Alvotech Q3 FY2024 earnings call

• FDA Inspection: The company concluded an extensive general GMP inspection by the US-FDA of its Reykjavik, Iceland manufacturing site. Received two observations but viewed the overall result as a validation of compliance efforts. Expected industry standard pre-approval inspections and future FDA general GMP inspections on a two-year cadence. • Pipeline Progress: AVT16 (biosimilar to Entyvio) in patient trials; AVT03 and AVT05 received EMA acceptance; SELARSDI (Stelara biosimilar) approved in the US with launch in 2025. • Commercial Updates: Ramping up supply to US partners for AVT02; AVT04 biosimilar to Stelara launched in 23 markets; ex-US product revenues expected to contribute up to one-third of total revenues in 2024. • Margin Improvement: Product margin in Q3 was 37% due to increased shipments of AVT02 and new launches of AVT04, scaling operations.

Total revenues for the first nine months of 2024 were $339 million, a nearly 9-fold increase compared to the same period in 2023. Product revenues for the first nine months reached $128 million. In the third quarter, product revenues were $62 million, the highest recorded quarter for Alvotech, an increase of 16% from the second quarter. Product margin in Q3 was 37% compared to 17% in Q2, driven by increased shipments of AVT02 to the US and new product launches of AVT04 in Europe. Milestone revenues year-to-date reached over $210 million.

• Revenue guidance for 2024 is $400 million to $500 million, driven by new product launches and milestones. • Milestone revenues higher than initially guided due to earlier development progress than planned. • Potential shipment timing of some quantities into early 2025, impacting revenue and margin. • Forecasted cash interest payments in 2024 between $45 million and $50 million due to deferring cash interest payments on loan facility.

• Uncertainties related to FDA inspection outcomes and potential impact on future filings and approvals. • Shipment timing uncertainties that could affect revenue and margin projections. • Market competition for biosimilar products, particularly in the Eylea and Simponi markets.

Q: Comment on the FDA 483s and their impact on Stelara biosimilar launch?

A: The two observations from the FDA inspection are easily addressable. The overall result was a validation of compliance efforts and will not hold off the Stelara biosimilar launch in early 2025.

Q: Clarification on revenue guidance given $339 million already achieved in nine months?

A: There remains uncertainty in shipment timing with some quantities potentially phasing into early 2025, restricting further refinement of guidance for 2024.

Q: Impact of FDA inspection on Stelara biosimilar launch and 2025 guidance?

A: The FDA inspection outcomes will not hinder the Stelara biosimilar launch. The $600 million to $800 million revenue guidance for 2025 remains valid until new guidance is provided after commercial negotiations for AVT04 complete.

Q: Expectations on gross profit margin over next 12-18 months?

A: Product margins are expected to continue expanding as the year ends, but no specific guidance for 2025 is provided yet.