Biofrontera Sheds Antibiotic Asset to Focus on PDT, Chart Path to Profitability

WOBURN, Mass. – November 7, 2025 – Biofrontera Inc. (Nasdaq: BFRI) is doubling down on its photodynamic therapy (PDT) platform, announcing the sale of its Xepi® (ozenoxacin) Cream, 1% antibiotic to Pelthos Therapeutics Inc. for up to $10 million. The move, analysts say, is a strategic pivot designed to address ongoing financial challenges and concentrate resources on the company’s core dermatology business.

The deal, announced Wednesday, sees Biofrontera receive $3 million upfront, with an additional $1 million contingent on commercial product availability and up to $6 million tied to achieving specific revenue milestones for Xepi® within the US, Puerto Rico, and the US Virgin Islands. The company intends to use these funds to bolster its balance sheet and accelerate its journey to profitability.

Strategic Repositioning Amidst Financial Pressures

Biofrontera has faced headwinds in recent years, with its latest annual report revealing a net loss of $14.7 million. The sale of Xepi® – while generating $8.5 million in revenue in 2022 – appears to be a calculated move to streamline operations and focus on areas where the company believes it has a distinct competitive advantage: its Ameluz® treatment for actinic keratosis using PDT.

“This transaction allows Biofrontera to dedicate resources to its flagship PDT technology and pursue a more focused growth strategy,” said one industry analyst, speaking on background. “The company has been under pressure to demonstrate a clear path to profitability, and this move signals a commitment to that goal.”

The decision to divest Xepi® also follows a restructuring of its relationship with Biofrontera AG, reducing royalty payments and granting Biofrontera Inc. greater operational independence. This restructuring, combined with the asset sale, suggests a clear effort to control costs and maximize shareholder value.

Pelthos Therapeutics Expands Dermatology Pipeline

For Pelthos Therapeutics, the acquisition of Xepi® represents a significant step forward in building its dermatology pipeline. Founded in 2020 and backed by healthcare-focused venture capital firms, Pelthos has been actively seeking commercial-stage assets to accelerate its growth.

“Xepi® is a valuable addition to our portfolio, providing immediate revenue and a strong foundation for future expansion in the dermatology market,” said a source close to Pelthos Therapeutics. The company plans to leverage its existing commercial infrastructure to maximize the potential of Xepi® and broaden its reach to patients.

PDT Gains Traction in Dermatology

The move by Biofrontera highlights the growing interest in photodynamic therapy as a non-invasive treatment option for a range of skin conditions. Ameluz®, the company’s flagship product, utilizes PDT to target and eliminate precancerous lesions, offering a potentially superior alternative to traditional surgical methods.

“PDT is gaining traction as a safe and effective treatment for a variety of dermatological concerns,” noted a dermatologist consulted for this article. “Its non-invasive nature and minimal side effects make it an attractive option for patients.”

The broader dermatology market is seeing increased M&A activity, with companies seeking to acquire commercial-stage assets and innovative technologies. This trend suggests a growing confidence in the potential of dermatology as a lucrative and rapidly expanding field.

Challenges and Outlook

Despite the strategic rationale behind the asset sale, Biofrontera still faces significant challenges. The company will need to successfully execute its growth strategy for Ameluz® and demonstrate a sustained improvement in its financial performance.

“The sale of Xepi® buys Biofrontera some time, but it doesn’t solve all of its problems,” cautioned one financial analyst. “The company will need to prove that it can effectively commercialize Ameluz® and generate sufficient revenue to achieve profitability.”

Looking ahead, the success of Biofrontera’s pivot will depend on its ability to capitalize on the growing demand for PDT and establish a strong presence in the competitive dermatology market. The company’s commitment to innovation and its focus on patient-centric treatments will be critical to achieving its long-term goals. The dermatology space is ripe for innovation, and Biofrontera hopes to position itself as a leader in this evolving landscape.

Analysts will be closely watching Biofrontera’s financial performance in the coming quarters to assess the impact of this strategic repositioning and determine whether the company is on track to achieve its goal of sustainable profitability.