Alvotech

Alvotech operates as a vertically integrated biotechnology company exclusively focused on the development and manufacture of biosimilar medicines for the global market. The company's mission is to enhance patient lives and the sustainability of the global healthcare ecosystem by increasing the availability and accessibility of biosimilars. Alvotech has invested over $2 billion ¹ to build a comprehensive platform for developing and manufacturing biosimilars at scale, encompassing R&D, manufacturing, clinical testing, and regulatory approvals. The company's principal place of business is in Luxembourg, with its main operating subsidiary, Alvotech hf., and a large part of its R&D division located in Reykjavik, Iceland.

Alvotech's core business model revolves around developing and manufacturing high-quality biosimilars and then partnering with a global network of pharmaceutical companies for commercialization. The company licenses its biosimilars intellectual property to these partners in exchange for upfront payments, development and commercialization milestone payments, and royalties on sales. The revenue mix includes both product revenue and license and other revenue, with product revenue being transactional and license revenue often tied to development and regulatory milestones. Primary customer segments are the commercialization partners who then market and distribute the products to healthcare providers and patients.

The company currently has five commercialized products approved in major markets. AVT02, a biosimilar to Humira (adalimumab), is approved in the U.S., Canada, UK, and European Economic Area. AVT04, a biosimilar to Stelara (ustekinumab), is approved in the U.S., Canada, UK, European Economic Area, and Japan. AVT05, a biosimilar to Simponi (golimumab), is approved in the UK, European Economic Area, and Japan. AVT06, a biosimilar to Eylea (aflibercept), is approved in the UK, European Economic Area, and Japan. AVT03, a biosimilar to Prolia/Xgeva (denosumab), is approved in the UK, European Economic Area, and Japan. The company's pipeline also includes AVT16 and AVT80 (proposed biosimilars to Entyvio), AVT23 (proposed biosimilar to Xolair), AVT29 (proposed biosimilar to Eylea HD), AVT32 (proposed biosimilar to Keytruda), and AVT10 (proposed biosimilar to Cimzia), along with other undisclosed early-stage candidates.

For the fiscal year ended 31 December 2025, Alvotech reported total product revenue of $276.271 million ² and license and other revenue of $310.1 million ³. The company achieved a net profit of $27.9 million ⁴ for the year, a significant improvement from net losses of $231.9 million ⁵ in 2024 and $551.7 million ⁶ in 2023. As of 31 December 2025, the accumulated deficit stood at $2,409.8 million ⁷. Cash and cash equivalents were $172.4 million ⁸, and total outstanding indebtedness was $1,299.1 million ⁹, comprising $1,031.6 million ¹⁰ under the Secured Loan Facility, $96.7 million ¹¹ under the Senior Term Loan Facility, $68.4 million ¹² under the 2025 Convertible Bonds, and $102.4 million ¹³ in bank loans.

Comparing 2025 to 2024, product revenue increased from $273.472 million ¹⁴ to $276.271 million ¹⁵. Geographically, Europe's contribution to product revenue significantly increased from 20.7% ¹⁶ ($56.574 million ¹⁷) in 2024 to 55.1% ¹⁸ ($152.201 million ¹⁹) in 2025. Conversely, the USA's contribution decreased from 71.5% ²⁰ ($195.526 million ²¹) in 2024 to 38.3% ²² ($105.889 million ²³) in 2025. The Rest of World segment saw a slight decrease from 7.8% ²⁴ ($21.372 million ²⁵) to 6.6% ²⁶ ($18.181 million ²⁷). The company transitioned from a net loss of $231.9 million ²⁸ in 2024 to a net profit of $27.9 million ²⁹ in 2025.

During 2025, Alvotech received marketing approvals for three additional biosimilars: AVT03 (denosumab), AVT05 (golimumab), and AVT06 (aflibercept) in Japan, the UK, and the European Economic Area. Launch activities for these newly approved biosimilars commenced with respective commercial partners by the end of 2025. In January 2025, the FDA accepted the BLA for AVT05, in February 2025 for AVT06, and in March 2025 for AVT03. However, in October, November, and December 2025, the FDA issued Complete Response Letters (CRLs) for AVT05, AVT06, and AVT03, respectively, citing deficiencies related to the Reykjavik manufacturing facility. The company also acquired the R&D operations of Xbrane Biopharma AB in 2025, including all IP related to the development of AVT10 (biosimilar candidate to Cimzia), and started building an additional R&D and Quality hub in Stockholm, Sweden. Additionally, Alvotech acquired the operations of Ivers Lee in Switzerland, which handles packaging and device assembly. In December 2025, Alvotech and Teva reached a settlement and license agreement with Regeneron Pharmaceuticals Inc. for AVT06 in the United States, granting a license entry date in the fourth quarter of 2026. A settlement agreement was also reached with Regeneron and Bayer in January 2026 to market and sell AVT06 in the UK, Canada, Japan (excluding diabetic macular edema indication from May 1, 2026), the European Economic Area, and all other countries (excluding the U.S.) from May 1, 2026, and in Japan with all approved indications from November 1, 2026.

Management has determined that, based on the current operating plan and cash and cash equivalents of $172.4 million ³⁰ as of 31 December 2025, the uncertainty regarding the company's ability to continue as a going concern does not represent a material uncertainty and does not give rise to significant doubt. However, the company may require additional funding to obtain regulatory approval for and successfully commercialize its product candidates.

The company's growth areas are primarily focused on advancing its portfolio and pipeline of multiple biosimilar candidates through development and regulatory processes, with the aim of launching them into over 90 markets worldwide. Key growth vectors include the commercialization of newly approved biosimilars AVT03, AVT05, and AVT06 in Japan, the UK, and the European Economic Area, with launch activities having commenced by the end of 2025. Additionally, the pipeline includes proposed biosimilars such as AVT16 and AVT80 (Entyvio), AVT23 (Xolair), AVT29 (Eylea HD), AVT32 (Keytruda), and AVT10 (Cimzia), all of which represent future revenue opportunities upon successful development and regulatory approval. The company aims to be among the first wave of biosimilars to every reference product, leveraging its integrated platform for quality, cost, and speed to market.

Operationally, the company anticipates that its annual operating expenses may increase over the next several years due to additional commercialization expenses and continued research and development expenses. The company is committed to resolving the deficiencies identified by the FDA related to its Reykjavik manufacturing facility for AVT03, AVT05, and AVT06, which must be satisfactorily resolved for U.S. market approval. The company is also adapting to evolving regulatory environments, such as the EMA's April 2025 draft Reflection Paper proposing tailored clinical approaches for biosimilar development, which could impact the design, execution, and data expectations for ongoing and future submissions.

Planned capital allocation includes continued significant investment in research and development activities. Actual capital expenditures for the year ended 31 December 2025 amounted to $64.5 million ³¹, primarily consisting of property, plant and equipment, leasehold improvements, lab equipment, and computer equipment in Iceland. The company also engaged in debt financing activities in 2025, including the issuance of $108 million ³² of senior unsecured convertible bonds due 2030 with a 6.875% ³³ fixed coupon, and entering into a $100 million ³⁴ Senior Term Loan Facility maturing in December 2027 with a 12.50% ³⁵ cash interest rate.

Structural headwinds and execution risks include the lengthy, time-consuming, and uncertain regulatory review and approval processes of various authorities, including the FDA, EMA, MHRA, and European Commission. The company faces significant competition from reference products, other biosimilars, and other medicinal products, which could prevent it from achieving significant market penetration. Measures to contain healthcare costs, such as the U.S. Inflation Reduction Act, may reduce the addressable market for products and affect pricing. Geopolitical factors, including conflicts in the Middle East, may impact supply chains and increase costs. The company also faces risks related to its reliance on third parties for manufacturing, clinical studies, and commercialization, and the potential for disagreements with partners or their failure to commercialize products effectively.

The company faces several material risks, including significant indebtedness of $1,299.1 million ³⁶ as of 31 December 2025, which could impact its ability to satisfy obligations and refinance debt, especially given the $96.7 million ³⁷ Senior Term Loan Facility maturing in December 2027 and the $68.4 million ³⁸ 2025 Convertible Bonds due 2030. Regulatory risks are substantial, as evidenced by the Complete Response Letters from the FDA for AVT03, AVT05, and AVT06 due to manufacturing facility deficiencies, which could delay U.S. market entry. Competition is intense from originators and other biosimilar companies, potentially limiting market share and revenue. Geopolitical tensions, such as conflicts in the Middle East, may disrupt supply chains, increasing costs and causing delays. Operational risks include reliance on single-source suppliers for manufacturing components and the potential for manufacturing disruptions, as well as the identified material weaknesses in internal control over financial reporting that require ongoing remediation. Changes in healthcare laws, such as the U.S. Inflation Reduction Act, could reduce the addressable market and affect pricing. Legal proceedings, including ongoing patent litigation with Amgen regarding AVT03 in the U.S. and JAMP's proceedings against AbbVie for AVT02 in Canada, pose risks of substantial costs and market access impacts. The company is also subject to evolving sustainability disclosure requirements in the EU, which could lead to increased compliance costs and reputational damage.

Management's message to shareholders emphasizes the company's commitment to leveraging its integrated platform to develop and manufacture high-quality biosimilars and to work with its global network of partners for commercialization. They highlight the achievement of a net profit of $27.9 million ³⁹ for the year ended 31 December 2025, a significant turnaround from previous losses. Strategic priorities include resolving the FDA deficiencies for AVT03, AVT05, and AVT06 to enable U.S. market entry, continuing to advance the diverse pipeline of biosimilar candidates, and maintaining strong commercial partnerships to ensure global reach. Management also underscores the importance of attracting and retaining high-quality talent, with over 89% ⁴⁰ of the workforce dedicated to manufacturing and development, and a commitment to ESG and corporate responsibility, particularly minimizing environmental impact through the use of nearly 100% ⁴¹ renewable energy in Iceland.