were recorded in accounts payable, related parties net of applicable accounts receivable in the consolidated balance sheets. Service Agreements In December 2021, we entered into an Amended and Restated Master Contract Services Agreement (the “Services Agreement”), which provides for the execution of statements of work, by and among the Company, Biofrontera AG, Biofrontera Pharma and Biofrontera Bioscience, primarily for regulatory support and pharmacovigilance. The Services Agreement enables us to continue relying on Biofrontera AG and its subsidiaries for various services it has historically provided to us for as long as we deem necessary. We currently have statements of work in place regarding pharmacovigilance, regulatory affairs, and medical affairs, and are continuously assessing the other services historically provided to us by Biofrontera AG to determine (i) if they will be needed, and (ii) whether they can or should be obtained from other third-party providers. Expenses related to the Services Agreement were negligible and $0.2 million for the years ended December 31, 2024 and 2023, respectively, and were recorded in selling, general and administrative, related party. Amounts due to Biofrontera AG related to the Services Agreement were negligible and $0.1 million as of as of December 31, 2024 and 2023, respectively, and were recorded in accounts payable, related parties in the consolidated balance sheets. Clinical Lamp Lease Agreement On August 1, 2018, the Company executed a clinical lamp lease agreement with Biofrontera Bioscience to provide lamps and associated services. Total revenue related to the clinical lamp lease agreement was negligible and $0.1 million for the years ended December 31, 2024 and 2023 and recorded as revenues, related party. Amounts due from Biofrontera Bioscience for clinical lamp and other reimbursements were negligible and $0.2 million for the years ended December 31, 2024 and 2023, which were offset against accounts payable, related parties. Other The Company recorded a receivable of $2.8 million as of December 31, 2023, due from Biofrontera AG (presented net in accounts payable, related party) for its 50% share of the balance of a legal settlement for which both parties were jointly and severally liable. There was no interest income recognized for the years ended December 31, 2024 and 2023, in connection with this receivable and the $2.8 million balance was net settled against payments for inventory in February 2024. The Company received expense reimbursement from Biofrontera AG and Biofrontera Bioscience on a quarterly basis for costs incurred on behalf of these entities, which are netted against expenses incurred within selling, general and administrative expenses. Total expense reimbursements were $0.3 million and $0.7 million for the years ended December 31, 2024 and 2023 respectively. As of December 31, 2024 and December 31, 2023, our investment, related party consisted solely of 3,019 and 8,450 common shares of Biofrontera AG, respectively. The total investment had minimal value as of December 31, 2024 and $0.1 million as of December 31, 2023. See Note 6. Investment, Related Party.

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