Biofrontera provides an update on the integration progress of Cutanea Life Sciences. On March 25, 2019, Biofrontera Inc. through its wholly owned subsidiary Biofrontera Newderm LLC, acquired 100% of the stock of Cutanea, a specialty pharmaceutical company focused on dermatology products, from Maruho. At the time of the acquisition, Maruho had agreed to cover any restructuring expenses as well as all other expenses during the three-month integration period, which ended on June 25, 2019, as well as to indemnify Biofrontera and Cutanea from any liabilities relating to or arising from the period prior to the closing. During the three-month restructuring period, Biofrontera was able to seamlessly integrate Cutanea into its existing organization by leveraging synergies in all corporate functions. Biofrontera Inc. has taken responsibility for the supply chain management as well as customer service, financial and market access support for the expanded US product portfolio. All business activities in the US will be consolidated at Biofrontera Inc.'s head office in Woburn, MA before the end of the year. Through the acquisition of Cutanea, Biofrontera was able to expand its US product portfolio with two FDA-approved prescription drugs - Xepi, the prescription antibiotic cream for the treatment of impetigo and Aktipak, a generic drug for the treatment of mild to moderate acne. Due to technical challenges with the manufacturing process of Aktipak, which cannot be remedied in the short term, Biofrontera has determined to cease the sale of Aktipak until further notice. The combined US sales force will continue to promote both, our flagship drug Ameluz and our new drug Xepi. Biofrontera acquired Cutanea for an initial purchase price of 1.00 US-Dollar. Maruho agreed to provide, in addition to the restructuring cost in the first three months and the cost of all of Cutanea's potential liabilities, an amount of up to USD $7.3 million as start-up costs to cover any incremental costs from business activities resulting from the purchase of Cutanea. A deferred purchase price equaling the actual start-up costs requested by Biofrontera shall be payable to Maruho by January 2023 at the latest. Thereafter, profits from the sale of Cutanea products will be equally shared between Maruho and Biofrontera until 2030.
