Alvotech's stock slid 8.7% on Tuesday after the biosimilar developer disclosed a combined $152 million equity raise that comprised a public offering and a concurrent private placement.
The Reykjavik, Iceland-headquartered company said the public portion consisted of roughly 22.7 million shares priced at $3.75 per share, generating about $85 million in gross proceeds. Simultaneously, Alvotech sold approximately 17.8 million shares to European investors in a private placement, which produced around $67 million in gross proceeds. Together, the transactions amount to roughly $152 million before fees and expenses.
Alvotech noted the public offering price represented an 11.6% discount to the stock's prior closing price. With approximately 312 million shares outstanding, the company said the combined share issuances produced notable dilution for existing shareholders.
Management indicated that net proceeds from both the public offering and the private placement will be used to fund the development of its biosimilar assets, and to provide working capital and for general corporate purposes. The firm identified Bank of America, Jefferies and Evercore as joint bookrunners on the public offering.
Market reaction extended beyond the single-session drop: through Monday, Alvotech shares were down 17% year-to-date. The financing and the terms of the issuance were central to the intraday price move, according to the company’s announcements.
The combined transactions increase Alvotech’s cash resources while expanding its equity base. Shareholders and market participants will now observe how the company deploys the proceeds toward its biosimilar pipeline and corporate needs.
Context for investors
Investors evaluating the equity should account for the immediate market response to the financing and the reported dilution that follows a sizeable share issuance. Alvotech has stated its intended uses of proceeds; the company did not provide further details about timing or specific programs targeted for funding beyond the general descriptions in its announcement.