Alvotech Q1 FY2024 earnings call

Commercializing Humira Biosimilar in US: Product is interchangeable with Humira, first to achieve interchangeability with high concentration form. Received exclusivity for approved strengths until May 2025. Partnered with Quallent for private label, Evernorth to offer at zero out-of-pocket cost. Teva making progress on formulary discussion, over 1 million units in binding purchase orders for US launch. ### Progress with Stelara Biosimilar: Launched in Canada, Japan, Europe; approved in US, commercial supply production begun. Expect to initiate supply to partner in Q4 2024. ### Pipeline Advancements: 2024 set to be busiest year for pipeline with at least three additional filings in major markets. Partnered with Dr. Reddy's Laboratories on AVT03 for US and European markets, expect to file application later in 2024. Positive top line results on AVT05 patient trial. ### Business Development: Active in BD pipeline, including AVT03 program, exploring refinancing options for debt.

Total revenues for Q1 2024 were $36.9 million, an increase of 132% compared to $15.9 million in the prior year. Product revenues in Q1 were $12.4 million, down $3.4 million versus prior year. Gross margin increased from negative $23 million in Q1 2023 to positive $17 million in Q1 2024. Adjusted EBITDA in Q1 2024 was negative $38 million, an improvement of $27 million versus the same period in the prior year.

Revenue Guidance: Raised 2024 revenue guidance to $400 million to $500 million. ### EBITDA Guidance: Revised EBITDA guidance to $100 million to $150 million. ### Q2 Expectations: Expect strongest quarter yet for revenue, first positive adjusted EBITDA in company history, driven by product revenues from AVT02 launch in US and AVT04 globally, and milestone revenues. ### Product Launches: Plan to launch biosimilar to Humira in several global markets, AVT04 in additional markets, and AVT02 in US with formulary contracting advanced. ### Milestones: Anticipate completing clinical development and submitting marketing applications for three additional biosimilar candidates, commence clinical studies for AVT16 program.

Q: Is the majority of the guidance revision owed to the private label deal with Quallent? And is the 1 million purchase orders all going to be booked in 2024?

A: Joel Morales states the guidance change was driven by contracting outcomes in the US, particularly with 02, and the 1 million purchase orders are expected to be booked in 2024.

Q: On gross margins, can you help understand better?

A: Joel Morales explains gross margin in Q1 was lower due to variables like milestone revenues and production, expecting margins to increase as volumes grow and fixed costs are absorbed.

Q: For 2025, do you continue to expect twice the growth of 2024?

A: Joel Morales says they have not changed guidance for 2025, still targeting $600 million to $800 million in revenues.

Q: On AVT06, what are the launch timelines?

A: Anil Okay says they are filing the program within 2024, with approval expected next year, but specific launch timing not guided yet.

Q: Any GLP-1 capabilities or ambitions?

A: Anil Okay states Alvotech has capabilities to develop GLP-1s but does not currently have one in portfolio, with ideas in long-term pipeline.

Q: What does Reddy's bring to the table in the collaboration?

A: Anil Okay mentions Dr. Reddy's strong capabilities in injectable and hospital space, competitive in denosumab space, and Alvotech's innovative cell line positions them competitively.

Q: Is the 1 million units biosimilar Humira in units pens or PRA?

A: Anil Okay clarifies it is in units per pen, with POs over 1 million pens.

Q: How significant is interchangeability in gaining market share?

A: Anil Okay believes interchangeability is a significant advantage, providing exclusivity and reducing conversion friction.