Alvotech Q3 FY2025 earnings call

• FDA Status: Received CRL from FDA for BLA of biosimilar to Simponi due to unresolved issues from Reykjavik facility inspection; Reykjavik facility remains FDA-approved.
• Pipeline: 5 approved biosimilars, 12 disclosed development programs, and cell lines for 15 targets. Products like AVT06 (Eylea biosimilar), AVT05 (Simponi biosimilar), AVT03 (Prolia/Xgeva biosimilar) scheduled for launches in Europe.
• Financials: Q3 licensing revenues strong, integration of Ivers-Lee completed; YTD revenues up 24% YOY; revised full year outlook to $570M-$600M revenue and $130M-$150M adjusted EBITDA.
• Market Performance: In U.S., second largest market share in Humira biosimilar segment; in Europe, Hukyndra growing volumes; SIMLANDI fastest-growing Humira biosimilar in Canada; Stelara biosimilar leading in Europe.

Alvotech's Q3 2025 financials showed licensing revenues at $81 million, supporting a strong gross margin of 69%. For the first 9 months of 2025, total revenues were $420 million, representing 24% year-on-year growth. Gross margin was 59% and adjusted EBITDA in the first 9 months was $68 million (16% margin). The company's revenue growth has been remarkable, with a 127% average annual growth from 2021 to year-end 2024, and projected 94% compounded average growth from 2021 to end of 2025.

• Revised full year 2025 outlook: Revenue $570M-$600M, adjusted EBITDA $130M-$150M.
• Anticipate strong finish to 2025, with licensing revenues contributing significantly; expect margin recovery and accelerated revenue contribution from new launches and geographical diversification in 2026.

• FDA CRL due to facility inspection issues; potential impact on product approvals and launches.
• Regulatory uncertainties and ongoing need to address manufacturing and documentation issues to maintain FDA compliance.

Q: Explain the CRL and status of resolving observations?

A: Joe McClellan said no repeat observations, committed to over 180 actions, 93% completed, ongoing improvements communicated to FDA.

Q: Impact of CRL on revenue and production?

A: Linda Jonsdottir said lower product revenues and margins due to timing, orders, and facility improvements; Robert Wessman noted visibility on production and year-end expectations.

Q: R&D spend and Q4 outlook?

A: Joseph McClellan discussed manufacturing control improvements; Linda Jonsdottir said R&D spend elevated in Q2/Q3, expecting lower in Q4 but still higher than initial expectations.

Q: Impact of regulatory changes on pipeline?

A: Robert Wessman and Joseph McClellan mentioned anticipating regulatory changes over 2 years ago, leveraging that in pipeline development, including for Keytruda and Cimzia biosimilars.