Alvotech Q4 2025 and Full Year 2025 Earnings Call - FDA remediation largely complete, BLAs targeted for resubmission in Q2 2026

Operator: Good day, and thank you for standing by. Welcome to the Alvotech Q4 2025 and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one one on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Benedikt Stefansson. Please go ahead.

Benedikt Stefansson, Moderator/IR, Alvotech: Thank you and welcome to our listeners. Yesterday evening, the company issued a press release announcing our financial results for the full year and fourth quarter of 2025. Material accompanying today’s earnings call was also published on our investors portal, investors.alvotech.com in the earnings calendar section. Our press release presentation and statements that we make on the call today may include forward-looking statements. These statements do not ensure future performance and are subject to risks and uncertainties that are outlined in company filings with Securities and Exchange Commission. Any risks and uncertainties could cause actual results to differ materially from forward-looking statements that are made. Presenting on today’s call are Róbert Wessman, Founder and Executive Chairman, Lisa Graver, Chief Executive Officer Designate, Joseph E. McClellan, Chief Operating Officer, Linda Jónsdóttir, Chief Financial Officer. Also with us on the call is Balaji V. Prasad, Chief Strategy Officer.

Róbert will begin today’s presentation with a summary of business highlights. Lisa will then present a commercial update. Joseph will discuss the status of our pending biologics license applications with the FDA and our R&D pipeline. Linda will then conclude with a discussion of the financial results. Following the introductions, our team will be happy to take your questions. With that, I would like to turn the call over to Róbert Wessman.

Róbert Wessman, Founder and Executive Chairman, Alvotech: Hello everyone, and thank you for joining us today. 2025 was an important year for Alvotech. We continued to strengthen our position as one of the leading global developers of biosimilars. We expanded our commercial footprint, advanced several pipeline programs, and strengthened the financial position of the company through successful capital market transactions and our listing on Nasdaq Stockholm. At the same time, we have addressed the regulatory observation of the FDA inspection of our Reykjavik manufacturing facility, and we implemented a comprehensive quality improvement program. Based on the progress made so far, we expect to resubmit the affected applications to the FDA during the second quarter of 2026. We will of course update the market once those submissions have been accepted. We have addressed regulatory observation before in the industry, and we know how to solve them.

Our focus has been on strengthening the operational platform so that we can continue to scale the business globally going forward. Alvotech has 30 biosimilars in development today. We are advancing plans to have a second source manufacturing site for some of our key products going forward. This includes manufacturing of drug substance and drug product at a strategic CMO partner based in the United States. This will give us greater operational flexibility and over time, reduce operational dependence on a single manufacturing site. Lisa will provide more details on the progress we are making with this initiative. Stepping back for a moment, the long-term drivers of the biosimilar market remains very strong. Across the pharmaceutical industry, we are seeing a continued shift towards biologic medicines. Today, around 40% of global pharmaceutical sales come from biologics.

If you look at the development pipeline, this shift is even more pronounced. Around 60% of phase 2 and phase 3 pharmaceutical development today involves biologics. This tells us that the reliance on biologics will only increase over time as more targeted therapies are developed. At the same time, more than 100 biologics are expected to lose patent protection over the next decade. While healthcare systems around the world are under increasing pressure to reduce costs, this creates a very significant opportunity for biosimilars. Another important development for the industry was that FDA draft guidance related to biosimilar development. In practice, it means that large, expensive efficacy trial will increasingly not be required. Some studies in the past have cost around $100 million per program and added 1-2 years to development timelines.

Reducing that requirement substantially lowers the development cost and time needed to bring biosimilars to market. At Alvotech, we anticipated those changes, and we adopted our development strategy already several years ago. The new FDA guidance, therefore, does not change our strategy, but rather validates the approach we have already taken. Importantly, we are now well positioned to benefit from those changes compared to many of the other companies that are still set up for the older model. Joseph will discuss this in more detail and explain how these changes may benefit our pipeline. Turning to the next slide, our ongoing investment into our platform means that today we can initiate development of a new biosimilar program roughly every two months. This has enabled us to build one of the most comprehensive biosimilar pipelines in the industry.

We now have 30 biosimilars in development, representing more than $185 billion in global sales. This pipeline is what will drive Alvotech’s future growth, and we will continue to, of course, expand it. Before handing over, I would also briefly highlight our financial performance for the year. In 2025, total revenues increased by 20% to $591 million, while adjusted EBITDA increased by 27% to $137 million. Linda will discuss the financial results in more detail shortly. Finally, as we have announced earlier this year, Lisa Graver has joined Alvotech as a Chief Executive Officer. From the beginning, I saw my role as a CEO to be a time-defined appointment focused on building the company’s platform and global partnerships.

Lisa and I have worked together over 20 years, and she has served as Alvotech board member since 2022. Lisa brings a wealth of experience in commercial, R&D, manufacturing, and quality compliance. With Lisa’s appointment as our CEO, Linda’s appointment as CFO, and Joseph and Anthony stepping into expanded roles, the key management positions are now all based on-site in Iceland, and the senior leadership has been strengthened. With the platform and people now firmly in place, the company is entering into a new phase focused on operational execution and commercial scale. I will continue to serve as Executive Chairman and be actively engaged in the business, and I’m very much looking forward to work closely with Lisa and the leadership team. We, as a team, will of course, continue to build Alvotech into a leading global biosimilar company.

With that, I will hand the call over to Lisa.

Lisa Graver, Chief Executive Officer Designate, Alvotech: Thank you, Robert, and hello, everyone. In addition to continuing my collaboration with Robert, I’m excited to help maximize the full potential of the robust pipeline Alvotech has built and is continuing to build. Before going into an overview of 2025 achievements, I want to address upfront a key priority of the team and myself. The team has been executing on an extensive improvement plan to address all outstanding issues related to the FDA inspection in July 2025 to ensure we receive FDA approval for all pending applications for AVT03, AVT05, and AVT06 this year. Despite continuing to commercialize our existing products in the U.S. and receiving approval for and commercializing AVT03, AVT05, and AVT06 in markets outside the U.S., we are committed to addressing all areas where improvement is required.

To that end, I want to highlight an initiative that we have been advancing since last year that looks to dual source the manufacturing of some of our key products. As part of strengthening the long-term resilience and scalability of our platform, we are also evaluating opportunities to broaden our manufacturing footprint for selected products. Importantly, any future expansion would build on the strong manufacturing platform we’ve established in Iceland, which remains the cornerstone of our global production network and a critical source of our technical expertise at operational scale. As we evaluate options to broaden our manufacturing footprint, the United States is a natural area of focus, given the importance of the U.S. market for biosimilars and the increasing emphasis on supply resilience within the U.S. healthcare system. Expanding our manufacturing base for selected products would support several important objectives.

First, it would strengthen supply resilience by reducing reliance on a single manufacturing site. Second, it would support future launches and increasing commercial volumes across global markets. Third, a more diversified manufacturing platform strengthens our value proposition to commercial partners who prioritize supply reliability alongside product quality and economics. And finally, it provides greater strategic flexibility in a more complex external environment, including evolving healthcare policy environments, as well as broader supply chain dynamics. Taken together, these steps will further strengthen the resilience and scalability of our manufacturing platform as we support future launches and increasing global demand. Turning to our 2025 achievements. Over the past year, we have continued to expand the commercial footprint of our biosimilars portfolio while strengthening the operational foundation that supports long-term growth. Our focus has been on three priorities.

First, continuing the rollout of our approved biosimilars across global markets through our commercial partners. Second, ensuring reliable and scalable supply as volume increases. Third, positioning the company to capture the next phase of biosimilar market evolution, particularly in the United States. During 2025, we achieved several important milestones across the company. Our commercial partner, Teva, launched Selarsdi in the United States, marking our second biosimilar launch in the U.S. market and demonstrating the strength of our global partnership model. We also received geographic expansion with approvals and first launches for Golimumab, Denosumab, and Aflibercept across Europe, the United Kingdom, and Japan, targeting some of the largest biologic franchises in medicine. As we continue to build our pipeline, we form new commercial partnership agreements with Advanz Pharma, which included our Cimzia program and with Dr. Reddy’s for our Keytruda program.

We further expanded our global commercial partnership network with the addition of Sandoz to broaden our reach across major pharmaceutical markets. As part of our efforts to further strengthen our technical and regulatory capabilities, we continue to expand our process development organization. Integrating Xbrane’s R&D team in Stockholm has added highly experienced scientists with deep expertise in biosimilar development and enhanced our ability to advance multiple programs in parallel. The acquisition of Ivers-Lee’s assembly and packaging business gave us greater flexibility and added capacity to meet increasing global demand for our biosimilars. It establishes a centralized assembly and packaging hub from which we can serve multiple global markets from a single location. From a corporate perspective, we further strengthened our financial position during the year, raising close to $300 million from the capital markets to support continued investment in our development programs and manufacturing platform.

We also broadened our investor base through the listing of Alvotech shares on Nasdaq Stockholm, providing greater access to Nordic and European investors and further strengthening our presence in the region. These transactions are a testament to the strength of our platform, our strategy, and our execution capabilities. Turning to our on-market portfolio, Humira remains one of the largest biologics markets globally, and biosimilars continue to gain share. At the beginning of 2025, the originator held roughly 70% of the U.S. market. By the end of the year, that share had declined to around 45% and continues to fall as patients switch to biosimilars. This continued shift toward biosimilars in the Humira market reflects strong payer support and growing physician confidence. In the United States, SIMLANDI saw continued volume growth between the third and fourth quarters, and we are expecting further growth in 2026.

SIMLANDI now holds approximately 9% of the market in the U.S., making it the second-largest and one of the fastest-growing biosimilars in the segment. In Europe, Humira continues to demonstrate a consistent performance despite entering a crowded market. Elsewhere, our partners continue to expand access across Latin America and Middle East markets. In 2026, we anticipate further launches in rest-of-world markets, and that AVT-02 will remain an important contributor to our commercial portfolio. Stelara represents another large and attractive biologics market with significant biosimilar opportunity, and we continue to see strong rollout of AVT-04 across key regions. In the United States, where biosimilars now account for approximately 40% of the market, Teva continues to expand formulary coverage for Selarsdi, holding a strong and growing market position. In Europe, Uzpruvo has established a leading position with more than 20% share of the biosimilar segment.

We expect continued biosimilar adoption across this market in 2026. Turning to AVT-05, our biosimilar to Simponi, which currently faces very limited competition in markets where it has been approved. We expect to be first to launch in several key markets and potentially the only biosimilar option for a period of time. Being first to market in a highly attractive biologic segment with limited competition represents a significant commercial opportunity for Alvotech, and we expect commercial momentum to build across launch markets through 2026. In Europe, AVT-05 was the first biosimilar to Simponi to be approved by both the EMA and the MHRA. Marketed under the Gobivaz brand, our partner, Advanz Pharma, began launch activities following shipment of product in December at a successful National Health Service Tender award in the UK. In Japan, AVT-05 is also the first and only approved biosimilar to Simponi.

Our partner, Fuji Pharma, has announced a market entry date of May 2026, and we anticipate being the first to launch a SIMLANDI biosimilar in this market and for there to be limited competition for some considerable time. Elsewhere, we have filed for approval in several additional rest-of-world markets. In Canada, we are the only company to have filed to date based on available information, and we expect a decision in the first half of 2026. Following approval of AVT-06 in Europe, the United Kingdom, and Japan in the second half of 2025, we announced a licensing and settlement agreement that resolves all remaining patent disputes related to Aflibercept 2 mg worldwide. The agreement provides clear pathways for market entry of AVT-06 across key global markets and allows our partners to prepare for launches with confidence.

In the US, we have a licensed entry date in the fourth quarter of 2026 or earlier under certain circumstances, which positions Alvotech and our commercial partner, Teva, for a potential launch in the US market this year, pending FDA approval. Following the shipment of product to Japan, our partner, Fuji Pharma, launched in February this year with the first and only Aflibercept biosimilar in that market, and they are reporting strong early demand. Product has also been shipped to Europe. While we expect this market to be more competitive, our partners expect to gain a strong market share. Together with our commercial partners, we believe this positions Alvotech well to compete in the global Aflibercept market, which is evolving toward longer-acting dosing regimens that reduce the burden on both patients and physicians.

The high-dose version of Aflibercept supports extended dosing intervals compared with the original formulation and is expected to represent an important part of the future market. In anticipation of this shift, we have been developing a biosimilar candidate for Eylea HD. We are targeting a first regulatory submission in 2026, which would potentially put us in the first wave of biosimilar launches for the high-dose product. Having both low-dose and high-dose Aflibercept programs allows Alvotech to participate across the full evolution of the global Aflibercept market, which remains one of the largest for ophthalmology globally. Following approval of AVT-03 in Europe in November 2025, first wave launch supplies were shipped to our commercial partners in December. Our partners, Stada and DRL, have successfully launched in Germany and select European markets. As we anticipated, early pricing dynamics have been competitive, particularly in tender-driven segments.

Despite the competitive environment, we believe that AVT-03 represents an important addition to the Denosumab biosimilar landscape, and we expect commercial momentum to build gradually through 2026 as launches expand and biosimilar adoption increases. In Japan, AVT-03 remains the first and only biosimilar to have secured approval with our partner Fuji Pharma preparing for market entry in 2026. I want to emphasize that the continued expansion of our commercial portfolio is closely linked to the strength of our development pipeline, the investments therein, and the licensing revenue from that portfolio. The performance of our business going forward is also reliant upon our focus on cost optimization across all aspects of the company, which Linda will address later. I will now pass it to Joseph, who will provide an update on our R&D programs and our continued success in building that pipeline.

Joseph E. McClellan, Chief Operating Officer, Alvotech: Thank you, Lisa. I will briefly cover three areas today. First, the status of our U.S. regulatory submissions. Second, progress across our development pipeline. Third, recent regulatory communications impacting biosimilar development. Last year, Alvotech had four active U.S. biologics license applications with the FDA for proposed biosimilars to Simponi Aria, Prolia, and Xgeva. In the fourth quarter of 2025, we received complete response letters from the FDA for these applications. Further, after receiving the CRLs, we received a post-application action letter, or PAAL, detailing the remaining open items with the FDA after review of our 483 response. The CRLs were related to issues identified following the FDA’s inspection of our Reykjavík facility in July of 2025. No issues were raised regarding the analytical, pharmacokinetic, or clinical efficacy and safety data submitted in the applications. The dossiers themselves were considered complete.

Following the inspection, we initiated a comprehensive remediation program addressing the FDA’s observations. By the end of 2025, we had implemented most of the required corrective actions. Our focus since then has been on demonstrating that these improvements are effective and sustainable over time, which is a normal part of the quality process to ensure that improvements are durable before resubmission. Based on current progress, we remain on track to resubmit the BLAs in the second quarter of this year, which would position us for FDA decisions before the end of the year. Importantly, our Reykjavik facility remains an FDA-approved manufacturing site, and we continue to manufacture our on-market products for both U.S. and the rest of the world markets. Turning to the pipeline, over the next decade, more than 100 biological medicines are expected to lose exclusivity.

Against that backdrop, Alvotech continues to build one of the largest biosimilar pipelines in the industry with more than 30 candidates currently in development. When selecting new programs, we focus on biologics where we see a combination of multiple factors, including significant market opportunity, durable mechanism of action, high scientific barriers to entry where Alvotech can be successful, and opportunities where Alvotech’s integrated development and manufacturing platform can create meaningful differentiation. Consistent with our strategy, we are excited with the progress we are making with our biosimilar candidates to both the intravenous and high concentration subcutaneous usage forms of Entyvio. Earlier this year, we announced positive top-line results from a pivotal pharmacokinetic study, which allows us to move forward with regulatory submissions in major markets with all dosage forms and strength currently approved for Entyvio.

Entyvio is an important therapy for inflammatory bowel disease and represents a multi-billion dollar opportunity in the immunology market. Based on current plans, we expect to submit regulatory applications later in 2026. Importantly, we anticipate being among the first companies to launch a biosimilar to Entyvio, including both the intravenous and subcutaneous use presentations. Another important program in development is our biosimilar candidate for Keytruda, one of the highest selling medicines in the world, with annual sales exceeding $30 billion. Keytruda has transformed treatment across multiple oncology indications and continues to expand into new therapeutic areas. Through our collaboration with Dr. Reddy’s Laboratories, we are combining development expertise with global commercial capabilities to pursue this opportunity, sharing development costs and marketing rights for Keytruda biosimilar targeting global markets.

We are anticipating submitting a therapeutic pharmacokinetic study for our proposed biosimilar to Keytruda and are on track to submit a marketing application in 2028. This would position us for a launch upon Merck’s loss of exclusivity. More broadly, we continue to expand the capabilities of our integrated biosimilars platform. Last year, we increased our R&D capacity through the acquisition of a new center of excellence in Stockholm. In manufacturing, we strengthened our downstream integration through the acquisition of Ivers-Lee, which adds capabilities into device assembly, packaging, and logistics. In Iceland, we’ve added to our perfusion capacity, which supports production of our Stelara and Simponi biosimilars, and we continue to implement improvements for both perfusion and fed-batch production. Also, we are adding new drug substance and new drug production suites in our existing Reykjavík facility, expanding our manufacturing capacity.

This additional capacity will enable us to support demand for approved products as well as our development pipeline. These investments further strengthen our end-to-end development and manufacturing platform. Before closing, I would like to briefly comment on the recent FDA draft guidance related to biosimilars development. Up until now, to support the approval of a biosimilar application in both the EU and the U.S., developers may have been expected to conduct a three-way pharmacokinetic similarity study and a comparative clinical efficacy and safety study, in addition to a comprehensive analytical similarity assessment. The draft guidance reflects a move toward more efficient and science-based development pathway. In particular, it reduces the need for a large comparative efficacy and safety clinical study, as well as providing flexibility in the use of reference products.

In practical terms, this means that in most cases, companies will be able to support the demonstration of biosimilarity with a two-arm pharmacokinetic study, either in a healthy subject population or a therapeutic setting. Further, it gives study sponsors flexibility in the selection of reference products for the study and foregoes the need of a three-way pharmacokinetic bridging study. Importantly, Alvotech anticipated this regulatory evolution. Over the past years, we proactively aligned our development strategies with both the FDA and the EMA, engaging early and often across multiple programs to obtain scientific advice. Notably, the FDA provided early recommendations for our early-stage products even prior to issuing the draft guidance, encouraging streamlined development and clarifying when a two-arm PK study without a U.S.-sourced comparator is acceptable.

This foresight by Alvotech and proactive regulatory engagement uniquely positions us to capitalize immediately on the streamlined framework, reducing costs and strengthening our leadership in global biosimilar development. To summarize, Alvotech continues to make progress across its late-stage pipeline and its research, development, and platform capabilities. With a broad pipeline and fully integrated development and manufacturing platform, we believe we are well-positioned to address the growing global demand for lower-cost biologic medicines. With that, I will hand the call over to Linda, who will provide an overview of our financial results.

Linda Jónsdóttir, Chief Financial Officer, Alvotech: Thank you, Joe. Indeed, it has been an eventful year for Alvotech. Since joining in July last year, I’ve had the privilege of witnessing firsthand just how much this team can accomplish in a short period of time. Despite the challenging operating environment, the company delivered important operational, financial, and commercial milestones, advancing major launches, expanding our global footprint, and strengthening our financial position. What has stood out most for me since day one is the strong belief in delivering on our mission, not just at the leadership level, but across the organization. With that context, let me walk you through the fourth quarter and full year financial results. Unless otherwise stated, the figures discussed today are adjusted numbers. Reconciliations to the corresponding IFRS measures are included in our earnings materials.

Starting with the highlights from Q4 2025, performance landed within our guidance with a strong close to the year. Growth was primarily driven by licensing revenues on the back of continued development progress and successful achievement of several performance milestones related to our new launches outside the US, while product sales were softer. Total revenues in the quarter were up 13% compared to the same quarter last year, at $173 million, with licensing revenues making up 75% of the total and being the key driver of the quarter. This mix lifted gross margin to 66% and adjusted EBITDA to $69 million, or a 40% margin. On the product side, revenues was $43 million and product margin negative by 37%, reflecting timing of orders and planned facility upgrades to support upcoming launches.

As noted last quarter, we did expect product margin to be impacted by facility improvements and lower throughput in the second half of 2025. Looking towards 2026, we are expecting operating performance back-end loaded in Q4, in line with trends in 2025 and previous years. Operating cash flow was negative at $28 million, mainly impacted by lower revenue collections from soft product revenues in the second half of 2025 and inventory build-up related to upcoming launches. Our year-end cash balance was $172 million, supported by the financing transactions completed in Q4, the $108 million convertible bonds and the $100 million senior term loan. These transactions strengthen the balance sheet, provide more operational flexibility, and support our launch program heading into 2026.

Overall, we closed the year with strong gross margin driven by licensing revenues, while we continue to invest in product launches and market expansion. Turning now to the full year of 2025. This slide summarizes the highlights for a year that delivered solid top-line growth, strong licensing contributions, and positive operational cash flow for the first time. Total revenues for the year were $593 million, up 21% year-on-year. The mix was split evenly between product revenues and licensing revenues, demonstrating the continued strength of our licensing model and its important role in funding R&D activity and pipeline progression. Product revenues were driven by commercial momentum for our Humira biosimilar AVT02 and for our Stelara biosimilar AVT04, which launched in the U.S. in Q1 2025.

In addition to the three new approved products, we delivered shipments for those products to our commercial partners in December, and these new products will continue to deepen our commercial footprint. Gross margin finished at 61%, showing the benefit of licensing revenues within the mix. As we convert our R&D pipeline into commercialized products, we expect product revenues to become a larger share of the mix over time, with licensing milestones revenues at similar levels as now. Adjusted EBITDA for the year was $137 million, up 27% over the year. That represents a margin of 23%, reflecting strong licensing income translating directly to EBITDA. Operating cash flow for the year was positive for the first time at $7 million, and reflects the company’s commercial inflection point in 2024 to 2025. Turning to cash flow.

The main impact on our cash flow is around our inventory build-up related to launch preparation, our acquisitions, alongside the impact of our financing actions in the fourth quarter. The full year grid shows the movement from $51 million in opening cash to $172 million in cash balance at the end. Looking at the three first bars together, we see positive operating cash flow before interest and tax of $7 million. Working capital outflows is largely tied to inventory build for multiple upcoming launches, CapEx and M&A investments, including the Boston acquisitions of Ivers-Lee and Xbrane. We swapped it under CapEx and acquisitions, and you also see a significant step up from new equity and net borrowings in 2025.

In Q4 specifically, operating cash flow was negative by $28 million, mainly driven by timing of collections in the quarter, CapEx and intangibles totaling $16 million, reflecting ongoing investments in manufacturing capacity and pipeline investments. Net interest payments were $35 million, following the transition from PIK to cash interest on the existing term loans, and net borrowings were $207 million, driven by the completion of the financing package in Q4 which strengthened liquidity and enhanced our financial flexibility heading into 2026. The next slide summarizes the financing activities completed in Q4 and how they enhance our liquidity and financial flexibility heading into 2026. The capital structure is now balanced between term debt, senior secured facilities, and the new convertible bond.

While net debt increased with the Q4 financing inflows, our leverage ratio, being net debt to adjusted EBITDA, lowered to 9.3 times and is expected to improve meaningfully in line with our 2026 outlook, with double-digit revenue growth and expanding EBITDA. On the topic of revenue growth, the next slide summarizes how we continue building a diversified resilient revenue base, supported by more products on the market, broader geographical reach, and sustained progress across the R&D pipeline and future product launches. With an R&D pipeline of around 30 products, licensing milestone revenues are expected to continue on an annual basis consistent with prior years. Additionally, each incremental launch adds diversification and improves visibility into future revenues and strengthens quality of earnings.

Turning to the 2026 financial outlook, we are reaffirming the outlook for 2026, with revenues in the range of $650-$700 million, which reflects continued double-digit sales growth as we expand our commercial portfolio and bring additional products to market across approved geographies. Adjusted EBITDA is expected to increase to $180-$220 million, supported by portfolio expansion and increased operating scale. The lower end of the range assumes no U.S. launches in 2026. Just to briefly summarize key items on the asset side of our balance sheet. Our asset base increased during the year, supported by strategic acquisitions and ongoing pipeline investments. Total non-current assets increased by 19%, driven primarily by the two acquisitions of Ivers-Lee and Xbrane, capacity extensions, capitalized pipeline investments, and higher contract assets due to timing of revenue recognition and payments.

Deferred tax assets adjusted downwards by $130 million. Inventory increased by $92 million over the year as we built ahead of upcoming product launches across approved markets. Trade receivables decreased by $70 million, lastly due to timing of product shipments and improved collection cycles. Next, a few comments on the key movements across equity and liabilities. Our equity position improved by $128 million, mainly driven by profits for the period and capital contributions linked to our Swedish listing. The movement in derivative financial liabilities decreased by $156 million, mainly reflecting fair value changes on earned shares. Borrowings increased primarily due to the convertible bond and $100 million senior term loan facility completed in Q4 2025. To summarize, this is the last slide I want to leave you with here today.

Q4 landed in line with our outlook for the full year. A very strong finish driven primarily by licensing revenues, while product sales were softer, reflecting timing of orders and planned facility upgrades to support upcoming launches. Revenue diversification continues to strengthen as more of the portfolio is launched across Europe, Japan, and other regions. This diversification reduces concentration risk and supports long-term sustainable growth. As stated before, there is high focus on reaching cash flow positivity by the year end of 2026. Operating cash flow was positive in Q4 2025 for the first time at $7 million. Leverage is trending down, and we expect that to continue in line with our reaffirm 2026 outlook for double-digit revenue growth and margin expansion. With that, I’d like to hand over to Lisa.

Lisa Graver, Chief Executive Officer Designate, Alvotech: Thank you, Linda. Before we open the call for questions, I would like to briefly summarize where we are today. Alvotech has built a fully integrated biosimilars platform supported by a broad pipeline, global manufacturing capabilities, and strong commercial partnerships. During 2025, we continued to expand that platform while also strengthening our operational foundation through significant investments in quality systems and compliance. Looking ahead, our priorities remain clear. We will continue advancing our biosimilar portfolio toward approval and commercialization in all markets, including the U.S. We will maintain strong focus on operational excellence, efficiency, and regulatory compliance, which includes expanding our manufacturing footprint with key dual sourcing initiatives. We will continue expanding our pipeline in the most cost-effective way and strengthening our global partnerships. The biosimilars opportunity remains large and durable, and we believe Alvotech is well positioned to capture that opportunity.

With that, operator, we would be happy to take questions.

Operator: Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. We will take our first question, and the question comes from the line of Ashwani Verma from UBS. Please go ahead. Your line is open.

Ashwani Verma, Analyst, UBS: Thanks. Yeah, thanks for taking our question. Maybe just like on the U.S. approvals, where you said that you completed the remediation program. Can you give us a sense of what are the pending items between now and the filing? How confident are you this time that this would result in an approval? Any chances of additional inspection from the FDA? And then second question, just I’m trying to understand, like, the guidance that you provided, the $650 million-$700 million compared to what you did for 2025 at $593 million. Like, is there any assumption of these three new products for U.S. market at all at the low end of the guide?

If you strip that out, like what would be the outlook for the full year? Thanks.

Joseph E. McClellan, Chief Operating Officer, Alvotech: This is Joseph McClellan. Thank you for the question. I’ll take the first part, and then I’ll hand it over to Linda for the second. We, as I said, completed our remediation efforts. We are now gathering the information showing that our changes are effective. We’re compiling that information and putting that forth. That is why we’re in the final stretches of being ready to submit. We’re working really hard to do it by the end of the first quarter, but we’re also prepared that it could be in the second, but definitely in the first half of this year. The approval process is then a six-month clock based on the PDUFA guidelines. Then yes, there is an opportunity for the FDA to inspect again.

Lisa Graver, Chief Executive Officer Designate, Alvotech: However, we are working to have as comprehensive as a response as possible that would potentially could not require them to come and inspect again. Linda?

Linda Jónsdóttir, Chief Financial Officer, Alvotech: Yes. On the guidance question, like, on the outlook for 2026, like in the lower end of the range, we are not including revenues from our U.S. launches. I think that’s the answer to that one. I mean, I just think about the upper end as like. I mean, I would just think about the lower end as no revenues from the U.S., and then the upper end is what we’re striving for.

Ashwani Verma, Analyst, UBS: All right. Okay. Thank you so much.

Operator: Thank you. We will take our next question. The question comes from the line of Glen Santangelo from Jefferies. Please go ahead. Your line is open.

Glen Santangelo, Analyst, Jefferies: Oh, yeah. Thanks for taking my question. Just two quick ones for me. Linda, I did also want to follow up on the guidance, and I think I hear you loud and clear that you’re not really building much in terms of the U.S. approvals into the guidance. When I sort of walk that bridge from the $593 you generated this year to the $650-$700 for fiscal 2026, can you just give us a sense for what type of incremental commercial approvals outside of the U.S. may be required to sort of get into that range? Or are you not building in any incremental approvals into that guidance? Then secondly, Lisa, kind of curious to follow up on your comments about expanding the manufacturing platform.

I just wonder if you can give us a better sense for, you know, timing, how you’re thinking about that, the cost associated with that. You know, also, you know, to follow up on Joe’s comments with respect to the FDA draft guidance changes, how that may impact your R&D costs and your operating expenses. I’m just trying to get a sense for how the cap structure may evolve here over the next sort of 12-18 months based upon your ambitions. Thanks so much.

Lisa Graver, Chief Executive Officer Designate, Alvotech: Linda?

Linda Jónsdóttir, Chief Financial Officer, Alvotech: Yeah. On the guidance question, like, what we’re building in there is just the momentum on the launches we’ve already gotten approval on. Looking at Europe and rest of world. As I stated before, like, what we are firmly targeting is then to get before year-end and getting to the upper end of the range. The approvals in the U.S.

Lisa Graver, Chief Executive Officer Designate, Alvotech: Okay. Thank you for the question. It’s Lisa. Regarding the dual sourcing and the capacity. It is something that we’ve been evolving. It is certainly something that, as Joe has detailed, in the past, as we look at our expanding portfolio and pipeline, that certainly is needed, in order for us to capitalize and maximize on commercial potential. From a timing point of view, I think this is a first half event in terms of being able to secure that. We’re not in a position today to sort of name the party or parties we’re talking about, but we will certainly once we’ve secured that.

I think from a cost and a CapEx perspective, I mean, this does somewhat dovetail with the changes that we had been anticipating in terms of R&D expenditure. You know, for us, this allows us to do more for the same cost base that we’ve been anticipating over the last few years. It allows us to do more in terms of actual programs, but it also allows us to be able to build into that the anticipation around capacity building. I think, you know, what we’ll see as we unfold the year is it’s very much within scope of our expectations in terms of spend, both CapEx, and I include in that R&D spend as well.

Glen Santangelo, Analyst, Jefferies: Okay, thanks for the comments.

Lisa Graver, Chief Executive Officer Designate, Alvotech: Thank you.

Operator: Thank you. We will take our next question, the question comes from the line of Christopher Uhde from SEB. Please go ahead. Your line is open.

Christopher Uhde, Analyst, SEB: Hi there, Christopher Uhde from SEB. Thanks for taking my questions. I guess I’d like to start with some big picture things. Lisa, congratulations on the new role. As you take the reins, how should we think about your aims and ambitions? Is this continuation, evolution or revolution? I know you highlighted, of course, manufacturing investments, but what do you see as the most pressing short-term priorities and in particular, anything you think needs to be done differently or emphasized differently, both short term and long term?

Lisa Graver, Chief Executive Officer Designate, Alvotech: Yeah. I think it’s very much evolution, not revolution. I think the team has certainly built a solid platform, as I’ve said in my remarks and as you’ve heard from Joe and others. I think it’s really, you know, ensuring that we execute truly on the pipeline that we’re building and continue to make sure that we launch those programs through our partners of course. That partnership model really is very heavily reliant on our performance, not only on R&D, but ultimately approval and being able to supply. From a priority perspective, there is no question, and I think that was outlined as well in our remarks. That is sort of number one, two, and three across the board.

I think working alongside on the compliance piece, I mean, the U.S. market obviously continues to be important to us. Europe and other markets continue to perform very well for us as you saw through our 2025, and we anticipate that continuing in 2026. We do need to make sure, and it’s certainly my intent to work with the team that we continue to build upon the scaling that we’ve done so far from a commercial production perspective.

Christopher Uhde, Analyst, SEB: Okay, great. Thanks. If I could ask just a little bit more of a specific question. Could you talk a little bit about Iran war disruption risk to your supply chain and logistics? I mean, where is there more exposure, you know, manufacturing like disposables, tissue culture, media, other items, or shipping costs?

Lisa Graver, Chief Executive Officer Designate, Alvotech: Yeah. I think from our point of view right now, I mean, we do have markets that we’re expanding to in the Middle East, but those are still early days in terms of expansion. Most of what we’re anticipating, you know, from a contribution point of view, continue to come from the key markets, U.S., E.U., Japan. Right now we are not seeing that as an immediate direct impact on procurement or supply.

Christopher Uhde, Analyst, SEB: Okay, great. Thanks. If I could just ask one more bigger picture question before getting back into the queue. The big concern we hear back from investors is around the competitive landscape. Would you please just walk us through, let’s say an update on your thinking around how you can mitigate competitive exposure, whether that be development strategy or niches or, you know, some other kind of innovation at some level that could insulate you?

Lisa Graver, Chief Executive Officer Designate, Alvotech: Yeah. Yes, absolutely. I think, you know, as we’ve said, I think we anticipated some of the changes on the regulatory front, particularly in the U.S. I think we started early, which allowed us to do a larger subset of programs. I think being first and forming in the first wave, but ultimately being first to market is our goal. That comes from, you know, the speed of our development, which I think has been fantastic and we have a good track record with. I think it then comes to approval and our IP positioning, which again, I think we’re very strategic in terms of how we design our products, both from a IP perspective in the U.S. as well as other markets. It’s very complementary from that perspective.

for us, we try and choose programs where we can enable that first mover advantage, and that comes from both the complexity of the program, our investment in it, as well as our strategy ultimately commercially, both from an IP entry point of view, as well as how we tackle contracting in the U.S., and the partnerships we have with very, you know, players that have the ability to penetrate quickly, like Stada and Advanz.

Christopher Uhde, Analyst, SEB: Thanks.

Operator: Thank you. Once again, if you wish to ask a question, please press star one one on your telephone. We will take our next question, and the question comes from the line of Arvid Nisander from DNB Carnegie. Please go ahead. Your line is open.

Arvid Nisander, Analyst, DNB Carnegie: Thank you and good afternoon. First off, a question, just trying to understand the underlying momentum of the established portfolio here. Product sales have been a bit on the softer side over the past two quarters. Data that we can track is incomplete, but it seems like TRX growth for AVT02 seems to be moderating into 2026 and PBM dynamics are of course intensifying. Just wondering if the sort of script and sales trends represent the true signal here or if it’s just noise. If you can say anything on the revenue growth trajectory that you’re expecting for AVT02 and how it will evolve through the year.

Secondly on R&D spend, which steps down quite significantly in Q4, while your guidance, I guess implies an increase on a total spend basis for 2026. So how should we think about the sequencing of R&D through 2026? Is this more likely to be back-end loaded? Yeah, I’ll stop there. Thanks.

Lisa Graver, Chief Executive Officer Designate, Alvotech: Maybe I’ll start just on some of the performance pieces on our commercialized programs. When we look at 2025, I think we’re certainly exiting the year from a sales out into the market perspective in the U.S. We’ve seen growth in AVT02 and AVT04. We are continuing and expect to see that growth in 2026. A lot of that growth is through certainly in the U.S., our partnership with Teva. In rest of world markets, we do have some uptake for AVT02 and AVT04. I think AVT02 in Europe a little more challenging from a growth perspective, but we’re still anticipating it. We did enter that market last, but we have been able to secure leading positions in some of the European markets like Austria and Sweden.

We are still anticipating top line growth on AVT02, certainly on AVT04. There is, we believe continued to be opportunity in 2026, especially when we look at our exit position in 2025. I think we were sitting at around a 5% share in the U.S., about a 9% share on AVT02 in the U.S. We do think there’s continued momentum, certainly in the very near term. We’re positioned well, I think with our partners, even given some of the PBM pressures, our formulary business continues to contribute. Our unbranded business as well is also contributing to that overall growth perspective. Maybe finally, just to say it, these markets are still evolving in terms of generic erosion of the branded base.

I think we’re going to continue to see AbbVie get excluded in 2026, which will help obviously our additional ability to secure new business, but just to maintain and grow just through volume, the business we’ve secured today. Maybe I’ll turn it to Linda Jónsdóttir.

Linda Jónsdóttir, Chief Financial Officer, Alvotech: Yes. Thank you.

Lisa Graver, Chief Executive Officer Designate, Alvotech: Revenue piece.

Linda Jónsdóttir, Chief Financial Officer, Alvotech: Perhaps also just to comment a bit on the revenue piece, unlike with quarterly fluctuations, I think it’s also good to keep in mind, like we are a B2B company, so you can always expect to see some fluctuations between quarters, depending on, like, timing of quarters. If I move into the R&D spend, like I would say, it’s fairly going to be fairly balanced throughout next year. We continue to invest in our R&D efforts, which have been paying off a lot, looking at our pipeline. Perhaps also to mention that, as I mentioned in the call itself, we are expecting 2026 to be back-end loaded towards the end of Q4. Just also keep that one in mind.

Arvid Nisander, Analyst, DNB Carnegie: Great. I’ll jump back in the queue. Thank you, guys.

Operator: Thank you. We will take our next question. The question comes from the line of Christopher Uhde from SEB. Please go ahead. Your line is open.

Christopher Uhde, Analyst, SEB: Hi. Thanks for taking my follow-ups. I guess, you know, on the question that we just heard, a follow-up around the dynamic with SIMLANDI. What can you say about the overall market dynamics over the past year for the Humira biosimilar market? And what’s the future of private label sales for you in the U.S.? And I guess for both products, I mean, in the past I think we’ve heard management say that, you know, you could have probably three or four years of sales growth from a given product before erosion could start. Do you still see that as the case? Or, obviously, we’ve been looking for a return to growth at this point.

Lisa Graver, Chief Executive Officer Designate, Alvotech: Yeah. I do think that, you know, what we’ve seen through the end of 25 has been, you know, that continued growth. I think that a lot of that is truly coming from the continued loss of business for the innovative product. I think the exit was a biosimilar sitting at a roughly 55% share. I think there’s still that continued opportunity amongst the subset of players that are out there today. We’re sitting at a decent spot with that 9% share in terms of AVT02. We do think there’s more continued growth on that formulary business just as a factor of that erosion of the branded space.

In terms of private label for AVT02, I do think we continue to seek opportunity there. I’ll never say that there’s no opportunity, but I think the formulary business will continue to be a focus for us, certainly in 2026 and beyond. AVT04, as I mentioned, we are seeing decent growth. I mean, that’s a more recent launch, and certainly we’re still young in terms of the overall erosion. I think the exit was about 41% in 2025 for biosimilar share. There’s still opportunity there.

You know, Teva has been very good commercial partner in terms of how they’re growing the market and partnering on the unbranded space as well as on the formulary piece. We’re optimistic still that we will continue to see growth over the next few years. For us, we’re not ready to say this is plateaued by any stretch, just given the fact that we’re still seeing that brand erosion continue to happen.

Christopher Uhde, Analyst, SEB: Great. Thanks. If I could ask about whether you could quantify the sum of sales for the three new launches that happened in 2025, product sales, that is.

Linda Jónsdóttir, Chief Financial Officer, Alvotech: We don’t quantify it specifically, but it is like, I mean, it is definitely a part of our contribution in Q4.

Christopher Uhde, Analyst, SEB: Okay, thanks. I guess for the guidance high end, well taken on the revenue of new products of the U.S. launches not being part of the low end. At the high end, would it be licensing revenues only or also product sales?

Linda Jónsdóttir, Chief Financial Officer, Alvotech: It will be both, like on the high end.

Róbert Wessman, Founder and Executive Chairman, Alvotech: The high end, Róbert here. The high end is mainly reflecting growth in supply revenues.

Christopher Uhde, Analyst, SEB: Okay, great.

Róbert Wessman, Founder and Executive Chairman, Alvotech: It is both.

Christopher Uhde, Analyst, SEB: Okay. Is it still fair to say that with respect to the cadence that you discussed, you know, your six-month visibility remains extremely high? I mean, essentially, that the orders have been placed.

Linda Jónsdóttir, Chief Financial Officer, Alvotech: Yes. We have good visibility until the next six months.

Christopher Uhde, Analyst, SEB: Okay, great. I guess the last thing I wanted to ask about was just in terms of the product gross margin, and I might have missed this, I didn’t quite catch it in your comments. Obviously negative for the past two quarters. When do you expect the portfolio to deliver leverage again there?

Linda Jónsdóttir, Chief Financial Officer, Alvotech: I would say, like, I mean, we are definitely seeing impact from our facility improvements both in Q3 and in Q4, and that’s in line with what we also commented on in Q3, that it would flow into Q4. I mean, I think things are moving well on that front, so we should be seeing this trending up now in 2026.

Róbert Wessman, Founder and Executive Chairman, Alvotech: Maybe to add to that, Róbert here. If you look at our gross margin, because we need to look at the gross margin, which includes then of course both the licensing and the supply revenues. There is always a trade-off. I mean, if you have a lower milestones, you would get a higher margin and vice versa. We are basically seeing 62% gross margin in our business to 2025. If you look at the comparable companies like Samsung and Celltrion, we are delivering today a gross margin which is higher than those two. As mentioned by Linda, those revenues can be lumpy, both the license one and of course how we ship.

Just to underline that we have of course been in a shutdown due to FDA remediation a few times this year.

Christopher Uhde, Analyst, SEB: Great. Thank you very much.

Róbert Wessman, Founder and Executive Chairman, Alvotech: Yeah. That is of course reflecting a bit how we ship, also.

Christopher Uhde, Analyst, SEB: That’s all for me. Thanks.

Operator: Thank you. This concludes today’s question and answer session. I’ll now hand back for closing remarks.

Lisa Graver, Chief Executive Officer Designate, Alvotech: Thank you. On behalf of the team presenting today and all of us at Alvotech, I wanna thank everyone who joined us for this webcast. We look forward to talking to you again and wish you all a wonderful day.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.