Alvotech Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Product Performance: Humira biosimilar shows strong growth in both European and U.S. markets; STELARA biosimilar performs well in key regions with solid market share.
• Pipeline and Partnerships: Signed significant partnership agreements for early-stage pipeline, expanded R&D efforts, and acquired Ivers-Lee in Switzerland to enhance the value chain.
• Financials: First half revenue up 30% YOY to $306M, product revenues up over 200%, Q2 product revenues $95M, licensing revenues $78M, adjusted product margin 33%, adjusted EBITDA $54M in the first half.

Segment Performance

• Humira Biosimilar (SIMLANDI/HUKYNDRA): In Europe, the partner with HUKYNDRA continues to gain market share, now in its fourth year in the European market. In the U.S., SIMLANDI's launch has led to an accelerated conversion to Humira biosimilars, with over 40% share of the U.S. Humira market estimated in July and holding the second largest market share in the U.S. Partners sell the biosimilar in 33 markets globally, with 67 total marketing approvals.
• STELARA Biosimilar (AVT04/SELARSDI/UZPRUVO): AVT04 was the first entrant in Europe, Canada, and Japan with strong results. In Europe, UZPRUVO outperforms expectations with strong sales volumes and holds the first or second largest market share in key European markets. In the U.S., the biosimilar share reached over 20% of the overall STELARA market in July, with uptake progressing as expected.

Guidance

• Revenue: First half revenue at $306M, with Q3 expected to be soft and Q4 stronger due to quarterly lumpiness in revenue recognition.
• EBITDA: In line with expectations, with the fourth quarter typically being the strongest quarter of the year.
• Pipeline: Focus on accelerating pipeline development, scaling manufacturing, and improving operational efficiencies.

Risks

• Regulatory: Uncertainties around FDA inspections and approval timelines for biosimilar product approvals.
• Market: Lumpiness in revenue recognition due to milestone timing and quarterly phasing of revenues.

Question and Answer

Q: Confidence in top line guidance going forward?

A: Linda mentions revenue recognition is lumpy, with product and milestone revenues expected to soften in Q3 and strengthen in Q4, but remains in line with earlier guidance.

Q: Growth in SIMLANDI Quallent channel?

A: Anil says there's a valid contract, but focus is on value rather than volume, with the second half expected to be challenging but continuing.

Q: FDA inspection impact on AVT03,05,06 approval?

A: Robert states inspections are ordinary course, and the company will keep the market informed upon product approvals.

Q: Guidance reiteration?

A: Robert says they are in line with expectations, with no change to guidance.

Q: Revenue guidance and EBITDA?

A: Robert says they are in line with expected figures, with the fourth quarter typically being the strongest.

Q: BLA approval timing?

A: Robert says they are targeting BsUFA dates and expect no slippage from those dates.